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Page 2 of 7 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org Due to Seaport Centre’s waterfront location and the associated flood risk, in 1984, a perimeter levee and related flood and inundation protection facilities such as retaining walls and riprap (collectively, the “Seaport Centre Levee”) were constructed to protect the area. In 2001, Seaport Plaza was constructed on Seaport Peninsula adjacent to Seaport Centre. Following construction of the Seaport Centre Levee, ownership of the levee and related facilities transferred to the City in December 1985 because the City is the entity that must own and maintain public levees. Concurrently therewith, the City established the Seaport Centre Maintenance District (“Maintenance District”) to fund the City’s ongoing operation and maintenance of the Seaport Centre Levee, as well as certain stormwater, sanitary sewer, and water facilities within Seaport Centre (“Wet Utilities”). Seaport Plaza was not included in the Maintenance District and did not have levee facilities along its border with Redwood Creek. The northern-most segment of the Seaport Centre Levee was located along Seaport Plaza’s southern border with Seaport Centre, inland from Redwood Creek. In 2019, the Federal Emergency Management Agency (“FEMA”) prepared updated maps and determined that the Seaport Centre Levee did not meet the national standards for protecting against a 100-year flood event. This major flood event, as defined by the National Flood Insurance Program, has a one percent chance of occurring in any given year. Consequently, the Seaport Centre Maintenance District area was classified as being in a special flood hazard area, meaning it is susceptible to a high risk of flooding. The designation is important because buildings located in a special flood hazard area are required to obtain and maintain flood insurance for mortgages from federally regulated or insured lenders. Flood insurance for buildings and structures in a special flood hazard area is also more expensive. If a building or structure in a special flood hazard area does not have flood insurance and there is a flood, the property owner is ineligible for any type of federal assistance. In order to remove Seaport Centre and Seaport Plaza from the special flood hazard area, FEMA required improvements to the Seaport Centre Levee and required City to (a) construct levee and related flood and inundation protection facilities along the perimeter of Seaport Plaza facing Redwood Creek, along the border of HCP’s property with the neighboring property owned by Stanford, and along the side of Cardinal Way that faces the property owned by Abbott Laboratories (“Seaport Plaza Levee Improvements”) and (b) raise the existing levee improvements in Seaport Centre to an elevation above the 100-year flood event and replace or reinforce several retaining walls (“Seaport Centre Levee Improvements”). Collectively, the Seaport Plaza Levee Improvements and Seaport Centre Levee Improvements are the “New Levee.” To assist SCOA, MetLife and HCP in financing construction of the New Levee to meet FEMA requirements and future maintenance costs for the New Levee, City, SCOA, and HCP entered into the Levee Financing and Improvement Agreement dated October 27, 2020, as amended by that certain First Amendment dated December 13, 2021 (“LFIA”). The LFIA provides that the Parties shall enter into a Purchase Contract substantially in the form attached as Exhibit C to the LFIA (“Form Purchase Contract”) for the City’s acquisition of the New Levee. Under the LFIA, the purchase price for the New Levee is the lesser of the final budget for or the final, actual costs of the New Levee based on an accounting of actual costs prepared by SCOA. The LFIA and Form Purchase Contract require that City make an initial payment to HCP and MetLife when an Easement Deed and Grant Deed for the New Levee from each of HCP and MetLife are recorded. The LFIA provided that the initial payment would consist of the balance in the CFD Maintenance Fund after offsets for the projected costs of capital repairs for Seaport Centre Wet Utilities. Thereafter, City would pay the balance of the purchase 8.C. - Page 2 of 117 192