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Environmental Review of Corridor As part of the City's due diligence in determining whether to purchase the Corridor, the City hired BKS & Associates in September 2007 to prepare a Phase I Environmental Review of the Corridor. The purpose of a Phase I review is to determine if there are hazardous materials on or within the property. The results of the Phase I Environmental Review disclosed that beneath a portion of Segment 7 of the Corridor is a petroleum hydrocarbon plume that has apparently migrated from the property (housing the Unocal gas station) adjacent to the Corridor at 4191 First Street. The plume represents a recognized environmental condition. The Phase I review indicated that the property owner at 4191 First Street has submitted to the Alameda County Health Care Services a work plan for further investigation of this condition; however, other than the installation of monitoring wells on the site, no investigation or other work to alleviate this condition is being conducted at this time, The County will be the lead agency for the remediation effort. Based on environmental issues pertaining to Segment 7 located in the Northern Property, City staff proposed to the County and the County has accepted that the City purchase the Corridor in two phases-the Southern Property (that portion of the Corridor between Bernal Avenue and Ray Street; Segments 1 through 6) and the Northern Property (that portion of the Corridor north of Ray Street to Stanley Boulevard; Segments 7 through 10). The City would purchase the Southern Property for $5.5 million (Southern Property Closing Date). The second closing date for the Northern Property (Northern Property Closing Date) would occur when and if the Alameda County Health Care Services issues a remedial action completion certification letter (Certification) in connection with recognized environmental conditions impacting Segment 7 of the Corridor. If the County is unable to issue the Letter within five years of the Southern Property Closing Date or some later mutually agreed upon date, then the City's obligation to purchase Segment 7 of the Northern Property would terminate at no cost or penalty to the City. The City would be obligated to purchase the balance of the Northern Property, Segments 8 through 10 (Balance of the Northern Property) at that time for $1,687,250. Terms of the Proposed Purchase Agreement The following is a summary of the deal points of the attached Purchase Agreement between the County and the City for the purchase of the Corridor: The City is obligated to purchase and the County is obligated to sell the entire Corridor consisting of the above ten parcels and depicted on the attached Exhibit A; segments 1 through 6 shall be referred to as the Southern Property; Segments 7 through 10 shall be referred to as the Northern Property and Segment 7 is the contaminated property. 2. The purchase price to be paid by the City to the County is $7.5 million; $5.5 million for the Southern Property and $2.0 million for the Northern Property. 3. The City shall pay to the County the sum of $2.1 million at the close of escrow on the Southern Property that is proposed to occur no later than July 31, 2008. Page3of6