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ATTACHMENT 1 <br />b. Ground Lease of the Property. The Ground Lease shall be in <br />accordance with the following terms: <br />i. Term of Ground Lease. The Ground Lease shall become effective <br />on the Closing Date (defined below) and shall have a term of not <br />less than seventy-five (75) years. <br />ii. Taxes and Assessments. The tenant shall be responsible for the <br />payment of any and all property taxes and assessments levied <br />against the leasehold estate and the Property during the term of the <br />Ground Lease subject to any abatement available therefrom. <br />iii. Project Use. The Property shall be used during the term of the <br />Ground Lease only for affordable housing (and related community <br />serving uses). <br />iv. Rent. Developer shall pay City a capitalized rent payment (the <br />"Capitalized Rent"), which shall be due upon execution of the <br />Ground Lease, in the amount of $3,954,000, which is equal to the <br />fair market value of the Land (as determined by an MAI appraiser) <br />as of the date of this Agreement. To fund the Capitalized Rent, <br />City shall provide a "carryback loan" in the amount of the <br />Capitalized Rent ("Takeback Loan"), and Developer shall repay <br />the Takeback Loan in accordance with a promissory note executed <br />by Developer in favor of the City.. <br />V. Rehabilitation and Operation of the Project. Developer shall be <br />responsible, at its sole cost, for construction, operation, and <br />maintenance of the Project during the Ground Lease term. <br />vi. Title to Property. The Ground Lease shall provide that City will <br />own fee title to the Land, and that the Developer will own all <br />improvements constructed or otherwise located on the Land, <br />during the Ground Lease term. Pursuant to the Ground Lease City <br />will execute and deliver, at the permanent loan closing for the <br />Project, a lease rider to the Ground Lease in favor of the California <br />Tax Credit Allocation Committee ("TCAC"), in the form required <br />by TCAC. <br />vii. Disposition of Improvements at End of Lease. At the end of the <br />Ground Lease term, title to all the improvements shall <br />automatically vest in City without further action required by either <br />Party, and without any obligation by City to pay any compensation <br />therefor. <br />viii. Mortg�aizee Protections. The Ground Lease shall include standard <br />mortgagee protection provisions. <br />OAK #4811-5363-1135 Q <br />