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HomeMy WebLinkAboutCity Council Packet - 03/27/2012 TIGARD City of Tigard TIGARD CITY COUNCIL BUSINESS MEETING March 27 2012 COUNCIL MEETING WILL BE TELEVISED I: \Design & Communications \Donna \City Council \ccpkt3 13125 SW Hall Blvd. • Tigard, Oregon 97223 • 503.639.4171 TTY Relay: 503.684.2772 • www.tigard- or.gov City of Tigard ' Tigard Business Meeting - Agenda TIGARD TIGARD CITY COUNCIL AND LOCAL CONTRACT REVIEW BOARD MEETING DATE AND TIME: March 27, 2012 - 6:30 p.m. Study Session; 7:30 p.m. Business Meeting MEETING LOCATION: City of Tigard - Town Hall - 13125 SW Hall Blvd., Tigard, OR 97223 Agenda Revised 3/21/2012 - Item No. lD - Congressional City Conference Reports Agenda Revised 3/23/2012 - Item No. 3D - Child Abuse Prevention Month Proclamation & Item 11 - Non Agenda Items - Consider Waiving Sign Permit Fees for Tigard Youth Football PUBLIC NOTICE: Anyone wishing to speak on an agenda item should sign on the appropriate sign -up sheet(s). If no sheet is available, ask to be recognized by the Mayor at the beginning of that agenda item. Citizen Communication items are asked to be two minutes or less. Longer matters can be set for a future Agenda by contacting either the Mayor or the City Manager. Times noted are estimated; it is recommended that persons interested in testifying be present by 7:15 p.m. to sign in on the testimony sign -in sheet. Business agenda items can be heard in any order after 7:30 p.m. Assistive Listening Devices are available for persons with impaired hearing and should be scheduled for Council meetings by noon on the Monday prior to the Council meeting. Please call 503 -639 -4171, ext. 2410 (voice) or 503- 684 -2772 (TDD - Telecommunications Devices for the Deaf). Upon request, the City will also endeavor to arrange for the following services: • Qualified sign language interpreters for persons with speech or hearing impairments; and • Qualified bilingual interpreters. Since these services must be scheduled with outside service providers, it is important to allow as much lead time as possible. Please notify the City of your need by 5:00 p.m. on the Thursday preceding the meeting by calling: 503- 639 -4171, ext. 2410 (voice) or 503 -684 -2772 (TDD - Telecommunications Devices for the Deaf). SEE ATTACHED AGENDA • VIEW LIVE VIDEO STREAMING ONLINE: bttp: / /www.tvctv.org /government- programming /government - meeting$ /tigard CABLE VIEWERS: The regular City Council meeting is shown live on Channel 28 at 7:30 p.m. The meeting will be rebroadcast at the following times on Channel 28: Thursday 6:00 p.m. Sunday 11:00 a.m. Friday 10:00 p.m. Monday 6:00 a.m. City of Tigard Study Session - Agenda TIGARD TIGARD CITY COUNCIL & LOCAL CONTRACT REVIEW BOARD (LCRB) MEETING DATE /TIME: March 27, 2012/6:30 p.m. Study Session and 7:30 p.m. Business Meeting MEETING LOCATION: City of Tigard — Town Hall, 13125 SW Hall Blvd., Tigard, OR 97223 6:30 PM • STUDY SESSION A. Briefing on Intergovernmental Agreement with Metro to Transfer Trail Easements to the City B. Administrative Items • Exemplary Citizen Nominations • EXECUTIVE SESSION: The Tigard City Council will go into Executive Session to discuss real property transaction negotiations, and for consultation with legal counsel regarding current and pending litigation under ORS 192.660(2) (e) and (h). All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose any information discussed. No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. Council Calendar: April 3 Tuesday City Center Development Agency Meeting — 6:30 p.m., Town Hall 10 Tuesday Joint Meeting with Beaverton City Council and Planning Commission /Metro - 6:30 p.m., Beaverton City Hall, 4775 SW Griffith Drive, Beaverton 17* Tuesday Council Business /Workshop Meeting — 6:30 p.m., Town Hall 23 Monday Budget Committee Meeting — 6:30 p.m., Public Works Auditorium 24* Tuesday Council Business Meeting — 6:30 p.m., Town Hall 30 Monday Budget Committee Meeting — 6:30 p.m., Public Works Auditorium May 1 Tuesday City Center Development Agency Meeting — 6:30 p.m., Red Rock Creek Conference Room 7 Monday Budget Committee Meeting — 6:30 p.m., Public Works Auditorium 8* Tuesday Council Business Meeting — 6:30 p.m., Town Hall 14 Monday Budget Committee Meeting— 6:30 p.m., Town Hall 15* Tuesday Council Workshop Meeting — 6:30 p.m., Town Hall 22* Tuesday Joint Meeting with Lake Oswego City Council at Lake Oswego, Dinner at 5:30 and Meeting at 6:30, 380 A Avenue, Lake Oswego TIGARD CITY COUNCIL STUDY SESSION AGENDA — March 27, 2012 City of Tigard I 13125 SW Hall Blvd., Tigard, OR 97223 I 503 - 639 -4171 I www.tigard- or.gov 7:30 PM 1. BUSINESS MEETING - MARCH 27, 2012 A. Call to Order — Mayor Dirksen B. Roll Call C. Pledge of Allegiance D. Council Communications & Liaison Reports 2012 Congressional City Conference Reports have been moved to Item No. 11— COUNCIL LIAISON REPORTS E. Call to Council and Staff for Non - Agenda Items 2. CITIZEN COMMUNICATION (Two Minutes or Less, Please) 7 :35 p.m. - time is estimated. A. Follow -up to Previous Citizen Communication B. Citizen Communication - Sign Up Sheet 3. PROCLAMATIONS: 7:45 p.m. - time is estimated. A. Proclaim April 15 -22, 2012 National Days of Remembrance (Video clip will be played) B. Proclaim National Community Development Week, April 8 -14, 2012 C. Proclaim April as Arbor Month D. Proclaim Child Abuse Prevention Month 4. CONSENT AGENDA: (Tigard City Council and Local Contract Review Board) - These items are considered routine and may be enacted in one motion without separate discussion. Anyone may request that an item be removed by motion for discussion and separate action. 7:55 p.m. - time is estimated Motion to: A. Approve City Council Meeting Minutes for: • February 14, 2012 • February 21, 2012 B. Authorize the City Manager to Enter into an Intergovernmental Agreement (IGA) with Washington County Regarding West Nile Virus C. Approve an Intergovernmental Agreement with Metro to Transfer Trail Easements to the City D. Local Contract Review Board: 1. Award Contract for 103rd /McDonald Storm Drain Improvements to HSC, LLC • Consent Agenda - Items Removed for Separate Discussion: Any items requested to be removed from the Consent Agenda for separate discussion will be considered immediately after the Council /Local Contract Review Board has voted on those items which do not need discussion. 5. REVIEW 2012 OREGON LEGISLATIVE SESSION AS IT RELATES TO TIGARD'S LEGISLATIVE PRIORITIES 8:00 p.m. - time is estimated. • Senator Burdick and Representative Doherty are scheduled to attend. 6. GRANT EXEMPTION FROM PROPERTY TAXES AS PROVIDED UNDER TIGARD MUNICIPAL CODE SECTION 3.50 FOR FIVE NON - PROFIT LOW - INCOME HOUSING PROJECTS 8:20 p.m. — time is estimated RESOLUTION NO. 12 -11— A RESOLUTION GRANTING AN EXEMPTION FROM PROPERTY TAXES UNDER TIGARD MUNICIPAL CODE SECTION 3.50 FOR FIVE NON- PROFIT LOW -INCOME HOUSING PROJECTS OWNED AND OPERATED BY COMMUNITY PARTNERS FOR AFFORDABLE HOUSING (CPAH) AND HAWTHORNE URBAN DEVELOPMENT LLC 7. APPROVE PURCHASE OF THE PAULL PROPERTIES AND AUTHORIZE THE CITY MANAGER TO COMPLE 1'E THE PROPERTY PURCHASE 8:30 p.m. - time is estimated. RESOLUTION NO. 12 -12 — A RESOLUTION APPROVING THE PURCHASE OF THE PAULL PROPERTIES, COMMONLY REFERRED TO AS THE EAST BULL MOUNTAIN PROPERTIES, (TAX LOTS 2S104DCO5800 AND 2S104DCO5900), AND AUTHORIZING THE CITY MANAGER TO TAKE ALL NECESSARY ACTION TO COMPLETE THE PROPERTY PURCHASES ON BEHALF OF THE CITY 8. ADOPT REVISED PLANNING COMMISSION BYLAWS (RESOLUTION) AND AMEND TIGARD MUNICIPAL CODE CHAPTER 2.08 (ORDINANCE) 8:40 p.m. - time is estimated. RESOLUTION NO. 12 -13 — A RESOLUTION AMENDING THE TIGARD PLANNING COMMISSION BYLAWS TO BE CONSISTENT WITH COUNCIL APPROVED MODEL BYLAWS ORDINANCE NO. 12 -03 — AN ORDINANCE AMENDING TIGARD MUNICIPAL CODE CHAPTER 2.08, PLANNING COMMISSION, COMPLEMENTING AMENDMENTS TO AMENDED PLANNING COMMISSION BYLAWS, CONSISTENT WITH COUNCIL APPROVED MODEL BYLAWS 9. LEGISLATIVE PUBLIC HEARING: CONSIDER PARK SYSTEM DEVELOPMENT CHARGE (SDC) METHODOLOGY AND A RESOLUTION AMENDING THE CITY'S MASTER FEES AND CHARGES SCHEDULE. Hearing is rescheduled to June 12, 2012 10. COUNCIL LIAISON REPORTS 2012 Congressional City Conference Reports 9:00 p.m. - time is estimated 11. NON AGENDA ITEMS 9:15 p.m. — time is estimated A. Consider Waiving Sign Permit Fees for Tigard Youth Football RESOLUTION NO. 12 -14 — A RESOLUTION WAIVING $104 IN TEMPORARY SIGN PERMIT FEES FOR TIGARD YOUTH FOOTBALL 12. EXECUTIVE SESSION: The Tigard City Council may go into Executive Session. If an Executive Session is called to order, the appropriate ORS citation will be announced identifying the applicable statute. All discussions are confidential and those present may disclose nothing from the Session. Representatives of the news media are allowed to attend Executive Sessions, as provided by ORS 192.660(4), but must not disclose any information discussed. No Executive Session may be held for the purpose of taking any final action or making any final decision. Executive Sessions are closed to the public. 13. ADJOURNMENT 9:25 p.m. - time is estimated. SL Se ss ` AIS -826 A. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 10 Minutes Agenda Title: Briefing on an Intergovernmental Agreement (IGA) with Metro to Transfer Trail Easements to the City Submitted By: Greer Gaston, Public Works Item Type: Update, Discussion, Direct Staff Meeting Type: Council Business Mtg - Study Sess. Information ISSUE The council will be briefed on a consent item to consider an IGA with Metro to transfer trail easements to the city. STAFF RECOMMENDATION / ACTION REQUEST No action is requested during the briefmg; the council will consider the IGA on the consent agenda. KEY FACTS AND INFORMATION SUMMARY Background The City of Tigard plans to construct a segment of the Fanno Creek Trail from Grant Avenue to Woodard Park. This project is included in the Park System Master Plan adopted by council in 2009 and is listed as a high priority in the Tigard Greenways Trail System Master Plan accepted by council in 2011. The project will be included in the proposed 2012 -2017 Capital Improvement Plan. In 2006, voters passed Metro's natural areas bond measure. Metro used a portion of its bond proceeds to purchase two key easements required to construct this segment of the Fanno Creek Trail. With these easements, the city will have all the property necessary to construct this trail segment. Summary of the IGA • Metro transfers the easements to Tigard in order for Tigard to construct, operate and maintain the Grant Avenue to Woodard Park trail segment. • Tigard assumes sole responsibility for the easements. • Tigard installs on -site signage acknowledging the easements were obtained using Metro's natural areas bond measure proceeds. • Tigard is required to construct the trail segment within 10 years of the easement transfer. If the trail is not constructed, the city must convey the easement back to Metro. Funding Information If the easement is conveyed to Tigard, trail construction is eligible for certain funding opportunities, like Washington County's Major Streets Transportation Improvement Program (MSTIP). Staff has requested this project be added to the Washington County MSTIP list that is currently being developed. If the easements are owned by Metro, the trail project would not qualify for such funding. Park system development charge (SDC) revenue and proceeds from Tigard's $17 million park bond could also be used to fund this project. OTHER ALTERNATIVES The council could decide not to accept the easements; the city would not construct the trail segment. COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS 2012 Tigard City Council Goal No. 1.c. - "Deliver on the promise of the voter - approved park bond by identifying all acquisition opportunities and completing the majority of park land acquisitions and improvements by the end of 2012." This project is included in the Park System Master Plan adopted by council in 2009 and is listed as a high priority in the Tigard Greenways Trail System Master Plan accepted by council in 2011. DATES OF PREVIOUS COUNCIL CONSIDERATION This is the first time this IGA has come before the council. Fiscal Impact Fiscal Information: By entering into the IGA with Metro, the city agrees to construct the trail segment from Grant Avenue to Woodard Park within the next 10 years. The current estimate for construction is $650,000. Up to 60 percent ($390,000) of the project could be funded by park SDCs, with the remaining 40 percent ($260,000) funded through other sources such as the city's park bond proceeds or county MSTIP funds. Attachments 1A INTERGOVERNMENTAL AGREEMENT This Intergovernmental Agreement ( "Agreement ") is by and between Metro, an Oregon municipal corporation, located at 600 Northeast Grand Avenue, Portland, Oregon, 97232 -2736 ( "Metro "), and the City of Tigard, located at 13125 SW Hall Blvd., Tigard, Oregon 97223 (the "City"). This Agreement shall be effective on the last date of signature indicated below. RECITALS WHEREAS, Metro has acquired a trail easement across certain property located at 9744 SW Tigard Street, Tigard, Oregon 97223 (the "First Easement "). WHEREAS, Metro has also acquired another trail easement across certain property located at 9826 and 9900 SW Tigard Street, Tigard, Oregon 97223 (the "Second Easement "). WHEREAS, Metro purchased the First Easement and the Second Easement (referred to herein together as the "Easements "), both of which were identified as a priority in the Fanno Creek Linkages and Trail Target Area, using funds from the Natural Areas Bond Measure, 2006 Metro Ballot Measure 26 -80 ( "Metro Natural Areas Bond Measure "), approved by the voters on November 7, 2006. WHEREAS, the City now wishes to develop and construct the Fanno Creek Greenway Trail and has requested that Metro assign the Easements to the City as such areas are critical to (1) completing a continuous greenway trail from the Tualatin River, through the City of Tigard, into a highly urbanized, "walker- challenged" area and (2) protecting water quality along Fanno Creek and its tributaries. WHEREAS, in accordance with ORS 190.010, et seq, Metro and the City wish to enter into this Agreement to provide for the responsibilities and obligations of the parties with respect to the assignment of the Easements. AGREEMENT Now, therefore, in consideration of the mutual agreements and promises herein, the parties agree as follows: Easement Holder. Immediately following the parties execution of this IGA, Metro shall assign to the City all its right, title and interest in the Easements. The assignment to the City shall be in the form attached hereto as Exhibit A (the "Assignment "). Management, Maintenance, and Operation of the Easements. Upon acceptance of the Assignment, the City shall have sole responsibility for the Easements, including without limitation the management, maintenance, development, security, and operation of any trail constructed thereon. Signage; Publications. The City shall install on -site signage stating that funding for the acquisition of the Easements came from 2006 Metro Natural Areas Bond Measure proceeds. Such signage shall be installed in Woodard Park along the Fanno Creek Greenway Trail in prominent and at highly visible locations approved by Metro. Signage shall be either (a) a standard, free - standing sign provided by Metro, which Metro shall make available to the City upon request; or (b) inclusion of Metro's logo and script in other signage, with Metro's logo and script of a size equal and comparable to the size of the City's logo and script. Metro shall make its graphics available to the City upon request. The City also shall document in any publication, media presentation, or other presentations that the acquisition of the Easements of the Fanno Creek Greenway Trail was paid for in part with proceeds from the 2006 Metro Natural Areas Bond Measure. All such signage shall comply with the City's sign ordinance and applicable regulations. Agreement to Re Convey. Metro is agreeing to assign its interest in the Easements so that Tigard will construct, operate, and maintain a trail across the Easements as part of the Fanno Creek Greenway Trail. The design and location of the trail shall be determined by the City in its sole discretion. In the event Tigard fails to (a) construct the trail across the Easements within ten (10) years of the execution of this Agreement and assignment of Metro's interest in the Easements or (b) operate and maintain a trail across the Easements for longer than one (1) year after trail construction, Tigard shall, at Metro's written request, assign, transfer and convey back to Metro all of Tigard's estate, right, title, and interest in, to, and under the Easements. Term. This Agreement shall continue in effect unless modified or terminated as provided herein. The parties may, by written agreement signed by each party, terminate all or a part of this Agreement based upon a determination that such action is in the public interest. Oregon Constitution and Tax Exempt Bond Covenants. Metro's source of funds for the acquisition of the Easements is from the sale of voter - approved general obligation bonds that are to be paid from ad valorem property taxes exempt from the limitations of Article XI, section 11(b), 11(c), 11(d) and 11(e) of the Oregon Constitution. The interest paid by Metro to bond holders is currently exempt from federal and Oregon income taxes. The City covenants that, during the term of this Agreement, it will take no action that would cause Metro to be unable to maintain the current status of the real property taxes as exempt from Oregon's constitutional limitations or the income tax exempt status of the bond interest. In the event the City breaches this covenant, and fails to cure such breach within sixty (60) days after the date the City receives written notice of such breach from Metro, Metro shall be entitled to seek whatever remedies are available at law or in equity to either cure the default or to compensate Metro for any loss it may suffer as a result thereof. Mutual Indemnification. To the maximum extent permitted by law and subject to the Oregon Constitution and the Oregon Tort Claims Act, ORS Chapter 30, the City shall defend, indemnify, and save harmless Metro and Metro's officers, employees, and agents from and against any and all liabilities, damages, claims, demands, judgments, losses, costs, expenses, fines, suits, and actions, whether arising in tort, contract, or by operation of any statute, including but not limited to attorneys' fees and expenses at trial and on appeal, arising out of or in any way connected with the performance of this Agreement by the City or the City's officers, employees, or agents. To the maximum extent permitted by law and subject to the Oregon Constitution and the Oregon Tort Claims Act, ORS Chapter 30, Metro shall defend, indemnify, and save harmless the City and the City's officers, employees, and agents from and against any and all liabilities, damages, claims, demands, judgments, losses, costs, expenses, fines, suits, and actions, whether arising in tort, contract, or by operation of any statute, including but not limited to attorneys' fees and expenses at trial and on appeal, arising out of or in any way connected with the performance of this Agreement by Metro or Metro's officers, employees, or agents. Oregon Law. The laws of the State of Oregon shall govern this Agreement, and both Metro and the City hereby submit to the jurisdiction of the courts of the State of Oregon. Severability. Entire Agreement; Modifications. If any covenant or provision of this Agreement shall be adjudged void, such adjudication shall not affect the validity, obligation, or performance of any other covenant or provision of this Agreement which in itself is valid, if such remainder would then continue to conform with the terms and requirements of applicable law and the intent of this Agreement. This Agreement constitutes the entire agreement between the parties and supersedes any prior oral or written agreements or representations relating to the Property. No waiver, consent, modification, amendment, or other change of terms of this Agreement shall bind either party unless in writing and signed by both parties. IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the last date of signature specified below. CITY OF TIGARD METRO By: Print Name: Martha Bennett Title: Chief Operating Officer Date: Date: EXHIBIT A Form of Assignment Assignee's Name and Address: The City of Tigard 13125 SW Hall Boulevard Tigard, OR 97223 Assignor's Name and Address: Metro Office of Metro Attorney 600 NE Grand Avenue Portland, OR 97232 -2736 AFTER RECORDING, RETURN TO: The City of Tigard City Engineer 13125 SW Hall Boulevard Tigard, OR 97223 ASSIGNMENT OF EASEMENT This ASSIGNMENT OF EASEMENT ( "Assignment ") is made as of the last date of signature herein (the "Effective Date ") by between Metro, an Oregon municipal corporation ( "Metro "), and the City of Tigard, an Oregon municipal corporation ( "Tigard "). Recitals WHEREAS, Metro is the holder of that certain Trail Easement dated , granted by , and recorded in the real property records of Washington County Oregon on as Document No. (the "Easement "). WHEREAS, in accordance with the Intergovernmental Agreement entered into between the parties on , 2012, and as permitted under Section 14 of the Easement, Metro wishes to assign all of its right, title and interest under the Easement to Tigard and Tigard wishes to accept and assume all of the right, title and interest of Metro thereunder. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Metro and Tigard agree as follows: Agreement 1. Metro hereby assigns, transfers, conveys, and sets over to Tigard all of Metro's estate, right, title, and interest in, to, and under the Easement. Tigard hereby accepts the forgoing assignment and assumes all of the duties, obligations, and responsibilities of the holder of the Easement. 2. Metro has notified that the Easement is being assigned to Tigard. This Assignment shall be governed by and construed under the laws of the State of Oregon. In case any of the provisions of this Assignment shall at any time be held by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason, such illegality, invalidity, unenforceability shall not EXHIBIT A Form of Assignment affect the remaining provisions of this Assignment, and such remaining provisions shall be construed and enforced to the fullest extent permitted by law. CITY OF TIGARD METRO By: By: Martha J. Bennett Name: Chief Operating Officer Title: Date: Date: State of OREGON County of This instrument was acknowledged before me on , 20l_ by as of the City of Tigard, an Oregon municipal corporation. Notary Public - State of Oregon State of OREGON County of Multnomah This instrument was acknowledged before me on , 201_ by Martha J. Bennett as Chief Operating Officer of Metro, an Oregon municipal corporation. Notary Public - State of Oregon AGENDA ITEM NO. 2 -B CITIZEN COMMUNICATION DATE: March 27, 2012 (Limited to 2 minutes or less, please) The Council wishes to hear from you on other issues not on the agenda, but asks that you first try to resolve your concerns through staff. This is a City of Tigard public meeting, subject to the State of Oregon's public meeting and records laws. All written and oral testimony becomes part of the public record. The names and addresses of persons who attend or participate in City of Tigard public meetings will be included in the meeting minutes, which is a public record. NAME, ADDRESS & PHONE TOPIC STAFF Pleas Print CONTACTED e Name: 042 bbI NS CJB(- iA Also, please spell your name as it sounds, if it will "� 4804/1"4/\ help the presiding officer pronounce: Address 1 15 50 5 Pficf f 7 ` City 1 4 State (ra Zip q Phone No. 3" 51 te - Li 7 r T 7 Name: ART (r j vO Also, please spell your name as it sounds, if it will rig A F r / L help the presiding officer pronounce: Address 1 4-5 8 5 u/ j a�o Avg City r Cr /+ R 13 State 0 (Z Zip / - Phone No. 59 3 (' 3 q G S' 5 Name: Also, please spell your name as it sounds, if it will help the presiding officer pronounce: Address City State Zip Phone No. CITIZEN COMMUNICATION t- eth2-erk anl 1 . 4( 41 - 'PPA =- I PORTLAND POKER ' - -- - PLAYERS ASSOCIATION .;1. POKER FIRST City Of Portland "social gaming" code http: / /www.portlandonline.com /auditor /index.cfm ?c =28515 Hi Myron, I have spoken to DOJ about Texas Hold'em and they confirmed our belief that this is a "social game" and therefore governed by local jurisdiction. I have included in this email a couple of references provided by DOJ regarding social games. I hope you find them helpful. 167.117 Definitions for ORS 167.108 to 167.164 and 464.270 to 464.530. As used in ORS 167.108 to 167.164 and 464.270 to 464.530, unless the context requires otherwise: (21) "Social game" means: (a) A game, other than a lottery, between players in a private home where no house player, house bank or house odds exist and there is no house income from the operation of the social game; and (b) If authorized pursuant to ORS 167.121, a game, other than a lottery, between players in a private business, private club or place of public accommodation where no house player, house bank or house odds exist and there is no house income from the operation of the social game. 167.121 Local authorization of social games. Counties and cities may, by ordinance, authorize the playing or conducting of a social game in a private business, private club or in a place of public accommodation. Such ordinances may provide for regulation or licensing of the social games authorized. [1974 c.7 §3] Larry Trott Senior Public Affairs Specialist Oregon Lottery �. 503 -540 -1046 r ; - ' \A 14 PPPA PORTLAND POKER T, PLAYERS ASS OCIATION A POKER FIRST 14A.70.040 Social Games Authorization Limited. Page 1 of 1 14A.70.040 Social Games Authorization Limited. A social game between players in a private business, private club, or place of public accommodation is authorized only when each of the following conditions are met: A. No house player, house bank, or house odds exist; and B. There is no house income from the operation of a social game; and C. The game cannot be observed from a public right of way; and D. Persons under 18 years of age are not permitted in the room or enclosure where the social game takes place; and E. A valid permit issued pursuant to this Chapter is conspicuously displayed in the room or enclosure where the social game takes place; and F. The room or enclosure where the social game takes place is open to free and immediate access by any police officer. Doors leading into the social game room must remain unlocked during all hours of operation; ana G. No player shall bet more than $1 in money or other thing of value in any one game, and the amount awarded the winner of a game shall not exceed $1 in money or other thing of value multiplied by the number of players in the game. http:// www. portlandonline .com/auditor /index.cfm ?print =l &a= 15444 &c =28515 3/13/2012 14A.7O.O50 Social Games Permit Required. Page 1 of 1 14A.7O.O5O Social Games Permit Required. A permit shall be required for any person to conduct or permit to be conducted in any private business, private club, or place of public accommodation any social game. Any violation of the conditions set forth in Section 14A.70.040 shall be considered grounds for suspension or revocation of such permit. Such permit is not subject to transfer or assignment, is not valid at any location other than the premises described therein, and shall be dated as of the first day of the month in which issued and shall expire 1 year from that date. http:// www. portlandonline .com/auditor /index.cfm ?print = l &a= 15445 &c =28515 3/13/2012 14A.70.060 Social Games Permit Application Process. Page 1 of 1 14A.70.060 Social Games Permit Application Process. A. The application for a permit to conduct any social game activity shall set forth all information deemed necessary by the Director of the Bureau of Licenses consistent with the regulations provided in this Chapter, including but not limited to a description of the premises subject to the permit, and the fingerprints of the owner(s), officers, principal managing employees, and all employees who are involved in conducting the game activities or operating the game premises of the applicant. The permittee shall notify the Director within 10 days of any change in owners, officers, or principal managing employees that occurs subsequent to permit issuance. 1. For the purposes of this Section, "principal managing employee" shall include: a. Any person who is a proprietor or partner of the applying organization; b. Any person who owns or controls 5 percent or more of the outstanding capital stock where the organization is a corporation; c. Any person who has supervisory authority over employees and /or operations of the business as it relates to the conduct of permitted social games; and d. Any person who has the authority to supervise the premises and conditions under which permitted social games are conducted. 2. Where the permit applicant is a nonprofit membership organization, "principal managing employee' shall also mean the chief elected official of the organization and any other elected official(s) whose authority extends to the supervision or management of permitted social games. 3. With the concurrence of the Chief of Police or proper designee, the Business Licenses Director may exempt a corporate stockholder from the definition "principal managing employee" when it is shown that the involvement of such stockholder(s) in the operations of the applying organization is limited to stock ownership and that such stockholder(s) has no role in the conduct of the organization's operations. 4. All persons required to supply information in the application shall by oath or affirmation swear to the veracity of the information supplied by them. B. There shall be no right to renewal of a permit; each application shall be considered as it would be for a new permit notwithstanding that the applicant has previously been issued a permit. C. Each application for a permit shall be accompanied by a nonrefundable fee of $500. D. Before issuance of a permit, the Director or appropriate designee shall confer with the Chief of Police or proper designee, who shall advise whether or not and on what basis there exists law enforcement concerns about the particular applicants €TMs suitability to obtain a permit. If the Chief of Police so recommends, then no permit shall be issued, provided that Council may finally determine, upon appeal by the applicant that permit shall be issued. http: / /www.portlandonline .com/auditor /index.cfm ?print =l &a= 15446 &c =28515 3/13/2012 14A.70.100 Inspection of Premises Permitted for Social Games. Page 1 of 1 14A.70.100 Inspection of Premises Permitted for Social Games. All persons who have been issued permits pursuant to this Chapter shall permit entry to premises where social games are conducted to any member of the Bureau of Licenses or any officer of the Bureau of Police, upon presentation of official identification, for the limited purpose of inspecting the premises and any activities, records, or devices involved in such games to ensure compliance with this Chapter. Failure to permit an authorized inspection shall be grounds for suspension or revocation of the involved social games permit. http: / /www.portlandonline.com /auditor /index.cfm ?print =l &a= 15450 &c =28515 3/13/2012 14A.70.110 Notice of Social Games Required. Page 1 of 1 14A.70.110 Notice of Social Games Required. Where social games are conducted, each permittee shall continuously and conspicuously post notice that is clearly readable and in letters at least 1 inch high that such games must be conducted in accordance with the conditions set forth in this Chapter, which shall be listed in their entirety. http: / /www.portlandonline .com/auditor /index.cfm ?print = l &a =15451 &c =28515 3/13/2012 __ ,filii . , _ ' 4 ■ , . 1 l' Wit I . , : . 1 4 i ii A ' i 4. . \ ..a ......, , • Si t . 1 , ... • • • . I 0 t • It ,,rr r aa . Ir e li l 7 . .. _ I� -- / 1 i . wt_11s4 , - a�ws..r�e...n...u.�.y......ctaw _ u�►c� .. -1:� , f ,. ..� - t R Oa - ti, F P f e .A. vL ?� e ° . 4 • ■ {rat 1 �.: Aiiii tiV q, t,?i lir Li. ... _ a 'IT . , „ ._ . . . - ,_ , , . ,,„ , 0 } r + # , 1 /I' • • \ t, N \ • „1. `` \\ '\ \‘ \ \h. \ r is . • c4 .. ^ , 1 • ■ t .,I it \ � \ \ All 1 f Y r � t. 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" II t . !f t , t 1 i • • • • .. .410111111".' • ' . - '' '' ', 11:1 * • 10, • -• "lit, i ti I . _ • AIS -785 Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 5 Minutes Agenda Title: Proclaim April 15 -22, 2012 National Days of Remembrance Prepared For: Joanne Bengtson Submitted By: Joanne Bengtson, City Management Item Type: Update, Discussion, Direct Staff Meeting Type: Proclamation Information ISSUE Should the Mayor proclaim April 15 -22, 2012 as the National Days of Remembrance in memory of the victims of the Holocaust? STAFF RECOMMENDATION / ACTION REQUEST N/A KEY FACTS AND INFORMATION SUMMARY N/A OTHER ALTERNATIVES N/A COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS N/A DATES OF PREVIOUS COUNCIL CONSIDERATION Mayor Dirksen issued this proclamation in April 2010. Attachments Proclamation - Days of Remembrance . . S ` T r s a r 4111 f: ... , 4 , k A .t a . Y v DAYS OF REMEMBRANCE WEEK April 15 -22, 2012 Whereas, the Holocaust claimed the lives of millions of European peoples for religious, racial, ethnic, or national reasons between 1933 and 1945; and Whereas, the history of the Holocaust offers an opportunity to reflect on the moral responsibilities of individuals, societies, and governments; and " Whereas, we the people of Tigard should always remain vigilant against hatred, , persecution, and tyranny, and Whereas, we the people of Tigard should actively rededicate ourselves to the principles of individual freedom in a just society; and Whereas, the Days of Remembrance have been set aside to remember the victims of the Holocaust as well as to reflect on the need for respect of all peoples; NOW THEREFORE BE IT RESOLVED THAT I, Craig E. Dirksen, Mayor of the City of Tigard, Oregon, do hereby proclaim the week of April 15 -22, 2012 as 1 DAYS OF REMEMBRANCE WEEK in memory of the victims of the Holocaust, and in honor of the survivors, as well as the -, rescuers and liberators, and further proclaim that we, as citizens of the City of Tigard, should work to promote human dignity and confront hate whenever and wherever it - .. occurs f` Dated this day of , 2012. IN WITNESS WHEREOF, my I have hereunto set m hand and caused the Seal of the City g of Tigard to be affixed. I ! , - -- N f, Craig E. Dirksen, Mayor k1 City of Tigard Attest: City Recorder . ° P G ' r $ a i r. T �JI: AIS -853 3. B. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 5 Minutes Agenda Title: Proclaim National Community Development Week, April 8 -14, 2012 Prepared For: Joanne Bengtson Submitted By: Joanne Bengtson, City Management Item Type: Update, Discussion, Direct Staff Meeting Type: Proclamation Information ISSUE Should Mayor Dirksen proclaim April 8 -14, 2012 as National Community Development Week? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends issuing the proclamation. KEY FACTS AND INFORMATION SUMMARY The week of April 8 - 14, 2012 has been designated as National Community Development Week. This is the 26th year of setting aside an entire week to commemorate community development activities on the national and local levels. The continued support of municipalities and nonprofit service providers will again help to provide a focus on the Community Development Block Grant (CDBG) program and its accomplishments over the past years. In Tigard, the success of the CDBG program is demonstrated in the provision of vitally needed public services to economically, mentally, or physically disadvantaged residents; rehabilitation of homes; construction /renovation of community centers and sheltered workshops; completion of neighborhood improvements including major sewer, drainage and street projects; and reconstruction of city-owned infrastructure such as roads. The observance of National Community Development Week offers Tigard the opportunity to show support for the CDBG program, which continues to face critical cuts in the federal budget and the long-term future of the program remains uncertain. In such conditions, the most effective way to transmit a message to our congressional delegation is to comment on programs that have been of value in upgrading the quality of life for Tigard residents. OTHER ALTERNATIVES n/a COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS n/a DATES OF PREVIOUS COUNCIL CONSIDERATION This is the 38th anniversary of the CDBG program. Attachments proclamation for Community Development Week E � �<,.� 1� `mss 1.''':''' d �i5 Y ;tds d � , ! le .,�� i �. . .j - 4 04. 4 . • A• y.k 7 .:;. 3 .. i„,11.74� �6°,',�,, 4 , ' r 4 , n £ r'•:r g 't� .t" ..r. � . , -- f ,� , 7 v } 5 # , ma c, � , . 7 a; _ t S l µ g, '�, A / iflfillalneam°lmlelSe0O lA,.A " A+ AARAMA.M.SOMMOMMAA AA AM ?.*AMMONS.. AA q•• AAA ""AP ..AASOMMO,,Ana a A............. . fie �' » I ; 7 1 ,4 t ,,.4 : ' _ .4 , /:::;: 1 1 :-. , . _- ' 1 1 : ' "a .. " ' " - A k N, ill' (40,(t .,,,,,h,. ,... I ( , ''"' r 2 ( (4 ) ( / l ( f f ( r( 1 '( ,(2,/i ..-.. : ,,, , , •,, r i Wes =: i y . City of Tigard fir - , / t.:; . , "'3 r: 4; National Community Development Week �z . Ap 8 — 14, 2012 z .. =! WHEREAS, the Community Development Block Grant (CDBG) Program was enacted into `F t 1r law by President Gerald Ford, as the centerpiece of the Housing and Community Development Act of 1974; and yam- r. - :.) ■ - WHEREAS, the CDBG has, as its primary objective the development of viable urban s - " communities, by providing decent housing and a suitable living environment and expanding "'� • ^'! economic opportunities, principally for persons of low and moderate income;" and . - , Ei . € . 1 WHEREAS, the CDBG program has considerable flexibility to allow communities to carry out ; " • da . ' , .1 ;k o activities that are tailored to their unique affordable housing and neighborhood revitalization ,.,' . `' '" needs; and i ' r - , - , WHEREAS, throughout its 38 -year history, the CDBG program has been a partnership : � F ;� among the federal, state and local governments, businesses and the nonprofit sector which 4 ; 1 ,� ; ' ) carry out activities that improve the lives and neighborhoods of low and moderate income • .. g _t"`, families; and `:; .I ''' , WHEREAS, s ince 1979, the City of Tigard has used $3,488,055 in CDBG funds to provide , 1 ;'� k housing rehabilitation; revitalization of community facilities and shelters, and physical `s A k �'-. redevelopment; and f il _ ' WHEREAS, a reduction in funding in recent years has had an impact on the City of Tigard k . t i by eliminating available improvement funding for roads an infrastructure; and •` • y - WHEREAS, the City of Tigard urges Congress to provide increased formula funding for r CDBG in FY 2013 and FY 2014; ' 4 w -` a NOW THEREFORE BE IT RESOLVED THAT I, Craig E. Dirksen, Mayor of the City of C ) y ; �, *, o Tigard, Oregon, do hereby proclaim the week of April 8 -14, 2012 as a , , ,� 4 y „ rfi NATIONAL COMMUNITY DEVELOPMENT WEEK 1. , ' t in Tigard, Oregon and urge all residents to join in recognizing the important role the • T- Community Development Block Grant Program plays in serving our community. L y- � :I ' .aW . •, : ::::::,i,: 1: :: : • ' Dated this day of , 2012. W ` , , IN WITNESS WHEREOF, I have hereunto set m hand and caused the Seal of the ,' s L City of Tigard to be affixed. y ; 4 r !. ;te a, , ' • J 7 f Craig E. Dirksen, Mayor ' � , ` tv; Cit of Tigard C ,, ,,, , At test: , e 1 i e a i < mei - -�.� � �c J D S %1 i s. uf City Recorder .1 1 • �•�\ IOOJ AOW NOJOJWO WOOOOOeOOSAWWWJOOOOOOOOJOOJIJOi JOJdi00JOOJeOWOOWOOOiiiOf ON+ OWOJOOJOOSOOMMOSSAW0 WJWanJJWJJOJJJJJJAJr /74. •, � 7 l I • i,� 4-11 ". 4 . ,7).-f:.,:::. .J 4 ` 1. , le y. T' J 1 t L , \, .. 3 t • ` ' 9 sv f ---- i v T �'u s,v 3 r i �� .0` y +; " i _ ^'�^ �� r 1WC.,, ^+'� f 'r;,� r om` . I I • : " I F , ,• eft+ 1 {`'N , :Y :? N' i ' -. t �7 s.„0.- x % xY , 1 � I: '""''' "k .. �� e AIS -857 3. C. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 5 Minutes Agenda Title: Proclaim April as Arbor Month Prepared For: Joanne Bengtson Submitted By: Joanne Bengtson, City Management Item Type: Receive and File Meeting Type: Proclamation Information ISSUE Should the Mayor proclaim April as Arbor Month? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends the proclamation. KEY FACTS AND INFORMATION SUMMARY ARBOR DAY 2012 is a chance to celebrate our trees! Arbor Day is America's day for honoring trees. Arbor Day is observed nationwide on the last Friday of April. In Oregon the first week in April is Oregon Arbor Week, dedicated to planting, protecting, and appreciating our trees. Tigard usually dedicates the entire month of April to be Arbor Month, with multiple activities and events designed to bring attention to the city's urban forest. The Mayor will celebrate by planting trees with the students of Fowler Middle School on April 4, 2012. OTHER ALTERNATIVES n/a COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS n/a DATES OF PREVIOUS COUNCIL CONSIDERATION The city has issued this proclamation for many years now and our Arbor Day /Week /Month celebrations engender a lot of community support for Tigard's urban forest. Attachments Arbor Month Proclamation i r►s,� 4W s 1`, `r te« t 1 e ,0r........ . r n + �f ,s 4 " �"• , ,- , y . t. , ' .•*`\! , - -, _..,,, , i �!,. ,' i \ w k . I � � - �` .--- - _ •a•s aeaaae.1a.aaeaeeea ASIA s kJ t ' ' ' 0 Illi t f . — itel'ts../ ,... i 1/40S / MO f ()In c;in'a /•Tigard ? tiiti,t s a S _ .L ,0:1 ARBOR MONTH ` -- ' Whereas, In 1872, Arbor Day, a special day set aside for the planting of trees, was ; • first celebrated in Nebraska; and ,,, Whereas, Tigard's urban forest is part of a larger ecology that spans from mountains -'.t z to ocean and is integral to our region's environmental quality; and �y Y .; p Whereas, our urban forest includes a diversity of public and private trees that grace our streets, yards, parks and greenways, provide habitat for wildlife, soften hardscapes, clean the air, protect water resources, and ensure that everyone can • experience natural beauty where we live, work, and recreate; and k Whereas, the City of Tigard recognizes that our urban forest is a necessity and is an ;. 'i integral part of the city's infrastructure; and Whereas, we are committed to providing resources to maintain and enhance the urban forest; and ■ Whereas, people of all ages and backgrounds, including citizens, civic or ; 9 g 9 organizations, 9 '' businesses, and government agencies, have formed partnerships to participate actively in the stewardship and caretaking of Tigard's urban forest. NOW THEREFORE BE IT RESOLVED that I, Craig E. Dirksen, Mayor of the City of Tigard, Oregon, do hereby proclaim the entire month of April 2012 as p; . 0 e • ., r .... .'. ARBOR MONTH ` '_ • rti '` in Tigard, Oregon and encourage people throughout the city to become more 'i ,o, involved with the planting and stewardship of the urban forest throughout the year of #: t : 2012. • _-`.. Dated this day of , 2012 • iv t • IN WITNESS WHEREOF, I have hereunto set my hand and caused the Seal of the - 0x lid ;in, ( ,e City of Tigard to be affixed. Craig E. Dirksen, Mayor ` • 6, City of Tigard Attest: ` � '`'+`` .. ` �;ry R City Recorder '' = ■ rte �:' a 1 \ ;'q e . . o AIS -879 3. D. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 5 Minutes Agenda Title: Proclaim April as Child Abuse Prevention Month Prepared For: Joanne Bengtson Submitted By: Joanne Bengtson, City Management Item Type: Update, Discussion, Direct Staff Meeting Type: Proclamation Information ISSUE Should the Mayor proclaim April as Child Abuse Prevention Month? STAFF RECOMMENDATION / ACTION REQUEST Issue the Proclamation. KEY FACTS AND INFORMATION SUMMARY In order to raise awareness about the tragedy of child deaths related to abuse and neglect, several communities within Washington County have agreed to issue proclamations to bring awareness to Child Abuse Prevention Month. Tigard's children are our most valuable resource, and they need our support to thrive and grow into healthy, productive adults. Every child deserves a nurturing family and a safe environment, free from fear, abuse, and neglect and combating child abuse will take a collaborative and community effort. OTHER ALTERNATIVES COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS DATES OF PREVIOUS COUNCIL CONSIDERATION Mayor Dirksen issued this proclamation in 2011. Attachments Proclaim Child Abuse Prevention Month City of CHILD ABUSE PREVENTION MONTH April 2012 Tigard's children are our most valuable resource, and they need our support to thrive , . and grow into healthy, productive adults. , WHEREAS, Every child deserves a nurturing family and a safe environment, free from y; - fear, abuse and neglect; and ,■ art WHEREAS, Child abuse affects every community and it will take a collaborative and community -wide effort to prevent it; and :: WHEREAS, During National Child Abuse Prevention Month, we state our unwavering , commitment to protecting children and promoting healthy families; and - WHEREAS, By bringing awareness to the Tigard community about child abuse and what each person can do to prevent it, we build a brighter future for all; and Y ' WHEREAS, I encourage all Tigard residents to visit: www.ChildWelfare.dov /Preventing , to learn what they can do to stop child abuse. NOW THEREFORE BE IT RESOLVED THAT I, Mayor Craig Dirksen of the City of �; Tigard, Oregon, do hereby proclaim the month of April 2012 as `< CHILD ABUSE PREVENTION MONTH ' in Tigard, Oregon and urge residents to observe this month by supporting programs and . activities that help prevent child abuse and provide for children's physical, emotional, and .1.7 developmental needs. `r'` Dated this day of , 2012. • >y IN WITNESS WHEREOF, I have hereunto set my hand and caused the Seal of the City Tigard ,4 Cit of Ti and to be affixed. ir.„ ,,,-,,:','' Craig E. Dirksen, Mayor ». l , >,, City of Tigard Y Attest: r: City Recorder fil AIS -837 4. A. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): Consent Item Agenda Title: Approve City Council Meeting Minutes Submitted By: Cathy Wheatley, Administrative Services Item Type: Motion Requested Meeting Type: Consent Agenda Information ISSUE Approve City Council meeting minutes. STAFF RECOMMENDATION / ACTION REQUEST Approve minutes as submitted. KEY FACTS AND INFORMATION SUMMARY Attached council minutes are submitted for City Council approval. (Dates of meetings are listed under "Attachments" below.) OTHER ALTERNATIVES N/A COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS N/A DATES OF PREVIOUS COUNCIL CONSIDERATION N/A Attachments February 14. 2012 City Council Meeting Minutes February 21. 2012 City Council Minutes AIS -845 4. B. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): Consent Item Agenda Title: Authorize the City Manager to Renew the West Nile Virus (WNV) Intergovernmental Agreement (IGA) with Washington County Prepared For: Brian Wheatley Submitted By: Greer Gaston, Public Works Item Type: Motion Requested Meeting Type: Consent Agenda Information ISSUE Shall the council authorize the city manager to renew the WNV IGA with Washington County? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends the IGA be renewed. KEY FACTS AND INFORMATION SUMMARY Summary of the IGA • This IGA will enable Tigard and Washington County to continue to work cooperatively on WNV monitoring and prevention efforts. • The county will oversee the WNV program and furnish the city with mosquito controls free of charge, a cost savings of approximately $8,500. • The city will use in -house staff and equipment to apply the mosquito controls. • The IGA will be in effect until December 2016. However, either party can terminate the agreement with 30 -day's notice. • The attached IGA and/or the attached Statement of Work refer to a 13 -page Mosquito Control Management Practices document and a 134 -page Pesticide Discharge Management Plan. These documents are available upon request. Background The City of Tigard and Washington County Department of Health and Human Services have been working together to implement the West Nile Virus (WNV) response plan since 2003. The plan focuses on education, sampling and treatment. Documented Cases of WNV Since the inception of the response plan, WNV has been documented in two dead crows: one found in Hillsboro in 2006, and one found in Beaverton in 2007. These birds were most likely infected by mosquitoes, the primary carrier of WNV. In rare cases, it is possible for mosquitoes to infect humans. Such infections can result in severe health problems. Oregon has had 73 documented cases of WNV in humans and one reported death. Control of WNV in Catch Basins In urban areas, lumped catch basins provide the perfect breeding ground for the type of mosquitoes that carry WNV. These catch basins are designed with a small holding pool or sump where water collects. The sump serves to filter out silt, but the resulting stagnant water also creates a place for mosquitoes to breed. In these catch basins, the most effective method of controlling mosquitoes is to apply a slow - release insecticide called a larvicide. Larvicide interrupts the mosquito's life cycle and prevents larvae from maturing into adults. Based on past sampling and monitoring data and the effectiveness of the larvicide, Tigard plans to treat approximately 2,400 city and school district sumped catch basins twice a year beginning in late June or early July. OTHER ALTERNATIVES The City Council could choose not to renew this IGA. COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS None DATES OF PREVIOUS COUNCIL CONSIDERATION The council last authorized the renewal of the WNV IGA at its December 16, 2008, meeting. Fiscal Impact Fiscal Information: As part of the agreement, Washington County will continue to supply the larvicide to treat Tigard's sumped catch basins. This represents a cost savings of approximately $8,500 per year. The City will use in -house staff and equipment to perform the work. Attachments WNV IGA WNV IGA Attachment A - Statement of Work AIS -829 4. C. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): Consent Item Agenda Title: Approve an Intergovernmental Agreement (IGA) with Metro to Transfer Trail Easements to the City Prepared For: Kim McMillan Submitted By: Greer Gaston, Public Works Item Type: Motion Requested Meeting Type: Consent Agenda Information ISSUE Shall the council approve an IGA with Metro to transfer trail easements to the city and authorize the city manager to sign the agreement? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends the council approves the IGA. KEY FACTS AND INFORMATION SUMMARY Background The council was briefed on this IGA in study session. The City of Tigard plans to construct a segment of the Fanno Creek Trail from Grant Avenue to Woodard Park. This project is included in the Park System Master Plan adopted by council in 2009 and is listed as a high priority in the Tigard Greenways Trail System Master Plan accepted by council in 2011.This project will be included in the proposed 2012 -2017 Capital Improvement Plan. In 2006, voters passed Metro's natural areas bond measure. Metro used a portion of its bond proceeds to purchase two key easements required to construct this segment of the Fanno Creek Trail. With these easements, the city will have all the property necessary to construct this trail segment. Summary of the IGA • Metro transfers the easements to Tigard in order for Tigard to construct, operate and maintain the Grant Avenue to Woodard Park trail segment. • Tigard assumes sole responsibility for the easements. • Tigard installs on -site signage acknowledging the easements were obtained using Metro's natural areas bond measure proceeds. • Tigard is required to construct the trail segment within 10 years of the easement transfer. If the trail is not constructed, the city must convey the easement back to Metro. Funding Information If the easement is conveyed to Tigard, trail construction is eligible for certain funding opportunities, like Washington County's Major Streets Transportation Improvement Program (MSTIP). Staff has requested this project be added to the Washington County MSTIP list that is currently being developed. If the easements are owned by Metro, the trail project would not qualify for such funding. Park system development charge (SDC) revenue and proceeds from Tigard's $17 million park bond could also be used to fund this project. OTHER ALTERNATIVES The council could decide not to accept the easements; the city would not construct the trail segment. COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS 2012 Tigard City Council Goal No. 1.c. - "Deliver on the promise of the voter - approved park bond by identifying all acquisition opportunities and completing the majority of park land acquisitions and improvements by the end of 2012." This project is included in the Park System Master Plan adopted by council in 2009 and is listed as a high priority in the Tigard Greenways Trail System Master Plan accepted by council in 2011. DATES OF PREVIOUS COUNCIL CONSIDERATION The council was briefed on this agreement in study session. Fiscal Impact Fiscal Information: By entering into the IGA with Metro, the city agrees to construct the trail segment from Grant Avenue to Woodard Park within the next 10 years. The current estimate for construction is $650,000. Up to 60 percent ($390,000) of the project could be funded by park SDCs, with the remaining 40 percent ($260,000) funded through other sources such as the city's park bond proceeds or county MSTIP funds. Attachments INTERGOVERNMENTAL AGREEMENT This Agreement is entered into, by and between Washington County, a political subdivision of the State of Oregon, and WHEREAS ORS 190.010 authorizes the parties to enter into this Agreement for the performance of any or all functions and activities that a party to the Agreement has authority to perform. Now, therefore, the parties agree as follows: 1) The effective date is: 04/01/2012, or upon final signature, whichever is later. The expiration date is: 12/30/2016; unless otherwise amended. 2) The parties agree to the terms and conditions set forth in Attachment A, which is incorporated herein, and describes the responsibilities of the parties, including compensation, if any. 3) Each party shall comply with all applicable federal, state and local laws; and rules and regulations on non - discrimination in employment because of race, color, ancestry, national origin, religion, sex, marital status, age, medical condition or handicap. 4) To the extent applicable, the provisions of ORS 279B.220 through ORS 279B.235 and ORS 279C.500 through 279C.870 are incorporated by this reference as though fully set forth. 5) Each party is an independent contractor with regard to each other party(s) and agrees that the performing party has no control over the work and the manner in which it is performed. No party is an agent or employee of any other. 6) No party or its employees is entitled to participate in a pension plan, insurance, bonus, or similar benefits provided by any other party. 7) This Agreement may be terminated, with or without cause and at any time, by a party by providing (30 if not otherwise marked) days written notice of intent to the other party(s). 8) Modifications to this Agreement are valid only if made in writing and signed by all parties. 9) Subject to the limitations of liability for public bodies set forth in the Oregon Tort Claims Act, ORS 30.260 to 30.300, and the Oregon Constitution, each party agrees to hold harmless, defend, and indemnify each other, including its officers, agents, and employees, against all claims, demands, actions and suits (including all attorney fees and costs) arising from the indemnitor's performance of this Agreement where the loss or claim is attributable to the negligent acts or omissions of that party. 10) Each party shall give the other immediate written notice of any action or suit filed or any claim made against that party that may result in litigation in any way related to this Agreement. PAGE 1 OF 2 - INTERGOVERNMENTAL AGREEMENT Rev. 10/6/05 11) Each party agrees to maintain insurance levels or self - insurance in accordance with ORS 30.282, for the duration of this Agreement at levels necessary to protect against public body liability as specified in ORS 30.270. 12) Each party agrees to comply with all local, state and federal ordinances, statutes, laws and regulations that are applicable to the services provided under this Agreement. 13) This Agreement is expressly subject to the debt limitation of Oregon Counties set forth in Article XI, Section 10 of the Oregon Constitution, and is contingent upon funds being appropriated therefor. 14) This writing is intended both as the final expression of the Agreement between the parties with respect to the included terms and as a complete and exclusive statement of the terms of the Agreement. WHEREAS, all the aforementioned is hereby agreed upon by the parties and executed by the duly authorized signatures below. Jurisdiction Signature Date Printed Name Title Address: WASHINGTON COUNTY: Signature Date Printed Name Title Address: 155 N First Ave Mail Stop # 5 Hillsboro, OR 97124 PAGE 2 OF 2 - INTERGOVERNMENTAL AGREEMENT Rev. 10/6/05 I ATTACHMENT A Statement of Work /Schedule /Payment Terms The County's Responsibilities: 1. The County shall coordinate efforts to meet the goals of the State Health Service's West Nile Virus (WNV) response plan. 2. The County shall coordinate public education related to matters of public health and human behavior related to vector -borne disease throughout Washington County. 3. The County shall work with state and local health, veterinarian, agricultural, and wildlife organizations to survey and track human, equine, and avian cases of WNV. 4. The County shall alert those subject to this Intergovernmental Agreement of confirmed WNV cases. 5. The County shall employ a Mosquito Control Coordinator to design and develop a sampling program and train City staff on mosquito sampling procedures, as needed. 6. The County shall establish a schedule for City staff to submit larval and adult mosquito samples, as needed. The County Mosquito Control Coordinator shall process and track larvae and adult mosquito samples collected by City staff. 7. The County shall provide larvicide product to the City to treat publicly owned sumped catch basins under city control. 8. The County shall maintain a database of known sumped catch basin and aquatic habitats. 9. The County shall maintain a database mapping complaints, surveillance findings and mosquito control activities. 10. The County shall maintain, design, develop and conduct a regional larval and adult mosquito program that will include representative catch basins, storm water facilities, and natural areas within the County throughout the mosquito season (typically March through October). 11. The County shall maintain registration and follow requirements as an operator for the 2300 A Pesticide General Permit through the Oregon Department of Environmental Quality. 12. The County shall establish mosquito management practices for catch basins (Attachment B) 13. The County shall maintain a Pesticide Discharge Management Plan as required for the 2300A Pesticide General Permit 14. The County shall conduct mosquito surveillance, visual assessments, mosquito control measures and efficacy checks throughout the County, as needed 15. The County shall maintain all correspondences relating to agreement CITY RESPONSIBILITIES 1. The City shall utilize and distribute public education materials provided by the County and Clean Water Services (CWS), in order to maintain a consistent regional communication strategy. PAGE 1 - ATTACHMENT A — 1/2012 ATTACHMENT A Statement of Work /Schedule /Payment Terms 2. The City shall actively educate neighborhood associations, community participation organizations, and other citizen groups, and encourage private property source reduction efforts and other personal behaviors that will reduce risk of exposure. 3. The City shall report bird and mosquito complaints that it receives to the County 4. The City shall identify, in cooperation with CWS, locations of storm water facilities and aquatic features that may produce mosquitoes and provide that information to the County to integrate with the County's complaint and surveillance information. 5. The City shall deliver larval and/or adult mosquito samples to the County Mosquito Control Coordinator for processing and tracking on the schedule established by the County, as needed. 6. The City shall allow the County to implement mosquito surveillance and control measures as needed, for sites under the control of the City. 7. The City shall maintain catch basins and storm water facilities to limit the presence of standing water and decaying organic debris (particularly dead cattails and grass clippings). 8. The City shall follow mosquito management practices for catch basins (Attachment B) developed by the County. 9. The City shall provide the County with reports of surveillance and/or pesticide applications, no later than 14 days after actions take place. 10. In the event the City is unable to implement mosquito surveillance and/or control measures in a timely manner, the City will notify the County and request assistance. 11. The City shall maintain pesticide application records in accordance with local, state and federal laws. 12. The City shall apply pesticides for mosquito control in compliance with local, state, and federal laws. 13. The City shall follow the County's Pesticide Discharge Management Plan regarding mosquito control as found in Attachment C and by this reference incorporated herein. 14. The City shall maintain all correspondences relating to agreement. Unless otherwise specified herein, the parties agree that there will be no monetary compensation paid to the other that each shall bear their own costs and that reasonable and beneficial consideration exists to support this agreement. PAGE 2 - ATTACHMENT A — 1/2012 AIS -851 4• D• 1• Business Meeting Meeting Date: 03/27/2012 Length (in minutes): Consent Item Agenda Title: Contract Award - 103rd/McDonald Storm Drain Improvements to HSC, LLC Prepared For: Joseph Barrett Submitted By: Joseph Barrett, Financial and Information Services Item Type: Meeting Type: Local Contract Review Board Information ISSUE Shall the Local Contract Review Board award a contract for the city's 103rd and McDonald Storm Drain Improvements Project to HSC, LLC? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends the Local Contract Review Board award the contract for the 103rd and McDonald Storm Drain Improvements project to HSC, LLC and authorize the city manager to take all necessary steps to execute the contract. KEY FACTS AND INFORMATION SUMMARY The storm line that runs north along 103rd Avenue and west along McDonald Street from 103rd Avenue to 104th Avenue does not have adequate capacity to accommodate the amount of water that needs to flow through it during heavy rainfall. Storm water has been observed flowing out of the catch basin at the 103rd / McDonald intersection. Storm water capacity, condition and pipe cover issues have been observed in the immediate area. These storm water issues lead to significant property damage potential. This purpose of this project is to provide adequate facilities to convey storm water through the area currently served by the existing storm drainage lines in the right of way of McDonald St and 103rd and 104th Avenues. This project is considered a "maintenance project" and is not listed in any master plan. This project is being done to maintain the hydraulic and structural integrity of the existing storm water system. This is project #94024 in the Storm System section of the 2011 -16 Capital Improvement Program. Staff issued an Invitation to Bid for the project on March 1, 2012 and received bids from twelve firms. The bids received were as follows: • HSC, LLC - $123,658 • Stan Anderson Builders - $134,773 • Braun Construction - $137,727 • D &T Excavation - $142,868 • Banzer Construction - $145,523 • Jim Smith Excavating - $146,513 • CG Contractors - $148,685 • Subcom Excavation - $152,350 • GT Excavating - $156,676 • David Roberts Contracting - $158,853 • Dunn Construction - $160,218 • Kerr Contractors - $170,796 Staff reviewed the submittals and found them to be responsible bids. Therefore, in accordance with the city's Public Contracting Rules, staff recommends the contract be awarded to HSC, LLC as the lowest responsible bidder. OTHER ALTERNATIVES The Local Contract Review Board may choose to decline the bids, not award the contract and direct staff to not perform the work. COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS N/A DATES OF PREVIOUS COUNCIL CONSIDERATION This is the first time this issue has come before the Local Contract Review Board. Fiscal Impact Cost: $123,658 Budgeted (yes or no): Yes Where budgeted ?: Stormwater Fund Additional Fiscal Notes: The estimated contract total for this project is $123,658. The Stormwater Fund has $190,500 budgeted in the 2011 -2012 fiscal year for this project. Of the $190,500 project budget, $150,500 is for construction; $15,000 is for design and engineering; and $25,000 is for project and construction management. The contract amount $123,658 within the budgeted amount for construction. Attachments No file(s) attached. AIS -830 5 Business Meeting • Meeting Date: 03/27/2012 Length (in minutes): 10 Minutes Agenda Title: Review 2012 Oregon Legislative Session as its Relates to Tigard's Legislative Priorities Prepared For: Kent Wyatt Submitted By: Kent Wyatt, City Management Item Type: Update, Discussion, Direct Staff Meeting Type: Council Business Meeting - Main Information ISSUE To what extent, does legislation promulgated by the 2012 Oregon Legislature impact Tigard's legislative agenda and City Council goals? STAFF RECOMMENDATION / ACTION REQUEST Review and discuss promulgated legislation and its potential impact on Tigard services. KEY FACTS AND INFORMATION SUMMARY Oregon legislators considered 297 bills during the month -long 2012 legislative session. Lawmakers focused a majority of their time on balancing the budget, improving education, reforming health care and boosting the economy. State Senator Ginny Burdick and State Representative Doherty will be on hand to provide a summary of approved legislation and its impact on Tigard's legislative agenda. OTHER ALTERNATIVES N/A COUNCIL GOALS, POLICIES, APPROVED MASTER PLANS Goal 2. Financial Sustainability Five -Year Goal: Support the legislature to address the fmancial needs of Oregon state and local governments. DATES OF PREVIOUS COUNCIL CONSIDERATION 11.22.12 - Discuss the 2012 Oregon Legislative Session and Its Potential Impact on Tigard LEAGUE OF OREGON CITIES SUPPLEMENTAL PACKET FOR s d 7, :)6/..2 (DATE OF MEETING) A (41(14 Herr) s 2012 LEGISLATIVE SESSION SUMMARY OF BILLS MARCH 2012 1 LEAGUE °_F Oregon CITIES Published by the League of Oregon Cities 2012 OREGON LEGISLATIVE ASSEMBLY OVERVIEW Subsequent to voters approving an amendment to the state constitution requiring annual sessions, the Legislature convened its first -ever "short" (35 -day) session on February 1, 2012. Although the goal established by leadership for adjournment was February 29, the Legislature finally adjourned sine die on March 5, within the 35 -day parameter. Once again legislators faced the daunting task of re- balancing a state budget hard hit by an underperforming economy, and tax revenue expectations that were ratcheted downward. The budget balancing challenge did not prove to be since difficult as revenue shortfalls were manageable and bi- partisan agreements were in place early in the session. Despite expectations, the session was neither light on policy- making nor relatively free of partisan rancor. By the close of the session, numerous policy bills were considered and tempers ran short. Following the adoption of rules limiting the number of bills introduced prior to the session, 301 bills were introduced — less than 10 percent of the number of bills introduced in prior "long" sessions. The League tracked and was engaged in 135 (nearly half) of these bills —a significantly larger percentage than expected. Not only were several significant policy debates undertaken— health care, education and land use, to name a few —but the session closed with a flurry of partisan bickering and communications breakdowns not seen in the Capitol recently. Inevitably, the intensity of a short, policy - filled session contributed to that outcome. The following pages provide a detailed summary of the legislation tracked by the League during the 2012 session. Click on the bill number to view the How to Read the Bill Summaries full text of the bill. SB 1529: New Classification of Property Effective Date: July 1, 2012* *Varying Effective Dates R Effective Date - indicates the date on which the bill becomes effective *Varying... - indicates that a particular bill has multiple portions that take effect on different dates 2012 Legislative Session Summary of Bills I 1 w - COMMUNITY DEVELOPMENT Economic Development ECONOMIC DEVELOPMENT - PASSED BILLS HB 4040: Oregon Investment Act Effective Date: March 2, 2012 HB 4040 creates the Oregon Growth Board, a new oversight board composed of the state treasurer, four legislators and two gubernatorial appointees. The board is charged with managing the funds in the Oregon Growth Account, as well as suggesting policy ideas to leverage additional private capital investments for economic development. The bill was supported by the League, the Association of Oregon Counties and the Oregon Economic Development Association. HB 4093: Enterprise and Electronic Commerce Zone Expansion Bill Effective Date: June 4, 2012 As passed, HB 4093: • Creates five new urban and three new rural enterprise zones; • Enlarges the size of rural enterprise zones from 12 to 15 miles; • Creates modest new reporting requirements for the new zones; and • Modifies the eligibility requirements for municipalities that had previously terminated an enterprise zone agreement. The original bill would have also created 10 new e- commerce zones, expanded the size of urban enterprise zones to 15 miles, and given municipalities the option of extending the additional exemption from property taxes in urban zones from two to three years. This bill was supported by the League, the Association of Oregon Counties and the Oregon Economic Development Association. "v$..rA,. . 'E'. _.2 ". vPaGir<, he [""f= ".Y' -.r, D.. .. '.i'i ECONOMIC DEVELOPMENT - FAILED BILLS HB 4028: Lottery- Backed Bond Bill HB 4028 would have allocated an additional $10 million in lottery- backed bonds for both the Special Public Works Fund for water and sewer projects and the ConnectOregon IV program. The bill would also have allocated $9.6 million to community college capital construction projects. HB 4028 was approved by the House Transportation and Economic Development Committee and referred to the Joint Ways and Means Committee, where no further action was taken. An effort was made to attach this bill via a minority report to SB 1544, but that motion failed on the House floor. 21 2012 Legislative Session Summary of Bills HB 4055: Nonmonetary Assistance for Businesses HB 4055 would have required state agencies and local governments to provide nonmonetary assistance to those: • Conducting business in Oregon or planning to relocate a business to Oregon; and • That commit in writing to hire a minimum number of new employees who are residents of Oregon. This bill received a hearing in front of the House Business and Labor Committee, but no further action was taken. HB 4107: Local Business Recruitment and Expansion Incentive HB 4107 would have awarded 50 percent of income taxes to local jurisdictions (60 percent to primary recruiters, 40 percent to other local taxing districts) who recruit new businesses or encourage business expansion. The income would be allocated locally for five years. In order to be eligible to receive income tax revenues, recruiting jurisdictions would have needed to register with the Oregon Business Development Department and receive a certificate by demonstrating that efforts were made by local officials that "substantially influenced the business entity to locate and conduct business in the jurisdiction." This bill did not receive a hearing. Environment and Natural Resources ENVIRONMENT AND NATURAL RESOURCES - PASSED BILLS SB 1512: Mercury in Lighting Effective Date: January 1, 2013 SB 1512 makes legislative findings regarding mercury and sets specific limits on the amount of mercury contained in lighting products (CFLs— compact fluorescents and fluorescents) sold in Oregon. The bill requires the Oregon Department of Environmental Quality to report to the Legislative Assembly on or after January 1, 2014. SB 1533: Green Energy Technology in Public Buildings Effective Date: January 1, 2013 SB 1533 changes and expands the definition of "green energy technology" to include references to geothermal electricity generation or direct use of geothermal energy for space or water heating. The definition of "green energy technology" in SB 1533 applies to a public contracting requirement to include green energy technology in an amount equal to 1.5 percent of the total contract price for the construction, reconstruction or renovation of a public building if the costs of the construction, reconstruction or renovation exceeds 50 percent of the value of the public building. 2012 Legislative Session Summary of Bills 13 ENVIRONMENT AND NATURAL RESOURCES - FAILED BILL HB 4166: Use of Forest Products in Energy Conservation Projects HB 4166 would have allowed the Oregon Department of Forestry to require applicants seeking tax credit certification for an energy conservation project to demonstrate whether efficiency standards chosen by the applicant would meet certification standards under specified forest product stewardship systems. The product stewardship systems identified in the bill were the Sustainable Forestry Initiative, the Forest Stewardship Council and the American Tree Farm System. The bill passed out of the House Energy, Environment and Water Committee; it was subsequently referred to the House Revenue Committee, but no further action was taken. Fish and Wildlife FISH AND WILDLIFE - PASSED BILL HB 4006: Fish and Wildlife Management Effective Date: Requires governor's signature HB 4006 requires the Oregon Department of Fish and Wildlife Commission and the Oregon Department of Fish and Wildlife to consult with private landowners, affected cities, counties and local service districts before determining if a species should be listed as threatened or endangered. The bill requires the commission to work with private landowners and affected cities, counties and local services districts to mitigate adverse impacts to local economies when the commission adds a species to the threatened or endangered list. HB 4006 does not specify the manner in which the commission will engage the affected parties and only applies to the state's listings and not to federal listings. HB 4006 does not change how and when a species will be added to the threatened or endangered list, and determinations for listing a species will continue to be based on documented and verifiable science. Housing HOUSING - PASSED BILL SB 1535: Affordable Housing Covenants Effective Date: February 27, 2012 SB 1535 authorizes affordable housing covenants, which are contained within a recorded master form instrument, to be incorporated by reference during future transactions and property transfers. The bill was promulgated in order to reduce recording errors that have inadvertently overlooked the recording of affordable housing covenants at transfer. 41 2012 Legislative Session Summary of Bills • Land Use LAND USE - PASSED BILLS SB 1544: Rezone Authorization for Industrial Lands within the City of Redmond Effective Date: Requires governor's signature SB 1544 allows the city of Redmond to re -zone a 465 -acre tract of land within its urban growth boundary to industrial use, without determining whether the change will have a significant effect on existing or planned transportation facilities or tolling the transportation planning rule (TPR). The bill additionally directs the city and the Oregon Department of Transportation to enter into an agreement to address transportation impacts. SB 1544 was subject to a minority report brought forward by Representatives Dave Hunt (D- Gladstone) and Jefferson Smith (D- Portland) on the House floor that failed on a party line vote (30 -30). The minority report would have added additional lottery bond authorization to the base fill for the following purposes: $10 million for ConnectOregon IV transportation projects; $10 million for infrastructure projects for the Special Public Works Fund; and $10 million for community college capital construction workforce development projects. SB 1582: Review of Wetlands Determinations Effective Date: Requires governor's signature SB 1582 authorizes a person to request an independent review of a wetlands determination made by the Oregon Department of State Lands that wetlands are present on a parcel owned by the person. The review must be conducted by a panel of three individuals experienced in wetland identification and delineation. One reviewer must be selected by the agency, one by the requestor, and one by the two selected reviewers. SB 1582 also changes the expiration of a wetland delineation determination from 10 years to five years and requires the landowner to conduct a review of the parcel five years after the determination was made. If conditions have changed, the bill requires the landowner to submit a new wetland delineation report; if conditions have not changed, the agency's final determination may be extended by five years. HB 4026: Court of Appeals Judges Effective Date: January 1, 2013 HB 4026 increases the number of judges on the Oregon Court of Appeals from 10 to 13. Under the bill, these three new positions become operative October 1, 2013. HB 4089: Lane County Annexation Option Effective Date: Requires governor's signature HB 4089 authorizes a narrow window of time (prior to January 1, 2013) for non - contiguous property owners to annex to a city within Lane County. The bill was brought forward by the city of Eugene to allow land owners in the Santa Clara and River Road districts to voluntarily annex to the city. 2012 Legislative Session Summary of Bills 1 5 y Historically, Lane County annexations were under the jurisdiction of the Lane County Boundary Commission (which allowed non- contiguous annexations), but property owners that had not yet annexed lost the ability to do so when the commission was dissolved by legislative action in 2007. SB 5701: Budget Rebalance Bill Effective Date: Requires governor's signature Supporting an anticipated directive from the governor for the Oregon Department of Land Conservation and Development (DLCD) to pilot a regional land use planning project, $200,000 from the state's general fund was added to the agency's budget to support rulemaking. Additionally, $350,000 was appropriated to DLCD for distribution to Jackson, Josephine and Douglas counties through intergovernmental agreements. The counties would use these funds to complete technical studies and mapping in preparation of a petition to the Oregon Land Conservation and Development Commission for rulemaking to consider amendments to definitions of agricultural and forest lands. A budget note was also added to DLCD's budget that requires the agency to report to the Legislature regarding local compliance with statutes regarding urban service agreements. The budget note will require DLCD to inventory compliance with this statute for cities larger than 10,000 population and suggest ways to achieve compliance: "The Department of Land Conservation and Development shall prepare a report that identifies which counties and cities with a population greater than 10,000 people have completed or not completed the following: 1. The requirement of urban service agreements contained in ORS 195. 2. Approved facilities plans. The report shall include the date the county and city's comprehensive plan was approved by the Land Conservation and Development Commission. The report shall include options to bring counties and cities into compliance with the ORS and shall be presented to the Joint Committee on Ways and Means prior to the 2013 legislative session." LAND USE - FAILED BILLS HB 4090: Urban Services HB 4090 would have: • Provided an owner of property located entirely within an urban growth boundary of a metropolitan service district new authority to force the provision of sanitary sewer and water services to their property. The bill authorized the property owner to compel services even if the property was located in an established service area identified in an urban services agreement, or if the established service provider was unable or unwilling to provide the services; and • Allowed a property owner whose property was not located within an established service area identified in an urban service district to choose a provider and force delivery of services for sanitary sewer and water if the provider had adequate capacity to provide the services and could maintain adequate service levels in the service area. HB 4090 authorized the service provider to charge the owner all costs associated with connecting the property to the service facilities and for delivery of sanitary sewer and water to the owner's property. The 61 2012 Legislative Session Summary of Bills a bill also authorized the owner to petition the county to initiate a process for review and modification of the urban service agreement to address the service needs of the owner's property in the event that direct negotiations between the property owner and the service provider failed. Under FIB 4090, when an urban service was provided to the property, a city or district that provided the services could require the property owner to waive remonstrance, agree to annexation or petition for annexation. The bill authorized the governing body of a district providing sanitary sewer and water services to declare an annexation approved by resolution or ordinance and without submitting the annexation plan to the electors. In addition, this bill allowed a city to impose and collect system development charges from the property owner when sanitary sewer and water services were provided to a property. The House Agriculture and Natural Resources Committee amended the bill to include provisions that would have: • Diminished city authority to determine how many special districts provide the same service inside existing city limits; and • Limited the opportunity for city residents to vote when a special district provides services inside city limits. As a result of the amendment, cities could not remove a portion of a special district from inside city limits unless the city provided the service. Additionally, voting requirements for "city" elections that are required when a special district provides services inside city limits would be limited to only the area that would receive service from the district. After approval by the House Agriculture and Natural Resources Committee, HB 4090 passed the House floor on a 31-29 vote, but no further action was taken by the Senate. HB 4095: "Agricultural Land" and "Forestland" Definitions HB 4095 would have allowed Jackson, Josephine or Douglas County to petition the Oregon Land Conservation and Development Commission to re- define the terms "agricultural land" and "forestland" for land use planning purposes in those counties. The bill would also have appropriated $350,000 to the petitioning counties and $250,000 for state agency costs associated with the work. This bill passed out of the House Judiciary Committee; it was subsequently referred to the Ways and Means Committee but no further action was taken. 2012 Legislative Session Summary of Bills 17 ENERGY ENERGY - PASSED BILL HB 4079: Technical Corrections for Energy - Related Tax and Excise Credits *Varying Effective Dates HB 4079 makes one policy change and several technical changes to the statutes governing energy- related tax credits. The technical changes in the bill are necessary to allow the Oregon Department of Revenue to complete rulemaking and implementation of HB 3672 from the 2011 session, which modified and extended a number of important tax credit programs, most notably the Business Energy Tax Credit (BETC). The technical changes in HB 4079 are as follows: • Creates a tax credit auction deadline to ensure the auctions held for tax credits occur no later than April 15 in the year following the allowable tax credit. In addition, the bill provides clarifying language to ensure that once a tax credit is sold and a certificate has been issued, the Oregon Department of Energy (ODOE) may not revoke the certificate. • Provides clarification that the Legislature has the authority in any fiscal year to reduce or eliminate the amount of the tax credits allowed for renewable energy development contributions. Applies the same authority granted to the Legislature to grants submitted after July 1, 2011 and to tax years beginning on or after January 1, 2011. • Modifies the number and type of jobs data needed from applicants seeking a grant from the ODOE for the installation or construction of a renewable energy production system. • Specifies that the tax credit allowed in each of the first two tax years in which the credit is claimed shall be 10 percent of the certified cost of the project but may not exceed the tax liability of the taxpayer. The credit allowed in each of the succeeding three years shall be 5 percent of the certified cost and may not exceed the tax liability of the taxpayer. • Creates provisions to allow the director of the ODOE to determine the percentage of the amount of tax credits allocated between alternative fuel vehicle infrastructure projects and transit services when an excess of applications are submitted. The policy change in HB 4079 allows one credit to be claimed (one time only) for each unit of biomass that is identified under ORS 315.141. The bill made this change to allow ODOE to develop a precertification process on products defined as biomass. The process is needed to enable ODOE to track the amounts of tax credits to be certified under these provisions. HB 4079 also requires information about biomass and energy - related tax credits to be posted on the Oregon transparency website that is maintained by the Oregon Department of Administrative Services. 8 1 2012 Legislative Session Summary of Bills FINANCE AND TAXATION Financial Administration FINANCIAL ADMINISTRATION - PASSED BILLS HB 4175: County Road Funds to Pay for Law Enforcement Patrols Effective Date: March 5, 2012 HB 4175 enables five additional counties to borrow county road funds to pay for the patrolling of roads by county law enforcement officials. Currently, only Douglas and Lane counties have statutory permission to borrow county road funds for this purpose. This bill expands that authority to Coos, Curry, Josephine, Klamath and Linn counties. HB 4175, HB 4176 and HB 4177 were passed in order to assist timber- dependent counties that are not currently receiving federal timber payments. HB 4176: Fiscal Assistance Board for Distressed Counties Effective Date: March 5, 2012 HB 4176 creates a fiscal assistance board for distressed counties that request the designation. The board is empowered to recommend and take actions necessary to resolve the fiscal issues facing a county, including reallocating county funds, cutting services, issuing bonds and referring measures to the voters of the county. The board can only make recommendations and take actions supported by a majority vote of the county governing body and a majority vote of the board. The board will be composed of: • All county commissioners from a participating county; • The county sheriff; and • Five members appointed by the governor. The state treasurer, secretary of state, director of the Oregon Department of Revenue and two representatives from the Legislature will serve as nonvoting members of the board. One -half of the costs of administering the board must be paid by the county. HB 4177: County Assessment Function Funding Assistance Account Modification Effective Date: March 5, 2012 HB 4177 authorizes a reduction of up to 10 percent of the amount a county expends on taxation and assessment functions while still receiving funds from the County Assessment Function Funding Assistance Account (CAFFAA) if: • The county received more than 10 percent of its prior year revenue from federal timber payments; • The reduction in county expenditures does not exceed 15 percent of the expenditures certified by the Oregon Department of Revenue (DOR) the year prior; and 2012 Legislative Session Summary of Bills 1 9 • The reduction in county expenditures does not result in a failure by the county to meet DOR's property taxation standards. The criteria in the bill will enable approximately a dozen counties to participate in the expense reduction. The CAFFAA is funded with a portion of the interest paid for delinquent property tax collections and a percentage of certain county assessor processing fees. FINANCIAL ADMINISTRATION - FAILED BILL FIB 4139: Community Banking FIB 4139 would have required public officials to deposit public funds with a community bank if the cost for the community bank to provide banking services, when multiplied by a factor of 0.9, is lower than the cost for a depository that is not a community bank to provide the same banking services. This bill did not receive a hearing. Local Taxation PROPERTY TAXES - PASSED BILLS SB 1529: New Classification of Property Effective Date: July 1, 2012* *Varying Effective Dates SB 1529 requires the creation of a separate class of real property for machinery and equipment and the combining of investor grade industrial properties with commercial properties when calculating the changed property ratio (CPR) for new construction. The Oregon Department of Revenue (DOR) will continue to appraise heavy industrial property, which will remain in its own class. The bill also allows liens for delinquent property taxes to be placed on machinery and equipment. Several years ago, the DOR issued a rule requiring county assessors to assess investor grade industrial properties with heavy industrial properties when calculating the CPR. When new property comes on the market, its property tax liability is determined by the CPR —the ratio of assessed value to real market value of other property in the county in that class. However, investor grade industrial properties are often very similar to commercial properties, and the CPR for commercial property is considerably lower than that of industrial property in most counties, making the classification important for determining property tax liability. SB 1529 attempts to remedy the issue; it is the product of a workgroup consisting of commercial real estate investors, county assessors, the DOR and others. 101 2012 Legislative Session Summary of Bills w SB 1532: Exempting Data Centers in Enterprise Zones from Central Assessment Effective Date: July 1, 2012* *Varying Effective Dates SB 1532 exempts data centers located in enterprise zones from central assessment for the duration of the enterprise zone agreement if the terms of the agreement are fulfilled. The bill also exempts from central assessment any additional property owned by a company operating a data center in an enterprise zone if: • The property does not amount to more than 5 percent of the cost of construction and installation of all real and tangible property owned by the company; and • The facility is directly related to the construction, installation or operation of the data center. HB 4041: Property Taxation Exemption for Indian Tribal Lands Effective Date: June 4, 2012 FIB 4041 exempts from taxation property owned by American Indian tribes that is used for "government services," such as tribal administration, health facilities, education, transportation, fire and police, low - income housing, cemeteries, utility services provided to an American Indian reservation, and other services that do not generate income. PROPERTY TAXES - FAILED BILLS HB 4066: Redefining Data Transmission Services in Central Assessment Statute HB 4066 would have exempted from central assessment data transmission services provided through a contractual arrangement with a person that transmits the data through tangible property under the ownership or control of that person. This bill received a hearing before the House Revenue Committee, but no further action was taken. TRANSIENT LODGING TAXES - FAILED BILLS SB 1519: Online Travel Companies and Transient Lodging Taxes SB 1519, introduced at the behest of the Oregon Restaurant and Lodging Association and supported by the League, would have required online travel companies to pay the state and local transient lodging tax on the sale price of the rooms they sell, rather than the discounted price at which they purchase the rooms. This bill received a hearing before the Senate Finance and Revenue Committee, but no further action was taken. 2012 Legislative Session Summary of Bills 111 GENERAL GOVERNMENT Courts iiiMMEMENNMEM COURTS - PASSED BILLS HB 4167: Court Fine Changes *Varying Effective Dates HB 4167 made technical changes to the implementation of HB 2712 from 2011, such as clarifying that offenses committed prior to January 1, 2012 would be subject to the fine assessments and system that existed in 2011. Of particular interest to cities, HB 4167 also clarified that fines derived from locally imposed parking ordinances are not subject to the requirement that the first $60 of a criminally- imposed fine be remitted to the state. During the 2011 legislative session, HB 2712 changed the court fine system by giving judges additional discretion in imposing sentences, folding defendant -paid assessments on violation fines into to fine amounts, and requiring all courts to forward the first $60 of a fine to the state. The $60 that is remitted to the state supports programs such as: the Oregon Department of Public Safety Standards and Training, the law enforcement medical liability account (which pays for medical expenses for persons injured during the course of an arrest), crime victims assistance and the state general fund. HB 4169: Diversion Agreements *Varying Effective Dates FEB 4169 imposes a $100 fee on defendants when entering into a diversion agreement with a district attorney. Under the bill, a municipal prosecutor is also considered a district attorney. A local court is allowed to keep $35 of the diversion fee and the remainder must be remitted to the state. HB 4169 also increases the cost of entering into a DUII diversion from $386 to $490 and requires a local court to send $200 of the DUII diversion fee to the state. A diversion agreement is a prosecutorial tool that is typically utilized when a young person with little or no criminal history commits a minor offense. The defendant is required to complete a series of tasks such as pay restitution or a fine, perform community service or attend classes in exchange for having the offense removed from their criminal record. COURTS - FAILED BILLS HB 4025: Court Fine Corrections HB 4025 would have brought changes made by the 2011 Legislature to the court fine system closer to a state of revenue neutrality for cities. In 2011, HB 2712 changed fine amounts and the amount of discretion judges had in handing down sentences. It also replaced the added assessments defendants paid, such as the unitary assessment, with a requirement that the first $60 of a fine be paid to the state. Municipal courts have projected a decline in 121 2012 Legislative Session Summary of Bills fine revenues as a result of these changes even though the stated intent of HB 2712 was to not have a fiscal impact on local courts. HB 4025 would have reduced the fiscal impact to cities caused by HB 2712 as follows: • Reducing the assessment paid to the state on violations from $60 to $45. HB 2712 replaced a number of assessments that were added to citations with a single $60 payment to the state that is distributed to the state general fund, the law enforcement medical liability account, victims assistance, court security, and the Oregon Department of Public Safety Standards and Training. The $60 assessment has first priority, meaning that it is paid before distributions are made to the city court or to the citing officer's agency. Dropping the assessment by $15 would have significantly reduced the fiscal burden that HB 2712 placed on local courts. • Placing payments to the city and the state as equal priorities. The $60 payment to the state is paid before all other beneficiaries of the fine are satisfied. Therefore, if a defendant only makes a partial payment on their fine or enters into a payment plan, the state may be the only recipient of funds from the fine. HB 4025 would have required local governments and the state to split the amount of the fine that is actually paid. HB 4025 was approved by the House Judiciary Committee and referred to the Joint Ways and Means Committee, where no further action was taken. Legislative members allowed the bill to die, vetting concerns about the short length of time since the passage of HB 2712 for exact impacts to be known. The League and the Association of Oregon Counties were mandated to supply data to the legislative fiscal officer prior to each odd - numbered year of the Legislature. Public Contracting PUBLIC CONTRACTING - FAILED BILLS HB 4115: Public Improvement Fee HB 4115 would have placed a fee (one -tenth of 1 percent of the contract price) on public improvement contracts issued under ORS 279C in order to fund audits of contracts issued using alternative bid methods. In recent years members of the Legislature and some building interests have become concerned over the use of bid methods that depart from the least -cost model normally required. When undertaking a complex building project, cities and other contracting agencies, , are allowed to use alternative bid methods, provided they go through a public process in making the awards. Contracting agencies opposed this legislation as an added cost for improvement projects. This bill received a hearing before the House General Government and Consumer Protection Committee, but no further action was taken. HB 4144: Least Cost Alterations HB 4144 would have required contracting agencies to make certain additions and subtractions when calculating a least cost bid on a public contract in order to encourage the use of local products and higher wages and benefits for employees. The League opposed this legislation because of concerns regarding compliance and exposure to legal liability. This bill received a hearing before the House Business and Labor Committee, but no further action was taken. 2012 Legislative Session Summary of Bills 113 Public Safety PUBLIC SAFETY- PASSED BILL SB 1559: 9 -1 -1 Payment Efficiencies Effective Date: January 1, 2013 SB 1559 requires the Oregon Office of Emergency Management (OEM) to make payments on behalf of cities and counties directly to public safety answering points (PSAP). The bill does not change the amount cities receive in 9 -1 -1 taxes and does not alter existing funding formulas. Most cities already have their 9 -1 -1 distribution sent directly to their PSAP; cities will still be required to include their 9 -1 -1 receipts in their budget. The bill was intended to provide administrative efficiencies for OEM and PSAPs. 14 1 2012 Legislative Session Summary of Bills TRANSPORTATION TRANSPORTATION - PASSED BILLS SB 1543: Transportation Projects *Varying Effective Dates SB 1543 requires the Oregon Transportation Commission to report annually (by November 1) to the Legislature on funding available for transportation projects identified and funded under Section 64 of the 2009 Jobs and Transportation Act (HB 2001). It further re- allocates unspent monies from two specified projects (the Interstate 5 /Interstate 205 Interchange and the U.S. Highway 26 Interchange from 185 to Cornell Road) to two other specified projects (I -84 Interchange at 257 Avenue and the U.S. Highway 26 Interchange at Shute Road). SB 1543 also allocates $5 million to Multnomah County during the remainder of the biennium for completion of a project on State Highway 43 at the Sellwood Bridge Interchange as well as $9.5 million for project development and construction of Cornelius Pass Road. The funding for these projects will come from increased "convenience fees" charged by the Oregon Department of Motor Vehicles for access to driver records (see SB 1591 below). Additional language in the bill relating to maritime operations in two Oregon ports was not material to city interests. SB 1546: Hazardous Tree Removal Effective Date: January 1, 2013 SB 1546 exempts the Oregon Department of Transportation (ODOT) from the need to obtain a local permit prior to removing any hazardous trees along a state highway. In a letter that ODOT placed into the record at the request of the League during the Senate Business, Transportation and Economic Development Committee's deliberations, the department clarified that the intent of the legislation is to: • Address hazardous trees located predominately in rural areas (rarely within city limits); • Provide a city with notice of action taken to remove an unsafe tree; and • Assure compliance with all local tree ordinances following tree removal, such as requirements for replanting. SB 1556: Buy America Preference *Varying Effective Dates SB 1556 allows, but does not mandate, a contracting agency (such as a transit agency) to give preference to a bidder who proposes to exceed the federal Buy America requirements applicable to federally funded transit projects. 2012 Legislative Session Summary of Bills 115 SB 1591: Roadside Rest Areas Effective Date: Requires governor's signature SB 1591 makes changes to the organizational structure of the Oregon Travel Experience (OTE), formerly known as the Oregon Travel Information Council. In addition, the bill transfers management responsibility (but not ownership) of 26 rest areas, primarily along the Interstate system, from the Oregon Department of Transportation to OTE. SB 1591 also allocates new revenues derived from an increase in the "convenience fee" charged by the Oregon Department of Motor Vehicles for access to driving records. As a result, OTE's budget for rest area management will increase from $3 million per year to $6.55 million. Of particular importance to cities, HB 1591 repeals that portion of the Jobs and Transportation Act —HB 2001 (2009) —that makes a $3 million off -the -top distribution of new State Highway Funds, derived from the increase in the state gas tax and other fees, to the OTE for rest area management. Those funds now will revert to the 50 -30 -20 state, county and city distribution formula, netting cities an additional $600,000 annually for population -based distribution to city road budgets. TRANSPORTATION - FAILED BILLS HB 4020: ConnectOregon Lottery Bonding HB 4020 would have increased the amount of lottery- backed bonds issued to fund loans and grants to ConnectOregon multimodal transportation program by $10 million. The 2011 Legislature approved $40 million in authority, and HB 4020 would have increased it to $50 million. This bill was amended into HB 4028. HB 4029: Transportation Project Reporting HB 4029 would have required the Oregon Transportation Commission to submit annual reports to the Legislature regarding the status of projects funded under Section 64 of the Jobs and Transportation Act — HB 2001 (2009) —by November 1. Further, HB 4029 mandated that this report contain the amount of funding available for reallocation from project savings, as well as a prioritized list of ongoing projects. Although approved by the House, the provisions of this legislation were amended into SB 1543. HB 4031: Outdoor Advertising Signs HB 4031 would have required the owner of a billboard to offer the sign for purchase by the property owner of the land on which the sign is located before removing the sign. Additionally, if such a transaction was completed, the sign owner would receive relocation credits usable for other signage. It was determined that this legislation would not trigger local sign ordinances even involving those which are considered non - conforming. The bill received a hearing by the House Transportation and Economic Development Committee, but no further action was taken. HB 4129: Private Maintenance of State Highways HB 4129 would have repealed a portion of the 2009 Jobs and Transportation Act —HB 2001 (2009) — requiring the Oregon Department of Transportation (ODOT), on an experimental basis, to contract with a private company for the maintenance of a segment of state highway. The segment that ODOT chose was 16 2012 Legislative Session Summary of Bills a 26 -mile segment of OR 219 from Scholls, north of Newberg, to about one mile west of I -5 near Woodburn. Despite concerns that private contractor costs exceeded ODOT's historical maintenance costs, the department persuaded the House Transportation and Economic Development Committee that the firm's work was of good quality and that the contract should be allowed to run its course (six years) before deciding on the cost/benefit of contracting for private maintenance. The bill was held in committee. 2012 Legislative Session Summary of Bills 117 WATER WATER MANAGEMENT - FAILED BILLS SB 1513: Split Season Water Rights Leasing Program SB 1513 would have allowed the continuation of the split season water rights leasing program beyond its January 2, 2014 sunset. Current authority exists to use split season leasing of water rights and allows the lease of all or a portion of an existing water right for use as an existing in- stream water right. SB 1513 stipulated that split use leasing must occur during the same water or calendar year and could not be concurrent. The term of the lease was not allowed to go beyond five water or calendar years. The bill would have required the holder of the water rights measure to report to the Oregon Water Resources Department the terms of the lease allowing the split lease of water. SB 1513 passed out of the Senate Environment and Natural Resources Committee; it was subsequently referred to the Senate Rules Committee, but no further action was taken. HB 4101: Columbia River Basin Water Development HB 4101 would have created a new state policy to enhance the available supply of water from the Columbia River Basin sources for consumptive and in- stream uses to promote economic welfare for the state. The bill made legislative declarations about the benefits of the agricultural industry as it relates to job creation and economic activity. HB 4101 would have also directed the Oregon Water Resources Department (WRD) to aggressively pursue the development of new water supplies from the Columbia River Basin sources, including increasing the amount of new water available for agriculture by a minimum of 100,000 acre feet above 2011 levels. The WRD was directed to complete the 100,000 acre feet increase by December 31, 2018 and report annually to the Legislature on their progress. The bill passed out of the House Energy, Environment and Water Committee without recommendation; it was subsequently referred to the House Rules Committee, but no further action was taken. 181 2012 Legislative Session Summary of Bills AIS -856 6. Business Meeting Meeting Date: 03/27/2012 Length (in minutes): 10 Minutes Agenda Title: Consider a Resolution Granting Exemption from Property Taxes under Tigard Municipal Code Section 3.50 for Five Non - Profit Low - Income Housing Projects Prepared For: Liz Lutz Submitted By: Liz Lutz, Financial and Information Services Item Type: Resolution Meeting Type: Council Business Meeting - Main Information ISSUE Shall five low- income housing projects owned and operated by Community Partners for Affordable Housing (CPAH) and one project owned by Hawthorne Urban Development LLC be exempted from City of Tigard property taxation for 2012? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends approval of this resolution. KEY FACTS AND INFORMATION SUMMARY Tigard Municipal Code 3.50 allows certain organizations providing low- income housing to be exempted from Tigard property taxation upon application by March 1 of each year and a demonstration of compliance with certain criteria listed in the Code. Community Partners for Affordable Housing owns and operates Greenburg Oaks, located at 11875 SW 91st Avenue in Tigard. They also own Village at Washington Square at 11157-11163 SW Hall Blvd in Tigard, the Knoll at Tigard, 12291 SW Knoll Drive, and a single family house located at 9330 SW Tangela Court in Tigard. Hawthorne Urban Development LLC owns and operates Hawthorne Villa at 7705 SW Pfaffle St. These projects are operated as low- income housing and meet all criteria listed in the Tigard Municipal Code. Community Partners for Affordable Housing submitted four applications for exemption from 2012 property taxes on February 28, 2012, and Hawthorne Urban Development submitted their application on February 27, 2012, which is within the March 1 deadline. These applications were reviewed by staff in the city's Community Development Department and staff determined that the requested tax exemptions are consistent with the applicable Tigard Municipal Code and also the adopted City Housing Policy. The attached resolution gives consent from the City of Tigard for this tax abatement. Under State law, Community Partners for Affordable Housing must receive similar approval from jurisdictions accounting for 51% (or more) of the total property taxes to be levied on these properties. This organization will also make application to the other taxing units. OTHER ALTERNATIVES Do not approve this tax exemption. COUNCIL OR CCDA GOALS, POLICIES, MASTER PLANS NA DATES OF PREVIOUS CONSIDERATION NA Fiscal Impact Cost: $42,447 Budgeted (yes or no): Yes Where Budgeted (department /program): General Fund Additional Fiscal Notes: The cost of $42,447 is the amount of Property Tax that Tigard will not collect next year by granting the exemption. Attached to the MS is a table showing the properties and their estimated values and the impact to Tigard. Attachments Resolution CD Letter - Hawthorne Villa Cd Letter -CPAH Application - Hawthorne Villa Application - Greenburg Oaks Application - Tangela Home Application -Knoll @ Tigard Application - Village at Washington Square Table- Fiscal Impact a c h rn.e f- February 3, 2012 Hawthorne Urban Development LLC and Accessible Living 8532 SW St. Helens Dr. Wilsonville, Oregon 97070 RE: Hawthorne Villa The City of Tigard offers a property tax abatement program for owners or leaseholders of property used to provide affordable housing within the City. Tigard's program, which conforms to State law, is set out in Tigard Municipal Code (TMC) 3.50. I have attached a copy of this section of the code for your information. TMC 3.50 contains the criteria for qualification for the tax abatement, the application process and the application contents. Applications for tax abatement are due by March 1. If you wish to apply for this abatement, your application should be sent to my attention. Please let me know if you have any questions or need any additional information. My phone number is 503 - 718 -2406. My e -mail address is Toby @tigard - or.gov. Sincerely, Toby LaFrance Finance & Information Services Director cc: Marty Wine, City Manager ( chmor) --1 _3 February 3, 2012 Linn Brillman Community Partners for Affordable Housing PO Box 23206 Tigard, Oregon 97281 RE: Greenburg Oaks Village at Washington Square Tangela Single Family Rental Home The Knoll at Tigard Low - Income Housing Property Tax Exemption Dear Ms. Brillman: The City of Tigard offers a property tax abatement program for owners or leaseholders of property used to provide affordable housing within the City. Tigard's program, which conforms to State law, is set out in Tigard Municipal Code (TMC) 3.50. I have attached a copy of this section of the code for your information. TMC 3.50 contains the criteria for qualification for the tax abatement, the application process and the application contents. Applications for tax abatement are due by March 1. If you wish to apply for this abatement, your application should be sent to my attention. Please let me know if you have any questions or need any additional information. My phone number is 503 - 718 -2406. My e-mail address is Toby @tigard - or.gov. Sincerely, Toby LaFrance Finance & Information Services Director cc: Marty Wine, City Manager P one: 503 -682 -7788 /TTY 711 ae y c asca d e 8532 SW Fax: 503-682-5656 St. Helens Drive MANAGEMENT, INC. Suite 201 Wilumville, Oregon 97070 Real Estate Management Services www.cascade- management.com February 29, 2012 Toby LaFrance, Finance Director City of Tigard 13125 SW Hall Blvd. Tigard, OR 97223 SENT VIA EMAIL ELECTRONIC PDF to: lizbetht'catigard- or.Rov Dear Toby LaFrance: Please find the attached application for tax abatement for Hawthorne Villa Apartments, located at 7705 SW Pfaffle St. in Tigard. Enclosed in this packet is the application itself and attachments including ownership and lease documents, a MOU to enter into these agreements, Oregon Housing and Community Services Project Restrictions and evidence of the 501(c)3 designation for the non - profit partner Accessible Living, Inc. Please let me know if you have any questions. Sincerely, ( ( Dave Bachman President and CEO Consultant and Management Agent to Hawthorne Villa Cc: Liz Lutz at lizbeth@tigard- or.gov — City of Tigard Marissa Daniels Cascade Management Inc. does not discriminate on the basis of handicapped status in © the admission or access lo, or treatment or employment in, its programs and activities The Compliance Officer is designated as the 504 Compliance Coordinator. ACCESSIBLE LIVING INC. 6160 SW Main Avenue Beaverton Oregon, 97008 City of Tigard Application for Tax Abatement February 29, 2012 Hawthorne Villa Apartments Address here: A. Property Description B. Projects Charitable Purpose C. Certification of Residents Income Levels D. How Tax Exemption Will Benefit Residents E. Tax Exempt Status F. Verification of Information G. Attachments (List) A. Property Description Hawthorne Villa Apartments, (Tax account # # is R282429, is located at 7705 SW Pfaffle St, Tigard OR 97223 just off of Pacific Highway in Tigard Oregon. The site sits on 4.76 acres and provides 119 units of affordable housing for low- income residents of Tigard. The property includes 8 apartment buildings and a house that contains the manager's unit and office. The property has 30 studios, 84 - 1 bedroom and 5 - 2 bedroom units. The project was purchased by Hawthorne Urban Development LLC in September of 2011 for the purpose of maintaining affordability of Hawthorne Villa, Improving its' accommodations to a sustainable and thriving community and re- establishing resident service activities through a non - profit partnership. The project has received private financing totaling $2.45 million. An additional $1,008,300 of additional financing is secured to complete project renovations. This is based on the Owner's commitment to deliver quality affordable housing in the City of Tigard. Over $445,000 of renovations are complete to the project exterior with another $563,300 planned for project interiors over the next 12 months. No tenant relocation is necessary for planned improvements. Hawthorne Exterior Improvements (Completed) — Total $445,000 Siding repaired all buildings Painting all buildings All Buildings Re- Roofed Asphalt Paving Parking Lot Landscape Improvements for entire site Deck /Railing replacements and improvements New Fencing Renovated Existing Office Building Hawthorne Interior Improvements Units - 118 Fully renovate 5 interior units (Completed) Interior Water Meter @ $750 per units $ 88,500 Replace appliances $ 118,000 Interior painting @ $600 per units $ 70,800 Replace interior carpet and vinyl @1200 $ 141,600 Replace interior in exterior door $1200 per unit $ 94,400 Contingency $ 50,000 The project is close to transportation and retail. Employment proximity is also excellent to many entry level service jobs, including many stores, banks or restaurants along Pacific Highway in Tigard. Many of the existing residents at Hawthorne Villa work within walking distance of the property. Legal Description: See Attached as part of Oregon Affordable Housing Commitment Documents GENERAL INFORMATION Name: Hawthorne Villa Apartments Property Type: Multi- Family (Garden /Low Rise) LIHTC Apartments Address: 7705 SW Pfaffle Street Tigard, Oregon 97223 Assessor's Parcel #: R282429 Census Tract No.: 306.00 Site Description: USABLE AREA EXCESS AREA SURPLUS AREA GROSS AREA SF ACRES SF ACRES SF ACRES SF ACRES 207,346 4.76 0 0.00 0 0.00 207,346 4.76 Zoning: Medium - Density Residential (R -12) Improvement Description: No. of Total Buildings: 9 (8 one and two -story apartment buildings and 1 single - family home that is used as a leasing office and manager's unit). Number of Units: 118 Amenities: Laundry rooms, storage units, and leasing office. Several landscaped courtyards on the property. The property has 30 studios, 84 -1 bedroom and 5 - 2 bedroom units. B. Project's Charitable Purpose Accessible Living Inc.'s mission is to provide low- cost housing which meets the specialized needs of seniors and disabled persons and their families and to promote the public's awareness of the plight of disabled persons to obtain low - cost accessible housing. ALI's involvement in Hawthorne Villa will be to provide support to residents in obtaining and retaining affordable housing through the delivery of resident services. ALI will work to identify the needs of Hawthorne Villa residents and work with the residents and property management to support residents in connecting with community programs and services to address those needs, including access to emergency services such as local food programs, utility assistance, eviction prevention and services for individuals and families struggling with addiction, mental health issues and other disabilities. ALI will seek to develop partnerships with organizations such as the Oregon Food Bank, Luke- Dorf, Lifeworks NW, Community Action, Hope Spring, and other community organizations to provide resource and referral. Where appropriate ALI will develop MOU's and release of information with residents, property management and community partners to better coordinate services and housing and to avoid tenant eviction. ALI will partner with Housing Independence, a non - profit service provider for individuals with special needs including seniors, individuals with physical and developmental disabilities, veterans and other underserved special needs populations that may need support in obtaining and retaining housing. The project has developed a current budget and commitment of $30,000 per year to sustain service delivery to residents. The services budget and delivery will be the sole and direct responsibility of ALI. C. Certification of Resident Income Levels Resident income levels are verified upon application. Hawthorne Villa currently has an extended use agreement with Oregon Housing and Community Services that will restrict the property be exclusively used for low income rentals until January 1, 2025. These covenants require that all households have earnings at or below 60% of the area median income. Currently the property income demographics demonstrate the need for continued affordability and a service commitment with the average income at 34% of AMI (see attached Household Demographics Report). We certify that all apartments in this property are currently rented to and will remain affordable to households earning at or below 60% of the area median income until January 1, 2025. D. How tax exemption will benefit residents 100% of the property tax exemption is a direct subsidy that benefits residents. Every dollar in tax reduction is passed on in scheduled rents and in the delivery of resident services programs. Without this funding Hawthorne Villa would not be able to retain its current affordability (below the 60% restriction). The tax exemption also allows for a $30,000 per year services budget to offer much needed services that supports residents in obtaining and retaining their housing, including connecting them with emergency services for eviction prevention. The remainder of the tax exemption savings will be applied to maintain rent levels below 60% of area median income. It can be argued that using property tax revenues to subsidize well managed affordable housing unit's results in a net savings of public resources. Fewer and less- severe police calls, healthier residents and stably housed social service consumers, all provide a direct reduction in the demand for government funded services. E. Tax exempt status Hawthorne Urban Development is the Owner (Landlord) who has entered into a lease agreement with Hawthorne Villa General Partnership (Tenant). ALI is a General Partner to Hawthorne Villa General Partnership who is responsible for day to day operation of the project. Hawthorne Villa General Partnership has a leasehold interest in Hawthorne Villa through the lease (attached). F. Verification of Information I hereby certify that the information for this tax abatement application is accurate and complete to the best of my knowledge. Cascade Property Management performs the day to day management of the property and is responsible for certifying income levels of each resident for compliance with program guidelines. Karen Voiss, Executive Director Date Accessible Living, Inc. General Partner of Tenant (Hawthorne Villa GP) ./ ..� • 20 CL--- Saj Jivanjee, tuber Hawthorn: rban Development LLC Owner G. Attachments OHCS Low Income Housing Commitments and Assignment Household Demographics Lease to Hawthorne Villa General Partnership Hawthorne Villa General Partnership Agreement Accessible Living Inc. 501c(3) evidence ATTACHMENT OREGON HOUSING AND COMMUNITY SERVICES COMMITMENTS AND ASSIGNMENT TO OWNER • Return t9; C py . Housing and Community Services Attn: Multifamily Housing Section 725 Summer St. NE, Suite B Salem, Oregon 47301 -1266 • ,SPACP.AgPYIi 71ii1 L1N FOR RRI COED15KS USL HOUSING AND COMMUNITY SERVICES DEPARTMENT STATE OF OREGON CONSENT TO ASSIGNMENT, TRANSFER, ASSUMPTION AND MODIFICATION AGREEMENT LOW-INCOME HOUSING TAX CREDIT THIS CONSENT TO ASSIGNMENT, TRANSFER, ASSUMPTION AND MODIFICATION AGREEMENT (this "Agreement ") is entered into and made this day of September, 2011, among: PARTIES: Recipient HAWTHORNE VILLA LIMITED PARTNERSHIP, an Oregon limited partnership New Obligor: HAWTHORNE URBAN DEVELOPMENT LLC, an Oregon limited liability company Grantor (herein "Department "): STATE OF OREGON, acting by and through its Housing and Community Services Department RECITALS A. Recipient is the owner of the real property described in Exhibit A and of any improvements thereon and of any personal property related thereto (collectively hereinafter, the "Project" or "Property "). Exhibit A is attached hereto and incorporated herein by reference. Recipient received a low - income housing tax credit allocation by the Department with respect to the development and operation of the Project in a final amount not to exceed One Hundred Eighty -One Thousand One hundred Forty-Three ($181,143) (the "Tax Credit"). The documents giving effect to the Tax Credit (the "Tax Credit.Documents ") are more fully described below. B. Recipient has or will convey its interest in the Property to HAWTHORNE URBAN DEVELOPMENT LLC (the "New Obligor or Owner") pursuant to that certain „_•__ Deed dated as of September 2011 (the "Deed "). • C. Recipient and New Obligor are willing to document the transfer of the Project and New Obligor's assumption of Recipient's interests and obligations with respect to the Property arid with respect to the Tax Credits from the Department and to commit to operate the Project in conformance with the Tax Credit Documents and this Agreement. The Department is willing to consent to the transfer in ownership of the CONSENT TO TRANSFER - LIFrrC Hawthorne Vftlaa Apartments Portland, OR • Page 1 of I2 OHCS #5000 • • Property and to allow the assumption of the Tax Credit Documents consistent with the terms and conditions of this Agreement. D. The Tax Credits are evidenced by a Reservation and Extended Use Agreement, Project No. 96046606, executed between the Recipient and the Department and dated on or about May 24, 1996, (the "Tax Credit Agreement "). Certain performance obligations with respect to the Project arising under the Tax Credits were made in a Declaration of Land Use Restrictive Covenants, executed by the Recipient in favor of the Department on or. about, April 8, 1997 and recorded April 9, 1997, as Instrument No. 97032421, Records of Washington County, Oregon (the "Declaration "). The Tax Credit Agreement and the Declaration are collectively referred to herein as the "Tax Credit Documents." AGREEMENT NOW, THEREFORE, for good and sufficient consideration, including the agreements and covenants herein contained, Recipient and New Obligor hereby agree with the Department as follows; 1. Incorporation of Recitals and Documents. The terms of the foregoing Recitals, Exhibit A and the Tax Credit Documents are incorporated herein by reference. 2. Conveyance to New Qblingr; Assiax?inent, Recipient has conveyed or is conveying its interests in the Property to New Obligor in the manner described in this Agreement, in the Deed and in other purchase documents. Recipient hereby assigns his interests in the Tax Credit Documents and in the Property to New Obligor. 3. Assumption, New Obligor hereby unconditionally assumes the interests of Recipient in the Project and the interests and obligations of Recipient under the Tax Credit Documents as modified herein, New Obligor also hereby unconditionally agrees, covenants and warrants that it shall perform all obligations arising under this Agreement or otherwise owed to the Department under the Tax Credit Documents. The Department shall have the right to resort to, proceed against, or otherwise exercise its rights with respect to any and all remedies, restrictive covenants or equitable servitudes with respect to the Property or the New Obligor and its assigns or successors in interest, whether such rights arise under the Tax Credit Documents, this Agreement, or are otherwise now or subsequently available at law. Now Obligor will execute and deliver to the Department such other documents reasonably requested by the Department to effect, exercise or maintain its rights under the Tax Credit Documents, this Agreement or otherwise with respect to the Project. 4. Consent. The Department hereby consents to and approves of the described transfer of the Property to New Obligor. The Department also consents to and approves of New Obligor's assumption of all the rights of Recipient and all obligations owed to the Department under the Tax Credit Documents, as further modified herein, without affecting in any manner the restrictions and requirements of such Tax Credit Documents with respect to any further .or additional transfer of ownership of the Project. This consent and approval by the Department is conditioned, however, upon prior execution and recording of subordination agreements acceptable to the Department by any and all current lien holders with respect to the Property. 5. • Limited Release. Recipient is hereby released by the Department from any obligations arising prospectively under the Tax Credit Documents except that Recipient is not released from any liability of any CONSENT TO TRANSFER • I.,AHHTC Hawthorne erne Villas Apartments Portland, OR Page 2 of 12 OHCS 0000 • nature. arising under the Tax Credit Documents before the date of this Agreement, Recipient's remaining Iiability,shall be joint and several with New Obligor and shall not be diminished or affected in any manner by New Obligor's assumption of the obligations and liabilities of Recipient under the Tax Credit Documents. 6. Modification of Tax Credit Doerr nl.. ente. 6.1 The Declaration is hereby amended to include the following: COVENANTS TO RUN WITH THE LAND; EQUITABLE SERVITUDES. • (a) The term "Owner" means the owner of the Project or Property and shall be construed to include the terms• "Recipient" and "New Obligor" or "Owner" as appropriate. (b) The Owner intends, declares, and covenants, on behalf of itself and all future owners and operators of the Project or Property during the term of this agreement, that the covenants, reservations, restrictions and equitable servitudes set forth in this agreement regulating and restricting the use, occupancy and transfer of the Project (1) shall be and are, until January 1, 2025, covenants running with the real property of the Project and do further constitute equitable servitudes with respect to the real property in favor of the Department and any tenant of this Project or Property, do encumber the Project until January 1, 2025, are binding upon the Owner's successors in title and all subsequent owners and operators of the Project, (2) are not merely personal covenants of the Owner, (3) shall bind the Owner and the Owner's successors and assigns until January 1, 2025, and (4) shall inure to the benefit of the Department and any tenant of the Project. The Owner hereby agrees that any and all Oregon state law requirements for the provisions of this agreement to constitute covenants running with the land or real property or to constitute equitable servitudes with respect to the real property in favor of the Department and any tenant of this Project or Property, shall be deemed satisfied in full. No transfer of any interest in the Project or Property shall be valid without the prior written consent of the Department, Until January 1, 2025, each and every contract, deed or other instrument hereafter executed conveying the Project or a portion thereof shall expressly provide that such conveyance is subject CO this agreement, provided, however, the covenants contained herein shall survive and be effective regardless of whether such contract, deed, or other instrument hereafter executed conveying the Project or portion thereof provides that such conveyance is subject to this agreement. • (c) The Owner covenants that the consent of any recorded prior lien holder on the Project or Property is not required in connection with recording this agreement, or if required, such consent has been or will be obtained by the Owner. BURDEN AND BENEFIT. The Owner hereby declares its understanding and intent that the burdens of the covenants, reservations, restrictions and equitable servitudes set forth herein touch and concern the land of the Project or Property in that the Owner's legal interest in the Project or Property is rendered less valuable thereby. The Owner hereby further declares its understanding and intent that the benefits of such covenants, reservations, restrictions and equitable servitudes touch and concern the land by enhancing and increasing the enjoyment and use of the Project or Property by tenants therein, the intended beneficiaries of such covenants, reservations, restrictions or equitable servitudes, and by furthering the public purposes for which tax credit assistance was provided by the Department for the Project or Property. CONSENT TO TRANSFER - L1rjTC Hawthorne Villas Apartments Portland, OR Page 3or12 OHCS #5000 6.3 The Declaration is further amended by replacing Section 9 thereof with the following language: • SECTION 9 - FUTURE TRANSFER OF OWNERSHIP, QUALIFIED CONTRACT This Section (choose one of the below) Will apply to the Project described herein: _X Will not apply to the Project described herein: • a) For the purpose of ensuring the Project will continue to be used as affordable housing, Owner hereby agrees to transfer the Project to a "qualified nonprofit organization" [as defined in IRC. 42(h)(5)(C)J acceptable to the Owner, Department and the mortgage lender after the end of the calendar year falling 15 years after the issuance of the Forms 8609 for the Project, or as soon thereafter as the transfer can be consummated, on the following terms: I) The consideration for the transfer shall be in accordance with the formula in !RC Section 42(b)(6)(F)in an amount equal to the sum of (a) the principal amount of outstanding indebtedness secured by the Project, (b) the adjusted investor equity in the building, and (c) other capital contributions not reflected in the amounts described above, reduced by cash distributions from (or available for distribution from) the project. 2) Owner shall be under no obligation to transfer the project to a qualified organization in the event that no acceptable qualified organization agrees in writing to accept title and assume Owner's obligations before the end of the calendar year falling 15 years after the issuance of the Forms 8609 for the project. 3) In making the determination of the transferee qualified nonprofit organization, first right of refusal shall be given to N/A . b) Owner further covenants to use its reasonable best efforts to assure, at the time of the transfer; (i) the Project is generating sufficient cash flow to service Project debt and pay Project operating expenses; and (ii) the Project is in reasonably good physical condition (for a multi- family apartment project of its age and quality). c) No provision of this section shall prevent any lender loaning funds secured by the Project from Ibrecloslug on the property or otherwise exercising its full rights as a lender, In the event of a bonafide foreclosure or Transfer of the Project to a lender by a deed in lieu of foreclosure, the foreclosing lender • shall take the project free and clear of any obligation to transfer the Project to a nonprofit organization or to operate the project as affordable housing except as provided for in IRC Section 42. Department or its assigns shall have the right to cure any default to avoid foreclosure and assure transfer as stated above, 7. Goycminj..aw: Venue; Consent to Jurisdiction. Recipient, New Obligor and each person now or at any time hereafter liable, whether primarily or secondarily, hereby agree that this Agreement and each of the Tax Credit Documents shall be governed by and construed in accordance with the laws of the State of Oregon without regard to principles of conflicts of law. Any claim, action, suit or other proceeding (collectively "Claim ") arising out of or related in any way to this Agreement shall be brought and conducted solely and CONSENT TO TRANSFER - I.UBTC Hawthorne Villas Apartments • Portland, OR Pact 4 urn OHCS 1/5000 • exclusively within an appropriate Circuit Court for the State of Oregon; provided, however, if a Claim must be brought in a federal forum., then it shall be brought and conducted solely and exclusively within the United States District Court for the District of Oregon. The Recipient and the New Obligor hereby consent to the in persona jurisdiction of said courts. In no event .shall this Section be construed as a waiver by the State of Oregon of any form of defense or immunity, whether it is sovereign immunity, governmental immunity, immunity based on the Eleventh Amendment to the Constitution of the United States or otherwise, from any Claim or from the jurisdiction of any court. 8. Notice to the Department. New Obligor shall promptly notify the Department in writing of (i) any material adverse change in the financial condition of. New Obligor, or (ii) any suit, governmental action, claim or other proceeding pending or threatened in writing which may have a material adverse effect on New Obligor or their business operations, condition (financial or otherwise) or involving the Project. New Obligor shall promptly provide to the Department on request such credit reports, current financial statements and information, prepared by certified public accountant and certified by New Obligor, and other documents and information pertaining to the financial condition and obligations of New Obligor, in reasonable detail and certified where appropriate, as the Department may reasonably require from time to time, including a detailed statement of income and expenditures (including debt service obligations) and supporting schedules, and updated financial statements. 9. Further Documentation and Assurance. New Obligor shall execute upon request of the Department such additional instruments and provide such further assurances as the Department may consider reasonably desirable or necessary to evidence or carry out the parties' intent and agreement under this Agreement or to complete, perfect, continue and preserve the obligations, restrictive covenants and equitable servitudes created under the Tax Credit Documents and/or this Agreement. New Obligor shall be responsible for all costs incurred in this transaction, including the cost of obtaining a tide insurance endorsement acceptable to the Department, if requested, insuring that the restrictive covenants and equitable servitudes arising under the Tax Credit Documents and this Agreement continue as valid encumbrances, in their original priority, against the Property and are not impaired by execution of this Agreement. 10 General provisions. 10.1 ). epreseniations of New Obligor. New Obligor hereby ratifies, affirms, reaffirms, acknowledges, confirms and agrees that: (i) the Tax Credit Documents (as modified by this Agreement) represent the legal, valid, binding and enforceable obligations of New Obligor; (ii) there are no existing claims, defenses, personal or otherwise, or right of set -off whatsoever available to New Obligor with respect to any of such Tax Credit Documents; and (iii) no event has occurred and no condition exists which would constitute a default under such Tax Credit Documents or this Agreement, either with or without notice or lapse of time, or both. 10.2 Survival; Ratification. Except as specifically modified pursuant to this Agreement, all the terms and provisions of the Tax Credit Documents remain in full force and effect. As modified by this Agreement, the Tax Credit Documents are approved and hereby ratified and reaffirmed. 10.3 No Relipquiphment of Covenants. This Agreement shall in no way act as a release or relinquishment of the restrictive covenants, equitable servitudes and encumbrances (collectively called the "Covenants ") recorded with respect to the Property protecting the Department's ability to enforce operation of the Project consistent COT SENT TO TMNSN'F,R -Linn n Hawthorne villas Apartments Portland, OR Page 5 at 12 %ICS #5000 • with the terms of the Tax Credit Documents except as expressly released or modified in this Agreement. The Covenants, as modified, are hereby ratified, and confirmed in all respects. 10,4 Full Fprce and Effect. This Agreement, and the Tax Credit Documents are in full force and effect and nothing contained in this Agreement shall be construed as modifying such docunienis, except as specifically provided pursuant to this Agreement. 103 I?efind Terms. Capitalized terms shall have the defined meanings provided in this Agreement or in the Tax Credit Documents. 10.6 Seve;ability. A determination that any term or provision of this Agreement is invalid or otherwise not enforceable shall not affect the validity of the remaining terms and provisions of this Agreement which shall remain in full force and effect, 10.7 Time of die Essence. Time is of the essence in the performance of any and all obligations under this Agreement. 10.8 Afkrugaez. In the event a lawsuit is instituted regarding this Agreement, the prevailing party in any dispute arising under this Agreement shall, to the extent permitted by law, be entitled to recover from the other its reasonable attorney fees and all costs and disbursements incurred at trial and on appeal. Notwithstanding any other provision in this Agreement or incorporated documents, reasonable fees shall not exceed the rate charged the Department by its attorneys. 10.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute but one agreement, Any party may execute this Agreement by signing any such counterpart. [The balance of this page is intentionally left blank! • • • CONSENT TO TRAiNSPER - tdHTC Hawthorne villas Apartomato • Portland, OR • Page 6 of 12 ones 45000 IN WITNESS WHEREOF, this instrument has been duly executed as of the date and year first above written. DEPARTM +NT: T • State o a regon, acting by and through its Ii I' USING A 1 COMMUNITY SERVICES DEPARTMENT 13y: David s . Summers, Manager Multifamily Housing Section STATE OF OREGON ) : as County of Marion ) The foregoing instrument was acknowledged before me this f, day of September, 2011, by David W. Summers, Manager, Multifamily Housing Section, Housing and Community Services Department, on behalf of the Department. OFFICIAL SEAL P I SUSAN ELAINE LEY � k NOTARY Dual icoRE( BAI QN NOTARY PUBLIC FOR ORE es COMMISSION NO.441023 Carrunission Expires: MY COMMIES EXPIRES SEPT. 08,'2018 M p I (Tile balance of this page is intentionally left blank) CONSENT TO TRANSFER - LIRTC Hawthorne Villas Apartments Portland, OR Pagc7o112 OPICS 115000 RECIPIENT: HAWTHORNE VILLA LIMITED PARTNERSHIP, an Oregon limited partnership By: Hawthorne Villa GP, Inc., an Oregon corporation By: Ashile Johnson, ember STATE OF,OREGON ) County of Wain ) The foregoing instrument was acknowledged before me this x" day of September, 2011, by Ashile Johnson, Member, general partner of Hawthorne Villa Limited Partnership, on behalf of said limited partnership of Hawthorne Villa GP, Inc. an Oregon general partnership. p , • OPFl NOTARY PUBLIC FOR M a RYs.MAY ;PUBUGORGON My Commission Expires: • . i � 1 � OOMt�!ON NO. az41 s5 ley COl1R111sI;SON OtP JAN. 2, 2Al2 [The balance of this page Is intensionally left blank) • CONSENT TO TRANSFER • LIHTC Hawthorne VBlaa Apartments Portland, OR • ' 8 of 12 OfICS #5000 N EW OBLIGOR: HAWTHORNE URBAN DEVELOPMENT LLC, an Oregon limited liability company • I3y: Sttj .I•iv eirl e IP— STATE OF OREGON ) ss County of Wa ittgrer liviomak The foregoing instrument was acknowledged before me this + o of September, 201 1, by Saj Jivanjee, Member of Hawthorne Urban Development LLC;, on behalf of said limited liability company. O SEAL. GREGORY S. BRAY • T u b NOTARYPUBLIGoNEGON NOTARY UBLI ). OREGON COMMISSION NO.424165 .,. -- — MY COMMISSION MIRES 2, 2012 ! My Commission Expires: t•iz • NEW OBLIGOR: HAWTHORNE URBAN DEVELOPMENT LLC, an Oregon limited liability company • 13y: Richard Krueger, Member 4 STATE OF OREGON ) : ss County of Washington ) rho NtiaN+.k ►K The foregoing instrument was acknowledged before me this 1 6 6 - day of September, 2011, by Richard Krueger, Member of Hawthorne Urban Development LLC, on behalf of said limited liability company. OFFICIAL SAL � x w ' pi s GREGORY S. BRAY NOTARY PUBIC ;o UKKEcc)N ' NOTARY PUBLIC.014EGON COMMISSION NO. 424166 My Commission Expires: • /-1 '' - MIYCOMMISSION MIRES JAN. 2, 2012 • balance of this page is intentionally left blank! CONSENT TO TRANSFER • LIRTC frawtl orno vistas Apartment Portland, OR Nit 9 or i7 OHCS #5000 • EXHIBIT A Real properly in the County of Washington, State of Oregon, described as follows: PARCEL !: A part of the George Richardson Donation Land Claim in (he Northeast quarter of the Southwest quarter of Section 36, Township 1 South; Range 'I West of the Willamolle Meridian, In the City 'of Tigard, County of Washington and Stale of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situatod in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1201.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed in Deed Book 279, Page 648; thence South 89 East, 85,0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner of said tract and true point of beginning of tract herein described; thence South 89'49' East, 25.0 feet; thence North 0 ° 11' East parallel with the East line of that tract described In deed to Leonard E.. Cason, et al, recorded January 16, 1968 In Book 677, Page 139, Washington County Records, 173,66 feet; thence South 88 °17' East, 96 feet to the East line of said Cason tract; thence South 0 °11' West along the East tine of said Cason tract, 316.0 feet to the Southeast corner thereof; thence North 8B°17' West along the South line of said Cason tract, 121.6 feet to the Southeast corner of that tract conveyed in Deed Book 279. Page 648; thence North 0 °11' East along the East line of that tract conveyed in Deed Book 279. Page 648, 141.34 feet, more Or less td the true point of beginning, ell situated In Washington County, Oregon.' PARCEL U: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of'figard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Wiiiamotte Meridian; thence South 09 °00' East, 1887.60 fee! to a point in the Northerly boundary . line of said Donation Land Claim; thence South 0 °11' West, 120/.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed to Deed Book 279, Page 648, and the true point of beginning herein described; thence South 89 °49' East, 110,0 feet to a point; thence North 0 °11' East, parallel with the East line of that tract described in deed to Leonard E. Cason, et el, recorded January 16, 1968 in Book 677, Page 139, Washington County Records, 173,66 feet to a point; thence North 88 °37' West, 110,0 feet to a point on the West fine of said Cason tract; thence South 0'11' West along said West line, 173.66 feet to the true point of beginning. PARCEL A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 38, Township 1 South, Range 1 West of the Willamette. Meridian, in the City of Tigard, County of Washington and Slate of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated In Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary tine of said Donation Land Claim; thence South 0 °11' West, 1204.0 feet to an iron pipe, said iron pipe marking the Northwest oorner that tract conveyed in Deed Book 279, Page 646; thence South 89 6 49' East, 85,0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner thereof; thence South 89 °49' East, 25.0 feet; thence North 0 0 11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Washington County Records, 173.66 feet; thence South 88 °17' East, 51.0 feet to the true point of beginning of the herein described premises; thence continuing South 88°17' East, 46.0 feet to a point on the East line et said Cason tract; thence North 0 °11' East along said East line, 90.0 feet; thence North 88 °17' West, 46.0 feet; thence South 0 °11' West, 90.0 feet to the true point of beginning. CONSENT TO TRANSFER - LifiYn Hawthorne Villas Apartments Portland, OR Pacc 10 of 11 OHCS ff5000 • PARCEL IV; • A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 38, Township 1 South, Ranged West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donauon'Land Claim, situated In Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89'00' East, 1867.80 feet to a point In the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West. 1030.34 feet to a point on the West line of that tract described In deed to Leonard E. Cason, at al, recorded January 16, 1968 in Book 677, Page 139, Records of Washington County. being the Westerly Northwest corner of that tract described In Mortgage recorded October 29, 1968 In Book 722, Page . 520, Records of Washington County and the true point of beginning of the herein described premises; thence South 88' 17' Esst, 181.6 feel; thence North 0 °11' East, 90.0 feel; thence South 88 °17' East, 45.0 feet to a point on the East line of said Cason tract; thence North 0 East along said East line, 171.34 feet to a point; thence North 88 °17' Weal, 66.00 feet to a point; thence South 0 °11' West, 75.0 feel to a point; thence North 88 °17' West, 141.6 feet to a point on the West line of said Cason tract; thence South 0'11' West along said West line, 186,34 ,feet to the true point of beginning. PARCEL V: - A pad of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claire, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point In the Northerly boundary Ilne of sald Donation Land Claim; thence South 0 °11' West, 844.0 feet to a point on the West One of that tract described in deed to Leonard Cason, et el, recorded January 16, 1968 in Book 877, Page 139, Records of Washington County, being the,Westeriy Northwest corner of the first tract described in Mortgage recorded February 4, 4989 in Book 732, Page 68, Records of Washington County and the true point of beginning of the herein described property: thence South 08 ° 17' East, 141.6 feet to a point; thence North 0 °11' East, 75.0 feet foe point; thence South 68 °17' East, 66,0 feet to a point on the East tine of said Cason tract; thence North 0 °11' East along said East line, 113.66 feel to a point; thence North 80 ° 17' ' West, 206 feet to a point on the West line of said Cason tract; thence South 0'11' West along said West line, 190 feet to the true point of beginning. PARCEL VI: • A part of the George Richardson Donation Land Claim In the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and Slate of Oregon, described as follows: BEGINNING al the Northwest corner of the George Richardson Donation Land Claim, situated In Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 ° 00' East, 1887.80 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0'11' West, 654,0 feet to a point on the West line of that tract described in deed to Leonard E. Cason, et el, recorded January 16, 1968 in Book 677, Page 139, Records of Washington County, being the Northwest corner of the Brat tract described in Mortgage recorded in Book 745, Page 285, Records of • Washington County and the true point of beginning of the herein described property; thence South 88 °17' East, 206 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East lino, 186.0 feet to a point; thence North 88'17' East, 206 feet to a point on the West line at said Cason tract; thence South 0 °11 West along said West line, 186,0 feet to the true point of beginning. PARCEL VII: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Wilmette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated In Section 36, Township 1 South, Range i West, Willamette Meridian; thence South 89 ° 00' East, 1887.60 feel to a point in the Northerly boundary CONSENT TO TRANSFER • r rrrc Hawthorne Villas Apartments Portland, OR Page Hot 11 OHCS 0000 line of said Donation Land Claim; thence South 0 9 11' West, 290 feet to a point, said point being the Southwest confer of a tract conveyed to Oscar Slitter and Grace Sidler by deed recorded November 28, 1911 in Deed Book 90, Page 45, and the irue point of beginning; thence South 0 ° 11' West, 178 feet to a point on the West line of (hat tract described in a deed to Leonard E, Cason, at al, recorded January 16, 1 968 in Book 677, Page 139, Records of Washington County, being the Northwest corner of the first tract described in Mortgage recorded May 19, 1971 in Book 818, Page 167, Records of Washington County; thence South 88 °1 East, 206 feet to a point on the East tine of said Cason tract; thence North 0 ° 11' East along said East tirre, 178 feet to the South line of saki Smiler tract; thence North 89' West along the West line of said Sidler tract, 206,0 feet to the true point of beginning. /The balance of this page is intentionally left blank/ CONSENT TO TRANSFER • Lir9TC Hawthorne Villas Apartments Portland, OR Page 12 of I E OHCS #5000 • .REOORDING,REQUESTED BY = D UN RECORDED, MAIL fO:' Oregon Housing and Community • 4 Services Department v 1600 State Street laletu, Oregon 97310 Attn: Komi P. Kalevor SPACE ABOVE FOR RECORDER'S USE OREGON HOUSING AND COMMUNITY SERVICES DEPARTMENT LOW- INCOME HOUSING TAX CREDIT DECLARATION OF LAND USE RESTRICTIVE COVENANTS THIS ECLARATION OF LAND USE RESTRICTIVE COVENANTS, (this "Declaration "), dated as of ri - ---- -- ,1997, by IIABELEattamALIMIThapAutwasELE, and its successors and assigns the "Owner ") is given as a condition precedent to the allocation of low-income housing credits by the Oregon Housing and Community Services Department, a governmental of the State of Oregon, together with any successor to its rights, duties, and obligations, (the "Department"). ). *(includes 117 tax credit units and WITNESSETH: • two ommon —area managers' units) 3EREAS, the Owner is or shall be the owner of a(n) 1 unit /rent housing development, 44 40-Rimaarse it. located on lands in the City of Tigard, County ofd State of Oregon, more particularly described in Exhibit A hereto, known as or to be known as S 4,WTH0RNE VILLA APARTME TS (the "Project "); and .'IiEREAS, the Department has been designated by the Governor of the State of Oregon as the housing credit agency for the State of Oregon for the allocation of low - income housing tax credit dollars (the "Credit "); and WHEREAS, the Owner has applied to the Department and entered into a Determination Letter and Agreement for an allocation of Credit to the Project in an amount not to exceed ne hun ed ei htv n t u ne th ee dollars ($1111_1_42) of tax exempt 12gnd financed 4% low - income housing credit allocation; and WHEREAS, the Department has agreed to issue a Form 8609 to the Owner upon the execution and recording of this Declaration which constitutes part of the Determination Letter and Agreement; and WHEREAS, the Owner has represented to the Department in Owner's Low - Income Housing Tax Credit Application (the "Application ") dated March 24. 1997, that Owner shall lease/rent 100 percent of the units in the Project to individuals or families whose income is 60 percent or less of the area family adjusted median gross income ( "Low- Income Tenants ") as determined in accordance with Section 42 of the Internal Revenue Code (the "IRC "); and WHEREAS, the Department has determined the Project would require a Credit allocation in the amount of 5181, 143 Pr exempt bond financed 4% tax credit allocation to be financially feasible; and WHEREAS, the Owner has represented to the Department rent restrictions it will maintain for the period of time ae specified in the Determination Letter and Agreement; and DECLARATION OF LAND USE RESTRICTIVE COVENANTS LTHTC PROJECT NUMBER OR96 - - 002 PAGE I OF 10 County of Washington J '� I, Jerry [i,:kantson,,Dl ot° of Assess- ment and.axatlon �a{1si;Exi;Offcio County Clerk for' id:courity,,tfo hereby Certify that the withiOn>krtrmentofwritJng ww8Yeceived and recorded•:in•:'tsooK` nords;of said ,S;rrry`R; .Director of Assessritent'•and •Taxation, Ex- 414cio•Gounty Clerk Doc : 97032421 Rect: 184122 83.00 04/09/1997 04:02:29pm • • this Declaration, provided, however, the covenants contained herein shall survive and be effective regardless • of whether such contract, deed, or other instrument hereafter executed conveying the Project or portion thereof provides that such conveyance is subject to this Declaration. (c) The Owner covenants to obtain the consent of any prior recorded lienholder on the Project to this Declaration and such consent shall beea condition precedent to the issuance of Internal Revenue Service Form 8609 constituting final allocation of the Credit. SECTION 3 - REPRESENTATIONS, COVENANTS AND WARRANTIES OF' THE OWNER The Owner hereby represents, covenants, and warrants as follows: (a) The Owner (I) is a limited partnership duly organized under the laws of the State of Oregon, and is qualified to transact business under the laws of the State of Oregon, (II) has the power and authority to own its properties and assets and to carry on its business as now being conducted, and (III) has the full legal right, power and authority to execute and deliver this Declaration. (b) The execution and performance of this Declaration by the Owner (I) will not violate or, as applicable, has not violated any provision of Iaw, rule or regulation, or any order of any court or other agency or governmental body, (11) will not violate or, as applicable, has not violated any provision of any indenture, agreement, mortgage, mortgage note, or other instrument to which the Owner is a party or by which it or the Project is bound, and (1Il) will not result in the creation or imposition of any prohibited encumbrance of any nature. (c) The Owner will, at the time of execution and delivery of this Declaration, have good and marketable title to the premises constituting the Project free and clear of any lien or encumbrance (subject to encumbrances created pursuant to this Declaration, any Loan Documents relating to the Project or other permitted encumbrances). (d) There is no action, suit, or proceeding at law or in equity, or by or before any governmental instrumentality or other agency now pending, or, to the knowledge of the Owner, threatened against or affecting it, or any of its properties or rights, which if adversely determined, would materially impair its right to carry on business substantially as now conducted (and as now contemplated by this Declaration) or would materially adversely affect its financial condition. (e) The Project constitutes or will constitute a qualified low - income building or qualified low - income project, as applicable, as defined in me Section 42 and applicable regulations. (i) Each unit in the Project contains complete facilities for living, sleeping, eating, cooking and sanitation (unless the Project qualifies as a single -room occupancy project or transitional housing for the homeless) which are to be used on other than a transient basis. (g) During the Term of this Declaration, all units subject to the Credit shall be leased, rented or made available to members of the general public who qualify as Low - Income Tenants (or otherwise qualify for occupancy of the low - income units) under the applicable election specified in Section 42(g) of the IRC. (h) The Owner agrees that tenant and third parties will be eligible to enforce MC Section 42 entitlements as DECLARATION OF LAND USE RESTRICTIVE COVENANTS LIRTC PROJECT NUMBER OR96 -4 -002 (I PAGE 3 OF 10 provided by the Fair Housing Act, as amended. (i) During the term of this Declaration, the Owner covenants, agrees and warrants that each low - income unit is and will remain habitable. (j) Subject to the requirements of TRC Section 42 and this Declaration, the Owner may sell, transfer, or exchange the entire Project at any time, but the Owner shall notify in writing and obtain the agreement of any buyer or successor or other person acquiring the Project or any interest therein that such acquisition is subject to the requirements of this Declaration and to the requirements of IRC Section 42 and applicable regulations. This provision shall not act to waive any other restriction on sale, transfer, or exchange of the project or any low- income portion of the Project. The Owner agrees that the Department may void any sale, transfer, or exchange of the Project if the buyer or successor or other person fails to assume in writing the requirements of this Declaration and the requirements of TRC Section 42. Notwithstanding the foregoing, the owner shall not dispose of any portion of a building which constitutes a portion of the Project and to which this Declaration applies unless the entire building is disposed of to such person. (k) The Owner agrees to notify the Department in writing prior to any sale, transfer, or exchange of the entire Project or any low - income portion of the Project. , (1) The Owner will provide certified financial documentation acceptable to the Department to satisfy the calculation of a qualified contract and to begin the one year period for finding a buyer in accordance with IRC Section 42(h)(6) if desired. (m) The Owner shall not demolish any part of the Project, substantially subtract from any real or personal property of the Project, or permit the use of any residential rental unit for any purpose other than rental housing during the term of this Declaration unless required by law or unless the Department has given its prior written consent. (n) The Owner represents, warrants, and agrees that if the Project, or any part thereof, shall be damaged, destroyed, shall be condemned, or acquired for public use, the Owner will use its best efforts, subject to the rights of any mortgagee, to repair and restore the Project to substantially the same condition as existed prior to the event causing such damage or destruction, or to relieve the condemnation, and thereafter to operate the Project in accordance with the terms of this Declaration. (o) The Owner warrants that it has not and will not execute any other Declaration with provisions contradictory to, or in opposition to, the provisions hereof, and that in any event, the requirements of this Declaration are paramount and controlling as to the rights and obligations herein set forth and supersede any other requirements in conflict herewith, (p) The applicable fraction for each building of the Project during the term of this Agreement shall not be less than the applicable fraction specified in the Low- Income Housing Tax Credit Determination Letter and Agreement (the "Agreement ") executed by the Owner as 100 percent. [See MC Section 42(h)(6)(B)} ( The Department may require the Owner to reduce rents charged for low- income units if property taxes imposed upon the Project are reduced because of a change in Oregon law, Any reduction in rent required by the Department shall not exceed the reduction in property taxes, taking into account any replacement taxes or equivalent charges, and shall further take into account prevailing operating or debt coverage requi.remenrs of the Project's lender(s)Q6 DECLARATION OF LAND USE RESTRICTIVE COVENANTS PROJECT NUMBER OR96 -4 -002 PAGE 4 OF 10 • (r) If the Section 8 Income Limits used to determine rent limits are reduced to account for a reduction in . property taxes imposed on the Project because of a change in Oregon law or if rents are otherwise reduced by federally subsidized housing assistance programs or comparable program to account for a reduction in property taxes imposed on the Project because of a change in Oregon law and the Department determines that the reduced rent charged for low- income units in the Project appropriately reflects the reduction in property taxes, then Section 3(q) of this Declaration shall not apply. (s) The owner will not refuse to lease to a holder of a voucher or certificate of eligibility under Section 8 of the United States Housing Act of 1937 because of the status of the prospective tenant as such a holder, (t) The owner agrees to fill out and sign Part II of the Form 8609 required to be completed by the building owner for the first year of the credit period and return a copy (without Schedules and other supporting documents) to the Department for the purposes of compliance monitoring. (u) The Department may charge a reasonable fee comparable to fees charged by the Department for monitoring activities in accordance with Section 8(d) of this Declaration for rent reviews and determinations made pursuant to Sections 3(q) and 3(r) of this Declaration. SECTION 4 - INCOME RESTRICTIONS; RENTAL RESTRICTIONS The Owner represents, warrants, and covenants that from and after initial occupancy and throughout the remaining term of this Declaration and in order to satisfy the requirements of IRC Section 42 ( "Section 42 Occupancy Restriction?) that; (Check applicable percentage election) ) (1)._ At least 20 percent or more of the residential units in the Project will be both rent - restricted and occupied by individuals whose income is 50 percent or less of family adjusted area median income. (2) . At least 40 percent or more of the residential units in the Project will be both rent - restricted and occupied by individuals whose income is 60 percent or less of family adjusted area median income. (b) The Department may require that the determination of whether a tenant meets the low- income requirement be made by the Owner or his designated agent at least annually on the basis of the current income of such Low - Income Tenant. SECTION 5 - DEPARTMENT'S OCCUPANCY RESTRICTIONS The Owner represents, warrants and covenants throughout the term of this Declaration that: (a) Project rents will not exceed the gross rent allowable under IRC Section 42. (Check b through e, if applicable) (b) X The Owner will extend the income and rental restrictions of IRC Section 42 for ls, years after the close of the compliance period. DECLARATION OF LAND USE RESTRICTIVE COVENANTS LIHTC PROJECT NUMBER OR96 -4 -002 PAGE 5 OF 10 c) _A._ xegardtess of any provision in this Declaration to the contrary, the Department's Occupancy Restrictions provided by this Section shall. remain in place for a period of a years or until in the case of foreclosure or deed in lieu of foreclosure of a prior recorded lien to thiis Declaration as provided in Section 6(b)(1) but subject to Section 6(c) of this Declaration. ("Check applicable election) (d) (I) _X_ The Owner will SET the earliest date upon which the Owner may request the Department to assist in procuring a qualified contract for the acquisition of the low - income portion which is a part of the Project to after year 14, from the year the project was placed in service. ' ' rr � •fir .. • • 11•• • ■ • • - •• • • • • • . • (e) ` Operating reserves when released from restricted use shall be wholly used to subsidize tenant rents consistent with guidelines prescribed by the Department. SECTION 6 - TERM OF DECLARATION (a) Except as hereinafter provided, this Declaration and the 1TRC Section 42 Occupancy Restrictions specified herein shall commence with the first day in the Project period on which any building which is part of the Project is placed in service and shall end on the date which is 15 years after the close of the compliance period. (b) The Owner shall comply with the requirements of IRC Section 42 relating to the extended use period, provided, however, this Declaration and the extended use period for any building which is part of this Project shall terminate: (1) On the date the building is acquired by foreclosure or instrument in lieu of foreclosure; or (2) On the last day of the one -year period specified in MC Section 42(h)(6)(I), if the Owner has properly requested in accordance with IRC Section 42 that the Department assist in procuring a qualified contract for the acquisition of the low - income portion of any building which is a part of the Project, the Department and the Owner have agreed upon the terms of sale as specified in Section 3(1) of this Declaration, and the Department is unable to present a qualified contract within one year of reaching written agreement regarding the terms of sale. (c) Notwithstanding subsection (b) above, IRC Section 42 rent requirements shall continue for a period of three years following the termination of the extended use requirement. pursuant to the procedures specified in subsection (b) above for those tenants existing as of the date of termination. During such three -year period, the Owner shall not evict or terminate the tenancy of an existing tenant of any low-income unit other than for good cause and shall not increase the gross rent above the maximum allowed under the IRC with respect to such low - income unit. (( If the Owner has agreed to optional Department's Occupancy Restrictions as reflected in Section 5 of this Declaration, neither this Declaration nor the extended use period shall terminate until the time period for compliance with such Department's Occupancy Restrictions has expired subject to earlier termination under Section 6(b)(1) above. DECLARATION OF LAND USE RESTRICTIVE COVENANTS LTIITC PROJECT NUMBER OR96 -4 -002 7 PAGE 6 OF IQ. "ECTION 7 - .ENFORCEMENT OF DEPARTMENT'S OCCUPANCY RESTRICTIONS (a) The Owner shall permit, during normal business hours and upon reasonable notice, any duly authorized representative of the Department, to inspect any books and records of the Owner regarding the Project with respect to the incomes of Low - Income Tenants which pertain to compliance with the Department's Occupancy Restrictions specified in this Declaration. (b) The Owner shall submit any other information, documents, or certifications requested by the Department which the Department shall deem reasonably necessary to substantiate the Owner's continuing compliance with the provisions of the Department's Occupancy Restrictions specified in this Declaration. SECTION 8 - ENFORCEMENT OF SECTION 42 OCCUPANCY RESTRICTIONS (a) The Owner covenants that it will not knowingly take or permit any action that would result in a violation of the requirements of IRC Section 42 and applicable regulations of this Declaration. Moreover, Owner covenants to take any lawful action (including amendment of this Declaration as may be necessary, in the opinion of the Department) to comply fully with the' IRC and with all applicable rules, rulings, policies, procedures, regulations or other official statements promulgated or proposed and published by the United States Department of the Treasury, the Internal Revenue Service, or HUD from time to time pertaining to Owner's obligations under MC Section 42 and affecting the Project. l , The Owner acknowledges that the primary purpose for requiring compliance by the Owner with restrictions provided in this Declaration is to assure compliance of the Project and the Owner with IRC Section 42 and the applicable regulations, AND BY REASON THEREOF, THE OWNER IN CONSIDERATION FOR RECEIVING LOW-INCOME HOUSING TAX CREDITS FOR THIS PROJECT HEREBY AGREES AND CONSENTS THAT THE DEPARTMENT AND ANY INDIVIDUAL WHO MEETS THE INCOME LIMITATION APPLICABLE UNDER SECTION 42 (WHETHER PROSPECTIVE, PRESENT OR FORMER OCCUPANT) SHALL BE ENTITLED, FOR ANY BREACH OF THE PROVISIONS HEREOF, AND IN ADDITION TO ALL OTHER REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE SPECIFIC PERFORMANCE BY THE OWNER OF ITS OBLIGATIONS UNDER THIS DECLARATION IN A STATE COURT OF COMPETENT JURISDICTION. The Owner hereby further specifically acknowledges that the beneficiaries of the Owner's obligations hereunder cannot be adequately compensated by monetary damages in the event of any default hereunder. (c) The Owner hereby agrees that the representations and covenants set forth herein may be relied upon by the Department and all persons interested in Project compliance under IRC Section 42 and the applicable regulations. (d) The Owner agrees to take any and all actions reasonably required by the Department to substantiate the Owner's compliance with occupancy restrictions of IRC Section 42 as now constituted or subsequently amended and other occupancy restrictions of the Department as now constituted or subsequently adopted and will pay a reasonable fee to the Department for the Department's monitoring of the Owners compliance based upon the Department's monitoring costs. (e) This Declaration and the Determination Letter and Agreement of which it is a part may be enforced by the Department or its designee in the event the Owner fails to satisfy any of the requirements herein. In addition, DECLARATION OF LAND USE RESTRICTIVE COVENANTS LI ITC PROJECT NUMBER OR96 -4 -002 PAGE 7 OF 10 this Declaration shall be deemed a contract enforceable by one or more Tenants as third -party beneficiaries of the Declaration and Determination Letter and Agreement. In the event the Owner fails to satisfy the Cequirements of this Declaration or the Determination Letter and Agreement and legal costs are incurred by the Department or one or more of the tenants or beneficiaries, such legal costs, including attorney fees and court costs (including costs of appeal), are the responsibility of, and may be recovered from, the Owner. SECTION 9 - EXTENDED LOW - INCOME HOUSING COMMITMENT .*NOT APPLICABLE" An Option and Right of First Refusal Agreement has been entered into with Tualatin Valley Housing Par ne s, the Pr. 'ect',s c.- -n- al Par er.. • _ - -. .. • :� • hereby agrees to transfer the Project to a "qualified nonprofit organization" [as defined in IRC 42(h)(5 acceptable to the Owner, the Department and the mortgage lender after the end of the calendar yea ailing years after the issuance of the Forms 8609 for the Project, or as soon thereafter as the tra er can be con mmated, on the following terms: ( consideration for the transfer shall be in accordance with the formula in IR ection h 42 the () b 6 in an • ount equal to the sum of (a) the () principal amount of outstanding ind - . edness secured by the Project, b) the adjusted investor equity in the Project, and (c) other capita ontributions'not reflected in the amo ..ts described above, reduced by cash distributions from (or . ailable for distribution from) the Project. (2) Owner shall be and - o obligation to transfer the Project to : qualified organization in the event that no acceptable quaiifi ; ganization accepts title and as mes Owner's obligations before the end of the calendar year falling !• years after the issuance : the Forms 8609 for the Project. (3) In making the determination o e transfer • - qualified nonprofit organization, first right of refusal shall be given to (4) Any controversy related to the sel: do .f the transferee qualified organization shall be settled by arbitration pursuant to the rule •f the Am. can Arbitration Association. (b) Owner further covenants to use i : reasonable best effort o assure that, at the time of the transfer: (i) the Project is generating sufficien h flow to service Project d - •t and pay Project operating expenses; and (ii) the Project is in reasona.. good physical condition (for a ti- family apartment project of its age and quality). (c) No provision o • 's section shall prevent any lender loaning funds secu - d by the Project from foreclosing on the prop - or otherwise exercising its full right as a lender. In the e - t of a bonafide foreclosure or transfer • • e Project to a lender by a deed in lieu of foreclosure, the foreclosin ender shall take the Project free . clear of any obligation to transfer the Project to a nonprofit organizatio or to operate the Project as ••: ordable housing except as provided for in 1RC Section 42. The Department . its assigns shall have .. .._ ._ - •- _ _ - r - -• -._ ..__ - .fit •- - .. _ TION 10 - MISCELLANEOUS (a) Sg_vgrabili. The invalidity of any clause, part, or provision of this Declaration shall not affect the validity of the remaining portions thereof. DECLARATION OF LAND USE RESTRICTIVE COVENANTS LIRTC PROJECT NUMBER 0 R96 -4 -002 PAGE 8 OF 10 (ti) Aura. All notices to be given pursuant to this Declaration shall be in writing and shall be deemed given when mailed by certified or registered mail, return receipt requested, to the parties hereto at the addresses set forth below, or to such other place as a party may from time to time designate in writing. To the Department: Oregon Housing and Community Services Department • ATTN: LIHTC PROGRAM 1600 State Street Salem, Oregon 97310-0161 To the Owner: HAWTHORNE VILLA LIMITED PARTNERSHIP ATTN: CHAD) ENNAIQR 16101 SW 72ND AVENUE SUITE 200 PORTLAND. OR 97224 The Department, and the Owner, may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. (c) Amendment. The Owner agrees that it will take all actions necessary to effect amendment of this Declaration as may be necessary to comply with the IRC, any and all applicable rules, regulations, policies, procedures, rulings, or other official statements pertaining to the Credit. The Department, together with Owner, may execute and record any amendment or modification to this Declaration and such amendment or modification shall be binding on third - parties granted rights under this Declaration. Subordination of,7eclaratiotl. This Declaration and the restrictions hereunder are subordinate to the =owl Ioan and loan documents on the Project in an original principal amount not to exceed $4.000,000, except insofar as IRC Section 42 (h)(6)(E) otherwise requires. The Department may subordinate this Declaration to other Financing, in its sole discretion and such subordination shall be binding on all third - parties granted rights under this Declaration. (e) Governing Law. This Declaration shall be governed by the laws of the State of Oregon and, where . applicable, the laws of the United States of America. (f) Survival of Obligations. The obligations of the Owner as set forth herein and in the Application shall survive the allocation of the Credit and shall not be deemed to terminate or merge with the awarding of the allocation. DECLARATION OF LAND USE RESTRICTIVE COVENANTS j _ l LIHTC PROJECT NUMBER OR96 --4-002 I PAGE 9 OF 10 IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its duly authorized 1 presentatives, as of the day and year first written above. • OWNER Hawthorne Villa invited Partnership • By: •,I�r�i,I► I \ t — Name: G- .David Sebastian Title; President, Hawthorne Villa Cl?, Inc., General Partner of Hawthorne Associates Limited Partnership. a General Partner STATE OF OREGON County of Washington This instrument was acknowledged before me this g ' d of f h I , 1997 by G. David Sebastian, President ytt-tpkda I )7F:b( 1 )• STEPHANIE CARTER ( • e : - NOTARY PUBLIC-OREGON NOTARY PUBLIC FOR OREGON � COMMISSION NO.059314 My Commission Expires: k YT. I d DD MYCOMMtSS10NE NOV. 12, 2000 This document prepared this March 27, 1997 , by 7-' `''� : f. lc.. Cc, cti' Print Natnc: Komi P. Kalevor T'_ t.. Tax Credit Program Representative • hnhfsltihtcUeltersi Revised 3/97 • } DECLARATION OF LAND USE RESTRICTIVE COVENANTS (j LIFITC PROJECT NUMBER OR96 -4-002 PAGE 10 OF 10 -'X IBI 'Dan • PARCEL, T: A Part of the Gem Southwest rge B'- eon Donation Land Claim In the Mort oast quarter of Section 36 Townahip 1 South 0 or the tScSdiau, in the City of Tigard, Coau4e 1 wee of the p . as falow$; ty ofashizagtan and State of f � fit• e yCU. described BEGINNING at the Northwest corner of the South situated in Sion 36, Township 1 South, Range r West i3 D tiAn Land here Claim, Donation 00' Eat+, 1887.60 ft to a point in r Willamette Meridian; thence Land Claim; thence Sou 0°11' the Noz*..eea±ip• boon P marking L feet to dam line o 'lg the Northwest corn of trace 12co 0 f an iron pipe. a f said tfzeuc2 5oGth 89 East, 85.0 feet an conveyed in Deed Book 279, Page fr Boa Deed Book 279, Page 648 to the f along the North line of that trams in Deed Book 2 the tract northeast corner of said tract and t_eue conveyed of North 0°11' min deecr.ibed; th e south 89°49' Eat, 25.0 f point of Leonard R. Eat parallel with the East line of th t ract thence Loon R. Cason, at al, recorded �Tanuary 16 1968, in Book 677, page- r Wag to 173.66 feet; thence Saute 88 °17' Eaat,•96 feet te ling said tract; a s ?i.q feet Canon to the Southeast career thereof thence South 0 ° 11' West along the Bast the Bast line ,, , line West said Cason tract South line of said Cason 'thence Nam 8$ ° 1.7' 'rtesr aiaug the tract, 121.6 feet to the Southeast coiner of that t - act in Deed Bonk 279, Page 648; t'1]once Hoch 0°11' a ed in conveyed Y Deed Book 279, Pal 648, 141.34 feet, more aeonr tea Bri 1 ?tee of that Croft: beginning, all situated tr laoxe or less, to the - true in �7aahiugton Caunr ozegon, point of PARcEL II: A part of the George Richaedson Donation Land Clam in the No sourest quarter of Section 36, Township 1 saute t of the ==diae, in the City of Tigard, County of Acs ' 1 to of of the Willamette cceibed as foll.c ws: h� n9tnn and state of orer�onr du�c: _'.xad BEGINNING at the Northwest corner of the rge s ituated i.n Sac',:won 36, Teem :hip 1 Souk ��`�d$nu Donati.aa Land Claim, Saute ed is East. '_887_60 feet to a , Range 1 w � , Willa mette Heridlae Slut Donation Land point in the Northerly b • thence Baia; t hence South 0 ° 1 ' West. 1204.0 feet iron. i lino of ir on pi ma'�g the uorthsae et corner of that tract c to ae & o pipe, said ou in Leon t a tthe true point of begi.nneng herein dese ibed- heped So Decd soak E s 1 648, point; teenc2 North 0 1' thence Stauuty 89°49' East, 110.0 feet described in deed to rth 0 1' E parallel with the East. line of t I.eenard 3. nncon, et al, recorded eaeuer, 16, 1968, Le hot t_ act Bo7 Page 139, washingon County Records, 173.66 feet to a point: ' 6e7, 114.0 feet to a point on the West line of sai.,d Canon racy; hexce N 88 ° ° 7' West, along said West line, 173.66 feet to the true Cf .int bECtl.an ; thence 0 IS WesW of r •••• e^CZ Sou PARCEL Izr: A part of tha George Richardson Donation Lead claim Southwest gaaz-',� of Section 36 1'a-� in the Northeast �-y. r thwe • dip 1 South �- of e of T' , Range °f' e Will as follows; the city Tigard of Was tzin9 d State of Oregon, zx�,cn, de3cribcrd BEGZNNING at Nor rho `..'.sweAt t:° rner aituatad in Seh t T of the George Richa.rdeon Donat`..ou Land claim, Township 1 South, claim, running thence South 89 ° 00' East, 1887.60 feet a1pointt, Will N Q =than and line of aai.d Donation Land Claim; thence ' South 0 ° l1' w 1204.0 feet to an n b said P 6 8 n p marking the 2£or �-hw4et corner of that t, � r 1n eye in i ok 2 7 pipe, r Pageay Deed 648; thence e South 89 ° 49' East, 85.0 feet along the Nc th in Aced that 279, La D Book 279, Page 648 to the No of line of that tract rtheast corner of thereof; t East, 25.0 fret; thence Naxth 0 °11' East parallel hen f outh tract described in d to Leonard a11e1 with t East line at Book 677, nard L. Cason; et al, recorded Jana , 1968, in t , Page 139, Washington County Records, 173.66 feet; thence! ou C 1 & 88 ° 1 . 7' 51_ 0 6 feet 7, Pa e he i 51ny point of beginning to a the herein described premj ea; thence inuin9 South 88d 7 tract; thence North 0 °11• point , the East line of said East along said East line, 90.0 feet- 1 7 feet; thence South 0 ° 11' West, 90_0 feet to the true point �� North 88 °17• West, 45.0 point of beginning- PARK Z7: A part of the George Richardson Donation Land Claim in Southwest quarter of Section 36, the Nor'...b.east der of the Soe , Township 1 South, Range 1 West of the W't Meridian. in the City of Tigard, county of Washington Willamette as follows: o and State of Aragon, de3cribecx U8G �G at the Northwest corner of the Section 36, xawashin ? G `'�� Richardson Donation Land Claim in Westo 56 and shi of South, Range 1 West, Willamette Meridian in the County of a paint on the Northerly b �� thence South 89 Otlr Rest, 1887.60 feet. to 0 °11 of said Donation Land Claim; !.hence South W 10 30.34 feet to a point on the west line of that tract to Leonard E. Cason, et al., z'ecorded Jaeele described to deed of Washiugtan Gaunt, being the Westerly y 16, 1968. r of 577, tract 139, rzsrax'..s 8 esterly Northwest comer of that tract d zczibed in Morn herein described Prrmi.A� gage recorded October 29, 1968, in Book 722, Page 520 Y and the true point of beginning of the r zooids of W South � ° = ` East 161.6 feet; - ; thence North 0 ° 11' East, 90.0 feet; thence r thenceSou E.$ 45.0 feat to a point on the Pm tract; Zest Line of said Cason nC W North ❑ South 0 °1 l' Last said 7 a t r along said ast line, 171_34 feet to a P° ; i Ea south 0 of 1 point; the North 88 ° 17' West, 65.0 fort to a ' West 75.0 feet to a point; thence North 88 Blest, 141.6 feet to a point on the Wet ln asp of said Cason tract; t-!� nr said West line, 186.34 £ t tract; e 2 Sour., 0 west along Qet to that true voint of bec,::.- i ! J� a PARCEL V; A part ofe xL3e Richardson Donation Land Southwest a ex of claim in•.rhe Northeast r Section 36., Tcwn thS 1 sou' quarter tar the ta as follows: the City of Tigard, county of Washington Eaa 1 West of of • tI► s."hingt°u and state of Dragon. described z at the Northwest corner of the Section 36 George Richardson Se r • Township 1 south, Rye 1 West of Donation Land Claim, is South 89 AO' East, 1887. &0 feet to a the Willamette Meridian thin thence Sou a point on the Northerly boundary Ong laid Donation that tract des ; thence South 0 °11' West, 844.0 feet to a Bite of ling, in that 677 bed in deed to Leonard E. at an t.hy blast Page 1" o f .Washington Cason C.3sa et al, recorded being Jatltl Northwest corner of the first �Y 16, No Bonk tic Papa 56, f_..,st tract described in Mortgagee orded.bFeeb the 4, i969, the Book described 6 records of Washington comity and the t rue �► d► 1953, the herein Oa1' property; thence South.' 88 17' E point at beg the East .East. 75.0 feet to point: thenoe South 8 8 ° 17' 7' East feat to a point; thence on L line of said Cason tract; thence No 0°11' East, 65.0 along feet 113.66 feet to a point; thence North tract; t 88 z 0 13 Eat a Paint line, 11 said feet tract t °17' West, 206 feet along said Bags lli true point o f South 0 °Zl' West along said_ �7est 1 point 190 feet W¢ l the PARCEL VI: A part of the George Richardson Donation Land claim Southwest quar+„�,Y of Section 36, i.n the Tor - w ' asC Meridian, cu the City , Township 1 South, Range 1 Wes of the as follows: ity of Tigard, Cannty of Washington and 5tata of Or ° f the WillametOregon, described BEGINNING at the Northwest eerier of the George Section 36, Township 1 S Sta outh, Range 1 West of w e Richardson Meridian Land e Co a a t Was i__7_ . e Mer_ dz� t-c of Oregon and r t 0 County a point on the � theaca South 89 ° 00' to we n5t f ray boundary line of said Donation Land claim; 1587.60 feet 0°11' Leonard g point aR the West 1_i n t'a deed a •a Cason et al, recorded January- 16, 1968, in that 67,, age ;bed a deed to Washington County, being the Northwest corner in Back 677, p Mortgage ashi recorded in E the Page we of the First 135, records of Morn of beginning corde of 4 285, records o h-in unty described t e in feat to the herein described P f wet g`oa G%ant and as tree feet Bast Point an the East line of said caeon tract; thence Sautes 88°17- East Line, 186.0 oeet to a point; thence No - h 88°17' North f ee Eat�t , along on the West Line the true poia.t beg =anin South 0 °11'7West along f d West pane, g. line, 186.0 feet • PARCRL Yi1: • e George Ri f a A part o th Richardson Donation Land Claim •A p tr t o t1 c ards er of Section 36, Township 1 Souk in-the Northeast quarter e Willamett of t Meridian, th pity of Tigard, county of Washington as idia follows: ' Range 1 hest of • and State of Oregon, d BECINHING at the Northwest corner of the George Richardson oanatson Secti n 36; said a South yam East, 1887 feet Lard Clam by being Claim; thence South 0°11 a point on the point, in point reco Southwest corer oee a tract conv conveyed to o S d1 to d 7�J4t w 'l�* rded November 28, 1911 in Book �r S described ' Spy 0°11' West, 178 feet. to ap, Page 4S, S idlcr and the true 139, zc°rds� to 1O'a`rd E. Casson et al, ' � Jn the F7 16, 1. of too 677, Page of Washington county, being the Northwest Page described 3 , 36. 3968 in Bonk 677, S3� County; Mo Mortgage recorded May 19, 1971, in Book corner of 1 re said thence South 88 °17' East, 206 feet 818, Page 167, �7 Cason tract; thence For' 0° 11' East cm the of said Cason Ca oaid act; z a Pont tr said Sid tract thence North 890 Wes;'t. t line, 178 t i.ne of the South t o the true point of beginning. 4 °Sow line of aa3 Q s • d1,er • • • e C.3 • WHEN RECORDED RETURN TO: Execution Copy First Interstate Bank of Oregon, N.A. 2701 NW Vaughn, 2nd Floor Portland, OR 97210 Attention: Corporate Trust CORRECTED REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS • BY AND AMONG THE STATE TREASURER OF THE STATE OF OREGON ' ACTING ON BEHALF OF THE STATE OF OREGON AND ON BEHALF OF THE STATE OF OREGON HEALTH, HOUSING, EDUCATIONAL AND CULTURAL FACILITIES AUTHORITY, FIRST INTERSTATE BANK OF OREGON, N.A. As TRUSTEE • AND HAWTHORNE VILLA LIMITED PARTNERSHIP RELATING To 53,952,000 STATE OF OREGON HEALTH, HOUSING, EDUCATIONAL • AND CULTURAL FACILITIES AUTHORITY REVENUE BONDS (HAwrHORNE VILLA PROJECT), 1996 SERIES A • DATED AS OF MAY 1, 1996 . ..: .. matt this is a t e origin cult nt, • ;IV NA! •r`? T) L r ii -411 Q /nom f.‘/„ REGULATORY AGREEMENT AND . DECLARATION OF RESTRJCTWE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (this "Regulatory Agreement"), relating to the Project as hereinafter defined, is made and entered into as of May 1, 1996, by and among the STATE TREASURER OF THE STATE OF OREGON, acting on behalf of the State of Oregon and on behalf of the State of Oregon Health, Housing, Educational and Cultural Facilities Authority (the State Treasurer when acting in such capacities referred to herein as the "Issuer "), FIRST INTERSTATE BANK OF OREGON, .N.A., • as trustee (the "Trustee ") under that certain Trust Indenture of even date herewith (the "Indenture ") by and between it and the Issuer, and HAWTHORNE VILLA LIMITED PARTNERSHIP, a limited partnership organized under the laws of the State of Oregon (the "Borrower "). PREMISES WHEREAS, the Issuer proposes to issue its State of Oregon Health, Housing, Educational and Cultural Facilities Authority Revenue Bonds (Hawthorne Villa Project), 1996 Series A (the "Bonds "), the proceeds of which will be utilized to fund a loan to the Borrower to be made by Washington Capital DUS, Inc. (the "Lender "), a Delaware corporation, in accordance with the Financing Agreement of even date herewith (the "Financing Agreement ") by and among the Issuer, the Borrower and the Trustee, in order to enable the Borrower to finance the acquisition, rehabilitation and development of the Project; and WHEREAS, in order to assure the Issuer and the owners of the Bonds that interest on the Bonds will he excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code ") and to satisfy the purposes of the Issuer in determining to issue the Bonds, certain limits on the occupancy of units in the Project need to be established and certain other requirements need to be met. NOW, THEREFORE, in consideration of the issuance of the Bonds by the Issuer and the use of the proceeds thereof to finance the Project, the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Issuer, the Trustee and the Borrower agree as follows: SECTION L. DEFINITIONS. Unless the context otherwise requires, the capitalized terms used herein shall have the respective meanings assigned to them in the recitals hereto, in this Section 1 or in the Indenture or the Financing Agreement. • "ADJUSTED INCOME" means the adjusted income of a person (together with the adjusted income of all other persons who intend to reside with such person in one residential unit) as REGULATORY AGREEMENT PAGE 1 calculated in the manner prescribed in Regulations Section 1. 167(k)- 3(b)(3) in effect as of the Closing Date. "AREA" means the Portland Primary Metropolitan Statistical Area. "CERT FICATE OF CONTINUING PROGRAM COMPLIANCE" means the Certificate to be filed by the Borrower with the Issuer, the Lender and the Trustee pursuant to Section 4(e) hereof, which shall be substantially in the form attached as Exhibit C hereto, or in such other form as maybe provided by the Issuer to the Borrower. "COUNTY" means Washington County, Oregon. "HOUSING ACT" means the United States Housing Act of 1937, as amended, or its successor. "INCOME CERTIFICATION" means a Verification of Income and an Occupancy Certificate in the form attached as Exhibit B hereto, or in such other form as may be provided by the Issuer to the Borrower. "Low INCOME TENANT" means any tenant whose Adjusted Income does not exceed sixty percent (60 %) of Median Gross Income for the Area with adjustments for family size. If all the occupants of a unit are students (as defined under Section 151(e)(4) of the Code), no one of whom is entitled to file a joint return under Section 6013 of the Code, such occupants shall not qualify as Low Income Tenants. The determination of a tenant's status as a Low Income Tenant shall be made by the Borrower upon initial occupancy of a unit in the Project by such tenant, on the basis of an Income Certification executed by the tenant. "LOW INCOME UNITS" means the units in the Project required to be rented, or held available for occupancy by, Low Income Tenants pursuant to Sections 4(a) and 6(b) hereof. "MEDIAN GROSS INCOME FOR THE AREA" means the area median income as determined in accordance with Section 142(d)(2)(B) of the Code, that is, by the Secretary of Housing and Urban Development in a manner consistent with determinations of area median gross income under Section 8 of the Housing Act (or if programs under Section 8 are terminated under the method used by said Secretary prior to such termination). "QUALIFIED PROJECT PERIOD" means the period beginning on the later of (i) the Closing Date or (ii) the first day on which at least 10% of the units in the Project are first occupied, and ending on the later of the following: (A) the date which is fifteen (15) years after the Closing Date (being May 24, 2011); or REGULATORY AGREEMENT '^ �` PAGE 2 (B) the first date on which no tax- exempt private activity bonds with respect to the Project are outstanding; or • (C) the date on which any assistance provided with respect to the Project under Section 8 of the, Housing Act terminates. "REGULATIONS" means the Income Tax Regulations of the Department of the Treasury applicable under the Code from time to time. "REGULATORY AGREEMENT" means this Regulatory Agreement and Declaration of Restrictive Covenants, together with any and all amendments and supplements hereto. "TAX- EXEMPT" means, with respect to interest on any obligations of a state or local government, including the Bonds, that such interest is excluded from gross income for federal income tax purposes; provided, however, that such interest may be includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax, under the Code. "UNITS" or "DWELLING UNITS" means all residential units in the Project except not more than two units set aside for resident manager or other administrative use. • "VERIFICATION OF INCOME" means a Verification of Income in the form attached as Exhibit B to this Regulatory Agreement, or in such other form as may be provided by the Issuer to the Borrower. Unless the context clearly requires otherwise, as used in this Regulatory Agreement, words of any gender shall be construed to include each other gender when appropriate and words of the singular number shall be construed to include the plural number, and vice versa, when appropriate. • This Regulatory Agreement and all the terms and provisions hereof shall be construed to effectuate purposes set forth herein and to sustain the validity hereof. The titles and headings of the sections of this Regulatory Agreement have been inserted for convenience of reference only, and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof or be considered or given any effect in construing this Regulatory Agreement or any provisions hereof or in ascertaining intent, if any question of intent shall arise. SECTION 2. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE BORROWER The Borrower hereby incorporates herein, as if set forth in full herein, each of the representations, covenants and warranties of' the Borrower contained in the Tax Certificate and in the Financing Agreement relating to the Project. . •� REGULATORY AGREEMENT PAGE 3 The Borrower acknowledges, represents and warrants that it understands the nature and structure of the transactions contemplated by this Regulatory Agreement; that it is familiar with the provisions of all of the documents and instruments to which it is a party or of which it is a beneficiary; that it understands the financial and legal risks inherent in such transactions; and that it has not relied on the Issuer for any guidance or expertise in analyzing the financial or other consequences of such financing transactions or otherwise relied on the Issuer in any manner except , to issue the Bonds in order to provide funds to assist the Borrower in financing the Project. SECTION 3. QUALIFIED RESIDENTIAL RENTAL PROJECT. The Borrower hereby acknowledges and agrees that the Project is to be owned, managed and operated in the same manner as a "qualified residential rental project" (within the meaning of Section 142(d) of the Code) for a . term equal to the Qualified Project Period. To that end, and for the term of this Regulatory Agreement, the Borrower hereby represents, covenants, wan and agrees as follows: (a) The Borrower will own, manage and operate the Project as a multifamily residential rental property consisting of a building or structure or several interrelated buildings or structures, together with any functionally related and subordinate facilities, and no other facilities, in accordance with Section 142(d) of the Code, Section 1.103 -8(b) of the Regulations and the provisions of the Housing Act, and in accordance with such requirements as may be imposed thereby on the Project from time to time. (b) All of the dwelling units in the Project will be similarly constructed units, and each dwelling unit in the Project will contain complete separate and distinct facilities for living, sleeping, eating, cooking and sanitation for a single person or a family, including a sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. (c) None of the dwelling units in the Project will at any time be utilized on a transient basis, or will ever be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home or trailer court or park. (d) No part of the Project will at any time during the Qualified Project Period be owned by a cooperative housing corporation, nor shall the Borrower take any steps in connection with a conversion to such ownership or use, and the Borrower will not take any steps in connection with a conversion of the Project to condominium ownership during the Qualified Project Period. (e) All of the dwelling units in the Project will be available for rental during the Qualified Project Period on a continuous basis to members of the general public, on a "first -come first- served" basis, and the Borrower will not give preference to any particular class or group in renting the dwelling units in the Project, except to the extent that dwelling units are required to be leased or rented to Low Income Tenants. REGULATORY AGREEMENT PAGE 4 (f) The Project consists of a parcel or parcels that are contiguous except for the interposition of a road, street or stream, and all of the facilities of the Project comprise a single geographically and functionally integrated project for residential rental property, as evidenced by the ownership, management, accounting and operation of the Project. (g) At the closing for the Bonds, the Borrower shall give the Issuer, the Trustee, the Lender and Fannie Mae notice of whether or not the Project is then in compliance with the provisions of this Regulatory Agreement. SECTION 4. Low INCOME TENANTS; REPORTING REQUIREMENTS. Pursuant to the requirements of the Code, the Borrower hereby represents, warrants and covenants as follows: (a) Commencing on the Closing Date, Low Income Tenants shall occupy at least forty percent (40 %) of all completed and occupied units in the Project before any vacant units are occupied by persons who are not Low Income Tenants; and for the Qualified Project Period no less than 40% of the total number of completed units of the Project shall at all times be rented to and occupied by Low Income Tenants. For the purposes of this paragraph (a), a vacant unit which was most recently occupied by a Low Income Tenant is treated as rented and occupied by a Low Income Tenant until reoccupied, other than for a temporary period of not more than 31 days, at which time the character of such unit shall be redetermined. (b) • No tenant qualifying as a Low Income Tenant shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's Adjusted Income increases to exceed the qualifying limit for Low Income Tenants. However, should a Low Income Tenant's Adjusted Income, as of the most recent determination thereof, exceed one hundred forty percent (140 %) of the applicable income limit for a Low Income Tenant of the same family size, the next available unit of comparable or smaller size must be rented to (or held vacant and available for immediate occupancy by)•a Low Income Tenant. Until such next available unit is rented, the former Low Income Tenant who has ceased to qualify as such shall be deemed to continue to be a Low Income Tenant for purposes of the forty percent (40 %) requirement of Section 4(a) hereof. (c) For the Qualified Project Period, the Borrower will obtain, complete, and maintain on file Income Certifications for each Low Income Tenant, including an Income Certification dated (i) immediately prior to the initial occupancy by such Low Income Tenant in the Project, and (ii) annually thereafter, within thirty days before or after the anniversary of such Low Income Tenant's initial occupancy of a unit in the Project. The Borrower will provide such additional information as may be required in the future by the Issuer and by the Code, as the same may be amended from time to time, in such form and manner as may be required by applicable rules, rulings, policies. procedures, Regulations or other official statements now or hereafter promulgated, proposed or made by the Department of the Treasury or the Internal Revenue Service with respect to Tax - Exempt obligations, all as and to the extent required to maintain the Tax - Exempt status of the Bonds or to comply with the laws of the State. A copy of the most recent Income Certifications for Low Income Tenants commencing or continuing occupation of a Low Income Unit shall be REGULATORY AGREEMENT PAGE 5 attached to each report to be filed with the Issuer and the Trustee pursuant to paragraph (e) of this Section 4. The Borrower shall make a good faith effort to verify that the income information provided by an applicant in a Verification of Income is accurate by taking one or more of the following steps as a part of the verification process: (I) obtain a pay stub for the most recent pay period, (2) obtain an income tax return for the most recent tax year, (3) conduct a search with a credit reporting company, (4) obtain an income verification from the applicant's current employer, (5) obtain an income verification from the Social Security Administration and/or the State of Oregon if the applicant receives assistance from either of such entities, or (6) if the applicant is unemployed and does not have an income tax return, obtain another form of independent verification. (d) The Borrower will maintain complete and accurate records pertaining to the . Low Income Units, and will permit any duly authorized representative of the Issuer, the Trustee, the Lender, Fannie Mae, the Department of the Treasury or the Internal Revenue Service to inspect the books and records of the Borrower pertaining to the Project, including those records pertaining to the occupancy of the Low Income Units. (e) The Borrower will prepare and submit to the Issuer and the Trustee (and to the Lender upon the Lender's written request), no later than the fifteenth day of the first month of each calendar quarter until the end of the Qualified Project Period, a Certificate of Continuing Program Compliance executed by the Borrower stating (i) the percentage of the Dwelling Units of the Project which were occupied or deemed occupied, pursuant to subsection (a) hereof, by Low Income Tenants during the preceding calendar quarter; and (ii) that either (A) no unremedied default has occurred under this Regulatory Agreement or the Financing Agreement, or (B) a default has occurred, in which event the certificate shall describe the nature of the default in detail and set forth the measures being taken by the Borrower to remedy such default. (f) For the Qualified Project Period, all tenant leases or rental agreements shall be subordinate to this Regulatory Agreement, the Indenture and the Mortgage and shall contain clauses, among others, wherein each tenant who occupies a Low Income Unit: (i) certifies the accuracy of the statements made in the Verification of Income and (ii) agrees that the family income and other eligibility 'requirements shall be deemed substantial and material obligations of the tenancy of such tenant, that such tenant will comply promptly with all requests for information with respect thereto from the Borrower, the Trustee, the Lender or the Issuer, and that the failure or refusal to comply with a request for information with respect thereto shall be deemed a material breach of such tenant's lease, permitting immediate termination of such lease or rental agreement. (g) Each lease or rental agreement pertaining to a Low Income Unit also shall contain a provision to the effect that the Borrower has relied on the Verification of Income and supporting information supplied by the Low Income Tenant in determining qualification for occupancy of the Low Income Unit, and that any failure to provide accurate information in the Verification of Income or supporting information or material misstatement in the Verification of Income or supporting information (whether or not intentional) will be cause for immediate termination of such lease or rental agreement. Each such lease or rental agreement shall also provide REGULATORY AGREEMENT PAGE 6 that the tenant's income is subject to annual certification in accordance with Section 4(c) hereof and that if upon any such certification such tenant's Adjusted Income exceeds the income limit applicable to Low Income Tenants, such tenant may cease to qualify as a Low Income Tenant. (h) In addition to any and all other reports or information required to be provided or filed hereunder by the Borrower, during the Qualified Project Period, the Borrower shall annually file with the Internal Revenue Service an "Annual Certification of a Residential Rental Project" (currently IRS Form 8703) by March 3I after the close of the calendar year for which certification is made, and/or such other certification, filing or report, with such frequency and by such date, as the Internal Revenue Service may in the future require in connection with the operation of the Project in manner necessary to ensure the Tax - Exempt status of the Bonds. Concurrently with such . filing, the Borrower shall deliver to the Trustee and the Issuer copies of each IRS Form 8703 or other certification, filing or report filed with the Internal Revenue Service pursuant to this subsection (h). SECTION S. TAX - EXEMPT STATUS OF THE BONDS. The Borrower hereby represents, warrants and agees as follows: (a) The Borrower will not knowingly take or permit, or omit to take or cause to be taken, as is appropriate, any action that would adversely affect the Tax - Exempt status of the interest on the Bonds and, if the Borrower should take or permit, or omit to take or cause to be taken, any such action, it will take all lawful actions necessary to rescind or correct such actions or omissions promptly upon obtaining knowledge thereof. (b) The Borrower will, at its own expense, file of record such documents and take such other steps as are necessary, in the written opinion of Bond Counsel filed with the Issuer and the Trustee, with copies to the Lender and Fannie Mae, in order to ensure that the requirements and restrictions of this Regulatory Agreement will, subject to the proviso in Section 12 regarding termination of this Regulatory Agreement, be binding upon all owners (including subsequent owners, if any) of the Project, including, but not limited to, the execution and recordation of this Regulatory Agreement in the real property records of the County. (c) The Borrower hereby covenants to include or reference the requirements and restrictions contained in this Regulatory Agreement in any documents transferring any interest in the Project to another person to the end that such transferee has notice of, and is bound by, such restrictions, and, except in the case of a foreclosure or deed in lieu of foreclosure or comparable conversion of the Mortgage Loan by Fannie Mae or its nominee, whereby Fannie Mae or its nominee becomes the owner of the Project, to obtain the agreement from any transferee to abide by all requirements and restrictions of this Regulatory Agreement, it being understood that no such agreement shall be required of Fannie Mae or its nominee. SECTION 6. MODIFICATION OF COVENANTS. The Borrower, the Trustee and the Issuer hereby agree as follows: • REGULATORY AGREEMENT PAGE 7 (a) To the extent any amendments to the Regulations or the Code shall, in the written opinion of Bond Counsel filed with the Issuer, the Trustee and the Borrower (with a copy to the Lender and Fannie Mae), impose requirements upon the ownership or operation of the Project more restrictive than those imposed by this Regulatory Agreement, and if such requirements are applicable to the Project, this Regulatory Agreement shall be amended in accordance with the procedures set forth in Section 6(c) hereof to impose such additional or more restrictive requirements. (b) To the extent that the Regulations or the Code, or any amendments thereto, shall, in the written opinion of Bond Counsel filed with the Issuer, the Trustee and the Borrower (with a copy to the Lender and Fannie Mae), impose requirements upon the ownership or operation of the Project less restrictive than imposed by this Regulatory Agreement, this Regulatory Agreement may be amended or modified to provide such less restrictive requirements, but only (i) by written amendment signed by the Issuer, the Trustee and the Borrower, (ii) with the written consent of Fannie Mae, and (iii) upon receipt by the Issuer, the Trustee, the Lender and Fannie Mae of the written opinion of Bond Counsel to the effect that such amendment will not affect the Tax - Exempt status of interest on the Bonds. (c) The Borrower, the Issuer and, if applicable, the Trustee, shall execute, deliver and, if applicable, file of record any and all documents and instruments reasonably necessary to effectuate the intent of this Section 6, and each of the Borrower and the Issuer hereby appoints the Trustee as its true and lawful attorney -in -fact to execute, deliver and, if applicable, file of record on behalf of the Borrower or the Issuer, as is applicable, any such document or instrument (in such form as may be approved in writing by Bond Counsel) if either the Borrower or the Issuer defaults in the performance of its obligations under this subsection (c); provided, however, that unless directed in writing by the Issuer or the Borrower, the Trustee shall take no action under this subsection (c) without first notifying the Borrower, the Issuer, the Lender and Fannie Mae, and without first providing the Borrower or the Issuer, or both, as is applicable, an opportunity to comply with.the requirements of this Section 6. Nothing in this subsection (c) shall be construed to allow the Trustee to execute an amendment to this Regulatory Agreement on behalf of the Issuer or the Borrower. SECTION 7. INDEMNIFICATION; PAYMENT OF OTHER AMOUNTS. The Borrower hereby covenants and agrees that it shall indemnify and hold harmless and defend, the Issuer, the Lender and the Trustee and the respective officers, members, supervisors, directors, officials, employees, agents and attorneys of each of them as set forth in the Financing Agreement, subject to the terms and provisions of the Financing Agreement; provided that such indemnification shall remain in effect notwithstanding termination of the Financing Agreement. In addition, the Borrower hereby agrees as follows: (a) The Borrower shall pay and discharge and shall indemnify and hold harmless the Issuer and the Trustee from (i) any lien or charge upon payments by the Borrower to the Issuer and the Trustee hereunder and (ii) any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges in respect of any portion of the Project. If REGULATORY AGREEMENT PAGE 8 any such claim is asserted, or any such Iien or charge upon payments, or any such taxes, assessments, imposition or other charges, are sought to be imposed, the Issuer or the Trustee shall give prompt notice to the Borrower and the Borrower shall have the sole right and duty to assume, and will assume, the defense thereof with full power to litigate, compromise or settle the same in its sole discretion. (b) The Borrower will pay upon demand all of the fees and expenses paid or incurred by the Trustee and/or the Issuer in enforcing the provisions hereof (including, but not . limited to, fees and expenses of Trustee and its counsel prior to trial, at trial, and on appeal, and in any bankruptcy or arbitration proceedings). Notwithstanding any other provision of this Regulatory Agreement to the contrary, neither Fannie Mae, its nominee nor any successor in interest thereto will assume or take subject to any liability for the indemnification obligations of the Borrower for acts or omissions of the Borrower prior to any transfer of title to Fannie Mae or its nominee, whether by foreclosure, deed in lieu of foreclosure or comparable conversion of the Mortgage Loan. Following any transfer of title to Fannie Mae or its nominee, any obligation of Fannie Mae or its nominee under this Section 7 shall be strictly limited to acts and omissions of Fannie Mac or its nominee which occur following acquisition of the Project by Fannie Mae or its nominee, whether such acquisition is by foreclosure, deed in lieu of foreclosure or comparable conversion of the Mortgage Loan, and only during the period of Fannie Mae's, or its nominee's, ownership and operation of the Project. The Borrower shall remain liable under this Section 7 for its actions and omissions prior to any transfer of title to Fannie Mae or its nominee, notwithstanding any consent given pursuant to Section 10. The provisions of this Section 7 shall survive the term of the Bonds and. this Regulatory Agreement. SECrioN 8. CONSIDERATION. The Issuer has issued the Bonds to provide funds to finance the Project, all for the purpose, among others, of inducing the Borrower to operate the Project as provided herein. In consideration of the issuance of the Bonds by the Issuer, the Borrower has entered into this Regulatory Agreement and has agreed to restrict the uses to which the Project may be put on the terms and conditions set forth herein. SECTION 9. RELIANCE. The Borrower hereby recognizes and agrees that the representations and covenants set forth herein may be relied upon by all persons interested in the legality and validity of the Bonds and in the exemption from Oregon personal income taxation and the Tax - Exempt status of the interest on the Bonds. In performing their duties and obligations hereunder, the Issuer and the Trustee may rely upon statements and certificates of the Low Income Tenants, and upon audits of the books and records of the Borrower pertaining to the Project in compliance with Section 4 hereof In addition, the Issuer and the Trustee may consult with counsel, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Issuer or the Trustee hereunder in good faith and in conformity with such opinion. In determining whether any default or lack of compliance by the Borrower exists REGULATORY AGREEMENT _ _ PAGE 9 under this Regulatory Agreement, the Trustee shall not be required to conduct any investigation into or review of the operations or records of the Borrower and may rely solely on any written notice or certificate delivered to the Trustee by the Borrower or the Issuer with resect to the occurrence or absence of a default unless it knows that the notice or certificate is erroneous or misleading. SECTION 10. SALE OR TRANSFER OF THE PROJECT. Except as may be specifically permitted by the terms of the Financing Agreement, the Borrower hereby covenants and agrees not to sell, transfer or otherwise dispose of the Project or any portion thereof (other than leases for individual tenant use as contemplated hereunder and replacement of personal property and fixtures), without obtaining the prior written consent of the Issuer and Fannie Mae, which consent of the Issuer shall, except in the case of a foreclosure or deed in lieu of foreclosure or comparable . conversion of the Mortgage Loan by Fannie Mae, whereby Fannie Mae or its nominee becomes the owner of the Project, be conditioned solely upon receipt by the Issuer and the Trustee of(i) evidence reasonably satisfactory to the Issuer that the Borrower's purchaser or transferee has assumed in writing and in full, and is reasonably capable of performing and complying with, the Borrower's duties and obligations under this Regulatory Agreement (subject to the limitations herein provided), (ii) a certificate of the Borrower that no default has occurred and no event which, with the passage of time or the giving of notice, or both, would constitute a default under this Regulatory Agreement has occurred, and that any fees due under this Regulatory Agreement have been paid, (iii) an opinion of counsel to the transferee that the transferee has duly assumed the obligations of the Borrower under this Regulatory Agreement and that such obligations and this Regulatory Agreement are • binding on the transferee and (iv) an opinion of Bond Counsel that such sale, transfer or other disposition of the Project will not adversely affect the Tax - Exempt status of interest on the Bonds and the exemption of such interest from Oregon personal income taxes. Provided the above conditions have been satisfied, upon request, the Issuer will provide to the Borrower and the purchaser or transferee its written consent to any sale, transfer or disposition of the Project, or any portion thereof, in accordance with this Section 10 and written notice to the Trustee of the Issuer's consent. No consent by the Issuer shall be required in connection with the acquisition of title to the Project by Fannie Mae or its nominee pursuant to foreclosure of the Mortgage by Fannie Mae, or the acceptance by Fannie Mae of a deed in lieu of such foreclosure, or comparable conversion of the Mortgage and, therefore, in connection with such acquisition of title by Fannie Mae or its nominee, as provided above, compliance with the provisions specified in clauses (i), (ii), (iii) and (iv) above shall not be required to make effective any such title acquisition. It is hereby expressly stipulated and agreed that any other sale, transfer or other disposition of the Project in violation of this Section 10 shall be null, void and without effect and shall be ineffective to relieve the Borrower of its obligations under this Regulatory Agreement. Nothing contained in this Section 10 shall affect or limit any provision of the Mortgage or any other document or instrument to which the Borrower is a party which requires the Borrower to obtain the consent of the holder of the Mortgage Note or any other person as a precondition to sale, transfer or other disposition of the Project. SECTION 11. TERM. This Regulatory Agreement and all and several of the terms hereof shall become effective upon its execution and delivery, and shall remain in full force and effect for the period provided herein and shall terminate in its entirety (except for provisions otherwise REGULATORY AGREEMENT _ _ PAGE 10 provided with a specific termination date) at the end of the Qualified Project Period, it being expressly agreed and understood that the provisions hereof are intended to survive the retirement of the Bonds and discharge of the Indenture and the Financing Agreement if the Qualified Project Period extends beyond such retirement and discharge. The terms of this Regulatory Agreement to the contrary notwithstanding, the requirements of this Regulatory Agreement shall terminate and be of no further force and effect in the event of involuntary noncompliance caused by fire or other casualty, seizure, requisition, foreclosure, transfer of title by deed in Iieu of foreclosure, change in a federal law or an action of a federal agency after the Closing Date which prevents the Issuer and the Trustee from enforcing such provisions, or condemnation or a similar event, but only if, within a reasonable period, either the Bonds are retired . or amounts received as a consequence of such event are used to provide a project which meets the requirements hereof; provided, however, that the preceding provisions of this sentence shall cease to apply and the restrictions contained herein shall be reinstated if, at any time subsequent to the termination of such provisions as the result of foreclosure of the Mortgage or the delivery of a deed in lieu of foreclosure or a similar event, the Borrower or any related person (within the meaning of Section 1.103 -I0(e) of the Regulations) obtains an ownership interest in the Project for federal income tax purposes. The Borrower hereby agrees that, following any foreclosure, transfer of title by deed in lieu of foreclosure or similar event, neither the Borrower nor any such related person as described above will obtain an ownership interest in the Project for federal tax purposes. Upon the termination of the terms of this Regulatory Agreement, the parties hereto agree to execute, deliver and record appropriate instruments of release and discharge of the terms hereof; provided, however, that the execution and delivery of such instruments shall not be necessary or a prerequisite to the termination of this Regulatory Agreement in accordance with its terms. SECTION 12. COVENANTS TO RUN WITH THE LAND; EQUITABLE SERVITUDES. The Borrower hereby subjects the Project to the covenants, reservations and restrictions set forth in this Regulatory Agreement. The Issuer and the Borrower hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running with the land and shall be deemed equitable servitudes and shall pass to and be binding upon the Borrower's successors in title to the Project; provided, however, that on the termination of this Regulatory Agreement, said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conve the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. SECTION 13. BURDEN AND BENEFIT. The Borrower hereby declares its understanding and intent that the burdens of the covenants set forth herein touch and concern the land in that the Borrower's legal interest in the Project is rendered less valuable thereby. The Borrower hereby further declares its understanding and intent that the benefits of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by Low Income Tenants, REGULATORY AGREEMENT _ 4 PAGE 11 • the intended beneficiaries of such covenants, reservations and restrictions, and by furthering the ► public purposes for which the Bonds were issued. SECTION 14. COMMON PLAN. The covenants, reservations and restrictions hereof shall apply uniformly to the entire Project in order to establish and canny out a common plan for the use of the site on which the Project is located. SECTION 15. DEFAULTS; ENFORCEMENT. If the Borrower defaults in the performance or observance of any covenant, agreement or obligation of the Borrower set forth in this Regulatory Agreement, and if such default remains uncured for a period of sixty (60) days after notice thereof shall have been given by the Issuer or the Trustee to the Borrower, or for a period of sixty (60) days • from the date the Borrower should, with due diligence, have discovered such default, then the Trustee, acting on its own behalf or on behalf of the Issuer, shall declare an "Event of Default" to have occurred hereunder. Following the declaration of an Event of Default hereunder the Issuer or • the Trustee may, at their respective options, take any one or more of the following steps, in addition to all other remedies provided by law or equity: (i) by mandamus or other suit. action or proceeding at law or in equity, including injunctive relief, require the Borrower to perform its obligations and covenants hereunder or enjoin any acts or things which may be unlawful or in violation of the rights of the Issuer or the Trustee hereunder; • (ii) have access to and inspect, examine and make copies of all of the books and records of the Borrower pertaining to the Project; • (iii) with the consent of Fannie Mae, declare a default under the Financing Agreement, accelerate the indebtedness of the Borrower under the Financing Agreement, and proceed with any remedies provided therein; and /or (iv) take such other action at law or in equity as may appear necessary or desirable to enforce the obligations, covenants and agreements of the Borrower hereunder; provided, however, that any claim for damages, indemnification or any other monetary obligation sought to be enforced by Issuer or the Trustee shall be subordinate to the Mortgage Loan. For so long as the Bonds are outstanding, the rights of the Issuer in this Regulatory Agreement (except the rights of the Issuer under subdivision (a) of Section 7) will be assigned as security to the Trustee and shall be enforceable by the Trustee, upon notice to but without the consent or approval of the Issuer, in accordance with the terms hereof and the terms of the Indenture. No delay in enforcing. the provisions hereof as to any breach or violation shall impair, damage or waive the right of any person entitled to enforce the same to obtain relief against or REGULATORY AGREEMENT PAGE 12 recover for the continuation or repetition of such breach or violation or any similar breach or violation thereof at any later time or times. • All reasonable fees, costs and expenses of the Trustee and the Issuer incurred in taking any action pursuant to this Section 15 shall be the sole responsibility of the Borrower. No breach or default under this Regulatory Agreement shall defeat or render invalid any mortgage or like encumbrance upon the Project or any portion thereof given in good faith and for value. Notwithstanding anything herein to the contrary, neither the Issuer nor the Trustee, or any - other person acting on behalf of either of them, shall: (a) initiate or take any action which may have the effect, directly or indirectly, of impairing the ability of the Borrower to timely pay the principal of, interest on, or other amounts due and payable under, the Mortgage Loan; (b) interfere with or attempt to influence the exercise by Fannie Mae of any of its rights under the Mortgage Loan, including, without limitation, Fannie Mae's remedial rights under the Mortgage. Loan upon the occurrence of an event of default by the Borrower under the Mortgage Loan; or (c) upon the occurrence of an event of default under the Mortgage Loan, take any • action to accelerate or otherwise enforce payment or seek other remedies with respect to the Mortgage Loan or the Bonds; provided that the foregoing prohibition shall not be construed to prevent the Issuer from consulting with Fannie Mae or to limit the rights of the Issuer and the Trustee to specifically enforce this Regulatory Agreement in order to provide for the operation of the Project in accordance with the Code and the Act; and provided further that this prohibition shall not be construed to limit the rights of the Issuer to enforce its rights against the Borrower under Section 7 so long as it does not cause the Borrower to file a petition seeking reorganization, arrangement, adjustment, or composition of or in respect of the Borrower under any applicable liquidation, insolvency, bankruptcy, rehabilitation, composition, reorganization, conservation or other similar law now or hereafter in effect. The Issuer and the Trustee acknowledge that, notwithstanding the occurrence of any violation of this Regulatory Agreement, neither the Issuer nor the Trustee shall have any right to cause or direct acceleration of the Mortgage Loan, to enforce the Mortgage Note or to foreclose on the Mortgage, and that no person other than Fannie Mae shall have the right to (a) declare the principal balance of the Mortgage Note to be immediately due and payable or (b) commence foreclosure or other like action without express written authorization from Fannie Mae. REGULATORY AGREEMENT _ w PAGE 13 Promptly upon determining that a violation of the Regulatory Agreement has occurred, the Issuer or the Trustee shall, by notice in writing to the Lender and Fannie Mae, inform the Lender and Fannie Mae that such violation has occurred, the nature of the violation and that the violation has been cured or has not been cured, but is curable within a reasonable period of time, or is incurable. SECTION 16, THE TRUSTEE. The Trustee shall act as specifically provided herein and in the Indenture. The Trustee shall have no duty to act with respect to enforcement of the Borrower's performance hereunder as described in Section 15 unless it shall have actual knowledge of any such default. The Trustee may act as the agent of and on behalf of the Issuer under this Regulatory Agreement, and any act required to be performed by the Issuer as herein provided shall be deemed • taken by the Issuer if such act is performed by the Trustee. In connection with any such performance, however, the Trustee is acting solely as Trustee under the Indenture, and not in its individual capacity, and all provisions of the Indenture relating to the rights, privileges, powers and protections of the Trustee shall apply with equal force and effect to all actions taken (or omitted to be taken) by the Trustee in connection with this Regulatory Agreement. Neither the Trustee nor any of its officers. directors or employees shall be liable for any action taken or omitted to be taken by it hereunder or in connection herewith except for its or their own negligence or willful misconduct. The Trustee may consult with legal counsel selected by it (the reasonable fees of which counsel shall be paid by the Borrower) and any action taken or suffered by it reasonably and in good faith in accordance with the opinion of such counsel shall be full justification and protection to it. After the date on which no Bonds remain outstanding as provided in the Indenture, the Trustee shall no longer have any duties or responsibilities under this Regulatory Agreement and all references to the Trustee in this Regulatory Agreement shall be deemed references to the Issuer. SECTION 17. RECORDING AND FILING. The Borrower shall' cause this Regulatory Agreement and all amendments and supplements hereto to be recorded and filed in the real property records of the County and in such other places as the Issuer or the Trustee may reasonably request. The Borrower shall pay all fees and charges incurred in connection with any sutr.h recording. SECTION 18. PAYMENT OF FEES. Notwithstanding any prepayment of the Mortgage Loan and notwithstanding a discharge of the Indenture, the Borrower shall continue to pay to the Trustee reasonable compensation for any services rendered by it hereunder and reimbursement for all expenses reasonably incurred by it in connection herewith, and shall continue to pay (or shall prepay) the Issuer's annual administrative fee and expenses as provided in the Financing Agreement; provided that neither Fannie Mae, its nominee nor any purchaser from Fannie Mae or its nominee shall have any liability for the payment of any accrued and unpaid fees owed by the Borrower prior to the date of acquisition of the Project by Fannie Mae or its nominee. SECTION 19. GOVERNING LAW. This Regulatory Agreement shall be governed by the laws of the State of Oregon. The Trustee's rights, duties and obligations hereunder are governed in their entirety by the terns and provisions hereof and of the Indenture. REGULATORY AGREEMENT C--� PAGE 14 SECTION 20. AMENDMEN'T'S. (a) This Regulatory Agreement may be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County, only with the prior written consent of Fannie Mae and notice to the Lender, and only upon receipt by the Issuer of an opinion from Bond Counsel that such amendment will not adversely affect the Tax- Exempt status of the Bonds. • (b) Anything to the contrary contained herein notwithstanding, the Issuer, the Trustee and the Borrower hereby agree to amend this Regulatory Agreement to the extent required, in the opinion of Bond Counsel, in order that interest on the Bonds remains Tax - Exempt. The parties .. requesting such amendment shall notify the other parties to this Regulatory Agreement and Fannie Mae of the proposed amendment, with a copy of such requested amendment to Bond Counsel and a request that Bond Counsel render to the Issuer an opinion as to the effect of such proposed amendment upon the Tax - Exempt status of the Bonds. This provision shall not be subject to any provision of any other agreement requiring any party hereto to obtain the consent of any other person in order to amend this Regulatory Agreement. SECTION 21. NOTICES. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery or first class mail, postage prepaid, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: To the Issuer: State of Oregon Health, Housing, Educationai and Cultural Facilities Authority Pacwest Center, Suite 1700 • 1211 SW Fifth Avenue Portland, Oregon 97204 Attention: Executive Director Telecopy Number: (503) 796 -2900 With a copy to: State Treasurer 159 Capitol Building Salem, Oregon 973 10 Teleeopy Number: (503) 373 -7051 To the Trustee: First Interstate Bank of Oregon, N.A. 2701 NW Vaughn Street, 2nd Floor Portland, Oregon 97210 Attention: Corporate Trust Department Telecopy Number: (503) 340 -5685 • T . REGULATORY AGREEMENT PAGE 15 To the Borrower: Hawthorne Villa Limited Partnership c/o Hawthorne Associates Limited Partnership Suite 200 16101 SW 72nd Avenue • Portland, Oregon 97224 Attention: Mr. Chad Rennaker with a copy to: Stephen M. Seidel Miller, Nash, Wiener, Hager & Carlsen 111 SW Fifth Avenue, Suite 3500 Portland, Oregon 97204 To Fannie Mae: Federal National Mortgage Association 3900 Wisconsin Avenue, N.W. Washington, D.C. 20016 -2899 Attention: Senior Vice President, Multifamily with a copy to: Federal National Mortgage Association 3900 Wisconsin Avenue, N.W. Washington, D.C. 20016 -2899 Attention: Office of the General Counsel - re: Multifamily Matters with a copy to: Federal National Mortgage Association 135 North Los Robles Avenue Suite 300 Pasadena, California 91101 -1707 Attention: Vice President/Multifamily • with a copy to: Arent Fox Kitner Plotkin & Kahn 1050 Connecticut Avenue, N.W. Washington, D.C. 20036 Attention: Stephen D. Kahn • To the Lender: Washington Capital DUS, Inc. 1616 North Fort Myer Drive, Suite I210 Arlington, Virginia 22209 Attention: Robert L. Moore with a copy to: Ballard Spahr Andrews & Ingersoll 555 13th Street NW, 4900 East Washington, D.C. 20004 Attention: Mary Jo George REGULATORY AGREEMENT PAGE 16 • The Issuer, the Trustee, the Borrower, the Lender and Fannie Mae may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Notice shall be deemed given three business days after the date ofrnailing. A duplicate copy of each notice, certificate or other communication given hereunder by any party to another shall also be given to each of the others. SECTION 22. FINANCIAL OBLIGATIONS PERSONAL TO BORROWER, The Issuer acknowledges that the Project shall be encumbered by the Mortgage and shall be subject to any and all other Mortgage Loan Documents, Notwithstanding any provisions of this Regulatory Agreement to the contrary, all obligations of the Borrower under this Regulatory Agreement for the payment of money and any claims for damages against the Borrower occasioned by breach or alleged breach • by the Borrower of its obligations under this Regulatory Agreement, including indemnification obligations, shall not be secured by or in any manner constitute a lien on the Project and no Person shall have the right to enforce such obligations other than directly against the Borrower as provided in Section 15 of this Regulatory Agreement. No subsequent owner of the Project shall be liable or obligated for the breach or default of any obligation of any prior owner of the Project under this Regulatory Agreement, including but not limited to any payment or indemnification obligation. Such obligations are personal to the Person who was the Borrower at the time the default or breach was alleged to have occurred and such Person shall remain liable for any and all damages occasioned thereby even after such Person ceases to be the owner of the Project. SECTION 23. SEVERABILITY. If any provision of this Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby. SECTION 24. MULTIPLE COUNTERPARTS. This Regulatory Agreement may be simultaneously executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original. SECTION 25. CONSTRUCTION. The parties to this Revelatory Agreement acknowledge that each party and its counsel have participated in the drafting and revision of this Regulatory Agreement. Accordingly, the parties agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in the interpretation of this Regulatory Agreement or any amendment, modification, supplement or restatement of any of the foregoing or of any exhibit to this Regulatory Agreement. J REGULATORY AGREEMENT _ PAGE 17 [This space intentionally left blank. The signatures of the parties appear on the following pages./ . REGULATORY AGREEMENT PAGE 18 IN WITNESS WHEREOF, the Issuer, the Trustee and the Borrower have executed this Regulatory Agreement by duly authorized representatives, all as of the date first above written. JIM HILL, STATE TREASURER, ON BEHALF OF THE ISSUER • • G. Bruebaker, Deputy State Treasurer • • • STATE OF OREGON )ss: County of / ) • • The foregoing instrument was acknowledged before me this ,p day of /7) /t, 1996, by Gary Bruebaker, Deputy State Treasurer, for and on behalf of .dim Hill, State Treasurer, on behalf of the Issuer. APFICIAL SEAL ." L '`�% JUDY ANN RUTKOWSKI )) ! NOT PUBLIC - OREGON ) �! I .. 14 COMMISSION N0. 053186 , ' " ' M Y COMMISSION WIRES JUL 18,2000 Notary Ptn lic for the State of Oregon My4ommission Expires: 7 : / /.){ • it REGULATORY AGREEMENT PAGE 19 • FIRST INTERSTATE BANK OF OREGON, N.A., AS TRUSTEE • By (�(' Au orized Officer STATE OF OREGON � t )ss: County of �1'IU.�h � ) rVI The foregoing instrument was acknowledged before me this day of 1996. by ��I , an .Authorized Officer of First Interstate Bank dfOregon, N.A.. for and on behalf of First Interstate Bank of Oregon. N.A.. as Trustee. • OFFICIAL SEAL "MINA C. REMAUX 'may (VO�it 'YPt18LIGOREGON A ca+�' "isSioN'�o• 027Z378 . otary Public for the State of Oregon MY ", OMMISSION EXPIRES SEPT. 13, 1997 My Commission Expires: 97 • r REG ULATORY AGREEMENT PAGE 20 • HAWTHORNE VILLA LIMITED PARTNERSHIP, as Borrower By: TUALATIN VALLEY HOUSING PARTNERS, a General Partner of the Borrower By: Qa Its: Execu1 0 I1'eL. - And: HAW'IHORNE ASSOCIATES LIMITED PARTNERSHIP, a General Partner of the Borrower By: HAWTHORNE VILLA GP, INC., a General Partner of the Hawthorne Associates Limited Partner By: 7 Its: '*?;�... [[ ' 'r STATE OF OREGON )ss: 1I�� County of !� (,ITriO Yk ) The foregoin instrument was acknowledged before me this 23 Aay of 1996. by GA4 , for and on behalf of Tualatin Valley Housing Partner . as general partner of Hawthorne Villa Limited Partnership. i °, CFFICtAL SEAL NO - , ,s' • ' LIGG;fEga1V • rri'= SI(Tht N i 7878 j'Ct ry Public for the State Qt Oregon CQtdMtSSI0N ,P+yES SEPT. 13, 1897 My Commission Expires: 1-13-C17 STATE OF OREGON )ss: County of mU.thlpyylq„n ) rri The foregoing instrument was acknowledged before me this 23' av of 1 996. by J� -,, I43 BUJ IOGK, . for and on behalf of Hawthorne Villa GP, Inc., zs gene parmer of Hawthorne Associates Limited Parmership. a general parmer of Hawthorne Villa Limited Parmership. OFFICIAL SEAL "Wok t:. CASM lsX I , L I - ' N ^` -�" "`tir3L1C-0Rt t3bN '`a" co+l£P N:). 027E713 ar Public for the State of Oregon MY COMMISSION v F:F,ES SET +3. 19A7 My Commission Expires: q H3 • REGULATORY AGREEMENT PAGE 21 EXHIBIT A DESCRIPTION PARCEL I: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: . BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South Range 1 West, Willamette Meridian; thence South 89 °00', East 1,887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1,204.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed in Deed Book 279, Page 648; thence South 89 °49' East, 85.0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner of said tract and true point of beginning of the tract herein described; thence South 89 °49' East, 25.00 feet; thence North 0°11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968, in Book 677, Page 139, Washington County Records, 173.66 feet; thence South 88°17' East, 96 feet to the East line of said Cason tract; thence South 0°11' West along the East line of said Cason tract, 315.0 feet to the Southeast corner thereof; thence North 88°17' West along the South line of said Cason tract, 121.6 feet to the Southeast corner of that tract conveyed in Deed Book 279, Page 648; thence North 0 °11' East along the East line of that tract conveyed in Deed Book 279, Page 648, 141.34 feet, more or less, to the true point of beginning, all situated in Washington County, Oregon. PARCEL II: A part orthe George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0°11' West 1204.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed in Deed Book 279, Page 648, and the true point of beginning herein described; thence South 89 °49' East, 110.0 feet to a point; thence North 0 °11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al. recorded January 16, 1968, in Book 677, Page 139, Washington County Records, 173.66 feet to a point; thence North 88 °37' West, 110.00 feet to a point on the West line of said , LLO 145940. I 15661-0031 Cason tract; thence South 0°11' West along said West line, 173.66 feet to the true point of beginning. PARCEL III: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, . situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian and running thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1204.0 feet to an iron pipe, said iron pipe marking ,the Northwest corner of that tract conveyed in Deed Book 279, Page 648; thence South 89 °49' East, 85.0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner thereof; thence South 89 °49' East, 25.0 feet; thence North 0 °11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968, in Book 677, Page 139, Washington County Records, 173.66 feet; thence South 88°17' East, 51.0 feet to the true point of beginning of the herein described premises; thence continuing South 88 °17' East, 45.0 feet to a point on the East line of said Cason tract; thence North 0 0 11' East along said East line, 90.0 feet; thence North 88°17' West, 45.0 feet; thence South 0°11' West, 90.0 feet to the true point of beginning. PARCEL IV: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim in Section 36, Township 1 South, Range 1 West, Willamette Meridian in the County of Washington and State of Oregon, and running thence South 89 °00' East, 1887.60 feet to a point on the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1030.34 feet to a point on the West line of that tract described in deed to Leonard E. Cason. et al. recorded January 16, 1968, in Book 677, Page 139, records of Washington County, being the Westerly Northwest corner of that tract described in Mortgage recorded October 29, 1968, in Book 722, Page 520, records of' Washington County and the true point of beginning of the herein described premises; thence South 88° 17' East 161.6 feet; thence North 0°11' East, 90.0 feet; thence South 88°17' East, 45.0 feet to a point on the East line of said Cason tract: thence North 0 °11' East along said East line, 171.34 feet to a point; thence North 88 °17' West, 65.0 feet to a point; thence South 0 °11' West. 75.0 feet to a 1101- 15910.1 15863-0031 point; thence North 88°17' West, 141.6 feet to a point on the West tine of said Cason tract; thence South 0 °11' West along said West line, 186.34 feet to the true point of beginning. PARCEL V: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, in Section 36, Township 1 South, Range 1 West of the Willamette Meridian and running thence South 89 °00' East, 1,887.60 feet to a point on the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 844.0 feet to a point on the West line of that tract described in deed to Leonard E. Cason et al, recorded January 16, 1968, in Book 677, Page 139, records of Washington County, being the Westerly Northwest corner of the first tract described in Mortgage recorded February 4, 1969, in Book 732, Page 58, records of Washington County and the true point of beginning of the herein described property; thence South 88°17' East, 141.6 feet to a point; thence North 0°11' East, 75.0 feet to a point; thence South 88 °17' East, 65.0 feet to a point on the East line of said Cason tract; thence North 0°11' East along said East line, 113.66 feet to a point; thence North 88°17' West, 206 feet to a point on the West line of said Cason tract; thence South 0 °11' West along said West line, 190 feet to the true point of beginning. PARCEL VI: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim in said Section 36, Township 1 South, Range 1 West of the. Willamette Meridian, in the County of Washington and State of Oregon and running thence South 89 °00' East, 1887.60 feet to a point on the Northerly boundary line of said Donation Land Claim; thence South 0°11' West, 654.0 feet to a point on the West line of that tract described in deed to Leonard E. Cason et al, recorded January 16, 1968, in Book 677, Page 139, records of Washington County, being the Northwest corner of the first tract described in Mortgage recorded in Book 745, Page 285, records of Washington County and the true point of beginning of the herein described property; thence South 88 °17' East, 206 feet to a point on the East line of said Cason tract; thence North 0°11' East along said East line, 186.0 feet to a point; thence North 88°17' East, 206 feet to a point on the West line of said Cason tract; thence South 0 °11', West along said West line, 186.0 feet to the true point of beginning. LL01- 45440.1 1 5863.0031 PARCEL VII: • A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: • BEGINNING at the Northwest corner of the George Richardson Donation Land Claim in Section 36; thence South 89 °00' East, 1887.60 feet to a point on the Northerly boundary line of said Donation Land Claim; thence South 0 °11', 290 feet to a point, said point being the southwest corner of a tract conveyed to Oscar Sidler and Grace Sidler by deed recorded . November 28, 1911 in Deed Book 90, Page 45, and the true point of beginning; thence South 0 °11' West, 178 feet to a point on the West line of that tract described in a Deed to Leonard E. Cason et al, recorded January 16, 1968, in Book 677, Page 139, records of Washington County, being the Northwest corner of the first tract described in Mortgage recorded May 19, 1971 in Book 818, Page 167, records of Washington County; thence South 88 °17' East, 206 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East line, 178 feet to the South line of said Sidler tract; thence North 89° West along the South line of said Sidler tract, 206.0 feet to the true point of beginning. • J � LLO 1- 45940.1 15863-0031 • • Exhibit B • [FORM OF INCOME CERTIFICATION) VERIFICATION OF INCOME RE: [name and address of Project Apartment Number: I/We, the undersigned, being first duly sworn, state that I /we have read and answered fully, and truthfully each of the following questions for all persons who are to occupy the unit in the above apartment development for which application is made, all of whom are listed below: 1. 2. 3, 4. 5. Name of Members Relationship Social of the to Head of Security Place of Household Household Ae,e Number Employment HEAD SPOUSE 6. The anticipated income of all the above persons during the 12 -month period beginning this date, including income described in (a) below, but excluding all income described in (b) below. is $ • (a) The amount set forth above includes all of the followine income (unless such income is described in (b) below): (1) all wages and salaries, over -time pay, commissions, fees, tips and bonuses before payroll deductions; (ii) net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets); (iii) interest and dividends (include all income from assets as set forth in item 7(b) below); (iv) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts; (v) payments in lieu of earnings, such as unemployment and disability compensation, ) workmen's compensation and severance pay; B -1 (vi) the maximum amount of public assistance available to the above persons; (vii) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (viii) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (ix) any earned income tax credit to the extent it exceeds income tax Jiability. (b) The following income is excluded from the amount set forth above: (i) casual, sporadic or irregular gifts; (ii) amounts which are specifically for or in reimbursement of medical expenses; (iii) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; (iv) amounts of educational scholarships paid directly to a student or an educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purposes; (v) hazardous duty to a member of the household in the armed forces who is away from home and exposed to hostile fire; (vi) relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; • (vii) income from employment of children (including foster children) under the age of 18 years; (viii) foster child care payments: (ix) the value of coupon allotments under the Food Stamp Act of 1977; (x) payments to volunteers under the Domestic Volunteer Service Act of 1973; (xi) payments received under the Alaska Native Claims Settlement Act; (xii) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (xiii) payments on allowances made under the Department of Health and Human Services' Low- Income Home Energy Assistance Program; (xiv) payments received from the Job Partnership Training Act; (xv) income derived from the disposition of funds of the Grand River and of Ottawa Indians; and 1 1 � B -2 (xvi) the fast $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Coun of Claims or from funds held in trust for an Indian tribe by the Secretary of Interior. 7. If any of the persons described in column 1 above (or any person whose income or contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands), provide: (a) the total value of all such assets owned by all such persons: $ , and (b) the amount of income expected to be derived from such assets in the 12 -month period commencing this date: $ 8. (a) Will all of the persons listed in column I above be or have they been full - time students during five calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students? Yes No (b) (Complete only if the answer to Question 8(a) is "Yes "). Is any such person (other than nonresident aliens) married and eligible to file a joint federal income tax return? Yes No We acknowledge that all of the above information is relevant to the status under federal income tax law of the interest on bonds issued to finance construction of the apartment building for which application is being made. We consent to the disclosure of such information to the issuer of such bonds, the holders of such bonds, any trustee acting on their behalf and any authorized agent of the Treasury Department or Internal Revenue Service. Date: Head of Household • Spouse SUBSCRIBED AND SWORN to before me this day of (NOTARY SEAL) Notary Public in and for the State of My Commission Expires: NOTE TO BORROWER: A vacant unit previously occupied by individuals or a family of low income, may be treated as occupied by individuals or a family or low income until reoccupied, other than for a period of 31 consecutive days or less, at which time the character of the unit shall be redetermined. ) )3-3 • FOR COMPLETION BY BORROWER ONLY: • 1. Calculation of eligible income: • (A) Enter amount entered for entire household in 6 above: (B) If the amount entered in 7(a) above is greater than $5,000, enter: 0) the product of the amount entered in 7(a) above multiplied by the current passbook savings rate as determined by HUD: (ii) the amount entered in 7(b) above: g (iii) Tine (i) minus line (ii) (if less than $0, enter $0): $ (C) TOTAL ELIGIBLE INCOME (Line I(A) plus line I(B)(iii)): S II. Qualification as individuals or a family of low income: (A) Is the amount entered in line 1(c) less than 60% of Median Gross Income for the Area *? Yes No (B) (i) If line 1I(A) is "No ", then the household does not qualify as individuals or a family of low income; skip to item III. (ii) If line 1I(A) above is "Yes" and 8(a) above is "No ", then the household qualifies as individuals or a family of low income; skip to item III. (iii) If line II(A) above is "Yes" and 8(b) above is "Yes ", then the household qualifies as individuals or a family of low income; skip to item III. .(iv) If neither (ii) nor (iii) is applicable, then the household does not qualify as individuals or a fatuity of low income. III. (Check one) The household does not qualify as individuals or a family of low income. The household qualifies as individuals or a family of low income. IV. Number of apartment unit assigned: (enter here and on page one) Borrower * "Median Gross Income for the Arca" means the median income for the area where the Project is located as determined by the Secretary of Housing and Urban Development under Section 8(0(3) of the United States Housing Act of 1937, as amended, or if programs under Section 8(0 are terminated, median income determined under the method used by the Secretary prior to the termination. B-4 r . OCCUPANCY CE1 TIFICATE (To be filed with the Issuer along with a Verification of Income upon the rental of a unit to any low Income Tenant.) Project: The tenant identified in the attached Verification of Income has entered into a lease with respect to a unit in the above - described Project. Such tenant is /is not (circle one) a Low Income Tenant. The rental of a unit to such tenant will not result in a violation of any of the requirements of the Financing Agreement or the Regulatory Agreement to which the Borrower is a party. Witness Borrower Date: • 8 -5 • Exhibit [FORM OF CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE} CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE Wiutesseth that on this day of ,19 , the undersigned, having borrowed certain funds from the (the "Issuer ") for the purpose of constructing a multifamily rental housing development (the "Project "), does hereby certify that during the preceding quarter (i) such Project was continually in compliance with the Regulatory Agreement executed in connection with such loan from the Issuer, (ii) % of the units in the Project were occupied by Low Income Tenants (minimum of 40%) and does hereby further certify that the representations set forth herein are true and correct to the best of the undersigned's knowledge and belief. Set forth below are the names of Low Income Tenants who commenced or terminated occupancy during the preceding quarter. • Commenced Occupancy Terminated Occupancy 1 . 1. 2 2. 3. 3. The units occupied by Low Income Tenants are of similar size and quality to other units and are dispersed throughout the Project. Attached is a separate sheet listing the number of each unit and indicating which units are occupied by Low Income Tenants, the size, the number of bedrooms of such units and the number of Low Income Tenants who commenced occupancy of units during the preceding quaver. Witness Borrower Date: • • C-I Unit Low Income O or Mar et Unit Total Eligible Income o. of Bedrooms Rem for Low Income Units fS . Ft. Size • Total Number of Units: Percentage of Low Income Units: Number of Low Income Tenants commencing occupancy this quarter: • t 1 • C -2 ATTACHMENT HAWTHORNE VILLA HOUSEHOLD DEMOGRAPHICS Household Demographics Report Printed on: 2/27/12 12:07 pm Community = Hawthome Villa (252) Effective Date = 2/27/2012 Fundin• Pro. ram = Tax Credit Federal Adults pry GROSS INCOME DEDUCTIONS Total In >= 18 Children Teens Teens Move -In Move -In Certified Change Move -In Certified Unit Ethnicity Household yr <= 5 yr 6-12 yr 13-17 yr Date $ %AMI $ %AMI $ % $ $ 1 -001 na 1 1 08/04/00 7,642 (7,642) (100) 1 -002 na 1 1 06/19/06 7,582 (7,582) (100) 1 -003 Caucasian 2 2 03/30/10 8,341 14 % 1 -004 Caucasian 1 1 08/01/11 24,544 48 % 24,544 48 % 1 -005 Caucasian 1 1 10/29/10 14,713 29 % (14,713) (100) 1 -006 Caucasian 1 1 03/12/10 11,016 21 % 11,016 1 -007 Caucasian 2 2 03/21/11 20,400 35 % 20,400 35 % 1 -008 Caucasian 1 1 08/01/08 8,580 7,309 14 % (1,271) (15) 1-009 Caucasian 1 1 02/08/99 1 -010 Caucasian 1 1 01/28/11 11,472 22 % 11,472 22 % 1 -011 na 1 1 08/18/06 16,492 (16,492) (100) 1-012 na 1 1 07/01/08 16,492 (16,492) (100) 1 -014 Caucasian 2 2 01/20/06 1 -015 Caucasian 1 1 08/09/10 20,424 40 % (20,424) (100) 1 -016 na 1 1 10/01/10 12,360 24 % 22,404 44 % 10,044 81 1 -017 Caucasian 1 1 08/25/11 22,069 43 % 22,069 43 % 2 -018 Caucasian 1 1 07/09/08 2 -019 Caucasian 1 1 09/13/11 14,560 28 % 14,560 28 % 2 -020 Caucasian 1 1 03/09/05 11,568 23 % 2 -021 Caucasian 1 1 10/22/10 27,990 54 % (27,990) (100) 2 -022 Caucasian 1 1 06/16/10 5,700 11 2 -023 Caucasian 1 1 05/09/11 28,034 55 % 28,034 55 % 2 -024 Caucasian 1 1 10/01/05 12,936 (12,936) (100) 2 -025 na 2 2 09/10/07 2 -026 Caucasian 1 1 05/01/06 13,020 25 % 2 -027 Caucasian 1 1 01/09/12 26,489 52 % 26,489 52 % 2 -028 Black 2 2 01/07/06 21,843 (21,843) (100) 2 -029 Caucasian 1 1 01/03/10 2 -030 Caucasian 2 2 12/17/07 26,743 45 % 2 -031 Caucasian 2 2 04/18/11 18,609 32 % 18,609 32 % 2 -032 Caucasian 1 1 05/28/10 3 -033 Asian 2 2 02/07/11 15,500 26 % (15,500) (100) 3 -034 Caucasian 1 1 07/22/11 13,863 27 % 13,863 27 % 3-035 Caucasian 1 1 02/01/11 10,608 21 % 10,608 21 3-036 Caucasian 1 1 06/28/03 31,582 61 % 3 -037 Hawaiian /Pacificls 1 1 10/08/11 24,638 48 % 24,638 48 % land 3-038 Hispanic/Latino 1 1 02/01/09 3 -039 Caucasian 1 1 07/21/09 3 -040 na 1 1 09/28/00 22,193 (22,193) (100) 3 -041 Caucasian 1 1 02/12/04 8,088 16 % 3 -042 Caucasian 1 1 08/19/11 19,176 37 % 19,176 37 % 3-043 Caucasian 1 1 12/09/00 3 -044 Caucasian 1 1 10/13/00 10,047 12,468 24 % 2,421 24 3 -045 <VACANT> 3 -046 na 2 2 03/01/08 28,756 49 % Report Version: 7-Aug-2010 (8.0.0) Page 1 of 3 I Household Demographics Report Printed on: 2/27/12 12:07 pm Adults Pre- GROSS INCOME DEDUCTIONS Total In >= 18 Children Teens Teens Move -In Move -In Certified Change Move -In Certified Unit Ethnicity Household yr <= 5 yr 6 -12 yr 13 -17 yr Date $ %AMI $ %AMI $ % $ $ 3 -047 Other 1 1 12/06/07 21,840 (21,840) (100) 3 -048 Caucasian 1 1 03/01/07 13,860 27 % 4 -049 Hispanic/Latino 6 4 1 1 02/21/05 4 -050 Other 2 2 10/01/11 28,995 49 % 28,995 49 % 4 -051 Caucasian 2 2 12/12/10 9,396 16 % 9,396 16 % 4-052 Caucasian 1 1 12/06/11 4-053 Caucasian 1 1 12/29/10 17,517 34 % (17,517) (100) 4-054 Caucasian 1 1 06/15/11 4-055 na 2 1 1 05/11/11 14,024 24 % 14,024 24 % 6 -056 Caucasian 2 2 10/04/11 20,448 35 % 20,448 35 % 6 -057 Caucasian 1 1 02/01/12 9,684 19 % 6 -058 Hawaiian /Pacificls 1 1 09/03/11 23,920 47 % 23,920 47 % land 6 -059 na 2 1 1 04/01/11 19,714 34 % 19,714 34 % 6 -060 na 1 1 12/28/07 17,016 (17,016) (100) 6 -061 Caucasian 1 1 02/09/09 6 -062 na 1 1 07/01/05 7,644 (7,644) (100) 6 -063 Caucasian 1 1 12/15/11 8,710 17 % 8,710 17 % 6 -064 Caucasian 1 1 03/04/08 7,894 15 % 6 -065 na 1 1 12/11/99 21,838 (21,838) (100) 5-066 Caucasian 1 1 06/23/06 7,968 16 % 5 -067 Caucasian 1 1 02/07/08 5 -068 na 4 2 2 06/04/05 26,000 35 % 5-069 Other 2 2 07/01/09 15,507 26 % (15,507) (100) 5 -070 Caucasian 1 1 01/27/09 7 -071 Caucasian 1 1 02/16/11 10,704 21 % (10,704) (100) 7 -072 Other 1 1 07/13/07 28,140 (28,140) (100) 7 -073 Caucasian 2 1 1 12/15/11 14,610 25 % 14,610 25 % 7 -074 Caucasian 1 1 11/10/96 5,652 (5,652) (100) 7 -075 na 1 1 06/20/11 19,573 38 % 19,573 38 % 7 -076 Caucasian 1 1 08/20/11 23,140 45 % 23,140 45 % 7 -077 Caucasian 1 1 09/15/11 10,800 21 % 10,800 21 % 7 -078 Caucasian 1 1 04/29/09 8,088 16 % 8,088 7 -079 na 2 2 11/22/05 19,741 (19,741) (100) 7 -080 Amerindian /Alask 1 1 07/07/11 24,482 48 % 24,482 48 % an 7 -081 Caucasian 1 1 08/17/06 7,236 (7,236) (100) 7 -082 Black 1 1 09/20/11 14,908 29 % 14,908 29 % 7 -083 Caucasian 1 1 06/04/09 8,088 16 % 7 -084 <VACANT> 7 -085 na 1 1 07/13/04 16,070 7 -086 < VACANT> (16,070) (100) 7 -087 Caucasian 1 1 10/01/10 8,336 16 % (8,336) (100) 7 -088 Hispanic/Latino 1 1 02/14/11 21,000 41 % (21,000) (100) 7 -089 na 1 1 10/01/04 8,532 (8,532) (100) 7 -090 Caucasian 1 1 08/19/10 16,824 33 % 7 -091 na 1 1 09/25/07 11,945 (16,824) (100) 7 -092 <VACANT> (11,945) (100) 7 -093 na 1 1 09/26/08 9,401 (9,401) (100) Report Version; 7 -Aup -2010 (8.0.9) Page 2 of 3 Household Demographics Report Printed on: 2/27/12 12:07 pm Adults Pre- GROSS INCOME DEDUCTIONS Total In >= 18 Children Teens Teens Move -In Move -In Certified Change Move -In Certified Unit Ethnicity Household yr <= 5 yr 6-12 yr 13 -17 yr Date $ %AMI $ %AM! $ % $ $ 7 -094 Caucasian 1 1 02/04/08 7 -095 Asian 1 1 10/21/05 7,188 (7,188) (100) 7 -096 Caucasian 1 1 01/24/08 7 -097 <VACANT> 7 -098 Caucasian 1 1 01/06/12 22,838 44 % 22,838 44 % 7 -099 Caucasian 1 1 01/15/10 7 -100 12/15/11 8 -101 Caucasian 1 2 11/17/09 8 -102 Black 1 1 08/27/10 11,352 22 % (11,352) (100) 8 -103 Black 1 1 02/11/08 8 -104 Caucasian 1 1 11/24/10 19,607 38 % (19,607) (100) 8 -105 Caucasian 1 1 11/01/10 21,363 42 % (21,363) (100) 8 -106 Caucasian 3 1 1 1 10/02/09 8 -107 Caucasian 1 1 05/27/10 19,723 38 % 8 -108 Asian 2 2 03/16/05 12,264 21 % 8 -109 Caucasian 1 1 06/15/07 12,348 24 % 8 -110 <VACANT> 8 -111 Caucasian 1 1 10/22/10 17,690 30 (17,690) (100) 8 -112 Caucasian 1 1 03/20/09 14,815 29 % 8 -113 Caucasian 1 1 05/14/10 13,360 26 % 13,360 8 -114 Caucasian 2 2 07/03/11 27,848 47 % 27,848 47 % 8 -115 Caucasian 1 1 06/22/06 25,000 49 % 8 -116 Hispanic/Latino 3 3 01/01/08 8 -117 Caucasian 1 1 03/05/07 11,916 23 % 8 -118 Caucasian 1 1 04/17/09 7,812 15 % 8 -119 Caucasian 1 1 05/25/11 13,780 27 % 13,780 27 % 8 -7705 05/01/11 Community Averages: 1 1 0 0 0 15,332 34 % 8,265 31 % (6,793) (89) 0 0 Total Units: 119 Vacant Units: 6 Occupied Units: 113 COMMUNITY SUMMARY: Move -In Income Certified income Income Layer # Avg # Avg < =20% 3 16% 12 15% > 20% And <= 30% 16 25 % 19 25 % > 30% And <= 40% 10 36 % 8 36 % > 40% And <= 50% 11 46 % 13 47 % > 50% And <= 60% 3 54 % 2 54 % > 60% And <= 80% 1 61 % > 80% Report version. 7-Aug-2010 (e.0.0) Page 3 of 3 ATTACHMENT MOU FOR NON - PROFIT GENERAL PARTNERSHIP WITH PARTNERSHIP AGREEMENT AND LEASE TO PROPERTY (PARTNERSHIP AGREEMENT AND LEASE TO BE ENTERED INTO FOLLOWING PRELIMINARY REVIEW AND APPROVAL OF TAX EXEMPTION STATUS) MEMORANDUM OF UNDERSTANDING TO FORM GENERAL PARTNERSHIP In order To Provide Social Services and Low Income Housing At Hawthorne Villa Apartments [Fee3 &Z.44iar 21, 2012] PARTIES Hawthorne Urban Development, LLC ( "Hawthorne ") C/O Richard Krueger 21001 Dairy Creek Rd North Plains, OR 97133 Accessible Living, Inc ( "ALI ") 3300 NW 185th St 186, Portland, OR 97229 -3406 PURPOSE The purpose of this Memorandum of Understanding ( "MOU ") is to outline the expression of interest and binding intent to execute the proposed Partnership Agreement and for the partnership to then execute the proposed Lease, both of which are attached hereto, upon approval of the City of Tigard of the parties application for tax exempt status for the property known as Hawthorne Villa Apartments at 7705 SW Pfaffle Street, Tigard, Oregon, 97223 ( "Hawthorne Villa Apartments "). RECITALS A. ALI is a non -profit corporation who provides social services and support for low income residents. B. Hawthorne is an entity that owns Hawthorne Villa Apartments which provides residence to low income individuals at restricted and below market rent. C. The parties wish to enter into a mutually beneficial relationship that allows the continuation of Hawthorne's ability to provide residences to low income individuals at restricted and below market rents; and, to allow low income individuals to receive social support services from ALI while residing at Hawthorne Villa Apartments. D. For the success of this intended desire held by both parties, it is necessary for them to maintain the tax exempt status per the City of Tigard Code, Chapter 3.50 et seq. ( "Code ") Hawthorne and ALI wish to create a partnership who will lease the Hawthorne Villa Apartments form Hawthorne per Section 3.50.020(B) of the Code to achieve their mutual goal to provide below market rent and social services to people of need. UNDERSTANDING Section 1. Creation of Partnership. ALI and Hawthorne agree to create a partnership ( "Partnership ") under the Oregon Revised Partnership Act (the "Act ") upon approval of tax exempt status of the property known as Hawthorne Villa Apartments at 7705 SW Pfaffle Street, Tigard, Oregon, 97223 under Code 3.50. It is the intent of the Partners that this Agreement shall create a general partnership subject to the terms, restrictions and limitations set forth in the attached proposed Partnership Agreement. Section 2. Consideration. Consideration for this transaction, includes, but is not limited to: I . Payment to ALI of: a. Base Compensation of $2,500 /mos or such other amounts that may from time to time be determined by the written consent or agreement of all the Partners. b. Enhanced Compensation at an hourly rate of $30 for each hour that it spends in executing enhanced services. 2. Services performed by ALI as follows: a. Basic Services set forth in the attached proposed Partnership Agreement, including but not limited to these examples: (1) Housing Success: Assist residents to maintain their housing; (2) Cooperate with the building manager to assist each resident in maintaining lease compliance and in obtaining and coordinating services; (3) Follow -up on all ALI notices given to residents: Contact the affected resident's case manager, if applicable; make referrals as appropriate; assist with neighbor relations; work closely with Hawthorne or its agents to coordinate supportive services; (4) When necessary to evict resident, communicate and work closely with Hawthorne and its agents or staff for smooth transition of the resident from the building; (5) Refer residents to appropriate agencies for benefits; make referrals to meet basic needs of' food, clothing, personal items, medical care, and other assistance, as needed; (6) Work with Hawthorne and its agents and local support agencies on eviction prevention strategies; (7) Provide monthly newsletter to residents with the collaboration of Property Management; (8) Meet monthly with Hawthorne and its agents and on -site staff; and (9) Coordinate resident meetings as needed. b. Enhanced Services set forth in the attached proposed Partnership Agreement, including but not limited to these examples. (1) Asset Development: (A) Provide opportunities for residents to increase their economic stability. (B) Provide residents with information regarding financial literacy classes. (2) Skill Development — ALI shall offer opportunities that help residents build skills and provide social opportunities, such as follows: (A) Schedule and promote on -going classes and workshops such as "Cooking on a Budget ", exercise /movement classes, and /or other classes or activities as determined by resident interest. (B) Monthly newsletter of building news and local activities. (C) Provide computer instruction and open labs. (D) Social gatherings for community building 3. Ownership interests in the partnership by ALI and Hawthorne per section 3.7 of the Partnership Agreement. 4. Execution of the attached Lease giving the Partnership rights to possess, use and maintain Hawthorne Villa Apartments for the benefit of low income housing residences. 5. Maintenance of Tax Exempt Status to allow continued services to low income residential tenants. 6. Initial Capital Contributions by Hawthorne in the amount of $8,000.00; and, 7. Improvements planned by Hawthorne as follows: Hawthorne Interior Improvements Units 118 Budget Interior Water Meter @ $750 per units $ 88,500 Replace appliances $ 118,000 Interior painting @ $600 per units $ 70,800 Replace interior carpet and vinyl @I200 $ 141,600 Replace interior in exterior door $1200 per unit $ 94,400 Contingency $ 50,000 TOTAL $ 563,300 Section 3. Negotiation. The principal aspects of the transaction have been negotiated and finalized and documented in the attached proposed Lease and Partnership Agreement. Section 4. Due Diligence. ALI and Hawthorne both acknowledge they each have performed a due - diligence investigation of each other; and, believe each can perform as needed to provide shelter and social services to low income individuals. Section 5. Conditions to Execution of the Attached Partnership Agreement and Lease. Execution of the agreements will be contingent on approval of tax exempt status per Code 3.50; Section 6. Closing Date. The expected closing date will be on or about March 1, 2012, or, within three business days of approval of tax exempt status, which ever date is later. Section 7. Expenses. Each party to the transaction will pay its own expenses and those of any professional advisers, including attorney fees. Section 8. Effect of This Letter. This letter is an expression of interest only and does not constitute a binding legal obligation of the parties, and may not be relied on as the basis for a contract by estoppel or be the basis for a claim based on detrimental reliance or any other theory; however, the parties agree that they intend to execute the attached Partnership Agreement and Lease upon of approval of tax exempt status. Section 9. Termination. This letter may not be terminated by either party unless tax exempt status is denied; or, July I, 2012, whichever first occurs. Termination shall occur immediately upon delivery of a written notice to the other party of intent to terminate. Dated 11 )4 , 2012 Hawthorne Urban Development, LLC Pt..� J ✓r J By: Title: MI* M � ��- Dated "SA , 2012 Ac Bible Living, Inc., By: Yrs.( • Title: �. J x ► rk for PARTNERSHIP AGREEMENT AGREEMENT OF PARTNERSHIP This AGREEMENT OF PARTNERSHIP (this "Agreement "), dated as of , 2012, is among Hawthorne Urban Development, LLC, an Oregon limited liability company (hereinafter, "Hawthorne ") and Accessible Living, Inc., an Oregon non - profit corporation (hereinafter, "ALI ") (each individually, a "Partner," and collectively, the "Partners "). AGREEMENT The parties agree as follows: SECTION 1. CREATION AND TERM OF PARTNERSHIP 1.1 Creation of Partnership. The Partners agree to create a partnership (the "Partnership ") under the Oregon Revised Partnership Act (the "Act "). It is the intent of the Partners that this Agreement shall create a general partnership subject to the terms, restrictions and limitations set forth herein. 1.2 Name. The name of the Partnership is Hawthorne Villa General Partnership. Hawthorne shall be responsible for registering Hawthorne Villa General Partnership as an assumed business name with the Oregon Secretary of State within 60 days after this Agreement is fully executed by both Partners. 1.3 Principal Office. The principal office from which the Partnership conducts its business will be at 7705 SW Pfaffle Street, Tigard, Oregon, 97223. The business of the Partnership may also be conducted at such other places as may from time to time be determined by the Partners. The Partnership books and records will be kept at 21001 Dairy Creek Road, North Plains, Oregon 97133. 1.4 Purposes and Powers. The Partnership is formed for the purpose of managing, renting, maintaining, improving, and otherwise enhancing the value of the real property owned by Hawthorne and located at 7705 SW Pfaff le Street, Tigard, Oregon 97223 ( "Hawthorne Villa "), all the while maintaining Hawthorne's ability to receive tax credits or tax exemption from the City of Tigard or such other government entity through the use and management of said property. Without expanding the foregoing purpose, the Partners shall be empowered to do all things necessary for, incident to, or in furtherance of conducting such business. 1.5 Indefinite Term of Partnership Subject to Election to Dissolve. The term of the Partnership will commence as of the date of this Agreement and will continue until the Partners having more than 51% of the Ownership Interests of the Partnership, excluding any dissociated Partner, after October3l, 2012, gives 60 days' written notice to the Partnership and to the other Partners of the election to dissolve the Partnership. The Partnership will dissolve 61 days after such notice is given and its affairs will be wound up, unless it has been dissolved earlier as provided in this Agreement. 1.6 Title. Title to Hawthorne Villa shall remain in the name of Hawthorne. Hawthorne shall lease Hawthorne Villa to the Partnership and the Partnership shall utilize its possessory interest in Hawthorne Villa to achieve the goals stated in Section 1.4 above. SECTION 2. BOOKS AND RECORDS; ACCOUNTING 2.1 Books and Records. 2.1.1 Maintenance of Books and Records. The Partnership will maintain a separate books of account for the Partnership at 21001 Dairy Creek Road, North Plains, Oregon 97133, which will show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received, and all income derived in connection with the conduct of the Partnership and the operation of the Partnership business. The books of account will be prepared in accordance with U.S. generally accepted accounting principles consistently applied and, to the extent inconsistent with those principles, in accordance with this Agreement. 2.1.2 Access to Books and Records. Any Partner or any agent or representative of a Partner, at the Partner's own expense and without notice to any other Partner, may examine, copy, and audit the books and records of the Partnership and make copies of and abstracts from the financial and operating books and records of account of the Partnership, and discuss the affairs, finances, and accounts of the Partnership with the independent accountants of the Partnership, alt at such reasonable times and as often as a Partner or any agent or representative of a Partner may reasonably request. The rights granted to a Partner pursuant to this Section 2.1.2 are expressly subject to the Partner's compliance with the confidentiality procedures and guidelines of the Partnership as may be established from time to time. 2.1.3 Reports. Hawthorne will prepare or cause to be prepared financial reports of the Partnership and coordinate financial matters of the Partnership with the Partnership's accountants. Within 90 days after the end of each fiscal year and within 60 days after the end of each fiscal quarter, the Hawthorne will cause each Partner to be furnished with a copy of the balance sheet of the Partnership as of the last day of the applicable period, a statement of income or loss for the Partnership for that period, and a statement of the Partnership's cash flow for the period. Annual statements must also include a statement of the Partners' Capital Accounts (defined in Section 3.8) and changes therein for the fiscal year. Annual statements will be compiled by the Partnership's accountants. 2.2 Method of Accounting. The books of account of the Partnership will be kept on a cash basis. 2.3 Accounting Year. The books of account of the Partnership will be kept on a calendar year basis. The taxable year of the Partnership will be the calendar year. 2.4 Income Tax Information. The Partnership will furnish each Partner with information pertaining to partnership taxable income or loss, including but not limited to the informational tax returns of the Partnership and Schedule K -1, applicable to such Partner. Such information must show each Partner's distributive share of each class of income, gain, loss, deduction, or credit of the Partnership. Such information will be furnished to the Partners as soon as is practicable after the close of the Partnership's taxable year. 2.5 Tax Matters Partner. Hawthorne will be the tax- matters partner for the Partnership. SECTION 3. CAPITAL 3.1 Initial Contribution. The Partners will initially contribute cash to the capital of the Partnership in the respective amounts (each an "Initial Contribution ") set opposite such Partner's name below: Partner Contribution Hawthorne Urban Development $8,000.00 ALI $ 80.00 TOTAL $ 08.80.00 The Initial Contribution of each Partner will be due and payable in full 30 days after the date of this Agreement. 3.2 Additional Contributions. If Partners whose Ownership Interests (set forth in Section 3.7) equal or exceed 51% determine that additional funds are necessary to meet the needs of the Partnership, the Partners making such determination must so notify the other Partner(s) in writing. Any such notice must set forth (a) a statement of the aggregate additional capital required, (b) a reasonably detailed breakdown of the expenditures for which such funds will be used, and (c) a date by which the contribution is required to be made, which date may not be sooner than 15 days after the giving of such notice (the "Contribution Date "). If any such notice is given, the Partners must, on or before the Contribution Date, contribute to the Partnership such sums as are requested in such notice, in the ratio of their respective Ownership Interests. 3.3 Failure to Make Contributions. If any Partner (the "Defaulting Partner ") fails to make a contribution required to be made by such Partner pursuant to Section 3.2 (a "Noncontributed Amount "), the other, nondefaulting Partner(s) will have the right and option at any time thereafter, but not the obligation, to advance to the Partnership the unpaid portion of such required contribution. Any such advance will bear interest at a rate equal to five percentage points above the annual rate of publicly announced prime rate of interest charged by Wells Fargo Bank in Tigard, Oregon, as of the Contribution Date, but not more than the maximum rate allowed by law. The advance must be secured by the partnership interest of the Defaulting Partner on whose behalf such advance is made. Repayment by the Defaulting Partner of the advance will be due not later than 90 days after it is made. Until such advance, plus interest, is repaid, the Defaulting Partner will not have any right to participate in the management of the Partnership. If any such advance, plus interest, is not repaid when due, the party making such advance may either foreclose on the security interest granted on the partnership interest of the Defaulting Partner pursuant to the Oregon Uniform Commercial Code, or elect any other remedy at law or in equity. Each Partner agrees to execute and deliver all documents and instruments reasonably requested by the Partnership or the other Partners that may be required to evidence the obligation to repay the advance, to perfect the security interest granted pursuant to this section, and otherwise to effectuate and carry out the provisions of this section. 3.4 Adjustment of Ownership Interests. There shall be no adjustments to ownership interest based upon any Partner's failure to repay any debt incurred under Section 3.3 above. 3.5 Interest. Without limiting or waiving any interest incurred or accrued pursuant to a debt created under Section 3.3 above, no interest will be paid on the Initial Contributions or on any subsequent contributions to capital of the Partnership. 3.6 Return of Contributions; No Right to Withdraw Capital. Each Partner agrees to look solely to the assets of the Partnership for the return of such Partner's capital contributions and, if the assets of the Partnership are insufficient to return such capital contributions, such Partner will have no recourse against any other Partner for that purpose. Except as specifically provided in this Agreement, a Partner may not withdraw capital from the Partnership. To the extent that any amount that any Partner is entitled to receive from the Partnership pursuant to any provision of this Agreement constitutes a return of capital, each Partner consents to the withdrawal of such capital. A Partner will not have the right to demand and receive property other than cash in return for such Partner's capital contribution. 3.7 Ownership Interest. The "Ownership Interest" of each Partner in the Partnership will be as follows: Ownership Name Percentage Hawthorne 99.9% ALI 0.01% 3.8 Capital Accounts. The Partnership will maintain a separate capital account (a "Capital Account ") for each Partner in accordance with the requirements of Treasury Regulation §1.704 -I. Each Partner's Capital Account will be equal to: (a) The amount of cash and the fair market value of the property contributed to the capital of the Partnership by such Partner in accordance with Section 3; plus (b) Such Partner's allocable share of any profits of the Partnership pursuant to Section 4; minus (c) Such Partner's allocable share of any losses of the Partnership pursuant to Section 4; minus (d) The amount of cash and the fair market value of property distributed to such Partner. On a sale, exchange, transfer, assignment, gift, or other disposition of an interest in the Partnership, the Capital Account associated with the interest so transferred, whether such Capital Account has a positive or a negative balance, will be transferred to the transferee of such interest. SECTION 4. ALLOCATION OF PROFITS AND LOSSES 4.1 Determination. The net profit or net loss of the Partnership for each fiscal year will be determined as of the end of such fiscal year by the Partnership's certified public accountants in accordance with those principles of the cash method of accounting that are employed in the preparation of the federal income tax informational return filed by the Partnership for that fiscal year, but without any special provisions for tax - exempt or partially tax - exempt income of the Partnership. 4.2 Allocation. The net profit or net Loss of the Partnership for each fiscal year will be allocated among the Partners in direct proportion to their Ownership Interests. 4.3 Transfer of Partnership Interest. If a Partner transfers all or part of such Partner's interest in the Partnership, or if Ownership Interests of the Partners are adjusted pursuant to Section 3.4, the net profit or net loss of the Partnership allocable to the interest so transferred or adjusted will be prorated between the transferor and the transferee for the fiscal year in which such transfer or adjustment occurs in accordance with the number of days during such fiscal year that each owned such interest. SECTION 5. DISTRIBUTIONS The Partners must, not less often than quarterly, review the financial operations and cash position of the Partnership and may distribute any cash (including the proceeds of any refinancing of indebtedness of the Partnership) that is in excess of the amount that Partners having more than 51% of the Ownership Interests determine is reasonably needed by the Partnership. Any distribution pursuant to this Section 5 will be allocated among the Partners in the ratio of their Ownership Interests on the date of such distribution. SECTION 6. ADMINISTRATION OF PARTNERSHIP BUSINESS 6.1 Management. Except for powers vested exclusively in the Partners as provided in Section 6.2 and subject to the consent requirements in Section 6.3, all Partners will have the right to participate in the management and conduct of the business of the Partnership. Except as otherwise provided in this Agreement, any matters related to the conduct of the business of the Partnership or the administration of the internal affairs of the Partnership will be decided by the affirmative vote or consent of Partners having combined Ownership Interests equal to or exceeding 51% in interest of the Ownership Interests. 6.2 Management Duties. Except as provided for in this Agreement, each Partner shall have sole and exclusive management rights and responsibilities as outlined in this Section 6.2. On the affirmative vote or consent of Partners having more than 51% of the Ownership Interests, each right and responsibility outlined herein may be removed without cause, which removal will terminate such Partner's rights and responsibilities under this section, but will not affect the Ownership Interest or other rights of said Partner under this Agreement. On the death, incapacity, resignation, or removal of any Partner, a successor Partner will be selected by Partners having more than 51% of the Ownership Interests. The following Partners will have the following powers and authority to act on behalf of the Partnership: 6.2.1 Hawthorne's Management: Hawthorne (either by its self or through its agents) shall exclusively manage the following: (a) General Partnership obligations: (1) All contracts with property managers, general contractors, subcontractors and other professionals related to Hawthorne Villa regardless of the expenditures involved in said contract; (2) Any capital expenditures or series of related capital expenditures, when the total of such expenditures are in excess of $5,000. (3) Entering into any contract on behalf of the Partnership if the contract involves the payment of more than $ 5,000.00 by or to the Partnership; or the contract may not be terminated by the Company upon 90 or fewer days' notice for any or no reason without any additional Liability arising out of or resulting from the termination; (4) The conversion of the Partnership into any other type of entity; (5) The incurring of any indebtedness by the Partnership other than in the ordinary course of the business of the Partnership, or as expressly provided in this Agreement; (6) Procuring all insurance necessary for the real estate and operations of Hawthorne Villa; (b) The following Property Management obligations: (1) Maintain a waiting list of applicants and fill vacancies from the waiting list. (2) Coordinate move -ins and move -outs with resident. Notify ALI or its agents and staff of move -ins and move -outs. (3) Maintain the Hawthorne Villa building in general good repair and keep common areas and exteriors clean and free of hazards. (4) Provide and maintain essential services to residents per Oregon Residential Landlord Tenant Act. (5) Respond in a timely manner to requests for repairs by residents. (6) Cooperate with ALI or its agents in efforts to assist clients in maintaining lease compliance and in obtaining and coordinating services. Notify ALI of potential lease violations for preventive action. (7) Participate in monthly Property Management - Resident Services meetings, and assist in planning such meetings as requested. (8) When necessary to evict resident, communicate and work closely with ALI or its agents for a smooth transition of resident from building. 6.2.2 ALI's Management: ALI will hire resident services staff who will be assigned to 20 hours per week, providing or coordinating resident services at Hawthorne Villa. Provider's Service staff will be on -site a minimum of two (2) hours per week and available by phone other hours. ALI's service provider will also meet with property management staff at least weekly by phone and monthly on -site at Hawthorne Villa. ALI will additionally be responsible for conducting a needs assessment annually at the property to best match services to the needs of the resident population. ALI's resident services coordinator will provide the basic services outlined below and, subject to Hawthorne's prior written approval, the Partnership shall pay additional compensation to ALI for such enhanced services in accordance with Section 6.5 (b). ALI will provide the following services: (a) Basic Services - Basic Services described below will be developed by ALI during the months of February through April, 2012, inclusive, with full implementation of the developed services to begin no later than June 1, 2012: (I) Housing Success: Assist residents to maintain their housing; (2) Cooperate with the building manager to assist each resident in maintaining lease compliance and in obtaining and coordinating services; (3) Follow -up on all ALI notices given to residents: Contact the affected resident's case manager, if applicable; make referrals as appropriate; assist with neighbor relations; work closely with Hawthorne or its agents to coordinate supportive services; (4) When necessary to evict resident, communicate and work closely with Hawthorne and its agents or staff for smooth transition of the resident from the building; (5) Refer residents to appropriate agencies for benefits; make referrals to meet basic needs of food, clothing, personal items, medical care, and other assistance, as needed; (6) Work with Hawthorne and its agents and local support agencies on eviction prevention strategies; (7) Provide monthly newsletter to residents with the collaboration of Property Management; (8) Meet monthly with Hawthorne and its agents and on -site staff; and (9) Coordinate resident meetings as needed. (b) Enhanced Services - These enhanced services are available to all Hawthorne Villa residents, subject to the prior written approval by Hawthorne. ALI shall be paid additional compensation for such services subject to Section 6.5 (b): (1) Asset Development: (A) Provide opportunities for residents to increase their economic stability. (B) Provide residents with information regarding financial literacy classes. (2) Skill Development -- ALI shall offer opportunities that help residents build skills and provide social opportunities, such as follows: (A) Schedule and promote on -going classes and workshops such as "Cooking on a Budget ", exercise /movement classes, and/or other classes or activities as determined by resident interest. (B) Monthly newsletter of building news and local activities. (C) Provide computer instruction and open labs. (D)Social gatherings for community building. 6.3 Restrictions. 6.3.1 Consent of Majority of Partners for Certain Acts. No Partner may engage in any of the following acts without the written consent of Partners (who may include the Partner engaging in such act or acts) having Ownership Interests equal to or exceeding 51 %: (a) Endorse any note, or act as an accommodation party, or otherwise become surety for any person, on behalf of the Partnership. (b) Borrow or lend money on behalf of the Partnership, or make, deliver, or accept any commercial paper, or execute any mortgage, security agreement, bond, or lease, or purchase or contract to purchase, or sell or contract to sell, any property for or of the Partnership, except that any Partner may, without the consent of any other Partner, purchase for the Partnership such items of equipment, materials, and supplies as are used or useful in the ordinary course of the Partnership business. 6.3.2 Unanimous Consent of Partners for Certain Acts. No Partner may engage in any of the following acts without the written consent of all Partners: (a) Enter into any agreement as a result of which any person may become interested with such Partner in the Partnership. (b) Admit a person as a Partner of the Partnership. (c) Do any act that is detrimental to the best interests of the Partnership (except as permitted by Section 6.4) or that would make it impossible to carry on the ordinary business of the Partnership. (d) Do any act that negatively affects the tax exempt status of Hawthorne Villa. 6.4 Time Devoted; Other Activities. Each Partner will be required to devote only such time to the affairs of the Partnership as the Partner determines in its sole discretion may be necessary to manage and operate the Partnership, and each such Partner will be free to serve any other person or enterprise in any capacity that the Partner may deem appropriate in the Partner's discretion. 6.4.1 Waiver of Claims to Interests of Other Partners. Each Partner acknowledges that the other Partners and their Affiliates are free to engage or invest in the following activities or businesses, any one or more of which may be related to the activities or businesses of the Partnership: Own, lease, manage or otherwise participate in the operations of real estate or personal property other than Hawthorne Villa. Any Partner who engages in or invests in any business or activity described above may do so without having or incurring any obligation to offer any interest in such business or activity to the Partnership or any Partner, and neither this Agreement nor any activity undertaken pursuant to this Agreement will prevent any Partner from engaging in or investing in those businesses or activities, or require any Partner to permit the Partnership or any Partner to participate in them. As a material part of the consideration for the execution of this Agreement by each Partner, each Partner hereby waives, relinquishes, and renounces any such right or claim of participation or interest in any such business or activity. The Partners acknowledge that certain conflicts of interest may arise and hereby agree that the specific rights with respect to the Partners' and their Affiliates' freedom of action provided in this Section 6.4.1 are sufficient to protect their respective interests in relation to the possible conflicts and are to be in lieu of all other possible limitations that might otherwise be implied in fact, at law or in equity. A Partner will not be obligated to disclose, present, or offer to the Partnership or the other Partners any investment or business opportunity of which the Partner becomes aware, it being understood that the business of the Partnership is limited to the purposes set forth in Section 1.4. 6.4.2 Transactions with Partners and Affiliates. To the extent permitted by applicable law and except as otherwise provided in this Agreement, Hawthorne is authorized to purchase property from, to sell property to, or otherwise to deal with any Partner, acting on its own behalf, or any Affiliate of any Partner, as long as any such purchase, sale, or other transaction is in the ordinary course of the Partnership's business and is made on terms and conditions that are no less favorable to the Partnership than if the sale, purchase, or other transaction had been entered into with an independent third party. The Partners agree that the Lease and Property Management contract satisfy this independent third -party standard and the Partners hereby authorize the Hawthorne to enter into the agreements referenced in this Section 6.4.2. 6.4.3 Loans to and from Partners and Affiliates. Subject to obtaining the written consent of the Partners as provided in Section 6.3, each Partner and any Affiliate of a Partner may also lend money to, borrow money from, act as a surety, guarantor, or endorser for, guarantee or assume one or more specific obligations of, provide collateral for, and transact other business with the Partnership and, subject to other applicable law, has the same rights and obligations with respect thereto as a person who is not a Partner; however, if a Partner acts as surety, guarantor, or endorser for a Partnership obligation, that act must be at no cost to the Partnership. 6.5 Salaries to Certain Partners. (a) Base Salary - ALI will be entitled to a monthly base salary of $2,500 or such other amounts that may from time to time be determined by the written consent or agreement of all the Partners. This salary will be treated as Partnership expenses in determining its profits and losses. (b) Enhanced Salary — So long as ALI has received prior written consent from Hawthorne to provide services listed in 6.2.2(b) above, then ALI shall be paid by the Partnership an hourly rate of $30 for each hour that it spends in executing such services. This enhanced salary shall be paid by the Partnership on or about the last day of the month in which the enhanced service was provided. As a condition to receiving such enhanced salary payment, prior to the last day of the month in which the enhanced service was provided, ALI shall submit to the Partnership an itemized list of what enhanced services were provided and an exact amount of time allotted for such enhanced service. This enhanced salary will be treated as Partnership expenses in determining its profits and losses. 6.6 Expense Account. Each Partner will be entitled to reimbursement monthly, on the submission of an itemized account, for such items as have been expended for the benefit of the business from such Partner's personal assets. 6.7 Operating Fund. The Partnership will maintain accounts at such banks and other financial institutions as determined by the Partners. All Partnership funds must be deposited in the Partnership's name and will be subject to withdrawal only on the signatures of both Hawthorne and ALI, except that a separate account ( "Operating Fund ") may be maintained with a balance never to exceed $30,000. The amounts in that separate account will be subject to withdrawal on the signature of ALI alone. The Partners agree that if the balance of the Operating Fund ever drops below $8,000, then ALI shall notify Hawthorne as such, and within 10 business days after receipt of such notice, ALI and Hawthorne shall both sign whatever instruments are necessary to transfer funds from one of the Partnership's other accounts to bring the balance of the Operating Fund up to $30,000. 6.8 Indemnification. Each Partner will indemnify and hold harmless the Partnership and each of the other Partners from any and all expense and liability resulting from or arising out of any negligence or misconduct on his or her part to the extent that the Partnership does not have insurance coverage for the expense or liability or the amount of the expense or liability exceeds the Partnership's insurance coverage. 6.9 Advisers. The Partnership may select and engage the services of such advisers, accountants, lawyers, agents, and brokers as may be necessary or advisable in connection with the accomplishment of the Partnership purposes described in Section 1.4. SECTION 7. TRANSFER OF PARTNERSHIP INTERESTS 7.1 Restriction on Transfer. Except as expressly permitted under this Section 7 or any other provision of this Agreement, no Partner may sell, exchange, assign, pledge, give, or otherwise transfer or encumber in any manner or by any means whatsoever, whether to or in favor of another Partner or one who is not a Partner, and whether by operation of law or otherwise, all or any part of such Partner's interest in this Partnership, without obtaining the prior written consent of all other Partners. 7.2 Right of First Refusal. A Partner may, without the prior written consent of the other Partners, sell his or her entire interest (but may not sell a part of his or her interest) in the Partnership if he or she fully complies with this Section 7.2. Such Partner (the "Selling Partner ") must give written notice to all other Partners (the "Nonselling Partners ") that he or she has received a bona fide offer of purchase, in writing, of his or her entire interest in the Partnership (the "Offer "). Such notice must state with specificity the name and address of the person(s) desiring to purchase the Partnership interest, together with the price and terms of payment. A copy of the Offer must accompany the notice. Such notice also must contain the offer of the Selling Partner to sell his or her entire interest in the Partnership to the Nonselling Partners in the same manner, price, and terms as provided in the Offer. The notice must further contain a representation and warranty that the party making the Offer can fully perform all of the obligations of the Selling Partner under this Agreement, and in the case of ALI, that the party making the offer, if accepted as a Partner would not jeopardize the tax exempt status of the property managed by the Partnership and owned by Hawthorne. For a period of 60 days after the giving of such notice by the Selling Partner, the Nonselling Partners will have the option to accept the offer of the Selling Partner and to purchase the entire Partnership interest of the Selling Partner. Such option will be exercisable by the giving of written notice of acceptance, signed by the Nonselling Partners, to the Selling Partner within such 60 -day period. 7.3 Sale Pursuant to Lapse of Right of Refusal. If the Nonselling Partners fail to exercise the option granted under and in accordance with Section 7.2, the Selling Partner will be free, for a period of 61 days after giving the notice described in Section 7.2, to transfer and assign his or her entire Partnership interest to the person(s) named in the third -party, bona fide offer of purchase, at a price and on the terms and conditions no less favorable to the Selling Partner than those set forth in the Offer. If the Partnership interest is not transferred and assigned as provided in this Section 7.3, it will remain subject to all the terms, conditions, and restrictions set forth in Section 7. 7.4 Rights of Assignee. In accordance with ORS 67.200, no person to whom a Partnership interest is transferred or assigned (other than as expressly permitted under Section 7 or another provision of this Agreement) may be a Partner or otherwise entitled, during the continuance of the Partnership, to participate in the management or administration of the business or internal affairs of the Partnership, to require any information or account of Partnership transactions, or to inspect the Partnership books and records. The assignee will merely be entitled to receive, in accordance with the terms of the assignment or other transfer, the profits, losses, and distributions to which the assigning or transferring Partner would otherwise be entitled. 7.5 Liability of Selling Partner. If any Partners' Partnership Interest is transferred pursuant to Section 7.2 above, and after such transfer, the Partnership or any Partner incurs economic losses due to a misrepresentation or breach of the warranty contained in the notice required under Section 7.2 above, then the Selling Partner shall be liable in damages to both the Partnership and each remaining Partner for such economics losses incurred by such party due to said breach. SECTION 8. DISSOCIATION OF A PARTNER; ACTION FOR PARTITION; BREACHES 8.1 Waiver of Partition. No Partner may, either directly or indirectly, take any action to require partition or to cause the sale of any asset or property of the Partnership and, notwithstanding any provisions of applicable law to the contrary, each Partner (and each Partner's legal representatives, successors, or assigns) hereby irrevocably waives any and all rights it may have to maintain any action for partition or to compel any sale with respect to a Partner's interest in the Partnership, or with respect to any asset or property of the Partnership, except as expressly provided in this Agreement. 8.2 Covenant Not to Dissociate or Dissolve. Subject to ORS 67.015, each Partner hereby covenants and agrees that the Partners have entered into this Agreement based on their mutual expectation that all Partners will continue as Partners and carry out the duties and obligations undertaken by them under this Agreement and that, except as otherwise expressly required or permitted hereby, each Partner hereby covenants and agrees not to (a) cause or permit itself to be dissolved, if the Partner is an entity or association, (b) dissociate or attempt to dissociate from the Partnership, (c) exercise any power under the Act to dissolve the Partnership, (d) transfer all or any portion of its Partnership interest, except as otherwise expressly permitted by this Agreement, (e) petition for judicial dissolution of the Partnership, or (f) demand a return of its contributions or profits (or a bond or other security for the return of such contributions or profits) without the unanimous written consent of the Partners. 8.3 Death or Permanent Incapacitation. Intentionally Deleted. 8.4 Consequences of Violation of Covenants. Notwithstanding anything to the contrary in the Act, if a Partner (a "Breaching Partner ") (a) attempts to cause a partition in breach of Section 8.1, (b) attempts to dissociate from the Partnership, dissolve the Partnership, or take any action in breach of Section 8.2, (c) becomes a debtor in bankruptcy, executes an assignment for the benefit of creditors, or seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the Partner of all or substantially all of the Partner's property, (d) fails, within 60 days after appointment, to have vacated the appointment of a trustee, receiver, or liquidator of the Partner or all or substantially all of the Partner's property, or (e) is expelled as a Partner, then in any such event the Partnership will continue, and the Breaching Partner will be subject to this Section 8.4. In that event, the following will occur: (a) The Breaching Partner will immediately cease to be a Partner and will have no further power to act for or to bind the Partnership; (b) The other Partners will continue to have the right to possess (as Partners) the Partnership's property and goodwill and to conduct its business and affairs; (c) The Breaching Partner will be liable in damages, without the requirement of a prior accounting, to the Partnership for all costs and liabilities that the Partnership or any Partner may incur as a result of such breach; (d) The Partnership will have no obligation to pay to the Breaching Partner any contributions, capital, or profits, but may, by notice to the Breaching Partner within 30 days after the date of dissociation, elect to make Breach Payments (as defined in Section 8.5) to the Breaching Partner in complete satisfaction of the Breaching Partner's interest in the Partnership; (e) If the Partnership does not elect to make Breach Payments pursuant to Section 8.5, the Partnership will treat the Breaching Partner as if the Breaching Partner were an unadmitted assignee of the interest of the Breaching Partner and will make distributions to the Breaching Partner of only those amounts otherwise payable with respect to such interest hereunder; (f) The Partnership may apply and offset any distributions otherwise payable with respect to such interest (including Breach Payments) to satisfy any claims it may have against the Breaching Partner; (g) The Breaching Partner will have no right to inspect the Partnership's books or records or to obtain other information concerning the Partnership's operations for any period after the date of breach; (h) The Breaching Partner will continue to be liable to the Partnership for any unpaid capital contributions required under this Agreement before the date of dissociation with respect to such interest and, to the fullest extent permitted by the Act, will continue to be jointly and severally liable with the other Partners for any debts and liabilities (whether actual or contingent, known or unknown) of the Partnership; (i) Notwithstanding anything to the contrary in this Section 8.4, unless the Partnership has elected to make Breach Payments to the Breaching Partner in satisfaction of such Partner's interest, the Partnership may, on the Breaching Partner's behalf, offer and sell (on any terms that are not unconscionable) the interest of the Breaching Partner to any other Partner, person, or entity who agrees to become a Partner with respect to such interest and to perform the duties and obligations imposed by this Agreement on the Breaching Partner; and (j) If the Partnership has not elected to make Breach Payments to the Breaching Partner in satisfaction of such Partner's interest and has not effected a sale of the Partner's interest as provided in Section 8.4(i) above, the rights and obligations of the Partnership and the Breaching Partner will not be governed by, and the Partners hereby waive the application of, the provisions of ORS 67.250. 8.5 Breach Payments. For purposes of this Section 8, Breach Payments will be made in four installments, each equal to one - fourth of the Breach Amount, payable on the next four consecutive anniversaries of the breach by the Breaching Partner, with simple interest accrued from the date of the breach through the date that each such installment is paid on the unpaid balance of the Breach Amount at 9% per annum. The "Breach Amount" will be an arnount equal to the greater of $1 or the Net Equity of the Breaching Partner's interest on the date of such breach, computed in accordance with Section 3.7. The Partnership may, at its sole election, prepay all or any portion of the Breach Payments or interest accrued thereon at any time without premium or penalty. 8.6 No Security. Notwithstanding any provision of the Act, the Partnership will not be obligated to secure the value of the Breaching Partner's interest by bond or otherwise. SECTION 9. DISSOLUTION OF PARTNERSHIP 9.1. Liquidating Events. The Partnership will dissolve and commence winding up and liquidating on the first to occur of any of the following events (a "Liquidating Event "): (a) Hawthorne Villa loses its tax exempt status; (b) The sale of all or substantially all of Hawthorne Villa; (c) The vote by Partners holding 51% or more of the Ownership Interests to dissolve, wind up, and liquidate the Partnership; or (d) Any other event described in subsection (4), (5), (6), or (7) of ORS 67.290 requiring that the Partnership be liquidated and wound up. The Partners hereby agree that, notwithstanding any provision of the Act, the Partnership will not dissolve before the occurrence of a Liquidating Event. If a court of competent jurisdiction determines that the Partnership has dissolved before the occurrence of a Liquidating Event, the Partners hereby agree to continue the business of the Partnership without a winding up or liquidation. 9.2 Notice of Dissolution. If a Liquidating Event occurs or an event occurs that would, but for the provisions of Section 9.1, result in a dissolution of the Partnership, then Hawthorne must, within 30 days thereafter, (a) provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of Hawthorne) and (b) publish notice of the dissolution in a newspaper of general circulation in each place where the Partnership conducts business (as determined in the discretion of the Hawthorne). SECTION 10. WINDING UP 10.1 Rights and Duties. On the occurrence of a Liquidating Event as described in Section 9.1, the Partnership will continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners, and no Partner may take any action that is inconsistent with, or not necessary to or appropriate for, winding up the Partnership's business and affairs. To the extent not inconsistent with the foregoing, all covenants contained in this Agreement and obligations provided for in this Agreement will continue to be fully binding on the Partners until the Partnership's assets have been distributed pursuant to this Section 10.1 and the Partnership has terminated. Hawthorne will be responsible for overseeing the winding up and liquidation of the Partnership, will take full account of the Partnership's liabilities and assets, will cause the Partnership's assets to be liquidated as promptly as is consistent with obtaining the fair market value thereof, and will cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed in the following order: (a) First, to creditors other than Partners in satisfaction of the Partnership's debts and liabilities to such creditors other than liabilities for which reasonable provision for payment has been made; (b) Second, to the Partners in satisfaction of all of the Partnership's debts and liabilities to Partners other than liabilities for which reasonable provision for payrnent has been made; and (c) The balance, if any, to the Partners in accordance with their positive Capital Accounts after giving effect to all contributions, distributions, and allocations for all periods. 10.2 No Additional Compensation. No Partner will receive any additional compensation for any services performed pursuant to this Section 10. 10.3 Waiver of Priority and Subordination. Each Partner understands and agrees that by accepting the provisions of this Section 10 setting forth the priority of the distribution of the assets of the Partnership to be made on its liquidation, the Partner expressly waives any right that it, as a creditor of the Partnership, might otherwise have under the Act to receive distributions of assets pari passu with the other creditors of the Partnership in connection with a distribution of assets of the Partnership in satisfaction of any liability of the Partnership, and hereby subordinates to the debts and liabilities to those creditors any such right. 10.4 Restoration of Deficit Capital Accounts. If any Partner's Capital Account has a deficit balance (after giving effect to all contributions, distributions, and allocations for all taxable years, including the taxable year during which the Liquidating Event occurs), such Partner must contribute to the capital of the Partnership the amount necessary to restore the deficit balance to zero. 10.5 Liquidating Trust; Reserve. In the discretion of Hawthorne, a pro rata portion of the distributions pursuant to Section 10.1 that would otherwise be made to the Partners may be: (a) Distributed to a trust established for the benefit of the Partners solely for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the Partners arising out of or in connection with the Partnership. The assets of any such trust may be distributed to the Partners from time to time, in the reasonable discretion of Hawthorne, in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the Partners pursuant to Section 10.1; or (b) Withheld to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to allow for the collection of the unrealized portion of any installment obligations owed to the Partnership; any such amounts withheld must be distributed to the Partners as soon as practicable. The portion of the distributions that would otherwise have been made to each of the Partners that is instead distributed to a trust pursuant to Section 10.5(a) or withheld to provide a reserve pursuant to Section 10.5(b) will be determined in the same manner as the expense or deduction would have been allocated if the Partnership had realized an expense equal to such amounts immediately before distributions being made pursuant to Section 10.1. SECTION 11. ADMISSION OF ADDITIONAL PARTNERS Without limiting any other provision of this Agreement, no person or entity may be admitted as a Partner without first having received the prior written consent of all the Partners and executing a counterpart copy of this Agreement, as amended, pursuant to which such new Partner agrees to be bound by the provisions of this Agreement, as amended. SECTION 12. MISCELLANEOUS 12.1 Amendment of Partnership Agreement. This Agreement may be amended only by the written agreement of all the Partners. 12.2 No Assignment. No party may assign or delegate any of the party's rights or obligations under this Agreement to any person unless the assignment or delegation is expressly permitted by this Agreement. 12.3 Binding Effect. This Agreement will be binding on the parties and their respective heirs, personal representatives, successors, and permitted assigns, and will inure to their benefit. 12.4 Notices. All notices or other communications required or permitted by this Agreement: (a) must be in writing; (b) must be delivered to the parties at the addresses set forth below, or any other address that a party may designate by notice to the other party; and (c) are considered delivered: (1) upon actual receipt if delivered personally, by fax, or by a nationally recognized overnight delivery service; or (2) at the end of the third business day after the date of deposit, if deposited in the United States mail, postage pre -paid, certified, return receipt requested. (d) Notices to Hawthorne: Hawthorne Urban Development LLC Jivanjee Circosta Architects LLP PO BOX 230579 Tigard OR 97281 (e) Notices to ALI: 3300 NW 185` ST., #186 Portland, OR 97229 -3406 12.5 Waiver. No waiver will be binding on a party unless it is in writing and signed by the party making the waiver. A party's waiver of a breach of a provision of this Agreement will not be a waiver of any other provision or a waiver of a subsequent breach of the same provision. 12.6 Severability. If a provision of this Agreement is determined to be unenforceable in any respect, the enforceability of the provision in any other respect and of the remaining provisions of this Agreement will not be impaired. 12.7 Further Assurances. The parties will sign other documents and take other actions reasonably necessary to further effect and evidence this Agreement. 12.8 No Third -Party Beneficiaries. The parties do not intend to confer any right or remedy on any third party. 12.9 Termination. The termination of this Agreement, regardless of how it occurs, will not relieve a party of obligations that have accrued before the termination. 12.10 Survival. All provisions of this Agreement that would reasonably be expected to survive the termination of this Agreement will do so. 12.11 Attachments. Any exhibits, schedules, and other attachments referenced in this Agreement are part of this Agreement. 12.12 Remedies. The parties will have all remedies available to them at law or in equity. All available remedies are cumulative and may be exercised singularly or concurrently. 12.13 Governing Law. This Agreement is governed by the laws of the State of Oregon, without giving effect to any conflict -of -law principle that would result in the laws of any other jurisdiction governing this Agreement. 12.14 Attorney's Fees. If any arbitration, action, suit, or proceeding is instituted to interpret, enforce, or rescind this Agreement, or otherwise in connection with the subject matter of this Agreement, including but not limited to any proceeding brought under the United States Bankruptcy Code, the prevailing party on a claim will be entitled to recover with respect to the claim, in addition to any other relief awarded, the prevailing party's reasonable attorney's fees and other fees, costs, and expenses of every kind, including but not limited to the costs and disbursements specified in ORCP 68 A(2), incurred in connection with the arbitration, action, suit, or proceeding, any appeal or petition for review, the collection of any award, or the enforcement of any order, as determined by the arbitrator or court. 12.15 Entire Agreement. Except for the Articles of Organization, this Agreement contains the entire understanding of the parties regarding the subject matter of this Agreement and supersedes all prior and contemporaneous negotiations and agreements, whether written or oral, between the parties with respect to the subject matter of this Agreement. 12.16 Signatures. This Agreement may be signed in counterparts. A fax transmission of a signature page will be considered an original signature page. At the request of a party, each other party will confirm a fax - transmitted signature page by delivering an original signature page to the requesting party. 12.17 Arbitration. Any dispute between the parties that is to be resolved by arbitration as provided in this Section 17.8 must be settled and decided by arbitration conducted in accordance with the rule of the Arbitration Service of Portland, Inc., as then in effect (the "Arbitration Rules "), except as provided below. Any such arbitration must be held and conducted in the city or county in which the Premises is located, before one (1) arbitrator who will be selected by mutual agreement of the parties; if agreement is not reached on the selection of such arbitrator within fifteen (15) days of receipt of a written demand for arbitration as set forth below, then an arbitrator is to be appointed by the presiding judge of the Circuit Court of the County in Oregon in which the Premises is located. The parties enter into this Agreement as of the date first written above. [Signature Pages to Follow] Dated , 2012 Hawthorne Urban Development, LLC By: Title: Dated , 2012 Accessible Living, Inc., By: Title: LEASE Between HAWTHORNE URBAN DEVELOPMENT, LLC "Landlord" and Hawthorne Villa General Partnership "Tenant" Dated: , 2012 LEASE In consideration of the mutual promises of the parties set forth in this Lease, the Landlord Ieases to Tenant and Tenant leases from Landlord on the following terms and conditions the apartment complex commonly known as Hawthorne Villa Apartments located on the real property described in Exhibit A, illustrated on the site plan attached as Exhibit B -1, portions of which are further illustrated on Exhibit B -2, including all apartment units, parking areas, maintenance facilities, common use areas and any other improvements on the site necessary for the use and operation of the apartment complex (the "Premises "). SECTION 1 BASIC LEASE PROVISIONS This Section sets forth certain definitions and a summary of the basic provisions contained in the Lease. In the event of any conflict between any provision contained in this Section 1 and a provision contained in the balance of the Lease, the latter provision will control. 1.1 Date of Lease: , 2012 1.2 Name of Landlord ( "Landlord "): Hawthorne Urban Development, LLC 1.3 Address for Notices to Landlord: C/O Richard Krueger, 21001 Dairy Creek Rd, North Plains, OR 97133 Phone No.: 5036471000 Fax No.: 1.4 Address for Rent Payments: C/O Richard Krueger, 21001 Dairy Creek Rd, North Plains, OR 97133 1.5 Name of Tenant ( "Tenant "): Hawthorne Villa General Partnership 1.6 Address for Notices to Tenant: 7705 SW Pfaffle Street, Tigard, OR 97223 Phone No.: 503- 639 -8158 Fax No.: 503 -624 -2770 1.7 Premises. The apartment complex as shown on Exhibits A, B -1 and B -2 with a street address of 7705 SW Pfaffe Street, Tigard, Oregon, 97223. 1.8 Permitted Use (see Section 5.1): Rental of apartments units as low income housing. 1.9 Trade Name to Be Used by Tenant at Premises (see Section 5.4): Hawthorne Villa Apartments 1.10 Gross Leasable Area of Premises: 207,346 sq. feet/ 4.76 acres 1.11 Lease Term (see Section 3): 5 years 1.12 Renewal Options(s): Two five year terms 1.13 Base Rent (see Section 4): $35,433.83 per month, subject to adjustments based on amount of Gross Rents and Expenses. See Exhibit H. 1.14 Base Rent Increase (see Section 4.2): 3% per annum, subject to downward adjustment if needed to maintain tax exempt status and rules governing the Low Income Housing Tax Credit ( "LIHTC ") Program. 1.15 Percentage Rent Rate: N/A 1.16 Tenant's Proportionate Share (Building): 100% 1.17 Tenant's Proportionate Share (Common Areas): 100% 1.18 Minimum Hours of Operation (see Section 5.3): 24 hours /7 days /365 days 1.19 Landlord's Broker (see Section 17.11): N/A 1.20 Tenant's Broker (see Section 17.11): N/A 1.21 Security Deposit (see Section 15): $TBD 1.22 Prepaid Rent (see Section 4.5): $TBD 1.23 Guarantor's Name and Address (see Exhibit F): N/A 1.24 Radius Restriction Area (see Section 5.6): N/A 1.25 Exhibits: Exhibit A Legal Description and General Description Exhibit B -1 Site Plan Exhibit 8-2 Sample Illustrations Exhibit C Landlord Work Exhibit D Rules and Regulations Exhibit E Confirmation Letter Exhibit F Addendum Exhibit G Portions of Appraisal by Colliers International Valuation & Advisory Services, dated June 24, 2011 and valued through August 1, 2012 that are relevant to the determination of the restricted rent, value of unrestricted rent and the tax savings to Landlord. Exhibit H Base Rent Calculation 1.26 Definitions. 1.26.1 Building. Building means alI structures upon the Premises, including without limitation, those certain 9 buildings making up Hawthorne Villa Apartments and laundry rooms, storage units, and leasing office. 1.26.2 Common Area. Common Area means all areas and facilities within and about Hawthorne Villa Apaitiuents for the use and enjoyment of Tenant and residential subtenants, including all vehicle parking spaces and areas, roads, traffic lanes, driveways, sidewalks, pedestrian walkways, landscaped areas, court yards, signs, service - delivery facilities, common storage areas, common utility facilities, and all other areas provided and designated by Landlord. 1.26.3 Default Interest Rate. Default Interest Rate means the prime rate of interest as declared by a major bank of national standing plus two (2) percentage points, but not in any event at a rate greater than the maximum rate of interest permitted by Iaw, calculated from and after the date of Default or expenditure until paid. 1.26.4 ECR. ECR means that certain agreement creating easements, covenants, and restrictions affecting Hawthorne Villa Apartments , made and entered into as of April 8, 1997, by and between Hawthorne Villa Limited Partnership and Oregon Housing and Community Services, as amended by written instrument dated September 13, 201 l , and as further amended from time to time. 1.26.5 Gross Leasable Area. Gross Leasable Area means the aggregate of the number of square feet of or acreage of area of all the Premises. 1.26.6 Gross Rents. As used in this Lease, Gross Rents means all rental receipts from Tenant's business operated at the Premises, whether paid in cash or credit, and all money and things of value received by, or paid to, Tenant. The term Gross Rents does not include any taxes collected from residential subtenants and for which Tenant is accountable to any goveriunental agency, and does not include the amount of any actual refunds or credits made by Tenant. 1.26.7 Hazardous Materials. Hazardous Materials means petroleum, asbestos, polychlorinated biphenyls, radioactive materials, radon gas, or any chemical, material, or substance defined as or included in the definition of "hazardous substances, hazardous waste, hazardous materials, extremely hazardous waste, restrictive hazardous waste, or toxic substances," respectively, or words of similar import under any applicable federal, state, or local law, ordinance, statute, rule, or regulation, including but not limited to the Comprehensive Environmental Response Compensation Liability Act of 1980, as amended, the Federal Water Pollution Contract Act, as amended, ORS chapter 465 ( "Hazardous Waste and Hazardous Materials I "), ORS chapter 466 ( "Hazardous Waste and I azardous Materials 11 "), ORS chapter 468 ( "Environmental Quality Generally "), the Pollution Control and the Hazardous Materials Transportation Act, or any regulation or publication adopted or promulgated pursuant to such laws, ordinances, statutes, rules, or regulations, and any other chemical, material, or substance to which exposure is prohibited, limited, or regulated by any governmental authority, or may or could pose a hazard to the health and safety of the occupants of the Premises on which may or could pose a hazard to the environment. 1.26.8 Landlord's Work. Landlord's Work means those improvements and alterations that Landlord will construct in or about the Premises, as described in Exhibit C attached to this Lease (see Section 16). Landlord's Work reflects the renovations to be performed and noted in the Exhibit G Appraisal. 1.26.9 Lease Commencement Date. Lease Commencement Date means the date on which Landlord delivers possession of the Premises to Tenant. 1.26.10 Premises. Premises means those certain Premises consisting of approximately 207,346 sq. feet/ 4.76 acres square feet of Gross Leasable Area plus the Common Areas and the Building plus all other appurtenances used by Tenant. 1.26.11 Rent Commencement Date. Rent Commencement Date means the date that is the later of (a) March 1, 2012, or (b) thirty (30) days after the date Landlord delivers possession of the Premises to Tenant in accordance with Section 3.1 or the date upon which Tenant commences business operations in the Premises, if earlier than the date described in (a) or (b). 1.26.12 Site Plan. Site Plan means that certain site plan attached to this Lease as Exhibit B -1 showing Hawthorne Villa Apartments. 1.26.13 Tenant's Work. Tenant's Work means those improvements and alterations that Tenant will construct in the Premises, as described in Exhibit C, attached to this Lease. See Section 16. 1.26.14 Capital Expenditure. For the purpose of this Lease only, Capital Expenditure means improvements and alterations intended to acquire or upgrade physical assets such as the Buildings, Common Areas, and structural and systematic components of the Premises and machinery. Capital Expenditures do not include repairs and maintenance to keep the Premises in good operating condition (i.e. fixing leaks, drywall, painting, fixing broken windows etc.) SECTION 2 DEMISE OF PREMISES; USE OF COMMON AREAS 2.1 Demise of Premises. Commencing on the Lease Commencement Date, Landlord leases to Tenant and Tenant leases from Landlord the Premises for the Term as set forth in Section 1.11. 2.2 Right to Use Premises including Building and Common Area. Tenant and its employees, contractors, residential subtenants and invitees will have the right to use the Premises for all purposes necessary for the use and enjoyment of residential subtenants, including areas needed for ingress and egress to and from the Premises and for automobile parking on the terms and conditions contained in this Lease and subject to any reasonable rules and regulations that Landlord may from time to time promulgate. 2.3 Restrictions, Regulations, and Laws. This Lease is subject to all easements, restrictions, agreements of record, mortgages and deeds of trust, zoning and building Laws, and all other Iaws, statutes, codes, ordinances, rules, regulations, and other governmental requirements now in effect or becoming effective after the date this Lease is executed (collectively, the "Laws "). SECTION 3 POSSESSION AND COMMENCEMENT OF TERM 3.1 Delivery of Possession and Commencement of Term. Landlord will deliver the Premises to Tenant in its current condition and repair. Tenant understands Landlord is planning to complete items listed on Exhibit C; however, delivery of possession and commencement of the Lease Term is not contingent upon substantial completion of the items on Exhibit C. By accepting possession of the Premises under this Lease, Tenant acknowledges that Tenant accepts the Premises "AS IS, WHERE IS" and as suitable for Tenant's intended use, in good and sanitary operating order, condition, and repair, and without representation or warranty by Landlord as to the condition, use, or occupancy that may be made of the Premises and that the Gross Leasable Area of the Premises is as set forth in Section 1.10. If there is any delay in delivering possession of the Premises to Tenant, the term of this Lease will be extended by the number of days of the delay. If the Lease Commencement Date is a date other than the first day of a calendar month, then the Term will be deemed extended by the number of days between the Lease Commencement Date and the first day of the first calendar month thereafter so that the Tenn of the Lease will expire at midnight on the last day of the last calendar month of the Lease Term (the "Expiration Date "). After the Lease Commencement Date, Rent Commencement Date, and Expiration Date have been determined pursuant to this Section 3, Landlord will notify Tenant in writing thereof and Tenant will complete and execute a confirmation letter in the form attached to this Lease as Exhibit E and incorporated in this Lease by reference. 3.2 Early Possession. If possession of the Premises is delivered to Tenant before the Lease Commencement Date, Tenant will have the right to occupy the Premises subject to all the terms and provisions of this Lease, including the payment of all Additional Rent and utilities. The payment of Base Rent will not commence until the Rent Commencement Date. 3.3 Renewal Options. As long as Tenant is not then in default of this Lease beyond any applicable notice and cure period, Tenant will have the option to extend the Term for two (2) additional periods of five (5) years each (individually, an "Extension," and collectively, the "Extensions "), commencing at midnight on the date on which the Term or any Extension expires. Base Rent during an Extension will be increased three percent (3 %) annually over the Base Rent in effect in the previous lease year for each and every lease year of the Extension, adjusted as needed to reflect the savings resulting from any exemption from taxation provided by the City of Tigard. Each Extension will be deemed automatically exercised by Tenant and Landlord and the parties will be bound by this Lease for the Extension unless Tenant or Landlord gives the other party written notice of its intention not to exercise its option to extend the Lease, not later than one- hundred - eighty (180) days before the expiration of the Tenn or the preceding Extension. If Tenant or Landlord notifies the other that it elects not to exercise its option as set forth above, Tenant will vacate the Leased Premises upon the expiration of the Term or Extension then in effect and will deliver the Leased Premises to Landlord in accordance with the terms and conditions of this Lease. SECTION 4 RENT 4.1 Base Rent. 4.1.1. Acknowledgments: Landlord and Tenant agree that a recent appraisal on the property indicated the Rent Gap (average market rent for Tigard & Tualatin less market rents at the Premises) to be approximately 10 %. See Exhibit G, pg. 62. As noted by the Appraisal: Unit Type # of Units Concluded Market Rents Concluded L11 -ITC Rents Difference in Rent % Gap Studio 30 $540 $485 -$55 10.2% 1 BD /1 BA (605SF) 62 $610 $550 460 9.8% 1 13D /1 BA (685SF) 21 $640 $575 465 10.2% 2 BD /1 BA 5 $725 $670 455 7.6% The Appraisal states, and its analysis explains, the concluded restricted rents after renovation are based on a typical Rent Gap of about 10% from the market rent conclusion. The Gross Rent as noted by the Appraisal is $768,900.00 in normal market conditions. See Exhibit G, pg. 67. The parties agree that the 10% Rent Gap reduces Gross Rents by about $77,000.00. The Appraisal states the estimated value of the tax exemption per unit to be $375.00. See Exhibit F, pg. 29 & 71. With 118 units, the exemption provides a savings of about $44,250.00 to Landlord. The saving of $44,250.00 is offset by the decreased rental receipts received for the Property. Even if one factors in miscellaneous income from laundry, vending and storage of about $18,750 per year, the rent restrictions still cause lost revenues to exceed the exemption. As a result, the parties agree to Base Rent based on the Gross Rents less Tenant Expenses and agree that the tax savings resulting from the exemption are reflected in the Base Rent in light of the Rent Gap. 4.1.2. Base Rent Amount: Throughout the original Term, Tenant will pay to Landlord, as base rent, the amounts set forth in the schedule set forth in Section 1.13 ( "Base Rent "). Tenant will pay Base Rent in advance on the first day of each calendar month of the Term at the address for rent payments set forth in Section 1.4, or at any other place that Landlord designates except that Tenant will pay Landlord the first month's Base Rent and Security Deposit on the date that Tenant executes this Lease. 4.2 Base Rent Increase. The Base Rent as set forth in Section 4.1 will be increased by three percent (3 %) on the first day of each Lease Year after the Base Year but adjusted as needed to reflect the savings resulting from any exemption from taxation provided by the City of Tigard. 4.3 Records. Tenant will maintain complete and accurate records showing Gross Rents and Tenant Expenses on a monthly basis. Tenant will ensure that all records are available for inspection by Landlord at all times after reasonable advance notice. 4.4 Reporting. In addition to all monthly statements of Gross Rents and Expenses as required by Section 4.3, Tenant will submit to Landlord an annual statement of Gross Rents for each calendar year and partial calendar year during the Term within thirty (30) days after the end of each calendar year during the Term. 4.5 Audit. Landlord may cause Tenant's records of Gross Rents and Tenant Expense computations to be examined at any time by an accountant or other representative selected by Landlord. If the examination discloses that the Base Rent was understated, Tenant will immediately pay the unpaid Base Rent to Landlord together with interest at the Default Interest Rate on the shortage of Base Rent from the dates that such Rent should have been paid by Tenant. If the Base Rent was understated by more than two percent (2 %), Landlord will provide written notice to Tenant of the understatement and, in addition to any Base Rent due, Tenant will pay the cost of the audit. If Tenant understates Gross Rents and Expenses at any subsequent time during the team of the Lease, in addition to all other rights and remedies available to Landlord hereunder, Tenant will pay the cost of the audit and Landlord may, by written notice to Tenant, terminate this Lease. 4.6 Additional Rent 4.6.1 Operating Expenses. In addition to Base Rent, Tenant will pay Landlord, as Additional Rent, Operating Expenses in accordance with this Section. For purposes of this Lease, the term Operating Expenses means all expenses paid or incurred by Landlord (or on Landlord's behalf) as reasonably determined by Landlord as necessary or appropriate for the operation, maintenance, repair, or replacement of the Premises as required by Landlord under this Lease, including the Building and Common Areas thereon. Operating Expenses may include, without limitation, (a) salaries, wages, and benefits of employees of Landlord engaged in the repair, operation, maintenance, and replacement thereon, if any; (b) payroll taxes, workers' compensation insurance, uniforms, and related expenses for those employees, if any; (c) the cost of all gas, utilities, sewer charges, and other services furnished to the Premises including the Building and Common Areas; (d) the cost of maintaining and repairing the Premises including the Building and Common Areas, including any replacement thereof, performed or to be performed by Landlord; (e) the cost of all comprehensive general liability and "all risk" casualty insurance carried by Landlord; (f) the costs for renting all supplies and tools necessary for the maintenance and repair of the Building and Common Areas; (g) the costs of capital improvements, replacements, and remodelings of the Common Areas, the costs of which will be amortized (with interest on the unamortized balance at a commercially reasonable rate, as determined by Landlord) over the useful life of the improvements or remodelings and otherwise in accordance with generally accepted accounting principles uniformly applied as reasonably estimated by Landlord; (h) alterations and improvements to the Premises including the Building and Common Areas made by reason of all applicable Laws and requirements of any public authority or the requirements of any insurance body, but excluding any alteration or improvement that is included in Landlord's obligation to deliver the Premises, Building and Common Areas in compliance with Law, as set forth in Section 3.1; (1) management fees paid to a third party, or, if no managing agent is employed by Landlord, Landlord will be entitled to charge a reasonable management fee, and that fee will be included in the Operating Expenses; (j) reasonable legal, accounting, and other professional fees incurred in connection with the operation, maintenance, repair, replacement, and management of the Building and Common Areas; (k) the cost of landscape and parking -area maintenance, repair, and when necessary as determined by Landlord, including the replacement thereof; (1) janitorial and cleaning supplies and services; (m) all other charges properly allocable to the operation, repair, maintenance, and, if necessary, replacement of the Common Areas, Building, and Building Systems in accordance with generally accepted accounting principles; and all Section 4.4.3 Taxes (if imposed) . 4.6.2 Operating Year. Operating Year means each calendar year of the Term. If the Lease Commencement Date or the Expiration Date occurs on any date other than the first (1st) day of the calendar year, all calculations, costs, and payments referred to in this Section 4 will be prorated for the portion of the calendar year to which they apply. 4.6.3 Taxes. The term Taxes includes (a) if imposed, all ad valorem and other real property taxes and assessments and personal property taxes, charges, rates, user fees, duties, and assessments rated, levied, or imposed by any governmental authority with respect to the Premises and any improvements, fixtures, and equipment located in it or on it, and with respect to all other property of Landlord, real or personal, located in or on the Premises; (b) if imposed, any tax in lieu of a real property tax; (c) if imposed, any tax or excise levied or assessed by any governmental authority on the Rent payable under this Lease or Rent accruing from the use of the Premises or any portion of it; and (d) if imposed, any tax or excise imposed or assessed by or against Landlord that is measured or based in whole or in part on the capital used by Landlord to improve the Premises. The term Taxes does not include federal or state corporate or personal income taxes. if Landlord receives a refund of Taxes, then Landlord will credit the refund, net of any professional fees and costs incurred by Landlord to obtain the same, against the Taxes for the Operating Year to which the refund is applicable or the current Operating Year, at Landlord's option. Notwithstanding the foregoing, Tenant will pay before delinquency all taxes, assessments, licenses, fees, and charges assessed, imposed, or levied on (a) Tenant's business operations, (b) all trade fixtures, (c) leasehold improvements, (d) merchandise, and (e) other personal property in or about the Premises. 4.6.4 Written Statement of Estimate. Before the Lease Commencement Date, Landlord will furnish Tenant with a written statement setting forth Landlord's estimate of Operating Expenses and Taxes and Tenant's Proportionate Share (Center) thereof for the first Lease Year. Thereafter, before the commencement of each Operating Year after the first Operating Year or as soon thereafter as reasonably possible, Landlord will furnish Tenant with a written statement setting forth the estimated cost of Operating Expenses and Taxes for the next Operating Year. Tenant will pay to Landlord as Additional Rent commencing on the Lease Commencement Date, and thereafter on the first day of each calendar month, an amount equal to one - twelfth (1 /12th) of the estimated cost of Operating Expenses and Taxes, as shown in Landlord's written statement for that Operating Year. If Landlord fails to deliver the written estimate, Tenant will continue to pay to Landlord an amount equal to one - twelfth (1 /12th) of the estimated cost of Operating Expenses and Taxes for the immediately preceding Operating Year until Landlord furnishes the written estimate. Upon receipt of the written estimate, Tenant will pay an amount equal to the difference between the estimated cost of Operating Expenses and Taxes for the expired portion of the current Operating Year and the Tenant's actual payments during that time, and any payments by Tenant in excess of the estimated cost of Operating Expenses, Taxes, and Insurance will be credited to the next due payment of Rent from Tenant. Landlord reserves the right, from time to time, to adjust the estimated cost of Operating Expenses and Taxes, and Tenant will commence payment of one - twelfth (1 /12th) of the revised estimate on the first (1st) day of the month following receipt of the revised estimate. 4.6.5 Final Written Statement. Within one - hundred- twenty (120) days after the close of each Operating Year during the Term, Landlord will deliver to Tenant a written statement (the "Operating Statement ") setting forth the actual cost of Operating Expenses and Taxes for the Premises for the preceding Operating Year for each such item. If the actual Operating Expenses and Taxes for the preceding Operating Year are greater than the amount paid by Tenant for the Operating Expenses and Taxes, Tenant will pay the amount due to Landlord as Additional Rent within thirty (30) days after Tenant receives the statement. If the actual Operating Expenses and Taxes for the preceding Operating Year are less than the amount paid by Tenant for the Operating Expenses and Taxes, then Landlord will, at Landlord's election, either (a) pay the amount of Tenant's overpayment to Tenant within thirty (30) days after the date of the statement or (b) apply the overpayment to Tenant's next Rent payment, reimbursing only the excess over the next Rent payment, if any. If an Operating Year ends after the expiration or termination of this Lease, any Additional Rent in respect thereof that is payable under this Section will be paid by Tenant within ten (10) days after Tenant receives the Operating Statement for the Operating Year, and any Additional Rent paid by Tenant in excess of the amount due under this Lease for the portion of the Operating Year after expiration or termination of this Lease for that Operating Year will be refunded by Landlord to Tenant within ten (10) days of the expiration of that Operating Year. Landlord's late delivery of any written statement will not constitute a waiver of Tenant's obligation to pay Operating Expenses and Taxes, but Landlord will use reasonable efforts to deliver such written statements as soon as reasonably possible after the commencement of each Operating Year. 4.6.6 Tenant Examination. The Operating Statement need not be audited but must contain sufficient detail to enable Tenant to verify the calculation of Operating Expenses, Taxes, and insurance for the Premises. 4.6.7 Tenant's Share Tenant's share of Operating Expenses and Taxes shall be One I- Iundred percent (100 %) of the total cost. 4.6.8 Late Charges and Interest. Rent not paid when due will bear interest until paid at the Default Interest Rate. Landlord may impose a late charge of the greater of (a) five percent (5 %) of Rent then due or (b) $50 for each payment of Rent made more than ten (10) days late (the "Late Charge "). Tenant acknowledges that late payment by Tenant to Landlord of any Rent or other sums due under this Lease will cause Landlord to incur costs not contemplated by this Lease, that the exact amount of those costs are extremely difficult and impracticable to ascertain, and that the Late Charge is not a penalty but represents a fair and reasonable estimate of the costs that Landlord will incur by reason of any such late payment. Landlord may levy and collect a late charge in addition to all other remedies available for Tenant's default, and collection of a late charge will neither be in lieu of nor waive the breach caused by the late payment. 4.7 Prepaid Rent. Unless waived by Landlord, Tenant will pay the initial monthly Base Rent for the first full month of the Lease Term for which Rent is payable upon the Lease Commencement Date. 4.8 Place of Payment. All payments required to be paid by Tenant under this Lease, other than the Base Rent, will constitute Additional Rent. Tenant must make all payments of Additional Rent at the address for rent payments set forth in Section 1.4, or at any other place that Landlord designates from time to time. SECTION 5 USE 5.1 Permitted Use. Tenant will use the Premises only for the purpose set forth in Section 1.8 and for no other purpose without the written consent of Landlord. 5.2 Further Covenants Regarding Use. 5.2.1 Compliance with Laws. Except for Landlord's obligations as specifically set forth in this Lease, Tenant will comply at its expense with all applicable Laws, including without limitation those regarding the maintenance, operation, condition, and use of the Premises when and as required by the applicable public authority. Tenant will not use the Premises in conflict with any Laws nor will Tenant permit anything to be done in or about the Premises that would conflict with any Laws. 5.2.2 Activities on Premises. Tenant will neither conduct nor permit any activities on the Premises that would likely (a) increase the fire insurance rate on the Premises, (b) cause a cancellation of any of Landlord's insurance policies, (c) create a nuisance, (d) damage the reputation of Hawthorne Villa Apartments , or (e) be reasonably offensive to Landlord or other tenants. Tenant will not allow the disposal of any medical waste at the Premises trash receptacles by Tenant or Tenant's employees, agents, or independent contractors. 5.2.3 Manner of Operating Business. Tenant will keep the Premises clean and orderly and will operate its business in the Premises in a first- class, professional manner. Tenant will supervise its employees and cause Tenant's agents, independent contractors, employees, customers, suppliers, and invitees to conduct their activities in a manner that complies with the requirements of this Lease and the Rules and Regulations. 5.3 Continuous Operation. Tenant will continuously use and conduct its business described in Section 1.18 on the Premises during, at a minimum, the hours set forth therein. If Tenant fails to operate its business in the Premises for a period of thirty (30) days for any reason other than a casualty or condemnation that materially interferes with Tenant's operation of its business in the Premises, Tenant will be deemed to have abandoned the Premises and Landlord will have the right to exercise any and all rights and remedies set forth in this Lease. Tenant will use best efforts to operate the business conducted on the Premises in a diligent manner that will produce the maximum volume of Gross Rents. 5.4 Name of Business. The advertised name of the business operated in the Premises is set forth in Section 1.9. Tenant agrees not to change its advertised name without the prior written consent of Landlord, which consent Landlord will not unreasonably withhold. 5.5 Storage, Trash, and Recycling. Tenant will not store anything outside except in those areas approved in writing in advance by Landlord. Tenant will use only those trash and garbage receptacles approved by Landlord. Tenant will dispose of trash and other matter in a manner acceptable to Landlord, at Tenant's expense. Tenant will comply with all recycling programs required by applicable Laws or by Landlord from time to time. SECTION 6 UTILITIES, SERVICES, AND SECURITY 6.1 Utilities and Services. Tenant will pay all charges for utilities and services supplied to the Premises, including without limitation "hookup" and service charges for electricity, gas, telephone, cable, water, and sewer, If consumption is not separately metered to the Premises, Tenant will pay Landlord as an Operating Expense for all utilities consumed on the Premises at a rate reasonably determined by Landlord that is not in excess of the cost to Landlord. 6.2 Security. Landlord may, but will have no obligation to, provide security service or adopt any security measure concerning the Premises, and Tenant will abide by all reasonable security measures adopted by Landlord. SECTION 7 INSURANCE AND INDEMNITY 7.1 Tenant's Insurance 7.1.1 Commercial General Liability Insurance. At all times during the Term of this Lease, Tenant, at its expense, will maintain commercial general liability insurance in respect of the Premises and the conduct or operation of business in it, naming Landlord and its managing agent, if any, as additional insureds, with a combined single limit of not less than two million dollars ($2,000,000); unless otherwise reduced by Landlord in writing. All such insurance will insure the Tenant's performance of the indemnity agreement as to liability for bodily injury to, illness of, or death of persons and damage to property set forth in this Lease. Tenant will pay for and deliver to Landlord and any additional insured such policies or certificates of insurance, in form reasonably satisfactory to Landlord, issued by the insurance company or its authorized agent, at least ten (10) days before the Lease Commencement Date. Tenant will procure and pay for renewals of such insurance from time to time before the expiration thereof, and Tenant will deliver to Landlord and any additional insured the renewal policy at least thirty (30) days before the expiration of any existing policy. All such policies must contain a provision whereby the same cannot be canceled or modified unless Landlord and any additional insured are given at least thirty (30) days' prior written notice of the cancellation or modification, 7.1.2 Property and Business - Interruption Insurance. Tenant will continuously maintain at its expense (a) special form type property insurance coverage on all furnishings, leasehold improvements, fixtures, inventory, and equipment located on the Premises, covering full replacement value, (b) insurance on all plate glass on the Premises, covering replacement cost, and (c) business - interruption coverage. The proceeds of such insurance, as long as this Lease remains in effect, will be used to repair or replace the leasehold improvements, fixtures, inventory, equipment, and plate glass so insured and to compensate Tenant for any damage incurred by Tenant resulting from any interference with Tenant's ability to operate its business in the Premises. 7.1.3 Workers' Compensation Insurance. At all times during the Lease Term and any extensions or renewals, Tenant agrees to keep and maintain, and to cause Tenant's agents, contractors, and subcontractors to keep and maintain, workers' compensation insurance and other forms of insurance as may from time to time be required by Law or may otherwise be necessary to protect Landlord and the Premises from claims of any person who may at any time work on or in the Premises, whether as a servant, agent, or employee of Tenant or otherwise. Such insurance must be maintained at the expense of Tenant or Tenant's agents, contractors, or subcontractors and not at the expense of Landlord. 7.1.4 Insurance Policy Requirements. All insurance policies to be carried by Tenant must cover the risks and include only prudent deductible amounts as reasonably determined by Landlord from time to time. All insurance policies must name Landlord and Landlord's mortgagee as additional insureds and must be provided by responsible insurance companies authorized to issue insurance in the State of Oregon, with loss- payable clauses satisfactory to Landlord, and with ratings no less than B + VIII by A.M. Best Insurance Rating Service. Before occupying the Premises, Tenant must deliver to Landlord copies of all policies or certificates evidencing such insurance in form acceptable to Landlord. All policies and certificates must bear endorsements requiring thirty (30) days' written notice to Landlord before any change or cancellation. 7.2 Landlord's Insurance. During the Lease Term, Landlord may, at its discretion, maintain in full force and effect a policy or policies of property insurance covering the Building and the Center that provide coverage against such risks that are commonly covered under (a) a commercial general liability insurance policy providing secondary coverage to Tenant's policy, (b) a "special form" type of policy (including earthquake and /or flood coverage, at Landlord's election), together with loss of Rents coverage, and (c) any other insurance that Landlord deems reasonably necessary. 7.3 Waiver of Subrogation. Each property insurance policy obtained by each party that covers or applies to the Premises, or the personal property, fixtures, or equipment located in or on the Premises, must include an appropriate clause or endorsement that waives the insurance company's right to make any subrogation claim and that permits the insured, before any loss, to agree with the other party to this Lease to waive any claim it might have against the other party without invalidating the coverage under the insurance policy. The waiver of subrogation and permission for waiver of any claim must extend to the parties and their respective agents and employees. Each party releases the other and its agents and employees in respect of any claim (including a claim for negligence) that it might otherwise have against the other party or its agents or employees for loss, damage, or other casualty (including rental value or business interest, as the case may be) occurring during the Term of this Lease and normally covered under a special form property insurance policy in the form normally used in respect of similar property in Portland, Oregon. 7.4 Indemnification. Each party will indemnify, defend, and hold harmless the other party and its respective partners, directors, officers, agents, and employees from and against any and all third -party claims for bodily injury or property damage arising from or in connection with any accident, injury, or damage even if caused in part by the negligence of the indemnitee or its partners, directors, officers, agents, and employees occurring in, at, or upon an area under the care, custody, and control of the indeinnitor, together with all costs, expenses, and liabilities incurred or in connection with each such claim or action or proceeding brought thereon, including without limitation all attorney fees and expenses at trial and upon appeal. SECTION 8 REPAIRS, MAINTENANCE, AND ALTERATIONS 8.1 Maintenance of Premises and Building 8.1.1 By Landlord. Landlord will repair, maintain, or replace, when necessary, the major structural and system components of the Premises, (major structural and system components do not include items such as, without limitation, basic fixtures or components such as faucets, light bulbs, switch plates, basic wiring repair for a unit, range hoods, etc. or items that do not materially add to the value of the Premises) including the Common Areas and the roof foundation, exterior walls, interior structural walls, all structural components, and all systems (such as mechanical, electrical, HVAC, and plumbing) of or in the Building. Tenant expressly waives the benefits of any statute now or later in effect that would otherwise give Tenant the right to make repairs at Landlord's expense and deduct that cost from Rent owing to Landlord. 8.1.2 By Tenant. Except for Landlord Repairs set forth in Section 8.1.1, Tenant will (a) maintain all portions of the Premises and fixtures situated within and upon the Premises in good order and repair (i.e. fixing leaks, drywall, painting, fixing broken windows etc.); (b) repair and maintain as needed to comply with the Oregon Residential Landlord Tenant Act (ORS Chpt. 90) and comply with any other legal requirements; (c) to satisfy sublease obligations to residential subtenants; (d) maintain, repair, or replace, when necessary, all special equipment and decorative treatments installed by or at Tenant's request and that serve the Premises only; (d) make all necessary repairs and replacements to all portions of the Premises and pay Landlord for the repairs or replacements to the Building if any such repairs or replacements are needed because of Tenant's misuse or primary negligence; and, (e) not commit waste to the Premises, Building or Common Areas. If Tenant fails to perform Tenant's obligations under this Section or under any other Section of this Lease, then after ten (10) business days' prior written notice to Tenant, except in an emergency when no notice is required, Landlord may enter the Premises, perform the obligations on Tenant's behalf, and recover the cost of performance, together with interest at the Default Interest Rate as Additional Rent payable by Tenant with the next installment of Base Rent. 8.2 Condition of Premises upon Termination. Upon the termination of this Lease, Tenant will surrender the Premises to Landlord broom clean, in good condition and repair, except for ordinary wear and tear and for casualty datnage. All or any of the alterations or improvements to the Premises chosen by Landlord (excluding trade fixtures installed by Tenant and Tenant's other personal property) will, at Landlord's option, either (a) become part of the Premises and belong to Landlord and will be surrendered with the Premises without disturbance upon the termination of the Lease or (b) be removed by Tenant before the termination of this Lease, in which event Tenant will repair all damage caused thereby. No later than sixty (60) days before the Expiration Date, Landlord will deliver written notice to Tenant of Landlord's exercise of the foregoing option. If Landlord fails to provide that notice, Landlord will be deemed to have elected clause (b) above. 8.3 Alterations 8.3.1 By Landlord. As long as the alteration or change does not materially interfere with Tenant's operation of its business in the Premises, Landlord may modify or alter any improvements in or upon the Premises, including the Building and Common Areas. 8.3.2 By Tenant. Unless Tenant obtains Landlord's prior written consent, which Landlord can withhold in its sole discretion, Tenant will not make or permit to be made any alterations or improvements (a) to the building envelopes, exteriors, structures, roofs, or electrical, mechanical, HVAC or plumbing systems of the Premises, (b) Capital Expenditures; (c) any work that cost in excess of Five Thousand Dollars ($5,000), or (d) that require a building permit. If Landlord consents to Tenant's making any alterations or improvements, the same must be made at Tenant's sole expense, using a contractor first approved in writing by Landlord, and the same must be made in accordance with plans and specifications first approved in writing by Landlord and in accordance with all applicable Laws. Landlord may require a cash deposit or other reasonable security to assure Landlord that the cost of the alterations or improvements will be paid promptly when and as due to avoid any liens. 8.4 Trade Fixtures. Upon the termination of this Lease, Tenant will remove all trade fixtures, movable furniture, and equipment located on the Premises that belong to Tenant, and will repair at its expense any damage caused to the Premises by such removal. If Tenant fails to remove any such property, Landlord may either (a) retain the property and all rights of Tenant with respect to it will cease, the property being deemed abandoned, (b) require Tenant to remove the property, or (c) effect a removal and place the property in storage for Tenant's account. Tenant will be liable to Landlord for the cost or reasonable value of removal, restoration, transportation to storage, and storage, with interest on all such as expenses as provided in Section 1.26.4. 8.5 Entry and Inspection. Landlord or Landlord's agents or employees may enter the Premises at any time in the event of an emergency. Otherwise, after giving Tenant twenty -four (24) hours' prior oral notice, Landlord or Landlord's agents or employees may enter the Premises to determine Tenant's compliance with this Lease, to make necessary repairs, or to show the Premises to prospective tenants, lenders, or purchasers. On Landlord's request, Tenant will provide Landlord with keys to all doors at the Premises. 8.6 Maintenance of Common Areas. Tenant, at its expense, will keep the Common Areas neat, clean, and free of ice, snow, trash, and other debris and will maintain the Common Areas at all times during the Terni in a state of good condition and repair (ordinary wear and tear and damage due to uninsured casualty and condemnation excepted) and, in any event, in compliance with the applicable standards with respect thereto, if any, that are set forth in the ECR (see Section 1.26.5). SECTION 9 RECONSTRUCTION AND RESTORATION 9.1 Minor Damage. If, during the Term, the Premises are damaged by fire or other casualty covered by Landlord's insurance and the damage is not "substantial" as defined in Section 9.2, and if Landlord receives insurance proceeds therefor, Landlord will promptly repair the damage at Landlord's expense and Tenant will repair any damage to its property at its expense or using proceeds from the insurance described in Section 7.1.2, and this Lease will continue in full force and effect. 9.2 Substantial Damage. If, during the Term, twenty -five percent (25 %) or more of the Premises is destroyed or damaged by fire or other casualty (such percentage being defined as an amount exceeding twenty-five percent (25 %) of its full construction - replacement cost), then Landlord or Tenant may elect to terminate this Lease by giving the other party written notice of the termination within sixty (60) days after the date of the damage. Otherwise, Landlord will promptly commence commercially reasonable action to restore the Premises to a condition comparable to that existing before the damage and will thereafter prosecute the restoration to completion with diligence. Tenant will cooperate with Landlord during the period of repair and will vacate all or any part of the Premises to the extent necessary for the performance of the required work. Landlord need not incur expenses for restoration in excess of the net insurance proceeds received by Landlord for that purpose after payment of all reasonable costs, expenses, and attorney fees incurred by Landlord in connection therewith. 9.3 Abatement of Rent. All rent will be abated during the period and to the extent the Premises are not reasonably usable for Tenant's use. If the damage does not cause any material interference with Tenant's use, there will be no Rent abatement. 9.4 Repair of Leasehold Improvements and Tenant's Property. Repair, replacement, or restoration of any of Tenant's fixtures, inventory, leasehold improvements, equipment, or personal property (the "Tenant's Personal Property") will be the responsibility of Tenant. If (a) Tenant's Personal Property is damaged or destroyed by fire or other casualty and (b) this Lease is not terminated as set forth in Section 9.2, Tenant will promptly commence the restoration and repair of Tenant's Personal Property to a condition comparable to that existing before the damage, and thereafter will prosecute the restoration and repair to completion with diligence. SECTION 10 ASSIGNMENT AND SUBLETTING Except for subleasing to residential subtenants which is expressly authorized by Landlord, Tenant will not (voluntarily or by operation of law) assign, transfer, mortgage, pledge, hypothecate, or encumber the Premises or Tenant's leasehold estate or sublet any portion of the Premises, or otherwise transfer any interest in the Premises (each of the foregoing being sometimes referred to as a "Transfer ") without Landlord's prior written consent in each instance, which consent will not be unreasonably withheld. Landlord may condition its consent to a proposed Transfer on reasonable conditions, including without limitation an increase in Base Rent to the fair market rental value of the Premises. If Landlord withholds its consent to a proposed Transfer for any of the following reasons, the withholding will be deemed to be reasonable: (a) conflict, incompatibility, or duplication of the proposed use with other uses or restrictions in or pertaining to the Premises; (b) financial inadequacy or managerial inexperience of the proposed transferee; (c) any proposed change in use would diminish the reputation or profitability of the other businesses located in the Premises; (d) the unsuitability of percentage - rent clauses for the proposed transferee; (e) the proposed use would have an adverse impact on the use of the common facilities by other tenants of the Premises; (i} Tenant is then in default of the Lease or has been in default on two or more occasions during the twelve- (12 -) month period preceding the date that Tenant requests the Transfer; (g) Tenant's failure to deliver to Landlord an assignment or sublease executed by Tenant and any assignee or sublessee in form and content reasonably acceptable to Landlord; and (h) any other reasonable criterion or requirement. SECTION 11 CONDEMNATION 11.1 Entire or Substantial Taking. If more than fifteen percent (15 %) of the Premises or more than twenty -five percent (25 %) of the Common Areas are taken under the power of eminent domain, or if any taking renders the balance of the Premises unusable for Tenant's use, this Lease will terminate on notice by Landlord or Tenant to the other party as of the date the condemning authority takes possession. A sale by Landlord to any authority with power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, will be deemed a taking under the power of eminent domain under this Section 11. 11.2 Partial Taking. If any taking under the power of eminent domain does not result in a termination of this Lease pursuant to Section 11.1, the Base Rent payable under this Lease will be reduced, effective on the date the condemning authority takes possession, in the same proportion as the reduction in Gross Leasable Area of the Premises. 11.3 Awards. Landlord is entitled to any award for a taking of all or any part of the Premises under the power of eminent domain, whether the award is made as compensation for diminution in value of the leasehold or for taking of the fee. Tenant hereby assigns to Landlord all interest in any such award. Nothing in this Lease precludes Tenant from making a separate claim for the value of its lost trade fixtures, Personal Property, or moving expenses as long as any such claim or award resulting from the claim does not reduce Landlord's award. SECTION 12 SIGNS Tenant will not construct or install any signs, banners, or other advertising material visible from the exterior of the Premises without Landlord's prior written consent. Landlord's consent to such signage will not be unreasonably withheld. SECTION 13 OTHER OBLIGATIONS OF PARTIES 13.1 Liens. Tenant will pay when and as due all claims for work done on the Premises or for services rendered or materials furnished to the Premises and will keep the Premises free from any liens other than liens created by Landlord. If Tenant fails to pay such a claim or to discharge any lien within thirty (30) days of demand, Landlord may either (a) pay the claim on behalf of Tenant and then collect that amount from Tenant as additional Rent or (b) obtain a bond covering the lien and collect all costs and expenses incurred in obtaining the bond, including attorney fees, from Tenant as Additional Rent. Amounts paid by Landlord will bear interest and be repaid by Tenant as provided in Section 14.3. Any action taken by Landlord as allowed in this Section will be in addition to any other right or remedy and will not constitute a waiver of any right or remedy Landlord may have because of Tenant's breach of this Lease. 13.2 Holding Over. If Tenant fails to vacate the Premises, remove Tenant's property, or restore the Premises as required by this Lease upon the expiration or earlier termination of this Lease, Landlord may, upon thirty (30) days' prior written notice to Tenant, either (a) treat Tenant as a tenant from month to month, subject to all the provisions of this Lease (except that the Term will be month to month and the Base Rent will be one - hundred -fifty percent (150 %) of the Base Rent payable by Tenant immediately before the end of the Term), or (b) eject Tenant from the Premises and recover damages caused by the wrongful holdover. 13.3 Subordination. Any mortgage, deed of trust, or ground lease to which this Lease is, at the time referred to, subject and subordinate is called a "Superior Mortgage" and the holder of a Superior Mortgage, or its successor in interest, at the time referred to, is called the "Superior Mortgagee." This Lease and all rights of Tenant under it are subject to and subordinate to all mortgages that may now or hereafter affect the Premises, whether or not the mortgages also cover other lands and buildings, to each and every advance under the mortgages, and to all renewals, modifications, replacements, and extensions of the mortgages. This Section is self - operative, and no further instrument of subordination will be required. In confirmation of this subordination, Tenant will promptly execute, acknowledge, and deliver any instrument that Landlord or any Superior Mortgagee may reasonably request to evidence the subordination. 13.4 Notice. If any act or omission of Landlord would give Tenant the right, immediately or after the lapse of a period of time, to cancel or terminate this Lease, or to claim a partial or total eviction, Tenant will not exercise that right until (a) it has given written notice of that act or omission to Landlord and each Superior Mortgagee whose name and address has previously been furnished to Tenant and (b) a reasonable period of time has passed to allow the Landlord and each such Superior Mortgagee to cure the condition. 13.5 Attornment. For purposes of this Section, the term Successor Landlord means any Superior Mortgagee who succeeds to the rights of Landlord under this Lease, whether through possession, foreclosure action, or delivery of a new lease or deed, or any third party who succeeds to the rights of Landlord under this Lease by virtue of having purchased the Premises at a foreclosure sale. The Successor Landlord will accept Tenant's attornment, assume Landlord's obligations under the Lease, and agree in writing to not disturb Tenant's quiet possession of the Premises. Tenant will attorn to and recognize the Successor Landlord as Tenant's Landlord under this Lease and Tenant and the Successor Landlord will promptly execute and deliver an instrument reasonably acceptable to the parties to evidence such attornment and nondisturbance agreement. Upon such attornment, this Lease will continue in full force and effect as a direct lease between the Successor Landlord and Tenant upon all the terms, conditions, and covenants set forth in this Lease except that the Successor Landlord will not be (a) liable for any previous act or omission of Landlord under this Lease; (b) subject to any offset, deficiency, or defense that has accrued to Tenant against Landlord; (c) bound by any previous modification of this Lease or by any previous prepayment of more than one (1) month's Base Rent, unless the Superior Mortgagee expressly approved of the modification or prepayment in writing; or (d) liable for the return of any security deposit that was not actually transferred to the Successor Landlord. 13.6 Landlord's Liability; Sale. Landlord's liability under this Lease will be limited to Landlord's interest in the Premises, and any judgment against Landlord will be enforceable solely against Landlord's interest in the Premises. If the original Landlord under this Lease, or any successor owner of the Premises, sells, conveys, or otherwise transfers its interest in the Premises, all liabilities and obligations on the part of the original Landlord, or such successor owner, under this Lease accruing thereafter will terminate. All Liabilities and obligations of Landlord accruing thereafter will be binding on the new owner. Tenant agrees to attom to such new owner. 13.7 Estoppel Certificate. Within ten (10) days after written request by either party to the other, the requested party will deliver a written statement to the requesting party stating (a) the amount of all Base Rent, and the date to which the Base Rent and other charges have been paid, (b) whether the Lease is unmodified and in full force and effect, (c) whether the party knows of any current default by the other party and a description of any such default, and (d) any other matters that may reasonably be requested by the requesting party or by any prospective lender or purchaser. 13.8 Rules and Regulations. Tenant agrees to comply with all rules, regulations, and requirements for the Premises, as adopted and modified by Landlord from time to time at Landlord's sole and exclusive discretion (the "Rules and Regulations "), and to cause Tenant's contractors, employees, agents, and invitees to abide by the Rules and Regulations. The Rules and Regulations applicable to the Premises as of the date of this Lease are attached to this Lease as Exhibit D. Tenant agrees that Landlord will not be responsible to Tenant for the noncompliance by any residential subtenant or occupant of the Premises with the Rules and Regulations. 13.9 Covenant of Quiet Enjoyment. Landlord covenants that, as long as no event of default has occurred that remains uncured beyond any applicable cure period allowed by this Lease, Tenant will peaceably and quietly have, hold, and enjoy the Premises during the term of this Lease without any interruption or disturbance from Landlord or any party claiming, by, through, or under Landlord, subject to the terms and conditions of this Lease. SECTION 14 DEFAULTS AND REMEDIES 14.1 Default. The following events constitute events of default: 14.1.1 Payment Default. Tenant fails to pay any Base Rent, or Additional Rent, or any other amount due under this Lease, within three (3) days after receiving notice that the same is past due. No notice and no opportunity to cure will be required if Landlord has previously given Tenant notice of failure to make any such payment required by this Lease two (2) or more times in any twelve- (12 -) month period during the Term. 14.1.2 Unauthorized Transfer. Tenant makes any Transfer of Tenant's interest in this Lease, including any assignment or subletting of it, without Landlord's prior written consent as required by Section 10. 14.1.3 Abandonment of Premises. Tenant fails to occupy or use the Premises for the purposes described in Section 1.8 for a total of 60 or more consecutive calendar days during the Term, unless such failure is excused under any other provision of this Lease. 14.1.4 Default in Certain Covenants. Tenant fails to deliver the instruments described in Section 13.4 or 13.6 within five (5) days after receiving written notice from Landlord after the expiration of the time for delivery required in Section 13.4 or 13.6, as applicable, or Tenant fails to comply with any applicable Law when and as required by the applicable governmental authority. 14.1.5 Default in Other Term or Covenant. Tenant fails to comply with any other term, covenant, or condition of this Lease or to fulfill any other obligation of this Lease within twenty (20) days after written notice by Landlord specifying the nature of the failure with reasonable particularity. No notice and no opportunity to cure will be required if Landlord has previously given Tenant notice of failure to comply with such term or condition or to fulfill such other obligation of this Lease two or more times in any twelve -month period during the Term. 14.1.6 Insolvency Defaults. (a) Dissolution, termination of existence, insolvency on a balance -sheet basis, or business failure of Tenant; (b) Tenant's commencement of a voluntary case under the federal bankruptcy laws or under any other federal or state law relating to insolvency or debtor's relief; (c) the entry of a decree or order for relief against Tenant in an involuntary case under the federal bankruptcy laws or under any other applicable federal or state law relating to insolvency or debtor's relief; (d) the appointment of or the consent by Tenant to the appointment of a receiver, trustee, or custodian of Tenant or of any of Tenant's property; (e) an assignment for the benefit of creditors by Tenant; (f) Tenant's failure generally to pay its debts as they become due; (g) Tenant's making or suffering a fraudulent transfer under applicable federal or state law; (h) Tenant's concealment of any of its property in fraud of creditors; or (i) the imposition of a lien through legal proceedings or restraint upon any of the property of Tenant which is not discharged or bonded. During any period in which there is a Guarantor of this Lease, each reference to "Tenant" in this paragraph will be deemed to refer to "Guarantor" or "Tenant" separately. 14.2 Remedies upon Default. Upon any default, Landlord may exercise any one or more of the following remedies, or any other remedy available under applicable law: 14.2.1 Retake Possession. (a) To the extent permitted by law, Landlord may reenter and retake possession of the Premises, without notice, either by summary proceedings or by any other applicable action or proceeding [, or by other means, including self help]. (b) Upon retaking possession of the Premises, Landlord may use the Premises for Landlord's own purposes or relet the Premises on any reasonable terms without prejudice to any other remedies that Landlord may have by reason of Tenant's default. None of these actions will be deemed an acceptance of surrender by Tenant. To the extent permitted by law, and except as expressly provided in this Lease, Tenant waives the service of (i) any notice of intention to terminate this Lease or to retake the Premises, (ii) any demand for payment of Rent or for possession, and (iii) any and every other notice or demand required or permitted under applicable law. 14.2.2 Relet the Premises. Landlord at its option may relet the whole or any part of the Premises, from time to time, either in the name of Landlord or otherwise, to any tenants, for any terms ending before, on, or after the expiration date of the Term, at any rentals, and on any other conditions (including concessions and free -rent periods) that Landlord, in its sole discretion, determines to be appropriate. Landlord is to use commercially reasonable efforts to mitigate any damages incurred by Landlord as a result of any default by Tenant. However, no failure to mitigate damages by Landlord will operate to relieve Tenant of any liability under this Lease or otherwise affect Tenant's liability. If other comparable and unleased space exists in the Premises, Landlord will have no obligation to attempt to relet the Premises before leasing other space in the Premises. 14.2.3 Damages for Default. Whether or not Landlord retakes possession of or relets the Premises, Landlord may recover all damages caused by the default (including but not limited to unpaid Rent, attorney fees reasonably incurred, all costs of reletting the Premises, the unamortized cost of improvements installed by Landlord for Tenant, and broker commissions) together with interest thereon at the Default Interest Rate. Landlord may sue periodically to recover damages as they accrue during the remainder of the Term without barring a later action for further damages. Landlord may at any time bring an action seeking accrued damages plus damages for the remaining Term as allowed by Law. 14.3 Cure of Tenant's Default. Without prejudice to any other remedy for default, Landlord may perform any obligation of Tenant or make any payment required by Tenant under this Lease if Tenant fails to do so. On demand, Tenant will immediately reimburse Landlord for Landlord's costs of such performance, including reasonable attorney fees and all disbursements, together with interest at the Default Interest Rate from the date of expenditure until fully paid. SECTION 15 SECURITY DEPOSIT Upon execution of this Lease, Tenant will deposit with Landlord the sum set forth in Section 1.21 (the "Security Deposit "), as security for Tenant's full and faithful performance of every provision of this Lease. If Tenant is in default of any provision of this Lease, Landlord may, but will not be obligated to, apply all or any part of the Security Deposit to remedy the default. If any portion of the Security Deposit is so applied, Tenant must immediately deposit with Landlord cash in an amount sufficient to restore the Security Deposit to its original amount. Landlord may commingle the Security Deposit with Landlord's funds, and Tenant will not be entitled to interest on the Security Deposit. If Tenant fully and faithfully performs every provision of this Lease, the Security Deposit or any remaining balance of it will be returned to Tenant within thirty (30) days after the expiration of the Term. SECTION 16 LANDLORD'S AND TENANT'S WORK Landlord will perform the work described as Landlord's Work, if any, as set forth in the attached Exhibit C; but, the completion of Landlord's Work is not a condition precedent to commencement of the tenancy, this Lease or the obligation to pay rent. SECTION 17 MISCELLANEOUS 17.1 Waivers. No waiver by either party of performance of any provision of this Lease will be deemed to be a waiver of nor prejudice such party's right to otherwise require performance of the same provision or any other provision. 17.2 Recording. Tenant will not record this Lease or any memorandum of it without Landlord's prior written consent, which consent Landlord may withhold in its sole discretion. 17.3 Notices. All notices, demands, consents, approvals, and other communications provided for in this Lease will be invalid unless set forth in writing and delivered by facsimile transmission, email, overnight air courier, personal delivery, or registered or certified U.S. mail with return receipt requested to the appropriate party at its address as set forth in Section 1.6 for Tenant and Section 1.3 for Landlord, Addresses for notices may be changed from time to time by written notice to all other parties. Any communication given by email transmission must be confirmed within forty -eight (48) hours by mail. Any communication given by mail will be considered received on the earlier of (a) forty -eight (48) hours after deposit in the U.S. mail, with postage prepaid, or (b) actual receipt, as indicated by the return receipt. Any communication given by facsimile and email transmission will be considered received when sent. Any communication given by personal delivery or by overnight air courier will be considered received when delivered. 17.4 Exhibits. The Exhibits listed in Section 1.25 are attached to and made a part of this Lease as if they had been set forth in full in this Lease. 17.5 Construction of Lease Provisions. (a) This Lease is to be construed and governed by the laws of the state of Oregon; (b) the invalidity or nonenforceability of any provision of this Lease will not affect or impair any other provision in it; (c) this Lease constitutes the entire agreement of the parties and supersedes all prior agreements or understandings between the parties with respect to the subject matter of it; (d) this Lease may not be modified or amended except by written agreement signed by both parties; (e) if there is more than one tenant, the obligations imposed by this Lease on Tenant will be joint and several; (f) time is of the essence of this Lease and each and every provision of it; (g) nothing contained in this Lease creates a principal -and -agent relationship, a partnership, or a joint venture between the parties to it, and no provisions contained in this Lease may be deemed to create any relationship other than that of landlord and tenant; (h) any provision of this Lease that does not require full performance before the expiration or earlier termination of this Lease will survive the expiration or earlier termination of this Lease and will be fully enforceable thereafter; (i) no representations have been made by Landlord or its agents and the parties have no understandings other than those set forth in this Lease; (j) upon delivery of possession of the Premises to Tenant, Tenant will be deemed to have measured the Premises and to have agreed that calculations of the Gross Leasable Area of the Premises, Building, and Premises are accurately set forth in the Basic Lease Provisions; and (k) no recalculation of square footage will affect the obligations of Tenant under this Lease including without limitation the amount of Base Rent, or Additional Rent payable by Tenant. 17.6 Successors. Subject to any limitations on assignments set forth in this Lease, all provisions of this Lease will inure to the benefit of and be binding on the successors and assigns of the parties to this Lease. 17.7 Attorney Fees in Suit or Action; Waiver of Jury Trial 17.7.1 Attorney Fees. If any suit or action is instituted to interpret or enforce any term or provision of this Lease, the prevailing party will be entitled to recover from the other party such sum as the court may adjudge reasonable as attorney fees at trial, on petition for review, or on appeal, in addition to all other sums provided by law. 17.7.2 Waiver of Jury Trial. THE PARTIES EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY OR ANY OTHER PARTY RELATING TO (A) THIS LEASE OR ANY UNDERSTANDINGS OR PRIOR DEALINGS BETWEEN THE PARTIES TO THIS LEASE, OR (B) THE PREMISES, THE BUILDING, OR THE PREMISES OR ANY PART THEREOF. 17.8 Dispute Resolution 17.8.1 Disputes Subject to Arbitration. Any dispute between the parties relating to the interpretation of their rights and obligations under this Lease must be resolved solely by arbitration in accordance with the provisions of this Section 17.8. NOTWITHSTANDING THE FOREGOING, SECTION 17.8 WILL NOT APPLY TO ANY DISPUTE CONCERNING THE PAYMENT OF RENT. 17.8.2 Arbitration. Any dispute between the parties that is to be resolved by arbitration as provided in this Section 17.8 must be settled and decided by arbitration conducted in accordance with the rule of the Arbitration Service of Portland, Inc., as then in effect (the "Arbitration Rules "), except as provided below. Any such arbitration must be held and conducted in the city or county in which the Premises is located, before one (1) arbitrator who will be selected by mutual agreement of the parties; if agreement is not reached on the selection of such arbitrator within fifteen (15) days of receipt of a written demand for arbitration as set forth below, then an arbitrator is to be appointed by the presiding judge of the Circuit Court of the County in Oregon in which the Premises is located. The provisions of the Arbitration Rules will apply to and govern the arbitration subject, however, to the following: (a) Any demand for arbitration must be in writing and must be made within ninety (90) days after the claim, dispute, or other matter in question arose. The arbitration proceeding must commence within thirty (30) days after the arbitrator is appointed, and all document exchange and other discovery of evidence must be completed within twenty (20) days after that appointment. (b) The arbitrator appointed must be a former or retired judge or practicing attorney with at least ten (10) years' experience in real property and commercial matters. The arbitrator will resolve the controversy in accordance with the Arbitration Rules, applicable law, and the terms and conditions of this Lease. Thereafter, the arbitrator will prepare in writing and provide to the parties his or her decision, including factual findings and reasons on which the decision is based. (c) The arbitration proceeding must be conducted and completed within five (5) days after its commencement and the arbitrator's decision must be made within sixty (60) days after the date of receipt of the written demand for arbitration. (d) The arbitrator must award the prevailing party its reasonable attorney fees, expert and nonexpert witness costs and expenses, and other costs and expenses incurred in connection with the arbitration, unless the arbitrator, for good cause, determines otherwise. (e) The nonprevailing party is responsible for paying the arbitrator's costs and fees. (f) The arbitrator's decision, which may include equitable relief, will be final and judgment may be entered on the decision in accordance with applicable law in any court having jurisdiction over the matter. 17.9 Hazardous Materials; Indemnities 17.9.1 Landlord Warranty. Landlord warrants and represents to Tenant that as of the date of this Lease, Landlord has no actual knowledge of the existence of any Hazardous Materials on, in, or under the Premises above the legally permitted background levels other than as previously disclosed to Tenant in writing. 17.9.2 Landlord's and Tenant's Representations. Landlord and Tenant each warrant and represent to the other that at no time during Tenant's occupancy of the Premises will either party store, or use, or permit the storage or use on, in, or under the Premises of any Hazardous Materials. Notwithstanding the foregoing, each party consents to the prudent use by the other party and other occupants of normal and customary chemicals and substances (including Hazardous Materials) applied in accordance with sound practices in the use of the Premises in quantities and in accordance with all Laws. Landlord and any occupant who uses any Hazardous Materials, including Tenant, will properly store and dispose of all Hazardous Materials as approved or authorized by Law and will not store or dispose of any Hazardous Materials on the Premises. 17.9.3 Landlord's Indemnity. Landlord agrees to indemnify and hold Tenant harmless from and against all costs, including attorney fees and court costs, incurred during the cleanup and restoration of the Premises in regard to all Hazardous Materials in or under the Premises that preexisted the Lease Commencement Date and that were not deposited on the Premises by Tenant and any Hazardous Materials deposited on the Premises subsequent to the commencement of this Lease by Landlord and its employees and agents. 17.9.4 Tenant's Indemnity. Tenant hereby agrees to indemnify and hold Landlord harmless from and against all costs, including attorney fees and court costs, incurred in the cleanup and restoration of the Premises resulting from (a) any Hazardous Materials brought onto the Premises by Tenant or its agents, employees, contractors, or invitees and any contamination by Hazardous Materials that results, directly or indirectly, from the use of the Premises by Tenant; and (b) any and all claims for liability, loss, damages, or expenses (including attorney fees) suffered by Landlord in connection with the existence of Hazardous Materials on the Premises, including in the soil or groundwater underlying or adjacent to the Premises and in the water, sewage, and drainage systems connected to and within the Premises, to the extent that such hazardous materials were deposited, discharged, or stored on or about the Premises by Tenant or its employees, agents, contractors, or invitees. 17.10 Force Majeure. Whenever this Lease prescribes a period of time for action to be taken by a party, that party will not be liable or responsible for, and the computation for the period of time will exclude, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, acts of terrorism, Laws, or any other causes of any kind whatsoever that are beyond the reasonable control of the party. This provision will not be applicable to excuse any delay in the payment of Rent or any other money owed by Tenant to Landlord. 17.11 Authority. The persons executing this Lease on behalf of Landlord and Tenant each hereby covenant and warrant that the execution of this Lease is duly authorized by the party executing this Lease, that such party is qualified to do business in Oregon, and that the person signing on behalf of each party was duly authorized by that party to bind that party to this Lease. 17.12 No Offer. This Lease is submitted to Tenant based on the understanding that such submittal is not an offer and will not bind Landlord in any way until (a) Tenant has duly executed and delivered duplicate originals of this Lease to Landlord and (b) Landlord has executed and delivered one of such originals to Tenant. The parties have executed this Lease to be effective on , 20 . Landlord: By: /s/ Its: /s/ Tenant: By: /s/ Its: /s/ Exhibit A Legal Description of the Premises LEGAL DESCRIPTION See Exhibit A -1. GENERAL INFORMATION Name: Hawthorne Villa Apartments Property Type: Multi - Family (Garden /Low Rise) LIHTC Apartments Address: 7705 SW Pfaffle Street Tigard, Oregon 97223 Assessor's Parcel #: R282429 Census Tract No.: 306.00 Site Description: USABLE AREA EXCESS AREA SURPLUS AREA GROSS AREA SF ACRES SF ACRES SF ACRES SF ACRES 207.346 4.76 0 0.00 0 0.00 207,346 4.76 Zoning: Medium- Density Residential (R -12) improvement Description: No. of Total Buildings: 9 (8 one and two -story apartment buildings and 1 single - family home that is used as a leasing office and manager's unit) Number of Units: 118 Amenities; Laundry rooms, storage units, and leasing office. Several landscaped courtyards on the property. EXHIBIT "A" LEGAL DESCRIPTION PARCEL 1: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1204.0 feet to an iron pipe, said iron pipe marking the Northwest comer of that tract conveyed in Deed Book 279, Page 648; thence South 89 0 49' East, 85.0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner of said tract and true point of beginning of tract herein described; thence South 89 °49' East, 25.0 feet; thence North 0 °11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Washington County Records, 173.66 feet; thence South 88 °17' East, 96 feet to the East line of said Cason tract; thence South 0 °11' West along the East line of said Cason tract, 315.0 feet to the Southeast corner thereof; thence North 88 °17' West along the South line of said Cason tract, 121.6 feet to the Southeast corner of that tract conveyed in Deed Book 279, Page 648; thence North 0 °11' East along the East line of that tract conveyed in Deed Book 279, Page 648, 141.34 feet, more or Tess to the true point of beginning, all situated in Washington County, Oregon. PARCEL 11: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1204.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed in Deed Book 279, Page 648, and the true point of beginning herein described; thence South 89 °49' East, 110.0 feet to a point; thence North 0 0 11' East, parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Washington County Records, 173.66 feet to a point; thence North 88 °37' West, 110.0 feet to a point on the West line of said Cason tract; thence South 0 °11' West along said West line, 173.66 feet to the true point of beginning. PARCEL 111: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1204.0 feet to an iron pipe, said iron pipe marking the Northwest corner of that tract conveyed in Deed Book 279, Page 648; thence South 89 °49' East, 85.0 feet along the North line of that tract conveyed in Deed Book 279, Page 648 to the Northeast corner thereof; thence South 89 °49' East, 25.0 feet; thence North 0 °11' East parallel with the East line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Washington County Records, 173.66 feet; thence South 88 °17' East, 51.0 feet to the true point of beginning of the herein described premises; thence continuing South 88 °17' East, 45.0 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East line, 90.0 feet; thence North 88 °17' West, 45.0 feet; thence South 0 °11' West, 90.0 feet to the true point of beginning. OrderNo.: 11002873 Exhibit F Y r Page 2 e Page 1 of PARCEL IV: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 1030.34 feet to a point on the West line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Records of Washington County, being the Westerly Northwest comer of that tract described in Mortgage recorded October 29, 1968 in Book 722, Page 520, Records of Washington County and the true point of beginning of the herein described premises; thence South 88° 17' East, 161.6 feet; thence North 0 °11' East, 90.0 feet; thence South 88 °17' East, 45.0 feet to a point an the East line of said Cason tract; thence North 0 °11' East along said East line, 171.34 feet to a point; thence North 88 °17' West, 65.00 feet to a point; thence South 0 °11' West, 75.0 feet to a point; thence North 88 °17' West, 141.6 feet to a point on the West line of said Cason tract; thence South 0 °11' West along said West line, 186.34 feet to the true point of beginning. PARCEL V: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 844.0 feet to a point on the West line of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Records of Washington County, being the Westerly Northwest corner of the first tract described in Mortgage recorded February 4, 1969 in Book 732, Page 58, Records of Washington County and the true point of beginning of the herein described property; thence South 88 °17' East, 141.6 feet to a point; thence North 0 °11' East, 75.0 feet to a point; thence South 88 °17' East, 65.0 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East line, 113.66 feet to a point; thence North 88 °17' West, 206 feet to a point on the West line of said Cason tract; thence South 0 °11' West along said West line, 190 feet to the true point of beginning. PARCEL VI: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary line of said Donation Land Claim; thence South 0 °11' West, 654.0 feet to a point on the West Tine of that tract described in deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139, Records of Washington County, being the Northwest corner of the first tract described in Mortgage recorded in Book 745, Page 285, Records of Washington County and the true point of beginning of the herein described property; thence South 88 °17' East, 206 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East line, 186.0 feet to a point; thence North 88 °17' East, 206 feet to a point on the West line of said Cason tract; thence South 0 °11 West along said West Tine, 186.0 feet to the true point of beginning. PARCEL VII: A part of the George Richardson Donation Land Claim in the Northeast quarter of the Southwest quarter of Section 36, Township 1 South, Range 1 West of the Willamette Meridian, in the City of Tigard, County of Washington and State of Oregon, described as follows: BEGINNING at the Northwest corner of the George Richardson Donation Land Claim, situated in Section 36, Township 1 South, Range 1 West, Willamette Meridian; thence South 89 °00' East, 1887.60 feet to a point in the Northerly boundary Order No.: 11002873 Exhibit Page 3 _ Fage__.i of 3 line of said Donation Land Claim; thence South 0 °11' West, 290 feet to a point, said point being the Southwest corner of a tract conveyed to Oscar Sidler and Grace Sidler by deed recorded November 28, 1911 in Deed Book 90, Page 45, and the true point of beginning; thence South 0 °11' West, 178 feet to a point on the West line of that tract described in a deed to Leonard E. Cason, et al, recorded January 16, 1968 in Book 677, Page 139. Records of Washington County, being the Northwest corner of the first tract described in Mortgage recorded May 19, 1971 in Book 818, Page 167, Records of Washington County; thence South 88 °17' East, 206 feet to a point on the East line of said Cason tract; thence North 0 °11' East along said East line, 178 feet to the South line of said Sidler tract; thence North 89° West along the West line of said Sidler tract, 206.0 feet to the true point of beginning. Order No.: 11002873 Exhibit - -- ` ' -- Page 4 page 3 0-1 7 , EXECUTIVE SUMMARY (CONTINUED) AERIAL PHOTOGRAPH R t o f t c is ' 4, 5 a � • she 't. 3 .,..h : i r } v 4, m l i" - I ". i t r � 1 r 1 �.e. • 4 A �.S :i V 4 rle l }' s ` � ' 1 -. t ' � �, * . �ll' xt ?TWt ?���Y?wwWs���ih��r'��eey r 1 f „ 1 r • ; r Subject 0 s te A i s� j 4f � i� S h � h �i 5? -! , - f "t i t :' 3 �, i �r . s 3 t' a , %,s I r i s , t ' wt F h f i ',v, ii", ti -ri, ':' )' au " h l z ? ' 'r. ; ny ..' c ` a ..., i ' . y 3 j '' k ' ' S6 • t t k �" u j< 14 t ' N i s 1`4.4 h f P N ` i .+ ! #. t uy, sir y.. 1.., t .E '{ a } tit 4 ?K r , � ` � 1 t t 7 '� � "^� '' � . fr' of , 1 t '). ey L 1 �x ''.-4,.. _ 1 f . —',, ; 1 '. '� ar t. _ i 1 ` + ' 1 i ? ... ..-.- �' . , tw 2[:t� ''yP.z•;l r;:' ra.. Exhibit ------8 — C110561 ®2011 Cotliers International Valuation &Advisory Services 3 EXECUTIVE SUMMARY (CONTINUED) SUBJECT PROPERTY PHOTOGRAPHS ; > - E f - ` “..,..• ' S ri • i d'1L y Atiff g 1 �° + {'� g r.# � . '� ��^;t�r..'x�1? ■r` '.:!t...-J-5' z .,...v..,. ,.. -z�- Typical one and two -story exterior Courtyard with additional exterior view r *. r i . ). arm .. S' a ' -,. '' �''tl E , ': 'z + T � 2s* • M1 _ R j S i h : g ay,. y 1 5. C_ 4y € fi `♦ Entry to leasing office /manager's unit Entry driveway • 1. . tt r f � '.h �w�^ � , - , i� : r '',-,.4...5,1' , ‘1.;,,...,..7.. � & . 3e { a, s. e ' • 'J - �( V . N+ �.. 1—'''''' '111 `� Y 3 ' IA [ % �Wb: v ,; Two -story building (studios) w/ surface parking spaces Street Scene: View hest along Pfeifle Street Exhibit 3 — Z • Paget of 3 4 C110561 © 2011 Colliers International Valuation & Advisory Services EXECUTIVE SUMMARY (ccxmNUEo) • :•d` a;:m� r { ' .: a� , .a Yc Via: a . �Y {�• H *r �, ' +• Y j� 4. , ..,r s is • {. J •, �' r 2` t r �� S ., ', : c r, •. • ♦ r a . . :`, 1 :...t4: ''! . ' - Sk} f T ,,,, y. 3 ♦. r' f...::- r •} .. r 7t . ` s G,J : n,a�r 1 S ° x a � t f� "� � , " 'a?I�c3�, i . '� :� � v s � tr� � t' .tt r., � � � ��� i t � � ,. �s+l {..��`` f a • c ' �p rij , +};vy. {:,. a L r r r 4 n 1 �\ - �a il { w' .>< _ � rtc g E. n K 5a ? .,;.. �r ; f # 4 f¢ j .-' .;. ,.!li t rye . o-; • ,!N,y < ,.. ,. i 1 Y ', (. Sty t 3F s'Ar'.t i A I a a i s t -4 . 3 3, r ,., }ir` . E7 A a * 46 ) 1 z�, C i� cF . �J .5rt � .: ii .'�• ,; ':::k w r, 1 fi `,, x, h >u ,, ^- ;s,'j, "r..r.•µrod Y r ..I` ra k s 4+" A .,4 , " y h 1 jr,'• ?r 4'''. a , t.i^ t>. �y. ....71...,,,..,- S , r. f a d ; S a S k fi r � � ,r 1 > 4J i a • .t� 7 �' z'� Y • , d ♦ n ♦ 9 ti : l: .t• N drr .q E a S +Y. { t ., r �� '"b' „; 12t• - F yn{, � p� N a ,4t..,fs a l r 5 c{`>< 4,,,. ; , /,1:Y i {y �R { t - p _ .� ' !O. a �t� t �+�Sp ' \ K • r • ;1s ••,4 tq 3 . Typical bedroom A.. Bathroom y ' ,4 ' . t y ' + i ,4it? ,� . tr > r i 1 z ` < ' x � r 4 i ' # 1 ;arse ;; r t O Ot ' .. • • :,•. r xt , .d — f t 44 ,,, { V'%F j j ' f '. t 1 SS 44 t.. [ •r � .. � r v .} r • ,'` ark„ "'(((III 1.4 Kitchen and dining room area Alternate K then view • 1 4 1"1,•,, .{ { w r y t ' - ; ,�., ; 'L +; r. x� i 4-17-5i ° m ... n , i '�r r i • { a { 1 JYIS tt I �, `? xs + ' �'i ” ie.. •i,' r S r r+i7 S jr >, '1 • r s +Y v r ' ' •'+ tS r•': j- 4 t i i e .' 3 r$ fi a !r ?, < •4E ' t c r. J 'dt ti4{ 11 �N�, - .i, • r r . , R`. ;i i, ^ I : i ` ' 1\1 gi. Y }F ° ,1 ''''°,44 '' � 's 4. i. .t r t Fa+ > . . ii • ny Yy ''': Y - +. _ . ,. t . _ � d �}�y, 4' . ' :1 Syt, ♦{ ^ ... f lill O t'4 ' '4' • v X 1 t t. S cry S t S , ,-;* , t } -sis. ° -: .A 2 • • ti 1w. s > ( t r t _ .S j Y [ : ,i E. . 11 t i X " " 't $1 r s 4 t T � • Typical living room View of the st:xt'.o from the entryway Exhib _ — t . o f . - C1305 61 ©2011 Colliers International Valuation c Advisory Srrvlces ' _ ' ~ 5 EXECUTIVE SUMMARY (CONTINUED) 1'.. s.. •Ci x� Ja "Y t t 55: . ''' . a • t,dr i ,7�at�,r[ • t� fti : k t ' yea . ,6 `•t y•••':"•:::,'.'..;.i.•' J t` t' ; �,�, 124.4 .., • ittN � b , 4 j ,240,,..1'',,, fi pt wx l• tJ 12n, a d t o y+ f<. C 'ti n • t 4 It � roL e4j a qJ � ▪ 4 • tf r ti J . a k Ea* ` J r,: -5`sr J,; ckt...4'. • Storage units Laundry room i k f � ,' t ? hr ` T } `. J S . fl b .gyp t pt ;, r 1� :w' f C Y�s . •' }*r•. !V:, f .'.';‘.11!" '••-.' r } kR e .. • 4 ' '''''''' '''''• '•"' ''V ' • '''' l ' : ' ''.= 'i'''' 41'1; : c'.. - .'.1 , 1'4 , , , , xio•i?-,...7:..\:.. , '.-t.t, ., r,k 1 h. , : Vt.' } .Y > • t , 1 5 } V,:.', t 1 i f- 4 ; t L 's i S t ': r a i X 2 t y ' 'T Sy t 't+ ' ,trj °i r i t t � � ' _ x•L t, } 4, t Y+ , ft t�0 C t t ' J 4c .t e tr'� ,, ., '4414P"' ki S iiY�v33 S $6iM'.1�Jtt� {y ? ,{ � L` i , , st 1 4 - r f t 2 3' ,c w[ it �'' y ' a d! ''' ;# t ,, t 0l... 1 f � t t f f, :t i t'4 } �W J` J t.: z i'hµ �. 3 d i G 3i yi "�r" $S W (` )-`� . "'{ S �• } �y F F Sh ! J ',, r` �` S. S ).•';r; 1 ` 'a "6 f• °ti ,�i`!` } i ? ! r i 3 s t y ( . f� � Y . . Common water heaters for studios Stairwell and to studio units • r a t tt? • �' 17- J . � - ............✓ „,...• ---- ,.4,-;...4.'t 1 c z� . y 1, t is ; �, ,� ;� 1 ` „� . t'%dt r • y 4 a Jk Ur � �' : ._ Y .. ..4 1 .........1 t ticOtkril •, t �r f1 aging roof ».rr �..__ xrc View of t, r;3. Exa mple of parking and building exterior Exhibit 5 ""_ Page_.?'_ cif 3 C110561 CO 2011 Colliers Intern alit nsi ValttB:i0n 3 J".c ?visor' Services ____.________..._______ ^__ 6 Exhibit C WORK LETTER SECTION 1 IMPROVEMENTS PROVIDED BY LANDLORD Landlord will provide the following improvements at the Premises at Landlord's expense ( "Landlord's Work ") as well as the permits for them: Hawthorne Interior Improvements Units 118 Budget Interior Water Meter @ $750 per units $ 88,500 Replace appliances $ 118,000 Interior painting @ $600 per units $ 70,800 Replace interior carpet and vinyl @ 1200 $ 141,600 Replace interior in exterior door $1200 per unit $ 94,400 Contingency $ 50,000 TOTAL 5 563,300 Exhibit D RULES AND REGULATIONS The following Rules and Regulations will remain in full force and effect until Tenant is notified in writing by Landlord of any changes or amendments to them: (1) Landlord reserves the right to require Tenant to discontinue any display or demonstration in or from the Premises that, in Landlord's sole opinion, interferes with the use of the public passageways of the Premises or constitutes a nuisance or an unhealthy or unsafe condition. (2) At all times Tenant must maintain an adequate number of suitable fire extinguishers in good working order in the Premises for use in the event of local fires, including electrical or chemical fires. (3) Tenant must immediately notify Landlord of any breakage, injury, fire, or disorder coming to its attention that occurs in or about the Premises or any of the Common Areas. (4) Tenant may not permit the use in the Premises of any device or instrument that is intended to be audible or visible beyond the confines of the Premises, such as a sound - reproduction system, television set, phonograph, or radio, or excessively bright, changing, flashing, flickering, moving, or neon lights, or other lighting devices or any similar devices, nor may Tenant permit any act or thing on the Premises that is disturbing to normal sensibilities or other tenants in the Premises. (5) Tenant may not, at any time, place any security gate or grille in front of the entrance doors or storefront of the Premises. (6) Landlord will not be responsible to Tenant for the nonobservance or violation of any of these Rules and Regulations. (7) Tenant is responsible for furnishing and installing all light bulbs for the Premises. (8) Landlord may, upon Tenant's written request, waive Tenant's compliance with any of the foregoing Rules and Regulations but (a) no waiver will be effective unless signed by Landlord or Landlord's authorized agent, (b) any such waiver will not relieve Tenant from the obligation to comply with such Rule or Regulation in the future unless expressly consented to by Landlord, and (c) no waiver granted to Tenant will relieve any other tenant from the obligation of complying with the foregoing Rules and Regulations, unless the other tenant has received a similar waiver in writing from Landlord. (9) The term Tenant as used in these Rules and Regulations means, in addition to the Tenant under the Lease, any sublessee, assignee, agent, servant, contractor, employee, invitee, or licensee of Tenant. All said parties must comply with these Rules and Regulations. r Exhibit E Confirmation Letter [date] [name] [address] Dear Re: (the "Premises ") CONFIRMATION LETTER AGREEMENT As you know, on , 2012, , a , as Landlord, and , a W _ __, as Tenant, entered into a Lease for the above - referenced real property. In Section 3.1 of that Lease, the parties agreed that once the Lease Commencement Date (as defined in the Lease) and certain other matters were determined, the parties would enter into a Ietter agreement confirming those matters. Therefore, by execution of this letter, Landlord and Tenant confirm the following facts: (1) The Lease Commencement Date is , 2012, Tenant has accepted the Premises, and the Premises are in the condition required by the Lease. (2) The date that Landlord delivered possession of the Premises to Tenant is _, 2012. (3) The Rent Commencement Date is , 2012. (4) The date that payment of Base Rent commences is , 2012. (5) The date that payment of Operating Expense commences is , 2012. (6) The Expiration Date is , 20] 7. Please execute and date the enclosed copy of this letter in the space provided for that purpose and return it to me at your earliest convenience. Thank you for your prompt attention to this matter. Very truly yours, /s/ [name] [title] Attachment /Ex. REVIEWED AND AGREED TO on , 2012. [COMPANY'S NAME] By: /s/ Nance: Title: Exhibit F ADDENDUM N/A as of 3.1.12 Page l of _a- , ASSESSMENT Si TAX INFOR`MA,TI s k.t ' ' The subject's assessed values and property taxes for the current year are summarized in the following table. According to the Washington County Tax Assessor, the subject is currently "specially" assessed and is currently fully tax exempt. Please note that it is unknown whether the subject property would remain tax exempt under the current potential buyer (discussed ahead). .. � a.s,.tibv. _ . ,w.'�'`.a 1 W$ -? �,....'`i�y. -...5 W: RMV Assessed 201012011 Millage APN RMV Land Imp./Other RMV Total Total Taxes Rate R282429 $1,666,000 $2,721,470 $4,387,470 $2,721,470 SO 50.000 Total $1,666,000 $2,721,470 $4,387,470 $2,721,470 $0 Assessment & Taxation Description - In Oregon, Measure 50 was passed in the May 20, 1997 special election. This measure establishes the maximum assessed value of property in Oregon for the 1997/1998 tax year as 90% of the property's real market value in the 1995/96 tax year. Any increases in assessed value for tax years following 1997/1998 are limited to 3% per year. Assessed value will be adjusted for new property or property improvements and certain other events. Certain local option taxes are permitted, if approved by voters. Measure 50 retains the existing total property tax rate for all property taxes, including local option taxes but excluding taxes for bonds at $5 per $1,000 of value for schools and $10 per $1,000 of value for non - school government. The subject property is not encumbered by bonds. Estimated Property Taxes - The subject's current ownership group is a non - profit and the subject property is currently tax exempt. Because the buyer is a "for- profit" entity it is unknown whether the county will continue to fully abate real estate taxes and the change in ownership may trigger a full project reassessment; however, it is likely that the subject would receive a special assessment at a reduced tax liability, due to its status as an LIHTC project. Although tax comparables are not used by the assessor's office, for the purposes of estimating taxes for this analysis, the real estate taxes of the LIHTC expense comparables used in this report are presented below to provide a sample of range of taxes on a per unit basis: . W4P t FtiROtltl 1 ..: :Cb Subject Comp. 1 Comp. 2 Comp. 3 Comp, 4 Comp. 5 Year Built 1989 1997 1992 1992 1991 1993 No. Units 118 124 104 114 54 210 Per Unit $0 $241 $670 5219 $513 Additionally, the Washington County Assessor's Office was contacted to assist in estimating taxes, According to Veronica with special assessment section, the subject began receiving special assessment in 2005. Additionally, the taxes at that time were $37,544.83 ($318 /unit), The Assessor's Office warned that if the property was reassessed a full appraisal would be triggered without regard to previous taxes; however, this analysis considers the previous taxes as a reasonable guideline for potential taxes and uses a typical 3% tax growth per year from the 2004 -2005 taxes. Therefore, the 2010 -2011 taxes would be $44,830 or $379 /unit, which seems reasonable based on the comparables as well. Based on the above range of the comparables and the discussion with subject's continued status as a tow- income housing project this analysis estimates taxes at $44,250 or $375 per unit Based on information provided by the buyer via phone, Veronica with the County Assessor stated that it is likely the full tax exemption would continue, but paperwork would need to be filed after the sale. C110561 CO 2011 Colliers International Valuation & Advisory Services 29 INCOME APPROACH — AFTER RENOVATION (CONTINUED) Discussion of Rental Adjustments Adjustments for differences between the subject property and the comparables can be made quantitatively or qualitatively. Adjustments for some differences can be derived from the market and are addressed in the Quantitative Adjustments paragraph. Other items for which dollar adjustments are more difficult to derive are addressed in the Qualitative Adjustments paragraph. Quantitative Adjustments • The subject property and the comparables vary to some degree in terms of project amenities, unit amenities, parking, laundry, and utilities. The following grid illustrates the quantitative adjustments applied to the comparables (when necessary) in order to make the comparables similar to the subject in terms of these features. -,. } { v.. r UitlEi l' i c 7iS.�.Bif 1Qj 111 , i,,,�,4T tab .. r i ,''`'. T �ij ,..', - , :: . >� �..� r,, . �i. Y �,z3� ay. i m ., s...a A .. ..- . . 7 .... n ._ 1 $ ....:. .,, � , .,.. _ ...a.,_. r a.1�, -. � .. Nn� -...._ n k �v :a... _.. Adjustments Comp. Comparison to the Subject Subcategory $ Adj. Subject Comp. 1 Comp. 2 Cow Con�p. 44 Comp. 5 Comp. 6 Project Amenities Pool 510 No Yes (5 10) Yes (510) Yes (S10) Yo (51()) Yes (S10) No $0 Clubhouse $10 No No SO No SO Yes ($10) No $0 Yes (510) No 50 Exercise facilities 510 No Yes ($ i0) No 50 Yes (510) No 50 Yes (510) No $0 Subtotal (520) (510) (530) (510) (530) $0 Unit Amenities _ Fireplace 510 No No 50 Yes (51(1) No 50 _ No - a0 Yes (510! No $0 Dishwasher 510 No Yes (5 Yes (810) Yes (:1)) Yes IS u) Yes t$10) Yes ($10) Subtotal (810) . (520) (S1 (510) (S20) (510) Laundry i Laundry 50 Yes No $0 Yes 50 No SO No SO No 50 Yes 50 Washer/DryerHookup( 510 No Yes (510) No $0 Yes (5 No $0 Yes (5101 No 50 Washer /Dryer 530 No Yes (330) No $0 Yes (830) Yes ($30) Yes (530) No 50 Subtotal (540) $0 (540) ($.?0) (540) 50 Parking __ Open 50 Yes Yes 50 Yes $0 Yes $0 Yes $0 Yes $0 Yes 50 Carport 516 No Yes ($16) No $0 Yes ((051 No SO No $0 No $0 Garage $75 No No $0 No 50 No 50 No 50 No 50 No 50 Subtotal ($15) 50 ($15) $0 50 $0 Utilities Included in Rent Electricity 530 No No 50 No 50 No 50 No 50 No 50 No 50 Water 515 Yes No 515 Yes 50 No 515 Yes $0 No 515 No $15 Hot Water 516 No No 50 No $0 No 50 No 50 No $D No $0 Sewer 516 Yes No 515 Yes 50 No $15 Yes 50 No 515 No 515 Garbage 515 Yes No $15 Yes 50 Yes 50 Yes 50 No 515 Yes $0 Telephone $20 No No 50 No $0 No 50 No $0 No 50 No 50 + Gas 510 No No 50 No $0 No 50 No 50 No 50 No $0 Cable /Satellfte 525 No No 50 No 50 No 50 Yes ($25) No 50 Yes (525) High -Speed Internet $35 No No $0 No 50 No 50 No $0 No 50 No 50 Subtotal $45 50 530 (525) 545 55 Total Adjustments (540) ($30) (565) (875) (545) (55) , xb1h)t ___.--Cr--- r ag e - �of ±--- C110561 © 2011 Colliers International Valuation & Aovisory Services 62 INCOME APPROACH —AFTER RENOVATION (CONTINUED) Gross Rental Income The gross rental income equals the total gross income based the rent conclusions presented above and is summarized in the following table. Income Items Unit Mix Market Rent Monthly Annual Rental Income Studio /1 BA 30 $485 $14.550 $174,600 1 BD/1 BA 62 $550 $34.100 $409,200 1 BD/1 BA 21 $575 $12,075 $144,900 2 BD/1 BA 5 $670 $3.350 $40,200 Total Rental Income 118 $543 $64,075 $768,900 Other Income The other income for the subject is discussed below and historical income can be seen in the next section. The renovations will not likely heavily impact potential other income sources; therefore historical figures are considered good indicators for this analysis. LaundryNending - Based on the historical income, income of $6,000 /year is used in the analysis, Storage - Based on the historical income, income of $750 /year is used in the analysis. Miscellaneous Income - Typical LIHTC projects see some minor other income relating to retained deposits, late feels, etc. The subject historical income appears reasonable and income of $12,000 /year is used in the analysis (near $8.50 /unit/month). Other Income l_aundryNending $500 56,000 Storage $63 $750 Miscellaneous Income $1,000 $12,000 Total Other Income $1,563 $18,760 Potential Gross Income (PGI) Potential gross income equals the gross rental income plus other income, and is stated as follows: P9TNTIAI Gfi3OA.5.1N1Cf?_ Vacancy and Credit Loss This category accounts for the time period between occupants, as well as possible prolonged vacancies under slow market conditions. This assignment reflects the probable stabilized vacancy during the economic life of the property and not necessarily the current or short -term vacancy. The subject's current vacancy rate is 5.1%. Vacancy for rent restricted properties in the subject's area is 2.7 %, according to our Colliers International Valuation & Advisory Services survey, shown in the Market Analysis Section of this report. The subject had six vacant units based on the rent roll used in the report. Based on the above information and contact with various developers, property owners, and managers, a vacancy rate of 5% is concluded on a stabilized basis recognizing the subject's location, planned rent gap, and area's historical vacancy rate. The other income items are Dased on income that is considered to already reflect vacancy and credit loss. Exhibit i aged 0L C110561 it 2011 Colliers International Valuation & Advisory Services 67 INCOME APPROACH - AFTER RENOVATION (CONTINUED) ..:SUBJECT HISTORICAL. NCO ` Elk EXPENSES { Year 2009 2010 2011 Annualized 2012 Budget Historicals" Total $ /Unit Total $!Unit Total St/Unit Total $/Un Low High INCOME ITEMS Rental Income $685,763 35,812 $685,789 $5,812 $698,403 35,919 $783,600 $6,641 35,812 $5,919 LaundryNending $0 $0 35,854 $50 35.904 350 $6,000 851 80 $50 Storage $0 $0 3745 $6 $637 $7 $900 $8 $0 $7 Miscellaneous income $14,382 3122 $12,275 $104 37,497 $64 310.392 388 $64 8122 EFFECTIVE GROSS INCOME $700,145 $5,933 $704,663 $5,972 8712,641 $6,039 $800,892 36,787 $5,933 $6,039 EXPENSE ITEMS Real Estate Taxes $0 $0 $0 $0 30 $0 30 $0 80 30 Additional Tax Charges $0 30 $0 $0 $0 $0 $0 80 80 $0 Insurance $10.308 $87 812,602 8107 811,265 $95 312.600 $107 $87 3107 Utilities $103.584 $878 $90,772 8769 8103,581 $878 $87.920 $745 $769 $878 Repairs and Maintenance 552,698 $447 $42.073 5357 833,750 8286 $35.640 $302 $286 $447 Landscaping 30 $0 83,950 $33 85.250 $44 314,400 8122 $0 $44 Turnover Expenses 80 $0 815,620 8132 318.435 3156 813.800 8117 30 8156 Off -Site Management $41.901 $355 $40,142 3340 S40,860 $346 $45.800 $388 $340 3355 % of EGI 6.0% 5.7% 5.7% 5. 7% 5.7% 6.0% On -Site Management 892.483 $784 883,455 8707 $60.018 $509 389,474 8758 3509 $784 Other Salaries 50 80 $0 $0 $0 $0 $0 80 $0 50 Payroll Taxes/Benefits $0 80 80 80 $0 $0 $0 30 $0 30 GeneraVAdninistrative 339,873 3338 828,830 8244 $20.781 $176 824.364 8206 3176 8338 Reserves 30 30 SO $0 30 80 $0 30 80 $0 ac7 Y EN TOTAL EXPENSES 8340,847 82,889 3317,444 32,690 8293,940 32,491 5323,998 32,746 82,491 82,889 `r• -• Expenses as % EGI 48.7% 45.0% 41.2% 40.5% 41.2% 48.7% NET OPERATINGINCOME $359,298 33.045 $387.219 33,282 8418,701 $3,548 $476,894 $4,041 33,045 $3,548 J [ I - )! C110561 © 2011 Colliers International Valuation & Advisory Services 69 INCOME APPROACH — AFTER RENOVATION (CONTINUED) � J % • sr w.. sti*�_.tA.�. `,_ 1.. «.,t ? ._.?....c _ ..I �r - .i.... 0 �_.,. ` Expense Item Total $IUnit Description &Analysis The subject is currently classified as "not assessable" or tax exempt by Washington County how ever, based on the previous Real Estate Taxes $44,250 $375 discussion presented in the Assessment and Tax & Information Section an annual lax liability of $44.250 is estimated for this analysis. Additional Tax Charges $0 SO There are no additional taxes. The concluded amount considers the comparables and the Insurance $13,000 $110 subject hlstoricals. The concluded amount considers the subject historicals and the Utilities $100,300 $850 expense comparables, but also considers that hot water is included in the rent for the studio units The concluded amount is based on the low er -end of the expense Repairs and Maintenance 541.300 $350 comparable range, considering the proposed renovations The concluded amount is based on the middle of the expense Landscaping $17,700 5150 comparable range and considers the amount of Landscaping at the subject The concluded amount is based on the low -end of the expense Turnover Expenses 517,700 $150 comparable range due to the high number of studio units at the subject and planned renovations. Oft - Bile Management 533.714 $286 The concluded amount is based on 4.5% of the concluded Effective Gross Income. % of EGI 4.5% The concluded amount is based on the middle of the expense On -Site Management 594,400 $800 comparable range. • Other Salaries $O $0 There are no additional taxes. Payroll Taxes /Benefits 50 $0 There are no additional benefits. • GeneraVAdminlstrativo $28,600 5225 The concluded amount considers the subject historical costs and the comparables. The concluded amount is based on $250/unit, which considers Reserves $29,500 $250 the subject's age. condition after renovation, and unit mix. The subject concluded expenses fall slightly below the range of the comparables, but this is reasonable recognizing the subject's Total Expenses $418,464 53,546 small average unit size The expense conclusion is generally above the comparables on a % of EGI basis. Overall the conclusions are reasonable recognizing the planned renovations and are used In the analysis. NOI Conclusion • Net Operating Income is equal to the effective gross income Tess the estimated expenses, and is stated as follows: ET.oP,ERAJING.11 COJ .... . „ m .,,,� • y t , ' l,�' rik t E. Wt. er�..vtt�'.. =. � ti' s .., p a.; .�. �: �• i W ,r.. wev.. 2�£ . .:! i i.. Exbibit Page S of C110561 © 2011 Colliers international Valuation & Advisory Services 71 EXHIBIT H Base Rent shall be calculated as follows: 2012: Estimated Gross Rents: $768,900.00 Rental Income + $ 18,750.00 (Laundry, Storage, Misc. Income) $ 787,650.00 - $ 38 (Vacancy /Credit Loss) $ 749,205.00 Tenant Estimated Operating Expenses: $323,999.00 (See Exhibit G, pg. 69) Estimated Base Rent: $ 749,205.00 - $ 323,999.00 $ 425,206.00 / 12 = $35,433.83/ per month Base Rent shall equal $35,433.83 adjusted monthly (up or down) to reflect actual Gross Rents and Tenant Expenses. ATTACHMENT ACCESSIBLE LIVING, INC. 501(C)3 EVIDENCE INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY DISTRICT DIRECTOR — 2 CUPANIA CIRCLE MONTEREY PARK, CA 91754 Data: FEB 24 1993 Employer Identification Number: 99- 3081823 Contact Person: TYRONE THOMAS ACCESSIBLE LIVING INC Contact Telephone Number: 7435 SW SORRENTO (213) 894 -2289 BEAVERTON, OR 97005 Our Letter Dated: May 1989 Addendum Applies: No Dear Applicant: This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section S01(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(1) and 170(b)(1)(A)(vi). Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a }(1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a)(1) organization. As of January 1, 1984, you are liable for taxes under the Federal Insurance Contributions Act (social security taxes) on remuneration of $100 or more you pay to each of your employees during a calendar year. You are not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA). You are required to file Form 990 only if your gross receipts each year are normally more than $25,000. For guidance in determining whether your gross receipts are 'normally" more than $25,000, see the instructions for Form 990. If a return is required, it must be filed by the 15th day of the fifth month after the end of your annual accounting period. A penalty of $10 a day is charged when a return is filed late, unless there is reasonable cause for the delay. However, the maximum penalty charged cannot exceed ;5,000 or 5 percent of your gross receipts for the year, whichever is less. This penalty may also be charged if a return is not complete, so please be sure your return is complete before you file it. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. r"" Letter 1050(DO /CG) • -2- ACCESSI$LB LIVING INC Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone number are shown above. Sineerel ours, +� f Michael J. Quinn District Director 1 Letter 1050UDO /CG! •-4 - Ffa CG'> n')0/1 J COMMUNITY PARTNERS . . FOR AFFORDABLE HOUSING, INC. MI JU PO Box 23206 • Tigard OR 97281 -3206 • Te1:503- 293-4038 • Fax:503- 293 -4039 • www.cpahinc.org • info @cpahinc.org City of Tigard Application for Tax Abatement Febn.iary 20, 2012 Greenburg Oaks (formerly Villa La Paz) Apartments 11875 SW 91 stAvenue, Tigard A. Property Description B. Project's Charitable Purpose C. Certification of Resident Income Levels D. How Tax Exemption Will Benefit Residents E. Tax Exempt Status F. Verification of Information G. IRS Letter A. Property Description Greenburg Oaks Apartments (Tax account # R 11895 SW 9e Avenue, is just off Greenburg Road, near Pacific Highway. The site sits on 3.01 acres and consists of 84 units in four buildings: 12 one- bedroom/one -bath 564 square foot units, 60 two - bedroom/one -bath 839 square foot units, and 12 three - bedroom/one -bath 1,007 square foot units. In 1998, CPAH added the now much used Community Center to the complex. The Community Center houses a computer center, library, multipurpose room and property management office. In 2005 /2006, CPAH completed a $3.5 million dollar rehabilitation of the apartment interiors, building exteriors and project site. Highlights of the rehab included: replacing all building siding and windows, re- configuring and repaving the parking lot, replacing all landscaping, upgrading the recreation facilities, upgrading site lighting and signage. Interior work included replacing all waterlines and • drains, replacing all cabinets, countertops, light fixtures and most appliances (refrigerators, dishwashers hot water with Energy Star rated devices, replacing all wivadow coverings and many carpets, re- texturing and repainting all apartment interiors. ThQ rehab project featured energy saving appliances, compact fluorescent light fixtures, better insulation, and low volume plumbing fixtures; all of which have reduced tenant energy costs. • The rehab work was done without displacing any tenants and with very minimal rent increases. As a testament to the quality of the rehab work, vacancies generally average under 5 %, accounts • payable are current and annual cash flow is positive. • Financing for the project came from a number of public and private grants and low income housing tax credit investments. No new debt was taken on. Approximately $10,000 of the funding was provided by the City of Tigard Affordable Housing Fee Assistance program. Other funding came from the Meyer Memorial Trust, the Paul Allen Foundation, the Oregon Community Foundation, Washington County Office of Community Development through the .. • CDBG and HOME investment programs, and the State of Oregon. Key Bank increased its investment by over $2 million dollars. Legal Description: The site is located in the southeast % of Section 35, Township 1 South, Range 1 West (Willamette Meridian). • Tax Lot: The Washington County Map shows the site as tax lot 23 - 74 - 2000, Parcels 1, II, and III. B. Project's Charitable Purpose The mission of Community Partners for Affordable Housing, Inc. (CPAH) is to promote a healthy community through the development of: permanent affordable housing, sustainable economic growth, and community -based partnerships. • CPAH's acquisition and renovation of the complex has ensured that the previously neglected property is professionally managed as safe, decent, and affordable housing for families with a shrinking number of housing options. Our property has significantly reduced the housing burdens of our families. The efficient delivery of our services has improved the health and prospects of all household members, and served to help break the multi - generational cycles of poverty. CPAH's APPLICATION FOR TAX ABATEMENT PAGE 2 OF 4 commitment to 40 years of affordability for those at 50 and 60% of median income guarantees that these apartments will be affordable effectively for the life of the buildings. CPAH maintains active partnerships with the Tigard Police Department, Tualatin Valley Fire & Rescue, Tigard Libraries, and the Tigard School District to enhance the safety and quality of life for residents and to be sure that our programs are well- coordinated with other community resources. Partnerships with Community Action, Good Neighbor Center, Luke -Dorf, HopeSpring, Neighborhood House, Lifeworks NW and other organizations to provide information and referral as well as emergency services like food boxes and rent and utility assistance. Coordination agreements with these agencies enhances ongoing case management and has provided a fresh start to many families facing significant barriers to moving from homelessness to permanent housing. Several families each year are being reunited with their children as a result of receiving a housing opportunity at Greenburg Oaks. Three of the apartments are reserved for low income families with at least one member in active recovery from alcohol or drug addiction. The Community Center at Greenburg Oaks is the focal point for support, skill building, and community building activities offered by CPAH through its resident services program which includes after - school and summer youth programs. CPAH's on -site computer learning center is used by youth for homework, research, e-mail, and educational games; and by adults for job search activities and Internet access. The Tigard Library has twice obtained grant resources to purchase children's material for our on -site library. CPAH offers a variety of adult services as well. These include classes in support of parenting skills, budgeting and other financial literacy skills, and nutritional shopping and cooking. The Community Center is also host to a number of general community activities including rent readiness courses, HopeSpring parenting classes, financial literacy classes, parenting safety skills and budget and nutrition classes. The Community Center hosts weekly meetings for AA, NA, and Alanon groups. Food distributions are also held in the Community Center for both the residents at Greenburg Oaks and others in the Tigard community. C. Certification of Resident Income Levels Resident income levels are verified upon application for tenancy and are recertified each year. CPAH has covenants with the state and with Washington County to use the property exclusively for low income rentals for a period of at least 40 years. These covenants require that all households have earnings at or below 60% of the area median income. Some units are restricted to households earning at or below 50 %. Compliance with these covenants is monitored by the State of Oregon Department of Housing and Community Services and by theWashington County Office of Community Development. We certify that all apartments in this property are targeted to and remain affordable to households earning at or below 60% of the Area Median Income. D. How Tax Exemption Will Benefit Residents 100% of the property tax exemption is a direct subsidy for the residents. Every dollar reduction in operating costs is passed on as a reduction in the scheduled rents. Some costs, such as the cost of operating our youth programs, must be funded from outside sources mostly through fund raising. Without property tax abatement, we would have to shift some of our fundraising efforts from developing sources for these programs and use them instead to cover basic operations. APPLICATION FOR TAX ABATEMENT PAGE 3 OF 4 It can be argued that using property tax revenues to subsidize well managed affordable hooking units results in a net savings of public resources. Fewer and less - severe police calls, healthier students, and stably housed social service consumers, all provide a direct reduction in the demand for government funded services. E. Tax Exempt Status CPAH is general partner of the Villa La Paz Limited Partnership, a single asset entity established for the purpose of acquiring the apartments and qualifying for low- income housing tax credits. CPAH's IRS Determination Letter is attached. CPAH undergoes a full independent audit of its books annually, as does Villa La Paz, LP. Both the State of Oregon Housing and Community Services Department and the U.S. Department of Housing and Urban Development review the project and resident files annually. F. Verification of Information - I hereby certify that the information in this application for tax abatement is accurate and complete to the best ofmy knowledge. Income Property Management Company performs day - to-day management of the property and is responsible for certifying income levels of each resident for compliance with program guidelines. 2.7-.0. ( Sheila Greenlaw -Fink, Executive Director Date • . APPLICATION FOR TAX ABATEMENT PAGE 4 OF 4 • • INTERNAL REVENUE SERVICE DEPARTMENT OP THE TREASURY DISTRICT DIRECTOR P. O. BOX 2508 CINCINNATI, OH 45201 Employer Identification Number: Date: 93- 1155559 MAR ) i tig DLN: COMMf3NITY PARTNERS FOR AFFORDABLE Contact 17053030720009 HOUSING THOMAS E O'BRIEN ID# 31187 • PO BOX 23206 Contact Telephone Number: TIGARD, OR 97281 -3206 (877) 829 -5500 Our Letter Dated: • February 1995 Addendum Applies :' • No Dear Applicant: • This modifies our letter of the above date in which we stated that you • w • ould be treated as an organization that is not a private foundation until the . expiration of your advance ruling period. • • Your exempt status under section 501(a) of the Internal Revenue Code as an • • • organization described in section 501(c)(3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section 509(a) of the Code because you are an . organization of the type described in section 509(a)(1) and 170(b)(1)(A)(vi)•. Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your sectiohi 509(a)(1) status, a grantor or contributor may not'rely on . this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change or the .part of the organization that resulted in your lose of such status, or if he she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a,•-section 509(a)(1) organization. If we have indicated in, the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about.your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone number are shown above. • Sincerely yours, District Director Letter 1050 (DO /CG) • , A I la c-fl TY) Q ilj tp COMMUNITY PARTNERS . ,i,, R AFFORDABLE HOUSING, INC. a • 1 FOR ��� • PO Box 23206 • Tigard OR 97281 -3206 • Te1:503- 293 -4038 • Fax:503- 293 -4039 • www.cpahinc.org • info@cpahinc.org City of Tigard Application for Tax Abatement February 20,2012 Tangela Single Family Rental Home 9330 SW Tangela A. Property Description B. Project's Charitable Purpose . C. Certification of Resident Income Levels D. How Tax Exemption Will Benefit Residents E. Tax Exempt Status F. Verification of Information G. IRS Letter . A. Property Description • Community Partiiers for Affordable Horsing, Inc. acquired the single family "Tangela House" at 9330 SW Tangela in Tigard, on December 31, 1999, with assistance from the Washington County CDBG program and a loan from Washington Mutual Savings Bank The Tangela home is located just two blocks from CPAH's multifamily project, Greenburg Oaks Apartments. The two story 1,916 square foot house sits on a 5,450 square foot lot and is zoned R -7 residential. CPAH converted an upstairs bonus room into a 5th bedroom and completed other necessary repairs after initial acquisition. In late 2006, the long term resident of the house gave notice that her family was growing and moving out and her Section 8 certificate was being reduced. She gave notice and moved into a smaller house consistent with her'reduced Section 8 :subsidy. We consider this a very successful outcome of a longterm occutpancy providing a stable neieighborhood environment to raise a family that had .previously experienced transient and sub- standard housing. CPAH completed more than $5,000 in repairs and replacements and the home was re-rented in • February 2007 to the existing large low income family who continues to live in the home demonstrating the continuance of stable housing for low income families. Legal Description: Barbee Court, Lot 1, Tigard, County of Washington, State of Oregon. Tax Lot: 1 S 135DC -05300. B. Projects Charitable Purpose The mission of Community Partners for Affordable Housing, Inc. (CPAH) is to promote a healthy community through the development of permanent affordable housing, sustainable economic growth, and community- -based partnerships. CPAH acquired the single family home in order to assist the County and the Good Neighbor Center Shelter in meeting a "replacement unit" requirement triggered by the Uniform Relocation Act when the shelter acquired its current site and demolished a single family home housing a low - income family. CPAH completed needed repairs and upgraded the Tangela home to a five - bedroom dwelling, in order to provide a rare opportunity in our cor munity — an affordable single - family rental house for a very large family. The home is proximate to CPAH's Greenburg Oaks property, where management and resident services are available to the household These services include a computer center, community room, neighborhood watch, Individual Development Account grants, and other programs. The resident services coordinator and property management staff visit the home on a regular basis to ensure that the property is well managed and to maintain an ongoing relationship with the residents. The home is located within a census tract (309) which has a higher than average concentration of low - income rental households. The number of residents without a high school diploma is notably APPLICATION FOR TAX ABATEMENT PAGE 2 OF 3 higher than for Tigard as a whole (15% vs. 9 %). This area boasted the second highest concentration of children under 9 of the eight census tracts in Tigard. While this area represents 9% of Tigard's population base, it is home to nearly 16% of the city's minority households. C. Certification of Resident Income Levels Resident income level is verified upon application, and must be less than 60% of the area's median income. Income is recertified annually. We certify that all residents served by this property earned at or below 60% of the AMT. D. How Tax Exemption Will Benefit Residents 100% of the property tax exemption is passed on as a direct subsidy for the residents. Every dollar reduction in operating costs results in a reduction in the scheduled rents. Some costs, such as the cost of operating our youth programs, must be funded from outside sources. Without property tax abatement, we would have to shift some of our fundraising efforts from developing sources for these programs and use them instead to cover basic operations. It can be argued that using property tax revenues to subsidize well managed affordable housing results in a net savings of public resources. Fewer and less -severe police calls, healthier students, and stably housed social service consumers, all provide a direct reduction in the demand for government funded services. E. Tax Exempt Status CPAH is direct owner of the Tangelo property and is a nonprofit 501(c)(3) organization. Our operations are audited annually to, among other things, confirm that we are in compliance with our charitable status and with requirements of the County grant and Washington Mutual loan documents. F. Verification of Information 1 hereby certify that the information in this application for tax abatement is accurate and complete to the best of my knowledge. Income Property Management Company performs day-to-day management of the property and is responsible for certifying income levels of each resident for compliance with program guidelines. 4.4 R 2 to - 12 Sheila Greenlaw -Fink, Executive Director Date APPLICATION FOR TAX ABATEMENT PAGE 3 OF 3 • • INTERNAL REVENUE SERVICE DEPARTMENT OP THE TREASURY DISTRICT DIRECTOR P. 0. BOX 2508 CINCINNATI, OH 45201 Employer Identification Number: Date: 93- 1155559 WAR r t 111 DLN: 17053030720009 COMMUNITY PARTNERS FOR AFFORDABLE Contact Person: HOUSING • THOMAS E O'ERIEN ID# 31187 PO BOX 23206 Contact Telephone Number: TIGARD, OR 97281 -3206 (877) 829 -5500 Our Letter Dated: • February 1995 Addendum Applies: No Dear Applicant: This modifies our letter of the above date in which we stated that you ' would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. • Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the • information you submitted, we have determined that you are not a private • foundation within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(1) and 170(b)(1)(A)(vi) Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a)(1) status, a grantor or contributor may not - rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change'on the.part of the organization resulted in your loss of such status, or if he'or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a,.-section 509(a)(1) organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent records. If you have any questions, - please contact the person whose name and telephone number are shown above. Sincerely yours. 4 . District Director • Letter 1050 (DO /CG) CGYr-07)-� City of Tigard Applicat for Tax Abatement Febnay20, 2012 The Knoll @ Tigard 12291 SW Knoll Drive Tigard, Oregon 97223 A. Property Description B. Project's Charitable Purpose C. Certification of Resident Income Levels • D. How Tax Exemption Will Benefit Residents E. Tax Exempt Status F. Verification of Information G. IRS Letter PAGE 1 OF 3 :M:i EE A. Property !Description The Knoll @ Tigard was completed April 2011 with the Grand Opening held on April 21,.2011. The:/' • Knoll @ Tigard is located at 12291 SW Knoll Drive in Tigard. The location fronts on Hall Boulevard between SW Hunziker :and SW Knoll. This site is a prime example of urban development, perched on the edge of the developing downtown of the City of Tigard, walking distance to; the library, senior center, transportation, shopping and a variety of other amenities. Previously, three parcels of land totaling 1 acre supported only 3 single family residences. Following the recent zone change, and consistent with the long range goals of the City development plans, The Knoll @ Tigard brings this density to nearly 50 units per acre. The design takes advantage of a site with an established infrastructure of utilities, adjacent transportation and services, and enhances its potential as a catalyst for respectful development of the urban neighborhood. The project receives a "very walkable" rating from Waikwcore.com. The Knoll @ Tigard is a 45,000 square foot, 48 -unit apartment building providing active living for independent, low- income seniors with common rooms and meeting space. Streetscape improvements were required on all 3 street frontages, including development of sidewalks, planting strips with street trees and below -grade utilities. Public spaces including entry courtyards and site walks are well lit. The Knoll @ Tigard is a secure access building with a surveillance system. The total site contains .98 acres. Legal Description: see attached Exhibit A Tax Lot: R458454, R458436, R458445 B. Project's Charitable Purpose The mission of Community Partners for Affordable Housing, Inc. (CPAH) is to promote a healthy community through the development .of:- permanent affordable housing, sustainable economic growth, and community -based partnerships. The Knoll @ Tigard is CPAH's first affordable units for'seniors in Tigard and compliments CPAH's affordable units for seniors in Hillsdale. The 48 units are affordable to very low and low income residents on a permanent basis (The Knoll @ Tigard provides affordable housing for a minimum of sixty (60) years, with maximum rents regulated by covenants on the property). Rents are affordable to households at 30% to 60% of area median income and below market rents. 45 of the units are one bedroom units and 3 of the units are two bedroom units (1 of which for the on- site manager). 12 of the one bedroom units are Project Based Section 8 units through the Washington County Housing Authority and are set -aside for Veterans. CPAH has expanded its community partnerships with the Tigard Police, the Tigard Library and the VA.. Community building is provided through resident services programs and outreach. The Community Room is the focal point for community building activities and includes 'a computer center for residents. C. Certification of Resident Income Levels Resident income levels are certified upon application. The seniors at The Knoll may remain in their units as long as they income qualify at entry. Rents range from $562 to $597 per month for the one - bedroom apartments deemed at 13% below market rates. Rents are $707 per month for the two- bedroom apartments. Water, sewer and trash are included in the monthly rental. PAGE 2 OF 3 D. How Tax Exemption Will Benefit Residents The property tax exemption is a direct savings for the residents, allowing for reduced operating costs which results in affordable reduced rents for the seniors at The Knoll. For both the initial development, and long term operations of the project, full tax abatement is essential. The project pro forma allowed for the construction of The Knoll which meets all City and State design requirements along with affordable rents for our seniors. The Knoll includes financing through Washington County HOME and CDBG funds, State of Oregon Trust Fund and Tax Credits. JP Morgan Chase is the private lender with Enterprise Neighborhood Partners as the investor (under the tax credit program). Tax abatement was critical in meeting lender and investor requirements while keeping rents affordable for The Knoll ® Tigard. Tax abatement is a direct benefit to senior residents who will pay lower rents. Tax abatement is key to the long -term sustainability of the project operating with affordable rents for seniors. E. Tax Exempt Status CPAH, an Oregon non-profit, is the general partner of The Knoll @ Tigard Limited Partnership, a single asset entity. CPAH's IRS Determination Letter is attached. CPAH undergoes full audit of its books annually, as will The Knoll @ Tigard. Mark Schwing of Markusen & Schwing in Beaverton currently provides audit services for CPAH and CPAH's single asset properties. The State of Oregon Housing and Community Services Department and the U.S. Department of Housing and Urban Development both will inspect and audit the project annually. The tax credit investor (Limited Partner) also monitors the project on a monthly basis and physically inspects on an annual basis. F. Verification of lnfomtation As CPAH's executive director, I hereby certify that the information in this application for tax abatement is accurate and complete to the best of my knowledge. Income Property Management provides the day - to-day management of the property and is responsible for certifying income levels of each resident for compliance with program guidelines. If additional information is desired on any aspect of this application, please do not hesitate to call. Thank you in advance for your consideration. Sheila Greeniaw Fink, CPAH Executive Director Date: 426/ 1 Z- PAGE 3 OF 3 INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY DISTRICT DIRECTOR • P. O. BOX 2508 CINCINNATI, OH 45201 • Date: • Employer Identification Number: 1 1 93- 1155559 Win I I 1141 DLN: • 17053030720009 COMMUNITY PARTNERS FOR AFFORDABLE Contact Person: HOUSING • THOMAS B O'BRIEN ID# 31187 PO BOX 23206 Contact Telephone Number: TIGARD, OR 97281 -3206 (877) 829 -5500 Our Letter Dated: - February 1995 Addendum Applies :' No Dear Applicant: This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the • information you submitted, we have determined that you are not a private • folmMA tion within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(1) and 170(b)(1)(A)(vi)'. Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a)(1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change the.part of • the organization that resulted in your loss of such status, or if he she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as eysection 509(a)(11 organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about.your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone number are shown above. Sincerely yours, e!c46066?, District Director • • Letter 1050 (DO /CG) • 6-6 /0 COMMUNITY PARTNERS 0. it FOR AFFORDABLE HOUSING, INC. J e PO Box 23206 • Tigard OR 97281 -3206 • Te1:503: 293 -4038 • Fax:503- 293 -4039• www.cpahinc.org • Info @cpahinc.org City of Tigard AppicalionforTincAixtement February 20, 2012 Village at Washington Square 11157 -11163 SW Hall Boulevard, Tigard A. Property Description B. Project's Charitable Purpose C. Certification of Resident Income Levels D. How Tax Exemption Wili Benefit Residents E. Tax Exempt Status F. Verification of Information G. IRS Letter A : •Property Description Village at Washington Square is located at 11157 - 11163 SW Hall Boulevard, between SW Spruce and SW Pfaffle in Tigard. The site is located within the Washington Square Regional Center and is proximate to employment opportunities as well as public transportation and other services. The Village at Washington Square includes three residential buildings with a total of 26 • dwelling units, and a community building, all arranged around a central courtyard/play yard. The project includes one studio, seven one - bedroom, five two-bedroom, seven three bedroom and six four - bedroom units. Eleven of the units are traditional apartment flats, while the other 15 are two- story townhomes with bedrooms above the main floor living space. The total site sits on .84 acres. Legal Description: Partition Plat 1998 -038, Lot 1 and Partition Plat 1998 -038, Lot 2 in the City of Tigard, County of Washington, State of Oregon Tax Lot: 1 S 135DA (04600 & 04700) B. Project's Charitable Purpose The mission of Community Partners for Affordable Housing, Inc. (CPAH) is to promote a healthy community through the development of: permanent affordable housing, sustainable economic growth, and community -based partnerships. When it opened in 2002, The Village at Washington Square was the first addition of affordable units to the Tigard housing stock in a decade. The 26 units are priced to be affordable to very low, low, and moderate-income residents. The project is subject to an extended use agreement to keep the rents affordable for 60 years, effectively the full life of the project. This covenant is recorded with the title of the property and requires that rents will be affordable to households at 30 %, 45% and 60% of area median income and significantly below market rents. Half of the units are three and four bedroom apartments serving larger families who are often unable to find affordable rental opportunities in Tigard. CPAH•main gins active partnerships with the Tigard Police Department, Tualatin Valley Fire & Rescue, Tigard Libraries, and the Tigard School District to enhance the safety and quality of life for residents and to ensure that our programs are well- coordinated with other community resources. CPAH works closely with Community Action and other agencies to provide information and referral as well as emergency services such as food boxes as well as rent and utility assistance. Coordination agreements with social service programs such as HopeSpring (a partnership of Lutheran Family Services, Community Action Organization, Good Neighbor Center, Luke -Dorf, and Lifeworks NW enhance ongoing case management and link stable housing with successful program outcomes. CPAH offers a variety of programs for youth including after school and summer programs as well as adult services including Neighborhood Watch, classes in support of parenting skills, budgeting and other financial literacy skills, and nutritional shopping and cooking. The Community Center is also host to HopeSpring self-sufficiency classes. The Village at Washington Square is located within a census tract (309) which has a higher than • average concentration of low- income rental households. The number of residents without a high school diploma is notably higher than for Tigard as a whole (15% vs. 9 %). This area has the second highest concentration of children under 9 of the eight census tracts in Tigard. While this area represents 9% of Tigard's population, it is home to nearly 16% of the city's minority households. APPLICATION FOR TAX ABATEMENT PAGE 2 OF 3 C. Certification of Resident Income Levels Resident income levels are verified upon application for tenancy. Residents may remain in their units as long as they income qualify at entry. Rents are well below the market for the area We certify that all apartments in this project are targeted to and remain affordable to households earning at or below 60% of the AML Compliance with income restriction requirements is audited annually by the State of Oregon Department of Housing and Community Services, Washington County Office of Community Development, and by our limited partner investor, Key Bank D. How Tax Exemption Will Benefit Residents 100% of the property tax exemption is a direct subsidy for the residents. Every dollar reduction in operating costs is passed on as a reduction in the scheduled rents. Some costs, such as the cost of operating our youth programs, must be funded from outside sources. Without property tax abatement, we would have to shift some of our fundraising efforts from developing sources for these programs and use them instead to cover basic operations. It can be argued that using property tax revenues to subsidize well managed affordable housing units results in a net savings of public resources. Fewer and less - severe police calls, healthier students, and stably housed social service consumers, all provide a direct reduction in the demand for government funded services. E. Tax Exempt Status CPAH is the general partner of the Village at Washington Square Limited Partnership, a single entity asset. CPAH's IRS Determination Letter is attached. CPAH undergoes full audit of its books annually, as does the Village at Washington Square. The State of Oregon Housing and Community Services Department and the U.S. Department of Housing and Urban Development review the project and resident files annually. F. Verification of Information I hereby certify that the information in this application for tax abatement is accurate and complete to the best of my knowledge. Income Property Management Company performs day-to -day management of the property and is responsible for certifying income levels of each resident for compliance with program guidelines. . . 2.Z -c - 12. Sheila Greenlaw Fink, Executive Director Date APPLICATION FOR TAX ABATEMENT PAGE 3 OF 3 4 • INTERNAL REVENUE SERVICE DEPARTMENT OF TEE TREASURY DISTRICT DIRECTOR • P. O. BOX 2508 CINCINNATI, OH 45201 Date: Employer Identification Number: 93- 1155559 MAR I I III DLN: 17053030720009 CO! JNZTY PARTNERS FOR AFFORDABLE Contact Person: HOUSING THOMAS E O'BRIEN ID# 31187 PO BOX 23206 Contact Telephone Number: TIGARD, OR 97281 -3206 (877) 829 -5500 Our Letter Dated: February 1995 Addendum Applies : • No • I Dear Applicant: • This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c)(3) is still in effect. Based on the information you submitted, we have determined that you are not a private • foundation within the meaning of section 509(a) of the Code because you are an organization of the type described in section 509(a)(1) and 170(b)(1-)(A)(vi)'. Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a)(1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to or the substantial or material change'on the.part of the organization, that resulted in your loss of such status, or if he she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a,•section 509(a)(11 organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questl. about.your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone number are shown above. sincerely yours, 6 District Director Letter 1050 (DO /CG) L C hq AIS- Fiscal Impact of Tax Abatement Property Estimated City of Tigard City of Tigard Total Tax Rate Total Market Tax Rate Property Tax Property Value* (Including Bond Impact Tax Impact Levy) (Estimated) Village at $1,754,450 $2.9659/$1,000 $5,204 $16.5961/$1,000 $29,117 Washington Square Single Family $223,400 $2.9659/$1,000 $663 $16.5961/$1,000 $3,708 Home — 9330 SW Tangela Ct. Greenburg $4,750,810 $2.9659/$1,000 $14,090 $16.5961/$1,000 $78,845 Oaks The Knoll @ $3,140,990 $2.9659/$1,000 $9,316 $16.5961/$1,000 $52,128 Tigard Hawthorne $4,441,900 $2.9659/$1,000 $13,174 $16.5961/$1,000 $73,718 Villa Total Impact $42,447 $237,516 * Because these properties have been exempted from property taxation in the past, Washington County does not show a current assessed value. These figures are an estimated market value. • AIS -840 7 Business Meeting • Meeting Date: 03/27/2012 Length (in minutes): 10 Minutes Agenda Title: Approve Purchase of the Paull Properties and Authorize the City Manager to Complete the Property Purchase Prepared For: Steve Martin Submitted By: Greer Gaston, Public Works Item Type: Resolution Meeting Type: Council Business Meeting - Main Information ISSUE Shall the council consider a resolution: • Approving the purchase the Paull properties as outlined in the purchase and sale agreement? • Authorizing the city manager to take all necessary action to complete the property purchases on behalf of the city? STAFF RECOMMENDATION / ACTION REQUEST Staff recommends the council approves the resolution. KEY FACTS AND INFORMATION SUMMARY In November 2010 Tigard voters passed a $17 million park bond measure. Eighty percent of bond proceeds were dedicated to acquiring park land such as the Paull properties. In late 2010, the Park and Recreation Advisory Board (PRAB) was tasked with evaluating more than 60 potential park properties. The Paull properties, commonly referred to as the East Bull Mountain properties, ranked near the top of the PRAB's acquisition list. The properties are located on Bull Mountain, at the northern terminus of Alpine Crest Way and to the west of Greenfield Drive. There is a vacant home on one property. Together the properties total 8 acres. Although a park is planned for the properties, about 4.4 acres were suitable for residential development. The remaining 3.6 acres, comprised of steep slopes, riparian areas and waterways, are considered sensitive and would have been more difficult to develop. The properties are situated outside Tigard city limits in unincorporated Washington County. However, the properties abut City of Tigard boundaries and will be annexed into the city if the property purchase is finalized. If the resolution is approved, the city will purchase the properties for $1.75 million. Other terms of the Purchase Agreement and Escrow Instructions are fairly standard and have been reviewed by the city's real estate attorney. Per the city's property acquisition procedures, a phase one environmental assessment of the property was conducted. No issues were identified in the assessment. OTHER ALTERNATIVES The council could choose not to adopt the resolution; the city would not purchase the property. COUNCIL OR CCDA GOALS, POLICIES, MASTER PLANS 2012 Council Goal 1.c. "Deliver on the promise of the voter - approved park bond by identifying all acquisition opportunities and completing the majority of park land acquisitions and improvements by the end of 2012." DATES OF PREVIOUS CONSIDERATION The council has discussed this property purchase, along with other potential park acquisitions, in executive session on the following dates: • July 26, 2011 • January 24, 2012 • February 28, 2012 Fiscal Impact Cost: $1,750,000 Budgeted (yes or no): Yes Where Budgeted (department/program): CIP - Park bond funds Additional Fiscal Notes: The asking price for the property was $2 million dollars; the property appraised at $1.6 million. The sellers and the city negotiated and ultimately settled on a purchase price of $1.75 million. Park bond fund dollars will be used to purchase the property; park land acquisition is included in the 2011 -2012 Capital Improvement Plan (CIP). Attachments Resolution Exhibit A - Purchase Agreement Map Showing Paull Properties AIS -745 8. Meeting • Meeting Date: 03/27/2012 Length (in minutes): 15 Minutes Agenda Title: Adopt Revised Planning Commission Bylaws (Resolution) and Amend Tigard Municipal Code Chapter 2.08 (Ordinance) Prepared For: Susan Hartnett Submitted By: Gary Pagenstecher, Community Development Item Type: Ordinance Meeting Type: Council Business Meeting - Main Resolution Public Hearing - Legislative � a Information ISSUE Consider a resolution adopting revised Planning Commission bylaws, which are consistent with the Model Bylaws previously approved by council, and an ordinance amending the Tigard Municipal Code Chapter 2.08, consistent with the revised bylaws. STAFF RECOMMENDATION / ACTION REQUEST 1) Approve the attached resolution and adopt the Planning Commission's Recommended Tigard Planning Commission Bylaws. 2) Accept the Planning Commission's finding that the proposed amendments to the Tigard Municipal Code, Chapter 2.08, Planning Commission, are consistent with the Planning Commission revised bylaws, and approve the attached ordinance. KEY FACTS AND INFORMATION SUMMARY In 2010, City Council adopted Model Bylaws and directed city boards and commissions to revise their bylaws to be consistent with them. The Tigard Municipal Code (TMC) Chapter 2.08, Planning Commission, addresses many of the same topics contained in the Model Bylaws. In addition, the existing Planning Commission Bylaws duplicate topics contained in the existing text of Chapter 2.08. Staff has worked with the Planning Commission to revise the existing bylaws to be consistent with the Model Bylaws and to prepare amendments to the TMC to assure consistency and eliminate duplication between the TMC and the Planning Commission Bylaws. On November 21, 2011, the Tigard Planning Commission considered revisions to their existing bylaws and amendments to TMC Chapter 2.08, Planning Commission. On February 6, 2012, the Tigard Planning Commission considered the Proposed Tigard Planning Commission Bylaws and, after making minor changes, the commission recommended council adopt the revised bylaws. The commission also reviewed the proposed amendments to Chapter 2.08 and concluded that they are consistent with the revised bylaws. Attachment 1 contains a resolution adopting the Planning Commission's recommended bylaws, which are Exhibit A to the resolution. For reference, the Model Bylaws are provided in Attachment 2 and the existing Planning Commission Bylaws are provided in Attachment 3. The revised bylaws integrate required portions of the Model Bylaws and certain sections of Chapter 2.08 into the existing Planning Commission Bylaws. Key highlights of the revisions include: 1. Composition of the Planning Commission will include a minimum of two members with expertise related to design to assure the Downtown Design and Review Board function of the commission can be fulfilled; 2. The charge to act as the Committee for Citizen Involvement for land use related matters, as assigned through Resolution No. 10 -62, is incorporated; 3. The charges and duties of the Planning Commission are no longer itemized in the bylaws but instead reference the language in the TMC Chapter 2.08, Planning Commission; 4. The term and responsibilities for alternate Planning Commission members are clarified; 5. Additional provisions on the use of electronic communications from the Model Bylaws and on conflict of interest from the TMC; and 6. Any future changes to the Planning Commission Bylaws are now subject to council approval. Concurrent with the bylaw revisions, amendments to TMC Chapter 2.08, Planning Commission, were prepared for council review and adoption by ordinance. Attachment 4 contains an ordinance approving the amendments to TMC Chapter 2.08, which are attached in strike - through text as Exhibit A to the ordinance. For ease of reading, a clean copy of TMC 2.08 is provided in Attachment 5. The proposed TMC revisions streamline the code and avoid redundancy with the revised bylaws. OTHER ALTERNATIVES The resolution implements the council's direction to amend the Planning Commission Bylaws, consistent with Model Bylaws. No alternatives are proposed. The ordinance revises Chapter 2.08 to be consistent with the revised bylaws. Council could modify the proposed amendments or choose to not adopt them. COUNCIL OR CCDA GOALS, POLICIES, MASTER PLANS NA DATES OF PREVIOUS CONSIDERATION None Fiscal Impact Cost: N/A Budgeted (yes or no): N/A Where Budgeted (department/program): N/A Additional Fiscal Notes: There is no fiscal impact associated with these actions. Attachments Attachment 1 - Resolution with Revised PC Bylaw. Attachment 2 - Model Bylaws Attachment 3 - Existing PC By1awa Attachment 4 - Ordinance with TMC 2.08 amendments Attachment 5 - TMC 2.08 (clean) • City ofTigard 1 . Board Commission Committee Name Here TIGARD M O D E L B Y L A W S • The model bylaws were developed using the City Center Advisory Committee and Tigard Tree Board Bylaws. • The model bylaws serve as a guide for boards. • Section headings should remain the same for all boards. • Boards have discretion to revise the model bylaws with the exception of areas highlighted in gray. SECTION I. CHARGE AND DUTIES A. The (insert board name) hereafter referred to as the "Board" shall have no powers except as conferred by resolution, City Charter, Tigard Municipal Code, or the Oregon Revised Statutes. B. It shall be the function of the (insert board name) to act as an advisory body to the City Council. C. The Board and its members shall conduct itself in a manner that's in keeping with applicable federal, state, and local laws pertaining to conduct and ethics and the City of Tigard Code of Conduct. Any violation of the provisions of such laws shall be grounds for removal from office. D. The (insert board name) is charged with advising the City Council on matters pertaining to: • List mission and duties of board. • Describe board's role in public involvement E. The Board may form subcommittees to investigate areas relevant to its charge or duties pursuant to this section. • List provisions for forming subcommittee. SECTION II. COMPOSITION A. The Board shall consist of (insert # of members) appointed by the City Council with the following representation: • State whether members must be a resident, have a certain expertise, live in a certain area, etc. B. Membership may temporarily drop below required minimums due to resignations and /or difficulty in recruiting qualified applications. SECTION III. APPOINTMENTS A. Council shall fill vacancies with individuals who meet the compositional requirements listed in Section II. B. Appointments of at -large members shall be made the City Council, with recommendations from the Mayor. City of Tigard 1 13125 SW Hall Blvd., Tigard, OR 97223 1 www.tigard - or.gov 1 page 1 SECTION IV. TERM OF OFFICE A. Board members serve for a term of (insert term length) beginning (insert beginning date) on the year of appointment. B. Any vacancy in the Board shall be filled by appointment by the Council and Mayor for the unexpired portion of the term. The unexpired portion of a terrn does not count towards the fulfillment of the maximum number of allowed terms. C. Members may be reappointed for up to (insert # ofconsecutive terms) consecutive terms. D. Members shall receive no compensation for their services. • (State whether reimbursements are given for trips, conferences, etc.) E. An individual board member may not act in an official capacity except through the action of the board. F. A member who seeks to resign from the Board shall submit a written resignation to the chair of the Board, the staff liaison, or the city recorder's office. If possible, the resignation should allow for a thirty (30) day notice so the City Council can appoint a replacement. SECTION V. ORGANIZATION OF THE BOARD A. At its first meeting of the year, and thereafter annually, the Board shall elect a Chair from its members who shall hold office at the pleasure of the Board. o ask The chair shall have general directional powers over the Board. The chair shall preside at all meetings and, in consultation with support staff, set the agendas and notify the board of all meeting times and place. The chair shall also be an ex- officio member of all subcommittees and shall be the sole spokesperson for the Board unless this responsibility is delegated to support staff. • (Insert other applicable officers such as vice - chair, secretary, etc.) B. If the Chair should resign, the Board shall, at its next meeting, conduct an election and provide a replacement to fill the unexpired term. C. Staff liaisons are the primary contacts for City of Tigard boards and the primary interface between these bodies and the City Council, City Manager, and departments. Besides serving as a technical resource, staff liaisons are responsible for meeting logistics, member recruitment and recognition, recordkeeping, and monitoring board effectiveness. SECTION VI. MEETINGS A. The regular meeting of the Board shall be held on the (insert meeting day /bow often) of each month at (insert time), at (insert location) unless otherwise determined by the Board. If the regular meeting day is a holiday, the meeting will be held on (insert alternative date). B. The Board shall meet (insert frequency of meetings during a calendar year) at a time and place that is specified at least five (5) days in advance. City of Tigard 1 13125 SW Hall Blvd., Tigard, OR 97223 1 www.tigard- or.gov 1 page 2 C. The parliamentary authority for the Board is Robert's Rules of Order Revised, except where superseded by these bylaws or local, state, or federal law. D. The Chair may call a special meeting, and the Chair shall call a special meeting if requested by three or more members. The call shall state the purpose of the meeting. Notice of a special meeting must be in writing and communicated to all members at least (Insert # ofdays) before the meeting. E. Agendas and minutes shall be posted for public notice on the City of Tigard web page and in the lobby of City Hall in compliance with Oregon Public Meetings Law. All meetings shall be open to the public. • (If applicable, include policy on Exec Session) F. A majority of votes of Board members present shall determine the official position of the Board on a given issue. Alternates are not allowed to vote under any circumstances. G. The Chair shall vote on all matters before the Board unless having declared a conflict of interest. H. Board members shall not send ;or receive electronic communications concerning any matter pending before the Board during a Board meeting. • Electronic Communications means e -mail, text messages, or other forms of communications transmitted or received by technological means. • Electronic Communications Devices means lap -top computers, blackberries, cell- phones, notebooks, or other similar devices capable of transmitting or receiving messages electronically. I. . Board member shall not use electronic communication devices to review or access information regarding matters not in consideration before the Board during a Board meeting. J. Any electronic communications regarding a quasi - judicial matter to be considered by the Board is an ex -parte contact and shall be disclosed as required by law. (Notre: Only applies to Planning Commission Bylaws.) SECTION VII, BOARD MEMBER RESPONSIBILITIES Members of the Board: (insert specific responsibilities, examples listed below) • Regularly attend meeting and contribute constructively to discussions, • Consider and discuss issues from a Citywide perspective, as well as that of particular stakeholder or interests, • Strive to reach consensus on matters under consideration • Act with respect and consideration for the viewpoint of others • Shall not make representations on behalf of the City of Tigard or Board whether intentional or not, without authorization. SECTION VIII. ATTENDANCE If a member is unable to attend a meeting, he or she is expected to notify the Chair. If a member has (Insert # of allowable unezcused absences) regularly scheduled meetings within one year, the issue shall be placed on the upcoming agenda, and upon majority vote of the Board members present, that position shall be declared vacant. The Board shall forward its action to the Mayor and Council, who shall fill the vacant position. SECTION IX. QUORUM City of Tigard 1 13125 SW Hall Blvd., Tigard, OR 97223 1 www.tigard - or.gov 1 page 3 At any meeting of the Board, a quorum shall be a majority of the current members (excludes Alternates) of the Board. No action shall be taken in the absence of a quorum except that the meeting may continue with discussion on agenda items. For the purposes of forming a quorum, members who have disqualified or excused themselves from participation in any matter shall be counted as present. In the event a quorum will not be present at any meeting, the Chair or Vice Chair shall notify the Board members in advance so that a decision may be made whether to meet and take no action on agenda items or to reschedule to a different time. SECTION X. REMOVAL OF MEMBERS A. The City Council may remove members of the Board in accordance with Section VIII Attendance. B. The Council, may also remove members, when, in its judgment the conduct of a member does not conform to the City of Tigard Code of Conduct for Boards, Commissions and Committees or based on other conduct unbecoming a. representative of the City. C. The Board may make a recommendation to Council for the removal of a member in accordance with Section VII Member Responsibilities. The Board shall forward a recommendation for replacement to the Mayor and Council in a timely manner. SECTION XI. ANNUAL REPORT OF THE BOARD A. Not later than (insert deadline for submitting annual report), the Board shall prepare and file its Annual Report to the City Council. B. The Annual Report shall include a summary of key activities and proceeding and any specific suggestions or recommendations which the Board believes would be noteworthy to the Council. C. The Annual Report shall not be submitted unless approved by the Board. SECTION XII. AMENDMENTS These bylaws are adopted by resolution of the Tigard City Council, are binding on the Board, and may be amended by the City Council. Boards may propose amendments for Council consideration. City of Tigard 1 13125 SW Hall Blvd., Tigard, OR 97223 1 www.tigard- or.gov 1 page 4 A RESOLUTION ADOPTING REVISED BYLAWS AND RULES OF PROCEDURE FOR THE ORGANIZATION OF AND CONDUCT OF BUSINESS BY THE TIGARD PLANNING COMMISSION. BE IT RESOLVED BY THE PLANNING COMMISSION OF THE CITY OF TIGARD, OREGON: The following bylaws, rules, and regulations are hereby adopted by the Planning Commission for the transaction of its business: ARTICLE I General Section 1. Explanation and Interpretation A. A nine member City Planning Commission has been established Chapter 2.08 of the Municipal Code. This chapter was enacted by the City Council pursuant to the authority of the home rule Charter of the City of Tigard. The Council has also adopted other ordinances, resolutions, and policy statements relating to the organization, powers, duties, and procedures of the Commission. The Commission is empowered to adopt and amend rules and regulations, to govern the conduct of its business consistent with the Charter and ordinances of the City, and official policies promulgated by the Council. B. It is the intention of the Commission to set forth in this resolution not only rules and regulations governing its organization and procedures, but also certain other provisions relating thereto, now contained in various ordinances, resolutions, and other documents. The intent is to set forth in one document the essential information relating to the Commission's organization and procedures for the benefit of the Commission, applicants, and the general public. ARTICLE II Responsibilities of Commission Section 1. Responsibilities. The purpose, objectives, and responsibilities of the City Planning Commission shall be as delineated in TMC Chapter 2.08.100, Powers and Duties of the Commission and include: A. Tigard Comprehensive Plan. The Commission shall carry out duties assigned to it by the Council relating to development, updating, and general maintenance of the Plan. B. Capital Improvement Program. The Commission will assist the Council in the formulation of a Capital Improvement Program and, after adoption of said Program, may submit periodic reports and recommendations to the Council relating to the integration and conformance of the Program with the Tigard Area Comprehensive Plan. C. Application of Development Regulations. Except for those matters which may be delegated to the Planning Director, the Commission shall review and take action on quasi judicial and legislative matters, and other proposals which result from the application of development regulations contained within the Development Code on specific pieces of property and uses of land, buildings, etc. The Development Code shall be followed in holding hearings and taking required action. D. Coordination and Cooperation. The Commission shall endeavor to advance cooperative and harmonious relationships with the City Council, Citizen Involvement Teams (CITs), other Planning Commissions, public and semi - public agencies and officials, and civic and private organizations, with a view to coordinating and integrating public and private planning and developmental and policy conflicts. The Commission may, and is encouraged to, exchange research, information, ideas and experiences, participate in joint meetings, develop programs and undertake such other formal and informal actions to facilitate cooperation and coordination. E. General Welfare. Upon its own initiative or direction of the Council, the Commission shall study and propose in general such measures as may be advisable for promotion of the public interest, health, morals, safety, comfort, convenience, and welfare of the City of Tigard and its environs related to its particular area of responsibility. F. Rules of Procedure. The Commission shall adopt and periodically review and amend rules of procedure. Rules of procedure shall govern the conduct of hearings and participation of Commission members on all matters coming before the Commission. These rules shall be consistent with State law and City ordinances relating to the same matters. ARTICLE III Officers Section 1. Officers. The Officers of the Commission shall be a President and Vice - President. The City Community Development Director shall be the Secretary of the Commission. In the event the Secretary is absent from any meeting, the Secretary may send a designee. Section 2. Election. A. The President and Vice - President shall be elected at the first meeting of each odd numbered year, and shall serve until their successors are elected and qualified. The term shall start with the first meeting in January, following election. B. If the office of the President or Vice - President becomes vacant, the Commission shall elect a successor from its membership who shall serve the unexpired term of the predecessor. C. Nominations shall be by oral motion. At the close of nominations, the Commission shall vote by voice vote upon the names nominated for the office. If requested by any member, written ballots shall be used for voting purposes. Section 3. President. A. Except as otherwise provided herein, the President shall have the duties and powers to: 1. Preside over all deliberations and meetings of the Commission; 2. Vote on all questions before the Commission; 3. Call special meetings of the Commission in accordance with these bylaws; 4. Sign all documents memorializing Commission action promptly after approval by the Commission. The power to sign reports and other documents of the Commission may be delegated, in writing, to the Secretary. B. All decisions of the President as presiding officer shall be subject to review by a majority of Commission members present upon motion duly made and seconded. Upon a majority vote of the members present, the Commission may overturn a decision of the President. Section 4. Vice - President. During the absence, disability, or disqualification of the President, the Vice - President shall exercise or perform all the duties and be subject to all the responsibilities of the President. In the absence of the President and Vice - President, the remaining members present shall elect an acting President. Section 5. Secretary. A. The Secretary shall: 1. Maintain an accurate, permanent, and complete record of all proceedings conducted before the Commission; 2. Prepare the agenda and minutes for all Commission meetings; 3. Give all notices required by law; 4. Inform the Commission of correspondence relating to Commission business and conduct all correspondence of the Commission; 5. Attend all meetings and hearings of the Commission or send a designee; 6. Compile all required records and maintain the necessary files, indexes, maps, and plans. B. The Secretary shall maintain records indicating all applications, appeals, hearings, continuances, postponements, date of sending notice, final disposition of matters, and other steps taken or acts performed by the Commission, its officers, and the Secretary. C. The Secretary shall perform such other duties for the commission as are customary in that role or as may, from time to time, be required by the Commission. ARTICLE IV Meetings Section 1. Regular Meetings. Regular meetings of the Commission shall be held in the Council Chambers, City Hall, 13125 SW Hall Blvd., Tigard, Oregon, or at such other places as may be determined by the Commission, at 7:00 p.m., or other time as determined by the Commission. Meeting dates are normally chosen for timely action on applications submitted for the Commission's consideration and are held at least once a month or as necessary. At regular meetings, the Commission shall consider all matters properly brought before it without the necessity of prior notice thereof given to any members. Section 2. Special Meetings. The President of the Commission upon his or her own motion may, or upon the request of a majority of the members of the Commission shall, call a special meeting of the Commission. Unless otherwise specified in the call, all special meetings shall be held at the regular meeting place and time of the Commission. Notice of special meetings shall be given personally or by mail to all members of the Commission and the Secretary not less than forty-eight (48) hours in advance thereof. In case of an emergency, a special meeting may be held upon such notice as is appropriate in the circumstances; provided, however, that reasonable effort is made to notify all members of the Commission. Section 3. Open Meetings. All meetings of the Commission shall be open to the public, except that the Commission may hold executive sessions, from which the public may be excluded, in such manner and for such purposes as may be authorized by law. Representatives of the news media shall be allowed to attend executive sessions under such conditions governing the disclosure of information as provided by law. Section 4. Notice of Meetings. A. In addition to notice required to be given to Commission members and the Secretary, public notice of all Commission meetings shall be given in a manner reasonably calculated to give actual notice to interested persons. The notice shall consist of the time and place of the meeting and an agenda or summary of the subject matter to be considered. B. Notice shall be posted on a bulletin board in the City Hall and disseminated to the City Recorder, local news media representatives, and other persons and organizations as provided by law. At the discretion of the Secretary, notice may also be provided to persons and organizations known to have a special interest in matters to be considered by the Commission. C. Notice shall be given not less than forty -eight (48) hours in advance of a meeting; provided, however, that in case of an emergency, a meeting may be held upon such public notice as is appropriate in the circumstances. D. Failure to provide notice as specified in this section, shall not invalidate any decision or proceeding of the Commission. Section 6. Agenda: Order of Business. A. The order of business at all meetings shall be determined by the agenda which shall be composed generally of the following items: 1) Call to order; 2) Roll call; 3) Communications; 4) Minutes of previous meetings; 5) Old business - continuances; 6 New business; 7 Other business; 8 Adjournment. B. Any item may be taken out of order by direction of the President. C. Actions of the Commission are not limited to the prepared agenda. D. Public hearings will be stopped at 11:00 P.M. unless there is a motion from the commission to extend the time of the hearing in progress. In the absence of that motion, the issue will be taken up at the following meeting. E. The Commission shall not consider a new item after 11:00 p.m. unless there is a motion by the Commission to extend the time for the agenda item. Section 7. Attendance. If a member of the Commission is unable to attend a meeting, he or she is expected to notify the Secretary. If any member is absent from 6 meetings within one year or three consecutive meetings without reasonable cause, upon majority vote of the Commission, that position shall be declared vacant. The Commission shall forward their action to the Mayor and Council, who shall fill the vacant position. Section 8. Quorum. At any meeting of the Commission, a quorum shall be a majority of the current members of the Commission. No action shall be taken in the absence of a quorum except to adjourn the meeting and to continue public hearings to a time and place certain. For the purposes of forming a quorum, members who have disqualified or excused themselves from participation in any matter shall be counted as present. In the event a quorum will not be present at any meeting, the Secretary shall notify the Commission members in advance of that fact, and all items scheduled before the meeting shall be automatically continued to the next regularly scheduled meeting. The Secretary shall post notice of the continuance on the door of the Council Chambers notifying the public of the continuance and specifying the date and time when the matter will be before the Commission. Section 9. Voting. A. The concurrence of a majority of the members of the Commission present at an open meeting shall be necessary to determine any question before the Commission. A tie vote causes the motion to fail. B. When a matter is called for a vote, the President shall, before a vote is taken, restate the motion and shall announce the decision of the Commission after such vote. C. Voting shall be by voice vote. All votes, whether positive, negative, or abstentions, shall be recorded in the minutes. D. Voting "in absentia" or by proxy is not permitted. E. A motion to reconsider can be made only at the same meeting the vote to be reconsidered was taken. Suspension of this rule is not permitted. Further, a motion to reconsider may only be made by a member who voted on the prevailing side of the issue. Section 10. Continuances, Remands. A. Any item before the Commission may be continued to a subsequent meeting. A motion to continue an item shall specify the date or event upon which continuation is to be based. If a matter which originally required public notice is continued without setting time and place certain, the public notification must be repeated when time and place are made certain. A list of continued items, showing the date at which an item was continued, or the event upon which continuance is based, shall be recorded and kept by the Secretary and made available to the public. B. Unless otherwise provided by the Council upon remand, any item remanded by the Council for reconsideration by the Commission shall be treated as a new item and proceedings shall be provided for as if the matter were initially before the Commission. C. A member absent during the presentation of any evidence in a hearing may not participate in the deliberations or final determination regarding the matter of the hearing, unless he or she has reviewed the evidence received. Section 11. Rules of Procedure. All rules of order not herein provided for shall be determined in accordance with the latest edition of "Robert's Rules of Order Newly Revised ". However, the Commission has an obligation to be as clear and simple in its procedure as possible. Section 12. Minutes. A. The Secretary or a designee shall be present at each meeting and shall cause the proceedings to be stenographically or electronically recorded. A full transcript is not required, but written minutes giving a true reflection of the matters discussed at a meeting and the view of the participants shall be prepared and maintained by the Secretary. Executive sessions are excluded from published minutes. B. Minutes shall be available to the public, upon request, within a reasonable time after a meeting and shall include the following: 1) Members present; 2) Motions, proposals, measures proposed and their disposition; 3) Results of all votes, including the vote of each member by name if not unanimous; and 4) Substance of any discussion of any matter. 5) If the minutes are not yet approved by the Commission, if requested, draft minutes, if available, may be provided. C. The Secretary may charge a reasonable fee for copies of minutes and other materials relating to Commission matters. D. Commissioners are expected to vote for approval of the minutes based on the accuracy of representation of events at the meeting. If there are no corrections, the President may declare the minutes approved as presented, without the need for a motion and vote. A vote in favor of adopting minutes does not signify agreement or disagreement with the Commission's actions memorialized in the minutes. E. Any Commissioner not present at a meeting must abstain from voting on approval of the minutes of that meeting. ARTICLE V Advisory Committees Appointment. Advisory committees to the Commission may be appointed by the Commission, with the concurrence of the Commission members, for the consideration of special assignments. ARTICLE VI Publication and Amendment of Bylaws and Rules of Procedure Section 1. Publication and Distribution. A copy of these approved bylaws and rules of procedures shall be: A. Placed on record with the City Recorder and the Secretary of the Commission; B. Available at each Commission meeting; C. Distributed to each member of the Commission; and D. Available to the public for the cost of duplication. Section 2. Amendment and Suspension. A. These bylaws, rules, and regulations maybe amended by approval of a majority of the members of the entire Commission at a regular or special meeting, provided notice of the proposed amendment is given at the preceding regular meeting, or at least five (5) days written notice is delivered to, or mailed to the home address of each Commissioner. The notice shall identify the section or sections of this resolution proposed to be amended. B. Notwithstanding subsection A above, any rule of procedure not required by law may be suspended temporarily at any meeting by majority vote of those members present and voting, except the rule on reconsideration. Amended by the Planning Commission of the City of Tigard, Oregon, with a quorum in attendance at its regular meeting of March 7, 2005, and signed by the President in authentication of its amendment. Planning Commission President Date City of Tigard, OR TIGARD MUNICIPAL CODE Chapter 2.08 PLANNING COMMISSION 2.08.020 Appointment - Membership AND HEARINGS OFFICER (Repealed by Ord. 12 -XX) Sections: 2.08.030 Commission Removal 2.08.010 Planning Commission 2.08.020 Appointment - Membership (Repealed by Ord. 10 -17) (Repealed by Ord. 12 -XX) 2.08.030 Commission Removal 2.08.040 Vacancy (Repealed by Ord. 10 -17) 2.08.040 Vacancy (Repealed by Ord. 12 -XX) (Repealed by Ord. 12 -XX) 2.08.050 Voting Members 2.08.050 Voting Members (Repealed by Ord. 12 -XX) 2.08.060 Election of Officers (Repealed by Ord. 12 -XX) (Repealed by Ord. 12 -XX) 2.08.070 Meetings - Quorum - Voting 2.08.060 Election of Officers (Repealed by Ord. 12 -XX) 2.08.080 Planning Commission Member (Repealed by Ord. 12 -XX) Conflict of Interest Activities (Repealed by Ord. 12 -XX) 2.08.070 Meetings - Quorum - Voting. 2.08.090 Disclosure of Prehearing Contact (Repealed by Ord. 12 -XX) (Repealed by Ord. 12 -XX) 2.08.100 Powers and Duties of 2.08.080 Planning Commission Member Commission Conflict of Interest Activities 2.08.105 Downtown Design Review Board (Repealed by Ord. 12 -XX) 2.08.110 Hearings Officer 2.08.120 Hearing Procedures 2.08.090 Disclosure of Prehearing Contact 2.08.010 Planning Commission (Repealed by Ord. 12 -XX) The Tigard Planning Commission advises the City Council on general land use and 2.08.100 Powers and Duties of transportation planning issues; long -range capital Commission improvement programs; and to act as a hearings body for applications of permits, land use A. Except as otherwise provided by the applications and land use appeals, or other matters City Council, and described in the commission's as directed by the City Council. The Planning bylaws, the Tigard Planning Commission may: Commission shall operate pursuant to bylaws approved by City Council, which may only be 1. Recommend and make suggestions amended by action of the City Council. (Ord. 92- to the City Council and to other public authorities 35 §2 (Exh. A)(part), 1992). concerning: 2 -08 -1 Code Update: 3/12 TIGARD MUNICIPAL CODE a. The long range comprehensive j. Plans for promotion, land use plans for the city, as well as any land use development and regulation of industrial and plans for specific areas within the city, economic activities in the community. b. Plans for the city -wide 2. Do and perform all other acts and transportation system, including the laying out, things necessary or proper to carry out the widening, extending and locating of public provisions of ORS 227.010 to 227.170, and thoroughfares; relieving traffic congestion 227.175 to 227.180; conditions; bicycle and pedestrian facilities; transit facilities and routes; design standards for 3. Study and propose such measures transportation facilities; and parking lot as are advisable for promotion of the public regulations, interest, health, morals, safety, comfort, convenience and welfare of the city, including the c. Any proposals to adopt or area that is expected to eventually become a part amend planning documents for the city -wide of the city through annexation. transportation system, including the transportation map of the comprehensive plan and the B. The City Council shall assign to the transportation capital facilities program, Planning Commission such facilities and services as necessary to enable the commission to hold its d. Establishment of districts for meetings, transact its business and keep its limiting the use, height, area, design, bulk and records. (Ord. 92 -35 §2 (Exh. A)(part), 1992). other characteristics of buildings and structures related to land development, including the 2.08.105 Downtown Design Review creation of and amendments to the Tigard Board development code and the zoning map, A. The council may appoint or designate a e. Betterment of housing and subcommittee of the Planning Commission as the sanitation conditions, Downtown Design Review Board. The Downtown Design Review Board shall have the power to f. Protection and assurance of conduct Type 111 -C hearings on applications for solar access; permits as specified in Title 18 of this code. g. Plans for regulating the future B. The subcommittee shall consist of a growth, development and design of the city in minimum of three members or alternate members respect to its public and private buildings and of the Planning Commission. works, streets, parks, grounds and vacant lots; C. A majority of the designated h. Plans to secure to the city and its subcommittee shall constitute a quorum. A inhabitants sanitation, proper service of public majority vote of those members present at an open utilities and telecommunications utilities, and meeting of the board shall be necessary to legally shipping and transportation facilities; act on any matter before the board. (Ord. 10 -12 § 1, 2010). i. Appropriate measures for energy conservation; and 2.08.110 Hearings Officer 2 -08 -2 Code Update: 3/12 TIGARD MUNICIPAL CODE The council may appoint or designate one or more qualified persons as Planning and Zoning Hearings Officer(s), to serve at the pleasure of the City Council. The hearings officer(s) shall have the power to conduct hearings on applications for permits. (Ord. 92 -35 §2 (Exh. A)(part), 1992). 2.08.120 Hearing Procedures A. Procedures for the conduct of quasi - judicial hearings as prescribed by Title 18 of this code shall apply with respect to the conduct of hearings by the Planning Commission, Downtown Design Review Board and hearings officer. B. Procedures for the conduct of legislative hearings as prescribed by Title 18 of this code shall apply with respect to the conduct of legislative hearings by the Planning Commission. (Ord. 92 -35 §2 (Exh. A)(part), 1992). • 2 - 08 - Code Update: 3/12 Polarity Management® Map Action Steps Action Steps 4' will we gain or maintain the positive Quality of life within the community 47 fi we gain or maintain the positive results from focusing on this left pole? results from focusing on this right pole 2 What? Who? By When Measures' . .. •. _ _ usin � What? Who By When? Measures p n pot? ,, 44 rittht ook+ A. Develop a strategic plan for . Economic vitality • Preserve history I A. Enacting codes and community development ordinances to protect B. Review and update of • Diversity perspective • Sustain community character history building and zoning • Increased revenue • Maintain comfort zone B. Implement community, codes(infrastructure) • Increased pride • Lower risk of financial & social educations and outreach C. Productive steps to engage • Sense of place cost activities the community Change and Stability - Early Warnings "* t Early Warnings Measurable indicators (things you can Measurable indicators (things you can count) that will let you know that you are • Loss of heritage • Economic stagnation i ant) that will let you know that you am netting into the downside ot this tett(?nlp • Chaos • Unhealthy development Tong into the downside of this rtght pole A. Increased opposition of city • Unintended consequences- (� • Flattened revenue A. Stagnant or decreasing q initiatives financial, social environmental 11 property values • Status quo B. Confusion surrounding the •Unwelcoming environment B. Vacancies or unhealthy mix direction of community til of commercial business C. Negative media C. Flat or reduced revenues because people aren't frequently shopping in area Fears negative results from over- tocusincg on the left pose tabtanifff of th, right r+. ole Collapse of community SUPPLEMENTAL PACKET F ; w , _ FOR -a te av /�. (DATE OF MEETING) 4 yenc✓a. l 7 ' Mi. 10 City of Tigard, Oregon NI Affidavit of Posting TIGARD In the Matter of the Proposed Ordinance(s) 1� - STATE OF OREGON ) County of Washington ) ss. City of Tigard / ) I, .1 t7 11 & f'. /.► /� C , being first duly sworn (or affirmed), by oath (or affirmation), depose and say: That I posted in the following public and conspicuous places, a copy of Ordinance Number(s) / o — 0 3 , which were adopted at the City Council meeting of .L/ h a 7, o? o%.ith a copy(s) of said Ordinance(s) being hereto attached and by reference made a part hereof, on the day of /I/I !kir , 201 t� - 1. Tigard City Hall, 13125 SW Hall Blvd., Tigard, Oregon 2. Tigard Public Library, 13500 SW Hall Blvd., Tigard, Oregon 3. Tigard Permit Center, 13125 SW Hall Blvd., Tigard, Oregon Signature of Person ho Performed Posting 1 ub S cribed and sworn (or affirmed) before me this day of ` L, , 20 / . 0 41M4,1 - Au D. *ale ole:, OFFICIAL SEAL Signature of Notary Public for Oreg , r<1 . ; : CATHERINE D WHEATLEY �C'"" NOTARY PUBLIC - OREGON �� COMMISSION NO. 459116 MY COMMISSION EXPIRES AUGUST 04, 2015 I:tadmicathy formsipost ordinance 2000.doc CITY OF TIGARD, OREGON TIGARD CITY COUNCIL ORDINANCE NO. 12 -03 AN ORDINANCE AMENDING TIGARD MUNICIPAL CODE CHAPTER 2.08, PLANNING COMMISSION, COMPLEMENTING AMENDMENTS TO AMENDED PLANNING COMMISSION BYLAWS, CONSISTENT WITH COUNCIL APPROVED MODEL BYLAWS. WHEREAS, the Tigard Municipal Code (TMC), Chapter 2.08, Planning Commission, includes sections on Commission Purpose, Appointment - Membership, Vacancy, Voting Members, Election of Officers, Meetings - Quorum, Conflict of Interest, Disclosure, Powers and Duties, Downtown Design Review Board, Hearings Officer, and Hearings Procedures; and WHEREAS, Council adopted Model Bylaws in 2010, and directed boards and commissions to adopt bylaws consistent with the Model Bylaws; and WHEREAS, on November 21, 2011, the Tigard Planning Commission held a workshop to consider the Staff Proposed Draft Amended Bylaws and on February 6, 2012, held a meeting to consider revised Tigard Planning Commission Bylaws and, with minor amendments, recommended the City Council adopt them; and WHEREAS, the Planning Commission also reviewed Tigard Municipal Code Chapter 2.08, Planning Commission and found that simplifying and streamlining sections of TMC 2.08 to include only sections on the Planning Commission, Powers and Duties of Commission, Downtown Design Review Board, Hearings Officer, and Hearing Procedures is consistent with the recommended amendments to its bylaws; and WHEREAS, on March 27, 2012, the City Council considered the Planning Commission's recommendation to adopt the revised Tigard Planning Commission Bylaws; and WHEREAS, on March 27, 2012, the City Council held a public hearing to consider amendments to Tigard Municipal Code, Chapter 2.08. NOW, THEREFORE, THE CITY OF TIGARD ORDAINS AS FOLLOWS: SECTION 1: Tigard Municipal Code, Chapter 2.08, Planning Commission is amended as shown in EXHIBIT A. SECTION 2: This ordinance shall be effective 30 days after its passage by the council, signature by the mayor, and posting by the city recorder. PASSED: By l./ /./YlzliJ2. ' 1 vote of all council members present after being read by number and title only, this 7 day of -? '7a't k_ , 2012. L 4//% .. A Carol A. Krager, Deputy City Recorder ORDINANCE No. 12- Page 1 APPROVED: By Tigard City Council this a fi Cray of / / al- 012. 4 �r Craig Dirksen, Mayor A m .vedasto i rm: 4 4.-f- t ity Art 49 9 y / {a k 11 2017 Date ORDINANCE No. 12- Page 2 c-y_k TIGARD MUNICIPAL CODE I Chapter 2.08 PLANNING COMMISSION AND HEARINGS OFFICER. 2.08.020 Appointment--.Membership: Sections: �• • _ _ ... , . , , 2.08.010 Prpose:Planning Commission , • - • , - • , . , , , - 2.08.020 Appointment--.Membership: (Repealed by Ord. 12 -XX) , _ • , , • , , • • : - 2.08.030 Commission Removak , • • , ' , (Repealed by Ord. 10 -17) ► . - , ' • • , • , , 2.08.040 Vacancy: . , , - •• , , (Repealed by Ord. 12 -XX) 2.08.050 Voting Members: . _ _ • . , , .. - , _ . (Repealed by Ord. 12 -XX) 95 26; Ord. 92 35 §2 (Exh. A)(part), 1992). 2.08.060 Election 44- 0LOfficers: (Revealed by Ord_. 12 -X X) (Repealed by Ord. 12 -XX 2.08.070 Meetings_ — ,Quorum - Voting 2.08.030 Commission Removal: (Repealed by Ord. 12-X X) 2.08.080 Planning Commission Member (Repealed by Ord. 10 -17) Conflict Of_uLInterest Activities: 2.08.040 Vacancy: (Repealed by Ord. 12 -XX) 2.08.090 Disclosure Of- oLPrehearing ... , Contact , _ ,,, . •_ ,, , , .- (Repealed by Ord. 12 -XX); • _ , . _ •• : • - , , • - 2.08.100 Powers Aiiii and Duties Of-ot (Ord. 92 35 §2 (Exh. A)(part), 1992). Commission: Renea ed by Ord. 12 -XX 2.08.105 Downtown Design Review Board: 2.08.050 Voting Members: 2.08.110 Hearings Officer: 2.08.120 Hearing Procedures: • , . , • , . _ . _ • , , • 2.08.010 1pese:Planning Commission • , , , , - The purpose of the Tigard Planning , . - :, • • , _ • Commission is to advises the City Council on . -• , . general land use and transportation planning , • • - : - _ , . • . , • . • - , - , issues; long -range capital improvement programs; . • , • , - • , , and to act as a hearings body for applications of _ . ' ,. ':., :. • .. ., permits, land use applications and land use . , • • e : , • - •. • ;A.- , appeals, or other matters as directed by the City 4-99). Council. The Planning Commission shall operate Revealed by Ord. 12 -XX pursua 10 bylaws a pprove d b Citv__Council, ich may only be amended by action of t itv 2.08.060 Election Of olOfficers: Council. (Ord. 92 -35 §2 (Exh. A)(part), 1992). 2 -08 -1 Code Update: 3/121/11 i . TIGARD MUNICIPAL CODE The Planning Commission, at its first • • . .. , , , • • - • • . . , • • - • • • • ' - • • • - • • ' • , the action is being taken. (Ord. 92 35 (Exh. • , , • . •. • _ • • A)(part), 1992). • - " Renealed by Ord. 12 -X • - ' • .- • • ' ' - • • • ' ' ' ' • - ' 2.08.090 Disclosure Of• jPrehearing e• Contact: (Repealed by Ord. 12 -X 2.08.070 Meetings_ — ,Quorum - Voting, • . • • , , • - • •, , , • ' of the members of the Commission shall , , • • , . • • _ . ._ . , • -. . ,,_ •... ._ , ., at - sue. , , - - • , .... •, • ! . .... , §2 (Exh. A)(part), 1992). (Repealed by Ord, . 2.08.080 Planning Commission Member , ; . - _ , Conflict Ofttfjnterest , , _ . , • , • • . e • Activities: (Exh. A)(part), 1992). Revealed by Ord, 12 - XX shall not participate in any Commission 2.08.100 Powers M- aniLDuties • - Commission: intcrresti• (a.)A Except as otherwise provided by the City Council, od described in the (1) The member or the spouse, brother, commission's bylaws, a Citylhe Tigard Planning • Commission may: o f t ,„t, , (1) Make and alter rules and (2) Any business in which the member • _ • - .. ., • . .. ! _ - t wo-Year er ... , . .. , • the City; (3) Any business for which the ( - L Recommend and make suggestions to the City Council and to other public authorities • concerning: 2 -08 -2 Code Update: 3/121/11 i TIGARD MUNICIPAL CODE ( The long range comprehensive land use plans for the Citycity, as i. appropr-iate Annronriate measures well as any land use plans for specific areas for energy conservation; and within the Gitycity, _41 Reoommcnp ---to the (g)b, Plans for the City y y- Plans for promotion, wide transportation system, including the laying development and regulation of industrial and out, widening, extending and locating of public economic activities in the community relieving traffic congestion conditions; bicycle and pedestrian facilities; (-332sDo and perform all other acts and transit facilities and routes; design standards for things necessary or proper to carry out the transportation facilities; and parking lot provisions of ORS 227.010 to 227.120 170, and regulations, 227.8 -175 to 227.180; (£ Any proposals to adopt (61 Study and propose such measures or amend planning documents for the Citycity- as are advisable for promotion of the public wide transportation system, including the interest, health, morals, safety, comfort, transportation map of the comprehensive plan and convenience and welfare of the City, including the transportation capital facilities program, the area that is expected to eventually become a part of the City city through annexation. Establishment of districts for limiting the use, height, area, design, bulk and (B The City Council shall assign to the other characteristics of buildings and structures Planning_Commission such facilities and services related to land development, including the as necessary to enable the Commission creation of and amendments to the Tigard commission to hold its meetings, transact its development code and the zoning map, business and keep its records. (Ord. 92 -35 §2 (Exh. A)(part), 1992). ( Betterment of housing and sanitation conditions, 2.08.105 Downtown Design Review Boar& OL Protection and assurance of solar access; (a.)A. The mincij,.,_may appoint or designate a subcommittee of the Planning (3-)&Reeemmend ' to the it Commission as the Downtown Design Review Plans for Board. The Downtown Design Review Board regulating the future growth, development and shall have the power to conduct Type III -C design of the City city in respect to its public and hearings on applications for permits as specified private buildings and works, streets, parks, in Title 18 of this grounds and vacant lots; amend- code. h. plans -Plans to secure to the City (Wil, The subcommittee shall consist of a city and its inhabitants sanitation, proper service minimum of three members or alternate members of public utilities and telecommunications of the Planning Commission. utilities, and shipping and transportation facilities; amid 2 -08 -3 Code Update: 3/121/11 z TIGARD MUNICIPAL CODE I ( majority of the designated subcommittee shall constitute a quorum. A majority vote of those members present at an open meeting of the Bear -board shall be necessary to legally act on any matter before the &wit ard. (Ord. 10 -12 § 1, 2010). 1 2.08.110 Hearings Officer: The Councii -- council may appoint or designate one or more qualified persons as Planning and Zoning Hearings Officer(s), to serve at the pleasure of the City Council. The Hearings hearings Q t eerofficer(s) shall have the power to conduct hearings on applications for permits. (Ord. 92 -35 §2 (Exh. A)(part), 1992). 1 2.08.120 Hearing Procedures: (e),/ Procedures for the conduct of quasi judicial hearings as prescribed by Seetien 8.'�- 6OTitle 18 of this code shall apply with respect to the conduct of hearings by the Planning Commission, Downtown Design Review Board and Hearings-hearings O€€eerofficer. I (Ma, Procedures for the conduct of l egislative hearings as prescribed by Section 4-8730400Title 18 of this code shall apply with respect to the conduct of legislative hearings by the Planning Commission. (Ord. 92 -35 §2 (Exh. A)(part), 1992). • 2 -08 -4 Code Update: 3/12444