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WHEREAS, the City Loan would be funded with a combination of funds from the HOME Investment Partnership Act established by the National Housing Act of 1990 and by the McKinney-Vento Homeless Assistance Act; WHEREAS, in addition to the City Loan, the Project will be financed by a combination of funds from Fremont Bank, the County of Alameda, and the Local Initiative Support Corporation (collectively, the "Senior Lenders"); WHEREAS, the Senior Lenders have required that the Agency and the City subordinate the Regulatory Agreement to the Senior Lenders' loan documents ("Senior Loan Documents"), and Allied and City staff have determined that there is no economically feasible alternative method of financing the Project without such subordination; and WHEREAS, the Senior Loan Documents include provisions that will protect the City's investment in the Project, including certain notice and cure rights. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Leandro hereby: 1. Finds that the financing of the Project in accordance with the City Loan Agreement will increase the availability of affordable housing in the community and facilitate the preservation of housing for very low- and extremely low-income households. 2. Finds that (i) the provision of financial assistance in the amount of the City Loan is necessary to make the Project financially feasible and affordable to low- and very low- income households, (ii) it would not be economically feasible to operate the Project at the proposed level of income-targeting and affordability without such financial assistance, and (iii) despite good faith efforts on the part of Allied, no other reasonable means of private or commercial financing is reasonably available to finance the Project at such affordability and income levels. 3. Finds that the Project is exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines Section 15301 because the Project involves the acquisition of an existing structure to provide affordable housing to low-income households. 4. Approves the provision of the City Loan pursuant to the terms and conditions set forth in the City Loan Agreement. 5. Approves the City Loan Agreement, the City Note, the City Deed of Trust and the Regulatory Agreement, and authorizes the City Manager or his or her designee to execute and deliver each such document to which the City is a party substantially in the form on file with the City Clerk. 819234-1 RESOLUTION NO. 2006-045 2