Oxygenase component of a two-component system involved in the biosynthesis of the enediyne antitumor antibiotic C-1027 (PubMed:18426211). Uses FADH(2) supplied by SgcE6 to catalyze the C-5 hydroxylation of (S)-3-chloro-beta-tyrosyl-S-SgcC2 (PubMed:18426211). Can also efficiently catalyze the regioselective hydroxylation of other 3-substituted beta-tyrosyl-S-SgcC2 analogs, including the bromo-, iodo-, fluoro-, and methyl-substituted analogs, but does not accept 3-hydroxy-beta-tyrosyl-S-SgcC2 as a substrate (PubMed:18426211). Is only active with SgcC2 (peptidyl carrier protein)-tethered substrates (PubMed:18426211). (3S)-3-amino-3-(3-chloro-4-hydroxyphenyl)propanoyl-[SgcC2 peptidyl-carrier protein] + FADH2 + O2 = (3S)-3-amino-3-(3-chloro-4,5-dihydroxyphenyl)propanoyl-[SgcC2 peptidyl-carrier protein] + FAD + H(+) + H2O The SgcE6-SgcC hydroxylation activity decreases in the presence of excess FAD. kcat is 1.4 min(-1). Optimum pH is 6.0. Antibiotic biosynthesis. Homotetramer. Disruption of the gene abolishes C-1027 production and leads to the formation of 22-deshydroxy-C-1027. Belongs to the FADH(2)-utilizing monooxygenase family.