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Attachment 3 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF PLEASANTON, THE HOUSING AUTHORITY OF THE CITY OF PLEASANTON AND PLEASANTON GARDENS, INC. November , 2013 THIS MEMORANDUM OF UNDERSTANDING (the "MOU") is effective as of this 5th day of November, 2013 by and between Pleasanton Gardens, Inc., a nonprofit corporation ("Pleasanton Gardens"), the Housing Authority of the City of Pleasanton, a public body corporate and politic organized under the laws of California(the "Housing Authority"), and the City of Pleasanton, a municipal corporation (the "City"). WHEREAS, Pleasanton Gardens, governed by the Pleasanton Gardens Board of Directors (the "Board"), is the owner of a 1.99 acre parcel located at 251 Kottinger Drive (the "Pleasanton Gardens Parcel") that is improved with a forty (40) unit senior housing development previously assisted by the United States Department of Housing and Urban Development ("HUD") under Section 236 of the National Housing Act of 1934, as amended, (the "Pleasanton Gardens Development"); and WHEREAS, the Pleasanton Gardens Development includes nineteen (19) one-bedroom units, twenty (20) studio units and one (1) two-bedroom unit reserved for the resident manager; all units, excepting the resident manager unit, are income restricted to households with an annual household income less than eighty percent (80%) of the Area Median Income ("AMI") and age restricted to elderly households where at least one household member is 62 years or older; residents are required to be capable of independent living; and WHEREAS, Pleasanton Gardens participates in the HUD Section 8 Loan Management Set Aside ("LMSA") Program and is currently party to a HUD Section 8 Housing Assistance Payments Contract (the "HAP Contract"). The HAP Contract, which covers thirty-one (31) units in the Pleasanton Gardens Development, is scheduled to expire on September 1, 2014, subject to renewal. These 31 units are income restricted to households with an annual income not greater than 50% of AMI and rents are based on 30% of a household's adjusted annual income in accordance with HUD guidelines; and WHEREAS, the Housing Authority, governed by the Housing Authority Board of Directors (the "Housing Authority Board"), is the owner of a 3.3 acre parcel located at 240 Kottinger Drive (the "Kottinger Place Parcel") that is improved with a fifty (50) unit HUD Public Housing Project (the "Kottinger Place Development"), operated in accordance with a contract known as an Annual Contributions Contract CA-081; and WHEREAS, the Kottinger Place Development includes eighteen (18) one-bedroom units, thirty (30) studio units and two (2) two-bedroom units of which one is reserved for the resident manager. All units, excepting the resident manager unit, are income restricted to households with an annual household income less than 50% of the AMI and age restricted at 62 years and older. Residents are required to be capable of independent living. The Kottinger Place Development has a minimum monthly rent of Fifty Dollars ($50) and rents are based on thirty percent (30%) of a household's annual income in accordance with HUD guidelines; and Page 1 of 6 191A52V1404312.3.10 23.2013