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CITY OF SAN LEANDRO NOTES TO BASIC FINANCIAL STATEMENTS For The Year Ended June 30, 2024 NOTE 19 – SHORELINE DEVELOPMENT PROJECT (Continued) In February 2020, the City Council further committed to the Shoreline Development by approving and entering into a DDA with Cal Coast Companies LLC, Inc., which includes authorization to enter into leases and a Purchase and Sale Agreement for the single family/townhome property, and outlines key business terms, including the scope of a development, schedule of performance and the respective responsibilities of the City and the Developer. On December 30, 2022, a new milestone was reached in the progress of the Monarch Bay Shoreline Development Project. Master Developer Cal-Coast and the City completed the sale and leasing of public properties that comprise the land for the Shoreline project. The City sold property to the Developer for construction of the Single Family Element under a seller-financed loan. As of June 30, 2024, the following progress has been made on the Shoreline Project: • After receiving approximately $9M in grant funding for construction of the library, the City continued preparation of final design and construction documents. • Following the closure of the marina in January 2023, City staff from multiple departments worked to ensure the area is stable, secure and clean. Work has included removal of debris and abandoned boats, closure to vehicle traffic, and plans to remove vacant buildings. • The City continued to prepare for construction of the City Park, completing review by the Bay Conservation and Development Commission’s (BCDC) Design Review Board in August 2023 and entering into contracts to prepare construction documents for final BCDC approval and permitting. • At the end of 2023, the Developer went into default on the seller-financed loan for sale of the Single-Family Property due to nonpayment of interest, and in 2024, the City started the foreclosure process on the loan. • In June 2024, the Developer's legal entity that entered into the loan and purchased the property with the City filed for Chapter 11 bankruptcy. The bankruptcy process is expected to last at least 9 months. • During the bankruptcy process, the City continues to diligently process the Developer's applications for permitting approvals as legally and contractually required. The Developer is currently preparing vesting tentative map, grading permit, and golf course plans for the development of the Single-Family Element, and under the loan agreement, the Developer must begin Site Preparation by the end of 2024. As of June 30, 2024, the City has recorded a loan receivable from Cal-Coast of $26,416,951 in the Shoreline Enterprise Fund, which includes the principal amount of the loan of $24,882,958, and accrued interest of $1,533,993. 94