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REDEVELOPMENT AGENCY OF SAN LEANDRO NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2010 COMMITMENTS AND CONTINGENCIES (Continued) B. Century Theaters Reimbursement and Performance Agreement The agreement requires the Agency to guarantee the ground lease by M &J Wilkow (or its successors and assigns) for property adjacent to the Bayfair Mall as part of the development of the Century Theaters complex. The obligation only occurs in the event of a default by the mall ownership. The amount of the obligation is subject to change over time as provided in the lease. C. The Alameda at San Leandro Crossings The Alameda at San Leandro Crossings, a 100 -unit affordable rental housing project which will be developed by the nonprofit BRIDGE Housing Corporation, is part of the proposed 300 unit Phase I development in San Leandro Crossings. Westlake Development Partners LLC will develop the remainder of Phase 1. The City Redevelopment Agency approved a development loan of $9.1 million in Set -Aside Funds in April 2009. Due to unforeseen factors beyond the developers' control, the Alameda was delayed in April 2010. The RDA will be assisting in financing $6.9 million (of the $9.1 million loan) through the future issuance of tax allocation bonds. The RDA designated the remaining $1.2 million for eligible pre - development costs for BRIDGE. As of Fall 2009, the estimated TAB loan term was expected to be 15 years with interest rate for taxable bonds to be approximately 7.7% to 8 %. The RDA will be able to reimburse itself from the proceeds of future TAB financing for expenditures made in advance of the issuance of the financing. D. Litigation The Agency is involved in various claims and litigation resulting from its normal operations. The ultimate outcome of these matters is not presently determinable. In the Agency managements' opinion, these matters will not have a significant adverse effect of the Agency's financial position. 11. SUBSEQUENT EVENTS The State Budget for 2010 -11 includes the second year of a two -year take from the redevelopment agencies to fund the Supplemental Educational Revenue Augmentation Fund ( SERAF). For San Leandro, the required payment for 2010 -11 will be slightly less than $900,000. San Leandro's SERAF obligation in 2010 -11 was roughly $4.2 million. Although the Agency was able to make that payment without borrowing from other funds, the requirement has a severe impact on the ability to complete and initiate redevelopment projects and programs in the near future. The passage of Proposition 22 in November 2010 appears to have eliminated the possibility of similar State takes in future. 35