Los ANGELES, CALIFORNIA

THE LINCOLN HEIGHTS BUSINESS AND COMMUNITY BENEFIT DISTRICT MANAGEMENT DISTRICT PLAN For a Los Angeles Landscaping, Security, Programming and Maintenance Property Business Improvement District (LSPM PBID) Los ANGELES, CALIFORNIA Final Plan August 30, 2007 Revised April 23, 2008 Presented by New City America, Inc. For the Lincoln Heights Stakeholders Group Councilman Ed Reyes Los Angeles City Clerk's Office 1

TABLE OF CONTENTS Lincoln Heights Business and Community Benefit District Management District Plan formed under the Landscaping, Security Programming and, Maintenance Property Business Improvement District (LSPM PBID) Ordinance of Los Angeles, California CONTENTS Section Number Page Number 1. Management District Plan Summary 3 2. Business and Community Benefit District Boundaries and District Boundary Map 8 3. District 1st Year Budget Division of Special Benefit Services by Category 19 4. Assessment Methodology 23-31 5. District Rules and Regulations 31 6. Implementation Timetable 31 7. Parcel Numbers of Properties Included 32-33 Attachment 1: I. Registered Professional Engineer's Report 34 2

SECTION 1 MANAGEMENT DISTRICT PLAN - EXECUTIVE SUMMARY The name of this proposed assessment district is the Lincoln Heights Business and Community Benefit District. The district is being established pursuant to City of Los Angeles Landscaping, Security, Programming and Maintenance Property Business Improvement District (LSPM PBID) District ordinance, "Division 6 of the Los Angeles Administrative Code, Chapter 9, Sections 6.600 to 6.620". The proposed Lincoln Heights Business and Community Benefit District is located within a "special economic incentive zone" as defined in Division 6 of Los Angeles Administrative Code, Chapter 9, Section 6.601. A "special economic incentive zone" means those areas of the City of Los Angeles which have been previously designated as, or subsequently designated as: Los Angeles Neighborhood Initiative areas (LANI), Targeted Neighborhood Initiative areas (TNI); Transportation Oriented Districts (TOD); or are commercial or industrial census tracts with a poverty level of 20% or higher. In addition, the area has been designated as: a State Enterprise Zone, a Housing and Urban Development Low and Moderate Census Tract and is eligible for Community Development Block Grant funding. The district qualifies for the LSPM PBID ordinance due to the fact that its census tracts are at a poverty level of 20% or higher, according to the 2000 Census. The particular census tract numbers 199201, 199202, 199700, 199800, and 199900 each have an individual poverty status of 20 percent or higher. Developed by the Lincoln Heights Stakeholders Group - this LSPM PBID Management District Plan will convey special benefits to commercially zoned properties located within the boundaries of the Lincoln Heights business district. The proposed new Lincoln Heights Business and Community Benefit District - LSPM PBID will provide new improvements and activities, including maintenance and cleaning, security, and other special programs within the district boundaries. The proposed Lincoln Heights Business and Community Benefit District - LSPM PBID will improve the District's image, attract new customers to their businesses, increase sales and increase occupancies for the commercial property owners in the District. The City of Los Angeles (LA), is a major property owner in the proposed district. The City of LA parcels will be deriving special benefits since the peripheral cleaning of parking lots will attract more visitor and vehicular traffic which creates additional parking revenue for the City. The additional parking revenues will yield greater sales tax revenues which will in turn provide greater economic prosperity for the area. In addition, the current base level of services that exists in and around the City parcels will be supplemented by the new proposed special benefits district and will ensure a system of cleanliness, beautification and reduction of criminal activity around many of these vacant or underutilized City owned parcels. Only special benefits can be assessed and the payment by the City of LA into the Lincoln Heights LSPM PBID will convey a cleaner, more attractive and inviting parking experience to visitors to the shopping areas. 3

Boundaries: LSPM PBID. The following text will define the new boundaries of the proposed Lincoln Heights General Description of the Proposed Boundaries: Parcels on the major commercial corridors of Lincoln Heights including the City owned parcels, the Los Angeles Unified School District parcels and the commercially zoned parcels as follows: All parcels on both sides of North Broadway running northeast from the Los Angeles Downey Recreation Center to Lincoln Park. Gates Street Elementary School and Lincoln High School, owned by the Los Angeles Unified School District (LAUSD) will be included in a special benefit zone due to the fact that the Los Angeles Unified School district has a fenced in parcel and provides a system of cleanliness and security within the borders of their parcels and attendance is compulsory. The LAUSD parcels along North Broadway will be assessed for their linear frontage along North Broadway only in order to fund the special benefit services for enhanced sidewalk sweeping, graffiti removal, enhanced trash emptying and beautification programs implemented along the Benefit Zone 1 parcels on North Broadway. The parcels surrounding Gates Street Elementary on North Broadway and across the street from Lincoln High School do not have a system of cleanliness, beautification and security due to their private ownership and these property owners have expressed the desire to be included in this special benefits district; All parcels within the area bounded by the east side of North Broadway on the east, Interstate 5 (from Pasadena Avenue to North Broadway) on the north, the Los Angeles River on the south and the west side of Pasadena Avenue the west, All of the parcels found at the historic Five Points area; (the intersection of Pasadena Avenue, Avenue 26, Daly Street intersection); All parcels along the east side of Avenue 26, running northeast from the Five Points intersection, the Lincoln Heights Public Library, inclusive (northeast corner of Workman and Avenue 26); The Lincoln Heights Public Library has been included in the District due to the fact that the general benefits it currently receives from the City of Los Angeles are not adequate to maintain the sidewalks and trash pick up at a level consistent with its intense use. The Library is included since it is an extension of the Five Points commercial corridor and has historically been associated with the commercial parcels in Lincoln Heights. The three commercially zoned corners which include the Library site at Avenue 26 and the south side corners of Avenue 26 and Workman Street are included in the district, the northwest corner is not included in the district due to its residential land use and its exclusion from traditional commercial corridors of Lincoln Heights. The houses on the same side of the block as the Library, running north from the Library have not been included due to their residential land use and will not receive special benefits. The single family and residentially zoned parcels on Workman Street from the Library to North Broadway have been exempted from assessments due to the fact that the proposed LSPM PBID is a commercially zoned special benefits district and not one which will deliver special benefit services to the residentially zoned parcels in Lincoln Heights. All parcels along Daly Street from the Pasadena Avenue/Avenue 26 intersection to the west side corners of Manitou Avenue two blocks southeast of the Daly StreeVNorth Broadway intersection; All parcels along Pasadena Avenue from the north side of the Lincoln Heights Bridge (over the Los Angeles River) to the Five Points intersection, inclusive of all of the parcels fronting on the Five Points intersection; 4

Budget: There are four basic categories of special benefit services that will be funded with this new Lincoln Heights LSPMPBID: 1. Sidewalk Operation and, Beautification; This category of special benefits includes, but is not limited to this includes all sidewalk cleaning services, graffiti removal, security services, and management and beautification of the sidewalks in the proposed District; 2. District Identity (Marketing and Promotions) 3. Administration and Corporate Operations 4. Contingency/City Fees/Reserve The first year budget for the Lincoln Heights LSPMPBID will be $ 599,083.00. The budget can be adjusted annually as follows: Annual cost of living adjustments not to exceed 5% are allowable within this Management District Plan, and if implemented by the owners association, may also contribute to the increase in budget from year to year. Source or Method of Financing and Benefit Zones: The basis of funding shall be through special benefit assessments levied on real property throughout the District through the use of various assessment methodologies employed through Benefit Zones. There shall be three Benefit Zones within the proposed Lincoln Heights LSPMPBID. The Benefit Zones have been created due to the different type and frequency of special benefit services that will be delivered to each of the respective areas. Linear foot frontage will be assessed on all sides of each benefiting parcel except in the parcels owned by the Los Angeles Unified School District, which will be assessed only along the frontage bordering North Broadway. Benefit Zone 1 in general, shall consist of all of the parcels on each side of North Broadway on the northeast side of the Interstate 5 freeway up to Lincoln Park, (excluding the Lincoln High School site). In addition, Benefit Zone 1 parcels shall include those along Daly Street from Manitou Avenue to the Five Points Intersection, inclusive of the Lincoln Heights Library, (Pasadena Avenue, Daly Street and Avenue 26). Benefit Zone 2 shall consist of all of the parcels not included in Benefit Zones 1 and 3, including those parcels between Interstate 5 and the Los Angeles River, as well as those not fronting along North Broadway, Daly Street, or the 5 points intersection (in Benefit Zone 1). Benefit Zone 3 shall include the parcels owned by the LAUSD (Gates Elementary and Lincoln High School). The LAUSD parcels will be assessed only along the North Broadway frontage since these parcels are fenced in, provide their own security and their own system of cleanliness provided by the LAUSD personnel. Benefit Zone 3 parcels will fund enhanced sidewalk sweeping, trash removal, graffiti removal and beautification programs only. 5

City owned and Los Angeles Unified School District parcels shall not pay for "District Identity" special benefits in the proposed Lincoln Heights LSPM PBID. Single family residential units built on commercially zoned parcels are assessed as a separate category. These single family residential units and/or condos, if any, will be assessed for their building square footage only at the rate of $.30 per square foot per year, commencing the first year of the district. The rationale for this assessment of building square footage rate only, regardless of Benefit Zone, is provided below. Single family residential units are assessed differently than multi-unit apartment buildings due to their land use. The multi-unit apartment buildings are commercial properties in which the tenant and landlord have a business relationship. They are required to have a business license to operate in the City of Los Angeles and these residential apartment buildings can be bought or sold just as commercial buildings can be bought and sold. Single family residential units or individual condo owners have a different relationship in the District as compared to retail or commercial land uses. These are the parcel owners which will use the sidewalks 7 days per week, at odd hours of the day. They will live and may work in the District. Residents will receive benefits from clean and safe special benefit services but not other programs designed to attract and retain businesses. These single family residential units will be assessed at a building square footage rate only, similar to the fixed rate property variables (lot size, linear frontage and lot size) assessments for non-single family residential units. The main difference is that single family residential unit parcel owners are only assessed for their parcel building square footage, not linear frontage nor lot size. Ground floor commercial or retail condominiums or parcels will be assessed consistent with the assessment methodology used for other commercial parcels. 6

Projected Annual Costs for First Year of the Lincoln Heights LSPM PBID by Benefit Zone: Table 1-A Single Family Linear Frontage Lot Square Building Square Residential Parcels - Benefit First Year Annual Footage First Year Footage First Year Annual Cost per Zone Costs Annual Costs Annual Costs square foot of buildin s ace 1 $ 0.30 3 $10.00 $ 0.00 $ 0.00 First Year Annual Budget: The first year annual budget is estimated to be $ 599,083.00 Cap: An annual Cost of Living Adjustment shall be allowable in the district. As approved by the Board of Directors of the Owner's Association, the management corporation shall have the option to increase the annual assessment rates based upon the Los Angeles County Consumer Price Index, or an amount not to exceed 5% (five per cent) per year. Any determination of an annual increase will be communicated in writing to the City Clerk's Office in the Annual Planning Report of each year. District Formation: District formation requires submission of petitions from property owners representing at least 30% of the total weighted assessments. Once the petitions have been submitted to the City Clerk's office, the Los Angeles City Council will adopt an Ordinance of Intention to establish the district and mail out ballots to all affected property owners. The district is formed if the weighted majority of returned ballots support the district formation. Duration: The district shall have a ten year term which shall commence on January 1, 2009 and expire on December 31, 2018. Governance: The Owner's Association, as defined by Ordinance No. 173167 amending Los Administrative Code Chapter 9, Sections 6.600 to 6.620 will review the District Budget and policies annually within the limitations of the Management District Plan as defined in Section 6.616 of Chapter 9 of the Administrative Code. Annual and quarterly reports will be filed with the City Clerk's office. An Owners' Association may contract with the City of Los Angeles to implement the improvements and activities and oversee the day-to-day implementation of the Management District Plan as well as submit recommendations to the City on issues including the annual budget and work plan. 7

Section 2 Business and Community Benefit District Boundaries and District Boundary Map Boundaries: Heights LSPMPBID. The following text will define the new boundaries of the proposed Lincoln General Description of the Proposed Boundaries: Parcels on the major commercial corridors of Lincoln Heights including the City owned parcels, the Los Angeles Unified School District parcels and the commercially zoned parcels as follows: All parcels on both sides of North Broadway running northeast from the Los Angeles Downey Recreation Center to Lincoln Park. Gates Elementary School and Lincoln High School, owned by the LA Unified School District will be included in a special benefit zone due to the fact that the Los Angeles Unified School district has a fenced in parcel and provides a system of cleanliness and security within the borders of their parcels. The LAUSD parcels along North Broadway will be assessed for their linear frontage along North Broadway only in order to fund the special benefit services for enhanced sidewalk sweeping, graffiti removal, enhanced trash emptying and beautification programs implemented along the Benefit Zone 1 parcels on North Broadway. The parcels surrounding Gates Elementary on North Broadway and across the street from the High School do not have a system of cleanliness, beautification and security due to their private ownership and these property owners have expressed the desire to be included in this special benefits district; All parcels within the area bounded by the east side of North Broadway on the east, Interstate 5 (from Pasadena Avenue to North Broadway) on the north, the Los Angeles River on the south and the west side of Pasadena Avenue the west, All of the parcels found at the historic Five Points area; (the intersection of Pasadena Avenue, Avenue 26, Daly Street intersection); All parcels along the east side of Avenue 26, running northeast from the Five Points intersection, the Lincoln Heights Public Library, inclusive (northeast corner of Workman and Avenue 26); The Lincoln Heights Public Library is included because the City cannot keep up with the intense services required by the increasing commercial traffic in the area needed to maintain the sidewalks and trash. The Library is included since it is an extension of the Five Points commercial corridor and has historically been associated with the commercial parcels in Lincoln Heights. The three commercially zoned corners which include the Library site at Avenue 26 and the south side corners of Avenue 26 and Workman Street are included in the district, the northwest corner is not included in the district due to its residential land use and its exclusion from traditional commercial corridors of Lincoln Heights. The houses on the same side of the block as the Library, running north from the Library have not been included due to their residential land use and will not receive special benefits. The single family and residentially zoned parcels on Workman Street from the Library to North Broadway have been exempted from assessments due to the fact that the proposed LSPM PBID is a commercially zoned special benefits district and not one which will deliver special benefit services to the residentially zoned parcels in Lincoln Heights. 8

All parcels along Daly Street from the Pasadena Avenue/Avenue 26 intersection to the west side corners of Manitou Avenue two blocks southeast of the Daly Street/North Broadway intersection; All parcels along Pasadena Avenue from the north side of the Lincoln Heights Bridge (over the Los Angeles River) to the Five Points intersection, inclusive of all of the parcels fronting on the Five Points intersection; Table 2 A Streets and Address Series for Parcels included in the proposed Lincoln Heights Business and Community Benefit District The following chart has been included to make it easier for property owners in the proposed district to identify their parcels. street Address Series S. Avenue 17 9

Table 2- B Street and intersection locations of parcels in the district described in the narrative on page 8 and 9 Street Sides Street From To Just East of N. Broadwa Just West of Pasadena Avenue Barranca Street Mid-block just West of Pasadena Avenue Both Workman Street Manitou Avenue 10

>. :of::::! rj) c...- ::::l..c E W C).- E c 0 Q) 0 w 0 0-0... I "0 0 d) c.w c ~ 0 -a w C d) N I(t') ~ 0 0 N N ~ u:: u:: C ro 1D N...... o co d) ffi.- C.- c...j w ::::l co (J) c c co d) d) d) co c d) co

BREAKDOWN OF PROPERTY VARIABLES AND REVENUE BY BENEFIT ZONE Current Database for Lincoln Heights LSPM PBID: Benefit Zone Linear Frontage Total Table 2 C Lot Square Footage Total Building Square Footage Total Single Family Resident Parcels Number of Units 983 linear feet 37,823 linear feet Amount Generated by Property Variable and Benefit Zone for Lincoln Heights LSPM PBID Linear Frontage Benefit Zone Total 1 $198,578.00 $ 82,344.00 $ 9,830.00 Table 2 D Lot Square Footage Total $187,924.00 Building Square Footage Total $ 46,400.00 Total by Benefit Zone $ 432,902.00 TABLE2 E LIST OF PARCELS DIVIDED BY THREE BENEFIT ZONES BENEFIT ZONE APN SITE ADDRESS 1 5204001001 2129 North Broadway 1 5204001002 2127 North Broadway 1 5204001003 2119 North Broadway 1 5204001004 2115 North Broadwav 1 5204001005 North Broadway 1 5204002019 2205 North Broadwav 1 5204002029 2207 North Broadway 1 5204002030 2215 North Broadwav #b 1 5204002036 2201 North Broadway 1 5204002038 163 South Avenue 24 1 5204003020 2511 Daly Street 12

1 5204003022 2500 Pasadena Avenue 1 5204003800 South Avenue 24 1 5204004001 2407 Daly Street 1 5204004002 2421 North Broadwav 1 5204004003 2421 Dalv Street 1 5204004004 2419 Daly Street 1 5204004005 2423 Daly Street 1 5204004006 2425 Daly Street 1 5204004013 2401 North Broadwav 1 5204004014 2409 North Broadwav 1 5204004015 2411 North Broadwav 1 5204004016 2417 North Broadway 1 5204004017 2419 North Broadway 1 5204004803 Dalv Street 1 5204004900 Dalv Street. 1 5204004901 154 South Avenue 24 1 5204005003 2426 North Broadway 1 5204005004 2422 North Broadway 1 5204005005 2416 South Broadwav 1 5204005006 2414 North Broadwav 1 5204005007 2412 North Broadway 1 5204005009 2335 Daly Street 1 5204005011 2333 Daly Street 1 5204005014 2329 Daly Street 1 5204005015 228 South Avenue 24 1 5204005022 2301 Daly Street 1 5204005032 2309 Daly Street 1 5204005034 2400 North Broadway 1 5204005036 2323 Daly Street 1 5204005901 216 South Avenue 24 1 5204006001 2214 North Broadway 1 5204006002 2200 North Broadway 1 5204006007 2122-2126 North Broadway 1 5204006008 2116 North Broadway 1 5204006034 2108 North Broadway 1 5204006900 South Avenue 22 1 5204011 001 2626 North Broadway 1 5204011002 2618 North Broadway. 1 5204011 003 2612 North Broadway 1 5204011004 2606 North Broadway 1 5204011005 Daly Street 1 5204011 006 2600 North Broadway 1 5204011 903 Daly Street 1 5204012002 2619 North Broadwav 1 5204012003 2615 North Broadway 1 5204012004 2601 North Broadway 1 5204012010 2422 Daly Street 1 5204012012 2428 Daly Street 13

1 5204012014 2432 Daly Street 1 5204012018 2440 Daly Street 1 5204012019 2625 North Broadway 1 5204012900 Daly Street 1 5204013001 2532 Daly Street 1 5204013002 2526 Daly Street 1 5204013003 2516 Daly Street 1 5204013004 2510 Daly Street 1 5204013005 2502 Daly Street 1 5204013006 2470 Daly Street 1 5204013007 2535 Workman Street 1 5204013017 2450 Daly Street 1 5204013801 Daly Street 1 5204013802 Daly Street 1 5204014900 Workman Street 1 5204015001 2729 North Broadway 1 5204015002 2411 Sichel Street 1 5204015003 2723 North Broadway 1 5204015004 2719 North Broadway 1 5204015005 2711 North Broadway 1 5204015006 2707 North Broadway 1 5204015007 2701 North Broadway 1 5204015901 2416 Workman Street 1 5204016001 2730 North Broadway 1 5204016002 2712 North Broadway 1 5204016003 2708 North Broadway 1 5204016004 2700 North Broadway 1 5204016005 2339 Sichel Street 1 5204016900 Workman Street 1 5204016901 Workman Street 1 5204020002 2334 Sichel Street 1 5204020003 2814 North Broadway 1 5204020022 2822 North Broadway 1 5204021003 2819 North Broadway 1 5204021004 2813 North Broadway 1 5204021005 2807 North Broadway 1 5204021006 2801 North Broadway 1 5204021029 2829 North Broadway 1 5204023002 2927 North Broadway 1 5204023003 2919 North Broadway 1 5204023004 2913 North Broadway 1 5204023025 2901 North Broadway 1 5204023026 2929 North Broadway 1 5204024001 2924 North Broadway 1 5204024003 2920-22 North Broadway 1 5204024004 2910 North Broadway 1 5204024005 2900 North Broadway 1 5205020003 2617 Pasadena Avenue. 14

1 5205020004 2613 Pasadena Avenue 1 5205020005 2601 Pasadena Avenue 1 5205020028 2621-2625 Pasadena Avenue 1 5205020029 2621-2625 Pasadena Avenue 1 5205020030 135 West Avenue 26 1 5205020032 2625 Pasadena Avenue 1 5205021001 2601 Workman Street 1 5205021002 111 East Avenue 26 1 5205021003 2610 Pasadena Avenue 1 5205021004 2603 Workman Street 1 5205022002 2515 Pasadena Avenue 1 5205022003 116 West Avenue 26 1 5205022004 2511 Pasadena Avenue 1 5205022005 2501 Pasadena Avenue 1 5205022012 128 West Avenue 26 1 5205022031 124 West Avenue 26 1 5205022032 2521 Pasadena Avenue 1 5208003002 3031 North Broadway 1 5208003006 3001 North Broadway 1 5208003025 3009 North Broadwav 1 5208003026 North Broadway 1 5208004002 3016 North Broadway 1 5208004003 3010 North Broadway 1 5208004004 3008 North Broadwav 1 5208004005 3000 North Broadwav 1 5208004027 3026 North Broadway 1 5208005003 3114-3116 North Broadway 1 5208005004 3110 North Broadwav 1 5208005005 3100 North Broadwav 1 5208005025 3130 North Broadway 1 5208006001 2409 Eastlake Avenue 1 5208006002 3125 North Broadway 1 5208006003 3121 North Broadway 1 5208006033 3105 North Broadwav 1 5208009006 3231 North Broadway 1 5208009023 3201 North Broadway 1 5208009024 3215 North Broadway 1 5208010002 3214 North Broadway 1 5208010003 3220 North Broadwav 1 5208010004 3224 North Broadway 1 5208010005 3230 North Broadway 1 5208010025 3200 North Broadway 1 5208011008 3300 North Broadway 1 5208012001 3331 North Broadway 1 5208012002 3325 North Broadway 1 5208012003 3319 North Broadway 1 5208012004 3315 North Broadway 1 5208012005 3307 North Broadwav 15

1 5208012006 3303 North Broadway 1 5208030001 3414 North Broadway 1 5208030002 3406 North Broadway 1 5208030003 3400 North Broadway 1 5208030017 3418 North Broadway 1 5208030018 3422 North Broadway 1 5208030019 3432 North Broadwav 1 5208031 002 3510 North Broadway 1 5208031 032 3500 North Broadway 1 5208031034 3520 North Broadway 1 5208031900 North Broadwav 2 5204002013 2222 Pasadena Avenue 2 5204002014 2218 Pasadena Avenue 2 5204002015 2214 Pasadena Avenue 2 5204002016 2206. Pasadena Avenue 2 5204002018 2204 Pasadena Avenue 2 5204002034 2200 Pasadena Avenue 2 5204002900 Pasadena Avenue 2 5204003014 2310 Pasadena Avenue 2 5205023003 2311 Pasadena Avenue 2 5205023004 2301 Pasadena Avenue 2 5205023043 Pasadena Avenue 2 5205023045 ~17415 Pasadena Avenue 2 5205023046 403 Pasadena Avenue 2 5205024001 2229 Pasadena Aven ue 2 5205024003 2219 Pasadena Avenue 2 5205024009 2213 Pasadena Avenue 2 5205024013 2225 Pasadena Avenue 2 5447012015 154 North Avenue 21 2 5447012019 140 North Avenue 21 2 5447014001 2001 Pasadena Avenue 2 5447014002 108 North San Fernando Road 2 5447014003 110 North San Fernando Road 2 I 5447014004 2011 Pasadena Avenue 2 5447014009 117 North Avenue 21 2 5447014010 121 North Avenue 21 2 5447014011 127 North Avenue 21 2 5447014012 131 North Avenue 21 2 5447014013 137 North Avenue 21 2 5447014020 158 North San Fernando Road 2 5447014023 140 North San Fernando Road 2 5447014024 138 North San Fernando Road 2 5447014025 136 North San Fernando Road 2 5447014026 122 North San Fernando Road 2 5447014027 118 North San Fernando Rd #20 2 5447014028 114 North San Fernando Road 2 5447014036 2031 Pasadena Avenue 2 5447014037 2019 Pasadena Avenue 16

2 5447014038 141 North Avenue 21 2 5447014040 154 North San Fernando Road 2 5447015901 140 North Avenue 19 2 5447018002 152 North Avenue 18 2 5447018003 1801 Pasadena Avenue 2 5447018004 155 North Avenue 19 2 5447018800 Pasadena Avenue 2 5447018900 1831 Pasadena Avenue 2 5447018901 South Avenue 19 2 5447019001 North Avenue 18 2 5447019002 147 North Avenue 18 2 5447019003 143 North Avenue 18 2 5447019004 137 North Avenue 18 2 5447019005 101 North Avenue 18 2 5447019007 1795 Pasadena Avenue 2 5447019008 1795 Pasadena Avenue 2 5447020006 1721 North Broadwav 2 5447020900 North Broadwav 2 5447020901 1771 North SprinQ Street 2 5447021 001 1823 North Broadway 2 5447021 002 147 South Avenue 19 2 5447021 016 120 South Avenue 18 2 5447021 018 115 South Avenue 19 2 5447021 019 South Avenue 18 2 5447021 022 1800 Pasadena Avenue 2 5447021 023 1800 Pasadena Avenue 2 5447021026 117 South Avenue 19 2 5447021027 126 South Avenue 18 2 5447021028 1821 North Broadway 2 5447022002 1919 North Broadway 2 5447022003 1915 North Broadway 2 5447022004 1909 North Broadway 2 5447022005 1901 North Broadwav 2 5447022007 140 South Avenue 19 2 5447022009 134 South Avenue 19 2 5447022010 132 South Avenue 19 2 5447022019 107 South Avenue 20 2 5447022022 1930 Pasadena Avenue 2 5447022023 1918 Pasadena Avenue 2 5447022027 1931 North Broadway 2 5447022028 118 South Avenue 19 2 5447022030 1902 Pasadena Avenue 2 5447023010 2020 Pasadena Avenue 2 5447023018 2001 North Broadway 2 5447023019 136 South Avenue 20 2 5447024001 1930 North Broadwav 2 5447024002 1922 North Broadwav 2 5447024003 1920 North Broadway 17

2 5447024004 North Broadway 2 5447024005 1918 North Broadway 2 5447024006 1908 North Broadway 2 5447024007 200 South Aven ue 19 2 5447024008 215 South Avenue 20 2 5447024029 202 South Avenue 20 2 5447024030 North Avenue 20 2 5447025001 1830 North Broadway 2 5447025004 1824 North Broadway 2 5447025005 1822 North Broadwav 2 5447025006 1818 North Broadway 2 5447025007 1814 North Broadway 2 5447025008 1812 North Broadway 2 5447025009 1804 North Broadway 2 5447025010 1800 North Broadwav 2 5447026001 1796 North Spring Street 2 5447026002 1786 North Sprinq Street 2 5447026021 1782 North sonno Street 2 5447026900 North Sorino Street 2 5447026901 219 South Avenue 18 2 5447026902 223 South Avenue 18 2 5447027004 North Sprinq Street 2 5447027008 235 South Avenue 17 3 5208011 901 3333 Manitou Avenue 3 5208011902 3333 Manitou Avenue 3 5208011903 3333 Manitou Avenue 3 5208011904 3333 Manitou Avenue 3 5208011905 3333 Manitou Avenue 3 5208026903 3501 North Broadway 18

SECTION 3 DISTRICT IMPROVEMENT AND ACTIVITY PLAN The summary of the 2009-10 operating budget for the Lincoln Heights LSPM PBID including the ten year projection, is provided on page 23. Table 3-A PROGRAM OR ACTIVITY FUNDED BY lincoln HEIGHTS BUSINESS AND COMMUNITY BENEFIT DISTRICT ESTIMATED ANNUAL COSTS (FIRST YEAR) District Identity 19

Lincoln Heights Business and Community Benefit District Allocation/Costs by Category 15% 66% l1li Sidewalk Operations and Beautification $395,395.00 66% l1li District Identity (OI) $53,918.00 9% Administrative /Corporate Operations $89,862.00 15% l1li Contingency/Reserve $59,908.00 10% IlllTOTAL: $599,083.00 20

DIVISION OF SPECIAL BENEFIT SERVICES By CATEGORY Explanation of Special Benefit Service Plan Components: The Lincoln Heights LSPM PBID Steering Committee has prioritized the following categories of special benefit services for the new district. The categories of special benefit services provide enough clarity to property owners to understand the intent of the budget category, however give the Owners' Association the flexibility its needs to allocate the services based upon the changing needs of the district from year to year within each budgeted category. The following category of special benefit services shall only be provided to parcels within the district. The frequency of those services is determined by their respective benefit zone. The service provider shall allocate the special benefit services based upon the assessments generated in each Benefit Zone. The percentages listed in Table 3 A, coupled with the assessments generated per Benefit Zone listed in Table 2 D shall guide the allocation of special benefit services per Benefit Zone. For example, 66% of Benefit Zone 1's revenues would be allocated to fund the special benefit services listed in the Sidewalk Operations and Beautification component of the services plan. In this specific case, 66% of the $ 432,902.00 generated in Benefit Zone 1 equals $285,715.00, and that amount would be allocated for this component. The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. (See page 26) SIDEWALK OPERATIONS AND BEAUTIFICATION: $ 395,395.00 Examples of these special benefit services and costs include, but are not limited to: o Private security over and above those services currently provided by the Los Angeles Police Department; o Regular sidewalk and gutter sweeping, o Regular sidewalk steam cleaning o Spot steam cleaning as necessary o Beautification o Enhanced trash emptying o Removal of bulky items as necessary o Graffiti removal, within 24 hours as necessary o Tree and vegetation maintenance o Parking assistance; o Maintenance personnel and supervisor/oversight costs The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. (See Page 26) DISTRICT IDENTITY $ 53,918.00 Examples of these special benefit services and costs include, but are not limited to: o Special events o Marketing and Promotions strategies o Holiday decorations 21

o o o Web site development and maintenance Advertising Communications The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. ADMINISTRATION AND CORPORATE OPERATIONS: $ 89,862.00 Examples of these special benefit services and costs include, but are not limited to: o Staff and administrative costs o Insurance o Office related expenses o Financial reporting The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. CONTINGENCylCITY FEES/RESERVE: $ 59,908.00 Examples of these special benefit services and costs include, but are not limited to: o Delinquencies' o City Fees" o Reserves'" 'Reserve for Slow Payments: A percent of the budget is held in reserve to offset delinquent and/or slow payment from both public and private properties. "City Fees: Assessments are budgeted in order to fund the expenses charged by the City of Los Angeles and County of Los Angeles for collection and distribution of LSPM PBID revenue. This line item expense shall be found in the "Contingency/City Fees/Reserve" portion of the budget. "'Reserves: Reserves are budgeted for those funds that remain from the 10% set aside, that are over and above those that have not been collected and are over and above the city fees. These reserves shall be carried forward from year to year, or may be reallocated to the designated budgetary categories found within the Management District Plan. Ten Year Operating Budget: A projected ten-year operating budget for the Lincoln Heights LSPM PBID is provided on Page 23. The projections are based upon the following assumptions: Assessments will be subject to changes in the Los Angeles County Consumer Price Index (CPI), with annual increases not to exceed 5% per year. Increases will be determined by the Owners Association and in no case shall annual increases exceed 5% per year, nor shall they exceed the actual CPI increase in a given year. Assessments for specific programs may be reallocated from year-to-year among District activities within a 10% range within each budget line item and may not exceed 10% of the total 22

budget for all programs and activities. Changes based upon District needs and changed services must be approved by the Los Angeles City Council, I Ten Year Projection of Maximum Assessment for the Lincoln Heights LSPMPBID Table3-B Continuation of Budget & Assessments As per the LSPM PBID Ordinance: Assessments for the maintenance of improvements constructed by the District, if any, shall continue to be levied on each parcel of land within the District for a period of time equal to the useful life of improvement, as determined by the City Clerk, regardless of whether the District is disestablished or the term of the original levy has expired. This budget does not fund any construction of improvements by the District. Bonds: No bonds will be issued in this proposed district. SECTION 4 ASSESSMENT METHODOLOGY The recommended methodology for the Lincoln Heights LSPM PBID employs the following property variables in funding the special benefit assessments: building square footage, lot size, linear frontage, building use and benefit zone and a building square footage rate for single family residential units. See Attachment I, the Assessment Engineers Report, for a complete analysis of the assessment methodology. 23

Calculation of Assessments The proportionate special benefit derived by each identified parcel shall be determined in a relationship to the entirety of the improvement or the maintenance and operation expenses of an improvement or for the cost of property service being provided. Per California Constitutional Amendment Article XIII D, Section 2(i), 'Special Benefit', means a particular and distinct benefit over and above general benefits conferred on a real property located in the district or to the public at large. No assessment shall be imposed on any parcel, which exceeds the reasonable cost of the proportional special benefits conferred upon that parcel. Only special benefits are assessable and these benefits must be separated from any general benefits. A general benefit is defined as a benefit to properties in the surrounding community or a benefit to the public in general resulting from improvement, activity or service to be provided by the assessment levied. The special benefits funded by this new District will be over and above existing City of Los Angeles baseline service levels in the commercially zoned parcels and will serve to increase tenancies, increase commerce, increase economic viability and fund a system of cleanliness and beautification over and above current service levels. All General Benefits (if any) to the surrounding community and general public are intangible and not able to be quantified. All benefits derived from the assessment outlined in the Management District Plan (MDP) fund only services directly benefiting the property owners in this specialized District in maintenance and security, as well as increased commerce and all the other goals and objectives of the Lincoln Heights LSPM PBID's purpose. Properties are assessed as defined on the county assessor's most current parcel maps. The preceding methodology is applied to the database of parcels within the District. The process for compiling the property database includes the following steps: A report was submitted to the City Clerks office using the data obtained from the County of Los Angeles Assessors office. The City Clerk reviewed the report. A list of properties to be included within the Lincoln Heights LSPM PBID is provided in section 7. The basis of funding shall be through special benefit assessments levied on real property throughout the District. Benefit Zones: The basis of funding shall be through special benefit assessments levied on real property throughout the District through the use of various assessment methodologies employed through Benefit Zones. There shall be three Benefit Zones within the proposed Lincoln Heights LSPM PBID. The Benefit Zones have been created due to the different type and frequency of special benefit services that will be delivered to each of the respective areas. Linear foot frontage will be assessed on all sides of each benefiting parcel except in the parcels owned by the Los Angeles Unified School 24

District, which will be assessed only along the frontage bordering North Broadway and commercially zoned residential units. Benefit Zone 1 in general, shall consist of all of the parcels on each side of North Broadway on the northeast side of the Interstate 5 freeway up to Lincoln Park, (excluding the Lincoln High School site). In addition, Benefit Zone 1 parcels shall include those along Daly Street from Manitou Avenue to the Five Points Intersection, inclusive of the Lincoln Heights Library, (Pasadena Avenue, Daly Street and Avenue 26). Benefit Zone 2 shall consist of all of the parcels not included in Benefit Zones 1 and 3, including those parcels between Interstate 5 and the Los Angeles River, as well as those not fronting along North Broadway, Daly Street, or the 5 points intersection (in Benefit Zone 1). Benefit Zone 3 shall include the parcels owned by the LAUSD, (Gates Street Elementary and Lincoln High School). The LAUSD parcels will be assessed only along the North Broadway frontage since these parcels are fenced in, provide their own security and their own system of cleanliness provided by the LA Unified School District personnel and attendance is compulsory. Benefit Zone 3 parcels will fund enhanced sidewalk sweeping, trash removal, graffiti removal and beautification programs only. City owned and Los Angeles Unified School District parcels will not benefit from and shall not pay for "District Identity" special benefits in the proposed Lincoln Heights LSPM PBID._District Identity services are geared to enhance commercial businesses in the District. Single family residential units built on commercially zoned parcels are assessed as a separate category. These single family residential units and/or condos, if any, will be assessed for their building square footage only at the rate of $. 030 per square foot per year, commencing the first year of the district. The rational for this assessment of building square footage rate only, regardless of Benefit Zone, is provided below. Single family residential units are assessed differently than multi-unit apartment buildings due to their land use. The multi-unit apartment buildings are commercial properties in which the tenant and landlord have a business relationship. They are required to have a business license to operate in the City of Los Angeles and these residential apartment buildings can be bought or sold just as commercial buildings can be bought and sold. Single family residential units or individual condo owners have a different relationship in the District as compared to retail or commercial land uses. These are the parcel owners which will use the sidewalks 7 days per week, at odd hours of the day. They will live and may work in the District. Residents will receive benefits from clean and safe special benefit services but not other programs designed to attract and retain businesses. These single family residential units will be assessed at a building square footage rate only, similar to the fixed rate property variables (lot size, linear frontage and lot size) assessments for non-single family residential units. The main difference is that single family residential unit parcel owners are only assessed for their parcel building square footage, not linear frontage nor lot size. Ground floor commercial or retail condominiums or parcels will be assessed consistent with the assessment methodology used for other commercial parcels. 25

Projected Annual Costs for First Year of the Lincoln Heights LSPM PBID by Benefit Zone: Table 4- A Single Family Linear Frontage Lot Square Building Square Residential Parcels - Benefit First Year Annual Footage First Year Footage First Year Annual Cost per Zone Costs Annual Costs Annual Costs square foot of building space 1 $10.00 $0.10 $0.05 $ 0.30 2 $ 5.00 $0.03 $0.03 $ 0.30 3 $10.00 $0.00 $0.00 $ 0.00 Database for Lincoln Heights LSPM PBID: Table 4- B Benefit Linear Frontage Lot Square Building Square Single Family Zone Total Footage Total Footage Total Residents - Number of Units 1 20,504 linear feet 1,902,261 sq. ft. 929,889 sq. ft. 0 2 16,792 linear feet 1,778,144 sq. ft. 742,968 sq. ft. 3 3 983 Linear feet 0 0 Total 37,823 linear feet 3,680,406 sq. ft. 1,672,857 sq. ft. 3 Amount Generated by Property Variable and Benefit Zone for Lincoln Heights LSPM PBID Table 4- C Benefit Zone Linear Frontage Lot Square Building Square Total by Benefit Total Footaae Total Footaae Total Zone 1 $198,578.00 $187,924.00 $ 46,400.00 $ 432,902.00 2 $ 82,344.00 $ 52,038.00 $ 21,969.00 $ 156,351.00 3 $ 9,830.00 0 0 $ 9,830.00 SingleFamily Residential Not assessed Not assessed $.30 per sq. ft. Units Total $290,752.00 $ 239,962.00 $ 68,369.00 $ 599,083.00 26

FREQUENCY OF SPECIAL BENEFIT SERVICES BY BENEFIT ZONE: Special Benefit Benefit Zone 1 Benefit Zone 2 Benefit Zone 3 Service Freauencv Freauencv Freauencv Private Security As Determined by As Determined by As Determined by Management Management Management Corporation Corporation Corporation Regular sidewalk 6 days per week 4 days per week 6 days per week sweeping Steam cleaning Quarterlv Twice per vear Quarterly Beautification Landscaping and Not provided until build To be determined hanging plants along out of residential North Broadway Enhanced trash 6 days per week 4 times per week 6 days per week emptying Removal of bulky items As needed As needed As needed Graffiti removal within As needed As needed As needed 24 hours Tree maintenance As needed As needed As needed Parking assistance As needed As needed, particularly Not applicable on the weekends Special events Seasonally Based upon needs of Not applicable specific land uses Holiday decorations Seasonally Seasonally Seasonally Marketing and As needed Not applicable Not applicable Promotions, Advertising As determined Not applicable Not applicable Administration Ongoing oversight Ongoing oversight Ongoing oversight Maximum Assessment Assessments will be subject to changes in the Los Angeles County Consumer Price Index (CPI), for all urban consumers, annual increases not to exceed 5% per year. Increases will be determined by the PBID Owners' Association and will vary between 0 and 5% in any given year. The following projections illustrate a potential 5% annual increase. 27

Table 4- D Benefit Zone 1 - Maximum Assessments by Property Variable Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $10.00 $10.50 $11.03 $11.58 $12.16 Lot SF $0.10 $0.11 $0.11 $0.12 $0.12 Blda SF $0.05 $0.05 $0.06 $0.06 $0.06 Single Family Residential Unit $0.30 $0.32 $0.33 $0.35 $0.36 2014 2015 2016 2017 2018 Linear Feet $12.76 $13.40 $14.07 $14.77 $15.51 Lot SF $0.13 $0.13 $0.14 $0.15 $0.16 Blda SF $0.06 $0.07 $0.07 $0.07 $0.08 Single Family Residential Unit $0.38 $0.40 $0.42 $0.44 $0.47 Table 4 - E Benefit Zone 2 - Maximum Assessment by Property Variable Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $5.00 $5.25 $5.51 $5.79 $6.08 Lot SF $0.03 $0.03 $0.03 $0.03 $0.04 Blda SF $0.03 $0.03 $0.03 $0.03 $0.04 Single Family Residential Unit $0.30 $0.32 $0.33 $0.35 $0.36 2014 2015 2016 2017 2018 Linear Feet $6.08 $6.38 $6.70 $7.04 $7.39 Lot SF $0.04 $0.04 $0.04 $0.04 $0.04 Blda SF $0.04 $0.04 $0.04 $0.04 $0.04 Single Family Residential Unit $0.38 $0.40 $0.42 $0.44 $0.47 28

Table 4- F Benefit Zone 3 - Maximum Assessment by Property Variable Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $10.00 $10.50 $11.03 $11.58 $12.16 Lot SF 0 0 0 0 0 Bldg SF 0 0 0 0 0 Single Family Residential Unit 0 I 0 0 0 0 2014 2015 2016 2017 2018 Linear Feet $12.76 $13.40 $14.07 $14.77 $15.51 Lot SF 0 0 0 0 0 Blda SF 0 0 0 0 0 Single Family Residential Unit 0 0 0 0 0 Budget Adjustments Annual budget surpluses, if any, will be rolled into the following year's budget. Assessments will be set annually, within the constraints of the CPI or land use changes. Revenues from the delinquent accounts may be expended in the year they are received. If the District is not renewed any remaining funds will be returned to property owners in the proportion by what they were received. Time and Manner for Collecting Assessments As provided by the City of Los Angeles LSPM PPBID establishment ordinance, "Division 6 of the Los Angeles Administrative Code, Chapter 9, Section 6.615., the Lincoln Heights LSPM PBID assessment will appear as a separate line item on the 2009 annual property tax bills prepared by the County of Los Angeles. Disestablishment If necessary, the disestablishment procedure is outlined in City of Los Angeles LSPM PBID ordinance, Division 6 of the Los Angeles Administrative Code, Chapter 9, Section 6.619. If the property owners vote to dis-establish the district, the balance of remaining special benefit district funds will be allocated to each and every property owner in proportion to the weight and percentage of their contribution to the District. Government Assessments The Lincoln Heights LSPMPBID Management Plan assumes that the City of Los Angeles and other government entities will pay assessments for the public property within the boundaries of the District. Article XIII D, Section 4 of the California Constitution was added in November of 1996 to provide for these payments. Parcels owned by the City of Los Angeles, the Los Angeles Unified School District and the County of Los Angeles shall receive benefits, commensurate with the assessments paid into the Lincoln Heights LPM PBID. The publicly owned parcels are presumed to benefit equally to the privately owned parcels, consistent with their location within their respective benefit zones. 29

The City is a major property owner in the proposed district. The City parcels will be deriving special benefits since the peripheral cleaning of parking lots will attract more pedestrian traffic which creates for additional parking revenue for the city. The additional parking revenues will yield greater sales tax revenues which will in turn provide greater economic prosperity for the City. In addition, the current base level of services that exists in and around the City parcels is lacking consistency and the new proposed special benefits district will ensure a system of cleanliness, order and reduction of criminal activity around many of these vacant or underutilized City owned parcels. Only special benefits can be assessed and the payment by the City into the Lincoln Heights LSPM PBID will convey a cleaner, more attractive and inviting parking experience to visitors to the shopping areas. In addition, the peripheral cleaning of the City owned parking lots will contribute to the generation of parking meter revenues. Table 4 - F Government Owned Parcels in the proposed Lincoln Heights LSPM PBID Benefit Leqal Owner Zone APN Site # Street Name Assessment Percent LA CITY 1 5204004901 154 South Avenue 24 $ 2,773.23 0.46% LA CITY 1 5204005901 216 South Avenue 24 $ 2,893.80 0.48% LA CITY 1 5204006900 South Avenue 22 $ 2,320.50 0.39% LACITY 1 5204011903 Daly Street $ 21,661.64 3.62% LA CITY 1 5204012900 Daly Street $ 1,337.70 0.22% LACITY 1 5204014900 Workman Street $ 6,193.10 1.03% LACITY 1 5204015901 2416 Workman Street $ 2,411.50 0.40% LACITY 1 5204016900 Workman Street $ 964.60 0.16% LACITY 1 5204016901 Workman Street $ 964.60 0.16% LACITY 1 5208031900 North Broadway $ 1,280.67 0.21% LACITY 2 5204002900 Pasadena Avenue $ 1,815.17 0.30% LACITY 2 5447015901 140 North Avenue 19 $ 14,095.54 2.35% LACITY 2 j 5447018900 1831 Pasadena Avenue $ 3,129.00 0.52% LACITY 2 018901 19th Avenue $ 2,100.28 0.35% LACITY 2 7020900 North Broadway $ 1,076.14 0.18% LACITY 2 5447020901 1771 North Sorino Street $ 4,523.40 0.76% LACITY 2 5447026900 North Sorino Street $ 4,971.81 0.83% LACITY 2 5447026901 219 South Avenue 18 $ 543.27 0.09% LACITY 2 5447026902 223 South Avenue 18 $ 543.27 0.09% TOTAL $ 75,599.22 12.62% L A CITY DEPT OF WATER & POWER 1 5204004900 Daly Street $ 662.03 0.11% LA UNIFIED SCHOOL DIST 3 5208011901 3333 Manitou Avenue $ 610.00 0.10% L A UNIFIED SCHOOL DIST 3 5208011902 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011903 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011904 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011905 3333 Manitou Avenue $ 560.00 0.09% 30

L A UNIFIED SCHOOL DIST 3 5208026903 3501 North Broadwav $ 7,010.00 1.17% TOTAL $ 9,830.00 1.64% SECTION 5 PROPERTY BUSINESS IMPROVEMENT DISTRICT RULES AND REGULATIONS Pursuant to the LSPM PBID ordinance, Division 6 of the Los Angeles Administrative Code, Chapter 9, Section 6.619, a Property Business Improvement District (PBID) may establish rules and regulations that uniquely apply to District. The Lincoln Heights LSPM PBID has not adopted any specific rules, every property will pay its proportional share of assessments to fund the special benefits conferred on that specific parcel. Bonds The District will not issue any bonds related to any program. SECTION 6 IMPLEMENTATION TIMETABLE The Lincoln Heights LSPM PBID is expected to be established and begin implementation of the Management District Plan on January 1, 2009. Pursuant to the City of Los Angeles LSPM PBID establishment ordinance, Division 6 of the Los Angeles Administrative Code, Chapter 9, Sections 6.600 to 6.620, the Lincoln Heights LSPM PBID will have a ten-year life beginning January 1, 2009 through December 31, 2018. 31

SECTION 7 PARCEL NUMBERS OF PROPERTIES INCLUDED The assessment methodology used is based on the following property variables: building square footage, lot size, linear frontage, building use and benefit zone. List of Parcels in Lincoln Heights LSPM PBID: APN Assessment 5204001 001 $3,441.90 5204005014 $1,325.00 5204015003 $1,294.00 5204001002 $1,615.40 5204005015 $1,060.00 5204015004 $1,501.50 5204001003 $1,796.45 5204005022 $1,418.90 5204015005 $1,507.15 5204001004 $1,643.00 5204005032 $2,672.85 5204015006 $1,473.10 5204001005 $763.00 5204005034 $4,428.45 5204015007 $3,870.50 5204002013 $690.80 5204005036 $2,293.70 5204015901 $2,411.50 5204002014 $0.00 5204005901 $2,893.80 5204016001 $4,500.25 5204002015 $770.87 5204006001 $4,287.00 5204016002 $3,772.10 5204002016 $0.00 5204006002 $2,753.80 5204016003 $1,400.30 5204002018 $0.00 5204006007 $4,905.00 5204016004 $3,889.00 5204002019 $555.10 5204006008 $1,374.25 5204016005 $1,340.00 5204002029 $1,654.75 5204006034 $6,490.30 5204016900 $964.60 5204002030 $1,455.00 5204006900 $2,320.50 5204016901 $964.60 5204002034 $231.33 5204011001 $5,406.65 5204020002 $2,424.50 5204002036 $2,922.65 5204011002 $1,568.15 5204020003 $7,853.90 5204002038 $3,978.30 5204011003 $1,774.15 5204020022 $6,049.85 5204002900 $1,815.17 5204011004 $1,853.50 5204021003 $1,448.90 5204003014 $5,262.17 5204011 005 $33.00 5204021004 $1,485.35 5204003020 $14,756.29 5204011 006 $2,823.00 5204021005 $1,462.95 5204003022 $2,825.60 5204011 903 $21,661.64 5204021006 $1,997.15 5204003800 $1,590.00 5204012002 $1,685.50 5204021029 $4,284.65 5204004001 $3,490.75 5204012003 $1,740.75 5204023002 $1,394.20 5204004002 $1,956.10 5204012004 $3,973.25 5204023003 $1,932.95 5204004003 $692.10 5204012010 $1,322.00 5204023004 $1,772.50 5204004004 $275.00 5204012012 $1,588.85 5204023025 $4,208.00 5204004005 $558.05 5204012014 $1,826.55 5204023026 $2,716.40 5204004006 $1,132.75 5204012018 $1,696.40 5204024001 $3,896.00 5204004013 $2,919.25 5204012019 $8,153.80 5204024003 $1,620.75 5204004014 $1,705.20 5204012900. $1,337.70 5204024004 $2,393.00 5204004015 $2,341.65 5204013001 $3,585.25 5204024005 $4,129.30 5204004016 $758.60 5204013002 $1,296.10 5205020003 $967.80 5204004017 $772.15 5204013003 $1,424.15 5205020004 $905.45 5204004803 $11,865.00 5204013004 $1,432.80 5205020005 $5,304.75 5204004900 $662.03 5204013005 $1,322.70 5205020028 $959.00 5204004901 $2,773.23 5204013006 $1,483.25 5205020029 $1,056.00 5204005003 $3,450.00 5204013007 $2,936.90 5205020030 $2,361.25 5204005004 $1,622.20 5204013017 $5,262.80 5205020032 $3,676.25 5204005005 $1,640.25 5204013801 $51.00 5205021001 $2,559.50 5204005006 $1,300.00 5204013802 $1,249.55 5205021002 $5,284.10 5204005007 $600.00 5204014900 $6,193.10 5205021003 $1,182.20 5204005009 $1,590.00 5204015001 $2,015.40 5205021004 $1,203.10 5204005011 $1,384.90 5204015002 $1,905.05 5205022002 $1,713.80 32

5205022003 $1,160.00 5208026903 $7,010.00 5447021 016 $398.00 5205022004 $1,190.00 5208030001 $1,375.60 5447021018 $596.00 5205022005 $2,744.95 5208030002 $1,401.10 5447021019 $625.80 5205022012 $1,132.60 5208030003 $1,871.20 5447021022 $4,790.57 5205022031 $1,316.00 5208030017 $1,458.10 5447021023 $1,244.66 5205022032 $2,895.00 5208030018 $1,826.10 5447021026 $795.00 5205023003 $708.02 5208030019 $1,883.40 5447021 027 $1,596.00 5205023004 $1,133.54 5208031002 $1,603.20 5447021028 $5,766.57 5205023043 $1,250.95 5208031032 $3,179.25 5447022002 $519.20 5205023045 $1,068.90 5208031034 $6,469.55 5447022003 $642.95 5205023046 $430.76 5208031 900 $1,280.73 5447022004 $747.41 5205024001 $1,269.35 5447012015 $1,343.25 5447022005 $1,276.48 5205024003 $665.13 5447012019 $3,462.31 5447022007 $398.00 5205024009 $916.41 5447014001 $867.98 5447022009 $398.00 5205024013 $502.00 5447014002 $374.90 5447022010 $398.00 5208003002 $1,665.60 5447014003 $498.04 5447022019 $573.60 5208003006 $3,102.50 5447014004 $432.40 5447022022 $927.96 5208003025 $4,510.00 5447014009 $508.60 5447022023 $622.15 5208003026 $2,533.00 5447014010 $752.65 5447022027 $6,049.98 5208004002 $1,452.00 5447014011 $467.65 5447022028 $1,566.00 5208004003 $1,528.50 5447014012 $902.11 5447022030 $3,201.12 5208004004 $1,125.00 5447014013 $902.11 5447023010 $2,201.71 5208004005 $2,952.00 5447014020 $598.96 5447023018 $1,752.05 5208004027 $5,159.00 5447014023 $453.55 5447023019 $5,437.77 5208005003 $1,573.50 5447014024 $598.87 5447024001 $1,259.20 5208005004 $1,347.65 5447014025 $1,057.00 5447024002 $519.20 5208005005 $2,352.45 5447014026 $804.65 5447024003 $377.60 5208005025 $5,299.50 5447014027 $453.55 5447024004 $141.60 5208006001 $2,703.95 5447014028 $453.55 5447024005 $609.20 5208006002 $1,442.00 5447014036 $1,721.01 5447024006 $519.20 5208006003 $1,250.00 5447014037 $1,093.49 5447024007 $1,349.95 5208006033 $5,967.35 5447014038 $1,403.21 5447024008 $597.00 5208009006 $3,494.05 5447014040 $1,644.83 5447024029 $1,514.95 5208009023 $4,358.00 5447015901 $14,095.54 5447024030 $1,534.10 5208009024 $4,032.40 5447018002 $2,210.21 5447025001 $816.56 5208010002 $1,463.10 5447018003 $4,041.35 5447025004 $450.60 5208010003 $1,656.75 5447018004 $2,536.34 5447025005 $246.40 5208010004 $1,623.50 5447018800 $457.49 5447025006 $596.26 5208010005 $3,155.00 5447018900 $3,129.00 5447025007 $395.84 5208010025 $3,209.45 5447018901 $2,100.28 5447025008 $277.72 5208011 008 $3,043.10 5447019001 $353.50 5447025009 $599.12 5208011 901 $610.00 5447019002 $470.20 5447025010 $1,386.19 5208011 902 $550.00 5447019003 $400.00 5447026001 $1,882.18 5208011 903 $550.00 5447019004 $426.25 5447026002 $758.63 5208011 904 $550.00 5447019005 $3,789.28 5447026021 $519.20 5208011 905 $560.00 5447019007 $150.72 5447026900 $4,971.81 5208012001 $2,986.90 5447019008 $2,358.47 5447026901 $543.27 5208012002 $1,684.95 5447020006 $7,355.27 5447026902 $543.27 5208012003 $1,425.25 5447020900 $1,076.14 5447027004 $156.81 5208012004 $1,364.50 5447020901 $4,523.40 5447027008 $2,307.13 5208012005 $1,364.50 5447021 001 $1,571.85 5208012006 $2,844.50 5447021002 $398.40 33

ATTACHMENT I REGISTERED PROFESSIONAL ENGINEER'S REPORT 34

Edward Henning & Associates URBAN REVITALIZATION FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Attachment 1 The Lincoln Heights Community Benefit District A Landscaping, Security, Programming and Maintenance Property Business Improvement District DISTRICT ASSESSMENT ENGINEER'S REPORT Prepared by Edward V. Henning, California Registered Professional Engineer # 26549 Edward Henning & Associates SEPTEMBER 5, 2007 13330 Buttemere Rd Phelan CA 92371 (760) 868-9963 mred2@earthlink.net

Edwa, " Henning & Associates URBAN REVITALIZATION 'FUNDING c, THE LINCOLNHEIGHTSCOMMUNITYBENEFIT DISTRICT - LSPMPBlD (Not Valid Without Signature and Certification Seal Within) DISTRICT ASSESSMENT ENGINEER'S REPORT To Whom It May Concern: I hereby certify to the best of my professional knowledge and experience that each of the identified benefiting properties located within the proposed Lincoln Heights Community Benefit District - a Landscaping, Security, Programming and Maintenance Property Business Improvement District (Lincoln Heights LSPM PBID) - will receive a special benefit over and above the benefits conferred on the public at large and that the amount of the proposed assessment is proportional to, and no greater than the benefits conferred on each respective property, Edward V, Henning RPE #26549 Se tember 5 2007 Date (NOT VALID WITHOUT CERTIFICATION SEAL AND SIGNATURE HERE) Introduction This report serves as the "detailed engineer's report" required by Section 4(b) of Article Xlllf) of the California Constitution (Proposition 218) to support the benefit property assessments proposed to be levied within the Lincoln Heights LSPM PBID in the City of Los Angeles, California being established for a ten year period. The discussion and analysis contained within constitutes the required "nexus" of rationale between assessment amounts levied and special benefits derived by properties within the Lincoln Heights LSPM PBID. NOTE: The terminology "identified benefiting parcel" or "property" is used throughout this report pursuant to SB 919 - "Proposition 218 Omnibus Implementation Act" which clarified portions of Prop 218. It provides the Engineer and District Consultant with the ability to actualiy identify iudividnal parcels which will benefit directly either in whole or in part from the proposed District funded programs and improvements and does not imply that ali parcels receive assessable benefits. 13330 Buttemere Rd Phelan CA 92371 (760) 868-9963 mred2@earthlinknet

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Background The Lincoln Heights LSPM PBID is a property-based benefit assessment district being established as a Landscaping, Security, Programming and Maintenance Property Business Improvement District (Alpha BID) pursuant to Chapter 9, Sections 6.600 through 6.620 of Division 6 of the Los Angeles Administrative Code. Due to the benefit assessment nature of assessments levied within an Alpha BID, district program costs are to be distributed amongst all identified benefiting properties based on the proportional amount of program benefit each property is expected to derive from the assessments collected. Within the Alpha BID statute, frequent references are made to the concept of relative "benefit" received from Alpha BID programs and activities versus amount of assessment paid. Only those properties expected to derive special benefits from Alpha BID funded programs and activities may be assessed and only in an amount proportional to the relative benefits expected to be received. The method used to determine benefits derived by each identified property within an Alpha BID begins with the selection of a suitable and tangible basic benefit unit. For property related services, such as those proposed in the Lincoln Heights LSPM PBID, the benefit unit may be measured in linear feet of primary street frontage or parcel size in square feet or building size in square feet or number of building floors or proximity to major corridors in average linear feet, or any combination of these factors. Quantity takeoffs for each parcel are then measured or otherwise ascertained. From these figures, the amount of benefit units to be assigned to each property can be calculated. Special circumstances such as unique geography, land uses, development constraints etc. are carefully reviewed relative to specific programs and improvements to be funded by the Alpha BID in order to determine any levels of diminished benefit which may apply on a parcel by parcel or categorical basis. Based on the factors described above such as geography and nature of programs and activities proposed, an assessment formula is developed which is derived from a singular or composite basic benefit unit factor or factors. Within the assessment formula, different factors may be assigned different "weights" or percentage of values based on their relationship to programs/services to be funded. Next, all program and activity costs, including incidental costs, district administration and ancillary program costs, are estimated. It is noted, as stipulated in Proposition 218, and now required of all property based assessment districts, indirect or general benefits may not be incorporated into the assessment formula and levied on the District properties; only direct or "special" benefits and costs may be considered. Indirect or general benefit costs, if any, must be identified and, if quantifiable, calculated and factored out of the assessment cost basis to produce a "net" cost figure. In addition, Proposition 218 no longer automatically exempts government owned property from being assessed and if special benefit is determined to be conferred upon such properties, they must be assessed in proportion to benefits 2 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) conferred in a manner similar to privately owned property assessments. From this, the value of a basic benefit unit or "basic net unit cost" can be computed by dividing the total amount of estimated net program costs by the total number of benefit units. The amount of assessment for each parcel can be computed at this time by multiplying the Net Unit Cost times the number of Basic Benefit Units per parcel. This is known as "spreading the assessment" or the "assessment spread" in that all costs are allocated proportionally or "spread" amongst all properties within the Alpha BID. The method and basis of spreading program costs varies from one Alpha BID to another based on local geographic conditions, types of programs and activities proposed, and size and development complexity of the District. Alpha BIDs may require secondary benefit zones to be identified to allow for a tiered assessment formula for variable or "stepped-down" benefits derived. Supplemental Proposition 218 Procedures and Requirements Proposition 218, approved by the voters of California in November of 1996, adds a supplemental array of procedures and requirements to be carried out prior to levying a property-based assessment like the Lincoln Heights LSPM PBID. These requirements are in addition to requirements imposed by State and local assessment enabling laws. These requirements were "chaprered'' into law as Article XlIID of the California Constitution. Since Prop 218 provisions will affect all subsequent calculations to be made in the final assessment formula for the Lincoln Heights LSPM PBID, Prop 218 requirements will be taken into account first. The key provisions of Prop 218 along with a description of how the Lincoln Heights LSPM PBID complies with each of these provisions are delineated below. (Note: All section references below pertain to Article XIII of the California Constitution): Finding 1. From Section 4(a): "Identify all parcels which will have a special benefit conferred upon them and upon which an assessment will be imposed" All "identified" individual parcels within the Lincoln Heights LSPM PBID will derive special benefit from the proposed District programs and activities. The benefits are special and unique only to the identified properties within the proposed District because programs and services (i.e. street operations, beautification and order; district identity 3 13.330Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) and streetscape improvements; administration and corporate operations; and contingency/reserves) will only be provided directly for the identified properties. These identified benefiting parcels are shown on the Boundary Map within the Management District Plan and are listed as an attachment to the Plan and this report - identified by assessor parcel number. Three benefit zones have been identified within the Lincoln Heights LSPM PBID. Boundary Description The following streets define the boundaries of the proposed Lincoln Heights LSPM PBID: General Proposed Boundaries: All parcels on both sides of North Broadway running northeast from the Los Angeles Downey Recreation Center to Lincoln Park. Gates Street Elementary School and Lincoln High School, owned by the Los Angeles Unified School District (LAUSD) will be included in a special benefit zone due to the fact that the Los Angeles Unified School district has a fenced in parcel and provides a system of cleanliness and security within the borders of their parcels and attendance is compulsory, The LAUSD parcels along North Broadway will be assessed for their linear frontage along North Broadway only in order to fund the special benefit services for enhanced sidewalk sweeping, graffiti removal, enhanced trash emptying and beautification programs implemented along the Benefit Zone 1 parcels on North Broadway. The parcels surrounding Gates Street Elementary on North Broadway and across the street from Lincoln High School do not have a system of cleanliness. beautification and security due to their private ownership and these property owners have expressed the desire to be included in this special benefits district; All parcels within the area bounded by the east side of North Broadway on the east, Interstate 5 (from Pasadena Avenue to North Broadway) on the north, the Los Angeles River on the south and the west side of Pasadena Avenue the west, All of the parcels found at the historic Five Points area; (the intersection of Pasadena Avenue, Avenue 26, Daly Street intersection); All parcels along the east side of Avenue 26, running northeast from the Five Points intersection, the Lincoln Heights Public Library, inclusive (northeast corner of Workman and Avenue 26); The Lincoln Heights Public Library is included because the City cannot keep up with the intense services required by the increasing commercial traffic in the area needed to maintain the sidewalks and trash. The Library is included since it is an extension of the Five Points commercial corridor and has historically been associated 4 13330 Buttemere Rd Phelan CA 92371 (760) 868-9963 mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) with the commercial parcels in Lincoln Heights. The three commercially zoned corners which include the Library site at Avenue 26 and the south side comers of Avenue 26 and Workman Street are included in the district, the northwest comer is not included in the district due to its residential land use and its exclusion from traditional commercial corridors of Lincoln Heights. The houses on the same side of the block as the Library, running north from the Library have not been included due to their residential land use and will not receive special benefits. The single family and residentially zoned parcels on Workman Street from the Library to North Broadway have been exempted from assessments due to the fact that the proposed LSPM PBID is a commercially zoned special benefits district and not one which will deliver special benefit services to the residentially zoned parcels in Lincoln Heights; All parcels along Daly Street from the Pasadena Avenue/Avenue 26 intersection to the west side comers of Manitou Avenue two blocks southeast of the Daly StreetINorth Broadway intersection; All parcels along Pasadena Avenue from the north side of the Lincoln Heights Bridge (over the Los Angeles River) to the Five Points intersection, inclusive of all of the parcels fronting on the Five Points intersection; Benefit Zones: There are three Benefit Zones within the proposed Lincoln Heights LSPM PBID. The Benefit Zones have been created due to the different type and frequency of special benefit services that will be delivered to each of the respective areas. Linear foot frontage will be assessed on all sides of each benefiting parcel except in the parcels owned by the Los Angeles Unified School District (LAUSD), which will be assessed only along the frontage bordering North Broadway and commercially zoned residential units. Benefit Zone 1 in general, shall consist of all of the parcels on each side of North Broadway on the northeast side of the Interstate 5 freeway up to Lincoln Park, (excluding the Lincoln High School site). In addition, Benefit Zone 1 parcels shall include those along Daly Street from Manitou Avenue to the Five Points Intersection, inclusive of the Lincoln Heights Library, (Pasadena Avenue, Daly Street and Avenue 26). Benefit Zone 2 shall consist of all of the parcels not included in Benefit Zones I and 3, including those parcels between Interstate 5 and the Los Angeles River, as well as those not fronting along North Broadway, Daly Street, or the 5 points intersection (in Benefit Zone I). Benefit Zone 3 shall include the parcels owned by the LAUSD (Gates Elementary and Lincoln High School). The LAUSD parcels will be assessed only along the North Broadway frontage since these parcels are fenced in, provide their own security and their own system of cleanliness provided by the LAUSD personnel. 5 Benefit Zone 3 parcels will fund 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN BEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) enhanced sidewalk sweeping, trash removal, graffiti removal and beautification programs only. City owned and Los Angeles Unified School District parcels shall not pay for "District Identity" special benefits in the proposed Lincoln Heights LSPM PBID. These parcels are not commercial in nature. The District Identity services are geared to enhance the commercial businesses in the District. Single family residential units built on commercially zoned parcels are assessed as a separate category. These single family residential units and/or condos, if any, will be assessed jar their building squarejootage only at the rate oj $0.30 per square foot per year, commencing the first year of the district. The rationale for this assessment of building square footage rate only, regardless of Benefit Zone, is provided below. Single family residential units are assessed differently than multi-unit apartment buildings due to their land use. The multi-unit apartment buildings are commercial properties in which the tenant and landlord have a business relationship. They are required to have a business license to operate in the City of Los Angeles and these residential apartment buildings can be bought Or sold just as commercial buildings can be bought and sold. Single family residential units or individual condo owners have a different relationship in the District as compared to retail or commercial land uses. These are the parcel owners which will use the sidewalks 7 days per week, at odd hours of the day. They will live and may work in the District. Residents will receive benefits from clean and safe special benefit services but not other programs designed to attract and retain businesses. These single family residential units will be assessed at a building square footage rate only, similar to the fixed rate property variables (lot size, linear frontage and lot size) assessments for non-single family residential units. The main difference is that single family residential unit parcel owners are only assessed for their parcel building square footage, not linear frontage nor lot size. Ground floor commercial or retail condominiums or parcels will be assessed consistent with the assessment methodology used for other commercial parcels Finding 2. From Section 4(a): "Separate general benefits (if any) from the special benefits conferred parcei(s). Only special benefits are assessable. " on As stipulated by Prop 218, assessment district programs and activities may confer a combination of general and special benefits to properties, but the only program benefits which can be funded through assessments are those attributed to special property related benefits. For the purposes of this analysis, a "general benefit" is hereby defined as: "A benefit to properties in the area and in the surrounding community or benefit to the public in general resulting 6 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVIT ALIZA non -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) from the improvement, activity, or service to be provided by the assessment levied". "Special benefit" as defined by the California State Constitution means a district benefit over and above general benefits conferred on real property located in the district or to the public at large. In the case of the Lincoln Heights LSPM PBID, the very nature of the purpose of this district is to fund supplemental programs, improvements and services within the Alpha BID boundaries above and beyond what is being currently funded either via normal tax supported methods or other funding sources. Specifically they include: The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. SlDEWALKOPERATIONSAND BEAUTIFICATION: $ 395,395.00 Examples of these special benefit services and costs include, but are not limited to: CJ Private security over and above those services currently provided by the Los Angeles Police Department; o Regular sidewalk and gutter sweeping, o Regular sidewalk steam cleaning Cl Spot steam cleaning as necessary CJ Beautification o Enhanced trash emptying CJ Removal of bulky items as necessary o Graffiti removal, within 24 hours as necessary [J Tree and vegetation maintenance o Parking assistance; Cl Maintenance personnel and supervisor/oversight costs The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. (See Page 26) DISTRICT IDENTITY $ 53,918.00 Examples of these special benefit services and costs include, but are not limited to: o Special events Q Marketing and Promotions strategies o Holiday decorations Q Web site development and maintenance o Advertising 7 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Cl Communications The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. ADMINISTRATION AND CORPORATE OPERATIONS: $ 89,862.00 Examples of these special benefit services and costs include, but are not limited to: CJ Staff and administrative costs CJ Insurance CJ Office related expenses Q Financial reporting The following category of special benefit services shall only be provided to parcels within the district and whose frequency is determined by their benefit zone. CONTINGENCY/CITY FEESIRESERYE: Examples of these special benefit services and costs include, but are not limited to: Cl Delinquencies" CJ City Fees" a Reserves*** $ 59,908.00 *Reserve for Slow Payments: A percent of the budget is held in reserve to offset delinquent and/or slow payment from both public and private properties. **City Fees: Assessments are budgeted in order to fund the expenses charged by the City of Los Angeles and County of Los Angeles for collection and distribution of LSPM PBID revenue. This line item expense shall be found in the "Contingency/City Fees/Reserve" portion of the budget. ***Reserves: Reserves are budgeted for those funds that remain from the 10% set aside, that are over and above those that have not been collected and are over and above the city fees. These reserves shall be carried forward from year to year, or may be reallocated to the designated budgetary categories found within the Management District Plan. 8 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Ten Year Operating Budget: A projected ten-year operating budget for the Lincoln Heights LSPM PBID is shown below. upon the following assumptions: The projections are based Assessments will be subject to changes in the Los Angeles County Consumer Price Index (CPI), with annual increases not to exceed 5% per year. Increases will be determined by the Owners Association and in no case shall annual increases exceed 5% per year, nor shall they exceed the actual CPI increase in a given year. Ten Year Projected Operating Budget for the Lincoln Heights LSPM PBID Projected Budae! 2009 2010 2011 2012 2013 Public Rights of Way & Sidewalk OoerationsiBeautificatlon $395,395.00 $415.164.75 $435,922.99 $457719.14 $480,605.09 District Jdentitv & Streetscaoe lmorovements $53.918.00 $56,613.90 $59.444.60 $62,416.82 $65537.67 Administrative/Comorate Ooerations $89,862.00 $94,355.10 $99,072.86 $104,026.50 $109,227.82 Continoencv/ReselVe $59,908.00 $62,903.40 $66,048.57 $69,351.00 $72.818.55 Total $599,083.00 $629,037.15 $660,489.01 $693,513.46 $728,189.13 Projected Budpet 2014 2015 2016 2017 2018 Public Rights of Way & Sidewalk Ooeratlons/Beaulffication $504,635.35 $529,867.12 $556.360.47 $584,178.50 $613,387.42 District Identitv & sseetscaee Improvements $68.814.55 $72,255.28 $75,868.04 $79,661.44 $83,644.51 Administrative/Corporate Operations $114,689.21 $120,423.67 $126,444.86 $132767.10 $139,405.46 Continoencv/ReselVe $76459.48 $80,282.45 $84296.57 $88.511.40 $92,936.97 Total $784,598.59 $802,828.52 $842969.94 $885,118.44 $929,374.36 9 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) FREQUENCY QF SERVICES Special Benefit Service Benefit Zone 1 Frequency Benefit Zone 2 Frequency Benefit Zone 3 Freauencv Private Security As Determined by As Determined by As Determined by Management Corporation Management Corporation Management Corooration Rezular sidewalk sweeninz 6 days oer week 4 days Del'week 6 days per week Steam cleaning Ouarterlv Twice per year Quarterly Beautification Landscaping and hanging Not provided until build out To be determined plants along North of residential Broadway Enhanced trash emptying 6 days per week 4 times per week 6 days per week Removal of bulky items As needed As needed As needed Graffiti removal within 24 As needed As needed As needed hours Tree maintenance As needed As needed As needed Parking assistance As needed As needed, particularly on Not applicable the weekends Special events Seasonally Based upon needs of Not applicable specific land uses Holidav decorations Seasonally Seasonally Seasonally Marketing and Promotions As needed Not applicable Not applicable Advertising As determined Not aoolicable Not aoolicable Administration Ongoing oversiaht Onzoinz oversight Ongoing oversizbt There are three benefit zones within the proposed new district. different type and frequency of special benefits that will be conferred on each zone. The Benefit Zones have been created based on the Each of these programs and activities work together to create a more pleasing environment within the district that is conducive to strengthening the current and future economic vitality of the commercial corridor through the attraction and retention of new business and increased commerce. The programs, improvements and services are designed to specifically benefit the assessed properties within the Alpha BID boundaries. The proposed Alpha BID assessments will only be levied on properties within the Alpha BID boundaries that specially benefit from Alpha BID services, improvements and activities. Assessment revenues will be spent to deliver services that provide a direct and special benefit to assessed parcels and to improve the economic vitality of these properties. Inasmuch as no services will be provided beyond the Alpha BID boundaries to the surrounding communities or to the public in general, any general benefits are unintentional. It is hereby determined that general benefits, if any, are not quantifiable, measurable, or tangible. 10 13330 Butternere Rd - Phelan CA 92371 - (760) 868-9963 rnred2@earthlink.net

Edward Henning & Associates URBAN REViTALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Finding 3. From Section 4(a): "(Determine) the proportionate special benefit derived by each parcel in relationship to the entirety of the cost of public improvement(s) or the maintenance and operation expenses or the cost of the property related service being provided. The proportionate speeial benefit cost for each parcel is listed in Addendum 1 attached hereto. The individual percentages (i.e. proportionate relationship to the total special benefit related program and activity costs) would be computed by dividing the individual parcel assessment by the total special benefit program costs. Finding 4. From Section 4(a): "No assessment shall be imposed on any parcel which exceeds the reasonable cost oftbe proportional special benefit conferred on that parcel." Not only are the proposed program costs reasonable due to the benefit of group purchasing and contracting which would be possible through the Lincoin Heights ISPM PBID, they are also considerably less than other options considered by the formation steering committee. The actual assessment rates for each parcel within the Alpha BID directly relate to the level of service to be provided within the benefit zones and the respective numerics for each parcel (i.e. lot size, building size and/or street frontage). Finding 5. From Section 4(a): "Parcels from assessment " that are owned or used by any (public) agency shall not be exempt There are several publicly owned properties currently within the proposed District. Lincoln Heights LSPM PBID Management District Plan assumes that the City of Los Angeles and other government entities will pay assessments for the public property within the boundaries of the District. Article XIII D, Sec 4 of the California Constitution was added in November of 1996 to provide for these payments. Parcels owned by government entities shall receive benefits, commensurate with the assessments paid into the Lincoln Heights LSPM PBID. The publicly owned parcels are presumed to benefit equally to the privately owned parcels, consistent with their location within their respective benefit zones. Each of these properties is physically and geographically integral to the culture and commerce of this business neighborhood. There is no conclusive evidence that these parcels would not receive special benefit from the programs, services and improvements proposed to be funded via District assessments. The City is a major property owner in the proposed district. The City parcels will be deriving special benefits since the peripheral cleaning of parking lots will attract more pedestrian traffic which creates for additional parking revenue for the II 133;30Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING TIlE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) city. The additional parking revenues will yield greater sales tax revenues which will in turn provide greater economic prosperity for the City. In addition, the current base level of services that exists in and around the City parcels is lacking consistency and the new proposed special benefits district will ensure a system of cleanliness, order and reduction of criminal activity around many of these vacant or underutilized City owned parcels. Only special benefits can be assessed and the payment by the City into the Lincoln Heights LSPM PBID will convey a cleaner, more attractive and inviting parking experience to visitors to the shopping areas. In addition, the peripheral cleaning of the City owned parking lots will contribute to the generation of parking meter revenues. They are as follows: Government Owned Parcels in the proposed Lincoln Heights CBDILSPMPBID Benefit LeaalOwner Zone APN Site # Street Name Assessment Percent LA CITY 1 5204004901 154 South Avenue 24 $ 2,773.23 0.46% LACITY 1 5204005901 216 South Avenue 24 $ 2,893.80 0.48% LACITY 1 5204006900 South Avenue 22 $ 2,320.50 0.39% LACITY 1 5204011903 Dalv Street $ 21,661.64 3.62% LA CITY 1 5204012900 Daly Street $ 1,337.70 0.22% LA CITY 1 5204014900 Workman Street $ 6,193.10 1.03% LACITY 1 5204015901 2416 Workman Street $ 2,411.50 0.40% LA CITY 1 5204016900 Workman Street $ 964.60 0.16% LACITY 1 5204016901 Workman Street $ 964.60 0.16% LA CITY 1 5208031 900 North Broadwav $ 1,280.67 0.21% LACITY 2 5204002900 Pasadena Avenue $ 1.815.17 0.30% LACITY 2 5447015901 140 North Avenue 19 $ 14,095.54 2.35% LA CITY 2 5447018900 1831 Pasadena Avenue $ 3129.00 0.52% LA CITY 2 5447018901 19th Avenue $ 2,100.28 0.35% LA CITY 2 5447020900 North Broadwav $ 1,076.14 0.18% LA CITY 2 5447020901 1771 North Sorina Street $ 4,523.40 0.76% LA CITY 2 5447026900 North Sorino Street $ 4,971.81 0.83% LA CITY 2 5447026901 219 South Avenue 18 $ 543.27 0.09% LA CITY 2 5447026902 223 South Avenue 18 $ 543.27 0.09% TOTAL $ 75,599.22 12.62% 12 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mredz@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION 'FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) L A CITY DEPT OF WATER & POWER 5204004900 Dal Street $ 662.03 L A UNIFIED SCHOOL DIST 3 5208011 901 3333 Manitou Avenue $ 610.00 0.10% L A UNIFIED SCHOOL DIST 3 5208011 902 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011 903 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011904 3333 Manitou Avenue $ 550.00 0.09% L A UNIFIED SCHOOL DIST 3 5208011905 3333 Manitou Avenue $ 560.00 0.09% L A UNIFIED SCHOOL DIST 3 5208026903 3501 North Broadwav $ 7010.00 1.17% TOTAL, f 9,830.00 1.64% Finding 6. From Section 4(b): "All assessments must be supported by a detailed engineer's report prepared by a registered professional engineer certified by the State of California". This report serves as the "detailed engineer's report" to support the benefit property assessments proposed to be levied within the Lincoin Heights LSPM PBID. Finding 7. From Section 4(c): "The amount of the proposed assessment for each parcel shall be calculated (along with) the total amount thereof chargeable to the entire district, the duration of such payments, the reason for such assessment and the basis upon which the amount of the proposed assessment was calculated." The individual and total parcel assessments attributable to special property benefits are shown on Appendix A to the Management District Plan. The District and resultant assessment payments will continue for ten years and may be renewed again at that time. The reasons (purposes) for the proposed assessments are outlined in Finding 2 above as wen as in the Management District Plan. The calculation basis of the proposed assessment in Zones 1 and 2 is attributed to the specific amount of street frontage, property square footage, and building square footage while J3 13330 Buttemere Rd > Phelan CA 92371 (760) 868-9963 mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN IfEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) assessments in Zone 3 are based only on street frontage. The basis for residential uses/condos is based on building square feet per unit. There are three (3) Benefit Zones identified. Assessment Formula Methodology Step 1. Select "Basic Benefit Unit(s)" Alpha BID assessment formulas typically are based on either property street frontage or parcel and building size or location, all which relate to the amount of special benefit conferred on a particular parcel and the proportionate assessment to be paid. The formula may base assessments on a single factor or a combination of factors. The specific nature of the program activities to be funded by the Lincoln Heights LSPM PBID (i.e, street operations, beautification and order; district identity and streetscape improvements; administration and corporate operations; and contingency/reserves) relate directly to the proportionate amount of street frontage. land area, and building area. The "Basic Benefit Units" will be expressed as a function of street frontage (Benefit Unit ~ A"), land square footage (Benefit Unit "B"), and building square footage (Benefit Unit "C"). Based on the shape of the Lincoin Heights LSPM PBID, as well as the nature of the District program elements, it is determined that all properties will gain a direct and proportionate degree of benefit based either on the respective amount of street frontage, parcel size, and building size within Zones 1 and 2 and on street frontage in Zone 3. SFRICondo assessments will be based on building square feet per dwelling unit due to the limited benefit derived by this land use. Step 2. Quantify Total Basic Benefit Units Taking into account all identified benefiting properties, the respective assessable benefit units are listed below: Benefit Linear Frontage Total Lot Square Footage Building Square Single Family Resident Zone Total Footage Total Parcels Number of Units 1 20,048 linear feet 1,902,261 sq. ft. 929,889 sq. ft. 2 16 792 linear feet 1 778,144 sq. ft. 742,968 sq. ft. 3 3 983 linear feet 0 Total 37,823 linear feet 3,680,406 SQ. ft. 1,672,857 SQ. ft. 3 13330 Buuemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net 14

Edward Henning & Associates URBAN REVIT ALlZA TlON -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Step 3. Calculate Benefit Units for Each Property. The number of Benefit Units for each identified benefiting parcel within the Lincoln Heights LSPM PBm was computed from data extracted from City of Los Angeles City Clerk land records as well as County of Los Angeles Assessor records and maps. These data sources delineate current land uses, property areas and dimensions of record for each tax parcel. While it is understood that this data does not represent legal field survey measurements or detailed title search of recorded land subdivision maps or building records, it does provide an acceptable basis for the purpose of calculating property based assessments. All respective property data being used for assessment computations will be provided to each property owner in the Alpha BID for their review. All known or reported discrepancies, errors or misinformation will be corrected. Step 4. Determine Assessment Formula The Lincoln Heights LSPM PBm assessment is to be based on a combination of up to three Basic Benefit Unit factors; street frontage (Benefit "A" Unit), parcel size (Benefit "B" Units), and building size (Benefit "C" Units), within three (3) Benefit Zones. It has been determined, based on rough program service eosts allocations, that the assessments should be levied approximately 70% (72.3% actual) on Zone 1, approximately 28% (26.1% actual) on Zone 2 and approximately 2% (1.6% actual) on Zone 3. SFRlCondo assessments will be based on the building square footage per dwelling unit (Benefit "C-SFR" Units) due to the limited benefit derived by this land use. Assessment Formula Factors: Zone I (Benefit Unit "I-A") ~ $599,083 x 33.2% 120,048 units ~ $IO.OOlunit (Benefit Unit "1-B") ~ $599,083 x 31.5% 11,902,261 units ~ $0.1Olunit (Benefit Unit "I-C") ~ $599,083 x 7.6% 1929,889 units ~ $0.05/unit Zone 2 (Benefit Unit "2-A") ~ $599,083 x 14% 116,792 units ~ $5.00Iunit (Benefit Unit "2-B") ~ $599,083 x 8.7% 11,778,144 units ~ $O.Q3/unit (Benefit Unit "2-C") ~ $599,083 x 3.4% 1742,968 units ~ $0.03Iunit Zone 3 (Benefit Unit "3-A") ~ $599,083 x 1.6% 1983 units ~ $1O.00/unit SFRlCondos on Commercially Zoned Parcels While there are currently only 3 single family units within the proposed District, an assessment formula factor needs to be developed that fairly and equitably assesses future development for this trendy business district land 15 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@eartblink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) use. While the types of services that benefit single family residential uses relate more to linear street frontages, this is not a viable way to assess future residential condominium developments which are built more along height and depth dimensions as well as density in allowable units per acre. A more viable basis of assessment would be the SRF unit building area in square feet. Thus for this land use, the assessment formula will be based on building square feet using the following logic: The basic SFR parcel is currently 33 feet wide; ifthe linear rate of$io/lin ft (per Zones I and 3) is used, the annual assessment would be $10 x 33 ft ~ $333 per SFR unit. Since SFR uses will not benefit from image enhancement programs (9% ofthe budget), the SFR uses should only be assessed for the remaining 91% of the budget or 91% x $333 ~ about $300 perunit. For an average sized SFR unit of 1000 sq ft, this would equate to $0.30 per sq ft of building space. This produces a benefit unit assessment that will vary based on SFR unit building area in square feet. Zones I. 2. 3 Benefit "C-SFR" Units ~ $0.30/unit (see discussion above) Step 5. Estimate Total District Costs The total District costs are shown below: Total Year 1 District Costs PROGRAMOR ACTIVITYFUNDEDBY LINCOLNHEIGIITS BUSINESS APPROXlMATE% ESTIMATEDANNUAL AND COMMUNITYBENEFIT DISTRICT OF FIRST YEAR COSTS (FIRST YEAR) ANNUAL BUDGET Sidewalk Operations and Beautification 66% $ 395,395.00 District Identity 9% $ 53,918.00 Administration/Corporate Operations 15% $ 89,862.00 Contingency/City Fees/Reserves 10% $ 59,908.00 TOTAL 100% $ 599,083.00 13330 Buttemere Rd Phelan CA 92371 - (760) 868-9963 mred2@earthlink.net 16

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) Step 6. Separate General Benefits from Special Benefits and Related Costs (Prop 218) All general benefits (if any) are intangible and unquantifiable. All benefits derived from the assessments outlined in the Management District Plan are for services directly benefiting the property owners within this area and support increased commerce. All decorations, promotions, maintenance, and professional and administration services are provided solely to properties within the district to enhance the image and value of the properties and businesses within the Lincoln Heights LSPM PBID. No services are delivered outside the boundaries. Any potential spill over effect is unquantifiable. Total District revenues are shown below. Total Year 1 District Revenues,.--------.-------.------.----------.-.--------.----.--------------------.----.-..--.-----.------.-.------..----.------.--.,--...-.-.-..--------...-.---..-..--.. l- - - - - - --, Funding Source! Subtotal Revenue. % of Total i [~:i:~!ii~~~:!yi~~i==:=:~~~-::~~~:~=:~_==:~~:=-:~::]:=:: Step 7. Calculate "Basic Unit Cost" With a Year I budget of$599,083 (special benefit only), the Basic Unit Costs ("A", "B" and/or "C) are shown above in Step 4. Since the Alpha BID is planned for a ten year term, maximum assessments for future years (Vears 2 througb 10) must be set at the inception of the Alpha BID. An annual inflationary CPI based rate increase of up to 5% may be imposed for Years 2-10, on approval by the Alpha BID Property Owner's Association. The maximum annual rates for Years 1-10 are as follows: Year 1-10 Maximum Assessment Rates ZONE 1 Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $10.00 $10.50 $11.03 $11.58 $12.16 Lot SF $0.10 $0.11 $0.11 $0.12 $0.12 BIMSF $0.05 $0.05 $0.06 $0.06 $0.06 Single Family Residential Unit $0.30 $0.32 $0.33 $0.35 $0.36 2014 2015 2016 2017 2018 Linear Feet $12.76 $13.40 $14.07 $14.77 $15.51 Lot SF $0.13 $0.13 $0.14 $0.15 $0.16 Bide SF $0.06 $0.07 $0.07 $0.07 $0.08 Single Family Residential Unit $0.38 $0.40 $0.42 $0.44 $0.47 17 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) ZONE 2 Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $5.00 $5.25 $5.51 $5.79 $6.08 Lot SF $0.03 $0.03 $0.03 $0.03 $0.04 Bid!! SF $0.03 $0.03 $0.03 $0.03 $0.04 Single Family Residential Unit $0.30 $0.32 $0.33 $0.35 $0.36 2014 2015 2016 2017 2018 Linear Feet $6.08 $6.38 $6.70 $7.04 $7.39 Lot SF $0.04 $0.04 $0.04 $0.04 $0.04 BId!! SF $0.04 $0.04 $0.04 $0.04 $0.Q4 Single Family Residential Unit $0.38 $0.40 $0.42 $0.44 $0.47 ZONE 3 Projected Assessments 2009 2010 2011 2012 2013 Linear Feet $10.00 $10.50 $11.03 $11.58 $12.16 Lot SF 0 0 0 0 0 Bldl! SF 0 0 0 0 0 Single Family Residential Unit 0 0 0 0 0 2014 2015 2016 2017 2018 Linear Feet $12.76 $13.40 $14.07 $14.77 $15.51 Lot SF 0 0 0 0 0 Bldl! SF 0 0 0 0 0 Single Family Residential Unit 0 0 0 0 0 Step 8. Spread the Assessments The resultant assessment spread calculations for each parcel within the Alpha BID are shown in Addendum 1 attached hereto and were determined by applying the District assessment formula to each identified benefiting property. 18 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVIT ALIZA non -FUNDING TIIE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) ADDENDUM 1 YEAR 1 ASSESSMENT ROLL APN YRIASSM'T APN YRI ASSM'T APN YRI ASSM'T 5204001001 $3,441.90 5204004016 $758.60 5204011006 $2,823.00 5204001002 $1,615.40 5204004017 $772.15 5204011 903 $21,661.64 5204001003 $1,796.45 5204004803 $11,865.00 5204 012 OO? $1,685.50 5204001004 $1,643.00 5204004900 $662.03 5204 012 cos $1,740.75 5204001005 $763.00 5204004901 $2,773.23 5204012004 $3,973.25 5204002013 $690.80 5204005003 $3,450.00 5204012010 $1,322.00 5204002014 $0.00 5204005004 $1,622.20 5204012012 $1,588.85 5204002015 $770.87 5204005005 $1,640.25 5204012014 $1,826.55 5204002016 $0.00 5204005006 $1,300.00 5204012018 $1,696.40 5204002018 $0.00 5204005007 $600.00 5204012019 $8,153.80 5204002019 $555.10 5204005009 $1,590.00 5204012900 $1,337.70 5204002029 $1,654.75 5204005011 $1,384.90 5204013001 $3,585.25 5204002030 $1,455.00 5204005014 $1,325.00 5204013002 $1,296.10 5204002034 $231.33 5204005015 $1,060.00 5204013003 $1,424.15 5204002036 $2,922.65 5204005022 $1,418.90 5204013004 $1,432.80 5204002038 $3,978.30 5204005032 $2,672.85 5204013005 $1,322.70 5204002900 $1,815.17 5204005034 $4,428.45 5204013006 $1,483.25 5204003014 $5,262.17 5204005036 $2,293.70 5204013007 $2,936.90 5204003020 $14,756.29 5204005901 $2,893.80 5204013017 $5,262.80 5204003022 $2,825.60 5204006001 $4,287.00 5204013801 $51.00 5204003800 $1,590.00 5204006002 $2,753.80 5204013802 $1,249.55 5204004001 $3,490.75 5204006007 $4,905.00 5204014900 $6,193.10 5204004002 $1,956.10 5204006008 $1,374.25 5204015001 $2,015.40 5204004003 $692.10 5204006034 $6,490.30 5204015002 $1,905.05 5204004004 $275.00 5204006900 $2,320.50 5204015003 $1,294.00 5204004005 $558.05 5204011 001 $5,406.65 5204015004 $1,501.50 5204004006 $1,132.75 5204011002 $1,568.15 5204015005 $1,507.15 5204004013 $2,919.25 5204011003 $1,774.15 5204015006 $1,473.10 5204004014 $1,705.20 5204011004 $1,853.50 5204015007 $3,870.50 5204004015 $2,341.65 5204011 005 $33.00 5204015901 $2,411.50 19 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVIT ALIZA TION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENEFIT DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) 5204016001 $4,500.25 5205024013 $502.00 5447012019 $3,462.31 5204016002 $3,772.10 5208003002 $1,665.60 5447014001 $867.98 5204016003 $1,400.30 5208003006 $3,102.50 5447014002 $374.90 5204016004 $3,889.00 5208003025 $4,510.00 544701400, $498.04 5204016005 $1,340.00 5208003026 $2,533.00 5447014004 $432.40 5204016900 $964.60 5208004002 $1,452.00 5447014009 $508.60 5204016901 $964.60 5208004003 $1,528.50 5447014010 $752.65 5204020002 $2,424.50 5208004004 $1,125.00 5447014011 $467.65 5204020003 $7,853.90 5208004005 $2,952.00 5447014012 $902.11 5204020022 $6,049.85 5208004027 $5,159.00 5447014013 $902.11 5204021003 $1,448.90 5208005003 $1,573.50 5447014020 $598.96 5204021004 $1,485.35 5208005004 $1,347.65 5447014023 $453.55 5204021005 $1,462.95 5208005005 $2,352.45 5447014024 $598.87 5204021 006 $1,997.15 5208005025 $5,299.50 5447014025 $1,057.00 5204021 029 $4,284.65 5208006001 $2,703.95 5447014026 $804.65 5204023002 $1,394.20 5208006002 $1,442.00 5447014027 $453.55 5204023003 $1,932.95 5208006003 $1,250.00 5447014028 $453.55 5204023004 $1,772.50 5208006033 $5,967.35 5447014036 $1,721.01 5204023025 $4,208.00 5208009006 $3,494.05 5447014037 $1,093.49 5204023026 $2,716.40 5208009023 $4,358.00 5447014038 $1,403.21 5204024001 $3,896.00 5208009024 $4,032.40 5447014040 $1,644.83 5204024003 $1,620.75 5208010002 $1,463.10 5447015901 $14,095.54 5204024004 $2,393.00 5208010003 $1,656.75 5447018002 $2,210.21 5204024005 $4,129.30 5208010004 $1,623.50 5447018003 $4,041.35 5205020003 $967.80 5208010005 $3,155.00 5447018004 $2,536.34 5205020004 $905.45 5208010025 $3,209.45 5447018800 $457.49 5205020005 $5,304.75 5208011 008 $3,043.10 5447018900 $3,129.00 5205020028 $959.00 5208011 901 $610.00 5447018901 $2,100.28 5205020029 $1,056.00 5208011 902 $550.00 5447019001 $353.50 5205020030 $2,361.25 5208011903 $550.00 5447019002 $470.20 5205020032 $3,676.25 5208011 904 $550.00 5447019003 $400.00 5205021001 $2,559.50 5208011 905 $560.00 5447019004 $426.25 5205021002 $5,284.10 5208012001 $2,986.90 5447019005 $3,789.28 5205021 003 $1,182.20 5208012002 $1,684.95 5447019007 $150.72 5205021 004 $1,203.10 5208012003 $1,425.25 5447019008 $2,358.47 5205022002 $1,713.80 5208012004 $1,364.50 5447020006 $7,355.27 5205022003 $1,160.00 5208012005 $1,364.50 5447020900 $1,076.14 5205022004 $1,190.00 5208012006 $2,844.50 5447020901 $4,523.40 5205022005 $2,744.95 5208026903 $7,010.00 5447021001 $1,571.85 5205022012 $1,132.60 5208030001 $1,375.60 5447021002 $398.40 5205022031 $1,316.00 5208030002 $1,401.10 5447021016 $398.00 5205022032 $2,895.00 5208030003 $1,871.20 5447021018 $596.00 5205023003 $708.02 5208030017 $1,458.10 5447021019 $625.80 5205023004 $1,133.54 5208030018 $1,826.10 5447021 022 $4,790.57 5205023043 $1,250.95 5208030019 $1,883.40 5447021 023 $1,244.66 5205023045 $1,068.90 5208031002 $1,603.20 5447021 026 $795.00 5205023046 $430.76 5208031032 $3,179.25 5447021 027 $1,596.00 5205024001 $1,269.35 5208031034 $6,469.55 5447021028 $5,766.57 5205024003 $665.13 5208031 900 $1,280.73 5447022002 $519.20 5205024009 $916.41 5447012015 $1,343.25 5447022003 $642.95 13330 Buttemere Rd - Phelan CA 92371 - (760) 868-9963 - mred2@earthlink.net

Edward Henning & Associates URBAN REVITALIZATION -FUNDING THE LINCOLN HEIGHTS COMMUNITY BENE~Tr DISTRICT - LSPMPBID (Not Valid Without Signature and Certification Seal Within) 5447022004 5447022005 5447022007 5447022009 5447022010 5447022019 5447022022 5447022023 5447022027 5447022028 5447022030 5447023010 5447023018 5447023019 $747.41 $1,276.48 $398.00 $398.00 $398.00 $573.60 $927.96 $622.15 $6,049.98 $1,566.00 $3,201.12 $2,201.71 $1,752.05 $5,437.77 5447024001 5447024002 5447024003 5447024004 5447024005 5447024006 5447024007 5447024008 5447024029 5447024030 5447025001 5447025004 5447025005 5447025006 $1,259.20 $519.20 $377.60 $141.60 $609.20 $519.20 $1,349.95 $597.00 $1,514.95 $1,534.10 $816.56 $450.60 $246.40 $596.26 5447025007 5447025008 5447025009 5447025010 5447026001 5447026002 5447026021 5447026900 5447026901 5447026902 5447027004 5447027008 $395.84 $277.72 $599.12 $1,386.19 $1,882.18 $758.63 $519.20 $4,971.81 $543.27 $543.27 $156.81 $2,307.13? 13330 Buttemere Rd - Phelan CA 923,.,,50) 868-9963 - mred2@earthlink.net

ORDINANCE NO. ----- An Ordinance of Intention to establish a Landscaping, Security, Programming and Maintenance Property Business Improvement District to be known as the Lincoln Heights Business and Community Benefit District (District) pursuant to the provisions of the City's Landscaping, Security, Programming and Maintenance District Ordinance (Division 6, Chapter 9, Los Angeles Administrative Code). WHEREAS, the Landscaping, Security, Programming and Maintenance District Ordinance authorizes the establishment of Landscaping, Security, Programming and Maintenance Property Business Improvement Districts within specifically defined commercial districts of the City located within "special economic incentive zones" and the levying of assessments on real property within the districts to pay for improvements, maintenance and activities within the districts; and WHEREAS, the proposed District is a commercial district located entirely within census tracts with a poverty level of 20% or higher according to the 2000 census; and WHEREAS, property owners within the District, who will pay more than 30 percent of the total assessments proposed to be levied, filed written petitions requesting the City Council to establish a district. NOW, THEREFORE, THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS: Section 1. DECLARATION. Pursuant to the provisions of the Landscaping, Security, Programming and Maintenance District Ordinance, the City Council hereby declares its intention to establish a Landscaping, Security, Programming and Maintenance Property Business Improvement District to be known as the Lincoln Heights Business and Community Benefit District (District). Sec. 2. ADOPTION OF ENGINEER'S REPORT, MANAGEMENT DISTRICT PLAN AND PRELIMINARY REPORT OF THE CITY CLERK. The City Council hereby adopts, approves and confirms the Engineer's Report, the Management District Plan, and the Preliminary Report of the City Clerk, all of which are included in Council File No. 02-2769. Sec. 3. PARCELS WITHIN THE DISTRICT. The City Council hereby reaffirms its finding that all parcels, which will have a special benefit conferred upon them and upon which an assessment will be imposed, are identified in the Management District Plan. 1

Sec. 4. PROPORTIONAL BENEFIT. The City Council hereby reaffirms that the assessment proposed to be imposed on each parcel does not exceed the reasonable cost of the proportional benefit conferred on that parcel. Sec. 5. SEPARATION OF GENERAL AND SPECIAL BENEFITS. The City Council hereby reaffirms that it has separated the general benefits, if any, from the special benefits conferred on each parcel. Sec. 6. ASSESSMENTS SUPPORTED BY ENGINEER'S REPORT. The City Council hereby reaffirms that all proposed assessments are supported by a detailed Engineer's Report prepared by a registered professional engineer certified by the state of California. Sec. 7. DISTRICT BOUNDARIES. The City Council hereby declares that the boundaries of the proposed District are as described and illustrated in the Management District Plan and the Preliminary Report of the City Clerk. A description of the proposed District boundaries is as follows: In general, the boundaries include all of the commercial and public parcels located on the major commercial corridors within the Lincoln Heights area of northeast Los Angeles. These primarily include: Spring Street and North Broadway beginning at the eastern edge of the Los Angeles river, running east under the Interstate 5 Freeway to Lincoln Park Avenue and along Pasadena Avenue beginning at the river, running east under the Interstate 5 Freeway to Workman. Street and all of the north-to-south commercial corridors that cross between North Broadway and Pasadena Avenue in this area. Sec. 8. IMPROVEMENTS AND ACTIVITIES. The City Council hereby declares that the proposed levy of assessments is to fund the improvements and activities detailed in the Management District Plan. They include, but are not limited to: security, maintenance, district identity and administration. Sec. 9. ANNUAL ASSESSMENT AND DURATION. The proposed District's total annual assessment for the first year is estimated to be $599,083.00. The annual assessment for subsequent years may be adjusted based upon the Consumer Price Index for the Los Angeles region or by a flat percentage rate, not to exceed five percent (5%) of the previous year's assessment. The annual assessment shall be levied for a period of ten (10) years, which is the proposed duration of the District and the period during which the improvements and activities will be provided. Sec. 10. BASIS FOR CALCULATING ASSESSMENTS. The proposed annual assessment for each property is based upon an allocation of program costs by benefit zones and a calculation of assessable linear street front footage, lot square footage and building square footage. A full and complete description ofthe basis upon which the proposed assessment was calculated is contained in the Engineer's Report and the Management District Plan. 2

Sec. 11. COLLECTION OF ASSESSMENTS. The City Council hereby declares that to the extent possible, assessments shall be collected at the same time and in the same manner as County ad valorem property taxes and shall be subject to all laws providing for the collection and enforcement of assessments. For properties that do not appear on the County tax rolls or for assessments for any years in which the City is unable to transmit the assessment information to the County in sufficient time for the County to collect the assessments with the County ad valorem property taxes, the City Clerk may bill and collect the assessments by mailing assessment notices (Statement of Assessment Due) to each property owner within the District at the address shown on City records. Assessments billed by the City Clerk are due 45 calendar days after the date of the Statement of Assessment Due. Sec. 12. NOTICE, PROTESTS AND HEARING PROCEDURES. The City Clerk shall comply with the notice, protest, and hearing procedures prescribed in the Proposition 218 Omnibus Implementation Act (California Government Code, Section 53750, et seq.). Sec. 13. SUMMARY OF PROCEDURES FOR COMPLETION AND RETURN OF BALLOTS. This Ordinance of Intention and a ballot (in the form of attached Exhibit A incorporated here by this reference) shall be mailed by first-class mail to each property owner in the proposed District. The ballot may be completed by the person(s) or entity owning the property within the proposed District. To complete the ballot, the property owner should do the following: (1) verify that the information listed on the ballot is correct; (2) indicate his or her decision to either approve or disapprove of the District assessment by marking an "X" or other verifiable mark in the appropriate place; (3) sign the ballot; (4) insert the completed ballot into the secrecy envelope provided; and (5) place the secrecy envelope inside the return envelope and mail to the City Clerk's Office. Sec. 14. PUBLIC HEARING. The City Council will hold a public hearing to determine whether to establish the District and levy assessments at 10 a.m., or as soon thereafter as City Council business permits, and on any days for continued hearing as ordered by the City Council, in the John Ferraro Council Chamber, Room 340, City Hall, 200 North Spring Street, Los Angeles, California 90012. At the public hearing, the City Council shall hear the testimony of all interested persons for or against the establishment of the proposed District, the boundaries of the proposed District, or the furnishing of specified types of improvements or activities of the proposed District. Sec. 15. NOTICE TO RECORD OWNERS. The City Clerk shall give notice of the public hearing, in the manner specified in Government Code Section 53753, to the record owner of each parcel subject to the levy of an assessment. The notice shall be given at least 45 days before the public hearing date and shall specify that the public 3