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HomeMy WebLinkAboutDowntown Fresno Property and Business Improvement District - Amdt. No 1 to Downtown Fresno Property and Business Improvement District (PBID) Grant Funding Agreement to increase city funding assistance by $56,139 to a total of $96,139=�4� REPORT TO THE CITYCOUNCIL March 17, 2009 FROM: CRAIG SCHARTON, Director Downtown and Community Re n AGENDA ITEM NO. 9:30am COUNCIL MEETING 3/17/09 APPROVED RY DEPARTMENT jillyl OIV IMNAGEA BY: ELUOTT BALCH. Downtown Revdalizaticn Manager Downtown and Community Revitalization SUBJECT: APPROVE AMENDMENT NO. ONE TO DOWNTOWN FRESNO PROPERTY AND BUSINESS IMPROVEMENT DISTRICT (PBID) GRANT FUNDING AGREEMENT TO INCREASE CITY FUNDING ASSISTANCE BY $56.139 TO A TOTAL OF $96,139, OF WHICH THE CURRENTLY UNEXPENDED AMOUNT OF $84,309 SHALL BE A NO, INTEREST, NO MATCH LOAN REPAYABLE FROM PBID ASSESSMENTS, TO FINANCE CONSULTING SERVICES AND OTHER COSTS INCURRED IN THE FORMATION OF THE DOWNTOWN PROPERTY AND BUSINESS IMPROVEMENT DISTRICT, AND AUTHORIZE THE EXECUTION OF DOCUMENTS. KEY RESULT AREA weswWloop Ceuntll ono 31ni Economic Development auo It 02"'1111 .e(. RECOMMENDATION Staff recommends that the City Council approve the modification of the existing Grant Funding Agreement to fund the next steps in the formation of a Downtown Fresno Propend and Business Improvement District (PBID) with an additional $56,139. These City monies will fund consulting services and other costs incurred! in the formation of the PBID. Under staff's proposal, all future Cly funds committed will be repaid from available PBID funds if the assessment is approved by progeny owners. EXECUTIVE SUMMARY Propany and Business Improvement Districts (PBIDs) we a proven, successful tool for downtown revitalization In other after. Since 2007, the effort to form a PBID in Downtown Fresno has renarent Gaysupgort in the farm of a $40,000 contingency, reserve fund available to match donations by the private sector. However, the maulathe City and private funds are not sufficient to complete the process of PBID formation. The Department requests Council approval to increase the total maximum City funding to $96,139, a level sufficient to fund the completion of the PBID formal process. Under the Department's proposal, all future City funds committed will be repaid from available PBID funds R the PBID is adopted by property owners. The proposed arrangement will add needed clarity to Ne funding for the PBID process, as well as a straightforward poliq election from the Cly an support for a vote on the PBID by Downtown property owners. Downtown Fresno PBID March 17, 2008 Page 2 of 6 Staff's research Indicates Nat a wmplete tundirgnepaymwt arrangement, as is proposed, has been the overwhelmingly predominant made of pubic support for PBID formation in other cities. Under state law the forward progress of PBID femoral wilt be subject to Council action at three milestones In the petition and nolicelprotest ballot process. At each milestone staff wlll return to Council with both an update on the use of the badgered funds. and a request for the necessary action. BACKGROUND About PBIDs The Property and Business Improvement Darrint (PBID) has became a common tool for Downtown revitalization throughout the U.S. and in Caldomia cities both large and small. Through a PBID, property owners pal their resources, talents, and energy to address the unique needs of a defined area. PBID revenues generated through special assessments on property are expanded in sacraments with an adopted business plan, pursuant to contract with an existing or newly fanned nonpmfit PBID management entity The state is We with examples of successful downtowns where a PBID has played a major role in revitalization. Approximately 80 PBIDs exist In California, most of Idem in Downtown areas. PBIDs are found In all of the slate's largest urban areas, Including the downtowns of comparably sized cities such as Sacramento, San Jose, Stockton, and Long Beach. PBIDs have also been an Important component of revitalization in downtowns asnearby as Visalia. Exhibit D provides reference data on PBID formation In several other Callfani etas. Across North America, similar contirols exist in over 1,000 places. PBIDs prowde two fundamental benefits to the downtowns they serve. The more tangible of these is the serviws and improvements the districts are able to provide. PEEI can be used for services ranging from economic development to greater cleanliness to enhanced safety, or for physical improvements such a$ signage or equals Improvement. The scope of services provided In any PBID Is a function of the assessment level supported by the property owners, and the business plan the owners adopt to guide the use of funds. The less tangible, but equally important, benefit of a PBID Is the effect of uniting progeny owners in a common purpose. In virtually every successfully revitalized downtown In America, some organization has emerged to exercise strong leadership, aroposa , and management of the downtown revitalization el with the capacity to marshal the areas private sector resources In an effective, coherent way, In many instances this role is naturally filled by the PBID management organization. A PBID for Downtown Fresno The functions of a Property and Business Improvement District (PBID) are an ideal match far the needs of Downtown Fresno at this early stage of revitalization. Fresno's existing downtown business -based Business Improvement District (or BID, a district formed through older state legislation that allows for a surcharge on business licensed, assesses ground -floor retail merchants along the Fulton Mall and in the Central Business District area, and generates only up to approximately $38,080 per year (less In recant years). Property owners are not a party to this assessment and have no designated place on the board of the Downtown Association of Fresno, the organization that receives and manages the businessbasedBID revenues. Because the Downtown Association's assessed membership Is so limned, both geographically antl by type of user, the existing business based BID does not effectively perform me vital role of uniting business and any owners in a common purpose. While many property owners are engaged In individual efforts to make mown Fresno successful, there Is no obvious structure for these owners to pool their resources, talents, energy to deliver the services and improvements that will collectively improve their propady values over Insufficient BID revenues preclude the Downtown Association from undertaking the range of projects, services, and policy advocacy needed to support the long-term revitalization of the area. The lack of resources has and to a downward spiral of low stakeholder expectations of to organization, lower membership interest, and more limited and volatile revenue to support ongoing capacity needs. The flaws in this financing and governance dructure stymie the best efforts of the committed, talented individuals involved. Taking into account these and other liabililies, along with Downtown Fresno's many strengths and opportunities, a panel of experts from the International Downtown Association provided a sal W recommendations tar Fresno in June 2006. The panel recommended a sal W'Msible" accomplishments In the short tarts— many of which are now underway— leading to formation of a PBID to keep downtown management and advocacy moving forward over time. City of Fresno support On June 19, 2007, the City Council directed staff to set aside $40,000 in contingency to support the study and formation of a Property and Business Improvement District (PBID) in Downtown Fresno. These funds weresat aside to be available on a matching basis. On February 26, 200$ the Council approved a resolution authorizing the expend i of $15,000 from this reserve to fund tee International Downtown Association (IDA) Panel which came and provided the recommendations described above for Fresno In June 2006, A nonprWX organization, One by One Leadership, acted as the fiscal agent for 09 City and matching pdvate donors to engage the IDA's services. Payments for the IDA and related expenses have totaled$23,339—$11,509 from private donors, and $11,830 in matching City funds. As a result, of the original id 0,0c0 In City funds set wide, $28,170 remains unspent. In addition there remains $15,691 In unspent covers funds committed to support PBID formation. In November 2008 the Downtown Fresno Partnership, an unincorporated group formed to champion the PBID formation process, executed a consulting agreement with Progressive Urban Management Associates (PUMA), for estimated fees and expanses of $69,900, Because of the limited capacityof One by One I-eadershlp, the Fresno Revitalization Corporation became the Downtown Fresno Partnership's fiscal agent and cosigned this agreement. On February 10, 2009, the Council also approved a change in the fiscal agent for the City's PBID Grant Funding Agreement from One. by One Leadership to the Fresno Revitalization Corporation. Because of the complexity of the financing, Including the matching funds requirement and the change In fiscal agent, the consultants from PUMA and their subcentraclom have worked unpaid to date, despite having already incurred costs In excess of $35,000. Since these charges still need to be paid, they are Included below In the future costs of PBID formation. Proposed funding arrangement On March 3, 2009, staff recommended that the Council approve a simpler funding arrangement wherein the remaining costs for PBID formation, less the pdvate funds available, would be funded wholly by the City, with no matching requirement Under stales proposed arrangement, all City funds expanded would be repaid to the City upon successful formation of the PBID and from avallable PBID funds. According to staff's research, such Downtown Fresno PBID March 17, 2008 Page 9 of 6 idingAmpayment arrangement has been a common way for cities to support PBID formation efforts around freta. Staff has not found another example of a city that required private funds to match the city's ribubons to the PBID process, n in the fanner arrangement. Council commit the March 3ltem to today, with direction to staff to return with further details about mntabilify during the PBID formation process. Constituent outreach and accountability are discussed in The funds requested under stag's proposed arrangement (corresponding to ExhlbB A, the amended Grant °unding Agreement( are as follows: Estimated remaining expenses to complete Downtown PBID $100,000 Less remaining available City funding from PBID reserve — 28,170 Less available funding from private donations — 15,691 Additional City funding needed =j51139 The total maximum future Clry outlay consists of the $28,170 In previously authorized City funds, plus the 656,139 in funds requested today, for a roust potential future City outlay of $89,309. Ades from the additional unding needed, staff's request involves a change in policy from a matching -funds arrangement to an maddened, but repayable, funding arrangement. 'allowing the March 3, 2009, Council hearing, the PUMA consultants provided City staff and the. Downtown =resno Partnership win a revised detail of costs (Exhibit Cf. The revision increases the estimated costs from 161900 to $85,000. The Increase ot $15.100 reflects: (a) Additional work by the consultant team's engineer to develop an adequate property owner husband, Including data about publicly owned properties, to support a sufficiently thorough constituent wheach effort and a complete diStra l financing plan. The prior contract total did not account for unexpected flfficukles In fining the necessary data. (I f Additional work by the consultants, and havel to Fresno, to make every effort possible to :ommunicate with the greatest number of property owners during the process at calibrating the business plan o maxlmlze voter support. To date, the consultant team and PBID advocates have had direct conversations vith more than 75 downtown stakeholders and have received survey input from an additional 90, The creased funding allows the team to continue to build on these efforts to reach out to as many stakeholders as Current arrangement Formed arrangement Provides sufficlent funding to complete PBID formaiion Na Vae Maximum future City outlay $28,170 $89,309 Funds repayable to City upon ado tion of PBID $0 $89,309 Funds repayable to City $o $0 if PBID formation falls Fiscal agent Fresno Revlte0zation Fresno Revitalization Corporation Corporation Minimum future private $15691 $15,691 contributions to PBID tormatlon , 'allowing the March 3, 2009, Council hearing, the PUMA consultants provided City staff and the. Downtown =resno Partnership win a revised detail of costs (Exhibit Cf. The revision increases the estimated costs from 161900 to $85,000. The Increase ot $15.100 reflects: (a) Additional work by the consultant team's engineer to develop an adequate property owner husband, Including data about publicly owned properties, to support a sufficiently thorough constituent wheach effort and a complete diStra l financing plan. The prior contract total did not account for unexpected flfficukles In fining the necessary data. (I f Additional work by the consultants, and havel to Fresno, to make every effort possible to :ommunicate with the greatest number of property owners during the process at calibrating the business plan o maxlmlze voter support. To date, the consultant team and PBID advocates have had direct conversations vith more than 75 downtown stakeholders and have received survey input from an additional 90, The creased funding allows the team to continue to build on these efforts to reach out to as many stakeholders as two Fresno PBID 1], 2008 I of Despile the increase In consultant costs, stall has worked with the Downtown Fresno Partnership to ensure that the total estimated amount required to complete the PBID formation process remains at or under $1 W,000, and the amount requested from the Council today remains unchanged from the March 3 hem. Constituent outreach Consistent with the overarching philosophy of the Downtown and Community Revitalization Department. the formation of a Downtown Fresno Property and Business Improvement District (PBID) will continue to be a community -led process. To date numerous Downtown properly owners have both pledged their support of the proposal for a PBID, and contributed funds to support the ongoing district formation process. Severalofihem constituents testified In support of the PBID process at the Match S. 2009. Council hearing on staffs proposed City funding arrangement. If the Council approves today's funding request, the next Mop in the PBID formation process will be a several - month period of more intensive outreach to property owners. These conversations will be driven by the private supporters of the PBID, not City staff, and will be d a decidedly two-way nature. Property owners Converted will have the opportunity to express what level of assessment — and what corresponding level of deliverable services and Improvements — they would support. The business plan for the district will be construct during these conversations to reflect the levels of assessment corresponding to the levels of special bemeNt conte wal that maximize constituent support for PBID fomlalgn. Generally the law requires that property,public (excluding federal) and private. be included within the PBID and assessed in proportion to any special benefit common. The PBID may include zones or areas reflecting these different rates d assessment. The boundaries of the district, including the areas within the district of greater or lesser assessments and dolverables, remain malleable until the final business plan Is issued. During the next four to five weeks, the Downtown Fresno Partnership will be continuing work with the consultant team's engineer to develop a complete Downtown property owner database. Additions to the tlatabase during this period will inform further constituent pohearh, calculation of anticipated assessments an private and public properties, and the eventual district budget for deliverable services and Improvements. The City and Redevelopment Agency will then also have access to this database, which will have Incredible value. as the Department continues to work on other Moralization efforts including specific land use plans, code enforcement. and festivals. Accountability and milestones Assembly Bill 3754 (Chapter 897, Statutes of 1994), the Property and Business Improvement Distinct Law of 1994, set forth Procedures for formation of a Property and Business Improvement District (PBID) In California. This procedure was refined by Proposition 218, a constitutional amendment adopted by CaiBomla voters in 1996 relating to elections for taxes, fees, and assessments. The PBID formation process includes at least three 'Milestones' where staff will be returning to Council to solicit further action. Final, at the end of the upcoming Period of intense constituent contact, a final business plan will be issued thal reflects Me property owner input received. The Council All need to decide whether the City, as a property owner to be assessed, will sign onto the pettion supporting formation of the PBID to implement in the business plan. Council approval of this plan will coincide with the start of petition -gathering among the various private and pudic property owners. Downtown Fresno PBID March 17, 2008 Pape 6 of 6 Second, 9 and when the petition receives support from more than 50% of the property owners, weighted by assessment liability, the City Clerk will accept the petif and the Council will need to adopt a resolution ordering fine Clerk to set a notice/protest public hearing and conduct a ballot process under Proposition 218. Third, the Council will be presented the ballcl results and, absent a majority protest, will be asked to adapt a resolution forming the Downtown Fresno PBID and then contract Mh the nonprofit owners organization to manage the PBID. Although the funds requested ere sufficient to support the entire PBID formation process, funds will only be expended As needed. 6inibit B provides an overview of how and when funds will the needed during the process. At each phase, the Department will approve additional expenditures based on (1) successful canonical of past steps, and (2) an Indicati0n, based on the best available information, that the hard step has a high likelihood of success. The Department looks forwad to the Council reports d each of the above milestones to provide updates on the use of funds, along with the requested policy actions. Stag Is committed to keeping the Council and the community, well Informetl during the entire remaining PSID foothill process. IaFYN_I\I31Jdii Funds are available In the Municipal Restoration Zona Fund In Downtown and Community Revitalization Department's FN2009 budget. it Is noted for Council's Information that if the PBID is not formed more is no mechanism to coped on the loan. Attachments Fxhibrt A— Proposed Amendment No. One to Grant Funding Agreement Fxhibh B — Remaining PBID formation process and funding Fxhibh C — Consultant cost aMdl Exhibit D— Chan of PBIDs In other cities ' 3/Iv/o7 CM orraesrvo 9.36 nan -A aryanM� K, AMENDMENT NO. ONE- TO GRANT FUNDING AGREEMENT Bem,een FRESNO REVITALIZATION CORPORATION, a Califomiermn-profit public benefit corporation ArM CITY OF FRESNO, a Califomia municipal corporation Regarding DOWNTOWN PROPERTY BASED IMPROVEMENT DISTRICT ("PBEY') AND RELATED DELIVERABLES This Amendment No. One to Grant Funding Agreement Regarding Downtown PBID and Related Deliverables ("Amendment') effective as of March 17, 2009 upon its complete execution is entered between FRESNO REVITALIZATION CORPORATION, a California non- profit public benefit corporation ('FRC"'), and the CITY OF FRESNO. a Califomia municipal corporation ("City). Recitals A. City and FRC we parries to a certain March 4. 2008 Gram Funding Agreement Regarding Downtown PBID Consultant Deliverables as assigned, assumed and amended ("Agreement"), incorporated herein by this reference: and B. It is in the public interest to modify The Agreement in carbon regards, upon the terms and conditions herein: and C. On Munch 17, 2019, the Fresno City Council considered and approved this Amendment No. One. Far NOW THEREFORE, in waiderarion ofthe above recitals, which recitals are conhacursl in azure, the mutual promises herein contained, and for other good and valuable consideration hereby acknowledged, the parties agree to the following: 1. The Revised Project Consultant Deliverables, Performance and Payment Schedule including progress payment benchmarks attached as Exhibit A hereto and incorporated herein shall control and take precedence. The FRC, as fiscal agent under the Agreement shall be paid in arrears at the fines and in the amounts provided m Exhibit A. 2. City shag provide additional finding of $56,139, for a mud City funding of $96254, of which the amount of $64,309 shall be a no -interest, no -nu mh loan repayable in the event of formation by the entity acting as the PBID owner's association, solely from lawfully available PBID funds and consistent with the PBID's maagement plan. and substantially consistent with the template assumable Promissory Note to be given by said entity in favor of the City attached as Exhibit B beam and incorporated herein. 3, fir the event of any conflict between the body of this Amendment No. One and any Exhibit or Attachment Income, the terms amW conditions of the body of this Amendment No. One shall control and mice precedence over the Exhibit or Attachment. 4. All capibfized terms used in this Amendment No. One, unless otherwise defined herein, shall have the meanings assigned to such terms iv the Agreement. 5. The City Manager / designee thereof shall be authorized to sign all documents / instruments necessary in pursuit hereof. 2 of7 6. Except as expressly modified and amended hereby, the Agreement shell remain an full force and effect From and after the effective date of this Amendmetn No. One, references in the Agreement to"this Agreement- shell mem the Agreement as hereby amended FRESNO REVITALIZATION CORPORATION a Culifomia nanprofi orpomtion By:� Name: Bryn Forhan Title: President Address: Ph. No. Date: V -F -o9 CRY OF FRESNO a California municipal corporation Name: Andrew T. Sousa Title: CityManager Date: 3 1'20 ,2009 APPROVED AS TO FORM: James Sanchez City Attorney ,J By: Robert IL Coyle, Senior Deputy Date: 4 -1 8 , 2009 ATTEST: Rebecca E. Minch City Clerk ( By: L N\ Depury Date: App:j 9 2009 Atteclunents: Exhibit A- Revised Project ComWtent Deliverables, Performance and Payment Schedule Exhibit B- Template Assumable Promissory Note aaC.m PW+ )rtraw 3of] EXHIBITA Revised Project Consultmn Deliverables, Performance and Payment Schedule Step 1: PRID PeasibUity and Draft Plan Estimated Completion Date Not To Exceed Proforma Cost 3.2 Database VerificatioNRefinement (same) 1.1 Travel and Minket Reconnaissance 30 days form notice to proceed $4000 1.2 Database Development Dome) $7680 1.3 Base Lesel of Services (same) $2280 Step 2: Plan Review & Refinement 3.6 Campaign Assistance (same) 2.1 Travel and Downtown Srakeholder 3.7218 Ballots (same) Outreach 150 days from notice to proceed $13680 2.2 Direct Mail/email Survey (same) $2780 23 Drag PBID Management Plan (same) $10600 2.4 Plan Review Workshops (same) $10240 2.4 Stakeholder Consensus (same) $ 3840 Step S: Petition & Ballot 3.1 Travel, Admin. Engineering & Final Plan 180 days from notice to paned $ 75W 3.2 Database VerificatioNRefinement (same) $2000 3.3 Campaign Training (same) $2000 3.4 PBID Newsletter (same) $3780 3.5 Draft PetifioNCity Review (same) $2000 3.6 Campaign Assistance (same) $3060 3.7218 Ballots (same) $2500 3.8 City Commit Approval (attendance) (some) (hourly rates) Miscellaneous/Ancillary 1.0 MeaWMallings $1283 2.0 Food. Rooms, Materials $3000 3.0 Project Management/Support Staff $8500 4.0 Prin✓Mail Matenals $2212 TOTAL $100000 All payment on 30 days of invoice in arrears for work mmple ed/aceep ed and substantiated costs incurred, per above. 4 of EXHIBIT B Pmmissory Note DO NOT DESTROY THIS NOTE: When paid, this note must he wromelettd in Borrower for Cancellation. Loan Amomn dbf309 Date: 2009 Fresno, California For value received the undersigned entity acting as the PBI) owner's waociatinn, . a California 1_J ("Borrower"), promises to pay to the order of the City of Fresno, a California municipal corporation, ("Lender"), the sum of Eighty Four Thousand Three Hundred Nine Dollars ($84,309), to the excess that such funds are loaned, without interest, and in accordance with the Grant Funding Agreement Regarding Downtown PBID and Related Deliverables, dated Match 4's, 2008, as assigned and amended, between the Fresno ReviWiMakal Corporation as fiscal agent thereunder and Lender. (collectively "Agreemrn['1. with all principal due and payable on or before j_, 20 j ("Maturity Date % on which date the unpaid balance of principal thereon shall be due and payable, along with attorney fees and costs of collection, and without relief fiom valuation and appeasement laws. This assumable Now is payable by Bnmower, solely from lawfully available PBID funds and consistent with the PBID's management plan, and in the amountslm the than provided thereim and said payments continue each successive you aril tM1e Maturity Date, upon which aU principal shall be due and payable. Any failure to make a payment requirN hereunder within ten (Io) days after such payments me due shall constitute a default under the Agreement and this Note. It shall not be a default hereunder if no payment was made because of insufficient lawfully avalable PBID funds in any particular year, provided that any such sbonfall(s) shall be added In succeeding loan payments) as/when due. Additionally any failure to timely submit to Lender PBID financial statements within one hundred eighty (180) days after Lender's reasonable request shall constitute a default under the Agreement and tail Note. All capitalized terms used in this Note, miens otherwise defined, wit have the respective meetings specified in the Agreement. Time is of the essence. It will he a default under this Note if Borrower defaults under the Agreement, or this Note and such default continues beyond a 30 days mfice and cure period. In the event of a default by Borrower wiN respect many sum payable under this Now and the below to ewe such default within 30 days, the Borrower shall pay a late charge equal to the lesser of 2% ofmy outstanding payment or the maximum amount allowed by law. All payments collated shall be applied firsno payment of my colts, fees or other charges due miler this Note and then to principal balance. On the occurrence of an uncured default then, w Ne option of Leader, this Now or my notes or other in comomts that may he taken in reoewnl or extension of =1111 all or any part of the indebtedness will immediately become due without any farther q wnwmLdemand_pro sLornoticeofanykmd. The indebtedness evidenced by this Note may, at the option of the Borrower, be prepaid in whole or in pan without penalty. Lender will apply all the prepayments fiat to the payment of env costs, fees, late charges, or other charges due under Us Note and then to the principal balance. All Loan payments are payable in lawful money of the United States of America at any place that Lender or the legal holders of Ws Note may, from time to time, in writing designate. Borrower agrees to pay all cans including, without limitation, reasonable attorney fees, incurred by the holder of this Now in the successful enforcement ofpeymrnt. whether or not suit is filed, and including, without f itation, all costs. reasonable attorney foes, and expenses incurred by the holder oftbis Note in connection with any bankruptcy, temporization, arrangement, or othm similar proceedings involving the Borrower that in any way affects the exercise by the holder of Us Note of its rights and remedies under this Now. All costs incurred by the holder of this Note in any action undertaken to obtain relief from the nay of bankruptcy statutes are specifically included in those cons and expenses to be paid by Borrower. Any notice, demand, or request relating to any matter act forth herein shall be in writing and shall be given as provided in the Agreement. No delay or omission of Lender in exercising my right or power arising in connection with any default will be contacted as a waiver or as acquiescence, nor will any single or partial exercise preclude my further exercise. Leader may waive my or the conditions in this Note and no waiver will be deemed m be a waiver of Lender's rights under this Note, but rather will be deemed to have been made in parsonage: of this Note and not in modification. No waiver of any default will be construed to be a waiver of or acquiescence w or coruent to any preceding or subArment default. Lender may transfer this Now and the tmmferee will then become vested with all the powers and rights given m Lender; and Leader will then be forever relieved from any liability or responsibility in the matter. If my one or more of the provisions in this Now is held to be invalid, illegal, or unenforceable in my respect by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions will not in my way be affected or impaired. This Note will be binding on and inure to the benefit of Borrower, Lender, and thein respective successors and assigns. Borrower and Lender agree that this Note will be deemed to have been made under and will be governed by the laws of California in all respects, including matters of construction, validity, and performance, and Own none of its wnm or provisions may be waived, altered, modified, or amended except as Lender and Borrower may comms to in awriting duly signed by Borrower or Leader or its audwm dagents. 6 of] This Note shell be nomewmse to Bonower and all its cwatimmt members. The sole recourse of the Lender under the Now shall be legelly, available PBID fonds wnaish nt with the PBID's containment plan, and Lender shall have no right to seek or recover any deficiency amount from Borrower or my partner of Borrower. Without waiver or limitation, the Fresno Revitalionion Corporation is car bound or obligated under this Note absent my express written consent/agreement of the Fresno Revitalization Corporation to act as PBID awaer's association. [COMPLETE THE FOLLOWING IN TITE EVENT OF BOND FINANCING] The indebtedness evidenced by this Note is and shall be subordinate in right of payment to the prior payment in but of all amounts then due and payable (including, but not limited to, all amounts due and payable by virtue of any default or acceleration or upon maturity) with respect to the indebtedness evidenced by [1, dated ar of in the origirW principal amount of S executed by the Borrower mud payable to ("Issuer'), as assigned m (Trustee"), to the extent end m the maunm provided in that terrain L_j Agreement dated as of , among the Lender, the Trustee dnd the Bonower (the `Subordination Agreement'). The rights and remedies of the payee and each subsequent holder of this Note shall he deemed, by virtue of such holder's acquisition of this Note, to have agreed to perform and observe all of the terms, covenants sod conditions to be performed or observed by the "Junior Lender' under the Subordination Agreement. In witcess whereof, Borrower has caused this Promissory Note to be executed as of the date and year first above svrinea FTiTiTl, I a Ca dionia ]� By: Name Title: Date: n. ��� 7of7