Asset Management Committee Meeting

Delridge Property & Asset Management Committee
Neighborhoods
Development
Associatian
AGENDA
"The purpose of DNDA is to engage community residents, businesses and
institutions in creating and maintaining a thriving Celridge community."
Meeting Time: Monday, August I 'I, 2008, 6 pm - 8:00 pm
Meeting Location: The home of Willard Brown (directions)
6351 18th Ave SW
Seattle, W A 98106
The committee's charge:

- Establish guiding principles that provide direction for management decisions.
- Help to ensure that new projects are planned sufficiently well to generate dependable
developer fees and ongoing revenue.
- Evaluate whether opportunities exist in existing projects to generate additional revenue.
- Focus both on the management of individual properties as well as the portfolio as a
whole.
- When individual properties are not performing to expectation, the committee will gather
and analyze pertinent data and establish decisive management plans. No property
should be underperforming for more than one or two years.
1. Open Meeting
- Review & Approve Meeting Notes from May 5
meeting
- Expectation of Committee Role &
Responsibilities by Members
- Review Priscilla's draft Task List & Priorities
2. Summary of Tenant Meetings
- Discuss briefing memo
- New Quantum staff
3. Property Information Sheets
- Discuss sample for external sheets
- Discuss sample for internal sheets
4. DNDA Debt Service Information
- Discuss Debt Service Chart
- Possibility of Refinancing Some Loans
5. Review Property Financial Performance
- 613012008 financial reports
- DNDA Subsidization of Property Cash Flow
6. New Property Management Contract
- Current Status
- Projected Time Line
5411 Delridge Way SW, Seattle, WA 98106 206-923-0917 (p) 206-923-0920 www.dnda.org
Delridge Property & Asset Management Committee
Neighborhoods
Development
Association
MEETING NOTES
"The purpose of DNDA is to engage community residents, businesses and
institutions in creating and maintaining a thriving Delridge community."
Meeting Time: Monday May 5,2008
Meeting Location: The home of Willard Brown
6351 18th Ave SW
Seattle, WA 98106
Present: Willard Brown, chair
Steve Botts
Derek Birnie, staff
Materials: Powerpoint
CAPMAP overview for Asset Management
DNDA Aiiiiiiai Pian for Asset ivianagemeni
Property and Financial reports for
- Vivian McLean Place
- One Community Commons
- Holden Manor
- Delridge Heights
- Croft Place Townhomes
- Cooper Housing
- Centerwood
See powerpoint for an outline of the discussion.
Regarding the committee's charge:

The Committee's Charge - the committee should establish guiding
principles that provide direction for
1. Oversee project budget development management decisions.
2. Monitor project financial performance - The committee should help to ensure
3. Long-term financial plans that new projects are planned
4. Recommend disposition of discretionary sufficiently well to generate dependable
properties developer fees and ongoing revenue.
5. - The committee will evaluate whether
6.
opportunities exist in existing projects to
7.
generate additional revenue - i.e.
throuah commercial tenants.
LJ~C,, I t3u,nrnrnec OCDA I F,aro,>rtnh ( ~/o,e - The committee will focus both on the
management of individual properties as
well as the portfolio as a whole.
- When individual properties are not
performing to expectation, the
committee will gather and analyze
pertinent data and establish decisive
management plans. No property
should be underperforming for more
than one or two years.
5411 Delridge Way SW, Seattle, WA 98106 206-923-0917 (p) 206-923-0920 www.dnda.org
Regarding Activities and Schedule for 2009:
- add the development of 2009 budgets
Activities & Schedule for 2008
Meet quarterly - 1st Monday of second month of
each quarter
Quarterly financial performance
Resident satisfaction survey
Advise Asset Manager workplan development
- Capital Needs Assessments
Advise Property Management contract renewal
Regarding review of properties

Projects - For the problem with the drainage pipe
at Youngstown, Willard recommends
Brandon Court Camacho & sons.
Vivian McLean Place
Centerwoad
Holden
Delridge Heights
Croft Place
Youngstown
West Seattle CRCIOCC
Regarding relationships:
Relationships - Willard can recommend a person at
SHA who may be able to help
Shared ownership interests:
.-Nalional Equity Fund
AuthorizersIFunders
.- King CountyAssessor
overcome bottlenecks in tenant
Private banks HUD paperwork processing.
-
WSHFC
Brandon homeowners
- SHA
KCHA
--
West Seattle Food Bank
Dellidge Library
Sound Families
Customers
-
Senrice Providers:
Quantum Property -.
+ HousingTenants
Youngstown Anchor Tenants
-. Management
Familv Services
King county Developmental
Neighborhood Service Center
Disabilities Division
Updates Updates
WSCRC Refinance near-complete Exposure:
Vivian McLean Place interest forbearance - Youngstow: Gates Foundation, Medina Foundation,
Burien, Ellensburg, WV Community Development
Tenant leadership: Program.. .
- Meetings - Croft: NationalAlliance to End Homelessness,
- Onine Group Seattle PI, Built Green, Builder Magazine, Sound
- Tenant-led activities Families, National American Indian Housing Council
New RFP from Sound Families - OCC: HDC sustainable design affinity group, Medina
Foundation, Seattle Office of Housing and HUD
undersecretary on homeless services, Washington
Families Fund, Senator Murray
Regarding updates:
Updates - Additional note: we are working to
amend the current two-year limit for
formerly homeless families in the
-Selecting an Asset Manager units funded by Sound Families.
-Improving CollaborationlCommunication - Our grant application to the
among stakeholders
-Improving unit turn time for Swnd Families technology matching fund to provide
Units internet access and online
-Developing open space management plans & leadership training for all tenants
protocols was declined. We will assess why it
-Drainage line at Youngstown
-Sewage leak at Delridge Heights
was declined and determine next
steps.
- We are working to get the assessed
value for Youngstown amended to
lower our property tax bill. This is in
a court of appeals in Olympia.
Other:
- Willard and SHA would like to get some help with the production staff at Youngstown in
putting together the July 4 party at High Point. Derek will work with Randy to see if we
are available and discuss fees.
- Add Willard's personal e-mail address to the list-serves.
- Willard will mark up financials and get comments back to staff by next week.
Discussion of members' expertise and how it adds value:

- Steve manages utility rights of way for PSE. It is a specialized field, but there are some
skill sets that are transferable:
o Problem-solving and negotiating with local governments and other ownership
stakeholders.
o Planning and facilitation of community meetings for project input.
Next meeting August 4 unless otherwise noted.

Draft Task List for Priscilla
August - December 2008
1) Monitor Compliance for each project with all appropriate funders/investor
2) Oversee property management

a. day to day oversight of property management company
b. tenant meetings
c. analyze existing management contracts
d. strategy for new contract
3) Staff support for Board's Asset Management Committee

a. Briefing materials for quarterly meetings
b. Meaningfhl updates & input between meetings
4) Finance structure for existing projects

a. Research refinance option
b. Discussion refinancing with bankers
c. Develop timeline for beneficial loan refinancing
d. Start process to refinance loans
5) Physical condition of structures

a. Complete Capital Needs Assessment (CNA) for each property as
required by public funders
b. Develop master plan for each property on implementation of
recommendations in CNA
6) Organizational capacity of DNDA

a. Record keeping & procedures
b. Represent DNDA to affordable housing committees
Delridge
Neighborhoods MEMO
Development
Association
TO DNDA Property and Asset Management Committee and senior staff

FROM Priscilla Call
DATE August 5,2008
REGARDING Results of tenant feedback meetings
Overview:
Last week, DNDA organized three separate meetings for the purpose of gathering direct
feedback from tenants of DNDA's housing properties regarding the management of the
properties. This memo summarizes the feedback we received and outlines a set of options
for maintaining and improving our performance.
Background:
DNDA operates 142 affordable rental housing units in seven bddings. Since February,
2004, DNDA has contracted with Quantum Management to provide management services
for all of them. The basic terms of the contracts are relatively vague. Some of the highlights
follow below.
Agent will carry out all marketing activities in a professional manner and in
compliance with all laws and regulations
Agent will take and process applications for rentals
Agent will prepare all leases
Agent will collect, deposit, and dsburse security deposits and rent
Agent will cause the Project to be maintained and repaired in accordance with
good management practices and local codes, and in a condition at all time
acceptable to Owner.
The agreement may be terminated by either party without cause as of the end of
any calendar month, provided at least sixty (60) days advance written notice
thereof is given by either party.
At this point in time, five of the seven contracts are beyond their stated expiration date of
February 15,2007. The Cooper Housing contract expired August 1,2008 According to the
contracts, they are continuing on a moth to month basis according to the original terms.
DNDA is a participant in an affinity group organized by the Housing Development

Consortium that is focused on Asset Management, and in particular on management
standards. In our estimation, our current contracts with Quantum contain relatively few
performance measures who which Quantum is accountable.
We organized the tenant feedback meetings in part to prepare for contract negotiations that
will lead to greater clarity in management performance expectations. Secondary outcomes
desired from the meetings included:
- improving tenant relations by assuring them that their voice and their concerns are
heard;
- informing tenants of a new management structure and new managers hired by
Quantum; and
541 1 Delridge Way SW, Seattle, WA 98106 206-923-0917 (p) 206-923-0920 www.dnda.org
- identifying tenant leaders who can be partners in building tenant organizations
capable of identifying and resolving issues - both in the buildings and in the broader
community.
There were three meetings:

1. Monday July 28 at Croft Place Townhomes focused on tenants of Croft and Holden
Manor. Eight residents attended, seven from Croft and one from Holden Manor.
For DNDA, Board Member Steve Boas, and staff members Derek Birnie, Priscilla
Call, and Phdlippia Goldsmith participated.
2. Wednesday July 30 at One Community Commons for tenants of OCC, Delridge
Heights and Centerwood. Nine residents attended, eight from OCC and one from
Centerwood. For DNDA, Board Members Steve Botts and Mchel Thomas; and
staff members Derek Birnie, Priscdla Call and Phillippia Goldsmith participated.
3. Saturday August 2 at Youngstown for Cooper Studos and Vivian McLean. Four
residents attended, all were from Vivian McLean. For DNDA staff members Derek
Birnie, Priscdla Call, and Phillippia Goldsmith participated.
Summary of feedback:
During the conversations, we categorized the majority of the comments into one of the
following categories:
- Claritv of Ex~ectations:D o tenants clearly understand what is expected of them and
what they can expect from management and property owner?
- Maintenance and U ~ k e e ~ D:o tenants and management meet expectations with
regard to property maintenance?
- Communications with. and Access to. Management: Can tenants contact
management to get questions answered or issues resolved?
- Communitv: To what degree is DNDA's housing meeting the mission of b d d n g
community for tenants, in addtion to providing affordable housing?
- P a r h p Lot: What individual issues are raised in conversation that are not systemic
or that do not affect a large number of tenants?
While some concerns raised were specific to a particular building, much of the feedback was
thematic and repeated at more than one meeting, or articulated several times in different
ways. Detailed transcriptions are avdable. What follows is a summary:
Claritv of Ex~ectations
- Unclear on the difference between tenant and management responsibilities in

instances such as responsibility for garden areas
- Tenants receive three day & ten day notices with no clear explanation of why they
receive the notice
- What are tenant responsibhties with regard to illegal activities such as drug use?
- How is the rent amount determined? Need more notice of coming rent increases
- What are the criteria of determining when a tenant is, or is not, billed for
maintenance work?
- Tenants do not know there is an appeal process, or what it is
- Lease renewal process & requirements not clear
Maintenance & U ~ k e e ~
- Repeated comments regarding the cleanliness of the interior of the buildngs

- Bllling issues with Seattle City Light, meter readers do not have access to OCC
- Parking mentioned at several properties. Not enough parking, tenants not parking
properly. Need some type of parhng system to alleviate these issues
- Frequency of garbage pick up and cleanliness of garbage areas brought up for a
number of properties
- Need for play equipment for kids
- Who is responsible to keep the litter picked up?
Communication with. & Access to. Management
- Tenants need 24 hour contact information for management staff

- Tenants should have an opportunity to respond, and correct when appropriate, prior
to receiving 10 day & 3 day written notices
- Once a tenant receives a notice they are unable to contact management staff to
discuss and understand the issue
- Tenants should receive receipts for all rent and other payments made to management
- Tenants need clear description of tenant rights and responsibilities
- New tenants should have opportunity to review lease before they go in to sign the
paperwork
- There should be posted times that management staff will be in the oftice, and they
should always be there during the posted times
- Management staff "never" return phone calls, mentioned repeatedly
- No management response for emergencies on week ends
- Management makes verbal agreements, then doesn't follow through and tenant has
no documentation of agreement
Community
- A number of complaints regardmg behavior of other tenants
- Management needs to show even enforcement of rules & requirements
- Need to identify and develop tenant leaders at each property
o Provide training and equip volunteer leaders in skills to identify and resolve
issues
Parking Lot
- Review Mutual Housing obligations at time of move in
- Tenants have turned in work orders for broken items in units. The item is never
fixed and the tenant does not receive a response
- Need bike rack, trash cans, and rubber mats in OCC courtyard
- Vandalism is a continuing problem
- Bark should not be put in garden areas
Recommendations and Next Steps:
Based on the feedback we received from tenants, we are recommending the following steps:
1. Finish the work with the HDC affinity group to establish a clear set of performance
criteria.
2. Determine whether to open the management to a competitive bidding process, or
does Quantum hold some benefit by its current position. Considerations:
a. Systems: Quantum holds all of our records in their files and databases.
What cost transferring to another management entity?
b. Staff: Several people, includng tenants, are employed by Quantum
specifically to work on DNDA properties. What impact on them of a
conversion.
c. Tenant disruption
3. Open an explicit renegotiation of the contracts and include refined performance
measures.
4. Work with DNDA finance staff to identify all appropriate funder & investor
requirements for each property. Review reports and financial statements to identify
areas for improvement. Then implement changes necessary to achieve identified
improvements.
August 11,2008
Manaqement Restructure
DNDA Properties Manaqed bv Quantum Manaqement
The re-structure is moving forward well. Shelly is still working out of the OCC
office through August and is working with each new manager on the transition
(ie. getting records to them, helping them with rent posting, bringing them up to
speed on each account). The following is an overall update:
-
Croft Place New managers, Chrystal and Roland Harris have officially started
working at the site as of Monday, August 3rd, but they are facing some
challenges in that they still need an operational computer and a unit for them to
move into (the current vacant unit is a Family Services unit). They are currently
living off site with a relative in West Seattle until a unit becomes available. They
are reporting to the office daily. Quantum terminated the Community Assistant,
Terri, as of July 31st. A notice for the residents regarding the management
transition was give to Chrystal last Wednesday (816) for distribution to the
residents. Chrystal was in the Quantum office on 816 for Quantum's new
manager orientation training and then later in the month she will be provided the
rent posting (e*site) training.
A meeting will be set up with Phillippia and Chrystal, as well as Hazel the Case
Manager, so everyone is on the same page from the beginning. There are also
some policylprocedures that will be addressed with relation to the tenant co-op
and their volunteer hours.
Vivian McLean - As of Tuesday (815) Quantum received the final cert approval
for the new managers, Shead and Tina Manning. They moved into the vacant 3-
bedroom unit. They will work out of a cubicle in the DNDA main office. The
notice of management transition for the residents was provided to Tina on 816 to
deliver to the residents. She was in the Quantum office on 816 for new manager
orientation training and then later in the month will be provided the rent posting
(e*site) training.
OCC - On last Tuesday (815) it was confirmed that the first couple selected was
over income to move into OCC. On 816 Quantum posted a new ad for the
position and is seeking a replacement team. This couple will remain at Cooper as
the key holders. Shelly is remaining at OCC at this point. Kali, the key holder at
OCC has not been notified yet of the transition, and won't be until Quantum is
certain of the person and timeline. There is a vacant 2-bedroom unit ready for
the new team once they are hired and the office in the commercial space will be
their office space.
CenterwoodIDelridge - Robin Graves, the new manager came in on Monday
(814) for the new manager orientation. She is a current qualified tenant already
living at Delridge but has expressed interest in moving into Centerwood to the
vacant 2 bedroom unit as she is now in a studio unit with her 14 year old son.
Quantum still needs to confirm that she will be able to income qualify for the
property. Shelly will be met with her on Saturday (819) to transition the tenant files
and to review pending items. The letter to the residents has been prepared and
will be handed out after the Saturday meeting with Shelly. Francisco will remain
living at Centerwood and will do the maintenance for both properties.
Holden Manor - W e have hired the manager from Holden Vista across the
street from Holden Manor. Her name is Myell Jewel and she began last week.
She will continue to reside at Holden Vista. She completed new manager
orientation training on 8.6. She has an office set up at Holden Vista that was
missing a fax machine, but Orca has provided one at no charge. Quantum is
seeking a maintenance person for both properties. The hope is that they will be
able to live at Holden Manor (although there isn't a unit available at this time) and
will receive a rent credit. Reggie, the current CA has indicated that he may be
interested in the position (and he is income qualified already) and the received a
resume from another Holden Manor resident. Quantum will discuss these two
people with Myell before moving forward with either one. A notice of
management transition was hand out to the residents last week.
DNDA website. Once we have the phone numbers established for each
property, we will need DNDA to update their website with the new staffing and
phone numbers.
Summarv - New M a n a ~ eTraining

r
On July 24th, Chrystal Harris (Croft) attended the annual Quantum Management
training including fair housing training with the Seattle Office of Housing and the
Washington State Human Rights Commission; on August is', Chrystal (Croft) and
Tina (Vivian) attended the SHA Section 8 paperwork training session at the
Porchlight office in Ballard. On 816 Chrystal (Croft), Tina (Vivian) and Myell
Jewell (Holden) were in the Quantum office going through their new manager
orientation and then will be back at the end of August for E*site (rent posting)
training as well as tax credit training.
Lake Washington Apartments
Owner: Lake Washington Limited Partnership, a Washington limited partnership
General Partner: Lake Washington Apartments L.L.C., a Washington limited liability

company
First Mortgage: $10,750,000 floating rate tax exempt bonds. Interest only during rehab.
Commence amortization January 29, 1999. (Reimbursement Agreement
p. 3.4)
Letter of Credit: Seafirst Bank, Key Bank and U.S. Bank

1 0 year Letter of Credit. Initial Letter of Credit = $10,880,800
Fee: 1% of Letter of Credit - paid October 1 each year for following
year.
Commencing October 1, 1997, must deposit monthly 1112 of Letter of
Credit fee due following October.
Seattle Loans: Non-Amortizing ($2,654,272)

($4,548,232) Accrue 3% simple interest first 20 years; 0% interest thereafter, due in 40
years or sale or refinance. 5% of accrued interest forgiven each year
between years 21 and 40.
Amortizing ($1,293,960)
1. -
First Amortizing 5750,000 @ 1% simple interest with interest
and principal payments starting January 1, 2000, @ $1,250.53
per month.
2. Second Amortizing - $543,960. 1% simple interest with monthly
payments as follows:
January 2007 $1,450
January 201 I $1,450
January 201 5 $1,450
Ninety days prior to January 2007, 201 1 and 201 5 partnership
can request a reduction for the foilowing 4 years if cash flow is
insufficient to make payments.
3. Tax Exempt $600,000 1% simple interest from January 27, 1998
with monthly payments of $1,600 commencing Jan. I , 2007.
Borrower can request a reduction based on cash flows.
Washington State Housing 1. $2,000,000 - 0% interest; principal paid 2% per year f $40,0001
Trust Fund Loans beginning December 1, 1999.
( $2,670,000): 2. $670,000 - 1% interest 5 0 year arnort ($17,044 yearly) beginning
December 1, 1999.
LlSC Guarantee: $488,000

Fee: $4,880 per year commencing April 1, 1998.
Released February 1, 2002, if no default (See 5.2 Reimbursement Agreement)
Bond Rate:
Washington State Finance Commission 0.300

Seafirst L.C. Fee 1.OOO
Trustee 0.025
Remarketing Agent 0.1 25
Rating Agency .0465
Bond Cap: 8% on bonds 1.496%
Replacement Reserve: $205 per unit per year commencing as each building is placed in service.
Increases 2% per year (Partnership Agreement, Exhibit A, J(2) and (31
Operating Reserve: $230,000 initially plus 1% of gross monthly rent collections commencing
when last unit is placed in service, until operating reserve reaches
$400,000 (Partnership Agreement, Exhibit A, J(4). Can never draw
down the operating reserve below $230,000 (Partnership Agreement 7.7
(a) iii).
Development Fee (split $200,000 Start of Construction

50/50 with SEED): $135,368 4/15/99 (Partnership Agreement, Exhibit A, F(211b))
Deferred Development Fee: $1,250,542 @ 7% interest, paid from surplus cash
Partnership
Management Fee: $25,000 commencing March 1, 1999. (Part. Agreement Exhibit D2.)
Distribution of Cash Flow:
Equity Payments:
Guaranties:
1. Rehab cost overruns Section 7.2 Partnership Agreement

2. Operating Deficits. Guarantee ends a t later of:
(a) 95% occupancy for 1 month
tb) 3 months of operating with no operating deficits.
'Conditions on last payment

SUMMARY 1
Columbia Hotel
4902 Rainier Avenue South
Seattle, W A 98118
+
(206)723-7017 phone (206)723-5985fax
www.seedseattle.org
The Columbia Hotel is a small apartment community located in a historical building in the heart of
Columbia City. Offered are studio and one-bedroom apartments in a secured building. The Columbia
Hotel is within walking distance of major bus lines, local coffee shops, restaurants and banks. The
neighborhood amenities are listed below.
Transportation
= Major Bus line on Rainier Avenue South (Metro bus numbers 7, 9)
MarketsDrug Stores
= Safeway Grocery Stores
= QFC Grocery Stores
= GroceryOutlet
Walgreen's Drug Store
Pu hlic Facilities
Seattle Public Library - Columbia City Branch
U.S. Post Office - Columbia City Branch
Banks
Wells Fargo
= U.S. Bank
Bank of America
Seattle Public Schools

= Franklin High School
John Meir Elementary
RestaurantslRecreation
Rainier Community Center (Indoorloutdoor basketball courts, after school programs)
= Farmer's Market - Columbia Plaza (May through October)
= La Medusa Restaurant
Deux Tamales Restaurant
= Columbia Ale House
Starbucks Coffee
Lottie Mott's Coffee Shop
SouthEast EffectiveDevelopment
''Live in Seattle's Histoiy . . . Live in the Heart of u Newly Revived Columbia City"
Lilac Lodge
5033 - 37* Avenue South
Seattle, WA 98 118
(206) 722-8399
www.seedseattte.org
The Lilac Lodge Apartments are newly redecorated and tucked away in a quiet residential
neighborhood in Columbia City. These one-bedroom apartments are designated for handicapped,
disabled and senior citizens. They provide a secured-entry building, resident parking, laundry facilities
and on-site management. A spacious garden area provides an atmosphere for quiet walks for the
residents. In addition to the quiet and pleasant environment that Lilac Lodge provides, the
neighborhood amenities are listed below.
Transportation
Major Busline on Rainier Avenue South (Metro bus numbers 7 & 9)
MarketdDrug Stores
= Viet-Wah Market
Safeway Grocery Store
= Long's Drug Store
= Walgreens Drug Store
Public Facilities
= Seattle Public Library - Columbia City Branch
U.S. Post Office - Columbia City Branch
Department of Social & Health Services (Graham Street Location)
Banks
= Bank of America

= Franklin High School
= Orca Elementary School
Restaurantskcreation
= Rainier Community Center (Indoor/outdoor basketball courts, after school programs & activities)
= Columbia Ale House
= Lottie Mott's Coffee Shop
= Starbucks
SouthEast Effective Development
"Stop and SmeN the Roses . . . and Join the Lilac Lodge Housing Community"
Nuuanu Pali Apartments
' ~ Martin Luther King Jr. Way South
5031 3 ~Avenue
Seattle, WA 98118
(206)760-2708
www.seedseattle.org
Nuuanu Pali Apartments are located on Martin Luther King Jr. Way South in the Rainier Valley. This
location provides easy access to nearby businesses in the surrounding neighborhood. Nuuanu Pali
offers 2 bedroom apartments, complete with resident parking, laundry facilities and professional on-site
management. The location is convenient to the residents for the following reasons:
Transportation
Major Busline on Martin Luther King Jr. Way South (Metro bus numbers 42,48)
MarketslDrug Stores
= Viet-Wah Market
= Safeway Grocery Store
* Grocery Outlet
= Long's Drug Store
Walgreens Drug Store
Public Facilities
Seattle Public Library - Columbia City Branch
= U.S. Post Office - Columbia City Branch
Department of Social and Health Services (Graham Street Location)
Banks
* Wells Fargo
= U.S. Bank
- Washington Federal Savings Bank

Washington Mutual

Franklin High School
* Orca Elementary School
Restaurants/Recreation
Rainier Community Center (Indoorloutdoor basketball courts, after school programs & activities)
= McDonald's
= Baskin & Robbins Ice Cream
"A Quiet Island Housing Community located in the busy Sea of Southeast Seattle"
July 9,2008
Debt Information for DNDA Properties as of 12/31/2006
Property Lender Interest Rate Annual Debt Loan Balance as of

Service Payment 12/31/2006
Delridge Heights * Anchor Savings 7.375% $31,284 $355,342
Bank
Delridge Heights City of Seattle 1% 50% net cash flow $370,000
Delridge Heights CTED 0% $4,625 $203,500
Holden Manor City of Seattle 1% 50% net cash flow $288,197
Holden Manor * Anchor Savings 7% $2 1,156 $247,143
Bank
Holden Manor CTED 1% $4,867 $178,755
Brandon Court KeyBank 5.75% $26,388 now - $323,450
balloon of $294,380
due 7/20 11
Centerwood * Anchor Savings 7% $28,344 $330,392
Bank
Centerwood City of Seattle 1% $50% of net cash $428,134
flow
Centerwood CTED 1% $10,608 $142,026
Cooper Cultural Impact Capital 6% Paid off 812006 $0
Center
Property Lender Interest Rate Annual Debt Loan Balance as of
Service Payment 12/31/2006
Vivian McLean City of Seattle 1% 50% net cash flow $830,000
(Delridge Mutual
Hsing)
Vivian McLean Wash. Mutual 6.92% $5 1,876 $627,163
Vivian McLean CTED 1% $1 1,659 $420,837
Vivian McLean National Equity nla nla Limited Partner
Fund (NEF) Tax (NEF) equity
Credit Investor 12131/06 - $406,118
Croft Place City of Seattle 1% 37% of net cash flow $1,5 10,773
Croft Place City of Seattle 1% 13%ofnetcashflow $391,000
Croft Place CTED 0% deferred $852,500
Croft Place * KeyBank FHLB + 1.5% Approx $14,28 1 $1,136,314
Croft Place NEF Tax Credit nla n/a NEF equity 12131I06
- Investor -- $984,496
Historic Cooper US Bank 4.875% $50,808 $800,000
School
Historic Cooper City of Seattle 1% 50% net cash flow $1,950,000
School
Historic Cooper CTED 0% Deferred payments $1,62 1,820
School start 3/2007
Historic Cooper NEF Tax Credit nla n/a NEF equity 12131/06
School Investor -- $2,524,070
Table 4. Income and Expenses for Year Ending December 3 1, 2007
Project Name : Centerwood
Prepared by: Email:
Tables 4(a) 4(b)
Reserves
Project: Centerwood
Table 4 (a) Replacement Reserve Deposits and Withdrawals

Dl ring Reporting Period ending Dec. 31,2007
Beginning Balance $ 46,445.22
I Date Explain All Withdrawals & Deposits Withdrawals Deposits Reserve Balance
Deposits $3,168 49,612.78
Owner Contribution $ 6,191.00 55,803.78
Interest Income $ 153.21 55,956.99
Ending Balance 55,956.99
Table 4 (b) Operating Reserve Deposits and Withdrawals

During Reporting Period ending Dec. 31,2007
Date Explain All Withdrawals & Deposits Withdrawals Deposits Reserve Balance
1/1/07-12/3 Deposits $1,121 14,854.67
1/1/07-12/3 Interest Income $ 42.95 14,897.62
I I I I
Ending Balance1 14,897.62
2007 Table 4 a,b Reserves

Project Name : COOPER ARTIST HOUSING
Prepared by: Gaye Barrett Email: barrettg@quantumm
- .
INCOME
Tables 4(a) 4(b)
Reserves
Project: COOPER ARTIST HOUSING

Beginning ~ a l a n c e l$ 10,009.1 7 1
10,009.1 7
Monthly Deposits $ 15,046.24 25,055.41
Interest accrued - 1/1/07 - 12/3 1/07 $ 668.71 25,724.1 2
I
I I I
Ending Balance1 25.724.1 2

105,798.43
Monthly Deposits $ 5,400.00 1 1 1,198.43
Interest accrued - 1/1/07 - 12/3 1/07 $ 3.61 7.00 1 14.81 5.43
I I I I
Endina Balance1 1 14.8 15.43

Project Name : Croft Place
Prepared by: Lesley McCullar Ernail: mccullarlQ cluantumr
INCOME
Subsidy Income (see instructions) - 0

Tables 4(a) 4(b)
Reserves
Project: Croft Place

1/07-12/07 Deposits $ 6,649.92 15,587.92
1/07-12/07 Interest Income $ 477.56 16,065.48
1/1/2007 Prior Year Adj $ 2,316.25 13,749.23

1/07-12/07 Prior Year Adj $ - $ 1.37 90,402.37
1/07-12/07 Interest Income $ 4,662.46 95,064.83
1/07- 12/07 Deposits $ 3,720.96 98,785.79

Table 4, Income and Expenses for Year Ending December 31, 2007
Project Name : Delridge Heights
Prepared by: Ernail:
JNCOME
I I
Subtotal1
Tables 4(a) 4(b)
Reserves
Project: Delridge Heights

Beginning Balance $ 61 ,I 38.42
1/07-12/07 Deposits $ 2,760.00 63,898.42
1/07-12/07 Interest Income $ 1,104.58 65,003.00
1 2/3 1/ZOO7 Deposit not posted at bank $ 230.00 64,773.00
I I I
1
I
I Ending Balance1 64.773.00

1 /07-12/07 Deposits $ 996.00 6,401 .I 2
1 /07-12/07 Interest Income $ 44.58 6,445.70
1 2/3 1 /ZOO7 Deposit not posted at bank $ 83.00 6,362.70
I I I
Ending Balance1
I
6,362.70 1
Table 4. Income and Expenses for Year Ending December 31, 2007
Project Name : Holden Manor
Prepared by: Lesley McCullar Email: mccullarl@quantumr
INCOME
( Subsidy Income (see instructions) OPERATING I SERVICES
Pest Control I I
Fire Safety $1 091
Tables 4(a) 4(b)
Reserves
Project: Holden Manor

Beginning Balance $ 19,269.1 1
1/07-12/07 Deposits $ 2,600.04 21,869.1 5
1/07-12/07 Interest Income $ 259.48 22,128.63
I I

Date I Explain All Withdrawals & Deposits I Withdrawals I Deposits Reserve Balance
1/O7-12/07 '~e~bsits $ 999.96 14,801.57
1/07-12/07 Interest Income $ 180.19 14,98 1.76
I I
I Ending Balance1 14.981.76

Table 4. Income and Expenses for Year Ending December 31, 2007
Project Name : One Community Commons
Prepared by: Gaye Barrett Email: barettg@quanturnrns
INCOME
EXPENSES OPERATING SERVICES

On Site management I $41,875
Off Site Management $20,400
Audit/Accounting I I
Legal Services
Tables 4(a) 4(b)
Reserves
Project: One Community Commons

During Reporting Period ending Dec. 31,2007 I I
Beginning Balance
Date Explain All Withdrawals & Deposits I Withdrawals ( Deposits Reserve Balance
I I -
NONE ESTABLISHED IN FY2007

DUE TO NEW LEASE-UP; PERM
FINANCING IS IN PLACE AS OF
5/08
I I I
Ending Balance1
I
- I

Beginning Balance
-
NONE ESTABLISHED IN FY2007

DUE TO NEW LEASE-UP; PERM
FINANCING IS IN PLACE AS OF
5/08
Ending Balance -

Project Name : Vivian McLean Apartments
Prepared by: Email:
Tables 4(a) 4(b)
Reserves
Project: Vivian McLean Apartments

Date Explain All Withdrawals 81 Deposits Withdrawals Deposits Reserve Balance
1/07-12/07 Deposits $ 6,699.96 3 1,017.96
I I I I
Ending Balance] 31,017.96

1/07-12/07 interest income $ 2,563.97 71,973.97
I I
I
I I
Ending Balance1 71,973.97

Delridige Neigborhoods Development Association
Schedule of DNDA Subsidizations of Rental Property Cash Flow Shortfalls
Fiscal Years 2007 and 2008
Delridge DMHLPI Historic Holden WSCRC -

Centerwood Croft Place Heights Vivian McL Cooper Sch. Manor OCC Total
5,476.00 5,476.00
3,500.00 3,500.00
6,000.00 6,000.00
5,000.00 5,000.00
$ 2,000.00 % 2,000.00
10,000.00 10,000.00
1,000.00 1,000.00
10,000.00 10,000.00
1,600.00 1,600.00
5,200.00 5,200.00
8,000.00 8,000.00
6,191.00 6,191.00
2,601.00 2,601.00
6,272.00 6,272.00
$ 8,191.00 $ 15,200.00 $ 12,500.00 $ 18,601.00 $ - $ 18,348.00 $ - $ 72,840.00
* Insurance Premium
Transfer per 2/28/07
Per ED Recommendation $ 2,000.00 $ 9,796.00 $ 1,000.00 $ 2,106.00 $ 1,511.30 $ 16,413.30
I January -June 2008

I
Other Transfers taken from

Operating Reserve Accounts
Z:\- DNDA Board\Committees\PropertyCommittee\2008 Property & Asset Management Committee\20080811materials\Rental Properties-DNDA Subidization for Cash
Flow Shortfalls.xls 8/8/2008
Delridge Neighborhoods Development Association
-
Summary Cash Flow Report Presentation: Rental Housing Operations
From 1/1/2007 Through 3/31/2007
Date: 5/2/2007 5 3 5 PM Page: 1

Quantum Management Services, Inc.
~anagementAgreement
Received Centelwood Apartments
BNDA Page 1 of 8
JAN 2 7 2005
MANAGEMENT AGREEMENT
THIS AGREEMENT is made this lSt

day of Februarv , 2005 , between
the "Owner": Delridqe Neiahborhoods Development Association
Address: 5411 Delridqe Way S.W.
Seattle, WA 98106
and the "Agent": , Quantum Manaqement Services, Inc.
Address: P.O. Box 2170
Lvnnwood, WA 98036
1. Appointment and Acce~tance: The Owner appoints Quantum Manaqement Services,

Inc. (hereinafter referred to as "Agent") as the exclusive agent for the management of
-
the property described in Section 2 of this Agreement, and the Agent accepts the
appointment, subject to the terms and conditions as set forth in this Agreement.
2. Description of Proiect: The property to be managed under this Agreement (hereinafter

referred to as the "Project") is an apartment building with city and state funding
consisting of the land, buildings and other improvements known as:
Name: Centerwood Apartments
.Number of Units: 12 units
3. Basic Information: As soon as possible, the Owner will furnish the Agent with a
complete set of "as-built" plans and specifications and copies of all guaranties and
warranties pertinent to construction, fixtures and equipment. With the aid of this
information and inspection by competent personnel, the Agent will thoroughly
familiarize itself with the character, location, construction, layout, plan and operation of
the project, and especially the electrical, heating, plumbing and ventilation systems and
other mechanical equipment as appljcable.
4. Marketina The Agent will carry out all marketing activities in a professional manner
and in compliance with all Federal and State Fair Housing and Equal Opportunity
regulations. All advertising and marketing costs will be paid out of the General
Operating Account as project expenses.
5. Rentals: The Agent will offer for rent and will rent the dwelling units in the project. The
following provisions will apply:
a. The Agent will show the premises to prospective tenants.

Management Agreement
Centenmod Apartments ,
Page 2 of 8
b. The Agent will take and process applications for rentals. If the apartment
application is rejected, the applicant will be given written notification of the
rejection with the reason for rejection. The rejected application, with for a copy
of the rejection notice, will be kept on file for one (I)year. A current list of
prospective tenants will be maintained.
c. The Agent will prepare all dwelling unit leases, and will prepare the leases to
reflect the Owner as being the Lessor. The lease will comply with all
requirements of the regulatory agreements secured against the property. In
executing the lease, the Agent will identify itself as Agent for the Owner. All
leases will be in a form approved by the Owner.
d. The Agent will collect, deposit, and disburse security deposits, if required, in
compliance with the terms of the lease and any State or local laws governing
tenant security deposits. Security deposits will be deposited by the Agent in a
separate account with a bank or other financial institution approved by Owner.
The institution will be one whose deposits are insured by an agency of the
United States government. This account will be carried in the Agent's name
and designated of records "Centerwood Securitv De~osit Trust Account."
6. Collection of Rents and Other Recei~ts: The Agent will collect when due all rents,
charges and other amounts receivable on the Owner's account in connection with the
management and operation of the Project. Such receipts will be deposited
immediately in the property's operating account with a bank selected by the Agent.
The bank will be one whose deposits are insured by the Federal Deposit Insurance
Corporation. This account will be carried in the Agent's name and designated of
records as Centerwood Operating Trust Account.
Enforcement of Leases: The Agent will secure full compliance by each tenant with the
terms of the lease. Involuntary termination of tenancies should be avoided to the
maximum extent consistent with sound management of the Project. The Agent may.
lawfully and in compliance with all regulatory agreements secured against the property,
terminate any tenancy when, in the Agent's judgment, sufficient cause (including, but
not limited to, the non-payment of rent) for such termination occurs under the terms of
the tenant's lease. For this purpose, the Agent is authorized to consult with legal
counsel to be designated by the Owner, to bring actions for eviction and to execute
notices to vacate and judicial pleadings incident to such actions; provided, however,
that the Agent will keep the Owner informed of such actions and will follow such
instructions as the Owner may prescribe for the conduct of such action. Any and all
attorneys' fees and other necessary costs incurred in connection with such actions will
be paid out of the General Operating Account as Project expenses.
8. Maintenance and Repair: The Agent will cause the Project to be maintained and
repaired in accordance with good management practices and local codes, and in a
condition at all times acceptable to the Owner. This will include, but is not limited to
cleaning, painting, decorating, plumbing, carpentry, grounds care, and such other
maintenance and repair work as may be necessary, subject to any limitations imposed
by the Owner in addition to those contained herein. All maintenance and repair items
will be paid out to the property's operating account as Project expenses.
Centelwood Apartments
Page 3 of 8
Incident thereto, the following provisions will apply:
a. Special attention will be given to preventative maintenance and, to the greatest

extent feasible; the services of regular mainienance employees will be used.
b. The Agent will contract with qualified independent contractors for the
extraordinary repairs beyond the capability of regular maintenance employees.
c. The Agent will systematically and promptly receive and investigate all service
requests from tenants, take such action thereon as may be justified, and will
keep records of the same. Emergency requests will be received and serviced
on a twenty-four (24) hour basis. Serious complaints will be reported to the
Owner after investigation.
d. The Agent is authorized to purchase all materials, equipment, tools, appliances,

supplies and services necessary for proper maintenance and repair of the
Project. All such costs are to be paid out of the property's operating account as
project expenses.
e. Notwithstanding any of the foregoing provisions, the prior approval of the Owner
will be required for any expenditure which exceeds One Thousand Dollars
($1,000) in any one instance for labor, materials, or otherwise in connection
with the maintenance and repair of the Project. This limitation is not applicable
for recurring expenses within the limits of the operating budget or emergency
repairs involving manifest danger to persons or property, or required to avoid
suspension of any necessary services to the Project. In the latter event, the
Agent will inform the Owner of the facts as promptly as possible.
f. The Agent is not responsible for conditions that are pre-existing to the date of
this contract or for maintenance or conditions which are identified subsequent
to the contract with the Owner but not funded by the Owner.
9. Utilities and Senlices: In accordance with good management practices, the Agent will
make arrangements for water, electricity, gas, fuel, oil, sewage and trash disposal,
vermin extermination, decorating, laundry facilities, and telephone service. The Agent
will make such contracts as may be necessary to secure utilities and services acting as
Agent for the Owner.
10. Em~lovees. The project will have an on-site Assistant Manager and an off-site
Manager who will be employees of the Agent, and will be hired, supervised, and
discharged by the Agent, subject to the following conditions:
a. The Manager will have duties of the type usually associated with his position. The
Owner agrees to assist the Manager in obtaining a Real Estate License.
b. The compensation (including fringe benefits) of the Manager and Assistant

Manager will be as prescribed in the Employment Contracts.
c. The Owner will reimburse the Agent for compensation (including fringe benefits)
payable to Resident Manager, maintenance employees or other such employees
Centerwood Apartments
Page 4 of 8
as the Agent deems necessary to properly run the Project, and for all local, state
and federal taxes and assessments (including, but not limited to, social security
taxes, unemployment insurance, workman's compensation insurance, payroll
processing fees, city licensing fees and B&O taxes) incident to the employment
of such personnel. Such reimbursements will be paid out of the property's
Operating Trust Account and will be treated as Project expenses. Alterations in
the staffing structure will be approved by the Owner in advance.
d. Compensation (including fringe benefits) payable to the on-site staff, such as the
Assistant Manager and off-site Manager, plus payroll processing fees, all city,
state and federal taxes and assessments or licenses incident to the employment
of such personnel, will be borne solely by the Project and will not be paid out of
the Agent's fee. The rental value of any dwelling unit furnished with any rent
reduction or rent-free to the on site Assistant Manager will be treated as a cost to
the Project.
e. Any personnel costs of the Agent's head office are born by Agent.
11. Repairs and Reports: The Agent will have the following responsibilities with respect to
records and reports:
a. The Agent will establish and maintain a comprehensive system of records,

books, and accounts in a manner satisfactory to the Owner. All records, books
and accounts will be subject to examination at reasonable hours by any
authorized representative of the Owner.
b. The Agent will furnish such information (including occupancy reports ) as may
be requested by the Owner from time to time with respect to financial, physical,
or operational conditions of the Project.
c. The Owner and the Agent will work together to prepare an estimated operating
budget for the project.
12. Operatinq Account: This will be a checking account and must be maintained in a bank
or banks insured by the Federal Deposit Insurance Corporation (FDIC).
a. Deposits: All income and revenue from the project shall, upon receipt,
immediately be deposited in the property's Operating Trust Account. This will
include rent receipts, laundry revenue, and any other project income. The
Owner and Agent may also at their discretion at any time deposit therein other
funds which are also to be used for purposes authorized by this section.
b. Disbursement: Not later than the 25th of each month, out of the General
Operating Account, the Agent shall pay the actual, reasonably and necessary
monthly expenses, for the current and ensuing month of operating and
maintaining the Project.
13. Security Deposit Agreement: Immediately upon receipt, all tenant security deposits
collected shall be deposited into a separate account at a federally insured institution,
and shall be handled in compliance with any state or local laws governing tenant
Page 5 of 8
security deposits. Funds in the Security Deposit Trust Account shall only be used for
authorized purposes as intended and represented by the project management and,
until so used, shall be held by the Agent in trust for the respective tenants. Any
income as a result of Lease violations and any interest that may be earned which is not
payable to the respective tenants shall be transferred to the property's Operating Trust
Account and treated as income of the housing project.
14. Bids, Discounts. Rebates, etc.: The Agent will obtain contracts, materials, supplies,
utilities, and services on the most advantageous terms to the Project, and is authorized
to solicit bids, either formal or informal, for items that can be obtained from more than
one source. The Agent will secure and credit to the Owner all discounts, rebates or
commissions obtainable with respect to purchases, service contracts, and all other
transactions on the Owner's behalf. Owner must approve all contracts that will exceed
the One Thousand Dollars ($1,000) limitation imposed in paragraph 8e.
15. Insurance: The Owner will effect and maintain all insurance to be carried with respect
to the Project and its operations and deliver all billings and a complete copy of each
insurance policy to the Agent. The Agent will pay premiums out of the General
Operating Account. Premiums will be treated as operating expenses. All insurance
will be placed with companies, on conditions, in amounts, and with beneficial interests
appearing thereon as shall be acceptable to the Owner provided that the same will
include public liability coverage, with the Agent designated as one of the additional
insured, in amounts not less than $1,000,000 per occurrence and $1,000,000
aggregate. The Agent will investigate and furnish the Owner with full reports on all
accidents, claims, and potential claims for damage relating to the Project, and will
cooperate with the Owner's insurers in connection therewith.
16. Com~liancewith Governmental Orders: The Agent will take such actions as may be
necessary to comply promptly with and all governmental orders or other requirements
affecting the Project, whether imposed by federal, state, county, or municipal authority.
Nevertheless, the Agent shall take no such action so long as the Owner is contesting,
or has affirmed its intention to contest, any such order or requirement. The Agent will
notify the Owner in writing of all notices of such orders or other requirements, within
seventy-two (72) hours from time of their receipt.
17. Nondiscrimination: In the performance of its obligations under this Agreement, the
Agent will comply with all provisions of any federal, state or local law prohibiting
discrimination in housing on the grounds of race, color, creed, sex, age, marital status,
national origin, or physical or mental handicap (applicant must have capacity to
execute a legal contract) including Title VI of the Civil Rights Acts of 1964 (Public Law
88-352, 78 Stat. 241), Title Vlll of the Civil Rights Act of 1968, Executive Order 11246,
and the Equal Credit Opportunity Act of 1974.
18. Agent's Com~ensation: The Agent will be compensated for its services under this
Agreement by a monthly fee equal to $50 per unit per month, or $600 per month, to be
paid from the Operating Trust Account and treated as a Project expense. Such fee will
be payable on the first day of each month beginning with the first day of the second
month of the Agreement and ending on the first day of the month after the last month
of the Agreement. Note that these fees do not include asset management, tax
exemption filings, or tenant relocations services. Storage fees for project files are
Page 6 of 8
charged at $1.50 per file box if QMS retains responsibility for file storage. Copies of
project records made at the head office are at the rate of $.I0 per copy.
19. Term of Aareernent: This Agreement shall be in effect for three years beginning on
February 15th, 2004 subject, however, to the following conditions:
a. This Agreement may be terminated by either party without cause as of the end
of any calendar month, provided at least sixty (60) days advance written notice
thereof is given by either party.
b. This Agreement does not include actions related to escrow services, relocation
services, rehabilitation andlor acquisition of properties, initial applications for
real estate tax abatement and asset management services related to the above
activities. These services may be provided at an additional agreed upon rate.
c. In the event a petition in bankruptcy is filed by or against either of the Principal

Parties, or in the event either makes an assignment for the benefit of creditors
or takes advantage of any insolvency act, the other party may terminate this
Agreement without notice to the other.
d. Upon termination, the Agent will submit to the Owner all project books and
records and after the Principal Parties have account to each other with respect
to all matters outstanding as of the date of termination, the Owner will furnish
the Agent security, in form and principal amount satisfactory to the Agent,
against any obligations or liabilities the Agent may properly have incurred on
behalf of the Owner hereunder.
20. Indemnifications. Notwithstanding any provision of this Agreement or any obligation of

Agent hereunder, it is understood and agreed: (a) that Owner has assumed and will
maintain its responsibility and obligation throughout the term of this Agreement for the
finances and the financial stability of the project; and (b) that Agent shall have no
obligation, responsibility or liability or liability to fund authorized project costs,
expenses, or accounts other than those funds generated by the project itself or
provided to the Project or to Agent by Owner. In accordance with the foregoing, Owner
agrees that Agent shall have the right at all times to secure payment of its
compensation, as provided for under Section 19 of this Agreement, from the Operating
and Management Account, immediately when such compensation is due and without
regard to other project obligations or expenses provided the Agent has satisfactorily
discharged all duties and responsibilities under this Agreement. Moreover, Owner
hereby indemnifies Agent and agrees to hold it harmless with respect to project costs,
expenses, accounts, liabilities and obligations during the term of this Agreement and
further agrees to guarantee obligations during the term of this Agreement and further
agrees to guarantee to Agent the payment of its compensation under Section 19 of this
Agreement during the term of this Agreement to the extent that the Project's Operating
and Management Account is insufficiently funded for this purpose. Failure of Owner at
any time to abide by and to fulfill the foregoing shall be a breach of this Agreement
entitling Agent to obtain from Owner, upon demand, full payment of all compensation
owed to Agent through the date of such breach and entitling Agent, at its option, to
terminate this Agreement forthwith. The Agent will not be held responsible for
regulatory compliance issues caused by conditions existing prior to the inception of this
Page 7 of 8
contract or beyond the Agent's control during this contract, nor for code violations or
vacancies caused by deferred or unfunded maintenance.
To the extent permitted by law, Agent agrees to defend, indemnify, and save
harmless Owner from all claims, investigations, and suits, or from actions or
failures to act of Agent, with respect to any alleged or actual violation of state or
federal labor or other laws pertaining to employees, it being expressly agreed
and understood that as between Owner and Agent, all persons employed in
connection with the premises are co-employees of Agent and LMC Resources,
not Owner. In addition, Agent agrees to defend, indemnify, and hold Owner
harmless from and against any and all losses, damages, claims, costs,
expenses, and liabilities (including but not limited to all legal fees, court costs,
and costs of investigation) resulting from any breach of this Agreement by Agent
and any intentional tort, criminal activity, reckless and other willful misconduct,
and any other act or omission by Agent, its agents or employees, outside the
scope of the agency relationship created by this Agreement. Agent agrees that it
will promptly notify Owner of any claims against Agent or Owner. Agent will
cooperate with Owner and, upon reasonable request, will attend hearings and
trials and assist in effecting settlements, securing and giving evidence, and
obtaining the attendance of witnesses in the conduct of suits. Agent will not
voluntarily settle any suit, make any payment, assume any obligation, or incur
any expense without the express written consent of Owner.
interpretive Provisions:
a. This Agreement constitutes the agreement between the Owner and the Agent
with respect to the management and operation of the Project, and no change
will be valid, unless made by supplemental written agreement, approved by
both Parties.
b. This Agreement has been executed in several counterparts, each of which shall
constitute a complete original Agreement, which may be introduced in evidence
or used for any other purpose without production of any of the other
counterparts.
Signatures on following page

Centerwood Apartments ,
Page 8 of 8
IN WITNESS WHEREOF, the Principal Parties (by their duly authorized officers) have
executed this Agreement on the date first above written.
OWNER: DELRIDGE N E I G H B o R ~ D SDEVELOPMENT ASSOCIATION
DATE: '11s 105
AGENT: QUANTUM MANAGEMENT SERVICES, INC.
BY:
DATE:
v7isa
PROPERTY MANAGEMEWl' AGREEMENT
This Agreement is made as of the date set forth herein, between

the Owner, Historic Cooper School LLC (\\OwnerH)and Agent, Quantum
Management Services, Inc. ("Agent") identified on the signature page
hereof. Certain terms of this Agreement are set forth on the
Information Schedule (the "Information Schedule") attached hereto and
made a part hereof.
W f T N E S S E T H :
In consideration of the terms, conditions, and covenants

hereinafter set forth, Owner and Agent hereby mutually agree as
follows:
1, Definitions. As used i n this Agreement:
(a) "BuildingN shall have the meaning ascribed to such

term in Section A of the Information Schedule.
(b) "Fiscal YearN shall mean calendar year unless
specifically provided to the contrary herein.
( C ) "Gross C o l l e c t i o n s " shall mean all amounts actually
collected by Agent, as rents or other payments, but excluding
(i) income derived from interest or investments, (ii)
discounts and dividends on insurance, and (iii) security
deposits .
(d) "Gross Rents" shall mean revenues collected from

Tenants plus any federal assistance paid to Owner with
respect to the Building.
(e) "Leaseft shall mean any Lease in which Owner has
agreed to let and Tenant has agreed to accept the dwelling
unit of the Building identified in the Lease in accordance
with the terms of the Lease.
( f)
"Mortgagest1 shall mean, collectively, all mortgages
from time to time encumbering the Building and all promissory
notes secured thereby.
(g) "Operating A c c o u n t " shall mean an account in
Agent's name and designated of record in an account name
identifying the Building and approved by Owner in writing, at
such financial institution as Owner may specify from time to
time in writing.
(h) "Renttr shall mean that monthly amount which Tenant

is obligated to pay Owner pursuant to the terms of a Lease.
Quantum/Cooper Housing f o f 16 07/19/2005

( i f "Tenant" shall mean a person or family occupying a
dwelling unit in the Building pursuant to a Lease.
2. Appoin+Jent and Aeeep.taaee. Owner appoints Agent as

exclusive agent for the management of the Building, and Agent
accepts the appointment, subject to the terms and conditions set
forth in this Agreement. Agent represents that it is experienced
in professional management of property of the character and occu-
pancy of the Building, and Agent agrees to manage the Building in
accordance with the highest professional standards for such
property.
3. Management Plan. Attached hereto as Exhibit 1 and by

this reference made a part hereof, if applicable, is a copy of the
Management Plan for the Building (the "Planw), prepared and
approved by Owner. The Plan, if applicable, contains a comprehen-
sive and detailed description of the policies and procedures to be
followed by Agent in the management of the Building, including but
not limited to the collection of delinquent rents and charges; and
the provisions of this Agreement are to be read in conjunction
with and not as a limitation upon the specific obligations of
Agent as set forth in the Plan. Agent agrees to comply with all
applicable provisions of the Plan, regardless of whether specific
reference is made thereto in any particular provision of this
Agreement.
4. Meetinq w i t h Owner. Agent agrees to cause a representa-
tive of Agent to confer with Owner and to attend meetings with
Owner at a reasonable time or times requested by Owner, provided
adequate notice is provided by Owner.
5. Basic Information. As soon as practicable, but not later
,than final completion of renovation of the Building or any phase
thereof, Owner shall furnish Agent with a complete set of general
plans and specifications for the Building and copies of all
guarantees and warranties pertinent to construction and fixtures
and equipment of the Building. With the aid of this information
and inspection by competent personnel, Agent shall thoroughly
familiarize itself with the character, location, construction,
layout, plan and operation of the Building, and especially the
electrical, heating, plumbing, and ventilating system, and all
other mechanical equipment in the Building.
6. Development Phase. The owner is responsible for working

with the General Contractor the Owner has hired. The Agent will
report any issues that are unresolved between the Agent and the
general contractor to the Owner. Further, the General Contractor
shall:
(a) Post notices around the construction area warning
Tenants and others that the area is under construction and
trespass may be hazardous;
Quantum/Cooper Housing
(b) Respond to Tenant complaints regarding the
construction activity that are forwarded by the Agent, and
notify Owner thereof; and
(c) Notify Owner of any dangerous condition that
emanates from construction.
7. Marketing. Agent shall carry out the marketing activi-

ties prescribed in the Plan or approved by Owner in writing.
Subject to the prior written approval of Owner, advertising
expenses incurred by Agent on behalf of Owner shall be paid out of
the Operating Account as expenses of the Building.
8. Leasing. Agent shall offer for rent and shall rent the
dwelling units in the Building, upon completion of construction of
each such unit and from time to time thereafter, in accordance
with a rent schedule approved in writing by Owner and the leasing
guidelines and form of lease referred to herein below. Incident
thereto, the following provisions shall apply:
(a) Agent shall show dwelling units f o r r e t i L i r k the
Building to all prospective Tenants.
(b) Agent shall take and process applications for
rentals, including prospective Tenant interviews and credit
checks. If an application is rejected, Agent shall promptly
give to the applicant a proper written notice stating the
reason for rejection.
(c) Agent shall comply with the special low-income
housing tax credit requirements concerning leasing and
related matters as set forth in Paragraph 9 hereof.
(d) Agent shall be responsible for the certification
and recertification of tenants covered by any Housing
Assistance Payments Contract and regulatory agreements that
may be applicable to the Building with respect City of
Seattle, State of Washington regulatory agreements and
federal Section 8 rent subsidies, following procedures
required by the City of Seattle, the State of Washington and
the U. S . Department of Housing and Urban Development ("HWDri ) .
After the first year of certification and recertification of
Tenants, the certification and recertification process shall
be the responsibility of Agent.
(e) Agent shall, subject to prior written approval by
Owner of any deviation from Owner's approved rent schedule,
Lease form, and leasing guidelines, execute all Leases in
project's name, identified thereon as agent for Owner.
If) Agent shall negotiate any commercial leases and
concession agreements called for in the Plan or approved in
writing by Owner and, subject to prior written approval by
Quanturn/Cooper Housing 3 of 1 6 07/19/2005

Owner of all terms and conditions, shall execute the same in
its name, identified thereon as Agent for Owner.
(g) Agent shall collect, deposit, and disburse security
deposits in accordance with the terms of each Lease. The
amount of each security deposit shall be as specified in the
Plan or as approved by Owner in writing. Security deposits
shall be held by Agent in a trust account, separate from all
other accounts and funds. Such account shall be in the name
of the project, also identifying the Building, and designated
of record as "Security Deposit Trust Account.'' Interest on
security deposits shall be paid according to law.
(h) Agent shall maintain a current list of acceptable
prospective Tenants and undertake all arrangements necessary
and incidental to the acceptance of rental applications and
the execution of Leases. Agent shall exercise its best
efforts (including, but not limited to, placement of
advertising, interview of prospective Tenants, assistance in
completion of rental applications and execution of Leases,
processi~lg of docuinerlLs drld credit arid er11ployruerlL
verifications, and explanation of the program and operations
of Owner), to effect the leasing of dwelling units, renewal
of Leases, and, in accordance with the terms of the Lease,
subleasing of dwelling units in the Building.
(i) Agent shall perform such other acts and deeds
requested by Owner as are reasonable, necessary, and proper
in the discharge of Agent's rental duties under this
Agreement. If these requests result in significant additional
time requirements on the part of the Agent, the Agent
reserves the right to additional compensation, to be
negotiated by the Owner and Agent.
(j) Agent shall prorate the first month's rent
collected from a Tenant should the Lease term commence on any
other day than the first day of the month. If the Lease term
occurs after the twentieth (20th) day of the month, the
prorated amount, plus the next month's rent, shall be
collected on or before the first day of the Lease term.
jk) Agent shall participate in the inspection of the
dwelling unit identified in the Lease together with the
Tenant prior to move-in and upon move-out, and shall record
in writing any previous damage to the unit and any damage
occurring during the Tenant's occupancy.
(11) Agent shall, unless otherwise agreed by Owner and
Agent in writing, (i) comply with the leasing guidelines
attached hereto as Exhibit 2 and by this reference made a
part hereof, and (ii) use for each Lease the form of lease
agreement attached hereto as Exhibit 3 and by this reference
made a part hereof, together with the form of Low-Income
Lease Rider attached hereto as Exhibit 4 and by this
Quantum/Cooper Housing 4 of 16 07/19/2005

reference made a part hereof, if required by Paragraph 9
hereof, without any material changes.
9. Tax Credit Requirements. Agent acknowledges that Owner

is required under its LLC Operating Agreement to use best efforts
to lease the percentage of the apartment space in the Building set
forth in Section B of the Information Schedule (based on number of
apartments or floor area, whichever is less) (the "Credit Units")
to tenants whose income and rent levels qualify such apartments
for inclusion in determining federal low-income housing tax
credits (the "Creditstf)for the Building, and that the Credits
will have substantial economic value to Owner and its partners.
Agent shall also lease any other qualified space if and as
indicated in Section B of the Information Schedule. Owner shall
furnish Agent with written descriptions of such requirements as
they relate to Agent's leasing and management duties hereunder.
Incident thereto, the following provisions shall apply for all
Credit Units:
(a) Agent shall, prior to approving each rental
application and prior to allowiriy prospective tellant to take
occupancy, (i) require prospective tenant to complete,
execute, and deliver the forms of Low-Income Lease Rider, and
(ii) obtain from the prospective tenant's employer (if any)
the completed and executed form of Employment Verification,
all attached hereto as part of Exhibit 4, as may be revised
by Owner from time to time, and (iii) shall perform such
other verifications of such tenant's non-employment income as
are necessary or appropriate, in order to provide necessary
certification and verification of the amount of such tenant's
annual family income, family size, and any other information
reasonably requested by Owner in writing in connection with
the Credits. Agent shall require tenants to certify in
writing as to such matters on an annual basis, prior to such
time as the information is required for tax reporting
purposes for the Credits. Owner shall give Agent advance
written notice of such requirements. Agent shall, prior to
leasing Credit Units, determine tenant income eligibility for
purposes of the Credits pursuant to applicable laws, using
the Managing Agent's Low-Income Eligibility Worksheet
attached hereto as part of Exhibit 4 or such corrective
revisions thereof as Owner shall furnish to Agent from time
to time upon any revisions in applicable laws. Without
Owner's express prior written consent, Agent shall not enter
into any lease on behalf of Owner to a tenant who fails to
meet the income and other eligibility requirements for the
Credits. Agent shall complete, execute, and deliver to
Owner, upon lease-up of the Credit Units and annually
thereafter prior to the time such information is required for
tax reporting purposes for the Credits, the form of Managing
Agent's Low-Income Leasing Certification attached hereto as
Exhibit 5, including a true and correct Rent Roll of all
apartment units in the Building in the format attached

therewith. Agent shall deliver copies of all leases, riders,
certifications, and verifications for the Credit Units to
Owner on a monthly basis, and shall deliver copies of annual
recertification to Owner prior to the time they are required
for tax reporting purposes for the Credits. All copying costs
at the Agent's head office related to these reports will be
an expense of the project.
( b ) Owner shall from time to time furnish Agent with a
written schedule of maximum rents for the apartments,
depending on family size for purposes of the Credits.
Without Owner's express prior written consent, Agent shall
not enter into any lease on behalf of Owner at a rental
amount exceeding the applicable maximum.
{c) Agent shall maintain and preserve all written
records of tenant family income and size, and any other
information reasonably requested by Owner in writing in
connection with the Credits, throughout the term of the
Agreement, and shall turn all such records over to Owner upon
the termination or expiration of the Agreement. Any costs of
storage of these records will be project expense.
(dl If requested by Owner in writing, Agent shall
prepare reports of low-income leasing and occupancy in form
suitable for submission in connection with the Credits.
(e) Agent shall cause the Project to be maintained in
compliance with all local health, safety, and building codes
to the extent of available funds, and shall promptly give
w ~ i L L e i i r ~ o L i c e L o Owrler drld to O w n e r ' s Li~rtited Partner, as
identified in Paragraph 28 hereof, if Agent receives notice
of any such code violation relating to the Building.
10. Collection of Rents, Etc. Agent shall collect when due,
directly or through an on-site manager, all rents, charges, and
other amounts receivable on Owner's account in connection with the
management and operation of the Building. Such receipts shall be
held in the Operating Account identifying the Building, separate
from all other accounts and funds.
11. Enforcement of Leases. Agent shall secure full compli-
ance by each Tenant with the terms of such Tenant's Lease. Volun-
tary compliance shall be emphasized, and Agent shall counsel
Tenants and make referrals to community agencies in cases of
financial hardship or other circumstances deemed appropriate by
Agent, all to the end that involuntary termination of tenancies
shall be avoided to the maximum extent, consistent with sound
management of the Building. Nevertheless, and subject to any
applicable procedures prescribed in the Plan, Agent may, and shall
if requested by Owner, lawfully terminate any tenancy when suffi-
cient cause for such termination occurs under the terms of the
Tenant's Lease, including, but not limited to, nonpayment of rent.
For this purpose, Agent is authorized to consult with legal coun-

sel to be designated by Owner and bring actions for eviction and
execute notices to vacate and judicial pleadings incident to such
actions; provided, however, that Agent shall keep Owner informed
of such actions and shall follow such instructions as Owner may
prescribe for the conduct of any such action. Reasonable attor-
neyst fees and other necessary costs incurred in connection with
such actions, as determined by Owner, shall be paid out of the
Operating Account. Agent shall properly assess and collect from
each Tenant or the security deposit the cost of repairing any
damages to the dwelling unit arising during the Tenantfs
occupancy.
12. Maintenance and Repairs. Agent shall cause the Building

to be maintained in a decent, safe, and sanitary condition and in
a rentable and tenantable state of repair, all in accordance with
the Plan and local codes, and Agent otherwise shall maintain the
Building at all times in a condition acceptable to Owner,
including, but not limited to, performance of cleaning, painting,
decorating, plumbing, carpentry, grounds care, and such other
maintenance and repair work as may be necessary. Incident there-
to, the following provisions shall apply:
(a) Special attention shall be given to preventive
maintenance, and to the greatest extent feasible, the
services of regular maintenance personnel shall be used.
(b) Subject to Owner's prior written approval, Agent
shall contract with qualified independent contractors for the
maintenance and repair of major mechanical systems, and for
the performance of extraordinary repairs beyond the
capability oL reyuldr mdinlenance persoililel. Agent shall
obtain prior to commencement of any work appropriate written
evidence of such contractor's liability and worker's
compensation insurance.
( c ) Agent shall systematically and promptly receive and
investigate all service requests from Tenants, take such
action thereon as may be justified, and keep records of the
same. Emergency requests shall be received and serviced on a
24-hour basis. Complaints of a serious nature shall be
reported to Owner after investigation. Owner shall have the
right to receive copies of all service requests and the
reports of action taken thereon.
(dl Agent shall use best efforts to take such action as
may be necessary to comply with any and all orders or
requirements of federal, state, county, or municipal
authorities having jurisdiction over the Building and orders
of any board of fire underwriters, insurance companies, and
other similar bodies.
(e) Subject to the provisions of paragraph 19 hereof,

Agent is authorized to purchase all materials, equipment,
Quantum/Cooper Housing 7 of 1 6 07/19/2005

tools, appliances, supplies, and services necessary for
proper maintenance or repair of the Building.
(ff Notwithstanding any of the foregoing provisions,

the prior approval of Owner shall be required for any
expenditure exceeding $1,000 in any one instance for labor,
materials, or otherwise, in connection with the maintenance
and repair of the Building, except for emergency repairs
involving manifest danger to persons or property, or required
to avoid suspension of any necessary service to the Building.
In the event of emergency repairs, Agent shall notify Owner
of the fact promptly, and in no event later than 72 hours
from the occurrence of the event.
13. Utilities and Services. In accordance with any appli-

cable provisions of the Plan, Agent shall make arrangements for
water, electricity, gas, sewage, and trash disposal, vermin exter-
mination, decorating, laundry facilities, and telephone service in
connection with the Building. To the extent available, all
utilities shall be paid in accordance with an annual budget plan
established by the utility.
14. Personnel. All on-site personnel shall be contracted
service providers or employees of Agent and shall be paid from the
Operating Account as an expense of the Building. Agent shall at
all times have sufficient personnel physically present at the
Building for the full and efficient performance of its duties
under this Agreement, including physical presence of responsible
persons at such times as reasonably may be requested by Owner.
15. Operatins Account. Disbursements rrom the Operating
Account shall be governed by the following:
(a) From the funds collected and held by Agent in the
Operating Account pursuant to paragraph 10 hereof, and
subject to Ownerts approved operating budget, Agent shall
make the following disbursements promptly when payable, in
the following order of priority:
(i) salaries and any other compensation due and
payable to the employees referred to in paragraph
14 hereof including Agentfs compensation, together
with related payroll taxes;
(ii) real estate taxes and assessments, and fire
and other hazard insurance premiums f including any
required monthly escrow payments therefor),
utilities, interest on the Mortgages, amortization
of the principal of the Mortgages, fees, and
establishment and maintenance of all reserve
funds;
(iii) other payments due and payable by Owner as
operating expenses incurred pursuant to Owner's
approved operating budget and in accordance with
this Agreement, and
(iv) distributions to or at the direction of
Owner, including distributions to Owner's partners
in accordance with Owner's partnership agreement.
(b) In the event that the balance in the Operating
Account is at any time insufficient to pay disbursements due
and payable under subparagraph 15 (a) hereof, Agent shall
promptly inform Owner of the fact and Owner may then remit to
Agent sufficient funds to cover the deficiency. In no event
shall Agent be required to use its own funds to pay such
disbursements.
16. Operatinq -duet. Agent shall prepare a recommended
annual operating budget for the Building for each fiscal year
during the term of this Agreement, and shall submit the same to
Owner at least ninety (90) days before the beginning of such
fiscal year. The annual operating budget shall include a schedule
of recommended rents to be charged for each dwelling unit, includ-
ing recommended rent increases with respect to Lease renewals and
new Leases. In preparing each proposed annual operating budget,
Agent shall use its best efforts to take account of anticipated
increases in real estate taxes, utility charges, and other operat-
ing costs. To the extent feasible, Agent shall support antici-
pated increases in real estate taxes and utility charges with
written evidence or documentation. Proposed annual operating
budgets for the Building shall be subject to approval by Owncr.
Owner shall promptly inform Agent of any changes incorporated in
the approved operating budget, and Agent shall make no expendi-
tures in excess of the amounts set forth in such approved operat-
ing budget, for each line item of operation expense itemized,
without the prior written approval of Owner, except as permitted
pursuant to subparagraph 12(f) hereof for emergency repairs
involving manifest danger to persons or property, or required to
avoid suspension of any services to the Building.
17. Records and Reports. In addition to any requirements
specified in the Plan or other provisions of this Management
Agreement, Agent shall have the following responsibilities with
respect to records and reports:
(a) Upon execution of this Agreement, Agent immediately
shall ascertain the general condition of the Building,
including, but not limited to, the taking of an inventory of
all furniture, equipment, tools, and supplies. Within thirty
(30) days after the execution of this Agreement, Agent shall
provide Owner with a copy of the inventories so prepared.
(b) Agent shall establish and maintain a comprehensive

system of records, books, and accounts, including
Quantum/Cooper Housing 9 o f 16 07/19/2005

computerized systems, in accordance with the Plan and in a
manner satisfactory to Owner. All records, books, and
accounts shall be subject to examination at reasonable hours
by any authorized representative of Owner, or of Owner's
investor member as identified in paragraph 28 hereof
("Owner' s Investor Member") .
(c) Agent shall prepare a monthly report, in accordance
with any applicable provisions of the Plan and in form
satisfactory to Owner, containing and including at least the
following: (i) a statement of income and expenses and
accounts receivable and payable for the preceding month,
including an itemized list of all delinquent rents as of the
tenth (10th) day of the current month, as well as a report on
action taken thereon by Agent; (ii) a rent roll/cash receipts
form for the previous month; (iii) a disbursements summary
for the previous month; (iv) current bank statements with
reconciliation of the Operating and Security Deposit
Accounts; {v) copies of paid bills and invoices for the
previous month; and (vi) a narrative of any unusual actions
taken or emergencies responded to, and a full report of any
accidents, claims, and potential claims, for the previous
month. Agent shall submit each such report to Owner on or
before the twentieth (20~") day of each month, and shall
concurrently mail a copy of the entire report to Owner's
Investor Member.
(dl Agent shall promptly furnish such additional
information (including monthly occupancy reports) as may be
requested from time to time by Owner or Owner's Investor
Member with respect to the renting and financial, physical,
or operational condition of the Building.
(e) Agent, or Agent's designee (LMC Resources), shall

prepare, execute, and file all forms, reports, and returns
required by law in connection with the employment of
personnel, unemployment insurance, workman's compensation
insurance, disability benefits, Social Security, and othelr
similar insurance, and all other benefits or taxes now in
effect or hereafter imposed.
( f) Agent shall establish tenant files containing
copies of leases, certification forms, notices, and other
documentation required by WSHFC, if and to the extent
applicable.
(g) Except as may otherwise be expressly provided in
this Agreement, all bookkeeping, data processing services,
and management overhead expenses shall be borne by Agent out
of its funds and shall not be treated as Building expenses.
18. Fidelity Bond. Agent shall furnish and maintain, at the

expense of the Building, for the duration of this Agreement and
any extensions thereof, plus thirty (30) days after the expiration

or termination thereof, a commercial blanket bond in favor of
Owner, in an amount not less than the sum of (a) two (2) monthsr
potential maximum Gross Rents for the Building plus (b) aggregate
Tenant security deposits held from time to time, both in amounts
as determined by Owner, and in a form and with a company accept-
able to Owner, which commercial blanket bond shall cover Agent and
all employees hired by Agent in connection with this Agreement.
Such fidelity bond shall cover losses discovered by Owner within
two (2) years after the occurrence of such losses. Such fidelity
bond shall be attached to this Agreement, and such fidelity bond
shall contain a written provision that Owner shall be given at
least thirty (30) daysf prior written notice of cancellation.
Agent shall provide Owner and Owner's Investor Member a copy of
such bond and any replacements within thirty (30) days after
written request from Owner or Owner's Investor Member,
19. Bids, Discounts, and Rebates. Agent shall obtain

contracts, materials, supplies, utilities, and services on the
most advantageous terms to the Building, and shall solicit
competitive bids on all contracts or purchases exceeding $2,500.00
for those items which can bc obtained from more than one source.
Agent shall secure and credit to Owner all discounts, rebates, or
commissions obtainable with respect to purchase, service
contracts, and all other transactions on Owner's behalf.
20. Liability of Aqent. Except as expressly provided to the
contrary herein, the obligations and duties of Agent under this
Agreement shall be performed as agent of Owner, but Agent shall be
liable for its breaches of this Agreement; provided, however, that
the Agent shall not be responsible for incurring any expenditures
i l l excess o1 exisLil~y V L ~ e d s u t ~ d L lpy~ u j t j ~ L e availdble
J funds from
the Building or funds supplied by Owner. All expenses incurred by
Agent in accordance with its obligations and duties under this
Agreement and consistent with Owner's approved operating budget,
except those due to its breaches of this Agreement and those
expressly specified as Agent's expenses herein, shall be for the
account of and on behalf of Owner.
21. Indemnification. To the extent permitted by law, Owner

agrees to defend, indemnify, and save harmless Agent from all
claims and suits in connection with the Building provided that
such claims and suits are attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible
property, and such claims and suits arise, or are alleged to
arise, in whole or in part out of any negligent act or omission of
Owner, its officers, employees, or agents. Owner agrees to include
Agent as an insured in Owner's general liability policy, but only
while Agent is acting as real estate manager for Owner under this
Agreement. Owner shall provide Agent with a certificate of insur-
ance evidencing such liability insurance and providing not less
than ten (10) days' notice to Agent prior to cancellation.
Quantum/Cooper Housing 11 of It5 07/19/2005

To the extent permitted by law, Agent agrees to defend, indemnify,
and save harmless Owner and its members from all claims,
investigations, and suits, or from actions or failures to act of
Agent, with respect to any alleged or actual violation of state or
federal labor or other laws pertaining to employees, it being
expressly agreed and understood that as between Owner and Agent,
all persons employed in connection with the premises are co-
employees of Agent and LMC Resources, not Owner. In addition,
Agent agrees to defend, indemnify, and hold Owner harmless from
and against any and all losses, damages, claims, costs, expenses,
and liabilities (including but not limited to all legal fees,
court costs, and costs of investigation) resulting from any breach
of this Agreement by Agent and any intentional tort, criminal
activity, reckless and other willful misconduct, and any other act
or omission by Agent, its agents or employees, outside the scope
of the agency relationship created by this Agreement. Agent
agrees that it will promptly notify Owner of any claims against
Agent or Owner. Agent will cooperate with Owner and, upon
reasonable request, will attend hearings and trials and assist in
effecting settlements, securing and giving evidence, and obtaining
the attendance of witnesses in the conduct of suits. Agent will
not voluntarily settle any suit, make any payment, asswne any
obligation, or incur any expense without the express written
consent of Owner.
22. Insurance. Agent shall at all times keep its employees

and contractors insured for statutory workersr compensation and
other employee benefits required by all applicable laws and shall
maintain liability insurance covering autzomobiles and other
vehicles operated by Agent. Agent shall maintain employer's
liability insurance for an amount not less than $1,000,000.00
covering claims and suits by or on behalf of employees and others,
not otherwise covered by statutory workersi compensation
insurance. In addition, Agent shall maintain a comprehensive
commercial liability policy in the amount of $1,000,000.00 per
occurrence/$2,000,000.00 aggregate and property fire damage/legal
liability in the amount of $50,000.00, ensuing out of claims from
Agent's actions outside the scope of the agency relationship
created by this Agreement, including without limitation any
intentional torts, criminal activity, and reckless or other
willful misconduct of Agent, its agents, and employees. Such
policy shall include coverage for contractual liability under this
Agreement. Owner and its partners shall be protected in all such
insurance by specific inclusion of Owner under an additional
insured or alternate employer rider. Agent shall provide Owner
with a certificate of insurance evidencing that all insurance
referenced in this Paragraph 22 is in full force and effect and
providing not less than thirty (30) days' notice to Owner prior to
cancellation, lapse, or nonrenewal or the reduction in the amount
of coverage. These stated coverage limits are subject to change
from time to time by the Owner's Investor Member.
23. Limitation of Liability. Owner and Agent agree that
they will not seek recourse against each other or the individual

members, shareholders, directors, officers, employees or agents of
Owner or Agent or any of their personal assets for satisfaction of
any liability with respect to this Agreement.
24. Increased Risk. Agent shall give Owner written

notice if any facts of which Agent is aware evidence an increase
in the risk of casualty loss or a claim of liability in connection
with the Building or its operation. Such notice shall be given as
soon as Agent has knowledge of such facts.
25. Audit Right. Owner shall have the right, within ten
(10) days written notice to Agent, to audit all files and accounts
pertaining to the Building at Agent's principal office during
normal business hours. If such audit reveals a material
discrepancy, Agent shall be responsible for promptly correcting
such discrepancy within ten (10) days after receipt of notice of
same.
26. Escrow Payments. From the funds collected and deposited
by Agent in the Operating Account, Agent shall make any monthly
escrow pciymllents required under the Mortgages, for the purpose of
funding insurance, tax, and such other reserve or escrow accounts
for the Building as Owner may require pursuant to the Mortgages.
Agent promptly shall present tax bills and insurance premium
notices to the escrow agent for payment and shall furnish Owner
with evidence of timely payment of such taxes and insurance
premiums.
27. Agent's Compensation. As compensation for all of
Agent's ongoing property leasing, management, and related services
under this Agreement, beginning in the month following the month
in which a certificate of occupancy for the Building is issued,
Agent shall receive a monthly fee in an amount equal to the amount
set forth in Section C of the Information Schedule (the
"Management Feee), to be paid out of the Operating Account and
treated as a Building expense. Such fee shall be payable on the
tenth (10th) day of the month following the month in which the
services were rendered, subject to the provisions of Paragraph 28
hereof.
28. Intentionally Deleted.
29. Compliance with Laws. In the performance of its obliga-

tions under this Agreement, Agent shall comply with applicable
local, state, and federal laws and regulations.
30. Term of Agreement. This Agreement shall be in effect
for the period commencing as of the date hereof and ending on the
third (3rd) anniversary of the date hereof, and shall be
automatically extended for one (1) year periods thereafter until
the date set forth in Section E of the Information Schedule,
subject to the following conditions:
Quantum/Cooper Housing 33 d f 16 07/19/2005

(a) Either Owner or Agent may elect not to extend this
Agreement by notifying the other party at least sixty (60)
calendar days in advance of the last day of the initial
period hereunder or any annual extension period thereafter.
(b) This Agreement may be terminated by mutual written

consent of Owner and Agent.
(c) In the event Agent fails to perform any of its
duties hereunder or to comply with any of the provisions
hereof, Owner shall notify Agent in writing and Agent shall
have ten (10) days thereafter within which to cure such
default to the reasonable satisfaction of Owner, and if such
default cannot be cured within such ten (10) day period,
Agent shall have such additional time as may be necessary to
cure the same provided that Agent demonstrates to the
continuing satisfaction of Owner that it is diligently
pursuing all necessary actions to cure such default and that
the same will be cured within a reasonable time without
damage or expense to Owner.
(dl In the event a petition in bankruptcy is filed by
or against Owner or Agent, or in the event Owner or Agent
makes an assignment for the benefit of creditors or takes
advantage of any insolvency act, Owner or Agent may terminate
this Agreement without notice to the other.
(e) Within five (5) days after the termination of this
Agreement, Agent shall close all accounts and pay the
balances or assign all certificates of deposit regarding the
Building to Owner, Within Leu (10) days d 1 L e ~ L11e
termination of this Agreement, Agent shall deliver to Owner
all plans and surveys of the Building in its possession and
all books and records concerning the Building. Within thirty
(30) days after the termination of this Agreement, Agent
shall submit to Owner all reports required under Paragraph 17
hereof to the date of such termination, and Agent and Owner
shall account to each other with respect to all matters
outstanding as of the date of termination.
31. Notices. All notices or other communications required
or desired to be given under this Agreement shall be in writing
and shall be delivered either personally or by U.S. certified
mail, return receipt requested, which shall be deemed delivered
upon personal delivery or two (2) business days after mailing, to
the parties at the addresses set forth in Section F of the
Information Schedule. In the event of a change in the mailing
addresses stated above, any addressee whose address changes hereby
agrees to give notice of a new or forwarding address within seven
(7) days of the effective date of said change to the other
addressee, whereupon subsequent notices shall be addressed to such
new or forwarding address.
32. Amendment. This Agreement constitutes the entire agree-
ment between Owner and Agent, and no amendment or modification
thereof shall be valid or enforceable except by supplemental
agreement in writing, executed by the parties hereto or the party
to be bound thereby. In addition, no such amendment or modifica-
tion shall be valid or enforceable without the prior written
consent of Owner's Investor Member.
Intentionally D e l e t e d .
34. Attorneyfs Fees. If any judicial remedy is

necessary to enforce or interpret any provision of this Agreement,
the prevailing party shall be entitled to reasonable attorney's
fees, costs, and other expenses, in addition to any other relief
the court may grant.
35. Enforceabilitx. The invalidity of any clause, part, or

provision of this Agreement shall not affect the validity of the
remaining portions <hereof. Owneris remedies under this Agreement
arc cumulative, and the exercise of one remedy shall not be deemed
an election of remedies nor foreclose the exercise of Owner's
other remedies. No waiver by Owner of any breach of this
Agreement shall be deemed to be a waiver of any other or
subsequent breach. Owner or Agent may apply to any court, state
or federal, for specific performance of this Agreement, for an
injunction against any violation of this Agreement, or for such
other relief as may be appropriate, since the injury arising from
a default under any of the terms of this Agreement would be
irreparable and the amount of damage would be difficult to
ascertain.
36. Governins L a w . The law of the state in which the
Building is located shall govern the interpretation and
enforcement of this Agreement.
37. Captions. The captions used in this Agreement are
inserted only as a matter of convenience and for reference and in
no way define, limit, or describe the scope or the intent of this
Agreement.
38. Execution of Counterparts. For the convenience of the

parties, this Agreement may be executed in multiple counterparts,
each of which shall constitute a complete original of this
Agreement, which may be introduced in evidence or used for any
other purpose without the production of any other counterparts.
39. Successors and Assigns. This Agreement shall inure to
the benefit of and constitute a binding obligation upon Owner and
Agent and their respective successors and assigns; provided,
however, that Agent shall not assign this Agreement, or any of its
duties hereunder, without the prior written consent of Owner. In
the event Owner's current Managing Member or any successor

Managing Member of Owner is removed as Managing Member in
accordance with Owner's operating agreement, any successor
Managing Member selected in accordance with such operating
agreement shall have authority to act hereunder on behalf of
Owner, and until such successor is selected Owner's Investor
Member shall have temporary authority to act hereunder on behalf
of Owner.
In Witness Whereof, the parties have executed this Agreement as of

the _lf day of August, 2005.
Owner :
Historic Cooper School LLC,

a Washington limited liability
company
By: Delridge Neighborhoods
Development Association, a
ton non-profit
Managing Member
Agent :
h . r I
a (n) corporation
The following provisions are incorporated into and made a part of
the foregoing Property Management Agreement between Owner and Agent to
which this Information Schedule is attached.
A. The term "Building" means, collectively, the real
P a r a q r a p h 1.
property commonly known as The Historic Cooper School Artist
Lofts, and all improvements, appurtenances, and equipment located
thereon, including thirty six (36) dwelling units and common
facilities comprising condominium unit number two in the building
located at 4408 Delridge Way SW.
8. Paragraph 9. The percentage of apartment space (number of
apartments or floor area, whichever is less) to be leased to
low-income tenants is one-hundred percent (100%). Any other
eligible space required to qualify for the Credits and leasing
requirements applicable thereto, if any, are as follows: Tax
Credits: 15 units (40% of total) at or below 60% of area median
income. Bonds: 20% of the units at or below 50% of area median
income. City of Seattle and State of Washington: 27 units at or
below 50% of area median income, 9 units at or below 30% of area
median income (defined using 35% of household income towards rent
and utilities).
C. Paragraph 27. The Management Fee shall be in an amount equal to:
$50 per unit per month. There will also be a one-time lease-up fee
of $150 per unit, payable upon occupancy of each unit, which will
be billed separately from this agreement. In addition there will
be a one-time charge if applicable of $500 for filing of the low-
income housing real estate tax abatement forms with King County
and the State of Washington.
D. Paragraph 28. If funds held in the operating account are
insufficient to pay Agent's Management Fee, funds in the operating
reserve under Owner's operating agreement shall be used to pay
Agent's Management Fee to the extent that such payment does not
reduce the amount of such operating reserve below eighty-five-
thousand-five-hundred dollars ($100,000).
E. Paraqraph 30. The date on which the Agreement will terminate,
subject to the conditions contained in Paragraph 27 thereof, shall
be 315f July, 2008.
F. Paraqraph 31. The addresses to which all notices required or
desired to be given under the Agreement shall be delivered are as
follows:
Agent: :
P.O. Box 2170, Lynnwood, WA 98036
Historic Cooper LLC
c/o Delridge Neighborhoods Development Assoc.
5411 Delridge Way SW
Seattle, WA 98106
W i t h a copy to Owner' s Investor: Member :

NEF Assignment Corp
c/o National Equity Fund, Inc.
547 West Jackson Boulevard, Suite 601
Chicago, Illinois 60661
Attention: Senior Vice President, Portfolio Management
EXHIBITS TO
PROPERTY MANAGEMENT AGREEMENT
Exhibit 1 : Banagernent Plan

(as attached by Owner and Agent)
Exhibit 2 : Leasing Guidelines
(as attached to this form Agreement)
Exhibit 3 : Form of Lease
(as attached by Owner and Agent)
Exhibit 4 : Form of Low-Income Lease Rider

(as attached to this form Agreement, must be
attached to each individual tenant lease), with
attacku~lenls
:
a. Managing Agent's Low-Income Eligibility Worksheet

and Certification of Qualified Occupant
Exhibit 5 : Managing Agent's Low-Income Leasing Certification

(as attached to this form Agreement), with
attachments:
a. Qualified Income Levels
EXHIBIT 2
LEASING GUfDELINES
Screeninq Process
1. Application. Each prospective Tenant must complete and sign a

written application 'for lease, containing detailed personal
information, previous residences and landlords for several years,
information on employment, income, assets, and credit, proposed
occupants (including ages) and pets, and references, and containing
such other information and statements as will enable Agent to screen
the prospective Tenant or as is otherwise proper and advisable for the
management of the Building in accordance with professional standards.
In conjunction with the lease applications, each prospective Tenant
must complete and sign Employment/Income Certificationfs) in the
form(s) attached herewith as part of Exhibit 4, where required under
Paragraph 9 of the foregoing Agreement.
2. Interview. Agent shall interview each proposed adult occupant
of the dwelling unit to be leased in order to help determine the
character of such persons.
3. Ehployment. Agent shall verify the employment and income
information given by the prospective Tenant, using the form of
Employment Verification attached herewith as part of Exhibit 4, where
required under Paragraph 9 of the foregoing Agreement.
4. Credit. Agent shall have a screening service conduct a
credit check of the prospective Tenant, which shall check with one or
more of the Tenant's previous landlords with respect to past rent
payment history.
5 . Housekeepinq. Agent shall have a screening service check with
one or more previous landlords of the proposed Tenant and other
occupants with respect to their ability to maintain an apartment in
good condition and to abide by building rules. If verbal information
is vague or questionable, Agent reserves the right to have the
applicant rejected for tenancy.
6 Commitment to the Arts. Owner shall, concurrent with steps 3-
5 above, conduct a peer review with each prospective Tenant to
determine whether the prospective Tenant can demonstrate a commitment
to some artistic discipline. Preference for occupancy in the building
will be given to artists.
7 . Approval. Agent shall submit to Owner for final approval, the
proposed Tenant's lease application only if, in Agent's best
professional judgment, the proposed Tenant is qualified to pay rent
when due and all proposed occupants are likely to maintain properly the
dwelling unit, abide by reasonable rules, and otherwise be suitable
occupants of the Building. Also, without Owner' s prior written
consent, Agent shall not approve any lease application unless the
Tenant and other proposed occupants constitute a low-income household
as defined for purposes of obtaining and maintaining a low-income
housing tax credit for the Building under Section 42 of the Internal
Revenue Code of 1986, as amended, to the full extent required under
Paragraph 9 of the foregoing Agreement.
B. -
Lease
1 . Application. Prior to leasing any dwelling unit, Agent shall

have screened the prospective Tenant and all other proposed occupants
in accordance with Section A hereof, and shall have approved the lease
application as described above.
2. Lease Form. In leasing dwelling units, Agent shall use only
the form of lease approved in writing by Owner from time to time, and
the form of Low-Income Lease Rider attached hereto as Exhibit 4, where
required under Paragraph 9 of the foregoing Agreement, without material
changes unless approved in writing by Owner.
3. Approved Rent.Agent shall not lease any dwelling unit for a
rental amount other than as specified in the rent schedule included as
part of Owner's approved operating budget or otherwise approved by
Owner in writing.
4. Security Deposit. Agent shall require not less than one (1)
month's security deposit, and shall require two (2) monthsr security
deposit if circumstances warrant. Agent shall also, if advisable,
collect a key deposit. Notwithstanding, all deposits collected must
conform to the project's regulatory agreements.
5. Named Tenant; Occupants, Pets. Each adult occupant of the
dwelling unit shall be named as Tenant in the Lease, and shall be
jointly and severally liable for rental payments. The Lease shall
specify all other permitted occupants and pets, and it shall be a
default if any non-permitted occupant resides in the dwelling units.
6. Term. Each Lease shall be for a minimum term of six months.
7. Substitution o f Unit. In the event rehabilitation or other
plans for the Building will require that the dwelling unit to be leased
to the Tenant be vacated or made available to another Tenant during any
portion of the Lease term, the Lease shall contain a provision for
substitution of another dwelling unit and relocation of the Tenant.
8 . Certain Lease Provisions. The form of lease to be approved by
Owner shall contain detailed provisions in plain language concerning
the following matters of practical importance, among others:
a. Condition of Unit. Acknowledgment o f the condition
of the dwelling unit as described in a unit inspection
report;
b. Default Charges. Tenant's liability for the
following default charges: late rent payment charges;
returned check charges; lost keys; damage to the dwelling
unit or the Building not caused by ordinary wear and tear;
missing property, fixtures, or equipment; and costs of rent
collection and eviction.
c. Procedures concerning deductions
Security Deposit.
from and return of security deposit, with interest to the
extent required by law, and any key deposit.
d. Utilities and Other Charges. Tenantts
responsibilities concerning utility services to the dwelling
unit, other services to the dwelling unit, other services
provided by Owner or Agent, and any parking or other charges.
e. Maintenance. Maintenance duties of Tenant and of
Owner, respectively, separately listed.
f. Alterations. Requirement of Owner's or Agent's
consent to alterations of the dwelling unit, listing
examples, and to charges of keys and locks.
g. Use Restrictions. Restrictions on Tenantfs use of
the dwelling units, including hazards, noise, nuisance, etc.
h. Changes. Tenant's obligation to report changes in
Tenant's household or employment status.
i. Rules. Tenant's and all other occupants' obligation
to comply with any rules and regulations issued by Owner or
Agent. A copy of any such rules shall be attached to the
Lease.
j . Other. Other provisions customarily included in

apartment leases or advisable for the Building.
k. Attachments. Acknowledgment by Tenant of any
attachments to the Lease.
1. Execution. Agent shall execute each Lease as agent
for Owner.

Asset Management Committee Meeting

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Asset Management Committee Meeting

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Delridge Property & Asset Management Committee

The committee's charge:

Regarding the committee's charge:

Regarding review of properties

Discussion of members' expertise and how it adds value:

Next meeting August 4 unless otherwise noted.

August - December 2008

1) Monitor Compliance for each project with all appropriate funders/investor

2) Oversee property management

3) Staff support for Board's Asset Management Committee

4) Finance structure for existing projects

5) Physical condition of structures

6) Organizational capacity of DNDA

TO DNDA Property and Asset Management Committee and senior staff

DNDA is a participant in an affinity group organized by the Housing Development

There were three meetings:

- Unclear on the difference between tenant and management responsibilities in

- Repeated comments regarding the cleanliness of the interior of the buildngs

Communication with. & Access to. Management

- Tenants need 24 hour contact information for management staff

DNDA Properties Manaqed bv Quantum Manaqement

Summarv - New M a n a ~ eTraining

Owner: Lake Washington Limited Partnership, a Washington limited partnership

General Partner: Lake Washington Apartments L.L.C., a Washington limited liability

Letter of Credit: Seafirst Bank, Key Bank and U.S. Bank

Seattle Loans: Non-Amortizing ($2,654,272)

LlSC Guarantee: $488,000

Washington State Finance Commission 0.300

Bond Cap: 8% on bonds 1.496%

Development Fee (split $200,000 Start of Construction

Deferred Development Fee: $1,250,542 @ 7% interest, paid from surplus cash

Distribution of Cash Flow:

1. Rehab cost overruns Section 7.2 Partnership Agreement

'Conditions on last payment

Seattle Public Schools

Seattle Public Schools

SouthEast Effective Development

- Washington Federal Savings Bank

Seattle Public Schools

Debt Information for DNDA Properties as of 12/31/2006

Property Lender Interest Rate Annual Debt Loan Balance as of

Table 4 (a) Replacement Reserve Deposits and Withdrawals

Ending Balance 55,956.99

Table 4 (b) Operating Reserve Deposits and Withdrawals

Ending Balance1 14,897.62

2007 Table 4 a,b Reserves

Project: COOPER ARTIST HOUSING

Table 4 (a) Replacement Reserve Deposits and Withdrawals

Table 4 (b) Operating Reserve Deposits and Withdrawals

2007 Table 4 a,b Reserves

Subsidy Income (see instructions) - 0

Project: Croft Place

Table 4 (a) Replacement Reserve Deposits and Withdrawals

Ending Balance 13,749.23

Table 4 (b) Operating Reserve Deposits and Withdrawals

2007 Table 4 a,b Reserves

Project: Delridge Heights

Table 4 (a) Replacement Reserve Deposits and Withdrawals

Table 4 (b) Operating Reserve Deposits and Withdrawals

( Subsidy Income (see instructions) OPERATING I SERVICES

Project: Holden Manor

Table 4 (a) Replacement Reserve Deposits and Withdrawals