HomeMy WebLinkAbout13 DDA 2011-01 TUSTIN GATEWAY PROJECTAgenda Item 1
• Reviewed:
AGENDA REPORT City Manager
Finance Director
MEETING DATE: JULY 5, 2011
TO: WILLIAM A. HUSTON, INTERIM CITY MANAGER
FROM: REDEVELOPMENT AGENCY STAFF
SUBJECT: DISPOSITION AND DEVELOPMENT AGREEMENT 11-01 (TUSTIN
GATEWAY PROJECT) - A HOTEL AND RETAIL SITE WITHIN THE
PACIFIC CENTER EAST SPECIFIC PLAN
SUMMARY
Approval is requested of a Disposition and Development Agreement 11-01 (Tustin
Gateway Project also referred to as "DDA 11-01") between the City of Tustin and R.D.
Olson Real Estate Group, Inc. dba R.D. Olson Development ("Developer") for the sale
of certain city owned property including the granting of an easement for the
development of a hotel and retail uses within the Pacific Center East Specific Plan.
RECOMMENDATION
It is recommended that the City Council:
1. Adopt Resolution No. 11-48 finding that:
a. An Initial Study evaluated the Project ("DDA 11-01") as it relates to the
previously approved Final Environmental Impact Report (EIR) 90-1 for the
Pacific Center East Specific Plan certified on December 17, 1990 and
Supplemental #1 to Final EIR 90-01 certified and adopted on May 5, 2003
(collectively, the Pacific Center East Environmental Documents) to determine
whether, in accordance with CEQA requirements, any additional
environmental documentation was required in connection with approval of the
DDA 11-01;
b. Based on findings in the Initial Study (i) the environmental effects of the
Project are within the scope of the Pacific Center East Environmental
Documents; (ii) no substantial changes are proposed in the Project or have
occurred with respect to circumstances under which the Project is being
undertaken since certification of the Pacific Center East Environmental
Documents; (iii) no new information has become available since the
certification of the Pacific Center East Environmental Documents; and (iv)
pursuant to Public Resources Code Section 21116 and the requirements of
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Tustin Gateway Project DDA 2011-01
July 5, 2011
Page 2
CEQA regulations promulgated with respect thereto, including Title 14
California Code of Regulations Section 15168 (c), no additional environmental
analysis, action or document is required by the CEQA; and
c. All applicable mitigation measures described in the adopted Mitigation
Monitoring Report for the Pacific Center East Specific Plan EIR are
incorporated into this Project or will be conditions of approval of pending
future entitlements for the Project.
2. Approve and authorize the City Manager, or Assistant City Manager, to execute
DDA 2011-01 between the City of Tustin and R.D. Olson Development, Inc., subject
to non-substantial modifications as may be determined necessary and
recommended by the City's Special Counsel prior to execution, and to carry out all
actions necessary to implement the DDA including execution of all related
documents including the reciprocal easement agreement, any necessary
subordination agreement, and to take any and all City actions necessary pursuant to
the DDA as required for phased closings and transfer of the subject properties to the
Developer upon satisfaction of all conditions and obligations of Developer.
FISCAL IMPACT
Pursuant to the DDA, the Developer's purchase price for the subject property will be
Eight Million Seven Hundred Ten Thousand Dollars ($8,710,000), the appraised fair
market value of the site. The property to be sold to Developer is comprised of three
parcels which are proposed to be sold in two phases. The first phase is comprised of
Parcel A and Parcel B and the second phase comprises Parcel C. The purchase price
of each parcel is as follows: Parcel A--Three Million Six Hundred Thousand Dollars
($3,600,000); Parcel B-- Two Million Five Hundred Fifty Thousand Dollars ($2,550,000),
and Parcel C-- Two Million Five Hundred Sixty Thousand Dollars ($2,560,000). For the
City's grant of the reciprocal easements on an adjacent Water Well Parcel also owned
by the City that will benefit Parcels A, B, and C, the Developer would pay the City Forty-
Eight Thousand Dollars ($48,000) in consideration for granting the easement.
The close of escrow for Phase I is the earlier of 60 days after a rough grading permit or
building permit has been issued or 18 full calendar months after the effective date of this
agreement. The total amount to be paid by the Developer for Phase I comprising
Parcels A and B would be Six Million One Hundred Fifty Thousand Dollars
($6,150,000).
City Council Report
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The close of escrow for Phase II is the earlier of 60 days after a rough grading permit or
building permit has been issued or 12 full calendar months after escrow has been
closed on Phase I. The total amount to be paid by the Developer for Phase II will be
Two Million Five Hundred Sixty Thousand Dollars ($2,560,000). In the event the
Developer cannot close escrow within the schedule stated, the property shall remain in
the ownership of the City.
Fiscal Impact of the Right-of-Way Acquisition and the Development of the Residual
Properties
The City recently acquired approximately 34.08 acres of land south of Edinger Avenue
for approximately $70,000,000 based on a court determined fair market value for former
AAE land. The Court stipulated that the fair market value of the property had to take
into consideration that residential uses could be developed on the property, using a
baseline for valuation of February 2007. Of the 34.08 acres, approximately 10.17 acres
are necessary for the Newport Avenue extension south of Edinger Avenue, the
realignment of Del Amo Avenue and the new Cal Trans Edinger ramp on the east side
of the SR-55 freeway (dedicated ROW). The valuation of the dedicated Right-of-Way
(ROW) represented approximately $20,890,000 of the estimated total court determined
fair market value of the entire property (the 34.08 acres), with the valuation of the
remaining property at $49,110,000 distributed across the remaining 23.91 acres
acquired by the City.
The former AAE land acquired by the City was recently subdivided with Parcel Map No.
2010-12, which included a portion of a Cal Trans dedication to the City of excess ROW
of approximately 3.53 acres related to the old Edinger Ramp. This now provides
approximately 27.44 acres available for development with future land sale proceeds
going to the City. Of the 27.44 acres, .85 acres is an identified Water Well Parcel to
benefit the Tustin Water Department that is located within the City of Santa Ana parallel
to the Project.
The total value of the proposed land sale and easement proceeds from the proposed
project under DDA 2011-01 is valued at $8,758,000 including $8,710,000 for 7.53 acres
and the right of the Developer to use a reciprocal easement valued at $48,000 on the
.85 acre Water Well Parcel.
Once the Tustin Gateway Project is sold and developed, there will be approximately
19.06 acres remaining for future sale and development.
City Council Report
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Fiscal Impact of Projected Redevelopment Tax Increment and Transient Occupancy Tax
(or Hotel Bed Tax)
When completed, it is estimated that the Project will generate approximately $47.7 million
in total land and development value including personal property. Since the Project is
located within the South Central Redevelopment Project Area, it is estimated that this
additional value would initially generate approximately $470,000 in gross additional annual
redevelopment tax increment to the Tustin Community Redevelopment Agency which
could increase annually based on reassessments of the property.
The estimated transient occupancy tax (TOT), from the proposed project, using the City's
current TOT rate of six percent (6%) and the build-out of 300 hotel rooms for the two
hotels, will initially be $700,000 annually (assuming 75% average annual occupancy).
This amount could increase depending on occupancy levels. The DDA places a covenant
on the property that would require that the hotel uses be required for a use covenant
period of 25 years. The City, at the current TOT, can expect to collect over $25.5 million
using an average annual growth rate of three percent (3%). Should the City be successful
in the future in raising its TOT rate to ten percent (10%), through a Proposition 218
election, which is in line with the majority of cities in Orange County, the annual TOT could
increase to an estimated $1,200,000 annually. With a 10% TOT over the period of the
DDA use covenant of 25 years, the City could be expected to collect over $43.75 million
using an average annual growth rate of 3%.
BACKGROUND
On November 2, 2010, the City approved an Exclusive Negotiation Agreement (ENA)
between the City and R.D. Olson Development to negotiate City conveyance to the
Developer of certain vacant property within the Pacific Center East Specific Plan and
development by the Developer of two nationally recognized "flag ship" hotels with a
minimum of 300 total rooms and a minimum of 8,000 square of restaurant and/or retail
space. While not restricted to such hotel brand names by the ENA, at the time the ENA
was brought to the Council the potential hotels that were mentioned for the subject site
included an extended stay hotel, the Marriot Residence Inn, and a business hotel, the
Hilton Garden Inn. The Planning Commission and City Council recently amended the
Pacific Center East Specific Plan to accommodate hotel uses on the proposed site.
DISCUSSION
A Disposition and Development Agreement ("DDA"), has been completed by the City for
development of the Tustin Gateway Project, a hotel and retail site. The primary purpose
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Tustin Gateway Project DDA 2011-01
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of the DDA is to effectuate the disposition and development of the site in accordance
with the Pacific Center Specific Plan, the Redevelopment Plan for the South Central
Redevelopment Project Area, and to offset a portion of the costs associated with
acquiring right-of-way for the SR-55 Ramp Reconfiguration and Newport Avenue
Extension Project, Phase I. The DDA provides for the Developer's phased purchase of
the approximately 7.53 acres of land generally bounded by Edinger Avenue on the
north, Newport Avenue on the east, the CalTrans Edinger Avenue off-on ramp on the
south and the SR-55 Freeway on the west.
The Project consists of construction and installation of two high-quality "flag" hotels: a
the Hilton Garden Inn or a comparable hotel flag acceptable to the City containing
approximately 160 rooms and the Hilton Homewood Suites or a comparable hotel flag
acceptable to the City containing approximately 140 rooms with approximately 190,000
square feet of building area for the hotels, including all of the amenities associated with
these hotels, and approximately 16,000 square feet of supporting retail and/or
restaurant and conference space. The Parties intend that the Project will function as
the centerpiece for the southern portion of the City bordering on and having prominent
visibility from the SR-55 Freeway.
The property totals approximately 7.53 acres. Under the current parcel configuration,
the property is comprised of three parcels which total approximately 7.53 acres. There
is also an additional .85 acre parcel immediately adjacent Water Well Parcel located in
the City of Santa Ana and owned by the City of Tustin which is being retained for water
utility purposes on which the City will grant to the Developer an easement for reciprocal
parking and access across the Water Well Parcel. As part of the proposed transaction,
a Lot Line Adjustment Application will need to be processed by the Developer for minor
modifications to the current parcel boundaries. The Lot Line Adjustment will not change
the total size of the property at approximately 7.53 acres, nor impact the City owned
Water Well Parcel. The proposed lot line adjustments will result in parcels that will be
sold to the Developer that are the following approximate sizes: Parcel A, approximately
3.06 acres; Parcel B, approximately 2.21 acres, and; Parcel C, approximately 2.26
acres.
The DDA will require the Developer to secure all required land use entitlements from the
Tustin Planning Commission and/or City Council, as applicable and as required by the
Pacific Center East Specific Plan. Vertical and horizontal improvements will be
constructed in compliance with all provisions of the DDA and with all "Conditions of
Approval" stipulated by the Planning Commission and/or City Council and other
applicable governmental agencies with jurisdiction, as applicable. Entitlement
approvals and obtaining building permits on Parcels A and B will also be a condition of
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any initial escrow closing. The DDA requires the Developer fund all project development
costs including, but not limited to, the acquisition of the site, construction of on-site and
off-site improvements and all public utility improvements related to developing the site.
The DDA also provides for review of more detailed construction plans at later stages of
design development to assure conformity with DDA requirements and entitlements that
may be granted by the City.
The following are a number of key business terms of the DDA:
Hotel Improvements: The Project will include two Class "A" hotel operators, one for
Parcel A and one for Parcel C. Developer shall complete the development of the
Vertical Improvements to consist of construction and installation of two high quality
"Class A" hotels and approximately 16,000 square feet of commercial space. At this
time, the Developer is proposing a Hilton Homewood Suites and Hilton Garden Hotel
which would meet the definition of an "upscale" operator and "Class A" hotel
according to Smith Travel Research ("STR").
Any alteration of the proposed product by the Developer will require City approval.
The hotels will comprise approximately 300 rooms combined and an adequate
number of parking spaces as required by the Specific Plan and Tustin City Code and
which may be defined by more detailed studies for the Project. Improvements shall
include, but not be limited to, buildings, architectural amenities, parking, security
lighting, pedestrian amenities, and trash enclosures. Design of all improvements
shall be consistent with requirements of the Pacific Center East Specific Plan,
development standards contained in the DDA and additional requirements contained
in any conditions of approval required for the Entitlements for the Project.
In design of the hotels, the Developer has agreed that:
(i) The hotels will be of the quality of at least a three star select service hotel;
(ii) The hotels will be a minimum of 3 stories in an urban format with said
format reflected in the exterior and exterior designs;
(ii) The hotels will be the highest quality tier of each of the proposed hotel
product lines contemplated.
• Hotel Operators: If Developer is unable to secure a Hilton Homewood Suites for
Parcel A, the extended stay hotel site, Class A hotels that would also be permitted
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Tustin Gateway Project DDA 2011-01
July 5, 2011
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include the Marriot Residence Inn, Hyatt Summerfield Suites, Staybridge Suites and
Stanwood Element. In the event that the Developer is unable to secure a Hilton
Garden Inn for Parcel C, the business hotel site, other Class A hotels that would also
be permitted include Hyatt Place, or the aloft by Stanwood. Any other alternative
hotel operators, not named in the DDA as acceptable alternatives, will only be
considered by the City for either Parcel A or Parcel C if the proposed operator is
classified by STR as "Upscale" or above, and is otherwise approved in writing by the
City in its sole discretion.
• Retail Uses: The retail uses for Parcel B must be compatible, complementary and
supportive of the "Upscale" hotel operations on Parcel A and on Parcel C, and
approved in writing by the City. "Class A Uses" with respect to retail exclude all
Prohibited Uses or Prohibited Users which are defined in Attachment No. 13 of the
DDA.
• Land Use Covenant: The property is encumbered by a use covenant requiring the
property to contain Class A hotel uses and other Class A uses over a 25 year period.
• Purchase Price and Market Value: Developer will purchase property in two phases:
Phase I comprises Parcel A and Parcel B for a total of 5.27 acres; and Phase II
comprises Parcel C (2.26 acres). The purchase price for Parcel A is Three Million
Six Hundred Thousand Dollars ($3,600,000) and for Parcel B it is Two Million Five
Hundred Fifty Thousand Dollars ($2,550,000), for a total of Six Million One Hundred
Fifty Thousand Dollars ($6,150,000) for Phase I. The purchase price for Parcel C is
Two Million Five Hundred Sixty Thousand Dollars ($2,560,000). All payments will be
due upon the close of escrow. The land value of the Water Well parcel, a portion of
which will be granted as a reciprocal easement to the Developer and also used for
Water Department purposes, has been determined at Forty-Eight Thousand Dollars
($48,000).
The purchase price for the property and the value of the reciprocal easement to be
granted by the City is not less than the fair market value of the properties based on
an independent appraisal conducted under contract to the City by Pacific Real
Estate Consultants. The project does not require any public subsidy.
• Deposit: An earnest money deposit ("Purchase Price Deposit") of Two Hundred Fifty
Thousand Dollars ($250,000) shall be delivered by the Developer to escrow within
five (5) business days of execution of the DDA. The Purchase Price Deposit shall
be credited against the Purchase Price as follows: $150,000 shall be credited to the
Phase 1 Purchase Price at the Phase 1 Close of Escrow and $100,000 shall be
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Tustin Gateway Project DDA 2011-01
July 5, 2011
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credited to the Phase 2 Purchase Price at the Phase 2 Close of Escrow. The
Deposit is returnable if Developer is unable to secure financing within six (6) months
of the DDA Effective Date.
Conditions of Property Conveyance: The Developer recognizes that the City will be
selling the Property on an "As is, Where is, With All Faults" basis, and the Developer
will acknowledge through the DDA that the City has made no representations or
warranties of any kind whatsoever (excepting only representations of the City
expressly set forth in the DDA), either express or implied in connection with any
matters with respect to the Property.
• Developer's Due Diligence Period: The Developer may elect to conduct further due
diligence investigations for a period commencing on the Effective Date of the DDA
and ending 90 days after the Effective Date.
• Acquisition and Project Financing: As a condition precedent to conveyance, the
Developer shall submit to the City the following evidence of financing:
o Demonstration to the satisfaction of the City that Developer has funds
sufficient to pay all costs relating to acquisition of the Property and
development of the Project on the Property, including sufficient equity capital,
bonding capacity and borrowing ability to fund the Project in writing from a
qualified lender.
o A letter from a Qualified Institutional Lender to the effect that the Developer
has established a commercial account with such financial institution and
maintains a good relationship with such financial institution.
o Developer shall secure a Construction Loan for the Project which shall be a
Permitted Mortgage approved by the City in an amount sufficient to meet the
debt requirements described and that all conditions to close of such
Construction Loan have been met or waived and that the Developer and
lender are prepared to close the Construction Loan immediately following the
Close of Escrow.
o Other documents as the City, in its good faith discretion, determines will
assist in the evaluation of whether the Developer is able to acquire the
Property, construct the Improvements and perform in a timely manner all of its
other obligations and commitments set forth in this Agreement.
City Council Report
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July 5, 2011
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• Reciprocal Easements: An easement will reserve property rights for the Water Well
Parcel for ingress, egress, parking and other purposes for the benefit of each of the
Development Parcels and for expected Water Department operations on the Water
Well Parcel.
• Infrastructure Improvement Responsibilities: The Developer is responsible for
completion of all off-site and on-site infrastructure improvements necessary for
development of the site, except the Water Well Facilities.
The DDA includes other provisions which are typical to such agreements. These
include, but are not limited to: a schedule of performance, restrictions on the ability of
the Developer to transfer the DDA, certain rights of reversion or repurchase in favor of
the City in the event of an inability to cure certain defaults by the Developer, use
restrictions and non-discrimination provisions, maintenance covenants, requirements for
insurance including environmental insurance, and indemnification, including
environmental indemnification in favor of the City and default provisions and remedies.
Once entitlements are approved for the Project, the Developer will be responsible for
preparing complete construction level improvement plans and will be required to obtain
building permits within the time schedules identified in the DDA.
An Initial Study has been prepared for DDA 2011-01 and future anticipated entitlement
applications for the Project. Based upon review of the Project and the EIR, it has been
determined that environmental issues related to the Project have previously been
addressed and evaluated in the Final Environmental Impact Report (EIR) 90-1 for the
Pacific Center East Specific Plan. No additional environmental analysis or action is
required. Staff recommends that the City Council find that:
(i) the environmental effects of the Project are within the scope of the Final
Environmental Impact Report (EIR) 90-1 for the Pacific Center East Specific Plan
certified on December 17, 1990 and Supplemental #1 to Final EIR 90-01 certified and
adopted on May 5, 2003 (collectively, the Pacific Center East Environmental
Documents) which were fully examined;
(ii) no substantial changes are proposed in the Project or have occurred with
respect to circumstances under which the Project is being undertaken since certification
of the Pacific Center East Environmental Documents;
(iii) no new information has become available since that the certification of the
Pacific Center East Specific Plan Environmental Documents; and
(iv) pursuant to Public Resources Code Section 21116 and the requirements of
CEQA regulations promulgated with respect thereto including Title 14 California Code of
City Council Report
Tustin Gateway Project DDA 2011-01
July 5, 2011
Page 10
Regulations Section 15168(c), no additional environmental analysis, action or document
is required and no new mitigation measures would be required.
CONCLUSION
The Project site is a critically important parcel in the overall development of the Tustin
Gateway which will serve as a highly visible southern and western entrance to the City
of Tustin. Given the site's central location in Orange County and it's adjacency to State
Route 55, the site presents a unique opportunity to create an extraordinary environment
for hotel and retail uses. The benefits to be derived from the project are numerous and
will have long lasting impacts to the City and community. The financial commitments by
Developer have been fully evaluated and the DDA protects the interest of the City.
Further, the purchase price for the property and the value of the reciprocal easement to
be granted by the City is not less than the fair market value of the properties based on
an independent appraisal conducted under contract to the City by Pacific Real Estate
Consultants. The project does not require any public subsidy.
Staff will be available to answer any questions that the City Council may have.
Additionally, special legal counsel Amy Freilich and Howard Weinberg, with the firm of
Armbuster, Goldsmith & Delvac, LLP was appointed by the City Attorney to assist the
City in its negotiation on this transaction and has reviewed and assisted in preparation
of all documents.
Christine Shingleton
Assistant City Manager
Attachments: Initial Study
Resolution No. 11-48
DDA 2011-01
Note: Due to the size of the draft DDA attachment, only a limited distribution was
made. Copies are available for review in the Office of the City Clerk.
INITIAL STUDY
COMMUNITY DEVELOPMENT DEPARTMENT
300 Centennial Way, Tustin, CA 92780
(714) 573-3100
ENVIRONMENTAL ANALYSIS CHECKLIST
For Projects With Previously CertiBed/Approved Environmental Documents:
Final Environmental Impact Report (EIR) 90-1 for the Pacific Center East Specific Plan
The following checklist takes into consideration the preparation of an environmental document prepared at an
earlier stage of the proposed project. This checklist evaluates the adequacy of the earlier document pursuant to
Section 15162 and 15168 of the California Environmental Quality Act (CEQA) Guidelines.
A. BACKGROUND
Project Title(s): Disposition and Development Agreement (DDA) 2011-01
(Tustin Gateway Project)
Lead Agency: City of Tustin and Tustin Water Department (for Water Well Parcel or "Easement
Area")
Lead Agency Contact Person: Christine Shingleton Phone: (714) 573-3107
300 Centennial Way
Project Location: Lots 2, 3, and 4 of Parcel Map No. 2010-127 within the City of Tustin and on a
portion of property located immediately adjacent to a Cal Trans Remnant parcel
identified as the "Water Well Parcel" winin the City of Santa Ana.
Project Sponsor's Name and Address: Same as above.
General Plan Designation: PC Commercial/Business
Zoning Designation: SP-11 Pacific Center East Specific Plan, as amended by SPA 11-01
Planning Area 5 (Regional Center)
Project Description: Disposition and Development Agreement (DDA) 2011-01 will effectuate the
Pacific Center East Specific Plan through disposition of certain property owned by the City of Tustin
and development of a project. The project will involve construction of two high quality flag hotels: one
to contain 160 rooms and one to contain 140 rooms with approximately 190,000 square feet for the
hotels and approximately 16,000 square feet of supporting retail and/or restaurant and conference space
and a water well facility on excess Cal Trans property. Related implementing actions prior to transfer of
the Parcels 2,3 and 4 ("Development Parcels") to the Developer will include City's establishment of
certain reciprocal easements,covenants and conditions with respect to the Development Parcels and the
Water Well Parcel (for a public purposes) which include for ingress, egress, parking and other purposes
for the benefit of eachof the Development Parcels and Water Well Parcel. Other implementing actions
will also include further processing by the Developer of certain entitlement applications for shared
parking, Site Plan and Design Review and a Lot Line Adjustment .
Surrounding Uses:
• Northerly along Edinger Avenue -Vacant and industrial uses zoned Planned Development (PC)
within the Pacific Center East Specific Plan and further north residential uses.
• Easterly -Vacant, industrial and office uses zoned Planned Development (PC) uses within the
Pacific Center East Specific Plan and further east of the Pacific Center East Specific Plan
industrial, offices and public and quasi-public uses zoned Industrial (M) and MCAS Tustin
Specific Plan.
• Southerly -Industrial and office uses zoned Industrial (M), Planned Community (PC) Industrial,
and SP3 -International Rectifier Specific Plan uses.
• Westerly -Costa Mesa SS Freeway and further west of the Freeway industrial and commercial
uses within the City of Santa Ana.
B.
Previous Environmental Documentation: Final EIR 90-1 for the Pacific Center East Specific Plan
adopted December 17, 1990. Supplement #1 to Final EIR 90-1 for the Pacific Center East Specific Plan
adopted May 5, 2003.
ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED
The environmental factors checked below would be potentially affected by this project, involving at least one
impact that is a "Potentially Significant Impact" as indicated by the checklist in Section D below.
^Land Use and Planning
^Population and Housing
^Geology and Soils
^Hydrology and Water Quality
^Air Quality
^Transportation & Circulation
^Biological Resources
^Mineral Resources
^Agricultural Resources
C. DETERMINATION:
On the basis of this initial evaluation:
^Hazards and Hazardous Materials
^Noise
^Public Services
^Utilities and Service Systems
^Aesthetics
^Cultural Resources
^Recreation
^Mandatory Findings of
Significance
^ I find that the proposed project COULD NOT have a significant effect on the environment, and a
NEGATIVE DECLARATION will be prepared.
^ I find that although the proposed project could have a significant effect on the environment, there will
not be a significant effect in this case because the mitigation measures described on an attached sheet
have been added to the project. A NEGATIVE DECLARATION will be prepared.
^ I find that the proposed project MAY have a significant effect on the environment, and an
ENVIRONMENTAL IMPACT REPORT is required.
^ I find that the proposed project MAY have a significant effect(s) on the environment, but at least one
effect 1) has been adequately analyzed in an earlier document pursuant to applicable legal standards, and
2) has been addressed by mitigation measures based on the earlier analysis as described on attached
sheets, if the effect is a "Potentially Significant Impact" or "Potentially Significant Unless Mitigated."
An ENVIRONMENTAL IMPACT REPORT is required, but it must analyze only the effects that
remain to be addressed.
® I find that although the proposed project could have a significant effect on the environment, there WILL
NOT be a significant effect in this case because all potentially significant effects 1) have been analyzed
adequately in an earlier EIR pursuant to applicable standards, and 2) have been avoided or mitigated
pursuant to that earlier EIR, including revisions or mitigation measures that are imposed upon the
proposed project.
^ I find that although the proposed project could have a significant effect on the environment, there WILL
NOT be a significant effect in this case because all potentially significant effects 1) have been analyzed
adequately in an earlier NEGATIVE DECLARATION pursuant to applicable standards, and 2) have
been avoided or mitigated pursuant to that earlier NEGATIVE DECLARATION, including revisions or
mitigation measures that are imposed upon the proposed project.
Preparers
West, Redevelopment Project Manager
Christine A. Shingleton, f~~istant City Manager
D. EVALUATION OF ENVIRONMENTAL IMPACTS
Date: ~ 'Z~'~~~
Date (o • z 3~2.m//
See Attached
EVALUATION OF ENVIRONMENTAL IMPACTS
I. AESTHETICS -Would the project:
a) Have a substantial adverse effect on a scenic vista?
b) Substantially damage scenic resources, including, but not
limited to, trees, rock outcroppings, and historic buildings
within a state scenic highway?
c) Substantially degrade the existing visual character or
quality of the site and its surroundings?
d) Create a new source of substantial light or glare which
would adversely affect day or nighttime views in the area?
IL AGRICULTURE RESOURCES: In determining
whether impacts to agricultural resources are significant
environmental effects, lead agencies may refer to the
California Agricultural Land Evaluation and Site Assessment
Model (1997) prepared by the California Dept. of
Conservation as an optional model to use in assessing impacts
on agriculture and farmland. Would the project:
a) Convert Prime Farmland, Unique Farmland, or Farmland
of Statewide Importance (Farmland), as shown on the maps
prepared pursuant to the Farmland Mapping and Monitoring
Program of the California Resources Agency, to non-
agricultural use?
b) Conflict with existing zoning for agricultural use, or a
Williamson Act contract?
c) Involve other changes in the existing environment which,
due to their location or nature, could result in conversion of
Farmland, to non-agricultural use?
III. AIR QUALITY: Where available, the significance
criteria established by the applicable air quality management
or air pollution control district may be relied upon to make the
following determinations. Would the project:
a) Conflict with or obstruct implementation of the applicable
air quality plan?
b) Violate any air quality standard or contribute substantially
to an existing or projected air quality violation?
c) Result in a cumulatively considerable net increase of any
criteria pollutant for which the project region is non-
attainment under an applicable federal or state ambient air
quality standard (including releasing emissions which exceed
quantitative thresholds for ozone precursors)?
d) Expose sensitive receptors to substantial pollutant
concentrations?
e) Create objectionable odors affecting a substantial number
of people?
No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
^ ^
IV. BIOLOGICAL RESOURCES: -Would the project:
a) Have a substantial adverse effect, either directly or
through habitat modifications, on any species identified as a
candidate, sensitive, or special status species in local or
regional plans, policies, or regulations, or by the California
Department of Fish and Game or U.S. Fish and Wildlife
Service?
b) Have a substantial adverse effect on any riparian habitat
or other sensitive natural community identified in local or
regional plans, policies, regulations or by the California
Department of Fish and Game or U.S. Fish and Wildlife
Service?
c) Have a substantial adverse effect on federally protected
wetlands as defined by Section 404 of the Clean Water Act
(including, but not limited to, marsh, vernal pool, coastal, etc.)
through direct removal, filling, hydrological interruption, or
other means?
d) Interfere substantially with the movement of any native
resident or migratory fish or wildlife species or with
established native resident or migratory wildlife corridors, or
impede the use of native wildlife nursery sites?
e) Conflict with any local policies or ordinances protecting
biological resources, such as a tree preservation policy or
ordinance?
f) Conflict with the provisions of an adopted Habitat
Conservation Plan, Natural Community Conservation Plan, or
other approved local, regional, or state habitat conservation
plan?
V. CULTURAL RESOURCES: -Would the project:
a) Cause a substantial adverse change in the significance of
a historical resource as defined in § 15064.5?
b) Cause a substantial adverse change in the significance of
an archaeological resource pursuant to § 15064.5?
c) Directly or indirectly destroy a unique paleontological
resource or site or unique geologic feature?
d) Disturb any human remains, including those interred
outside of formal cemeteries?
VI. GEOLOGY AND SOILS: -Would the project:
a) Expose people or structures to potential substantial
adverse effects, including the risk of loss, injury, or death
involving:
No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
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No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
i) Rupture of a known earthquake fault, as delineated on the
most recent Alquist-Priolo Earthquake Fault Zoning Map
issued by the State Geologist for the area or based on other
substantial evidence of a known fault? Refer to Division of
Mines and Geology Special Publication 42.
ii) Strong seismic ground shaking?
iii) Seismic-related ground failure, including liquefaction?
iv) Landslides?
b) Result in substantial soil erosion or the loss of topsoil?
c) Be located on a geologic unit or soil that is unstable, or
that would become unstable as a result of the project, and
potentially result in on- or off-site landslide, lateral spreading,
subsidence, liquefaction or collapse?
d) Be located on expansive soil, as defined in Table 18-1-B
of the Uniform Building Code (1994), creating substantial
risks to life or property?
e) Have soils incapable of adequately supporting the use of
septic tanks or alternative wastewater disposal systems where
sewers are not available for the disposal of waste water?
VILHAZARDS AND HAZARDOUS MATERIALS:
Would the project:
a) Create a significant hazard to the public or the
environment through the routine transport, use, or disposal of
hazardous materials?
b) Create a significant hazard to the public or the
environment through reasonably foreseeable upset and
accident conditions involving the release of hazardous
materials into the environment?
c) Emit hazardous emissions or handle hazardous or acutely
hazardous materials, substances, or waste within one-quarter
mile of an existing or proposed school?
d) Be located on a site which is included on a list of
hazardous materials sites compiled pursuant to Government
Code Section 65962.5 and, as a result, would it create a
significant hazard to the public or the environment?
e) For a project located within an airport land use plan or,
where such a plan has not been adopted, within two miles of a
public airport or public use airport, would the project result in
a safety hazard for people residing or working in the project
area?
f) For a project within the vicinity of a private airstrip,
would the project result in a safety hazard for people residing
or working in the project area?
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g) Impair implementation of or physically interfere with an
adopted emergency response plan or emergency evacuation
plan?
h) Expose people or structures to a significant risk of loss,
injury or death involving wildland fires, including where
wildlands are adjacent to urbanized areas or where residences
are intermixed with wildlands?
VIII. HYDROLOGY AND WATER QUALITY: -Would
the project:
a) Violate any water quality standards or waste discharge
requirements?
b) Substantially deplete groundwater supplies or interfere
substantially with groundwater recharge such that there would
be a net deficit in aquifer volume or a lowering of the local
groundwater table level (e.g., the production rate of pre-
existing nearby wells would drop to a level which would not
support existing land uses or planned uses for which permits
have been granted)?
c) Substantially alter the existing drainage pattern of the site
or area, including through the alteration of the course of a
stream or river, in a manner which would result in substantial
erosion or siltation on- or off-site?
d) Substantially alter the existing drainage pattern of the site
or area, including through the alteration of the course of a
stream or river, or substantially increase the rate or amount of
surface runoff in a manner which would result in flooding on-
or off-site?
e) Create or contribute runoff water which would exceed the
capacity of existing or planned stormwater drainage systems
or provide substantial additional sources of polluted runoff?
~ Otherwise substantially degrade water quality?
g) Place housing within a 100-year flood hazard area as
mapped on a federal Flood Hazard Boundary or Flood
Insurance Rate Map or other flood hazard delineation map?
h) Place within a 100-year flood hazard area structures
which would impede or redirect flood flows?
i) Expose people or structures to a significant risk of loss,
injury or death involving flooding as a result of the failure of a
levee or dam?
j) Inundation by seiche, tsunami, or mudflow?
IX. LAND USE AND PLANNING -Would the project:
a) Physically divide an established community?
No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
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b) Conflict with any applicable land use plan, policy, or
regulation of an agency with jurisdiction over the project
(including, but not limited to the general plan, specific plan,
local coastal program, or zoning ordinance) adopted for the
purpose of avoiding or mitigating an environmental effect?
c) Conflict with any applicable habitat conservation plan or
natural community conservation plan?
X. MINERAL RESOURCES -Would the project:
a) Result in the loss of availability of a known mineral
resource that would be of value to the region and the residents
of the state?
b) Result in the loss of availability of alocally-important
mineral resource recovery site delineated on a local general
plan, specific plan or other land use plan?
XI. NOISE
Would the project result in:
a) Exposure of persons to or generation of noise levels in
excess of standards established in the local general plan or
noise ordinance, or applicable standards of other agencies?
b) Exposure of persons to or generation of excessive
groundborne vibration or groundborne noise levels?
c) A substantial permanent increase in ambient noise levels
in the project vicinity above levels existing without the
project?
d) A substantial temporary or periodic increase in ambient
noise levels in the project vicinity above levels existing
without the project?
e) For a project located within an airport land use plan or,
where such a plan has not been adopted, within two miles of a
public airport or public use airport, would the project expose
people residing or working in the project area to excessive
noise levels?
f) For a project within the vicinity of a private airstrip,
would the project expose people residing or working in the
project area to excess noise levels?
XILPOPULATION AND HOUSING -Would the project:
a) Induce substantial population growth in an area, either
directly (for example, by proposing new homes and
businesses) or indirectly (for example, through extension of
roads or other infrastructure)?
b) Displace substantial numbers of existing housing,
necessitating the construction of replacement housing
elsewhere?
No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
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No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
c) Displace substantial numbers of people, necessitating the
construction of replacement housing elsewhere? ^ ^
XIII. PUBLIC SERVICES
a) Would the project result in substantial adverse physical
impacts associated with the provision of new or physically
altered governmental facilities, need for new or physically
altered governmental facilities, the construction of which
could cause significant environmental impacts, in order to
maintain acceptable service ratios, response times or other
performance objectives for any of the public services:
Fire protection?
Police protection?
Schools?
Parks?
Other public facilities?
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XIV. RECREATION -
a) Would the project increase the use of existing
neighborhood and regional parks or other recreational
facilities such that substantial physical deterioration of the
facility would occur or be accelerated?
b) Does the project include recreational facilities or require
the construction or expansion of recreational facilities which
might have an adverse physical effect on the environment?
XV. TRANSPORTATION/TRAFFIC -Would the project:
a) Cause an increase in traffic which is substantial in relation
to the existing traffic load and capacity of the street system
(i.e. result in a substantial increase in either the number of
vehicle trips, the volume to capacity ratio on roads, or
congestion at intersections)?
b) Exceed, either individually or cumulatively, a level of
service standard established by the county congestion
management agency for designated roads or highways?
c) Result in a change in air traffic patterns, including either
an increase in traffic levels or a change in location that results
in substantial safety risks?
d) Substantially increase hazards due to a design feature (e.g.
sharp curves or dangerous intersections) or incompatible uses
(e.g., farm equipment)?
e) Result in inadequate emergency access?
f) Result in inadequate parking capacity?
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g) Conflict with adopted policies, plans, or programs
supporting alternative transportation (e.g., bus turnouts,
bicycle racks)?
XVI. UTILITIES AND SERVICE SYSTEMS -
Would the project:
a) Exceed wastewater treatment requirements of the
applicable Regional Water Quality Control Board?
b) Require or result in the construction of new water or
wastewater treatment facilities or expansion of existing
facilities, the construction of which could cause significant
environmental effects?
c) Require or result in the construction of new storm water
drainage facilities or expansion of existing facilities, the
construction of which could cause significant environmental
effects?
d) Have sufficient water supplies available to serve the
project from existing entitlements and resources, or are new or
expanded entitlements needed?
e) Result in a determination by the wastewater treatment
provider which serves or may serve the project that it has
adequate capacity to serve the project's projected demand in
addition to the provider's existing commitments?
f) Be served by a landfill with sufficient permitted capacity
to accommodate the project's solid waste disposal needs?
g) Comply with federal, state, and local statutes and
regulations related to solid waste?
XVII. MANDATORY FINDINGS OF SIGNIFICANCE
a) Does the project have the potential to degrade the quality
of the environment, substantially reduce the habitat of a fish or
wildlife species, cause a fish or wildlife population to drop
below self-sustaining levels, threaten to eliminate a plant or
animal community, reduce the number or restrict the range of
a rare or endangered plant or animal or eliminate important
examples of the major periods of California history or
prehistory?
b) Does the project have impacts that are individually
limited, but cumulatively considerable? ("Cumulatively
considerable" means that the incremental effects of a project
are considerable when viewed in connection with the effects
of past projects, the effects of other current projects, and the
effects of probable future projects)?
c) Does the project have environmental effects which will
cause substantial adverse effects on human beings, either
directly or indirectly?
No Substantial
New More Change From
Significant Severe Previous
Impact Impacts Analysis
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EVALUATION OF ENVIRONMENTAL IMPACTS
DISPOSITION AND DEVELOPMENT AGREEMENT (DDA) 2011-01
AND FUTURE IMPLEMENTING ACTIONS
TUSTIN GATEWAY PROJECT
BACKGROUND
On February 19, 1991, the Tustin City Council adopted the Pacific Center East Specific
Plan and on April 19, 2011 adopted Specific Plan Amendment 11-001. Pacific Center
East is comprised of approximately 126 acres and is bounded on the west by the State
Route 55 Freeway, on the north by the Santa Ana-Santa Fe Channel, on the east by
Red Hill Avenue and on the south by Valencia Avenue. The Tustin City Council certified
Final EIR (FEIR) 90-1 for the Pacific Center East Specific Plan on December 17, 1990
and Supplement #1 to Final EIR 90-1 for the Pacific Center East Specific Plan was
adopted May 5, 2003. The FEIR is a Program EIR under the California Environmental
Quality Act ("CEQA."). The FEIR considered the potential environmental impacts
associated with the development of the Pacific Center East Specific Plan.
The proposed "Project" is the Disposition and Development Agreement (DDA) 2011-01
between the City of Tustin and Olson Real Estate Group, Inc (Developer) that will
effectuate the Pacific Center East Specific Plan, as amended, through disposition of
certain property owned by the City of Tustin and development of a project. The Project
will involve development of improvements that consist of construction and installation of
two high quality "Class A" hotels: one to contain 160 rooms and one to contain 140
rooms with approximately 190,000 square feet for the hotels and approximately 16,000
square feet of supporting retail and/or restaurant and conference space, plus a water
well facility by the City of Tustin. Improvements will include, but not be limited to
buildings, architectural amenities, parking, security lighting, pedestrian amenities, and
trash enclosures. Design of all improvements within the City of Tustin on Parcels 2, 3,
and 4 of Parcel Map 2010-127 will be consistent with requirements of the Pacific Center
East Specific Plan, development standards contained in the DDA, and additional
requirements contained in any conditions of approval required for the entitlements for
the Project. Any improvements to the Water Well Parcel will be consistent with
requirements as a public water utility as approved by the City Water Department.
Related future entitlement actions, as required by the DDA, will consist of Design
Review (site plan and architectural plan review) and Lot Line Adjustment to demonstrate
compliance with the Pacific Center East Specific Plan and Tustin City Code. Related
implementing actions prior to transfer of the Parcels 2, 3, and 4 of Parcel Map 2010-127
("Development Parcels") to the Developer will include City's establishment of certain
reciprocal easements, covenants and conditions with respect to the Development
Parcels and the Water Well Parcel for ingress, egress, parking and other purposes for
the benefit of each of the Development Parcels and Water Well Parcel, which includes a
public purpose. Other implementing actions will also include further processing by the
Developer of certain entitlement applications for shared parking, Site Plan and Design
Review and a Lot Line Adjustment.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 2
The Project is located on properties legally described as Parcels 2, 3, and 4 of Parcel
Map 2010-127 ("Development Parcels") and an excess Cal Trans Property ("Water Well
Parcel") adjacent to the SR-55 (Costa Mesa) Freeway. The Project was previously
envisioned per the Pacific Center East Specific Plan, as amended.
An Environmental Analysis Checklist has been completed and it has been determined
that this Project is within the scope of the previously approved Program FEIR and that
pursuant to Title 14 California Code of Regulations Sections 15162 and 15168(c), no
new effects could occur, and no new mitigation measures would be required.
Accordingly, no new environmental document is required by CEQA.
The following information provides background support for the conclusions identified in
the Environmental Analysis Checklist.
I. AESTHETICS -Would the project:
a) Have a substantial adverse effect on a scenic vista?
b) Substantially damage scenic resources, including, but not limited to,
trees, rock outcroppings, and historic buildings within a state scenic
highway?
c) Substantially degrade the existing visual character or quality of the site
and its surroundings?
d) Create a new source of substantial light or glare, which would adversely
affect day or nighttime views in the area?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. In addition, future
development associated with the Project will not be located on a scenic highway,
nor will the Project affect a scenic vista. Development of the site was considered
within the FEIR, as revised by Supplement #1, and will have no negative aesthetic
effect on the site or its surroundings when mitigation measures identified in the
FEIR, as revised by Supplement #1. Development of the Project will require
Design Review approval; however, as required per the DDA the Project will have a
consistent architecture style evident in all elements of design, from all elevations
of the structures and treatment of roofs and parapets, down to smaller elements
such as street furniture and trash enclosures.
Particular attention will also be paid to massing, scale, color, and expression of
such quality for the Project shall be true to the distinctive and unique elements of
Tustin, the Tustin Gateway area and the Pacific Center East Pacific Plan that will
be cohesive and in harmony with surrounding uses. Provisions of the Specific
Plan will ensure during the subsequent Design Review of the Project that all
exterior lighting will be required to be designed to reduce glare, create a safe night
environment, and avoid impacts to surrounding properties. The Water Department
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 3
will review all improvements to the Water Welt Parcel for compliance with similar
standards. Project will result in no substantial changes to the environmental
impacts previously evaluated by the FEIR, as revised by Supplement #1.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; applicable measures will be
included, when specifically applicable, as conditions of any recommended
entitlement approvals for future development of the Development Parcels or by
the Water Department for development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
DDA 2011-01
II. AGRICULTURE RESOURCES: In determining whether impacts to
agricultural resources are significant environmental effects, lead agencies
may refer to the California Agricultural Land Evaluation and Site
Assessment Model (1997) prepared by the California Dept. of Conservation
as an optional model to use in assessing impacts on agriculture and
farmland. Would the project:
a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide
Importance (Farmland), as shown on the maps prepared pursuant to the
Farmland Mapping and Monitoring Program of the California Resources
Agency, to non-agricultural use?
b) Conflict with existing zoning for agricultural use or a Williamson Act
contract?
c) Involve other changes in the existing environment which, due to their
location or nature, could result in conversion of Farmland to non-
agricultural use?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. In addition, the Project
would not convert prime farmland, unique farmland, or farmland of statewide
importance as shown on maps prepared pursuant to the Farmland Managing and
Monitoring Program of the California Resources Agency to non-agricultural use.
Also, the property is not zoned for agricultural use or a Williamson Act Contract,
nor does the allowed use involve other changes in the existing environment that
could result in the conversion of farmland to non-agricultural use. The project site
is not zoned or used as agricultural land. Proposed Project will result in no
substantial changes to the environmental impacts previously evaluated by the
FEIR, as revised by Supplement #1. There is no possibility that the activity in
question may have a significant effect on the environment.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 4
Mitigation/Monitoring Required: No mitigation is required.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
Farmland Mapping and Monitoring Program
III. AIR QUALITY: Where available, the significance criteria established by the
applicable air quality management or air pollution control district may be
relied upon to make the following determinations. Would the project:
a) Conflict with or obstruct implementation of the applicable air quality
plan?
b) Violate any air quality standard or contribute substantially to an existing
or projected air quality violation?
c) Result in a cumulatively considerable net increase of any criteria
pollutant for which the project region is non-attainment under an
applicable federal or state ambient air quality standard (including
releasing emissions that exceed quantitative thresholds for ozone
precursors)?
d) Expose sensitive receptors to substantial pollutant concentrations?
e) Create objectionable odors affecting a substantial number of people?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, Final EIR 90-
1 determined that regional ambient air quality conditions, combined with regional
cumulative traffic, contribute to the exceedance of daily State and Federal
standards for several air pollutants. Consequently, mitigation measures were
identified in Final EIR 90-1 to minimize these impacts. However, in approving the
Specific Plan, a Statement of Overriding Considerations was adopted by the Tustin
City Council on December 17, 1990 for cumulative air quality impacts that could not
be mitigated. Since the proposed actions would accommodate development
consistent with the Specific Plan, all environmental impacts related to the project
and the development of the site were considered in the adopted FEIR, as revised
by Supplement #1. Proposed Project will result in no substantial changes to the
environmental impacts previously evaluated by the FEIR, as revised by
Supplement #1. There is no possibility that the activity in question may have a
significant effect on the environment.
Mitigation/Monitoring Required: Specific mitigation measures were adopted by the
Tustin City Council in certifying the FEIR, as revised by Supplement #1. Any
applicable mitigation measures will be included in any future recommended
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 5
entitlement approvals for the Development Parcels or development of the Water
Well Parcel. However, the FEIR, as revised by Supplement #1, also concluded that
Specific Plan related operational air quality impacts were significant and impossible
to fully mitigate. A Statement of Overriding Consideration for the FEIR, as revised
by Supplement #1, was adopted by the Tustin City Council on May 5, 2003.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
IV. BIOLOGICAL RESOURCES: -Would the project:
a) Have a substantial adverse effect, either directly or through habitat
modifications, on any species identified as a candidate, sensitive, or
special status species in local or regional plans, policies, or regulations,
or by the California Department of Fish and Game or U.S. Fish and
Wildlife Service?
b) Have a substantial adverse effect on any riparian habitat or other
sensitive natural community identified in local or regional plans,
policies, regulations, or by the California Department of Fish and Game
or U.S. Fish and Wildlife Service?
c) Have a substantial adverse effect on federally protected wetlands as
defined by Section 404 of the Clean Water Act (including, but not limited
to, marsh, vernal pool, coastal, etc.) through direct removal, filling,
hydrological interruption, or other means?
d) Interfere substantially with the movement of any native resident or
migratory fish or wildlife species or with established native resident or
migratory wildlife corridors, or impede the use of native wildlife nursery
sites?
e) Conflict with any local policies or ordinances protecting biological
resources, such as a tree preservation policy or ordinance?
f) Conflict with the provisions of an adopted Habitat Conservation Plan,
Natural Community Conservation Plan, or other approved local, regional
or state habitat conservation plan?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. The FEIR, as revised
by Supplement #1, found that implementation of the Pacific Center East Specific
Plan would not result in impacts to federally listed threatened or endangered plant
or animal species. Proposed Project will result in no substantial changes to the
environmental impacts previously evaluated by the FEIR, as revised by
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 6
Supplement #1. There is no possibility that the activity in question may have a
significant effect on the environment.
Mitigation/Monitoring Required: No mitigation is required.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
V. CULTURAL RESOURCES: -Would the project:
a) Cause a substantial adverse change in the significance of a historical
resource as defined in §15064.5?
b) Cause a substantial adverse change in the significance of an
archaeological resource pursuant to § 15064.5?
c) Directly or indirectly destroy a unique paleontological resource or site
or unique geologic feature?
d) Disturb any human remains, including those interred outside formal
cemeteries?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, it is possible
that previously unidentified buried archaeological or paleontological resources
within the project site could be significantly impacted by grading and construction
activities associated with development of the site. With the inclusion of mitigation
measures that require future construction monitoring, potential impacts to cultural
resources can be reduced to a level of insignificance. Proposed Project will result in
no substantial changes to the environmental impacts previously evaluated by the
FEIR, as revised by Supplement #1. There is no possibility that the activity in
question may have a significant effect on the environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
measures will be included in as recommended conditions of entitlement
approvals for development of the site or by the Water Department in
development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 7
VI. GEOLOGY AND SOILS: -Would the project:
a) Expose people or structures to potential substantial adverse effects,
including the risk of loss, injury, or death involving:
• Rupture of a known earthquake fault, as delineated on the most
recent Alquist-Priolo Earthquake Fault Zoning map, issued by the
State Geologist for the area or based on other substantial evidence
of a known fault? Refer to Division of Mines and Geology Special
Publication 42.
• Strong seismic ground shaking?
• Seismic-related ground failure, including liquefaction?
• Landslides?
b) Result in substantial soil erosion or the loss of topsoil?
c) Be located on a geologic unit or soil that is unstable, or that would
become unstable as a result of the project, and potentially result in on-
or off-site landslide, lateral spreading, subsidence, liquefaction or
collapse?
d) Be located on expansive soil, as defined in Table 18-1-B of the Uniform
Building Code (1994), creating substantial risks to life or property?
e) Have soils incapable of adequately supporting the use of septic tanks or
alternative wastewater disposal systems where sewers are not available
for the disposal of wastewater?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, Final EIR 90-
1 identified impacts to the entire Specific Plan area related to the necessary grading
activity that would occur to accommodate the various types of development and the
resultant change to existing landform and topography. Consequently, mitigation
measures were identified in Final EIR 90-1. Proposed Project will result in no
substantial changes to the environmental impacts previously evaluated by the
FEIR, as revised by Supplement #1. There is no possibility that the activity in
question may have a significant effect on the environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
mitigation measures will be included as recommended conditions of entitlement
approvals for development of the site or by the Water Department in
development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 8
VII. HAZARDS AND HAZARDOUS MATERIALS: -Would the project:
a) Create a significant hazard to the public or the environment through the
routine transport, use or disposal of hazardous materials?
b) Create a significant hazard to the public or the environment through
reasonable foreseeable upset and accident conditions involving the
release of hazardous materials into the environment?
c) Emit hazardous emissions or handle hazardous or acutely hazardous
materials, substances, or waste within one-quarter mile of an existing or
proposed school?
d) Be located on a site which is included on a list of hazardous materials
sites compiled pursuant to Government code Section 65962.5 and, as a
result, would it create a significant hazard to the public or the
environment?
e) For a project located within an airport land use plan or, where such a
plan has not been adopted, within two miles or a public airport or public
use airport, would the project result in a safety hazard for people
residing or working in the project area?
f) For a project within the vicinity of a private airstrip, would the project
result in a safety hazard for people residing or working in the project
area?
g) Impair implementation of or physically interfere with an adopted
emergency response plan or emergency evacuation plan?
h) Expose people or structures to a significant risk of loss, injury or death
involving wildland fires, including where wildlands are adjacent to
urbanized areas or where residences are intermixed with wildlands?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. The FEIR, as revised
by Supplement #1, found that implementation of the Pacific Center East Specific
Plan would not result in impacts related to hazards and hazardous materials.
Proposed Project will result in no substantial changes to the environmental impacts
previously evaluated by the FEIR, as revised by Supplement #1. There is no
possibility that the activity in question may have a significant effect on the
environment.
Mitigation/Monitoring Required: No mitigation is required.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 9
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
VIII. HYDROLOGY AND WATER QUALITY: -Would the project:
a) Violate any water quality standards or waste discharge requirements?
b) Substantially deplete groundwater supplies or interfere substantially
with groundwater recharge, such that there would be a net deficit in
aquifer volume or a lowering of the local groundwater table level (e.g.,
the production rate of pre-existing nearby wells would drop to a level
which would not support existing land uses or planned uses for which
permits have been granted)?
c) Substantially alter the existing drainage pattern of the site or area,
including through the alteration of the course of a stream or river, in a
manner which would result in flooding on- or off-site?
d) Substantially alter the existing drainage pattern of the site or area,
including through the alteration of the course of a stream or river, or
substantially increase the rate or amount of surface runoff in a manner,
which would result in flooding on- or off-site?
e) Create or contribute runoff water which would exceed the capacity of
existing or planned storm water drainage systems or provide
substantial additional sources of polluted runoff?
f) Otherwise substantially degrade water quality?
g) Place housing within a 100-year flood hazard area as mapped on a
federal Flood hazard Boundary of Flood Insurance Rate Map or other
flood hazard delineation map?
h) Place within a 100-year flood hazard area structures, which would
impede or redirect flood flows?
i) Expose people or structures to a significant risk of loss, injury or death
involving flooding, including flooding as a result of the failure of a levee
or dam?
j) Inundation by seiche, tsunami, or mudflow?
k) Potentially impact stormwater runoff from construction activities?
I) Potentially impact stormwater runoff from post-construction activities?
m) Result in a potential for discharge of stormwater pollutants from areas
of material storage, vehicle or equipment fueling, vehicle or equipment
maintenance (including washing), waste handling, hazardous materials
handling or storage, delivery areas, loading docks or other outdoor
work areas?
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 10
n) Result in a potential for discharge of stormwater to affect the beneficial
uses of the receiving waters?
o) Create the potential for significant changes in the flow velocity or
volume of stormwater runoff to cause environmental harm?
p) Create significant increases in erosion of the project site or surrounding
areas?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. Development of the
Development Parcels associated with the Project will include project design and
construction of facilities to fully contain drainage of the site that will be required as
conditions of approval of the development project. Development of the Water Well
Parcel supports a public purpose that will also be reviewed by the Water
Department to ensure that all drainage is contained on the site as a condition of any
development on this parcel. No long-term impacts to hydrology and water quality
are anticipated for the development of the Project site. At this time, it is not
anticipated that the proposed Project will impact groundwater in the deep regional
aquifer or shallow aquifer. The proposed Project would not include groundwater
removal or alteration of historic drainage patterns at the site. The project site is not
located within a 100-year flood area and will not expose people or structures to a
significant risk of loss, injury, and death involving flooding as a result of the failure of
a levee or dam, nor is the project site susceptible to inundation by seiche, tsunami,
or mudflow. Any future drilling for a Water Well on the Water Well Parcel will be
subject to separate environmental review as it relates to any future extractions
activities by the Water Department.
Construction operations associated with development of the site would be required
to comply with the Total Maximum Daily Load (TMDL) for the Newport Bay
watershed that requires compliance with the Drainage Area Master Plan (DAMP)
and National Pollution Discharge Elimination System (NPDES) and the
implementation of specific best management practices (BMP). Compliance with
state and City and Water Department regulations and standards, along with
established engineering procedures and techniques, would avoid unacceptable risk
or the creation of significant impacts related to such hazards.
Final EIR 90-1 identified impacts to the entire Specific Plan area related to water
and drainage. Consequently, mitigation measures were identified in Final EIR 90-1
that would reduce the potential impacts of the project to a level of insignificance.
Proposed Project will result in no substantial changes to the environmental impacts
previously evaluated by the FEIR, as revised by Supplement #1. There is no
possibility that the activity in question may have a significant effect on the
environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 11
mitigation measures will be included as conditions of any recommended future
entitlement approvals for development of the Development Parcels or by the
Water Department in development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
IX. LAND USE AND PLANNING: Would the project:
a) Physically divide an established community?
b) Conflict with any applicable land use plan, policy, or regulation of an
agency with jurisdiction over the project (including, but not limited, to
the general plan, specific plan, local coastal program, or zoning
ordinance) adopted for the purpose of avoiding or mitigating an
environmental effect?
c) Conflict with any applicable habitat conservation plan or natural
community conservation plan?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. On February 19, 1991,
the Tustin City Council approved the Pacific Center East Specific Plan which
established land use and development standards for development of the
Development Parcels and site, and on April 19, 2011 adopted Specific Plan
Amendment 11-001 implementing minor text amendments. The Project will meet
the requirements of the Specific Plan.
Compliance with state, City (including the Specific Plan) and Water Department
requirements would avoid the creation of significant land use and planning impacts.
Also, the proposed Project will not conflict with any habitat conservation plan or
natural community conservation plan. Final EIR 90-1 identified impacts to the
entire Specific Plan area related to land use. Consequently, mitigation measures
were identified in Final EIR 90-1. Proposed Project will result in no substantial
changes to the environmental impacts previously evaluated by the FEIR, as
revised by Supplement #1. There is no possibility that the activity in question may
have a significant effect on the environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
mitigation measures will be included as conditions of any recommended future
entitlement approvals for development of the Development Parcels or by the
Water Department in development of the Water Well Parcel.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 12
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-001
Tustin General Plan
DDA 2011-01
X. MINERAL RESOURCES: Would the project:
a) Result in the loss of availability of a known mineral resource that would
be a value to the region and the residents of the state?
b) Result in the loss of availability of a locally important mineral resource
recovery site delineated on a local general plan, specific plan or other
land use plan?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. In addition, the
proposed project will not result in the loss of mineral resources known to be on the
site or identified as being present on the site by any mineral resource plans. Final
EIR 90-1 did not identify any potential impacts related to natural resources.
Proposed SPA 11-001 will result in no substantial changes to the environmental
impacts previously evaluated by the FEIR, as revised by Supplement #1. There is
no possibility that the activity in question may have a significant effect on the
environment.
Mitigation/Monitoring Required: No mitigation is required.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan
Tustin General Plan
XI. NOISE: Would the project:
a) Exposure of persons to or generation of noise levels in excess of
standards established in the local general plan or noise ordinance, or
applicable standards of other agencies?
b) Exposure of persons to or generation of excessive ground borne
vibration or ground borne noise levels?
c) A substantial permanent increase in ambient noise levels in the project
vicinity above levels existing without the project?
d) A substantial temporary or periodic increase in ambient noise levels in
the project vicinity above levels existing without the project?
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 13
e) For a project located within an airport land use plan or, where such a
plan has not been adopted, within two miles of a public airport or public
use airport, would the project expose people residing or working in the
project area to excessive noise levels?
f) For a project within the vicinity of a private airstrip, would the project
expose people residing or working in the project area to excessive
noise levels?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, the full build-
out of the Pacific Center East Specific Plan would result in short-term roadway and
freeway ramp construction noise impacts, and a less than significant permanent
increase in the ambient noise levels in and around the project site due to vehicular
traffic. Mitigation measures were identified in Final EIR 90-1 to minimize the short
term noise impacts. The Project could result in implementation activities that
generate noise; however, it will not result in substantial changes to the
environmental impacts previously evaluated by the FEIR, as revised by
Supplement #1. There is no possibility that the activity in question may have a
significant effect on the environment. Any future drilling of a Water Well on the
Water Well Parcel will be subject to separate environmental review as it relates to
any future extractions activities by the Water Department as it relates to any future
extractions activities by the Water Department.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
measures will be included as conditions of any recommended future entitlement
approvals for development of the Development Parcels or by the Water
Department in development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
XII. POPULATION & HOUSING: Would the project:
a) Induce substantial population growth in an area, either directly (for
example, by proposing new homes and businesses) or indirectly (for
example, through extension of roads or other infrastructure)?
b) Displace substantial numbers of existing housing, necessitating the
construction of replacement housing elsewhere?
c) Displace substantial numbers of people, necessitating the construction
of replacement housing elsewhere?
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 14
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. Therefore, there is no
direct increase to the City's population resulting from the project. The Pacific
Center East Specific Plan has previously been determined to be consistent with the
Tustin General Plan. Proposed Project will result in no substantial changes to the
environmental impacts previously evaluated by the FEIR, as revised by
Supplement #1. There is no possibility that the activity in question may have a
significant effect on the environment.
Mitigation/Monitoring Required: No mitigation is required.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
XIII. PUBLIC SERVICES
a) Would the project result in substantial adverse physical impacts
associated with the provision of new or physically altered governmental
facilities, need for new or physically altered governmental facilities, the
construction of which could cause significant environmental impacts, in
order to maintain acceptable service ratios, response times, or other
performance objectives for any of the public services:
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. Final EIR 90-1 identified
impacts to the area including the Specific Plan area related to public services,
including Fire and Police protection, schools and public facilities. Consequently,
mitigation measures were identified in Final EIR 90-1. Final EIR 90-1 did not
identify any potential impacts related to general public services or .other
governmental services. Any future drilling of a Water Well on the Water Well
Parcel will be subject to separate environmental review as it relates to any future
extractions activities by the Water Department as it relates to any future
extractions activities by the Water Department.
The Project will require Tustin public services such as fire and police protection
services, and recreation facilities. Police protection services and recreation
facilities for the site would be provided by the City of Tustin rather than the City of
Santa Ana. All of the other services listed below would be provided by the same
agencies.
Fire Protection. The development of the site allowed by the proposed Project will
be required to meet existing Orange County Fire Authority (OCFA) regulations
regarding demolition, construction materials and methods, emergency access,
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 15
water mains, fire flow, fire hydrants, sprinkler systems, building setbacks, and
other relevant regulations. Adherence to these regulations would reduce the risk
of uncontrollable fire and increase the ability to efficiently provide fire protection
services to the site. The number of fire stations in the areas surrounding the site
will meet the demands created by the proposed Project.
Police Protection. The need for police protection services was assessed by the
FEIR on the basis of resident population estimates, square footage of non-
residential uses, etc. The Project would increase the need for police protection
services. Entitlement conditions of approval for the Project, will require the
developer to work with the Tustin Police Department to ensure that adequate
security precautions such as visibility, lighting, emergency access, and address
signage are implemented in the project at plan check.
Proposed Project will result in no substantial changes to the environmental impacts
previously evaluated by the FEIR, as revised by Supplement #1. There is no
possibility that the activity in question may have a significant effect on the
environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
measures will be included as conditions of any recommended future entitlement
approvals for development of the Development Parcels or by the Water
Department in development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
DDA 2011-01
XIV. RECREATION
a) Would the project increase the use of existing neighborhood and
regional parks or other recreational facilities, such that substantial
physical deterioration of the facility would occur or be accelerated?
b) Does the project include recreational facilities or require the
construction or expansion of recreational facilities, which might have an
adverse physical effect on the environment?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, Final EIR 90-
1 did identify potential impacts related to the quality of recreation resulting from
development of the Specific Plan area. Future development of the site would not
generate a significant increase in the use of existing parks. Proposed Project will
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 16
result in no substantial changes to the environmental impacts previously evaluated
by the FEIR, as revised by Supplement #1. There is no possibility that the activity
in question may have a significant effect on the environment.
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
measures will be included as conditions of any recommended future entitlement
approvals for development of the Development Parcels or by the Water
Department in development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
XV. TRANSPORTATION/TRAFFIC: Would the project:
a) Cause an increase in traffic, which is substantial in relation to the existing
traffic load and capacity of the street system (i.e., result in a substantial
increase in either the number of vehicle trips, the volume to capacity ratio
on roads, or congestion at intersections)?
b) Exceed, either individually or cumulatively, a level of service standard
established by the county congestion management agency for
designated roads or highways?
c) Result in a change in air traffic patterns, including either an increase in
traffic levels or a change in location that results in substantial safety
risks?
d) Substantially increase hazards due to a design feature (e.g., sharp
curves or dangerous intersections) or incompatible uses (e.g., farm
equipment)?
e) Result in inadequate emergency access?
f) Result in inadequate parking capacity?
g) Conflict with adopted policies, plans, or programs supporting
alternative transportation (e.g., bus turnouts, bicycle racks)?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, Final EIR 90-
1 determined that the ultimate development of the entire Specific Plan area would
generate increased traffic in the vicinity. Consequently, mitigation measures were
identified in Final EIR 90-1 to minimize these impacts. A Statement of Overriding
Consideration was adopted to address impacts that could not be mitigated to a
level of insignificance. One mitigation measure required changes in the Circulation
Element of the City's General Plan. A General Plan Amendment re-designating the
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 17
classification of portions of Newport Avenue and Del Amo Avenue was approved in
1991.
Traffic conditions in the Specific Plan area were studied extensively during the
preparation of EIR 90-1. However, due to the age of the traffic study a new study
was commissioned in 2000 in conjunction with Supplement #1 to ensure that the
traffic analysis and findings were based on the most current data available and
consider the refinement of the roadway improvements from those described in Final
EIR 90-1. Traffic conditions and mitigation measures originally in Final EIR 90-1
were reevaluated in Supplement #1.
As part of this initial study and review of the Project, current land uses were
reviewed by the City's Transportation and Development Services Manager to
determine the status of development by Pacific Center East phase and by
generated traffic volumes. Based on this review, it was apparent that the land
development is within the parameters of authorized Phase I land uses and
acceptable Average Daily Trip (ADT) levels of Phase I of the Pacific Center East
phasing plan. Further, all of the infrastructure improvements have been completed
to facilitate the Pacific Center East Phase I development.
Transportation improvements for the 1990 Pacific Center East EIR 90-1 were
modified in Supplement #1 to EIR 90-1. Some of the improvements were deleted
and one new one was added with the revised traffic analysis. Some of the
improvements on the list have been completed with other projects, modified
through Settlement Agreements with adjacent jurisdictions, or relieved through
other environmental documents. Proposed Project will result in no substantial
changes to the environmental impacts previously evaluated by the FEIR, as
revised by Supplement #1. There is no possibility that the activity in question may
have a significant effect on the environment.
Mitigation/Monitoring Required: Specific mitigation measures were adopted by the
Tustin City Council in certifying the FEIR, as revised by Supplement #1. However,
the FEIR, as revised by Supplement #1, also concluded that Specific Plan related
traffic impacts were significant and impossible to fully mitigate. A Statement of
Overriding Consideration for the FEIR, as revised by Supplement #1, was adopted
by the Tustin City Council on May 5, 2003. However a review by the City's Traffic
and Development Manager have indicated that based on a review of
transportation/circulation roadway improvements, there is sufficient capacity to
accommodate the proposed Project without the implementation of additional
mitigation measures required in future Pacific Center East Specific Plan phases.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
DDA 2011-01
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 18
XVI. UTILITIES AND SERVICE SYSTEMS: Would the project:
a) Exceed wastewater treatment requirements of the applicable Regional
Water Quality Control Board?
b) Require or result in the construction of new water or wastewater
treatment facilities or expansion of existing facilities, the construction
of which could cause significant environmental effects?
c) Require or result in the construction of new storm water drainage
facilities or expansion of existing facilities, the construction of which
could cause significant environmental effects?
d) Have sufficient water supplies available to serve the project from
existing entitlements and resources, or are new or expanded
entitlements needed?
e) Result in a determination by the wastewater treatment provider, which
serves or may serve the project that it has adequate capacity to serve
the project's projected demand in addition to the provider's existing
commitments?
f) Be served by a landfill with sufficient permitted capacity to
accommodate the project's solid waste disposal needs?
g) Comply with federal, state, and local statutes and regulations related to
solid waste?
h) Would the project include a new or retrofitted storm water treatment
control Best Management Practice (BMP), (e.g. water quality treatment
basin, constructed treatment wetlands), the operation of which could
result in significant environmental effects (e.g. increased vectors and
odors)?
The Project is consistent with the development permitted in the Pacific Center East
Specific Plan, as amended, and would not increase the overall development
potential allowed by the Pacific Center East Specific Plan. However, Final EIR 90-
1 identified impacts to the entire Specific Plan area related to utilities.
Consequently, mitigation measures identified in Final EIR 90-1 were recommended
for implementation that would reduce the potential impacts to a level of
insignificance. Any future drilling of a Water Well on the Water Well Parcel will be
subject to separate environmental review as it relates to any future extractions
activities by the Water Department.
Proposed Project will result in no substantial changes to the environmental impacts
previously evaluated by the FEIR, as revised by Supplement #1. There is no
possibility that the activity in question may have a significant effect on the
environment.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 19
Mitigation/Monitoring Required: Mitigation measures were adopted by the Tustin
City Council in the FEIR, as revised by Supplement #1; any specifically applicable
measures will be included as conditions of any recommended future entitlement
approvals for development of the Development Parcels or by the Water
Department in development of the Water Well Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
XVII. MANDATORY FINDINGS OF SIGNIFICANCE
a) Does the project have the potential to degrade the quality of the
environment, substantially reduce the habitat of a fish or wildlife
species, cause a fish or wildlife population to drop below self-sustaining
levels, threaten to eliminate a plant or animal community, reduce the
number or restrict the range of a rare or endangered plant or animal or
eliminate important examples of the major periods of California history
or prehistory?
b) Does the project have impacts that are individually limited but
cumulatively considerable? ("Cumulatively considerable" means that
the incremental effects of a project are considerable when viewed in
connection with the effects of past projects, the effects of other current
projects, and the effects of probable future projects.)
c) Does the project have environmental effects, which will cause
substantial adverse effects on human beings, either directly or
indirectly?
Based upon the foregoing, the proposed project does not have the potential to
degrade the quality of the environment, substantially reduce the habitats or wildlife
populations to decrease or threaten, eliminate, or reduce animal ranges, etc. With
the enforcement of FEIR mitigation and implementation measures approved by the
Tustin City Council, the proposed Project does not cause unmitigated
environmental effects that will cause substantial effects on human beings, either
directly or indirectly. In addition, the proposed Project does have air quality impacts
that are individually limited, but cumulatively considerable when viewed in
connection with the effects of development of the Pacific Center East Specific Plan,
as amended by SPA 11-01. The FEIR previously considered all environmental
impacts associated with the implementation of the Pacific Center East Specific
Plan. The Project proposes no substantial changes to environmental issues
previously considered with adoption of the FEIR. Mitigation measures were
identified in the FEIR to reduce impact but not to a level of insignificance. A
Statement of Overriding Consideration for the FEIR, as revised by Supplement #1,
was adopted by the Tustin City Council on May 5, 2003.
Exhibit 1 of Attachment B of Resolution No. 11-48
Evaluation of Environmental Impacts
DDA 2011-01 (Tustin Gateway Project)
Page 20
Mitigation/Monitoring Required: The FEIR previously considered all environmental
impacts associated with the implementation of the Specific Plan. Mitigation
measures have been adopted by the Tustin City Council in the FEIR and any
specifically applicable mitigation measures would be included in the Project and,
where applicable, as conditions of any recommended future entitlement
approvals for development of the Development Parcels or by the Water
Department in development of the Water Wetl Parcel.
Sources: Field Observations
FEIR, as revised by Supplement #1
Pacific Center East Specific Plan, as amended by SPA 11-01
Tustin General Plan
CONCLUSION
The summary concludes that all of the proposed Project's effects were previously
examined in the FEIR, that no new effects would occur, that no substantial
increase in the severity of previously identified significant effects would occur, that
no new mitigation measures would be required, that no applicable mitigation
measures previously not found to be feasible would in fact be feasible, and that
there are no new mitigation measures or alternatives applicable to the project that
would substantially reduce effects of the project that have not been considered and
adopted. A Mitigation and Monitoring and Reporting Program and Findings of
Overriding Considerations were adopted for the FEIR on May 5, 2003, and shall
apply, as specifically applicable, to the proposed Project, as applicable.
RESOLUTION NO. 11-48
RESOLUTION NO. 11-48
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN APPROVING DISPOSITION AND
DEVELOPMENT AGREEMENT 2011-01 (TUSTIN
GATEWAY PROJECT) ALSO REFERRED TO AS "DDA
2011-01" BETWEEN THE CITY OF TUSTIN ("CITY") AND
R.D. OLSON REAL ESTATE GROUP, INC.
("DEVELOPER") FOR THE PURPOSES OF
CONSTRUCTING APPROXIMATELY 300 HOTEL ROOMS
AND 16,000 SQUARE FEET OF RETAIL SPACE LOCATED
WITHIN AN AREA BOUNDED BY EDINGER AVENUE ON
THE NORTH, NEWPORT AVENUE ON THE EAST, A
CALTRANS RAMP ON THE SOUTH, AND STATE ROUTE
55 ON THE WEST.
The City Council of the City of Tustin does hereby resolve as follows:
I. The City Council finds and determines as follows:
A. That the City desires to effectuate development of The Tustin Gateway
Project, including the Property, through the sale and development of such
property in accordance with applicable state and local requirements. The
disposition of the Property, the development and Completion of the Project
pursuant to DDA 2011-01 are in the vital and best interests of the citizens
of the City and the health, safety, and welfare of its residents, and are in
accord with the public purposes and provisions of applicable federal, state,
and local laws and requirements.
B. That the Project is located on properties legally described as Parcels 2, 3
and 4 of Parcel Map 2010-127 ("Development Parcels") and an excess
Cal Trans Property ("Water Well Parcel") adjacent to the SR-55 (Costa
Mesa) Freeway. The Project was previously envisioned per the Pacific
Center East Specific Plan, as amended.
C. That the Tustin Gateway Development, including the Project described in
DDA 2011-01, is being developed in accordance with all Governmental
Requirements, including the Redevelopment Plan for the South Central
Redevelopment Project Area, the General Plan and the Pacific Center
East Specific Plan.
D. That on March 29, 2010, the City obtained a final order of condemnation
for a majority of the Property proposed for redevelopment purposes
pursuant to a proceeding in eminent domain including Parcel 2 and a
portion of Parcel 3, each as defined in Section 1.3.1 of the DDA. The City
also entered into a Cooperative Agreement with Cal Trans and Cal Trans
conveyed former Cal Trans property to the City on December 23, 2010 by
Instrument No. 2020000695461 including a portion of Parcel 3, and a
Resolution No. 11-48
Disposition and Development Agreement with R.D. Olson Development
Page 2
remaining parcel located west of Parcel 3 and south of Edinger Avenue in
the City of Santa Ana (the "Water Well Parcel").
E. That the Developer was the selected respondent with respect to its
submitted written correspondence to the City dated July 15, 2010,
indicating an interest in purchasing certain property within the Specific
Plan area from the City, subject to negotiated terms and conditions.
F. That on November 2, 2010, the City entered into an Exclusive Agreement
to Negotiate ("ENA") with the Developer. The ENA provided that the City
desired to negotiate a DDA to have the Developer develop two nationally
recognized "flag ship" hotels with a collective minimum of 300 total hotel
rooms and a minimum of 8,000 square feet of restaurant and/or retail
space. The ENA also identified that the Developer may include
conference space in conjunction with any restaurant and/or retail space.
G. That the City of Tustin Planning Commission is not required to make a
"General Plan Consistency Finding" under California Government Code
§65402(a) because the property being disposed of is part of a larger
parcel which was acquired and used in part for street purposes.
H. That the purpose of the DDA is (a) to effectuate the Redevelopment Plan
for the South Central Redevelopment Project Area (as the same has been
or may be amended) and the Pacific Center East Specific Plan, in
accordance with the terms and conditions set forth therein through
disposition of the Property and development of the Project as further
described in the DDA, and (b) to provide for the sale and conveyance of
the Property, for maintenance and use of the Property and certain related
improvements by the Developer and for the construction of the Project by
the Developer on the Property and certain adjacent land, including the City
Water Well Parcel. All undertakings pursuant to DDA 2011-01 are for the
purpose of development of the Tustin Gateway Project and not for
speculation in land holding.
I. That on February 19, 1991, the Tustin City Council adopted the Pacific
Center East Specific Plan and on April 19, 2011 adopted Specific Plan
Amendment 11-001. Pacific Center East is comprised of approximately
126 acres and is bounded on the west by the State Route 55 Freeway, on
the north by the Santa Ana-Santa Fe Channel, on the east by Red Hill
Avenue and on the south by Valencia Avenue. The Tustin City Council
certified Final EIR (FEIR) 90-1 for the Pacific Center East Specific Plan on
December 17, 1990 and Supplement #1 to Final EIR 90-1 for the Pacific
Center East Specific Plan was adopted May 5, 2003 (the "Pacific Center
East Specific Plan Environmental Documents"). The Pacific Center East
Specific Plan Environmental Documents were Program EIR's under the
California Environmental Quality Act ("CEQA."). The Pacific Center East
Specific Plan Environmental Documents considered the potential
Resolution No. 11-48
Disposition and Development Agreement with R.D. Olson Development
Page 3
environmental impacts associated with the development of the Pacific
Center East Specific Plan.
J. That an Environmental Analysis Checklist has been completed and it has
been determined that this Project is within the scope of the previously
approved Pacific Center East Specific Plan Environmental Documents
and that pursuant to Title 14 California Code of Regulations Sections
15162 and 15168(c), no new effects could occur, and no new mitigation
measures would be required. Accordingly, no new environmental
document is required by CEQA.
K. That the proposed "Project" is DDA 2011-01 between the City and
Developer that will effectuate the Pacific Center East Specific Plan, as
amended, through disposition of certain property owned by the City and
development of a project. The Project will involve development of
improvements that consist of construction and installation of two high
quality "Class A" hotels: one to contain 160 rooms and one to contain 140
rooms with approximately 190,000 square feet for the hotels and
approximately 16,000 square feet of supporting retail and/or restaurant
and conference space, plus a water well facility to be constructed and
maintained by the City. Improvements will include, but not be limited to
buildings, architectural amenities, parking, security lighting, pedestrian
amenities, and trash enclosures. Design of all improvements on Parcels
2, 3, and 4 of Parcel Map 2010-127 will be consistent with requirements of
the Pacific Center East Specific Plan, development standards contained in
the DDA, and additional requirements contained in any conditions of
approval required for the entitlements for the Project. Any improvements
to the Water Well Parcel will be consistent with requirements as a public
water utility as approved by the City. Related future entitlement actions,
as required by the DDA, will consist of Design Review (site plan and
architectural plan review) and Lot Line Adjustment to demonstrate
compliance with the Pacific Center East Specific Plan and the Tustin City
Code. Related implementing actions prior to transfer of the Parcels 2, 3
and 4 of Parcel Map 2010-127 ("Development Parcels") to the Developer
will include City's establishment of certain reciprocal easements,
covenants and conditions with respect to the Development Parcels and
the Water Well Parcel for ingress, egress, parking and other purposes for
the benefit of each of the Development Parcels and Water Well Parcel,
which includes a public purpose. Other implementing actions will also
include further processing by the Developer of certain entitlement
applications for shared parking, Site Plan and Design Review and a Lot
Line Adjustment.
Resolution No. 11-48
Disposition and Development Agreement with R.D. Olson Development
Page 4
II. The City Council approves Disposition and Development Agreement 2011-01
and finds that the Project is within the scope of the previously approved Pacific
Center East Specific Plan Environmental Documents.
PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular meeting
on the 5t" day of July, 2011.
JERRY AMANTE
MAYO R
PAMELA STOKER
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No. 11-48 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 5t" day of
July, 2011 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
PAMELA STOKER
CITY CLERK
DISPOSITION AND DEVELOPMENT AGREEMENT 2011-01
(TUSTIN GATEWAY PROJECT)
Agreement
Effective Date
City
TUSTIN (as more fully defined in Section 1.4.1, ) and Olson Real Estate Group, Inc.,
dba R.D. OLSON DEVELOPMENT, a California corporation (as more fully defined in Section
Developer
1.4.2
PartyParties
Agreement indiv
The Parties agree as follows:
1.Subject and Purpose of Agreement; Parties; Applicable Requirements
.
Background Regarding the Project.
1.1
1.1.1The City desires to effectuate development of The Tustin Gateway
Development, including the Property (defined in Section 1.3), through the sale and development
of such property in accordance with applicable state and local requirements. The Tustin
Gateway Development, including the Project described in this Agreement, shall be developed in
accordance with all Governmental Requirements, including the Redevelopment Plan for the
South Central Redevelopment Project Area, the General Plan and the Specific Plan (each as
defined below).
1.1.2Developer was the selected respondent with respect to its submitted
written correspondence to the City dated July 15, 2010, indicating an interest in purchasing
certain property within the Specific Plan area from the City, subject to negotiated terms and
conditions.
1.1.3On March 29, 2010, the City obtained a final order of condemnation for a
majority of the Property proposed for redevelopment purposes pursuant to a proceeding in
eminent domain including Parcel 2 and a portion of Parcel 3, each as defined in Section 1.3.1.
The City also entered into a Cooperative Agreement with Cal Trans and Cal Trans conveyed
former Cal Trans property to the City on December 23, 2010 by Instrument No. 2020000695461
including a portion of Parcel 3, and a remaining parcel located west of Parcel 3 and south of
Water Well Parcel
Edinger Avenue in the City of Santa Ana
1.1.4On November 2, 2010, the City entered into an Exclusive Agreement to
ENA
Disposition and Development Agreement to have the Developer develop two nationally
collective minimum of 300 total hotel rooms and a
minimum of 8,000 square feet of restaurant and/or retail space. The ENA also identified that the
Developer may include conference space in conjunction with any restaurant and/or retail space.
1
Purpose of Agreement
1.2.
1.2.1The purpose of this Agreement is (a) to effectuate the Redevelopment Plan
for the South Central Redevelopment Project Area (as the same has been or may be amended)
RDA Plan
therein through disposition of the Property and development of the Project as further described
in this Agreement, and (b) to provide for the sale and conveyance of the Property, for
maintenance and use of the Property and certain related improvements by the Developer and for
the construction of the Project by the Developer on the Property and certain adjacent land,
including the City Dedication Parcels. All undertakings pursuant to this Agreement are for the
purpose of development of the Project and not for speculation in land holding.
Project
1.2.2-quality
hotels: The Hilton Garden Inn or a comparable hotel flag acceptable to the City as
described in Attachment No. 6 (Scope of Development) containing approximately 160 rooms
and the Hilton Homewood Suites or a comparable hotel flag acceptable to the City as described
in Attachment No. 6 (Scope of Development) containing approximately 140 rooms with
approximately 190,000 square feet of building area for the hotels, including a set of
accompanying amenities as defined and more fully described in the Scope of Development, and
approximately 16,000 square feet of supporting retail and/or restaurant and conference space.
The Parties intend that the Project will function as the centerpiece for the southern portion of the
City bordering on and having prominent visibility from the 55 Freeway.
Improvements
1.2.3ist of the buildings, structures, landscaping and
improvements comprising the two hotels (including a set of accompanying amenities as defined
in the Scope of Development) and two ancillary retail and/or restaurant buildings together with
all infrastructure improvements and utilities, whether on the Property or off the Property,
required to be constructed or installed on or in connection with the development of the Property,
including (a) all public and private streets, roadways, drives, alleyways, sidewalks and parking
lots and (b) all utilities required for the Project to the boundary of each building, structure or
other improvement requiring such utility access, all as further described on Attachment No. 6.
The Improvements shall be designed and constructed in a manner consistent with the Specific
Plan, the RDA Plan, the Approved Project Plans, the Entitlements and all applicable
Governmental Requirements.
1.2.4The disposition of the Property, the development and Completion of the
Project pursuant to this Agreement, and the fulfillment generally of this Agreement, are in the
vital and best interests of the citizens of the City and the health, safety, and welfare of its
residents, and are in accord with the public purposes and provisions of applicable federal, state,
and local laws and requirements.
2
Description of Property
1.3.
1.3.1The Property. As of the Effective Date, the City is the owner of the
following parcels each as legally described and depicted on Attachment No. 2:
Parcel 2
(a)he SR-55 Freeway Ramp and
west of Newport Avenue consisting of approximately 2.27 acres of land;
Parcel 3
(b) located north of Parcel 2 and west of Newport Avenue,
consisting of approximately 5.27 acres of land; and
(c)the Water Well Parcel, consisting of approximately .85 acres of land.
As part of the transactions contemplated herein, Developer shall process, on behalf of the
City, pursuant to the Subdivision Map Act and the City Code, a lot line adjustment of Parcel 2
Parcel AParcel B
and Parcel 3 in order to create three
Parcel CDevelopment ParcelDevelopment Parcels
Lot Line Adjustment
locations shown on Attachment No. 3
Adjustment, and pursuant to the terms of this Agreement, the City intends (i) to establish by
Declaration certain reciprocal easements, and covenants, conditions and restrictions with respect
to Parcel 2, Parcel 3 and the Water Well Parcel, including creation of certain non-exclusive
easement rights in favor of the owners of the Development Parcels over certain portions of the
Easement Area
title to the Development Parcels. The Development Parcels and the Easement Area are
Property.
Property
(d)Exclusions from the Definition of Property
exclude the following rights and interest which shall be explicitly reserved to the City:
(e)Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas
rights and other hydrocarbon by whatsoever name known, geothermal steam and all products
derived from any of the foregoing, that may be within or under the Development Parcels together
with the perpetual right of drilling, mining, exploring for and storing in and removing the same
from the Development Parcels or any other land, including the right to whipstock or directionally
drill and mine from lands other than the Development Parcels, oil or gas wells, tunnels and shafts
into, through or across the subsurface of the Development Parcels and to bottom such
whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the
exterior limits thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any
such well or mines; but without, however, the right to drill, mine, store, explore or operate
through the surface of the Development Parcels or otherwise materially adversely affect the use
or operation of the Development Parcels as anticipated in the DDA (defined below).
(f)Any and all water, water rights or interests therein appurtenant or relating
to the Development Parcels or owned or used by the GRANTOR in connection with or with
respect to the Development Parcels no matter how acquired by the GRANTOR, whether such
water rights shall be riparian, overlying, appropriative, littoral, percolating, prescriptive,
adjudicated, statutory or contractual, together with the perpetual right and power to explore, drill,
re-drill and remove the same from or in the Development Parcels, to store the same beneath the
3
surface of the Development Parcels and to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by the GRANTOR; but without, however, any
right to enter upon or use the surface of the Development Parcels in the exercise of such rights or
otherwise materially adversely affect the use or operation of the Development Parcels as
anticipated in the DDA.
(g)The rights of the City in and to the Water Well Parcel (including to the use
of the parcel for water utility and other purposes) other than as may be granted on a non-
exclusive basis to pursuant to the Declaration.
(h)From and after the dedication and acceptance by the City of any fee
dedication(s) required by the City as a condition of approval of the Entitlements, the term
Property
-of-way and any of the land dedicated by
Developer to and/or reserved by the City for any purpose, collectively referred to in this
City Dedication Parcels.
Agr The City Dedication Parcels shall, following
acceptance thereof by the City, be owned by the City and shall be utilized for public benefit or
purpose, including public roadways, right of way improvements, and related utilities, all of
which shall be constructed by the Developer as part of the Project.
Parties to the Agreement
1.4.
1.4.1City. The City is a municipal corporation of the State of California. The
City
as used in this Agreement shall mean the City of Tustin and each assignee or
in its sole discretion, to assign its rights and obligations to any agency or instrumentality of the
City in the future, including the Tustin Community Redevelopment Agency or the Tustin
Financing Authority. The principal office of the City and mailing address is 300 Centennial Way,
Tustin, California 92780.
Developer
1.4.2Developer
Real Estate Group, Inc. dba R.D. Olson Development, a California corporation, which is the
Developer as of the Effective Date, or, following Transfer of ownership pursuant to (a) a
Permitted Transfer approved by the City pursuant to Article 2 or (b) a Permitted Transfer that
does not require City approval under the terms of Article 2, to any assignee of or successor to the
The principal
office of the Developer and mailing address is 2955 Main Street, Suite 300, Irvine, CA 92614.
1.4.3Relationship of the Parties. It is hereby acknowledged that the
relationship of the City to the Developer is neither that of a partnership nor that of a joint venture
and that neither the City nor the Developer shall be deemed orconstrued for any purpose to be
the agent of the other Party, and neither Party shall have the power or the authority to speak on
behalf of the other Party or to bind the other Party to any contractual or other obligations. Prior
to Close of Escrow with respect to any Phase, the Developer may only with respect to such
Property characterize itself to third parties as the prospective developer and /or purchaser of the
Property within that Phase. The Developer shall not at any time hold itself out to the City or to
any other third party as an agent of the City, as applicable, and shall not, by any act or omission,
mislead any third party into believing, or allow any third party to continue in the mistaken belief,
4
that the Developer is an agent of the City or has the power or authority to bind the City to any
contractual or other obligation.
Local Requirements Applicable to Agreement
1.5. This Agreement is subject to
all Governmental Regulations, including the General Plan, the Specific Plan, the Tustin City
Code and ordinances and the RDA Plan, with respect to the Project.
Not a Development Agreement
1.6. This Agreement is not a development
agreement as provided in Government Code Section 65864 and, as further set forth in Section
8.3.2, is not a grant of any entitlement, permit, land use approval, or vested right in favor of the
Developer, the Project or the Property. The City shall use good faith efforts, within applicable
legal constraints and consistent with applicable City policies, to take such actions as may be
necessary or appropriate to effectuate and carry out this Agreement in a timely and commercially
reasonable manner.
City Transaction Expenses
1.7
City Costs Deposit and Subordination Agreement Expenses
1.7.1
Deposit
. Pursuant to the ENA, the Developer has paid to the City a deposit of $50,000 (the
City Costs Deposit
costs incurred in connection with the drafting, negotiation, execution, implementation and/or
termination of the ENA and this Agreement, including third party fees and costs incurred for
legal counsel, financial, engineering and other consultants and any other expenditures required in
connection with the drafting, negotiation, execution and implementation of the ENA and this
Agreement or the termination thereof for the period commencing with execution of the ENA
City
thorough conclusion of the transaction associated with the Phase 2 Close of Escrow
Transaction Expenses
The City Transaction Expenses shall specifically exclude (a) City staff
expenses and (b) fees or deposits required of Developer for processing entitlement applications
or complying with provisions of the California Environmental Quality Act or its State
implementing regulations. The City Costs Deposit shall be deposited by the City in an account
in a bank or trust company selected by the City. If any interest is paid on such account, such
interest shall accrue to any balances in the account for the benefit of Developer and as additional
security for the Developer obligations hereunder. The City Costs Deposit has been and will
continue to be expended by the City term of the ENA and
this Agreement and the City Costs Deposit will be depleted accordingly. If the amount of funds
in the City Costs Deposit account is depleted below Twenty-Five Thousand Dollars ($25,000),
the Developer shall be required, not more than two times, to pay to the City each time an
additional Thirty Thousand Dollars ($30,000). Each such payment shall be deposited by the City
into the City Costs Deposit account. If the City Transaction Expenses exceed $110,000 in the
aggregate, Developer shall not be obligated to reimburse the City for any City Transaction
not
Expenses in excess of $110,000. The City Costs Deposit is applicable to the Purchase Price.
In addition to the City Transaction Expenses, if and to the extent that following the Effective
Date the City incurs third party fees an
any revisions or negotiations necessary for City approval of the Subordination Agreement (the
Subordination AgreementExpenses
Agreement Expenses
request subsequent to the Effective Date for City review, approval or negotiation of the
5
Subordination Agreement, and provided that City Transaction Expenses have already reached
$110,000, the Developer shall deposit an additional $25,000 with the City, and when the $25,000
is depleted an additional $15,000 upon demand for Subordination Agreement Expenses (the
Subordination Agreement Expenses Deposit
. The Subordination Agreement Expenses
Deposit shall be deposited into the City Costs Deposit account but may be used by the City only
to pay the Expenses and the Subordination Agreement
Expenses Deposit will be depleted accordingly. The Subordination Agreement Expenses
Deposit Developer provides to City
the Phase 1 Closing. If the Phase 1 Close of Escrow does not occur, then the Developer shall not
receive a return or refund of any portion of the Subordination Agreement Expenses Deposit.
Payment of City Transaction Expenses
1.7.2. From and after the Effective
Date, the City Costs Deposit may be used by the City to pay the City Transaction Expenses. City
Transaction Expenses do not include: (a) any fees or deposits required of Developer for
processing entitlement applications, (b) any fees or costs for complying with provisions of the
,
(c) any costs to review or approve any applications or submittals by the Developer to the City in
connection with the Project, (d) any review, approval, or negotiation of the Subordination
Agreement, or (e) any other matters in this Agreement that expressly require Developer to pay, at
its sole cost, for the expenses in connection with such matters. The obligation of Developer to
obligation to pay for any of costs in the preceding sentence. Determination of costs, expenses,
and fees constituting City Transaction Expenses shall be made by the City in its sole discretion
and Developer shall upon request be entitled to receive summary notices from the City setting
forth amounts constituting City Transaction Expenses to be retained by City.
Recording of Memorandum of this Agreement
1.8. The Parties shall Record
against the Property at the time set forth in the Schedule of Performance a memorandum of this
Memorandum of DDA
Agreement in substantially the form and substance of the attached
hereto as Attachment No. 8, which Memorandum of DDA shall have superior position on title
relative to the liens of all lenders who provide financing for the Project. The provisions of this
Agreement shall run with the Property for the benefit of the City and the Developer and each
Successor Owner and any Person claiming by, through or under the City, Developer or any
Successor Owner as further described below.
Definitions
1.9. Initially capitalized terms used in this Agreement and not otherwise
defined in the text of this Agreement or in the Attachments shall have the meanings set forth in
Attachment No. 1.
2.Prohibition Against Transfers and Transfers of Control
. Any purported Transfer that
does not comply with the requirements of Article 2 or that is made in a manner or with the effect
or intent to circumvent the restrictions on Transfers and Transfers of Control set forth in this
Agreement shall, at the election of the City, be null and void and such Transfer shall be a
Material Default under this Agreement as of the date of the Transfer by the violating party,
which date shall not be extended by Force Majeure Delay.
6
Importance of Developer Qualifications
2.1. The Developer represents and agrees
that its undertakings pursuant to this Agreement are for the purpose of development of the
Project and not for speculation in land holding. The Developer further recognizes that the
qualifications and identity of the Developer are of particular concern to the City and community
in light of the following:
(a)The importance of the development of the Property and the Project to the
general welfare of the community;
(b)The fact that a change in ownership or control of the Developer or of its
members, or any other act or transaction involving or resulting in a significant change in
ownership control of the Developer or the degree of control thereof as described in the remainder
of this Article 2 is for practical purposes a transfer of rights and obligations under this
Agreement and/or a transfer or disposition of all or a portion of the Property then owned by the
Developer.
(c)That it is because of the qualifications and identity of the Developer and
its Key Employees that the City is entering into the Agreement with the Developer.
Transfers and Transfers of Control.
2.2
Restrictions on Transfers
2.2.1. For the reasons set forth in Section 2.1, the
Developer, on behalf of itself and all Successor Owners and each Person claiming by, through, or
under Developer or any Successor Owner, acknowledges and agrees that except as set forth in
this Section 2.2, no Person shall acquire any rights or powers under this Agreement prior to the
Recordation of a Final Certificate of Compliance, or solely with respect to Development Parcels
for which a Partial Certificate of Compliance is issued and Recorded, prior to the Recordation of
such Partial Certificate of Compliance. The following restrictions shall apply to each Transfer of
:
thereon or any portions thereof, and to each Transfer of Control
(a)No Transfer, including Transfer of Control, shall be valid or have any
force or effect unless the City shall have provided its prior written consent thereto as set forth in
this Agreement.
(b)Notwithstanding anything to the contrary set forth in this Section 2.2,
Developer may assign this Agreement to a Developer Affiliate without the requirement of
(c)No Transfer to a Mortgagee shall be valid or enforceable with respect to
the Development Parcels unless (i) the Mortgage is a Permitted Mortgage entered into with a
Permitted Mortgagee in compliance with the requirements and conditions of Article 16,
including consent of the City as required therein, and (ii) the Mortgagee is a Qualified
Institutional Lender approved by the City in its reasonable discretion, or (iii) if not a Qualified
Institutional Lender, approved by the City in it sole discretion.
Until Recordation of the Final Certificate of Compliance, the Property shall continue to
be subject to this Agreement and each Transferee and Successor Owner, and all Persons claiming
7
by, through, or under Developer or such Transferee or Successor Owner, shall be deemed to have
assumed and shall be obligated to comply with all covenants, conditions, restrictions, and
obligations of Developer under the terms of this Agreement unless otherwise set forth herein.
Transfers Other than to a Permitted Mortgagee, Developer Affiliate
2.2.2
or Retail Tenant
. Prior, and as a condition precedent for the benefit of the City, to any Transfer
(including Transfer of Control) that is not a collateral assignment of the Project or the Property
or any portion thereof to a Permitted Mortgagee pursuant to Section 2.2.3, to a Developer
Affiliate pursuant to Section 2.2.1, or to a Transfer to a Retail Tenant pursuant to Section 2.2.4:
(a)Developer shall have provided to the City at least twenty (20) Business
Days prior to the date of any proposed Transfer: (i) the name of the proposed Transferee; (ii) all
of the material proposed terms of the Transfer; (iii) current audited financial statements of the
proposed Transferee (or financial statements certified by an officer of the proposed Transferee, if
the proposed Transferee does not have audited financial statements); (iv) the names of all
Persons who own, directly or indirectly, a five percent (5%) or more interest in the proposed
by, or sold by the proposed Transferee in California over the preceding five (5) year period, and
the dates of involvement by the proposed Transferee with such projects and the success of the
projects, made by the manager, president or other person with appropriate authority from the
proposed Transferee to do so; (vi) all relevant instruments and other legal documents relating to
future development, use or maintenance of the Property; and (vii) such other relevant
information as the City may request in connection with its consent rights under this Agreement.
(b)The City shall have approved the Transfer in its sole discretion.
(c)The Transferee at the time of Transfer shall have expressly assumed for
itself and its successors and assigns, and for the benefit of the City, by instrument in substantially
the form and substance of the instrument attached hereto as Attachment No. 15, or otherwise as
satisfactory to the City in its sole discretion, acknowledged and Recorded, all the rights and
obligations of the Developer under this Agreement, the Quitclaim Deeds and the Declaration
arising from and after the date of such Transfer as to the Development Parcel or Development
Parcels acquired by it, and shall agree to be subject to all the conditions and restrictions to which
the Developer is subject by reason of this Agreement, the Quitclaim Deeds and the Declaration,
including provision of financial security as required by this Agreement.
Transfer to Permitted Mortgagee.
2.2.3Prior to the Recordation of a Final
Certificate of Compliance, or solely with respect to Development Parcels for which a Partial
Certificate of Compliance is issued and Recorded, prior to the Recordation of such Partial
Certificate of Compliance, the following shall apply to every Mortgage with respect to the
Property or any portion thereof:
(a)The Developer shall not encumber the Property with any Mortgage
without the prior written consent of the City as set forth in Section 2.2.1(c); any encumbrance in
violation of this Article 2 shall be a prohibited Transfer and a Material Default by Developer.
No Mortgage shall be a Permitted Mortgage under this Agreement and no Mortgagee shall be a
Permitted Mortgagee entitled to a Transfer under this Agreement unless such proposed
8
Mortgagee and its Mortgage and complete copies of the debt documents that set forth all material
have been reviewed and consented to
by the City pursuant to this Section 2.2 and, if applicable, Section 16.3.
(b)e(s) shall be limited
to one Permitted Mortgage per Development Parcel, consisting of a trust deed securing a loan
made by a Permitted Mortgagee in an amount and with security consistent with the Financing
Plan to finance the acquisition of the Property and construction of the Improvements
Construction Loan
and for no other purpose.
(c)Neither this Agreement, nor the Property (nor any portion thereof) shall be
cross-collateralized with any other contract or real or personal property, nor shall this Agreement
or the Property (or any portion thereof) serve as additional security for any other loan by a
discretion. In addition, any Construction Loan may not be cross collateralized or cross defaulted
with any other Construction Loan.
(d)The Developer shall not transfer the Property or any portion thereof to a
third party for purposes of a sale-leaseback transaction.
(e)At least ten (10) Business Days prior to entering into any Mortgage, the
documents and guaranties securing the interest of the Mortgagee, and such other information,
including the name and current audited financial statements of the proposed Mortgagee, as may
be reasonably necessary for the City to confirm the matters described in this Section 2.2.3, and
the City shall have the right to review the final drafts of the loan documents to ascertain that they
comply with the provisions of this Section 2.2.3, including:
(i)Whether the proposed Mortgagee is a Qualified Institutional
Lender and, if the proposed Mortgagee is not a Qualified Institutional Lender, the Developer
shall provide the City with the following additional information: (i) the names of all Persons
who own, directly or indirectly, a five percent (5%) or more interest in the proposed Mortgagee,
(ii) a statement describing other real estate projects for which financing has been provided by the
proposed Mortgagee in California over the preceding five (5) year period, the dates of
involvement by the proposed Mortgagee with such projects and the success of the projects,
which statement shall be made under penalty of perjury by the manager, president or other
person with appropriate authority from the proposed Mortgagee to do so, and (iii) such other
relevant information that the City may reasonably request.
(ii)The loan documents shall include a Subordination of Deed of Trust
and Memorandum of Intercreditor Agreement in substantially the form and substance as that
attached to this Agreement as Attachment No.11 or as otherwise approved by the City in its sole
Subordination Agreement
discretion to be executed and delivered by the Permitted
Mortgagee in Recordable form at the Close of Escrow. The Subordination Agreement shall be
Recorded at the closing of the Permitted Mortgage.
9
(iii)For each Construction Loan for the original construction of the
Improvements, the City shall have reasonably determined that the amount of the financing
provided for in the Construction Loan, together with the equity to be committed by the
Developer (including without limitation any mezzanine financing) for the construction of the
Project, shall be sufficient to pay for the costs of constructing the Project in accordance with the
construction budget, including appropriate construction contingencies and the costs of
. Notwithstanding the
foregoing, any mezzanine financing obtained by Developer shall be subject to all of the
limitations and restrictions in this Agreement, including without limitation, the restrictions on
Transfers, Changes of Control, and secured financing.
Transfer to Retail Tenant
2.2.4. The following shall apply to every transfer to
a Retail Tenant:
(a)Except as set forth in Section 12.1.1(f), any Transfer that consists solely of
Retail
the leasing of retail space within the Project to an End User that is a Class A User (
Lease
) shall not require approval of the City.
(b)Each Retail Lease Transfer shall be subject to the use covenants and
restrictions set forth in Article 12 and the Declaration.
(c)No Retail Lease Transfer shall be made with any Prohibited User or for
any Prohibited Uses described on Attachment No. 13 and/or the Declaration.
Foreclosure Transfers
2.2.5.
(a)Notwithstanding the provisions of Section 2.2.1 and/or 2.2.2(a), a Transfer
to a Permitted Mortgagee that acquires fee title and/or a leasehold interest by reason of a
Foreclosure shall not require the consent of the City or Developer or constitute a Potential
Default or Material Default under this Agreement.
(b)With respect to a Transfer to any Transferee which acquires title at a
Foreclosure sale or from a Permitted Mortgagee following a Foreclosure the provisions of
Section 2.2.2 shall apply; provided, however, the City shall not withhold its consent to such
Transfer so long as the Transferee shall meet each of the following criteria: (1) have an
outstanding reputation as a quality builder of retail developments of the scope and constructed of
the quality described by this Agreement as reasonably determined by the City; (2) be licensed to
do business in the State of California; (3) have an outstanding reputation for fair and honest
business dealings with persons or entities generally as reasonably determined by the City; (4)
have a sufficient net worth to undertake the obligations to be performed by Developer; and (5)
have successfully constructed, marketed, and leased major flag hotels and retail commercial
uses; provided that if the Transfer occurs at a Foreclosure sale, the information required under
Section 2.2.2(a) shall be provided as soon as practicable, and in no event more than thirty (30)
calendar days following the Transfer.
Release of Developer from Obligations Under this Agreement
2.2.6. In the
absence of (a) specific prior written agreement by the City, pursuant to which the City expressly
releases the Developer; or (b) execution by the City and Recording of a Final Certificate of
10
Compliance, no Transfer shall constitute a release of the Developer from any of its obligations
under this Agreement; provided that with respect to a Permitted Transfer of the entirety of
-remaining interest in the Project which includes written assumption by the
Transferee of the obligations set forth in this Agreement
Transfer shall release the Developer for matters occurring subsequent to theTransfer.
Notwithstanding the foregoing, in no event shall the Developer be released from any obligation
of Developer under this Agreement, including pursuant to any indemnity or release, accruing
during the period in which Developer was a Party to this Agreement.
City Estoppel
2.2.7. At the closing of any Permitted Mortgage and from time
to time thereafter (but in no event more than annually) within twenty (20) calendar days of the
e, the City shall execute and deliver to Developer a
City Estoppel, in substantially the form and substance of the City Estoppel attached hereto as
Attachment No. 16
ensure the accurateness of the statements made therein.
City Costs.
2.2.8Developer shall promptly
third party expenses, including legal fees, incurred with respect to the preparation, review, and
delivery
disapproval) of each Transfer.
Additional Provisions Regarding Developer
2.3.
Developer Qualifications
2.3.1. The Developer represents and warrants to the
City that (a) Developer is a California corporation and (b) Developer is qualified to do business
in the State of California.
Developer Changes
2.3.2. The Developer shall promptly notify the City of any
and all intended Transfers of Control and with respect thereto shall comply with the provisions
of this Article 2 governing Transfers, and shall promptly notify the City of all other changes
whatsoever in (a) the identity of any party in control of the Developer or the degree thereof,
structure, and (b) all other material information concerning the Developer and its associates
related to the Project, of which Developer or any of its partners have been notified or otherwise
have knowledge or information. A Change in Ownership in Developer as a result of the death of
Robert D. Olson to a family member or members of such deceased individual, and/or to one or
more trusts for the benefit of a family member or members of such deceased individual, shall be
deemed approved provided that it does not affect a Transfer of Control and provided, further,
that following such Change in Ownership, Developer shall remain bound by the terms of this
Key Employees. T
Agreement.
Key Employees
employees or representatives () who will be directly involved in the
development, so long as each is employed by Developer, are as follows:
Robert D. Olson, President
Blake Evans, Development Manager
11
Robert A. Olson, General Counsel
Gene Fong Associates , Project Architect
Assignment by Operation of Law
2.4. Neither this Agreement nor any interest
therein shall be assignable by the Developer by operation of law (including the Transfer of this
Agreement by testacy or intestacy). Any involuntary assignment or Transfer shall constitute a
Material Default by the Developer which shall not be subject to extension for Force Majeure
Delay. In such event, this Agreement shall not be treated as an asset of the Developer. The
following is a nonexclusive list of acts which shall be considered an involuntary assignment or
Transfer:
(a)If the Developer is or becomes bankrupt or insolvent or if any involuntary
filed against
proceeding is brought against the Developer (unless, in the case of a petition the
n
Developer, the same is dismissed within ninety (90) calendar days), or the Developer makes a
assignment
for the benefit of creditors, or institutes a proceeding under or otherwise seeks the
protection of federal or State bankruptcy or insolvency laws, including the filing of a petition for
voluntary bankruptcy or instituting a proceeding for reorganization or arrangement;
(b)If a writ of attachment or execution is levied on this Agreement or on any
Development Parcel, or on any portion thereof, where such writ is not discharged within ninety
(90) calendar days; or
(c)If, in any proceeding or action in which the Developer is a party, a
receiver is appointed with authority to take possession of a Development Parcel, or any portion
thereof, where possession is not restored to the Developer within ninety (90) calendar days.
Remedies For Improper Transfers
2.5. In the event of (a) a failure by Developer to
comply with the requirements of this Article 2 with respect to any Transfer or (b) a failure of any
Transferee to execute the assumption agreement required by Section 2.2, if applicable, the City
shall have all remedies available to it at law and in equity, including those specified in this
Agreement and specifically including the right to exercise the Right of Purchase and/or the Right
of Reversion contained in Article 15.
3.Representations and Warranties
.
3.1Developer Representations and Warranties. As an inducement to the City to enter
into this Agreement and to perform its obligations hereunder, the Developer represents and
warrants to the City as follows:
3.1.1The Developer has the necessary expertise, experience, qualifications and
legal status necessary to perform as the Developer pursuant to this Agreement and to construct
and complete the Project, and, without limiting the foregoing, the Developer is experienced in
the development, management, and leasing of hotel and retail projects of the size and type
described in this Agreement and understands the process and requirements associated with
projects such as the Project described herein;
3.1.2
and its other undertakings pursuant to this Agreement are for the purpose of timely development
12
of the Property in accordance with the Schedule of Performance attached to this Agreement and
not for speculation or land holding;
3.1.3The Developer is a California corporation, duly formed, qualified, and
validly existing and in good standing under the laws of the State of California, and is duly
qualified to do business in each other jurisdiction where the operation of its business or its
such qualification necessary;
3.1.4The Developer has all requisite power and authority required to enter into
this Agreement and the other instruments and documents referenced in this Agreement, subject
to any conditions set forth in this Agreement for the benefit of Developer, to consummate the
transactions contemplated hereby and thereby, to take any steps contemplated thereby or hereby,
and to perform its obligations hereunder and thereunder. No consent of any Person is required in
connection with any of the foregoing.
3.1.5All required action has been taken by the Developer and, subject to all
conditions set forth in this Agreement for the benefit of Developer, the Developer has obtained
all required consents in connection with entering into this Agreement and the instruments and
documents referenced in this Agreement to which the Developer is or shall be a party and the
consummation of the transactions contemplated hereby.
3.1.6The individuals executing this Agreement and the other instruments and
documents referenced in this Agreement on behalf of the Developer have the legal power, right
and actual authority to bind the Developer to the terms and conditions hereof and thereof.
3.1.7This Agreement is duly authorized, executed and delivered by the
Developer and all documents required in this Agreement to be executed by the Developer
pursuant to this Agreement shall be, at such time as they are required to be executed by the
Developer, duly authorized, executed and delivered by the Developer and are or shall be, at such
time as the same are required to be executed hereunder, valid, legally binding obligations of and
enforceable against the Developer in accordance with their terms. The Developer has duly
authorized, executed and delivered any and all other agreements and documents required to be
executed and delivered in order to carry out, give effect to, and consummate the transactions
contemplated by this Agreement.
3.1.8Neither the execution or delivery of this Agreement or the documents
referenced in this Agreement, nor the incurring of the obligations set forth in this Agreement,
and the documents referenced in this Agreement, nor the consummation of the transactions in
this Agreement contemplated, nor compliance with the terms of this Agreement and the
documents referenced in this Agreement, will violate any provision of law, any order of any
court or other government entity or conflict with or result in the breach of any terms, conditions,
or provisions of, or constitute a default under any bond, note, or other evidence of indebtedness
or any contract, indenture, mortgage, deed of trust, loan partnership agreement, lease or other
agreements or instruments to which the Developer or any of its members are a party or which
affect any of the Property.
13
3.1.9No attachments, execution proceedings, assignments of benefit to
creditors, bankruptcy, reorganization or other proceedings are pending or, to the best of
or its partners.
3.1.10The Developer is relying solely upon its own inspections and
investigations in proceeding with this Agreement and the transactions contemplated hereby, and
is not relying on the accuracy or reliability of any information provided to it by the City, on any
oral or written representation or on the non-disclosure of any facts or conclusions of law made by
the City, or any of its elected and appointed officials, officials, employees, agents, attorneys or
representatives made in connection with this Agreement. In making such investigation and
assessment, the Developer has been provided access to any persons, records or other sources of
information which it has deemed appropriate to review and it has thereafter completed such
investigation and assessment.
3.1.11The Developer acknowledges that the City has not made and will not
make any representations or warranties concerning compliance or non-compliance of any of the
Property or any portion thereof with Environmental Laws or the existence or non-existence of
Hazardous Materials in relation to the Property or any portion thereof or otherwise.
3.1.12There are no adverse conditions or circumstances, no pending or, to
other condition which could prevent or materially impair the to develop the
Project as contemplated by the terms of this Agreement.
3.1.13The Developer has not paid or given, and will not pay or give, any
third person any money or other consideration for obtaining this Agreement, other than the
normal cost of conducting business and cost of professional services such as architects, engineers
attorneys and real estate brokers.
3.1.14All reports, documents, instruments, information and forms of
evidence delivered by the Developer to the City concerning or related to this Agreement and the
and sufficiently complete at the time of submission to give the City true and accurate knowledge
of the subject matter, and do not contain any misrepresentation or omission.
3.1.15As of the Close of Escrow, the Developer will have the equity capital
and bonding capacity required for Completion of the Development and, as of the Close of
Escrow, Developer shall have delivered to the City evidence of financing as required by Section
,
4.5.1 and 4.5.2 including evidence of a Construction Loan made by a Permitted Mortgagee
approved by the City sufficient, together with evidence of equity as required by Section 4.5.2(a),
to (a) pay through Completion, all costs of development of the Project and the construction,
marketing and sale or lease of all the Improvements as further described in the Scope of
Development; and (b) enable the Developer to perform and satisfy all the covenants of the
Developer contained in this Agreement.
3.1.16The Developer does not have any contingent obligations or any other
contracts the performance or nonperformance of which could affect the ability of the Developer
14
to carry out its obligations hereunder. The Developer has not and shall not undertake such
additional projects as could reasonably be expected to jeopardize the sufficiency of such equity,
capital and firm and binding commitments for the purposes expressed in Section 3.1.15 above
and in the preceding sentence.
3.1.17There are no legal proceedings either pending or, to the best of the
been fully disclosed in the documents submitted to the City and which could materially affect the
ability of the Developer to carry out its obligations hereunder.
Section 3.1 shall be deemed to be
restated at each Close of Escrow, and shall survive each Close of Escrow and the termination of
this Agreement and shall not be merged with any Quitclaim Deed. In addition, each
representation and warranty in this Section 3.1 is deemed to be an ongoing representation and
warranty during the term of this Agreement and shall not be merged into any Quitclaim Deed.
As used in this Section 3.1
the Key Employees after conducting commercially reasonable inquiry.
Developer Covenants Regarding Representations and Warranties
3.2. The
Developer shall promptly advise the City in writing if there is any material change pertaining to
any matters set forth or referenced in Section 3.1 or if Developer becomes aware of any
representation or warranty in Section 3.1 being or becoming untrue in any material respect.
15
City Representations and Warranties
3.3. As an inducement to the Developer to
enter into this Agreement and perform its obligations hereunder, the City represents and warrants
to the Developer as follows:
3.3.1The City is a municipal corporation incorporated within and existing
pursuant to the laws of the State of California.
3.3.2The City has all requisite power and authority required to enter into
this Agreement, and subject to all conditions set forth in this Agreement for the benefit of the
City and the instruments referenced in this Agreement, to consummate the transactions
contemplated and to take appropriate steps contemplated in this Agreement, and to perform its
obligations under this Agreement. No consent of any additional individual, official, board,
division, judicial or administrative body, authority, or other party is required in connection with
any of the foregoing.
3.3.3All required action has been taken by the City and, subject to all
conditions set forth in this Agreement for the benefit of the City, the City has obtained all
required consents in connection with entering into this Agreement and the consummation of the
transactions contemplated hereby.
3.3.4The individual executing this Agreement and the instruments
referenced in this Agreement on behalf of the City has the legal power, right, and actual authority
to bind the City to the terms and conditions of this Agreement.
3.3.5There are no legal proceedings either pending or, to the best of the
City knowledge (without inquiry) threatened, to which the City is or may be made a
which has not been fully disclosed in the documents submitted to the Developer and which could
reasonably affect the ability of the City to carry out its obligations hereunder.
3.3.6The Property is within the boundaries of the Specific Plan for which a
Program EIR was certified on December 17, 1990 (Resolution 90-150) and a Supplemental EIR
was certified on May 5, 2003 (Resolution 03-63) and under the Specific Plan is zoned Planned
Community.
3.3.7This Agreement is duly authorized, executed, and delivered by the
City and all documents required herein to be executed by the City pursuant to this Agreement
shall be, at such time as they are required to be executed by the City, duly authorized, executed,
and delivered by the City and are or shall be, at such time as the same are required to be executed
hereunder, valid, legally binding obligations and enforceable by and against the City in
accordance with their terms.
representations and warranties set forth in this Section 3.3 shall be deemed to be
restated at each Close of Escrow as to transactions and documents related to each such closing,
and as so restated shall survive each Close of Escrow and the termination of this Agreement and
shall not be merged with any Quitclaim Deed.
16
4.Conveyance of Property from City to Developer
.
Conveyances
4.1. The Parties therefore agree that conveyances of the Property shall
be carried out pursuant to the terms of Article 7 and shall be coordinated as follows:
4.1.1At the Phase 1 Close of Escrow, the City shall cause the Declaration to
be Recorded and thereafter shall convey to Developer by Quitclaim Deed fee title to Parcel A
Phase 1 Property
and Parcel B (the );
4.1.2At the Phase 2 Close of Escrow, the City shall convey to Developer by
Phase 2 Property
Quitclaim Deed fee title to Parcel C (.
Purchase Price and Easement Price
4.2.
Purchase Price
4.2.1. As consideration for the sale of the Development
Parcels by the City to the Developer at the Close of Escrow for each Phase, the Developer shall
pay to the City as the purchase price for the Development Parcels a total Purchase Price of Eight
Million Seven Hundred Ten Thousand Dollars ($8,710,000) as further described in Section 4.2.4
and Article 7. The portion of the Purchase Price payable at the Phase 1 Close of Escrow shall
consist of the Parcel A Purchase Price and the Parcel B Purchase Price, and the portion of the
Purchase Price payable at the Phase 2 Close of Escrow shall consist of the Parcel C Purchase
Price, each of which shall be computed as follows:
Parcel A Purchase Price
(a). Subject to clause (d) below, the amount of
the Purchase Price attributable to Parcel A shall be Three Million Six Hundred Thousand Dollars
($3,600,000.00) (calculated as the product of $27.00 per square foot multiplied by the total gross
square footage of Parcel A). The Purchase Price attributable to Parcel A shall be adjusted at the
Close of Escrow to equal the product of $27.00 per square foot multiplied by the precise number
of square feet of land in Parcel A, as established by the Surveyor, after taking into account the
Parcel A Purchase Price
boundaries established by the Lot Line Adjustment (the .
Parcel B Purchase Price
(b). Subject to clause (d) below, the amount of the
Purchase Price attributable to Parcel B shall be Two Million Five Hundred Fifty Thousand
Dollars ($2,550,000.00) (calculated as the product of $26.50 per square foot multiplied by the
total gross square footage of Parcel B). The Purchase Price attributable to Parcel B shall be
adjusted at the Close of Escrow to equal the product of $26.50 per square foot multiplied by the
precise number of square feet of land in Parcel B, as established by the Surveyor, after taking
Parcel B Purchase
into account the boundaries established by the Lot Line Adjustment (the
Price
.
Parcel C Purchase Price
(c). The amount of the Purchase Price attributable
to Parcel C shall be shall be equal to the difference between (i) Eight Million Seven Hundred
Ten Thousand Dollars ($8,710,000) minus (ii) the Parcel A Purchase Price, minus (iii) the Parcel
Parcel C Purchase Price
B Purchase Price (the .
Easement Price
4.2.2. As consideration for the reciprocal easements
established in the Declaration by City for the benefit of Parcel A, Parcel B and Parcel C, at the
Easement Price
Phase 1 Close of Escrow
17
the amount of Forty Eight Thousand Dollars ($48,000.00).
Definitions
4.2.3. The Parcel A Purchase Price, Parcel B Purchase Price
Phase 1 Purchase Price
and the Easement Price , and the
Phase 2 Purchase Price
Parcel C Purchase Price
Purchase Price
Price and the Phase 2 Purchase Price
Payment of Purchase Price
4.2.4. The Purchase Price for the Property
shall be payable by the Developer to the City at each Close of Escrow, as follows:
Purchase Price Deposit
(a)
Phase 1 Deposit and Phase 2 Deposit
(i). An earnest money deposit
Purchase Price Deposit
( TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000)
shall be delivered by the Developer to Escrow Holder within five (5) business days of execution
of this Agreement. The Purchase Price Deposit shall be credited against the Purchase Price as
follows: (x) $150,000 shall be credited to the Phase 1 Purchase Price at the Phase 1 Close of
Phase 1 Deposit
$100,000 shall be credited to the Phase 2 Purchase Price
Phase 2 Deposit
Purchase Price Deposit
(ii). Unless the Developer has provided a
Termination Notice in accordance with Section 5.8, prior to the Financing Contingency
Deadline, the Purchase Price Deposit shall be nonrefundable (except as otherwise expressly
provided in Article 14) and shall be liquidated damages to the City in the event of certain
Defaults by Developer, as further set forth in Section 14.2.
Payment of the Balance of the Purchase Price
(b). No later than one (1)
Business Day prior to each Close of Escrow, the Developer shall deposit with Escrow Holder an
Developer Closing Payment
, be equal to: (i) (x) in the case of
Phase 1, the Phase 1 Purchase Price less the Phase 1 Deposit and less the Subordination
Agreement Expenses Deposit then paid (if any) and (y) in the case of Phase 2, the Phase 2
Purchase Price less the Phase 2 Deposit, plus (ii) such additional amount as is necessary to cover
all closing costs to be paid by the Developer pursuant to Section 7.6.1(b) and (c) and Section
7.6.4, as adjusted for any net credits or debits to the City for closing costs and/or prorations in
accordance with Section 7.6.1(a) and (c) and Section 7.6.4.
Payments in Immediately Available Funds
(c). Funds delivered to City or
Escrow Holder under this Agreement shall be in the form of cash, wire transfer (to such account
ck drawn on
good and sufficient funds on a federally chartered bank in the State of California and made
payable to the order of City or Escrow Holder, as the case may be.
Escrow and Joint Escrow Instructions
4.3. Not later than five (5) business days
after the execution of this Agreement by the City, the Developer and the City shall each deliver
an executed original counterpart of this Agreement to Escrow Holder. For purposes of this
Opening of Escrow
ves an executed
original counterpart to this Agreement signed by the Developer and the City. Upon the written
acceptance of this Agreement by Escrow Holder, this Agreement shall constitute the joint escrow
18
Escrow
instructions of the Developer and the City to Esc
a
acceptance of this Agreement, Escrow Holder is authorized to act in accordance with the terms
of this Agreement. The Devel
instructions upon request, with such modifications thereto as the Developer and the City may
reasonably require; provided, however, that if there is any conflict or inconsistency between such
general escrow instructions and this Agreement, this Agreement shall control. Escrow Holder
shall not prepare any further escrow instruction restating or amending this Agreement unless
specifically so instructed by the City and the Developer in writing. Any supplemental escrow
instructions must be in writing and signed by the City and the Developer and accepted by the
Escrow Holder to be effective.
-
4.4.
Investigation
4.4.1. Developer shall have the right to conduct
own investigation of the Property pursuant to Section 5.1 of this Agreement. If Developer
proceeds to the Close of Escrow, Developer represents and warrants to the City that Developer
will have satisfied itself that it has determined that all matters related to the Property, the Water
Well Parcel, the Declaration and the Project are acceptable to Developer, including without
limitation, the state of title (including easements, covenants, conditions and/or restrictions
affecting the Property, if any), the physical condition thereof, the physical condition of
structures, if any, located upon the Property and, as applicable, the accessibility and location of
utilities, and all mechanical, plumbing, sewage, and electrical systems located therein, suitability
of soils, environmental and other investigations regarding the Property. The Developer has
reviewed with respect to all matters
and use of the Property and the Develop
consummate the transactions described by this Agreement.
(a)The Developer acknowledges and agrees that, as of the Close of Escrow:
(i)Its determination to enter into this Agreement constitutes
ting the transactions described in this
Agreement:
(1)has been given the opportunity to inspect the Property and
to review the information and documentation affecting the Property including the environmental
condition of the Property, and is relying solely on its own investigation of the Property, including
such investigation prior to execution of this Agreement, and review of such information and
documentation in determining the physical, economic and legal condition of the Property, and
not on any information provided or to be provided by the City or the agents of the City,
(2)has performed its own assessment of Property, including
the environmental condition of the Property, the presence of Hazardous Materials on the
Property, the suitability of the soil for improvements to be constructed, the implications of land
use restrictions on the development plan for the Project and the Property and the consequences of
any subsequently discovered contamination on or adjacent to the Property, and
19
(3)has been provided with access to all information in the
possession of the City which it has requested.
(ii)Information provided to the Developer by or on behalf of the City
with respect to the Property was obtained from a variety of sources and that the City has not
made any independent investigation or verification of such information and makes no
representations as to the accuracy or completeness of such information; and Developer is
satisfied with the nature and extent of its permissible investigation of the physical condition and
other matters relating to the Property and is willing to consummate the transactions described by
this Agreement.
AS-IS; WHERE-IS
4.4.2 .
No Representations or Warranties
(a). The Developer recognizes that the
City would not sell the Property
and the Developer acknowledges that the City has made no representations or warranties of any
kind whatsoever (excepting only representations of the City expressly set forth in this
Agreement), either express or implied in connection with any matters with respect to the
in this Agreement, is buying the Property
condition, in its present state and condition and with all faults, if any. The Developer further
acknowledges and agrees that, except as otherwise specifically provided in Section 3.3, the City
has not made and does not make and specifically negates and disclaims any representations,
warranties, promises, agreements, or guaranties of any kind or character, whether express or
implied, oral or written, past, present, or future, whether by the City or any of its agents, elected
or appointed officials, representatives or employees, of concerning or with respect to:
(i)the value of the Property or the income to be derived from the
Property;
(ii)the existence or nonexistence of any liens, easements, covenants,
conditions, restrictions, claims or encumbrances affecting the Property;
(iii)the suitability of the Property for any and all future development,
uses and activities which the Developer may conduct thereon, including the development of the
Project described in this Agreement;
(iv)the habitability, merchantability or fitness for a particular purpose
of the Property;
(v)the manner, quality, state of repair or lack of repair of the Property;
(vi)the nature, quality or condition of the Property including water,
soil and geology;
20
(vii)the compliance of or by the Property and/or its operation in
accordance with any Governmental Requirement, including CEQA and the Americans with
Disabilities Act of 1990;
(viii)the manner or quality of the construction or materials, if any,
incorporated into the Property;
(ix)the presence or absence of Hazardous Materials, including asbestos
or lead paint at, on, under, or adjacent to the Property;
(x)the content, completeness or accuracy of the information,
documentation, studies, reports, surveys and other materials, delivered to the Developer in
connection with the review of the Property and the transactions contemplated in this Agreement;
(xi)the conformity of the existing improvements on the Property, if
any, to any plans or specifications for the Property;
(xii)compliance of the Property with past, current or future
Governmental Requirements relating to zoning, subdivision, planning, building, fire, safety,
health or environmental matters and/or covenants, conditions, restrictions or deed restrictions;
(xiii)the deficiency of any undershoring or of any drainage;
(xiv)the fact that all or a portion of the Property may be located on or
near an earthquake fault line or falls within an earthquake fault zone established under the
Alquist-Priolo Earthquake Zone Act, California Public Resources Code Sections 262 1-2630 or
within a seismic hazard zone established under the Seismic Hazards Mapping Act, California
Public Resources Code, Sections 2690-2699.6 and Sections 3720-3725;
(xv)the existence or lack of vested land use, zoning or building
entitlements affecting the Property; and
(xvi)with respect to any other matters.
Environmental Condition of the Property
(b).The Developer
acknowledges and agrees that the City makes no representation or warranty as to the
environmental condition of the Property or any portion thereof, or of the adequacy or accuracy of
any environmental report that has been rendered.
No Unauthorized Representations
(c). No Person acting on behalf of the
City is authorized to make, and by execution hereof, the Developer acknowledges that no Person
has made, any representation, agreement, statement, warranty, guarantee or promise regarding
the Property, the Project or the transactions contemplated in this Agreement or the past, present
or future zoning, land use entitlements, construction, physical condition, presence or extent of
Hazardous Materials or other status of the Property except as may be expressly set forth in this
Agreement. No representation, warranty, agreement, statement, guarantee or promise, if any,
made by any person acting on behalf of the City that is not contained in Agreement will be valid
or binding on the City.
21
Release
4.4.3. Save and except for the explicit representations, and
warranties of the City set forth in Section 3.3, Developer, on behalf of itself and each Successor
Owner and every Person claiming by, through or under the Developer or any Successor Owner
Releasing Party
each Close of Escrow, the right of each Releasing Party to recover from, and fully and
irrevocably releases, the City and its elected and appointed officials, employees, agents,
attorneys, affiliates, representatives, contractors, successors and assigns (individually, a
Released PartyReleased Parties
Developer or any Releasing Party may now have or hereafter suffer or acquire arising from or
Due
Diligence Information
any condition of the Property or any current or future
improvement thereon, known or unknown by any Releasing Party or any Released Party; (c) any
construction defects, errors, omissions or other conditions, latent or otherwise, including
environmental matters, as well as economic and legal conditions on or affecting the Property, or
any portion thereof; (d) the existence, Release, threatened Release, presence, storage, treatment,
transportation or disposal of any Hazardous Materials at any time on, in, under, from, about or
adjacent to the Property or any current or future improvement thereon or any portion thereof; (e)
claims of or acts or omission to act of any Governmental Authority or any other third party
arising from or related to any actual, threatened, or suspected Release of a Hazardous Material
on, in, under, from, about, or adjacent to the Property or any current or future improvement
thereon, including any Investigation or Remediation at or about the Property or any current or
future improvement thereon; (f) the cost or extent of the infrastructure work required to complete
the Improvements; (g) school related development fees and/or (h) any restriction on access to the
Property for pre-acquisition inspection; provided, however, that the foregoing release by the
Releasing Parties shall not apply to the extent that any Claim is the result of the gross negligence,
willful misconduct or fraud of the City or its elected and appointed officials, employees,
representatives, agents or consultants arising after the Phase 1 Close of Escrow with respect to
the Phase 1 Property or the Phase 2 Close of Escrow with respect to the Phase 2 Property. This
release includes Claims of which the Developer is presently unaware or which the Developer
does not presently suspect to exist which, if known by the Developer, would materially affect the
California Civil Code Section 1542, which provides as follows:
SE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
In this connection and to the extent permitted by law, the Developer on behalf of itself,
and the other Releasing Parties hereby agrees, represents and warrants, which representation and
warranty shall survive each Close of Escrow and the termination of this Agreement and shall not
be merged with any Quitclaim Deed, that (x) it realizes and acknowledges that factual matters
now unknown to it may have given or may hereafter give rise to Claims or controversies which
are presently unknown, unanticipated and unsuspected, (y) the waivers and releases in this
Section 4.4.3 have been negotiated and agreed upon in light of that realization and (z) the
Developer, on behalf of itself and the other Releasing Parties, nevertheless hereby intends to
22
release, discharge and acquit the Released Parties from any such unknown Claims and
controversies which might in any way be included as a material portion of the consideration
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS
SECTION.
______________________ _______________________
This release shall run with the land for the benefit of the Water Well Parcel, the City, and each
Successor Owner owning all or any portion of such land and from and after the acquisition
thereof by Developer, burdening the Development Parcels and the Successor Owners thereof
owning all or any portion of such land and all Persons claiming by, through or under the
Developer or any Successor Owner and, to further evidence its effectiveness with respect to
Successor Owners of the Property, shall be included in its entirety in each Quitclaim Deed.
Conditions Precedent to the City Disposition
4.5. The conditions set forth in
Sections 4.5.1 through 4.5.7 shall be conditions precedent for the benefit of the City with respect
to the Close of Escrow for either Phase 1 or Phase 2, as applicable, and shall be satisfied by the
Developer not later than the times specified for such conditions in the Schedule of Performance.
Only the City has the right to waive any of the conditions in this Section 4.5.
Financing Plan
4.5.1. As of the Effective Date, the Developer has provided
the City with the Proforma setting forth the Developer's current estimate of costs and revenue
sources for development of the Project. The Proforma is only intended to serve as a guide for the
preparation of a financing plan for the Project, and the Parties acknowledge that the actual
financing plan shall be based on more refined cost estimates and upon further discussions with
proposed lenders. On or before the dates set forth in the Schedule of Performance and with
respect to each Phase of development, the Developer shall submit to the City, for approval by the
Financing Plan
City in its reasonable discretion, a proposed financing plan that shall
include: (1) a cash flow projection for operation of the Project; (2) a cost breakdown for
development based upon government permits and approvals and any design documents; (3) a
true copy of each commitment for a Construction Loan and for other financing from external
sources in the amounts necessary to fully finance the development of the Project; (4) a sources
and uses table identifying the proposed use of each source of funding for the Project during the
construction period; and (5) evidence reasonably satisfactory to the City that the Developer has
sufficient additional funds available and is able to commit such funds to cover the difference, if
any, between costs of development of the Project and the amount available to the Developer
from external sources. The Citys review of the Financing Plan shall be for the purposes of
determining if the contemplated financing will be reasonably available, will provide sufficient
funds for construction of the Project and for its operation consistent with the terms of this
Agreement and will otherwise be provided on terms consistent with the terms and conditions of
23
this Agreement. If the City is not reasonably satisfied with the financial status of the Developer
or the proposed joint venture development entity following review of the Financial Plan, the City
shall be entitled to obtain the financial information of other members and/or partners of the
proposed development entity (and their respective members, partners, shareholders and/or other
owners at each tier until substantial assets are identified). The Developer shall identify with
specificity any submitted documents which the Developer wants the City to maintain as
confidential documents and a statement as to why the request is consistent and complies with the
provisions of the Public Records Act of the State of California. The City shall not disseminate
such information and shall take all reasonable steps to maintain such confidentiality, including
maintenance of such documents at a non-public location, unless otherwise required by law. The
as such parties agree to maintain the confidentiality of such statements.
Evidence of Financing
4.5.2. Developer shall have submitted to the City
the following evidence of financing:
(a)Demonstration to the satisfaction of the Assistant City Manager or
designee (i) the availability of funds sufficient to pay all costs relating to acquisition of the
Property and development of the Project on the Property, including sufficient equity capital,
bonding capacity and borrowing ability to fund the Project in writing from a Permitted
Mortgagee(s) and (ii) no material adverse change in the financial capacity or condition of
Developer or its financial or organizational relationships from that presented to the City in
connection with the execution of the ENA.
(b)A letter from a Qualified Institutional Lender to the effect that the
Developer has established a commercial account with such financial institution and maintains a
good relationship with such financial institution.
(c)Developer shall have secured a Construction Loan for the Project which
shall be a Permitted Mortgage approved by the City made by a Permitted Mortgagee as
determined by the City, in each case in accordance with the terms of Article 2 and Article 16 and
in an amount sufficient to meet the debt requirements described in clause (a) above, and the
Developer and Permitted Mortgagee(s) of such Permitted Mortgage(s) shall each have confirmed
in writing to Escrow Holder, for the benefit of the City that all conditions to close of such
Construction Loan have been met or waived and each is prepared to close the Construction Loan
immediately following the Close of Escrow and to fund the initial draw thereunder, or if there
exist conditions precedent to funding of the initial draw thereunder, setting forth each of the
conditions precedent to funding of the initial draw under the terms of the Construction Loan that
Construction Loan Conditions Letter
remain unsatisf.
(d)Such other documents, as the City, in its good faith discretion, determines
will assist in the evaluation of whether the Developer is able to acquire the Property, construct
the Improvements and perform in a timely manner all of its other obligations and commitments
set forth in this Agreement, including the documentation described in Section 8.5.1.
24
City Approvals
4.5.3. The Developer shall have applied for and obtained
all Entitlements by the time provided in the Schedule of Performance; provided, however, in the
event that Developer applies for such Entitlements no later than the date specified on the
Schedule of Performance but does not obtain such Entitlements in the Schedule of Performance
due to Force Majeure Delays, then such times provided in the Schedule of Performance shall be
extended accordingly, but in no event later than the Phase 1 Close of Escrow. The Developer's
application for the Entitlements shall be consistent with the Scope of Development and the terms
and conditions of this Agreement.
Assignment of Project Architect
4.5.4. With respect to each
Project Architect, Developer shall, in accordance with the Schedule of Performance, execute and
deliver to the City tContract, Plans, Specifications and Permits
substantially the form and substance of Attachment
No. 12 (t executed by Developer and such Project
Architect. The Assignment to the City, in the event of termination
vest title to the
Property pursuant to the Right of Reversion or Right of Purchase described herein and after City
, the
Developer's rights to: (a) the plans and specifications prepared pursuant to this Agreement; (b)
the contract between Developer and its architect; and (c) all permits and Entitlements relating to
the Project. The City hereby agrees to reassign such documents to the holder of any Permitted
Mortgage in the event such holder agrees to complete construction of the Project after a Material
Default (after the giving of any required notice and the expiration of all applicable cure periods)
by the Developer hereunder, after such holder assumes and agrees to perform Developer's
obligations hereunder.
Project Design
4.5.5. On or before the date specified in the Schedule of
Performance, the Developer shall have caused the Project Documents to be prepared and
submitted to the City for approval, and the City shall have approved such Project Documents as
provided in Section 8.4.
Franchise Agreements
4.5.6. On or before the date specified in the
Schedule of Performance, Developer shall have delivered to the City a fully executed copy of
each proposed hotel franchise agreement for operation of the hotels comprising the Project, with
the hotel brands required by this Agreement.
Insurance
4.5.7. Prior to or concurrently with the execution of this
Agreement by the Developer, the Developer shall have obtained and delivered to the City a
binder or certificate evidencing the insurance required by Article 11 effective upon the mutual
execution of this Agreement by the Developer and the City.
Declaration of Ownership; Additional Documentation
4.5.8. Prior to or
concurrently with the execution of this Agreement by the Developer, the Developer shall have
delivered to the City (i) a declaration certified by the President of Developer that the following
documentation submitted by the Developer to the City prior to the Effective Date is true and
correct as of Phase 1 Close of Escrow: (w) documentation relating to the corporate, partnership,
limited liability or ot
25
and its partners (and, if any partner is a limited partnership, its general partners, and if any
partner is a limited liability company, its members), including, as applicable: articles of
incorporation, California foreign entity registration, certificate of limited partnership, limited
partnership agreement and (as to the Developer and General Partner only) Statement of
Information and Operating Agreement (including any amendments thereto); (x) copies of all
resolutions or other necessary actions taken by such entity to authorize the execution of this
Agreement and any other documents or instruments required by this Agreement; (y) a certificate
of status issued by the California Secretary of State; and (z) a copy of any Fictitious Business
Name Statement if any, as published and filed with the Clerk of Orange County; (ii) a
certification by the Developer that the final Project budget for the Improvements approved by the
City prior to the Effective Date remains a reasonable budget; and (iii) certificates of good
standing and tax good standing of the Developer issued by the California Secretary of State
within thirty (30) calendar days of the Effective Date.
Process for Approval
4.5.9. With respect to disapproval by the City of any
of the submittals required by Section 4.5.1 through 4.5.6, the City shall state in writing the
reasons for disapproval and the changes that the City requests. The City shall use commercially
reasonable efforts to respond to each submission with fifteen (15) Business Days following its
receipt of the information. The Developer shall thereafter use commercially reasonable efforts to
submit revised submittals to the City for its approval within fifteen (15) Business Days after
receipt of the City's notification of disapproval. If the revised submittals are again disapproved
by the City (within the time frame and utilizing the procedures described above), then the
Developer shall have ten (10) Business Days to make a further submittal. If, despite the
Developer's good faith efforts, any submittals have not been approved within twelve (12) months
following the initial submittal date, then this Agreement may be terminated by either party by
written notice in accordance with Section 17.7.
5..
Due Diligence Period.
5.1 Developer acknowledges that while the City has been
negotiating this Agreement with the Developer, the Developer has had extensive access to the
Property within which to undertake such physical inspections and other investigations of, and
inquiries concerning, the Property as may be necessary to allow the Developer to evaluate the
physical characteristics of the Property, as well as such other matters as may be deemed by
Developer to be reasonably necessary to generally evaluate the Property and determine the
feasibility and advisability of Developers purchase and redevelopment of the Property for its
proposed Scope of Development. In addition to the due diligence investigation previously
conducted by Developer, Developer shall have an additional period of time as identified herein
to undertake specific additional inspections and investigations as are necessary and specifically
permitted herein to allow Developer to continue to evaluate the feasibility and advisability of
Developers purchase of the Property. The Developers obligation to purchase the Property shall
be contingent upon the Developers approval (or deemed approval), in the Developers sole
discretion, of the results of such inspection, examination and other due diligence. Developer
shall have the right to investigate the following matters: geotechnical data, including soil types
Due Diligence Matters
and compaction (collectively, the ), as each of the foregoing relate to
the suitability of the Property for construction of the Project. Developer may elect to conduct
such additional due diligence investigations during the period commencing on the Effective Date
26
and ending at 4:00 P.M. Pacific Time on the date that is 90 days after the Effective Date (such
Due Diligence Period
period, the ). Due Diligence Matters expressly exclude (x) all other
matters relating to and conditions of the Property, other than those set forth in the definition of
Due Diligence Matters, above, (y) those items known by the Developer as of the Effective Date,
and (z) those items expressly accepted by the Developer or waived by the Developer as set forth
in Section 4.4 and/or in the ENA. The Developer acknowledges and agrees that the Due
Diligence Period is adequate time to complete such investigation. Developer may give City
Diligence Termination Notice
written notice on or before the end of the Due Diligence
Period stating that Developer elects to terminate this Agreement. If Developer fails to give the
Diligence Termination Notice on or before the end of the Due Diligence Period, Developer will
be deemed to have approved all of the Due Diligence Matters and shall be deemed to have
waived its right to object to any Due Diligence Matters.
Financing Contingency Period
5.2. As a condition in favor of Developer to the
Phase 1 Close of Escrow and the Phase 2 Close of Escrow, on or before 4:00 p.m., local time on
Financing Contingency
the date that is six full calendar months after the Effective Date (the
Deadline
secured by a first deed of trust on the applicable Parcel(s) on terms acceptable to Developer in
Financing Contingency
may give City written
Financing Termination Notice
notice on or before the Financing Contingency Deadline
stating that the Financing Contingency is not satisfied. If Developer fails to give the Financing
Termination Notice on or before the Financing Contingency Deadline, Developer will be deemed
to have approved the Financing Contingency and shall be deemed to have waived its right to
terminate the Agreement. Developer agrees to use commercially reasonable efforts and to
proceed with all reasonable due diligence in its efforts to satisfy the Financing Contingency as
aforesaid on or before the Financing Contingency Deadline including, furnishing to any
easonably be required.
If following expiration of the Financing Contingency Deadline, Developer is unable to obtain
financing reasonably satisfactory to the City in accordance with the terms of this Agreement,
Developer shall be in default of its obligations under this Agreement.
Termination of Agreement
5.3. If Developer gives the Diligence Termination
Notice on or before the end of the Due Diligence Period or if the Developer gives the Financing
Termination Notice on or before the Financing Contingency Deadline, this Agreement shall
automatically terminate on the date of the Diligence Termination Notice or the Financing
Termination Notice, as applicable, and thereafter and in accordance with Article 14 neither Party
shall have any further obligations under this Agreement (subject to the provisions that expressly
survive the termination of this Agreement). In such event and in accordance with Article 14,
Escrow Holder shall return the Purchase Price Deposit and all interest accrued thereon (if any) to
Developer, less any title and escrow cancellation fees of Escrow Holder.
Limited License
5.4.
directors, employees, agents, representatives, tenants, prospective tenants, prospective
purchasers, contractors, or other Persons accessing the Property by, through or with the
Developer Representatives
diligence inspection and/or (b) obtaining data and making surveys and tests necessary to carry
27
out this Agreement, provided that, prior to the effectiveness of such license, the Developer shall:
(i) deliver to the City written evidence that the Developer has procured the insurance required
under Section 5.3 and Article 11 (ii) give the City twenty-four (24) hours telephonic, electronic
mail or written notice of any intended access which involves work on the Property or may result
in any impairment of the use of the Property or any portion thereof, or any adjacent portion of
the Property by any then-current owners, occupants, or contractors; (iii) access the Property in a
safe manner; (iv) conduct no environmental testing, sampling, invasive testing, or boring without
the written consent of the City; (v) allow no dangerous or hazardous condition to be created or
caused on the Property; (vi) comply with all Governmental Requirements and obtain all permits
required in connection with such access; and (vii) conduct inspections and testing during normal
business hours and subject to the rights of then-current owners, occupants, and contractors, if
This limited license shall commence on the Effective Date, may be revoked by the City during
the continuation of any Potential Default or Material Default by the Developer, or upon
termination of this Agreement by any Party, and shall be automatically revoked and terminated
with respect to each Parcel(s) upon the earlier to occur of a delivery by Developer of a
Termination Notice or the Close of Escrow for such Parcel(s).
Insurance
5.5. From and after the Effective Date, and as a condition precedent to
exercise by Developer or Developer Representatives of the license granted in Section 5.2, the
liability insurance covering the liability of the Developer, Developer Representatives, and the
City arising out of any investigative activities, in an amount and provided by a carrier reasonably
approved by the City. Such policy shall meet the requirements of Sections 11.1 and 11.2 and
shall name the City as additional insured. Prior to commencement of any work on the Property,
the Developer shall provide the City with a certificate of such insurance meeting the
requirements of Section 11.1 evidencing the effectiveness of the foregoing coverage. Such
policy of insurance shall be kept and maintained in force following each Close of Escrow or the
earlier termination of this Agreement and so long after such date as necessary to cover any
claims of damages suffered by Persons or property resulting from any acts or omissions of the
Developer or the Developer Representatives.
Indemnity
5.6. Developer hereby agrees to protect, indemnify, defend and hold
harmless the City and its elected and appointed officials, employees, agents, attorneys,
representatives, contractors, successors and assigns from and against any and all Claims arising
from or related to (a) the acts and omissions of Developer and Developer Representatives in
connection with exercise of the license provided in Section 5.2 or pursuant to the ENA, (b) entry
onto the Property by the Developer or the Developer Representatives, (c) the activities of, work
on or use of the Property by the Developer or the Developer Representatives, including with
respect to any inspections, surveys, tests, Investigations and studies carried out by the Developer
or the Developer Representatives on or adjacent to the Property, in each case whether occurring
prior to or following the Effective Date; provided, however, that the foregoing indemnity shall
not apply to any diminution in the value of the Property resu
discovery of any pre-existing condition, pre-existing circumstance or pre-existing Hazardous
Material on the Property. The Developer shall keep the Property free and clear of any
Property.
28
The indemnification by the Developer set forth in this Section 5.5 shall survive each Close of
Escrow and the termination of this Agreement and shall not be merged into any Quitclaim Deed.
Review of Certain Records and Materials
5.7. The City shall, within ten (10)
Business Days of the Effective Date and at no cost to the Developer, provide the Developer with
copies of all City-produced plans, reports, studies, investigations and other materials the City
may have that are pertinent to the Property and/or development of the Project; provided,
however, that the City makes no representation, warranty or guaranty regarding the completeness
or accuracy of such plans, reports, studies, investigations and other materials. The Developer
right to examine those books, records and files of the City relating to the environmental and
other condition of the Property which the City determines in its sole discretion are not or subject
to attorney-client privilege or other privilege or disclosure rules. The City agrees to make all
accountants, and other representatives at City Hall any time during business hours on Business
Days upon reasonable notice from the Developer.
Communications with City and Third Parties
5.8. From and after the Effective
Date, the Developer and the Developer Representatives shall communicate directly with (a) Ms.
Christine Shingleton, the Assistant City Manager, who shall be the administrator of this
Agreement on behalf of the City and such other employees, consultants, and attorneys of the City
as may be designated by the City Manager or the Assistant City Manager of the City from time
to time; (b) with the City staff and staff and members of other public agencies (but excluding the
City Redevelopment Agency); and (c) with third parties to all agreements affecting the Property
,
easement pursuant to the Declaration, and development of the Project. The City
staff shall have the right, but not the obligation, to attend and participate in any and all meetings
with other public agencies, the general public, and other interested parties with regards to the
Project. Upon request of the City, the Developer shall promptly provide the City with a copy of
each item of correspondence (including emails, letters, facsimiles, and any enclosures and
attachments) sent or received by the Developer in connection with entitlement, community, or
governmental approval of the Project.
6.Title; Survey.
Survey by Developer
6.1. Prior to the end of the Due Diligence Period, Developer at
Survey
shall have d by
Surveyor
a licensed surveyor shall be certified by the Surveyor to the City,
the Developer and the Title Company. The Survey shall depict: (a) the boundaries of each of
the proposed Development Parcels (which boundaries shall be finalized pursuant to application
by Developer for a Lot Line Adjustment), the Easement Area and, to the extent known, all City
Dedication Parcels, (b) the location of all improvements, perimeter improvements, easements,
roads, rights-of-way and encroachments located within twenty (20) feet of the boundary of the
Property, (c) all other Permitted Exceptions susceptible to depiction on a map or survey
identified by reference to the recording information applicable to the documents creating them,
and (d) any portion of the Property and/or the City Dedication Parcels lying within a flood
hazard area. Developer agrees to indemnify and hold the City and its elected and appointed
29
officials, employees, agents, attorneys, affiliates, representatives, contractors and successors and
assigns free and harmless from any and all Claims which the Developer shall incur or sustain as
a result of inaccuracy in the legal description for the Property, the Development Parcels or the
Easement Area, or the City Dedication Parcels. The indemnification by the Developer set forth
in this Section 6.1 shall survive the Close of Escrow and the termination of this Agreement and
shall not be merged into the Quitclaim. Prior to each Close of Escrow, the Developer shall cause
the Survey to be updated to reflect the finally determined City Dedication Parcels.
Permitted Exceptions
6.2. xpense, has
caused the Title Company to prepare and deliver to the Developer and the City with respect to
Preliminary Title
the Development Parcels: (a) one or more preliminary title
Reports
from Title Company based upon which the Title Company may issue a California
CLTA
ment
Policy
in the amount of the purchase price of the Development Parcels and
such additional amounts as Developer may request of Title Company. During the Due Diligence
Period, Developer shall review the Preliminary Title Reports and the other relevant documents
referenced below, and may object to matters set forth in the Preliminary Title Reports and
request that the Title Company remove from the Title Policy those exceptions to title
Permitted Exceptions
disapproved by Developer in the Preliminary Title Reportstle
shall include all of the following: (i) as of the last day of the Due Diligence Period, all matters set
forth on the Preliminary Title Reports, set forth on the Survey, and not otherwise deleted from
the Preliminary Title Reports nor endorsed over by the Title Company; (ii) the rights and
; and (iii) all covenants, restrictions and
encumbrances, liens, exceptions, leases, restrictions, deed restrictions and qualifications set forth
in or permitted or contemplated by this Agreement and the Declaration.
Supplemental Title Reports
6.3. If, after the end of the Due Diligence Period, the
Title Company discloses additional matters that affect title to the Development Parcels, then
Supplemental Title Report
disapproval of any item or exception shown on such Supplemental Title Report not previously
Disapproved
included in the Preliminary Title Reports and/or the Title Commitments
Exception
together with the Develo
Developer shall not have the right to disapprove any such item or exception if Developer has
specifically consented to such item, including all exceptions arising pursuant to this Agreement
and all matters appearing on the Title Commitments and/or on the Preliminary Title Reports
unless such matters had appeared on the Preliminary Title Report but had been removed from the
Title Commitment by the Title Company at the request of Developer. Failure of the Developer
to disapprove any item or exception shown on any such Supplemental Title Report on or before
the expiration of such ten (10) calendar day period shall be deemed to be an approval of the
matters set forth in such Supplemental Title Report. If the Developer designates a Disapproved
Exception, the Developer shall specify in writing its reason for such disapproval, and the City
shall have the right, but not the obligation, to (x) remove or cure the Disapproved Exception to
the reasonable satisfaction of the Developer, or (y) elect not to cure such Disapproved Exception.
If the City fails to nsuch
30
Disapproved Exception. If the City elects or is deemed to have elected not to cure any such
Disapproved Exception and proceed to take title to the Property in the manner set forth in this
Agreement and without either deduction or offset to the Purchase Price, and waive such
Disapproved Exception without cause of action hereunder against the City, or (ii) to provide
written notice to the City within five (5) calendar days after the City
election, of the Devel
the Purchase Price Deposit, to the extent previously paid by the Developer, and interest thereon,
if any, shall be refunded to the Developer in accordance with Sections 4.2.4 and 14.1.3. The
election to terminate this Agreement shall constitute the D
Disapproved Exception and its election not to terminate this Agreement under the foregoing
clause (ii). In the event the Developer shall not have terminated this Agreement under clause (ii)
of the preceding sentence, then all matters and exclusions or exceptions from title insurance
coverage shown in such supplement which the Developer shall have accepted pursuant to this
Section 6.3 (other than those which the City has agreed to cure as provided in this Section 6.3),
together with all Permitted Exceptions described in Section 6.2 shall be deemed Permitted
Exceptions.
ALTA Policy; Endorsements
6.4.
Developer Title Policy
6.4.1. It shall be a condition precedent to the
e Escrow that the Title Company issue the CLTA Policy with
Original CLTA
policy amount equal to the purchase price for the Parcels being purchased
Coverage
the
Escrow that the CLTA Policy show only exceptions to fee title that are Permitted Exceptions; the
to request and obtain additional CLTA coverage for the value of the development cost of the
Additional CLTA Coverage
ALTA Policy
endorsements as the Developer deems necessary; provided, however, that the issuance of such
Additional CLTA Coverage and/or of the ALTA Policy and the Developer Title Endorsements
shall not delay any Close of Escrow and shall not be a condition precedent to any Close of
Escrow. The Developer shall pay for all costs attributable to the CLTA Policy other than the
cost of the Original CLTA Policy and any excess cost attributable to obtaining the Additional
CLTA Coverage and the ALTA Policy, as well as the cost of the Developer Title Endorsements,
The title policies obtained by the
Developer Title Policy
City Title Policy
6.4.2. It shall be a City Phase 1 Closing Condition that the
Title Company issue an ALTA owners policy with extended coverage, with policy amount equal
to the value reasonably established by the City with respect to the rights and interests created by
Water Well Parcel, including the reciprocal access
and parking easements and the utility easements created thereby, which shall be subject to all
City Title Policy
31
7.Close Of Escrow
Time and Place of Close of Escrow
7.1.
Phase 1 Close of Escrow
7.1.1. The Phase 1 Close of Escrow shall take
Phase 1 Closing Date
place on
after the rough grading permit or any building permit has been issued for any part of the Project
and (b) the date that is eighteen (18) full calendar months after the Effective Date. The Phase 1
Close of Escrow shall be subject to the satisfaction of the conditions set forth in Sections 7.2
through 7.7, and shall take place at the offices of Escrow Holder, or at such other place that the
City selects.
Phase 2 Close of Escrow
7.1.2. The Phase 2 Close of Escrow shall take
Phase 2 Closing Date
after the rough grading permit or any building permit has been issued for Phase 2 of the Project
and (b) the date that is twelve (12) full calendar months after the Phase 1 Closing Date. The
Phase 2 Close of Escrow shall be subject to the satisfaction of the conditions set forth in Sections
7.2 through 7.7, and shall take place at the offices of Escrow Holder, or at such other place that
the City selects.
Extension of Closing Dates
7.1.3.The Phase 1 Closing Date and the Phase
2 Closing Date may be extended upon mutual written agreement of the Parties and by
Unavoidable Delays.
Conditions Precedent to Phase 1 Close of Escrow
7.2
Developer Phase 1 Closing Conditions
7.2.1
(a) to purchase Parcel A and Parcel B and the easement rights and (b) to complete all
requirements for the Phase 1 Close of Escrow is subject to and conditioned upon the satisfaction
en waiver of, each of the following conditions to the Phase 1 Close of
Developer Phase 1 Closing Conditions
:
(a)Not later than two (2) Business Days prior to the Close of Escrow, the
City shall have executed and delivered to Escrow Holder the following documents:
(i)the Declaration, acknowledged and in Recordable form;
(ii)a Quitclaim Deed for the applicable Parcel A and Parcel B,
acknowledged and in Recordable form;
(iii)if not previously recorded, the Memorandum of DDA,
acknowledged and in Recordable form;
(iv)
(v)
593-W;
32
(vi)with respect to one Construction Loan that is a Permitted Mortgage
with a Permitted Mortgagee approved by the City a Subordination Agreement in substantially the
form and substance of the Subordination Agreement attached as Attachment No. 11,
acknowledged and in Recordable Form.
(vii)s
Agreement and consummate the transactions contemplated hereby, and such proof of the power
and authority of the individual(s) executing and/or delivering any instruments, documents or
certificates on behalf of the City to act for and/or bind the City as may be reasonably required by
Title Company and/or the Developer; and
(viii)such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated in this Agreement.
(b)The Title Company shall be in a position to convert the Title
Commitments to the CLTA Policy with respect to the Phase 1 Property and issue same to the
Developer.
(c)Except for the Permitted Exceptions and the Declaration, there shall exist
no leases, licenses, contracts or rights of occupancy between the City and any third party with
respect to the Property to be conveyed at the Phase 1 Close of Escrow that shall survive the
Phase 1 Close of Escrow for such portion of the Property conveyed, with the exception of the
utility easements described in the Declaration attached as Attachment No. 10.
(d)The City shall have approved (i) the Concept Plan and Design Review for
Phase 1 of the Project, which shall be substantially in conformance with the Preliminary Plans
and the Scope of Development and (ii) the Lot Line Adjustment.
(e)Section 3.3 shall be
true and correct as of the Phase 1 Close of Escrow.
(f)The City shall not be in Potential Default or Material Default of any
covenant or agreement to be performed by the City under this Agreement.
City Phase 1 Closing Conditions
7.2.2.
Quitclaim Deed for Parcel A and Parcel B and to complete all requirements for the Phase 1 Close
of Escrow is subject to and conditioned upon the satisfaction ,
City Phase 1 Closing
Conditions
(a)Not later than one (1) Business Day prior to the Phase 1 Close of Escrow,
the Developer shall deliver to Escrow (i) The Developer Closing Payment with respect to the
Phase 1 Purchase Price and (ii) any other costs explicitly set forth in this Agreement as costs to
be paid by Developer at the Close of Escrow.
(b)Not later than one (1) Business Day prior to the Phase 1 Close of Escrow,
the Developer shall have obtained building permits for all of the Improvements to be constructed
33
on Parcel A and Parcel B as shown on the approved Project Documents (and shall have paid all
fees required in connection with the issuance of such permits).
(c)
following, which documents the Developer shall deliver to the Escrow not later than two (2)
Business Days prior to the Close of Escrow:
(i)a Quitclaim Deed for the applicable Parcel A and Parcel B
acknowledged and in Recordable form;
(ii)if not previously Recorded, the Memorandum of DDA,
acknowledged and in Recordable form;
(iii)substantially the form and
substance of Attachment No. 12 hereto;
(iv)consent to the Subordination Agreement executed by any Permitted
Mortgagee in substantially the form and substance of the consent to Subordination Agreement
attached as Attachment No. 11, acknowledged and in Recordable form;
(v)a re
forth in Section 3.1 in form and substance acceptable to the City;
(vi)a declaration certified by the President of Developer that the
documentation submitted by the Developer to the City pursuant to Section 4.5.7 prior to the
Effective Date is true and correct as of Phase 1 Close of Escrow together with certificates of
good standing and tax good standing of the Developer, issued by the California Secretary of
State within thirty (30) calendar days of the Phase 1 Closing Date.
(vii)a reaffirmation of the Release described in Section 4.4.3 in form and
substance acceptable to the City;
(viii)
into this Agreement and consummate the transactions contemplated hereby, and such proof of
the power and authority of the individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of the Developer to act for and/or bind the Developer as may
be reasonably required by Title Company and/or the City; and
(ix)such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated in this Agreement.
(d)Developer shall have provided and the City shall have approved (i) each of
the deliverables described in Section 4.5, (ii) the Subordination Agreement in substantially the
form and substance of the Subordination Agreement attached as Attachment No. 11 executed by
the Permitted Mortgagee, if any, acknowledged and in Recordable form, (iii) the Assignment of
substantially the form and substance of Attachment No. 12 executed by
the Project Architect, (iv) the Construction Loan Conditions Letter executed by the Permitted
34
Mortgagee and (v) the conditions precedent to issuance of the initial draw by Permitted
Mortgagee under the Construction Loan as described in the Construction Loan Conditions Letter.
(e)Developer and the Permitted Mortgagee (as determined by City) of such
Permitted Mortgage shall each have confirmed in writing to Escrow Holder for the benefit of the
City that all conditions to close of such Construction Loan have been met or waived and each is
prepared to close the Construction Loan concurrently with the Close of Escrow, and Developer
shall have provided to the City written verification from Escrow confirming that the deed of trust
to be recorded in conjunction with the closing of the Construction Loan has been fully executed
and acknowledged and in Recordable form and deposited into Escrow by the Construction Loan
lender.
(f)The Title Company shall be in a position to issue the City Title Policy
(g)The Developer shall have satisfied each of the conditions to Phase 1 Close
of Escrow set forth in Section 4.5.
(h)Section 3.1
shall be true and correct as of the Phase 1 Close of Escrow.
(i)The Developer shall not be in Potential Default or Material Default of any
covenant or agreement to be performed by the Developer under this Agreement.
(j)The Developer shall have submitted to the City evidence of insurance
policies required to be obtained by the Developer pursuant to Article 11.
Conditions Precedent to Phase 2 Close of Escrow.
7.3
Developer Phase 2 Closing Conditions
7.3.1
to purchase Parcel C and to complete all requirements for the
Phase 2 Close of Escrow is subject to and conditioned upon the satisfaction of, or the
, each of the following conditions to the Phase 2 Close of Escrow
Developer Phase 2 Closing Conditions
r before the Phase 2 Closing Date:
(a)Not later than one (1) Business Day prior to the Phase 2 Close of Escrow,
the Developer shall have obtained building permits for all of the Improvements to be constructed
on Parcel C as shown on the approved Project Documents (and shall have paid all fees required
in connection with the issuance of such permits).
(b)Not later than two (2) Business Days prior to the Close of Escrow, the
City shall have executed and delivered to Escrow Holder the following documents:
(i)a Quitclaim Deed for Parcel C, acknowledged and in Recordable
form;
(ii)
35
(iii)
593-W;
(iv)with respect to one Construction Loan that is a Permitted Mortgage
with a Permitted Mortgagee approved by the City, a Subordination Agreement in substantially
the form and substance of the Subordination Agreement attached as Attachment No. 11,
acknowledged and in Recordable Form.
(v)ion to enter into
this Agreement and consummate the transactions contemplated hereby, and such proof of the
power and authority of the individual(s) executing and/or delivering any instruments, documents
or certificates on behalf of the City to act for and/or bind the City as may be reasonably required
by Title Company and/or the Developer; and
(vi)such other documents or instruments as Escrow Holder may
reasonably request to consummate the transaction contemplated in this Agreement.
(c)The Title Company shall be in a position to convert the Title
Commitments to the CLTA Policy with respect to the Phase 2 Property and issue same to the
Developer.
(a)Except for the Permitted Exceptions and the Declaration, there shall exist
no leases, licenses, contracts or rights of occupancy between the City and any third party with
respect to the Property to be conveyed at the Phase 2 Close of Escrow that shall survive the
Phase 2 Close of Escrow for such portion of the Property conveyed, with the exception of the
utility easements described in the Declaration attached as Attachment No. 10.
(b) The City shall have approved the Concept Plan and Design Review for
Phase 2 of the Project, which shall be substantially in conformance with the Preliminary Plans
and the Scope of Development.
(d)ThSection 3.3 shall be
true and correct as of the Phase 2 Close of Escrow.
(e)The City shall not be in Potential Default or Material Default of any
covenant or agreement to be performed by the City under this Agreement.
City Phase 2 Closing Conditions
7.3.2
Quitclaim Deed for Parcel C and to complete all requirements for the Phase 2 Close of Escrow is
iver of, each of the
City Phase 2 Closing Conditions
before the Phase 2 Closing Date:
(a)Not later than one (1) Business Day prior to the Phase 2 Close of
Escrow, the Developer shall deliver to Escrow (i) The Developer Closing Payment with respect
to the Phase 2 Purchase Price and (ii) any other costs explicitly set forth in this Agreement as
costs to be paid by Developer at the Phase 2 Close of Escrow.
36
(b)ow Holder of the
following, which documents the Developer shall deliver to the Escrow not later than two (2)
Business Days prior to the Close of Escrow:
(i)a Quitclaim Deed for Parcel C, acknowledged and in
Recordable form;
(ii)ract in substantially the
form and substance of Attachment No. 12;
(iii)consent to the Subordination Agreement executed by any
Permitted Mortgagee in substantially the form and
substance of the consent to Subordination Agreement
attached as Attachment No. 11, acknowledged and in
Recordable form;
(iv)
warranties set forth in Section 3.1 in form and substance
acceptable to the City;
(v)a declaration certified by the President of Developer that
the documentation submitted by the Developer to the City
pursuant to Section 4.5.7 prior to the Effective Date is true
and correct as of Phase 2 Close of Escrow together with
certificates of good standing and tax good standing of the
Developer, issued by the California Secretary of State
within thirty (30) calendar days of the Phase 2 Closing
Date.
(vi)a reaffirmation of the Release described in Section 4.4.3 in
form and substance acceptable to the City;
(vii)
to enter into this Agreement and consummate the
transactions contemplated hereby, and such proof of the
power and authority of the individual(s) executing and/or
delivering any instruments, documents or certificates on
behalf of the Developer to act for and/or bind the
Developer as may be reasonably required by Title
Company and/or the City; and
(viii)such other documents or instruments as Escrow Holder
may reasonably request to consummate the transaction
contemplated in this Agreement.
(c)The Phase 1 Closing shall have taken place.
37
(d)Developer shall have provided and the City shall have approved (i) each of
the deliverables described in Section 4.5, (ii) the Subordination Agreement in substantially the
form and substance of the Subordination Agreement attached as Attachment No. 11 executed by
the Permitted Mortgagee, if any, acknowledged and in Recordable form, (iii) the Assignment of
substantially the form and substance of Attachment No. 12 executed by
the Project Architect, (iv) the Construction Loan Conditions Letter executed by the Permitted
Mortgagee and (v) the conditions precedent to issuance of the initial draw by Permitted
Mortgagee under the Construction Loan as described in the Construction Loan Conditions Letter.
(e)Developer and the Permitted Mortgagee (as determined by City) of such
Permitted Mortgage shall each have confirmed in writing to Escrow Holder for the benefit of the
City that all conditions to close of such Construction Loan have been met or waived and each is
prepared to close the Construction Loan concurrently with the Close of Escrow, and Developer
shall have provided to the City written verification from Escrow confirming that the deed of trust
to be recorded in conjunction with the closing of the Construction Loan has been fully executed
and acknowledged and in Recordable form and deposited into Escrow by the Construction Loan
lender.
(f)The Developer shall have satisfied each of the conditions to the
Phase 2 Close of Escrow set forth in Section 4.5.
(g)s set forth in
Section 3.1 shall be true and correct as of the Phase 2 Close of Escrow.
(h)The Developer shall not be in Potential Default or Material Default
of any covenant or agreement to be performed by the Developer under this Agreement.
(i)The Developer shall have submitted to the City evidence of
insurance policies required to be obtained by the Developer pursuant to Article 11.
Additional Close of Escrow Conditions
7.4. In addition to the provisions of
Sections 7.1, 7.2, and 7.3, the Close of Escrow with respect to each Phase of the Property shall
be conditioned upon the following Closing Conditions, which shall be for the benefit of each
Party:
Closing Cost Statement
7.4.1. Escrow Holder shall have delivered at least
two (2) Business Days prior to each Close of Escrow a statement of costs to each Party.
Supplementary Escrow Instructions
7.4.2. The Parties shall have
prepared and approved any supplemental Escrow instructions which Escrow instructions shall
state that the Quitclaim Deed may be recorded only if it is recorded concurrently with the closing
of the Construction Loan for the applicable Phase, which closing shall be evidenced by the
Recordation of the deed of trust securing the Construction Loan and such additional
supplemental Escrow instructions as may be needed.
Closing Certificate
7.4.3 . Each Party shall submit to Escrow Holder a
certificate stating that all Closing Conditions for its benefit have been satisfied or waived.
38
Procedures for Conveyance
7.5.
Costs and Expenses
7.5.1. The costs and expenses of each Close of Escrow
shall be allocated as follows:
(a). The City shall pay (i) the premium for the Original CLTA
Policy; (ii) one-half (1/2) of all Escrow fees and costs; (iii) all documentary transfer taxes, if any;
any. Except as provided in this Agreement and the
ENA, the City shall pay the fees of all consultants (including lawyers and environmental,
engineering and land use consultants) engaged by it.
(b). The Developer shall pay (i) the entire cost of, and
endorsements in excess of one half of the Original CLTA Policy, (ii) the entire cost of the City
Title Policy, (iii) the entire cost of the Survey and any additional land surveys required in
connection with the foregoing; (iv) document recording charges for the Declaration, the
Quitclaim Deeds, the Memorandum of DDA, the Subordination Agreement and all other
Recorded documents; (v) one-half (1/2) of all Escrow fees and costs; and (vi
share of prorations. The Developer shall pay the fees of all consultants and employees
(including lawyers and environmental, engineering and land use consultants) engaged by it.
Other Costs
(c). All costs and expenses related to the Close of Escrow and
the transfer of the Property to the Developer not otherwise allocated in this Agreement shall be
allocated between the Parties in accordance with the customary practice in Orange County,
California.
Possession
7.5.2. The City shall deliver possession of Parcel A and Parcel B
at the Phase 1 Close of Escrow and shall deliver Parcel C at the Phase 2 Close of Escrow.
Deliveries to Developer Upon Close of Escrow
7.5.3. The City agrees to
deliver to the Developer, with respect to the portion of the Property conveyed on or prior to each
Close of Escrow, outside of Escrow, the following items:
Records and Plans
(a)
copies of records and plans that will affect the conveyed Property after the Close of Escrow.
Licenses and Permits
(b)
copies of all licenses and permits affecting the conveyed Property.
Prorations
7.5.4.
Genera
(a)l. Rentals, revenues and other income, if any, from the conveyed
Property shall be prorated on a cash basis as of 11:59 P.M. Pacific Time on the day preceding the
Close of Escrow. Tax payments shall be prorated in accordance with Section 7.5.4(b).
Taxes
(b). The Developer shall be responsible for all taxes, assessments, fees
and charges imposed by any Governmental Authority with respect to the Property conveyed to
Developer in fee and all existing and future improvements thereon from and after the Close of
39
interest in the assessed
portion of the Property is a fee interest. If, after the Close of Escrow, any real estate taxes or
possessory interest taxes are assessed against any conveyed parcel pertaining to the period prior
to such Close of Escrow, the City agrees to contact the applicable taxing authority and seek
recognition and enforcement of its tax exemption. The provisions of this clause (b) shall survive
the termination of this Agreement and the Close of Escrow and shall not merge into any
Quitclaim Deed or the Declaration.
Other Expenses
(c). Any expenses relating to the conveyed Property (other
than taxes) shall be prorated on an accrual basis as of the Close of Escrow. The City shall pay all
amounts due thereunder which accrue prior to the Close of Escrow, and, unless previously paid
by the Developer, the Developer shall pay all amounts accruing on the Close of Escrow and
thereafter.
Method of Proration
(d). All prorations shall be made in accordance with
customary practice in Orange County, except as otherwise expressly provided in this Agreement.
The Developer and the City agree to cause a schedule of prorations to be prepared prior to the
each Close of Escrow. Such prorations, if and to the extent known and agreed upon as of each
Close of Escrow, shall be paid by the Developer to the City (if the prorations result in a net credit
to the City) or by the City to the Developer (if the prorations result in a net credit to the
Developer) by increasing or reducing the cash to be paid by the Developer at the Close of
Escrow. Any such prorations not determined or not agreed upon as of the Close of Escrow shall
be paid by the Developer to the City, or by the City to the Developer, as the case may be, in cash
as soon as practicable following the Close of Escrow. A copy of the schedule of prorations as
agreed upon by the Developer and the City shall be delivered to Escrow Holder at least three (3)
Business Days prior to each Close of Escrow. All prorations provided for in this clause (d) shall
-five (365) day year. If any portion of the
Property is part of a larger tax parcel, which as of the Close of Escrow remains unsegregated on
all charge the
Developer and credit the City for taxes and assessments allocated to such portion of the Property
on an acreage basis compared to the acreage for the entire larger unsegregated parcel, which
acreage figures for allocation purposes shall be fairly and equitably determined and supplied to
Escrow Holder by the City and reasonably approved by the Developer. The Parties shall
cooperate in good faith to cause the conveyed Property to be separately assessed and segregated
current tax roll at the earliest possible time.
Disbursements and Other Actions by Escrow Holder
7.5.5. At the Close
of Escrow and subject to the satisfaction or waiver by the benefited party of the conditions to
closing described in Section 7.2 or 7.3 as the case may be, and Sections 7.4 and 7.5, Escrow
Holder shall promptly undertake all of the following in the manner indicated below:
Funds
(a). Debit or credit all matters addressed in Section 7.5.1 and prorate
all matters addressed in Section 7.5.4 and disburse to the City the Purchase Price (as adjusted by
the foregoing debits, credits and prorations) deposited with Escrow Holder by the Developer.
Recording
(b). Cause to be Recorded, in the following order, the
Memorandum of DDA (if applicable), the Quitclaim Deed, the Declaration (if applicable), the
40
Subordination Agreement, if any, and thereafter, any other documents that the Developer and the
City may mutually direct, or that may be required by the terms of this Agreement to be
Recorded, obtain conformed copies thereof and distribute same to the Developer and the City.
Title Policies
(c). Direct the Title Company to issue the Developer Title
Policy for the applicable Phase to the Developer and, with respect to the Phase 1 Close of
Escrow, to issue the City Title Policy to the City. Concurrent with the issuance of the Developer
Title Policy and the City Title Policy, the Title Company shall provide such endorsements as
may be requested by the respective insured parties.
Delivery of Documents to Developer and City
(d). Deliver to each Party
original counterparts (and conformed copies, if applicable) of the Declaration, the Memorandum
of DDA (if not previously recorded), the applicable Quitclaim Deed, the Subordination
Agreement, if any, the FIRPTA Affidavit, the California Form 593-W and any other documents
(or copies thereof) deposited into Escrow by the Developer or the City pursuant hereto, and
deliver to the Parties a certified copy of their respective Escrow closing statements.
Other Actions
(e). Take such other actions as the Parties direct pursuant to
mutually executed supplemental Escrow instructions.
Notice
7.5.6. All communications from the Escrow Holder shall be directed
to the addresses and in the manner established in Section 17.7 for notices, demands and
communications between the Parties.
8.Development of the Property
.
Scope of Development
8.1.
Requirement to Develop the Project
8.1.1. The Scope of Development
attached to this Agreement as Attachment No. 6 sets forth the overall plan for the Project and
development of the Property, including: (a) design, development, and construction of the
Improvements including the design and construction of improvements upon the City Dedication
Parcels and other City property as may be required by any Entitlement approval. The Developer
shall develop the Property in the manner described in and consistent with the Scope of
Development and in accordance with the Schedule of Performance and the Approved Project
Plans, all as further described below. Until the issuance of a Final Certificate of Compliance, or
Partial Certificate of Compliance as to the applicable Development Parcel, and except as
excepted by Sections 2.2.4 or Article 16, no Person (including any Permitted Mortgagee) shall be
permitted or authorized to undertake the construction of any improvements on the Property,
including the Improvements, unless it shall have first assumed in writing all obligations of
Developer under this Agreement, for the portion of the Property in which such Person has an
interest, by written assignment and assumption agreement in substantially the form and
substance of the Assignment and Assumption Agreement attached to this Agreement as
Attachment No. 15, provided further that the foregoing restriction does not apply to tenant
improvements constructed in a Retail Space pursuant to contracts entered into by Developer or a
Successor Owner.
41
Control of Development
8.1.2. The Developer shall have control over the
design and layout of the Improvements (including height, shape and location of the buildings,
structures and other improvements, size of floor plates, and special landscaping and art features)
and over the special uses to be incorporated therein, subject to (i) the approval of the City thereto
pursuant to its Governmental Capacity as entitling agency (including the Concept Plan and
Design Review and any conditional use permit review which may be necessitated by particular
proposed uses or design features) and (ii) the design approval provisions set forth in Section
8.4.5 for the benefit of the City, which are undertaken by the City in its Proprietary Capacity.
Construction on City Dedication Parcels
8.1.3. Design and construction of
all Improvements upon the City Dedication Parcels shall be subject to City governmental review
and approval in its sole discretion. Developer shall be solely responsible to complete all of the
Improvements upon the City Dedication Parcels in compliance with all applicable Governmental
Requirements.
Project Development Costs
8.1.4. Within the time period set forth in the
Schedule of Performance, Developer agrees that it shall design and construct the Project at the
as a completely private development project that will be
financed in its entirety through private resources and that no part of any construction, demolition,
or other work to be carried out on the Property shall it shall not cause the Project to be paid for,
either in whole or in part, or in any way subsidized, by any Governmental Authority in any
manner that would cause the Improvements to co
Labor Code Section 1720 et seq. Without limiting the generality of the foregoing, the Developer
hereby agrees that all costs associated with planning, designing, constructing, and financing the
Project, preparing the Property and constructing the Improvements, including all hard costs, soft
costs, interest and lender fees, the cost of services, fees, exactions, dedications, cost overruns,
s required to be paid to any
person employed by the Developer, any Successor Owner, or their contractors or subcontractors
at each tier shall be the responsibility of the Developer without any cost or liability to the City.
Compliance with Governmental Requirements and Other
8.1.5
Requirements
. The Project shall be developed and maintained in accordance with this
Agreement and all Governmental Requirements of the City, the RDA Plan and the Approved
Project Plans.
Timing and Conditions of Project Development.
8.2
Schedule of Performance
8.2.1. Attached hereto as Attachment No. 5 is a
Schedule of Performance which sets forth the schedule for submissions, approvals and actions,
including the design and construction of the Improvements. The Parties acknowledge and agree
that time is of the essence with respect to the dates set forth in the Schedule of Performance.
Following conveyance of each Phase of the Property to the Developer, the Developer shall
promptly begin and thereafter diligently prosecute to completion all steps required by the
Schedule of Performance including design, construction and development of the Improvements
for such Phase within the time specified in the Schedule of Performance. The City may, in its
sole discretion and upon written request from the Developer, extend the time specified in the
Schedule of Performance. Any such agreed upon changes shall be within the limitations of the
42
Specific Plan, the Entitlements, and all other Governmental Requirements. To be effective, any
extensions shall be requested in writing by Developer and evidenced by written notice from the
Assistant City Manager or designee.
Phasing
8.2.2. The City acknowledges and agrees that the Project may be
constructed and Completed in Phases and as necessary to accommodate any phased acquisition
of the Property provided that: (i) the Phases shall be clearly identified on the Concept Plan and
Design Review as such submittals may be revised and approved by the City, (ii) conditions of
City approval may require certain additional Improvements to be constructed and Completed as
part of the first Phase of the Project, and (iii) upon Completion thereof, each Phase shall comply
with all Governmental Requirements, including all Specific Plan requirements and Entitlement
conditions of approval for development on the Property, without reliance upon Improvements to
be constructed in future Phases. Subject to the foregoing, the City agrees to cooperate in good
faith with the Developer to implement this Agreement so as to permit development of the Project
in Phases.
Completion of Improvements
8.2.3. Immediately after Close of Escrow
with respect to each Development Parcel, Developer shall promptly begin and thereafter
diligently prosecute to Completion the Improvements to be constructed as part of the applicable
Phase in accordance with the requirements of and within the time periods established by this
Agreement, including the Schedule of Performance, the Approved Project Plans, the
Entitlements, the Specific Plan, and all other Governmental Requirements, as well as all
requirements of private utility purveyors. Developer shall Complete the Improvements
associated with such Phase on or before the date set forth in the Schedule of Performance.
Land Use Matters
8.3.
Lot LineAdjustment
8.3.1 . Developer at its sole cost and expense shall
cause each of Parcel A, Parcel B, Parcel C and the Easement Area to be legally described and
shall process the Lot Line Adjustment, on behalf of the City, pursuant to the Subdivision Map
Act and the City Code.
Entitlements
8.3.2. It is the responsibility of the Developer, without cost to
the City: (a) to process, obtain, and maintain all Entitlements to assure that the design,
construction, use, operation, maintenance, repair and replacement of the Improvements is carried
out in accordance with the provisions of this Agreement, and is permitted by zoning, all
applicable City land use requirements and all other Governmental Requirements. Nothing
contained in this Agreement shall be deemed to waive the right of the City to act in its
Governmental Capacity with respect to the consideration and approval of the Entitlements and
all other permits, licenses and approvals requested by the Developer from time to time in
connection with the Project nor shall it entitle the Developer to any Entitlement or other City
approval necessary for the development of the Project, or to the waiver of any applicable City
requirements relating thereto, and the failure of the City to issue or approve any Entitlement
described in this Agreement, including to certify or approve any CEQA document, to approve
any required Lot Line Adjustment, Concept Plan and Design Review, conditional use permit or
other Entitlement shall not be a default of the City under this Agreement.
43
Agreement Does Not Grant Entitlements
8.3.3. This Agreement does not
(a) grant any land use entitlement to the Developer, (b) supersede, nullify, or amend any
condition which may be imposed by the City in its Governmental Capacity in connection with
approval of the Project, (c) guarantee to the Developer or any other party any profits from the
development of the Property, or (d) amend any Governmental Requirements of the City.
Nothing in this Agreement shall be construed or interpreted as committing the City to approve or
undertake any action or review process or activities that require the independent exercise of
discretion by the City, including any approval of any entitlement or permit application for which
the Developer applies for after the date of this Agreement.
Required Entitlements
8.3.4. Development of the Project shall be subject
to the following Entitlement review processes of the City: (a) Lot Line Adjustment, (b) Concept
Plan and Design Review approvals, and (c) Conditional Use Permit for shared parking and any
other approvals to the extent required by the City Code to permit the uses contemplated in the
Preliminary Plan or Approved Project Plan. Without limiting the foregoing, in developing and
constructing the Project, the Developer shall ensure that the Project complies with all applicable
development standards in the Specific Plan, the City Code and with all building codes,
landscaping, signage and parking requirements, except as may be permitted through variances
and modifications. The Developer acknowledges that the Specific Plan establishes a non-
residential total trip estimate for the Property and that the Project shall be required to comply
with such estimate. The Developer shall use its commercially reasonable efforts to obtain all of
the entitlements required for the Project and to cause the Entitlement Approval Date to occur.
City Review of Land Use Applications
8.3.5. Consistent with this
Agreement, the City agrees, without cost or other liability to the City or any commitment of the
City to approve or conditionally approve any Entitlements required for the full implementation
of this Agreement, to assist and cooperate with the Developer in its efforts to process such
Entitlements. The City will seek to expedite review of entitlement applications where reasonably
appropriate in order to meet the deadlines set forth in the Schedule of Performance. Without
limiting any other provision of this Agreement, the Developer shall pay all permit fees and other
fees and costs normally charged by the City in connection with application for and review and
approval of entitlements and permits.
CEQA Requirements
8.3.6. The Parties acknowledge and agree that under
CEQA the City and each Governmental Authority
taking a discretionary action with respect to the Project shall be required to consider the
applicability of CEQA to its approval thereof. To the extent that the City or any other
Governmental Authority determines that CEQA documentation is required in connection with its
approval of the Entitlements or the development of the Project, the Developer shall be
responsible, at its own cost and expense, for obtaining CEQA approvals and certifications, if any,
required by the City and any other Governmental Authority for development of the Project. The
Developer agrees to cooperate with the City in obtaining information to determine the
environmental impact of the Project, if any. The Developer acknowledges that the City shall
prepare any supplemental environmental information, if any, as may need to be completed in
order to effect compliance with CEQA, as determined by the City in its sole discretion, and the
Developer shall be responsible to pay all costs incurred by the City to prepare or to cause to its
44
consultants to prepare such environmental documents and shall enter into such agreements to pay
such costs as the City shall require.
Entitlement Conditions
8.4. The Developer acknowledges and agrees that the City
in its Governmental Capacity may require satisfaction of certain conditions and dedication of
certain property (including the City Dedication Parcels in connection with any approval of any
Entitlements.
Design Approval
8.5.
Design Review
8.5.1. It is understood and agreed to by the Developer that
the quality, character and uses proposed for the Project are of particular importance to the City.
In furtherance of the development of the Project and the foregoing, the City, acting in its
Governmental Capacity, shall require Concept Plan and Design Review approval as part of the
Entitlements. In addition, in its Proprietary Capacity as the current owner of the real property
that is the subject of this Agreement, the City will require review and approval of the Basic
Concept Plan for the Project as further set forth in this Section 8.4. Review of design documents
by the City in its Proprietary Capacity only shall be subject to time periods set forth below.
Plan Development and Cost
8.5.2. All plans and specifications for the
to the requirements set forth in this Article 8.
Process for Governmental Review
8.5.3. The Parties acknowledge that the
City shall have the right to review all plans, specifications and submissions, including any
changes therein, through its normal plan review and Entitlement process and that the City may
exercise its governmental discretion in review of any of the plans, specifications and
submissions. The Developer has previously submitted to the City a preliminary site plan for the
Preliminary Plan
Attachment No. 7, graphically
depicting the overall plan for development of the Improvements on the Property. Within the
timeframe shown in the Schedule of Performance, Developer shall submit for approval by the
City in its Governmental Capacity, final design drawings and related documents conforming to
the requirements of the City Code and including the required contents listed in Chapter 5 of the
Specific Plan. The Community Development Department is authorized pursuant to City Code to
approve minor changes to building plans after approval by the City provided such changes do not
significantly reduce the quality of the development concept or the design and materials to be
used in enhancing the architecture and aesthetics of the Improvements.
Coordination
8.5.4. The Developer and the Project Architect shall meet
with representatives of the City to review and come to a clear understanding of the planning and
design criteria required by the City. During the preparation of all plans and specifications for the
Project, staff of the City and the Developer shall hold regular progress meetings to coordinate the
preparation of, submission to, and review of such plans. The staff of the City and the Developer
shall communicate and consult as frequently as necessary to facilitate prompt and speedy
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Proprietary Review
8.5.5. The City in its Proprietary Capacity shall have
the right of reasonable architectural review of all Basic Concept Plans in accordance with
Section 8.4.6, including with respect to exterior elevations, exterior materials (including
selections and colors) and the size, bulk and scale for all buildings. The Developer
Department is responsible for
reviewing the working drawings and issuing recommendations with respect to the appropriate
Entitlements
review the concept plans, drawings and related documents for development of the Project: (a)
Proprietary Capacity and not its Governmental Capacity; (b)
shall not constitute an approval by the City of any Entitlements (c) shall not constitute a
determination by the City of the engineering or structural design, sufficiency or integrity of the
improvements contemplated by such plans, drawings and related documents, and (d) shall not
constitute a determination by the City of the compliance of such plans, drawings and related
documents with any applicable building codes, safety features and standards. Any inspection or
approval of plans and drawings made or granted pursuant to this Agreement shall not constitute
an inspection or approval of the quality, adequacy or suitability of such plans, specifications or
drawings, nor of the labor, materials, services or equipment to be furnished or supplied in
connection therewith. The Developer acknowledges and agrees that the City in its Proprietary
Capacity may approve or disapprove Basic Concept Plans and design review plans in order to
promote a high level of design that will impact development surrounding the Project, and to
provide an environment for the social, economic and psychological growth and well-being of the
citizens of the City and that the City is not constrained or limited to act solely within its
governmental discretion, authority, or capacity. The Developer shall not be entitled to damages
or disapprove Basic Concept Plans in its Proprietary Capacity.
Process for Proprietary Review
8.5.6. The Developer shall submit two
sets of Basic Concept Plans for the Improvements to the City. Such sets of Basic Concept Plans
shall be submitted in writing over the signature of the Developer or a representative duly
authorized by the Developer in writing. If the City approves such Basic Concept Plans, the City
shall endorse its approval on one set of such Basic Concept Plans and return them to the
Developer. The City shall conclusively be deemed to have given its approval to such sets of
Basic Concept Plans unless, prior to fifteen (15) B
sets of Basic Concept Plans, the City gives written notice of disapproval to the Developer
specifying in reasonable detail each item that the City disapproves and the reasons for such
disapproval. If necessary
disapproval and resubmit such Basic Concept Plans to the City for review and approval in
accordance with the provisions of this Section 8.4.6
shall be ten (10) Business Days
Approved Project Plans
8.5.7. Upon (i) approval by the City in its
Governmental Capacity of the Entitlements as described in this Article 8, (ii) approval by the
City in its Proprietary Capacity of the Basic Concept Plan under Section 8.4, and (iii) approval of
construction level drawings by the City in its Governmental Capacity, then such approved plans
Approved Project Plans
and drawings (collectively
Improvements on the Property. In addition to any other rights to approve or disapprove the
46
construction level drawings in its Governmental Capacity, the City may disapprove such
documents if they are not consistent with the Entitlements and the Basic Concept Plan previously
approved, do not represent a logical or commercially reasonable implementation thereof, and/or
do not provide for construction of the same square footage as set forth therein. Developer shall
not construct any Improvements on the Property unless the same are shown in the Approved
Project Plans or unless the prior written consent of the City in its Proprietary Capacity and, if
necessary, the approval of the City in its Governmental Capacity are obtained to any
modification thereof. To the extent of any inconsistencies between the plans identified in the
Scope of Development or the Preliminary Plans and the Approved Project Plans, the Approved
Project Plans shall govern and control as to the development of the Property.
Exculpation
8.5.8. The City shall not be liable in damages to the Developer
or to any owner, lessee, any licensee or other Person, on account of (a) any approvals or
disapproval by the City, including by the Assistant City Manager or designee whether made in
the Governmental or Proprietary Capacity of the City of any design documents, including any
Basic Concept Plan submittal, whether or not defective or whether or not in compliance with
applicable laws or ordinances; (b) any construction, performance or nonperformance by the
Developer or any owner, lessee, licensee or other Person of any work on the Property, whether or
not pursuant to Approved Project Plans or whether or not in compliance with applicable laws or
ordinances; (c) any mistake in judgment, negligence, action or omission in exercising its rights,
powers and responsibilities hereunder; and/or (d) the enforcement or failure to enforce any of the
provisions of this Agreement. Every Person who makes design submittals for approval agrees by
reason of such submittal, and the Developer and every Successor Owner of the Property or any
portion thereof agrees by acquiring title thereto or an interest therein, not to bring any suit or
action against the City seeking to recover any such damages and expressly waives any such
claim or cause of action for such damages which it would otherwise be entitled to assert. The
review of any design submittals shall not constitute the assumption of any responsibility by, or
impose any liability upon, the City as to the accuracy, efficacy, sufficiency or legality thereof nor
decrease or diminish any liability, duties, responsibilities, or obligations of the Developer under
this Agreement or otherwise. The provisions of this Section 8.4.8 shall survive the termination
of this Agreement.
No Supervision or Control
8.5.9. The City (whether acting in its
Governmental Capacity or its Proprietary Capacity) does not have any right, and hereby
expressly disclaims any right, of supervision or control over the architects, designers, engineers
or persons responsible for drafting or formulating of the plans, drawings and related documents
of the Developer.
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City of Santa Ana Approvals
8.5.10. The Developer acknowledges that the
Declaration encumbers the Water Well Parcel, which is located within the City of Santa Ana and
that the City of Santa Ana may determine that certain on-site improvements on the Easement
Area may require its review and approval where improvements are located within the
jurisdictional boundary of that city. While the City does not believe this is necessary for the
construction of improvements on the Water Well Parcel pursuant to the Declaration, the
Developer shall cooperate in good faith with the City of Santa Ana, if City concurs that any
permits are required to be issued by the City of Santa Ana. If the City of Santa Ana approval(s)
cannot be obtained after a good faith effort by the Developer as determined by the City, an
alternative design may be required by Developer subject to approval of the City, as further
described in the Scope of Development attached as Attachment No. 6. If an alternative design is
required, Developer shall have a reasonable time to revise and have a site plan approved for the
redesigned improvements on the Water Well Parcel.
Financial Status
8.6.
Financial Capability
8.6.1. After the Phase 1 Close of Escrow, and
thereafter until issuance of the Final Certificate of Compliance, the Developer shall continue to
be responsible for demonstrating to the City the financial capacity of Developer and the
capability of Developer to perform its obligations under this Agreement. In addition to the
requirements set forth in Sections 4.5.1 and 4.5.2, within thirty (30) calendar days following the
Phase 1 Close of Escrow, and thereafter upon request of the City, the Developer shall submit
such financial information of the Developeras the City may reasonably request. If the City is
not reasonably satisfied with the financial status of the Developer or the proposed joint venture
development entity following review of the aforesaid financial information, the City shall be
entitled to obtain the financial information of other members and/or partners of the proposed
development entity (and their respective members, partners, shareholders and/or other owners at
each tier until substantial assets are identified). The Developer shall identify with specificity any
submitted documents which the Developer wants the City to maintain as confidential documents
and a statement as to why the request is consistent and complies with the provisions of the Public
Records Act of the State of California. The City shall not disseminate such information and shall
take all reasonable steps to maintain such confidentiality, including maintenance of such
documents at a non-
negotiators and consultants may review the statements as necessary as long as such parties agree
to maintain the confidentiality of such statements.
Construction Loan
8.6.2. Developer,
expense, shall obtain and negotiate the terms of the Construction Loan. If and to the extent that
Developer requests the City to review and approve the Construction Loan documents and/or
negotiate any agreements between the City and the Construction Loan lender, Developer shall
reimburse the City for all costs incurred by the City in connection with any of the foregoing,
including without limitation, third party fees and costs incurred for legal counsel, financial
consultants and other consultants.
Additional Information
8.6.3. The Developer understands and agrees that
the City reserves the right at any time to reasonably request from the Developer additional
information, including information, data and commitments to ascertain the depth of the
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capability and desire of the Developer or other equity participants, to develop the Project
expeditiously.
Construction Covenants
8.7. With respect to construction of the Project, the
Developer hereby covenants and agrees as follows:
(a)The Developer shall maintain throughout the term of this Agreement,
sufficient equity, capital and firm binding commitments for financing necessary to (i) pay
through Completion, all costs of development, construction, marketing, sale and/or leasing,
operation and management of all the Improvements as defined in the Scope of Development; and
(ii) enable the Developer to perform and satisfy all the covenants of the Developer contained in
this Agreement and the Declaration. The Developer shall not undertake any additional project if
it could reasonably be expected to jeopardize the sufficiency of any equity, capital and firm and
binding commitments for the purposes expressed in the preceding sentence.
(b)The development of the Project shall be done in a professional and
competent manner. The Developer shall perform all work required to complete the Project and
related work in accordance with the Approved Project Plans, all Governmental Requirements
and at the level of quality set forth in the Scope of Development and Sections 1.3.2 and Article
12.
(c)The Developer shall be responsible for the timeliness and quality of all
work performed and materials and equipment furnished in connection with the Project, whether
the work, materials and equipment are performed and furnished by the Developer or through
subcontractors, sub-subcontractors (of all tiers) and suppliers.
(d)The Developer shall, within sixty (60) days of obtaining actual knowledge
of the same, promptly cause to be removed or bonded against (such bonding to be by the
provision of bonds satisfying California statutory requirements) any and all mechan
stop notices and/or bonded stop notices that are recorded and/or served by subcontractors, sub-
subcontractors (of all tiers) and suppliers in connection with the Project.
(e)Subject to Section 8.2.1, the Developer shall commence the development
of the Project promptly and shall diligently pursue to Completion and shall Complete
development of the Project in accordance with the time periods set forth in the Schedule of
Performance and in all events, on or before the dates set forth for Completion of the Project set
forth in the Schedule of Performance.
City Rights of Access
8.8. In addition to any rights it may have in its Governmental
Capacity, representatives of the City shall have the reasonable right of access to all portions of
the Property, without charges or fees, at normal construction hours during the period of
construction for the purposes of this Agreement, including the inspection of the work being
performed in constructing the Improvements. The City agrees to indemnify, defend and hold the
Developer harmless for any and all claims, liability and damages arising out of any such non-
governmental inspection or other activity on the Property by the City, or its agents, employees or
contractors permitted pursuant to this Section 8.8, except to the extent caused by the negligence
or willful misconduct of the Developer.
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Disclaimer of Responsibility by City
8.9. The City neither undertakes nor assumes
nor will have any responsibility or duty to the Developer, any Successor Owner or to any other
third party to review, inspect, supervise, pass judgment upon or inform the Developer, any
Successor Owner or any third party of any matter in connection with the development or
construction of Improvements, whether regarding the quality, adequacy or suitability of the
plans, any labor, service, equipment or material furnished for development of the Project, any
person furnishing same, or otherwise. The Developer, any Successor Owner and all third parties
shall rely upon its or their own judgment regarding such matters, and any review, inspection,
supervision, exercise of judgment or information supplied to the Developer, any Successor
Owner or to any third party by the City in connection with such matter is for the public purpose
of developing the Project, and neither the Developer nor any Successor Owner nor any third
party is entitled to rely thereon.
Local, State and Federal Laws
8.10. The Developer shall carry out the construction
of the Project, including all Improvements, subject to Section 8.1.4 and in conformity with all
Governmental Requirements, including all applicable federal and State labor laws and
regulations and shall investigate the applicability of and, if and to the extent applicable, pay
prevailing wages meeting the requirements of such laws and regulations; provided, however, that
Developer reserves the right to reasonably contest such laws and regulations. The Developer
hereby agrees that, with respect to the Project, Developer shall be fully responsible for
determining whether the foregoing wage requirements are applicable and agrees to indemnify,
defend and hold the City and its elected and appointed officials, employees, agents, attorneys,
affiliates, representatives, contractors, successors and assigns free and harmless from and against
any a
officers, directors, employees, agents, representatives, consultants and/or contractors (at every
tier) in construction of the Project with the prevailing wage requirements imposed by any
applicable federal and State labor laws.
Taxes, Assessments, Encumbrances and Liens
8.11. The Developer shall pay when
due and prior to delinquency all real estate taxes and assessments assessed and levied on or
against all portions of the Property subsequent to the conveyance thereof by the City to the
Developer. The Developer shall not place, or allow to be placed, on its interests in the Property,
Improvements, or any portion thereof, any Mortgage or encumbrance of lien not authorized by
this Agreement. The Developer shall remove, or shall have removed, any levy or attachment
made on its interests in the Property (or any portion thereof), or shall assure the satisfaction
thereof within a reasonable time but in any event prior to Foreclosure. Nothing contained in this
Agreement shall be deemed to prohibit the Developer from contesting the validity or amount of
any tax, assessment, encumbrance or lien, or to limit the remedies available to the Developer in
respect thereto. Developer shall promptly cause to be removed or bonded against (such bonding
to be by the provision of bonds satisfying California statutory requirements) any and all such
taxes, assessments, encumbrances and/or liens. The Developer hereby agrees to indemnify,
defend and hold the City and its elected and appointed officials, employees, agents, attorneys,
affiliates, representatives, contractors, successors and assigns free and harmless from and against
any and all Claims arising from failure to pay for construction of Improvements or other work
bonded stop notices that are recorded and/or served by subcontractors, sub-subcontractors (of all
50
tiers) and suppliers with respect to construction of Improvements or performance of work with
respect to the Project.
8.12. The Developer
acknowledges and agrees that it shall be responsible for design and construction of certain
infrastructure to support the development of the Project described in the Scope of Development
attached to this Agreement as Attachment No. 6, including roadway improvements; traffic and
circulation mitigation to support the Project; domestic and reclaimed water; sewer; telemetry;
utilities (electricity, gas, telephone, cable, telecommunications, etc.) Such work shall be carried
out in accordance with (a) the Scope of Development and the Schedule of Performance; (b) plans
and specifications prepared by the Developer and approved by the City; and (c) all Governmental
Requirements.
Other Fees and Assessments
8.13. The Developer acknowledges and agrees that in
addition to City fees, fees may be imposed by other Governmental Authorities with jurisdiction
over the Project and/or the Property and payment of any such fees and assessments shall be at
is subject to imposition of
developer school impact fees by the Tustin Unified School District
9.Certificate of Compliance.
Certificate of Compliance Defined
9.1. After (a) Completion of all construction and
development required to be undertaken by the Developer in conformity with this Agreement and
in accordance with the Schedule of Performance and (b) satisfaction by Developer of the
Conditions Precedent set forth below, in each case to the satisfaction of the City in its reasonable
discretion, the City shall deliver to the Developer or Successor Owner owning fee title , upon
request therefor by the Developer or such Successor Owner, (a) a Partial Certificate of
Compliance in Recordable form upon satisfaction of the Conditions Precedent to issuance
thereof set forth in Section 9.4 relating to each Phase and (b) a Final Certificate of Completion
in Recordable form upon satisfaction of the Conditions Precedent to issuance thereof set forth in
Section 9.4 relating to the Improvements for the Project The Certificate of Compliance shall be
in substantially the form and substance of the Certificate of Compliance set forth on Attachment
No. 14.
Conclusive Presumption from Certificate of Compliance
9.2. The Certificate of
Compliance shall be, and shall so state, conclusive determination of satisfactory completion of
the obligations of the Developer pursuant to this Agreement with respect to the Phase and
Parcel(s) for which it is issued.
Not Evidence
9.3. Issuance by the City of a Certificate of Compliance shall not
constitute evidence of compliance with or satisfaction of any obligation of the Developer to any
insurer of a Mortgage securing money loaned to finance the Improvements, nor any part thereof.
Such Certificate of Compliance is not notice of completion as referred to in Section 3093 of the
California Civil Code.
Conditions to Issuance of Certificate of Compliance
9.4
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Generally
9.4.1. After Completion of all Improvements to be Completed by
the Developer upon the Property in compliance with the terms of this Agreement and subject to
compliance by the Developer with all other provisions of this Agreement, and upon satisfaction
of the additional Conditions Precedent set forth in Section 9.4.2, the City shall furnish the
Developer with a Certificate of Compliance for the Project upon written request therefor by the
Developer; provided that a Certificate of Compliance for the Project shall be issued only upon
completion of the Improvements comprising the Project. The Certificate of Compliance shall be,
and shall so state, conclusive determination of satisfactory Completion of the Improvements
required by this Agreement, and of full compliance with the terms hereof. After the Recording
of a Certificate of Compliance, any Person then owning or thereafter purchasing, leasing, or
otherwise acquiring any interest in the Parcel(s) against which such Certificate of Compliance
was Recorded shall not (because of such ownership, purchase, lease or acquisition) incur any
obligation or liability under this Agreement with respect to such Improvements, except that such
Party shall continue be bound by releases contained in Section 4.4.3, the indemnities, covenants,
conditions and restrictions contained in Articles 10 and 12 and the Quitclaim Deed(s). Issuance
of the Certificate(s) of Compliance shall not waive any rights or claim that the City may have
against any party for latent or patent defects in design, construction or similar matters under any
others not a party to this Agreement. The Certificate of Compliance shall be in such form as to
permit it to be Recorded.
Conditions Precedent
9.4.2. The City shall not be obligated to issue a
Partial Certificate of Compliance with respect to any Phase or the Final Certificate of
Conditions
Precedent
(a)final inspection of the Propertyon which the Improvements arelocated by
or on behalf of the City and determination by the City thatall Improvements required in
connection with theProject have been Completed in conformance with this Agreement,
including the Approved Project Plans and all Governmental Requirements;
(b)issuance of a certificate of substantial completion for the Project, or the
Improvements on the Development Parcel, as applicable, by the Project Architect;
(c)issuance of final certificates of occupancy by the City for all buildings
within the Project, or, with respect to a Partial Certificate of Compliance, for all buildings on
Development Parcels within the relevant Phase;
(d)release or bonding in accordance with California law of all liens or rights
to record liens from the general contractor and all subcontractors having served valid preliminary
20-
the statutory period for filing liens having expired;
(e)payment by the Developer to the City of all funds then owing to the City
under this Agreement and, if applicable, the Declaration,
52
(f)no Potential Default or Material Default by Developer shall have occurred
and be continuing; and
City Obligations
9.4.3. The City shall not unreasonably withhold or delay
issuance of a Certificate of Compliance. If the City refuses or fails to issue the Certificate of
Compliance after written request from the Developer, provided each of the conditions
established in Section 9.4.2 have been satisfied, the City shall, within ten (10) Business Days of
the written request, provide a written statement which details the reasons the City refused or
failed to issue the Certificate of Compliance. The statement shall also contain a statement of the
actions that the Developer must take to obtain a Certificate of Compliance.
Effect of Final Certificate of Compliance
9.4.4. Upon Recording of the
Certificate of Compliance, this Agreement shall terminate and shall be of no further force and
effect, except that such termination shall have no effect on the Quitclaim Deeds or the
Declaration, each of which shall survive in accordance with its terms.
10.Indemnification and Environmental Provisions.
10.1. As a material part of the consideration for this
Agreement, and to the maximum extent permitted by law, the Developer shall indemnify,
protect, defend, assume all responsibility for and hold harmless the City and its appointed and
elected officials, agents, attorneys, affiliates, employees, contractors and representatives
Indemnified Parties
the City, from and against any and all Claims resulting or arising from or in any way connected
with the following; provided, however, that the Developer shall not be responsible for (and such
indemnity shall not apply to the extent of) the gross negligence or willful misconduct of the
Indemnified Parties:
(a) way;
(b)All acts and omissions of Developer in connection with the Project, the
Property, or any portion of any of the foregoing;
(c)Any plans or designs for Improvements prepared by or on behalf of the
Developer, including any errors or omissions with respect to such plans or designs;
(d)Any loss or damage to the City resulting from any inaccuracy in or breach
of any representation or warranty of the Developer, or resulting from any breach or default,
including Material Default, by the Developer, under this Agreement; and
(e)Any development or construction of any Improvements by the Developer,
whether regarding the quality, adequacy or suitability of the plans, any labor, service, equipment
or material furnished to the Property, any person furnishing the same, or otherwise.
Environmental Indemnity
10.2. As a material part of the consideration for this
Agreement, and effective as to the
acquisition of fee title to all or any portion thereof, the Developer on behalf of itself and
Successor Owners and each and every Person claiming by, through or under Developer or any
53
Successor Owner, hereby agrees that Developer and each Successor Owner shall, to the
maximum extent permitted by law, indemnify, protect, defend, assume all responsibility for and
hold harmless the Indemnified Parties from and against any and all Claims resulting or arising
from or in any way connected with the existence, Release, threatened Release, presence, storage,
treatment, transportation and/or disposal of any Hazardous Materials on, in, under, from, about
or adjacent to any portion or portions of said lands, regardless whether any such condition is
known or unknown now or upon acquisition and regardless whether any such condition pre-
exists acquisition or is subsequently caused, created or occurring, provided, however, that neither
the Developer nor any Successor Owner shall be responsible for (and such indemnity shall not
apply to) to the gross negligence or willful misconduct of the Indemnified Parties. This
environmental indemnity shall run with the land, shall be included in the Quitclaim Deeds and
shall be binding upon Developer and Successor Owners; provided, however, that such indemnity
shall not be binding upon Tenants under leases.
Duration of Indemnities
10.3. The indemnities set forth in this Article 10 shall
survive the Close of Escrow and the termination of this Agreement and shall not merge into any
Quitclaim Deed or the Declaration.
Claim Response
10.4. In the event that any Environmental Agency or other third
party brings, makes, alleges, or asserts a Claim, arising from or related to any actual, threatened,
or suspected Release of Hazardous Materials on or about the Property, including any Claim for
Investigation or Remediation on the Property, or such Environmental Agency or other third party
orders, demands, or otherwise requires that any Investigation or Remediation be conducted on
the Property, the Developer shall promptly upon its receipt of notice thereof, notify the City in
writing and hereafter shall promptly and responsibly respond to such Claim. Further, upon
receipt of such Claim, order, demand or requirement, the Developer shall (a) take such
reasonable measures, as necessary or appropriate, to reasonably dissuade such Environmental
Agency or other third party from bringing, making, alleging, or asserting any Claim against the
City arising from or related to any actual, threatened, or suspected Release of Hazardous
Material on or about the Property, including any Claim for Investigation or Remediation on the
Property, and (b) request that the Environmental Agency not issue any order, demand, or
requirement to the City under any of the Environmental Laws, or any other local, regional, State
or federal law, or seek penalties or take other punitive action against the City in connection with,
arising from, or related to any actual, threatened, or suspected Release of Hazardous Material on
or about the Property, including any Investigation or Remediation on or about the Property.
Release Notification and Remedial Actions
10.5. If, after Close of Escrow, any
Release of a Hazardous Material is discovered on the Property and regardless of the cause, the
Developer shall promptly (a) provide written notice (or in the event of emergency, telephonic
notice, followed by written notice) of any such Release to the City,
risk and expense and solely under the name of the Developer (but without prejudice to the
s rights against any responsible party): (i) remove, treat, and dispose of
the released Hazardous Material on the Property in compliance with and to the extent required by
each and every applicable Environmental Law, or if such removal is prohibited by any
Environmental Laws, take whatever action is required by any Environmental Law; (ii) take such
other action as is necessary to have the full use and benefit of the Property as contemplated by
54
this Agreement; and (iii) provide the City with satisfactory evidence of the actions taken as
required in this Section 10.5.
11.Insurance
.
Required Insurance
11.1
Developer shall procure and maintain, at its own cost and expense, and furnish or cause to be
furnished to the City, evidence of the following policies of insurance naming the Developer as
insured and, except for automobile insurance and wcompensation insurance, the City as
additional insured. All such insurance shall be kept in force with respect to each Development
Parcel and the Property until the Completion with respect to the Project.
Liability Insurance
11.1.1. Commencing upon the Effective Date, the
Developer shall maintain or cause to be maintained commercial general liability insurance to
protect against loss from liability imposed by law for damages on account of personal injury,
including death, suffered or alleged to be suffered by any person or persons whomsoever on or
about the Property and the business of the Developer on the Project, or in connection with the
operation thereof, resulting directly or indirectly from any acts or activities of the Developer or
anyone directly or indirectly employed or contracted with or acting for the Developer, or under
its respective control or direction, and also to protect against loss from liability imposed by law
for damages to any property of any person occurring on or about the Property or related to the
Project and the business of the Developer on the Property, or in connection with the operation
thereof, caused directly or indirectly by or from acts or activities of the Developer or any Person
acting for the Developer, or under its control or direction. Such insurance shall also provide for
and protect the City against incurring any legal cost in defending claims for alleged loss. Such
insurance shall be maintained in full force and effect until issuance of a Final Certificate of
Compliance for the Project and so long thereafter as necessary to cover any claims of damages
suffered by persons or property prior to issuance of a Final Certificate of Compliance for the
agents, contractors, suppliers, consultants or other related parties. The amount of insurance
required hereunder shall include comprehensive general liability, personal injury and automobile
liability with limits of at least Two Million Dollars ($2,000,000.00) combined single limit per
occurrence. The insurance shall be issued by a company authorized by the Insurance
Department of the State of California and rated A-VII or better (if an admitted carrier) or A-X (if
-VIII or better or from the State
Compensation Fund. Subject to the prior approval of the City Attorney and City Risk Manager,
such insurance may be provided by an umbrella insurance policy otherwise meeting the
requirements of this Article 11.
An Accord certificate evidencing the foregoing and providing the following
endorsements signed by the authorized representative of the underwriter and approved by the
City shall be delivered as a condition to each Close of Escrow and annually upon renewals of
each policy until issuance of a Certificate of Compliance for the Project. The endorsements shall
provide as follows: (1) designate the City, its elected and appointed officials, agents,
representatives and employees as additional insured on the commercial, general and automobile
policies; (2) the commercial general and automobile liability insurance coverages shall each be
55
primary, and not contribute with any insurance or self-insurance maintained by the City and (3) a
waiver of subrogation for the benefit of the City. The procuring of such insurance and the
delivery of policies, certificates or endorsements evidencing the same shall not be construed as a
employees.
11.1.2. Commencing upon the
Effective Date, the Developer shall obtain, and thereafter maintain or cause to be maintained,
compensation insurance issued by a responsible carrier authorized under the laws of the
State of California to insure employers aga
compensation laws now in force in California, or any laws hereafter enacted as an amendment or
persons employed by the Developer in connection with the Project and shall cover liability
within statutory limits for compensation under any such act aforesaid, based upon death or
bodily injury claims made by, for or on behalf of any person incurring or suffering injury or
death in connection with the Project or the operation thereof by the Developer. Notwithstanding
the foregoing, the Developer may, in compliance with the laws of the State of California and in
lieu of maintaining such insurance, self- compensation in which event the
Developer shall deliver to the City evidence that such self-insurance has been approved by the
appropriate State authorities. The Developer shall also furnish (or cause to be furnished) to the
City evidence satisfactory to the City that any contractor with whom it has contracted for
compensation insurance required by law. The insurance policy, by endorsement signed by an
authorized representative of the underwriter, shall contain a waiver of subrogation.
Property Insurance
11.1.3. Commencing upon the Close of Escrow for any
Phase, the Developer shall obtain, and thereafter maintain or cause to be maintained, for the
Property conveyed and all buildings, a policy or policies of insurance against loss or damage to
the Property and the Improvements thereon and all property of an insurable nature located upon
the Property, resulting from fire, lightning, vandalism, malicious mischief, riot and civil
commotion, and such other perils ordinarily included in special clauses of property loss coverage
coverage meeting the foregoing requirements during the pendency of any construction on the
Property. Such insurance shall be maintained in an amount not less than one hundred percent
(100%) of the full insurable value of the Improvements on the Property.
General Insurance Requirements
11.2.
11.2.1For all policies or certificates, an authorized representative of the
underwriter shall also agree in writing to notify the City within forty-eight (48) hours of their
knowledge of any cancellation, termination or modification of the such policies.
full insurable value
11.2.2s used in this Article 11 shall mean
the cost determined by mutual agreement of the Parties (excluding the cost of excavation,
foundation and footings below the lowest floor and without deduction for depreciation) of
providing similar Improvements of equal size and providing the same habitability as the
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Improvements immediately before such casualty or other loss, but using readily-available
contemporary components, including the cost of construction, architectural and engineering fees,
and inspection and supervision.
11.2.3All insurance provided under this Article 11 shall be for the benefit of
the Parties. The Developer agrees to timely pay all premiums for such insurance and, at its sole
cost and expense, to comply and secure compliance with all insurance requirements necessary
for the maintenance of such insurance. The Developer agrees to submit binders or certificates
evidencing such insurance to the City on an Accord form prior to the date upon which such
insurance is to be obtained at, if requested by the City, at each Close of Escrow. Within thirty
(30) calendar days, if practicable, but in any event prior to expiration of any such policy, copies
of renewal policies, or certificates evidencing the existence thereof, shall be submitted to the
City. All insurance provided for under this Article 11 shall be provided by insurers licensed to
-VII or better.
11.2.4If the Developer fails or refuses to procure and maintain insurance as
required by this
calendar days prior notice to the Developer, to procure and maintain such insurance. The
premiums paid by the City shall be treated as a loan, due from the Developer, to be paid on the
first calendar day of the month following the date on which the premiums were paid. The City
shall give prompt notice of the payment of such premiums, stating the amounts paid and the
name of the insured(s).
12.Covenants and Restrictions
.
Without limiting the ability of the City to impose conditions on development or
entitlement of the Property as provided in Article 8, the following covenants, conditions and
restrictions shall run with the land for the periods set forth in each case below and shall be
binding upon Developer and each Successor Owner, and upon each and every Person claiming
by, through or under Developer or any Successor Owner, for the benefit of the City Dedication
Parcels and the City and its successors and assigns owning all or any portion thereof:
Use Covenants
12.1.
Restrictions
12.1.1. The Developer covenants and agrees for itself, and each
Successor Owner, and each and every Person claiming by, through, or under Developer or any
Successor Owner, that:
(a)The Property and each part thereof shall be utilized only for lawful uses
typical defined in the Scope of Development.
(b)Neither Developer nor any Successor Owner, nor any person claiming by,
through or under Developer or any Successor Owner, including any End User, shall (i) use the
Property or any portion thereof for any Prohibited Use, or (ii) Transfer the Property or any
portion thereof to any Prohibited User.
(c)Each End User shall be a Class A User.
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(d)All End Users shall be subject to this Agreement.
(e)Developer shall provide the City with written notice of the identity of each
End User and the intended operational location of such End User at least fifteen (15) Business
Days prior to execution of any lease or other agreement to an End User in order to permit the
City to confirm that the covenants set forth in this Section 12.1 have not been violated. In the
event the City determines in its reasonable discretion that any proposed Lessee or End User or
any proposed use by such Lessee or End User would violate the use covenants set forth in this
Section 12.1 and the City provides Developer with written notice of its determination on or
before the date which is ten (10) Business Days following its receipt of such notice, the
Developer shall be prohibited from entering into a Lease or other agreement with such End User.
(f)Nothing in this Agreement shall (i) prohibit the City, in its sole discretion
from approving an End User which is not a Class A User, or (ii) obligate the City to exercise its
approval or enforcement rights with respect to the use covenants set forth herein, for the benefit
of the City or any third parties.
Additional Covenant
12.1.2. Developer covenants and agrees for itself and
each Successor Owner that it shall not engage in or permit any activity on the Property that
would violate this Agreement, the Declaration, the RDA Plan, the Approved Project Plans, or
any applicable Governmental Restrictions.
Maintenance Covenant.
12.2Developer, on behalf of itself and each Successor
Owner and each and every Person claiming by, through or under Developer or any Successor
Owner, hereby covenants and agrees, from and after each Close of Escrow, to maintain the
Property acquired by it in the same aesthetic and sound condition (or better) as the condition of
the Property at the time of the transfer of the Property to the Developer and consistent with the
following requirements:
12.2.1From the date of commencement of construction until issuance of a
Partial Certificate of Compliance for any Phase or a Final Certificate of Compliance, the
Developer and its successors and assigns shall maintain the Improvements under construction for
such Phase consistent with best construction industry practice.
12.2.2Upon Completion of all or any portion of the Improvements and the
a Partial or Final Certificate of Compliance for the Project, the Developer, its
successors and assigns shall maintain the Improvements on the Parcels subject to such Certificate
of Compliance Declaration attached hereto as
Attachment No. 10.
12.2.3In the event the Developer or any Successor Owner fails to maintain
the Improvements on the Property or any portion thereof in accordance with the standard for the
quality of maintenance, the City or its designee shall have the right but not the obligation to enter
the Property upon reasonable notice to the Developer or its successor or assigns, correct any
violation, and hold the Developer, or such Successor Owner, responsible for the cost thereof, and
such cost, until paid, shall constitute a lien on the applicable portion of the Property as and to the
extent described in Section 15.2.
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12.2.4Maintenance responsibilities shall be vested in one entity for all the
Property; provided, however, that the Developer shall have the right (i) to assign its maintenance
responsibilities under this Agreement (x) to a Transferee of the entirety of the Property and
Property, or (ii) to subcontract its maintenance responsibilities under this agreement to an
Affiliate of Developer or a first class property management company, provided that such
subcontracting shall not relieve the Developer of any liability for its obligations under this
Section 12.2.
Duration of Covenants
12.3. The covenants in Section 12.1 and Section 12.2 shall
remain in full force and effect with respect to each Development Parcel until the earlier of (a)
twenty five (25) years following the recordation of a Certificate of Compliance for such Parcel or
(b) fifty (50) years from the date of recordation of this Declaration, unless released at an earlier
date by the City in writing.
Obligation to Refrain from Discrimination
12.4. The Developer covenants and
agrees for itself, each Successor Owner and each and every Person claiming by, through or under
t
Developer or any Successor Owner, that here shall be no discrimination against or segregation
of any person, or group of persons, on account of sex, race, color, religion, ancestry, national
origin, disability, medical condition, marital status,or sexual orientation in the sale, lease,
transfer, use, occupancy, tenure or enjoyment of the Property or in development of the Project,
nor shall the Developer itself or any person claiming under or through it establish or permit any
such practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the
Property or in development of the Project.
Deed Restrictions/Covenants Running with the Land
12.5. The obligations of the
Developer set forth in this Agreement, the Declaration and the Quitclaim Deeds shall be
covenants running with the land, shall be binding upon the Developer, each Successor Owner
and each and every Person claiming by, through or under Developer or any Successor Owner for
the benefit of the City Water Well Parcel and the City Dedication Parcels and the City and the
successors and assigns of the City owning all or any portion of the fee interest in such property in
perpetuity unless specifically released in accordance with the terms of the relevant instrument.
Each Quitclaim Deed shall provide that any future transfer or conveyance of the Property or any
portion thereof shall include notice of the covenants, conditions and restrictions contained in the
Declaration and, prior to Recordation of the Final Certificate of Compliance, contained in this
Agreement. Each Quitclaim Deed shall convey the Property described therein, subject to
reservations, covenants and restrictions as set forth in this Agreement, the Permitted Exceptions,
matters disclosed by the Survey and any other matters specifically agreed to by the Developer in
writing or which the Developer is deemed to have accepted. This Agreement, including the Lien,
the Right of Purchase and the Right of Reversion contained herein, the Memorandum of DDA,
and the Declaration shall be superior in priority to all Mortgages.
13.Potential and Material Defaults.
Potential Defaults
13.1. Except as otherwise provided in this Agreement, in the event
Defaulting Party
either Party (the fails to perform, or delays in the performance of, any
obligation, in whole or in part, required to be performed by the Defaulting Party as provided in
59
Potential DefaultInjured Party
this Agreement (a , the other Party (the ) may give written
notice of such Potential Default to the Defaulting Party, which notice shall state the particulars of
the Potential Default. The Parties agree to cooperate in good faith and meet and confer regarding
such default.
Material Defaults.
13.2
Monetary Defaults
13.2.1. Notwithstanding any other provision of this
Agreement, if a Party fails to pay the other Party any sum required to be paid pursuant to this
Agreement, and the Injured Party gives the Defaulting Party written notice of such nonpayment,
such nonpayment shall be a Potential Default. The Defaulting Party shall have a period of
fifteen (15) calendar days after such notice is received, or deemed to have been received, within
which to cure the Potential Default by making the required payment; the period to cure such
Potential Default shall not be extended by Force Majeure Delays. In the event a Potential
Default for nonpayment is not cured within said fifteen (15) calendar day period, the Potential
Material Default
Default shall become a that shall be deemed to have occurred upon the
expiration of the cure period.
Non-Monetary Defaults
13.2.2. With respect to non-monetary defaults
Material Default
under this Agreement, a Potential Default shall become a in the event the
Potential Default is not cured, at the Defaulting Party's expense, (a) within twenty (20) Business
Days after written notice of such default from the Injured Party, or (b) if such cure cannot be
reasonably accomplished within such twenty-day period, within ninety (90) days after receiving
notice of the Potential Default, but only if the Defaulting Party has commenced such cure within
such twenty (20) Business Day period and diligently pursues such cure to completion, or (c)
within such longer period of time as may be expressly provided in this Agreement or as mutually
agreed to in writing between the Parties with respect to the Potential Default. The time periods
set forth in this Section 13.2.2 to cure a Potential Default may be extended by Force Majeure
Delays. Following written notice and failure to cure within the time periods set forth above, each
Potential Default shall become a Material Default that shall be deemed to have occurred upon the
expiration of the applicable cure period.
Transfer Defaults
13.2.3. Notwithstanding the foregoing, any Transfer in
violation of the provisions of Article 2 shall be a Material Default under this Agreement without
notice or cure period.
Interest
13.2.4. If a monetary Material Default occurs under this Agreement,
then in addition to any other remedies conferred upon the Injured Party pursuant to this
Agreement, the Defaulting Party shall pay to the Injured Party, in additional to all principal
amounts due, interest from the date of such payment or part thereof was due until the date paid at
the Default Rate.
No Waiver
13.2.5. Failure or delay in giving notice of a Potential Default
shall not constitute a waiver of any default, nor shall it change the time of default. Except as
otherwise expressly provided in this Agreement, any failures or delays by either Party in
asserting any of its rights and remedies as to any default shall not operate as a waiver of any
default or of any such rights or remedies. Delays by either Party in asserting any of its rights and
60
remedies shall not deprive either Party of its right to institute and maintain any actions or
proceedings which it may deem necessary to protect, assert or enforce any such rights or
remedies.
Due Diligence Information; Products
13.3.
Surrender of Due Diligence Information
13.3.1. Within five (5) Business
Days following a termination of this Agreement, the Developer shall use commercially
without representation or warranty of any kind by the Developer.
Surrender of Transferable Products
13.3.2. In connection with the
proposed Project, the Developer shall be preparing or causing to be prepared architectural and
other products, surveys, plans, reports, tests, studies and investigations with respect to the
Products
Property and the proposed Project (collectively, ). All Products shall be prepared at
a Material Default by the City, then, with respect to all Products other than architectural
products; financial or economic estimates, projections and evaluations; studies and information
related to potential tenants, lenders and investors; and any confidential or proprietary information
of Developer or its equity partner(s) (the Products not subject to such exclusions are collectively
Transferable Products
ights to any or all of the Transferable Products
identified by the City, but in no event shall the cost to the City exceed Five Thousand Dollars
($5,000.00). Upon such request, the Developer shall deliver to the City copies of all
Transferable Products requested by the City together with a bill of sale therefor, provided that the
Developer makes no representation, warrantee or guarantee regarding the completeness or
accuracy of the Transferable Products, and the Developer does not covenant to convey the
copyright or other ownership rights of third parties thereto. Such Transferable Products shall
thereupon be free of all claims or interests of the Developer or any liens or encumbrances. Upon
Transferable Products, the City shall
be permitted to use, grant, license or otherwise dispose of such Transferable Products to any
person or entity for development of the Project or any other purpose; provided, however, that the
Developer shall have no liability whatsoever to the City or any transferee or title to the
Transferable Products in connection with the use of the Transferable Products.
Survival
13.3.3. The provisions of this Section 13.3 shall survive the
termination of this Agreement in its entirety or as to any portion of the Property.
14.Nonoccurrence of a Condition at Close of Escrow
.
Failure of a Condition Absent a Default
14.1.
14.1.1In the event the Phase 1 Close of Escrow is extended for any of the
reasons set forth in this Section 14.1 not caused by a Potential Default or a Material Default by
either Party, either Party shall have the right to terminate this Agreement as hereinafter provided:
61
(a)In the event a final decision in any litigation brought by a third party or
approval of a referendum or initiative results in the inability of the City to convey Property to the
Developer, or of the Developer to perform its material obligations hereunder, either Party shall
have the right, upon thirty (30) calendar days prior written notice to the other Party and the
Escrow Holder, to terminate this Agreement.
(b)In the event litigation, referendum, or initiative brought by a third party
remains pending on the Phase 1 Closing Date as the same may have been extended by agreement
of the Parties in accordance with Section 7.1, and (i) such ongoing challenge prevents the City
from conveying the Property to the Developer, or (ii) in the event the Assistant City Manager or
designee reasonably determines in writing
inability to pe
so, either Party shall have the right, upon thirty (30) days written notice to terminate this
Agreement upon written notice to the other Party and the Escrow Holder.
(c)In the event of the passage of a referendum or initiative that results in the
inability of the City to convey the Property to the Developer or the inability of the Developer to
perform its material obligations hereunder, either Party shall have right, upon thirty (30) calendar
days prior written notice to the other Party and the Escrow Holder, to terminate this Agreement.
(d)In the event that the circumstances creating the right of termination in
Sections 14.1.1(a) through (c) above has been cured during such thirty (30)-day period, the right
to terminate shall likewise be extinguished.
14.1.2If any Close of Escrow does not occur on or before 5:00 p.m., Pacific
Time, on the applicable Closing Date, because of the failure to occur of a Closing Condition for
reasons other than (a) a Default solely by the Developer (which is governed by Section 14.2); (b)
a Default solely by the City (which is governed by Section 14.3), or (c) a Default by both Parties
(which is governed by Section 14.4), either Party may, by delivery of written notice to the other
and to the Escrow Holder, terminate this Agreement. In the event either the Developer or the
City is in Potential Default or Material Default as of any Closing Date, the Party in Default shall
not have the right to terminate the Agreement pursuant to this Section 14.1 until and unless the
Default is cured.
14.1.3Upon any termination under this Section 14.1, or a termination under
Sections 14.3.4, 14.4.2 or 14.4.3
Notice in accordance with Section 5.8, each Party shall pay one-
normal cancellation charges and any Closing Costs. Developer shall be paid any unapplied
portion of the Purchase Price Deposit and all interest accrued thereon, if any. In the event of a
termination as provided in this Section 14.1.3, the Developer shall comply with Section 13.3
before any amount of the Purchase Price Deposit is returned to the Developer, and shall
indemnify the City as provided in Section 5.5 and Article 10. The termination of this Agreement
pursuant to this Section 14.1.3 shall constitute a waiver of any rights, claims, causes of action, or
demands either Party may have against the other or the Property, or any portion thereof, but shall
not terminate or release any liability or obligations of the Developer to comply with Section 13.3
and to indemnify the City as provided in Section 5.5 and Article 10.
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,
14.1.4In the event of a termination as provided in this Section 14.1 under no
circumstances shall the Developer have any right or claim to, or against, the Project or Property
or any portion thereof.
Failure to Close With Respect to Any Close of Escrow; Material Default of
14.2
Developer
.
14.2.1IF THE CLOSE OF ESCROW WITH RESPECT TO EITHER
PHASE 1 OR PHASE 2 DOES NOT TAKE PLACE ON OR BEFORE 5:00 P.M., PACIFIC
TIME, ON A CLOSING DATE, SOLELY AS A RESPOTENTIAL
DEFAULT OR MATERIAL DEFAULT (INCLUDING FAILURE TO DELIVER
SUFFICIENT FUNDS TO CAUSE THE CLOSING TO OCCUR IN A TIMELY MANNER, IN
ACCORDANCE WITH THE PROVISIONS OF ARTICLE 7), THE PARTIES
ACKNOWLEDGE AND AGREE BY INITIALING THIS AGREEMENT IN THE SPACE
PROVIDED BELOW THAT:
(a)THE PURCHASE PRICE DEPOSIT FOR THE APPLICABLE PHASE
PROVIDED FOR IN SECTION 4.2 OF THIS AGREEMENT BEARS A REASONABLE
RELATIONSHIP TO THE DAMAGES WHICH THE PARTIES ESTIMATE MAY BE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, WHICH
DAMAGES WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO QUANTIFY,
THAT SUCH DEPOSIT CONSTITUTES
DAMAGES IN SUCH EVENT, AND THAT THE REMEDY PROVIDED FOR IN THIS
AGREEMENT IS NOT A PENALTY OR FORFEITURE AND IS A REASONABLE
DEFAULT.
(b)DEVELOPER SHALL PAY THE FULL AMOUNT OF ESCROW
CHARGES AS A RESULT OF SUCH DEFAULT AND TERMINATION AND
ALL CLOSING COSTS, WHETHER OR NOT DEVELOPER CONTESTS SUCH
TERMINATION.
14.2.2DEVELOPER SHALL COMPLY WITH THE REQUIREMENTS OF
SECTION 13.3.
14.2.3
(a)PHASE 1 CLOSE OF ESCROW.
DEFAULT IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT
AND FAILURE OF THE PHASE 1 CLOSE OF ESCROW TO OCCUR ON OR BEFORE THE
PHASE 1 CLOSING DATE, THE CITY SHALL HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT AND THE ESCROW BY WRITTEN NOTICE TO ESCROW HOLDER,
WHEREUPON THE CITY SHALL BE RELEASED FROM ITS OBLIGATION HEREUNDER
SUCCESSOR OWNER, AND THE CITY SHALL RETAIN THE PURCHASE PRICE
DEPOSIT AND ALL ACCRUED INTEREST THEREON AND/OR ESCROW HOLDER
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SHALL RELEASE THE PURCHASE PRICE DEPOSIT AND ALL ACCRUED INTEREST
THEREON TO THE CITY, TO THE EXTENT NOT ALREADY SO RELEASED, AS
EXCLUSIVE REMEDY HEREUNDER FOR
RIGHTS AND REMEDIES FOR A SEPARATE BREACH, IF ANY, OF THE
CONFIDENTIALITY AND/OR INDEMNIFICATION PROVISIONS OF THIS AGREEMENT
AND/OR THE PROVISIONS OF SECTION 13.3.
(b)PHASE 2 CLOSE OF ESCROW. IF, FOLLOWING THE PHASE 1
CLOSE OF ESCROW,
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT THERE IS A
FAILURE OF THE PHASE 2 CLOSE OF ESCROW TO OCCUR ON OR BEFORE THE
PHASE 2 CLOSING DATE, THE CITY SHALL HAVE THE RIGHT TO TERMINATE THIS
AGREEMENT AND THE ESCROW AS TO PHASE 2 ONLY BY WRITTEN NOTICE TO
ESCROW HOLDER, WHEREUPON THE CITY SHALL BE RELEASED FROM ITS
OBLIGATION HEREUNDER TO SELL THE PHASE 2 PROPERTY TO DEVELOPER OR
THE PHASE 2 PURCHASE PRICE DEPOSIT AND ALL ACCRUED INTEREST THEREON
AND/OR ESCROW HOLDER SHALL RELEASE THE PHASE 2 PURCHASE PRICE
DEPOSIT AND ALL ACCRUED INTEREST THEREON TO THE CITY, TO THE EXTENT
NOT ALREADY SO RELEASED, AS LIQUIDATED DAMAGES, WHICH DAMAGES
BREACH, IF ANY, OF THE CONFIDENTIALITY AND/OR INDEMNIFICATION
PROVISIONS OF THIS AGREEMENT AND/OR THE PROVISIONS OF SECTION 13.3.
THE TERMINATION OF THIS AGREEMENT AS TO PHASE 2 SHALL NOT MODIFY OR
AFFECT THE RIGHTS OF THE PARTIES UNDER THIS AGREEMENT WITH RESPECT
TO PHASE 1, NOR SHALL THE LIQUIDATED DAMAGE PROVISIONS OF THIS
SECTION LIMIT IN ANY MANNER THE RIGHTS AND REMEDIES OF THE PARTIES
SET FORTH IN ARTICLE 15 WITH RESPECT TO THE PHASE 1 PROPERTY.
___________________ ________________
Initials of City Initials of Developer
Failure to Close; Material Default of City
14.3.
14.3.1If a Close of Escrow does not occur on or before 5:00 p.m.,Pacific
Time, on any Closing Date, solely as a result of a Potential Default or Material Default by the
City in the performance of its obligations under this Agreement, then, so long as the Developer is
not in Potential Default or Material Default, the Developer shall have the right, by providing
notice to the City of its election to do so, either: (a) to purchase the Property pursuant to this
Agreement notwithstanding such Default by the City, whereupon such Default shall be deemed
waived as against the City and all third parties; or (b) to terminate this Agreement, cancel the
Escrow, and receive a return of any unapplied portion of the Purchase Price Deposit and all
interest accrued thereon (if any).
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14.3.2In the event City receive
purchase the Property, notwithstanding the Default by the City, the Developer shall deliver the
Developer Closing
receipt of said notice. Upon delivery of the Developer Closing Payment into Escrow and
payment by Escrow Holder of the Purchase Price to the City, the City shall convey title to the
Property as provided in this Agreement, and the Developer shall be deemed to have waived the
Default. In the event the City fails to deliver the applicable Quitclaim Deed and, if applicable,
the Declaration into Escrow within five (5) Business Days after the Developer has delivered the
Developer Closing Payment into Escrow, the Developer shall have the right to bring an action in
equity or otherwise against the City or subsequent owners, lessors or sublessors of the Property
for specific performance of Article 7 -of-pocket fees and
expenses incurred on the Project due to such Default in an amount not to exceed Fifty Thousand
.
Dollars ($50,000)
reasonable charges and Closing Costs.
14.3.3lection
to terminate this Agreement, the Developer shall be entitled to a full refund of its Purchase Price
Deposit and all interest accrued thereon, if any, and the City shall pay the full amount of Escrow
comply with its obligations under Section
13.3. The Developer shall not be entitled to pursue an action against the City for damages as a
result of the Default by the City.
14.3.4In the event either: (a) the City does not receive, within twenty (20)
Business Days after any Closing Date, notice of the Developer's election either to purchase the
Property pursuant to the Agreement notwithstanding Default by the City or to terminate this
Agreement or (b) Developer has elected to purchase the Property but fails to deliver the
Developer Closing Payment into Escrow no later than ten (10) Business Days after the City's
receipt of said notice, then the City shall have the right to terminate this Agreement by providing
written notice of its election to do so to the Developer, such termination to be pursuant to the
provisions of Section 14.1.3. In the event of a termination as provided in this Section 14.3.4,
under no circumstances shall the Developer shall have any right or claim to, or against, the
Property or any portion thereof.
14.3.5The termination of this Agreement pursuant to this Section 14.3 shall
not terminate or release any liability or obligations of the Developer to comply with Section 13.3
and to indemnify the City as provided in Section 5.5 and Article 10. In the event of a
termination as provided in Section 14.3.3, under no circumstances shall the Developer shall have
any right or claim to, or against, the Property, the Property or any portion thereof. The
termination of this Agreement pursuant to this Section 14.3 shall constitute a waiver of any
rights, claims, causes of action, or demands either Party may have against the other, except as
expressly provided above.
Material Default by Both Parties
14.4.
14.4.1If any Close of Escrow does not close on or before 5:00 p.m., Pacific
Time on the Closing Date, as a result of the Potential Default and/or Material Default of each
65
Party in the performance of its respective obligations under this Agreement, the provisions of
this Section 14.4 shall apply.
14.4.2If the Developer is in Material Default of its obligation to deliver a The
Developer Closing Payment or to provide the evidence of financing as provided in Section 4.5.1
and 4.5.2, and the City has deposited into Escrow the applicable Quitclaim Deed and the
Contract, the City shall have the right, notwithstanding any Material
Default of the City, to terminate this Agreement in accordance with Section 14.1.3.
14.4.3If the City is in Default of its obligation to deposit into Escrow the
applicable Quitclaim Deed and, if applicable, the Declaration as provided in Article 7, and the
Developer has delivered The Developer Closing Payment as provided in Article 7, and has
provided the evidence of financing as provided in Article 7, the Developer shall have the right,
notwithstanding any Default of the Developer, to terminate this Agreement in accordance with
Section 14.1.3.
14.4.4Except as provided above in Sections 14.4.2 and 14.4.3, in the event
both Parties are in Default with respect to their obligations to close Escrow on any Closing Date,
each Party may exercise any and all rights it may have to seek monetary damages from the other
Party. Notwithstanding the foregoing, in no event may either Party be entitled to specific
performance or other equitable relief, and in no event shall the Developer file a lis pendens
against the Property.
15.Remedies for Post-Phase 1 Close of Escrow Defaults
.
General Remedies
15.1. In the event the Developer is in Material Default following
the Phase 1 Close of Escrow hereunder, in addition to whatever other rights the City may have in
law or at equity, or as otherwise provided in this Agreement, the City may do any or all of the
following:
(a)The City may record a lien against the Property which lien shall have
priority over all Mortgages in accordance with Section 15.2.
(b)The City may sue for damages it may have incurred.
(c)The City may seek to specifically enforce the obligations of the
Developer.
(d)The City may terminate this Agreement with respect to all, or any portion
of the Property.
(e)The City may exercise its Right of Repurchase pursuant to Section 15.3
with respect to all or any portion of the Property.
(f)The City may exercise its Right of Reversion pursuant to Section 15.4
with respect to all or any portion of the Property.
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Lien Rights
15.2. Developer, on behalf of itself, each Successor Owner and each and
every Person claiming by, through or under Developer or any Successor Owner for the benefit of
the City and its successors and assigns hereby agrees that the delinquent amount of any payments
due hereunder, together with any late charges or interest due on any such delinquent payment,
reasonable attorneys fees and collection costs related to such
delinquent payment shall, to the greatest extent permitted by applicable law, be a lien and charge
upon the Property owned by the Defaulting Party and shall be a continuing lien upon such
City
Property in favor of the City effective as of the Effective Date ), which lien and
charge shall be paramount to the lien and charge of any Mortgage upon such Defaulting Partys
interest in the Property.
Right of PurchaseRight of Purchase
15.3. The City shall have the right (the ),
from time to time, at any time within one (1) year after the date that the Developer became in
Material Default (provided that upon Developer cure of such Material Default, such right shall
cease with respect to such Material Default only), by provision of written notice as described
below, to purchase any, or all of the Property in accordance with the following:
15.3.1Purchase Price. The purchase price for such Property shall be the
lesser of (i) seventy-five percent (75%) of the Fair Market Value of the affected Property
determined in accordance with Section 15.3.3, which Fair Market Value shall be that of each
component of the Property in the condition it or they may be in as of the date of election to
purchase, or (ii) an amount which provides sufficient net sales proceeds to pay a Permitted
Mortgagee with a lien upon the Property being purchased the principal and accrued and unpaid
interest to the date of the Material Default secured by such Property, and no other costs or
expenses. The Parties agree that the Property acquired by the City shall be free and clear of all
Mortgages at the time of conveyance to the City. The Parties agree that the amount of reduction
in the Fair Market Value of the Development Parcel bears a reasonable relationship to the
damages which the Parties estimate may be suffered by the City as the result of the Developer's
default in the performance of its obligations under this Agreement, which damages would be
impractical or extremely difficult to quantify, that the reduction in the acquisition price as
compared with the Fair Market Value of the Property constitutes a reasonable estimate of the
damages of the City in such event, and that the remedy provided for herein is not a penalty or
forfeiture, and is a reasonable limitation on the Developer's potential liability as a result of such
default. In the event the City exercises its Right of Purchase as to all or any portion of the
Property, as provided in this Section 15.3, this Agreement shall, unless otherwise determined by
the City in its sole discretion, terminate with respect to such Property as may be purchased,
provided that the provisions of this Section shall survive the termination of the Agreement.
15.3.2Process. If the City elects to repurchase all or any portion of the
Property the Parties shall: (a) within five (5) Business Days after the date of either the City's
election to purchase, or the Developer's notice to exercise its right to cause the purchase (but in
either event no earlier than the first date on which the City either has the right to purchase), open
an escrow with an escrow agent designated by the City for the purchase and sale, and shall
execute an escrow agreement that shall provide that the Developer shall pay all costs of the
escrow and shall include such usual and ordinary terms as are reasonably required by the escrow
agent and by the transaction; (b) no later than five (5) Business Days after the opening of escrow
(i) the Developer shall place into the escrow appropriate grant deeds conveying fee title to the
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Development Parcel (so that the City shall acquire the Property free and clear of any and all
liens, claims and encumbrances other than claims other than monetary liens that were of title as
of the date of the Closing, and any liens, claims or encumbrances approved in writing by the
City) and (ii) the Parties shall commence the procedure specified in Section 15.3.1 to determine
the Fair Market Value of the affected Property as provided in Section 15.3.3; and (c) no later
than twenty (20) Business Days after the Fair Market Value of such Property has been
determined, the City shall deposit into the escrow the purchase price, less the amount of any
monetary liens, including any Mortgage or Permitted Mortgage against the Property. The
escrow shall close, and title shall be conveyed to the City, no later than five (5) Business Days
after the City has deposited into escrow the purchase price. Concurrently with the close of
escrow, the Developer shall comply with its obligations under Section 13.3.
Determination of Fair Market ValueFair
15.3.3. The fair market value (
Market ValueRepurchase
) of the Parcel(s that the City has elected to repurchase (
Property
) shall be determined by one or more real estate appraisers selected as hereafter
provided, all of whom shall be members of The Appraisal Institute with not less than ten (10)
years experience in appraisal of hotel and retail properties in Orange County, California. Within
five (5) Business Days after Developer's receipt of written notice of the City's election to
Selection PeriodAppraiser
repurchase () each Party shall select one (1) appraiser () and
shall notify the other Party in writing of the Appraiser so selected. Each Appraiser shall deliver
to both Parties their written determinations of the fair market value of the Repurchase Property
Determination
on the date that is twenty (20) days after expiration of the Selection Period (the
Date
). If the difference between the fair market values determined by the Appraisers does not
exceed ten percent (10%) of the lesser of such appraised values, then the Fair Market Value shall
be the average of the appraisals. If, however, the difference between the appraisals shall exceed
ten percent (10%) of the lesser of such amounts, then the Appraisers shall, within five (5)
Business Days following the Determination Date select a third appraiser meeting the
Third Appraiser
qualifications stated above () to determine the fair market value of the
Repurchase Property within twenty (20) days after selection of the Third Appraiser. If there is a
third appraisal, the Fair Market Value for the Repurchase Property shall be the average of the
two (2) appraisals nearest in value. The Parties shall each bear the cost of the Appraiser they
select and shall share equally the cost of the Third Appraiser. All such determinations of Fair
Market Value shall be final and binding upon the Parties.
No Release of Liability
15.3.4. In the event the City is to purchase any
portion of the Property by reason of the exercise by the City of its election to do so upon a
Material Default by the Developer, such purchase shall not terminate or release any liability or
obligations of the Developer with respect to said Property to return any written Due Diligence
Information to the City as provided in Section 13.3 and to indemnify the City as provided in
Section 5.5 and Article 10. In the event the City purchases any portion of the Property, under no
circumstances shall the Developer have any right or claim to, or against, the purchased Property
or any portion thereof. In addition, the Developer shall represent and warrant that all
Improvements on the purchased Property as of the date of purchase are constructed in conformity
with all applicable Governmental Requirements. Notwithstanding the purchase of any Property
by the City as provided in this Section 15.3, this Agreement shall remain in full force and effect
with respect to the portions of the Property not purchased by the City.
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The Right of Reversion.
15.4
Right of Reversion
15.4.1. Following the Phase 1 Close of Escrow and
notwithstanding that such portion of the Property may be encumbered by one or more Mortgages
or Permitted Mortgages, in the event of the occurrence of any Reversion Action Date as
described in Section 15.4.2, and in addition to its other rights as a result of the Material Default
by the Developer, the City shall have the right on the terms and subject to the conditions set
forth in this Section 15.4 to re-enter and take possession of the Property and/or Improvements or
Right of Reversion
any portion thereof and to revest title thereto in the City (the ). Any
revesting of the Property or any portion thereof by the City whether based on voluntary action of
the Developer or otherwise after notice by the City of its intent to exercise the Right of
Reversion Event
Reversion is referred to herein as a . The City shall be entitled to exercise the
Right of Reversion at any time on or after the occurrence of any of any one or more of the
Reversion Action Dates provided that the City has complied with the Revesting Conditions for
the benefit of a Permitted Mortgagee set forth in Section 15.4.3.
Defaults Triggering the Right of Reversion
15.4.2. After conveyance of
title or possession and prior to the recordation of a Certificate of Compliance for the Project, the
City may exercise the Right of Reversion with respect to all or any portion of the Property
Reversion Action
conveyed to Developer upon the occurrence of any of the following (each, a
Date
):
(a)Developer fails to Complete any Phase of the Project within three (3)
years from the Close of Escrow for such Phase, subject only to the notice provisions set forth in
Section 13.1.
(b)The Developer abandons or substantially suspends construction of the
Project for a period of one hundred eighty (180) consecutive calendar days, and such becomes a
Material Default in accordance with the notice and cure provisions of Section 13.2
(c)A Material Default arises because of a voluntary or involuntary Transfer
or Transfer of Control, including a Foreclosure affecting all or any portion of the Property, by
any Mortgagee, violating the requirements of this Agreement.
Revesting Conditions for Benefit of Permitted Mortgagee
15.4.3.
Following any Reversion Action Date but prior to the Revesting Event, the City shall provide to
any Permitted Mortgagee with the right to cure set forth in clause (a) below, and if the Permitted
Mortgagee cannot cure without taking title to all or any portion of the Property in order to effect
Revesting Conditions
a cure, the condition set forth in clause (b) below (collectively, the ),
and the Parties agree that time is of the essence with respect to the dates and deadlines set forth
in this Section 15.4.3 and that such Revesting Conditions shall not be subject to extension for
Force Majeure Delay.
(a)Provision by the City of notice in accordance with Section 17.7 to each
Permitted Mortgagee having a Permitted Mortgage on the affected portion of the Property, of a
Material Default by the Developer remaining uncured after passage of the time periods set forth
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in this Agreement for cure thereof by the Developer and failure of any Permitted Mortgagee to
cure such Material Default in accordance with Section 16.7.
(b)After a Permitted Mortgagee has obtained title to any portion of the
Property, failure by such Permitted Mortgagee to have within a period of one (1) year from the
date upon which the Permitted Mortgagee or its designee obtains title to such portion of the
Property either (i) to (x) assume all obligations of the Developer under this Agreement, including
the obligation to construct the Improvements in accordance with a revised Schedule of
Performance agreed to by the Permitted Mortgagee or designee and the City and, thus, to step
into the role of Developer hereunder and (y) commence and diligently prosecute to Completion
the construction of the Improvements; or (ii) to sell the affected portion of the Property; or (iii)
complied with any of its obligations under Section 16.7 and, in the event of such failure, to have
cured such default within ninety (90) days of receiving written notice from the City in
accordance with Section 17.7.
Upon expiration of the time periods provided in clauses (a) and (b) above, if the Permitted
Mortgagee has failed to cure, City shall be entitled, without further action by any Person, to
complete the revesting of the Property and the Revesting Event.
Priority of the Right of Reversion
15.4.4.
(a)The Right of Reversion shall be senior in priority to any and all liens,
monetary encumbrances, and Mortgages, including Permitted Mortgages, encumbering such
Development Parcel or portion thereof, such that upon the Revesting Event all such liens,
encumbrances and Mortgages will be extinguished and the City will be revested of title to the
Property, or portion thereof, free and clear of all such liens, encumbrances and Mortgages.
(b)Notwithstanding anything to the contrary in this Agreement, if a Revesting
Event occurs, thereafter the City may determine, in its sole and absolute discretion, whether to
retain some or all of the Development Parcels, sell, lease or otherwise convey some or all of the
Development Parcels, or enter into a public-private partnership for the ownership, development
and operation of the Development Parcels. After a Revesting Event, the City shall owe no duty
or obligation to Developer, any Successor Owner, or any Permitted Mortgagee (or any other
Mortgagee) whatsoever, except only to the extent that City has any obligations to a Permitted
Mortgagee under the Subordination Agreement. Rather, the City shall act in whatever manner it
then determines to be in the best interest of the citizens of the City with respect to the future use,
enjoyment and/or economic value of the Development Parcels. After a Revesting Event, if and
to the extent that the City sells, leases or otherwise conveys some or all of the Development
Parcels, or enters into a public-private partnership for the ownership, development and operation
of the Development Parcels, then all consideration received by the City for any of the foregoing
shall be retained exclusively by the City, except to the extent that the City has an obligation to
disburse any such consideration (if any) under the terms of the Subordination Agreement.
Termination of Right of Reversion
15.4.5. The Right of Reversion shall
not apply to any portion of the Property after the recordation by the City of a Certificate of
Compliance with respect to the Property.
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16.Mortgages and Mortgagee Protection
.
Right To Encumber
16.1. All Mortgages shall be subject to and subordinate to this
Agreement, the Declaration, the City Lien the Right of Repurchase, the Right of Reversion, and
the Quitclaim Deeds. Subject to the foregoing and the terms, conditions, and limitations of this
Article 16, the Developer shall have the right to encumber its fee interest in the Property only,
with one Construction Loan per Development Parcel that is a Permitted Mortgage.
Acknowledgment by City of Permitted Mortgagee
16.2. Within ten (10) calendar
Section 2.2.3, the City shall acknowledge receipt of the name and address of any Mortgagee (or
proposed Mortgagee), and either (a) confirm in writing to the Developer and such Mortgagee
that such Mortgagee (i) is a Qualified Institutional Lender, if applicable or if the City determines
that any proposed Mortgagee is not a Qualified Institutional Lender would meet the other criteria
set forth in Section 2.2.3, and (ii) would be, upon closing of a Construction Loan meeting the
requirements of Section 2.2.3 and 16.3, a Permitted Mortgagee with all the rights of a Permitted
Mortgagee under this Agreement, or (b) give notice to the Developer and the proposed
Mortgagee that such proposed Mortgagee does not qualify as a Permitted Mortgagee, which
notice shall specify the basis for such determination.
Change in Loan Documents
16.3
Prior to Loan Closing
16.3.1. Following approval by the City of loan
documents and the Subordination Agreement pursuant to Section 2.2.3, but prior to closing of
the Construction Loan evidenced by such loan documents, the Developer shall not modify or
agree to modify those loan documents in a manner affecting the requirements of Section 2.2.3
without the prior written approval of the City in its sole discretion.
Following Loan Closing
16.3.2. Following approval by the City of the loan
documents and Subordination Agreement as satisfying the requirements of Section 2.2.3 and
closing of the loan evidenced by such loan documents, the Developer shall not, without the prior
written approval of the City in its sole discretion, modify or agree to modify the loan documents
in a manner that (a) increases the financial obligations of Developer, (b) modifies the
indebtedness secured by the Permitted Mortgage or (c) modifies or affects the City Lien rights as
set forth in Section 15.2. If such approval is not obtained for such loan modification, then,
notwithstanding any other provision of this Agreement or the Subordination or any subsequent
correspondence from the City specifying that the Mortgagee is a Permitted Mortgagee, from and
after the date of the loan modification, such Mortgagee shall be deemed to have lost its status as
a Permitted Mortgagee.
Initial Notice
16.4. If the Developer enters into any Mortgage(s) reviewed and, if
required, consented to, by the City pursuant to Sections 2.2.3 and 16.2, then the Mortgagee(s)
thereunder, if confirmed by the City as Permitted Mortgagee(s) pursuant to Section 16.2 shall be
entitled to the Permitted Mortgagee protections provided for under this Agreement from and
after such time as the Developer or such Permitted Mortgagee has provided the City notice, in
accordance with the provisions of Section 17.7, of the name and address of such Mortgagee,
accompanied by a copy of the executed loan documents for such Mortgage.
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Effect of a Mortgage
16.5. In the absence of any Foreclosure, no Mortgagee, as such,
in the exercise of its rights under its Mortgage or this Agreement, shall be deemed to be a
Successor Owner or mortgagee-in-possession of the Property so as to require such Mortgagee to
Agreement.
Foreclosure With
16.6. If a Permitted Mortgagee acquires all
or any portion of the Property in a Foreclosure, the provisions of Section 2.2.5 and the
Subordination Agreement shall govern such acquisition and the rights and obligations of such
Permitted Mortgagee. If a Permitted Mortgagee does not acquire the portion of the Property
which was the subject of a Foreclosure action, or if it does acquire by Foreclosure such portion
of the Property but then subsequently Transfers all or any portion of such acquired portion of the
Property, then upon such Foreclosure: (a) all of the provisions contained in this Agreement shall
be binding upon and benefit the Transferee which acquires title to all or any portion of the
Property, and (b) provided that such Person assumes the obligations of the Developer under this
Agreement in accordance with Section 2.2.2, the City shall recognize such Transferee as the
Developer under this Agreement.
Mortgagee Protections
16.7. Each Permitted Mortgagee of a then-existing Permitted
Mortgage affecting a portion of the Property which has provided notice to the City as required by
Section 16.4 shall, until its Permitted Mortgage is satisfied of record or until written notice of
satisfaction is given by the Permitted Mortgagee to the City or it ceases to be a Permitted
Mortgagee, be entitled to the following:
16.7.1Provision of concurrent notice of any default by any Party hereunder;
provided, however, that a failure of a Party to deliver a concurrent copy of such notice of default
to the Permitted Mortgagee shall not affect in any way the validity of the notice of default as it
relates to the defaulting Party, but in any subsequent proceedings arising from the notice of
default with respect to which there was a failure to provide the requested concurrent notice to the
Permitted Mortgagee, the interest of the Permitted Mortgagee and its lien upon the affected
Development Parcel shall not be affected in any way until such time as it has received proper
notice and all cure periods with respect thereto have expired, and provided, further, the giving of
any notice of default or the failure to deliver a copy to any Permitted Mortgagee shall in no event
create any liability on the part of the Person so declaring a default.
16.7.2The right, but not the obligation, at any time prior to the earlier to
occur of exercise of the Right of Purchase and/or Right of Reversion, or the termination of this
Agreement and without payment of any additional penalty or assumption of the obligations of
Developer under this Agreement, to cure or remedy such Potential Default or Material Default,
to effect any insurance, to pay any amounts due to the City, to make any repairs or
improvements, to do any other act or thing required of Developer under this Agreement and to
do any act or thing which may be necessary and proper to be done in the performance and
observance of this Agreement to prevent termination of this Agreement. To carry out the
foregoing, the Developer hereby agrees that such Permitted Mortgagee and its agents and
contractors shall have full access to the Property for purposes of accomplishing any of the
foregoing. Any of the foregoing done by such Permitted Mortgagee shall be as effective to
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prevent a termination of this Agreement or the exercise by the City of the Right of Purchase or
the Right of Reversion as the same would have been if done by Developer.
16.7.3Notwithstanding any other provision of this Agreement to the contrary,
if any Material Default shall occur which, pursuant to any provision of this Agreement, entitles
the City to terminate this Agreement and/or to exercise its Right of Reversion, the City shall not
be entitled to terminate this Agreement or to revest any portion of the Property unless (a) the
City, following the expiration of any periods of time given Developer in this Agreement to cure
such Material Default, shall have given written notice to such Permitted Mortgagee stating the
Notice to Mortgagee
, and (b) within ninety (90)
calendar days after delivery of such notice, such Permitted Mortgagee shall fail to do any of the
following:
(i)cure the Material Default if the same consists of the nonperformance
by Developer of any covenant or condition of this Agreement requiring the payment of money
by Developer to the City, other than payments required under Sections 4.2 or Article 7 (provided,
however, that nothing set forth in this Agreement shall restrict or limit the right of City to
exercise its Governmental Capacity remedies with respect to the Entitlements or any bond issues
in favor of the City); and
(ii)if the Material Default is not of the type described in clause (i)
Material Default, if
the same is capable of being cured within such ninety (90) calendar day period, (y) deliver a
Construction Bond to the City for all uncompleted Improvements; provided that the City shall
have the right (upon delivery by the City of a written demand and without the consent of any
other Person) to require the surety issuing the Construction Bond to commence the construction
necessary to complete the Improvements no later than twelve (12) full calendar months after the
date of the Construction Bond, or (z) commence, or cause any trustee under the Permitted
Mortgage to commence, and thereafter diligently pursue to completion, steps and proceedings to
;
Foreclosureprovided that except as extended by Section 16.7.4, such Foreclosure shall be
completed within a maximum of one (1) year following the commencement of such proceeding.
Any Material Default which does not involve a covenant or condition of this Agreement
requiring the payment of money by the Developer to the City shall be deemed cured if any
Permitted Mortgagee shall diligently pursue to completion Foreclosure and shall, upon acquiring
fee title to all or any portion of the Property, thereafter undertake its obligations (if any) with
respect such portion of the Property pursuant to Section 15.8.
16.7.4If such Permitted Mortgagee is prohibited from commencing or
prosecuting Foreclosure by any process or injunction issued by any court or by reason of any
action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving
Developer (other than any such process, injunction or court action occurring in response to any
negligence or misfeasance of Permitted Mortgagee), the times specified in Section 16.7.3(ii)(y)
for commencing or prosecuting a Foreclosure or other proceedings shall be extended for the
period of the prohibition; provided that the Permitted Mortgagee shall have fully cured any
Material Default required by Section 16.7.3(ii)(x) above and shall continue to perform and/or
cure all such obligations as and when the same fall due. Notwithstanding anything to the
contrary in this Section 16.7, if the Foreclosure is not consummated on or before the date that is
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365 days after the date of the Notice to Mortgagee, then at any time after such date (which shall
not be extended by any Bankruptcy of Developer or any Force Majeure delay), the City may (in
its sole and absolute discretion and without any further notice to any Mortgagee) consummate a
Revesting Event.
16.7.5No Permitted Mortgagee shall have the right to use the failure of the
City to provide notice to any other Mortgagee as a claim, defense or estoppel to application of
Failure of Permitted Mortgagee to Cure
16.8. If Developer shall have failed to cure
any Material Default following the Close of Phase 1 Escrow within the time periods for such
cure set forth in Article 13, and any notice required by Section 16.7.1 to a Permitted Mortgagee
was properly given, and such Permitted Mortgagee has not cured or commenced to cure as
required by Section 16.7.3, the C
notice to the Developer and such Permitted Mortgagee either: (a) purchase the Permitted
Mortgage pursuant to the Right of Repurchase set forth in Section 15.3; (b) subject to the
Reversion Conditions, exercise its Right of Reversion with respect to the applicable portions of
the Property pursuant to Section 15.4 or (c) exercise any other rights or remedies provided to
City by this Agreement.
Condemnation or Insurance Proceeds
16.9. Except as otherwise expressly set forth
in this Agreement, the rights of any Permitted Mortgagee pursuant to its Permitted Mortgage to
receive condemnation or insurance proceeds which are otherwise payable to such Permitted
Mortgagee or to a Party which is its mortgagor shall not be impaired.
Loss Payable Endorsement to Insurance Policy
16.10. The City agrees that the name
of the senior-
equired to be carried by
Developer under this Agreement.
No Subordination
16.11. This Agreement and the City Lien rights created hereby shall
not be subordinated to any Mortgage or other instrument without the express written consent of
the Parties hereto, each in its sole discretion.
Constructive Notice and Acceptance
16.12. Until such time as a Final Certificate of
Compliance is Recorded with respect to the Property and subject to the provisions of Article 2,
all of the provisions contained in this Agreement shall be binding upon and benefit any Person
who acquires fee title to a portion of the Property. Upon acquisition of fee title to an interest in
the Property or any portion thereof by a Person, other than a Permitted Mortgagee which is not
assuming the obligations of Developer under this Agreement, acquiring title through
Foreclosure, the acquiring Person and the City shall meet and confer in good faith to revise the
Schedule of Performance as reasonably necessary to provide adequate time for such Person to
satisfy the obligations of the Developer hereunder.
Bankruptcy Affecting the Developer
16.13. Developer and City hereby agree that this
Agreement (including the Right of Purchase and Right of Reversion contained herein), the
Declaration and each Quitclaim Deed shall contain and consist of covenants running with the
74
land and that neither this Agreement, the Declaration nor any Quitclaim Deed shall be subject to
rejection in bankruptcy, and Developer hereby waives its rights to reject this Agreement, any
Quitclaim Deed or the Declaration in bankruptcy. If, notwithstanding the foregoing, the
Developer, as debtor in possession, or a trustee in bankruptcy for the Developer seeks to and
does reject this Agreement, the Declaration and/or any Quitclaim Deed in connection with any
proceeding involving the Developer under the United States Bankruptcy Code or any similar
Bankruptcy Proceeding
waiver of any right of the City to challenge such rejection, the Parties hereby agree for the
benefit of the City and each and every Permitted Mortgagee that such rejection shall, subject to
Agreement, Quitclaim Deed, the Declaration and the Property corresponding thereto to the
such deemed assignment each Permitted Mortgagee shall, subject to compliance with Section
2.2, become the Developer hereunder as if the Bankruptcy Proceeding had not occurred.
Notice and Cure Rights of City
16.14. Upon the occurrence of an event of default
under any Mortgage, the holder of the Mortgage shall promptly notify the City of the occurrence
of such event of default, which notification shall be provided to the City contemporaneously with
the delivery to the Developer or its Assignee of any notice of default under any of Mortgage
documents. The City shall have the right, but not the obligation, during the cure periods which
apply to the Developer or its Assignee pursuant to the Mortgage documents and any cure period
which may apply to the City under applicable law, to cure default by Developer or its Successor
Owner relative to the Mortgage. If the City elects to cure Developer's default, the City shall be
entitled to reimbursement by Developer of all direct and actual costs and expenses incurred by
the City in curing the default and any amounts paid by the City in curing such Developer's
default shall be secured by the City Lien against the Development Parcels, under this Agreement.
17.General Provisions.
Applicable Law; Consent to Jurisdiction; Service of Process.
17.1This Agreement
shall be governed by, interpreted under, construed and enforced in accordance with the laws of
-of-law principles. The Parties hereto
agree that allactions or proceedings arising in connection with this Agreement and/or the
Property shall be tried and litigated exclusively in the Superior Court of the County of Orange,
State of California, in any other appropriate court of that county, or in the United States District
Court for the Central District of California. This choice of venue is intended by the Parties to be
mandatory and not permissive in nature, thereby precluding the possibility of litigation between
or among the Parties with respect to or arising out of this Agreement in any jurisdiction other
than that specified in this Section 17.1. Each Party hereby waives any right that it may have to
assert forum non conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this Section 17.1, and stipulates that the State and federal
courts located in the County of Orange, State of California, shall have in personam jurisdiction
and venue over each of them for the purpose of litigating any dispute, controversy or proceeding
arising out of this Agreement. Each Party hereby authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by this Section 17.1
by means of registered or certified mail, return receipt requested, postage prepaid, to its address
75
for the giving of notices as set forth in this Agreement, or in the manner set forth in Section
17.7(a) or (c) pertaining to notice. Any final judgment rendered against a Party in any action or
proceeding shall be conclusive as to the subject of such final judgment and may be enforced in
other jurisdictions in any manner provided by law.
Legal Fees and Costs
17.2. If any Party to this Agreement institutes any action, suit,
counterclaim, appeal, arbitration or mediation for any relief against another Party, declaratory or
otherwise to enforce the terms hereof or to declare rights hereunder or with respect to any
inaccuracies or material omissions in connection with any of the covenants, representations or
warranties on the part of the other Party to this Agreement, or in any other manner with respect
to this Agreement, then each Party shall be responsible for its own attorneys
Costs shall include in addition to costs incurred in prosecution or defense of the underlying
and costs, incurred in the following: (a) post-judgment motions
and collection actions; (b) contempt proceedings; (c) garnishment, levy, debtor and third party
examinations; (d) discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
Modifications or Amendments
17.3. No amendment, change, modification or
supplement to this Agreement shall be valid and binding on any of the Parties unless it is
represented in writing and signed by each of the Parties hereto. From time to time the Parties
may by mutual written agreement update each of Attachment Nos. 4, 5 and/or 6 and substitute
such updated Attachment for the Attachment attached hereto as of the Effective Date, and such
substitution shall not be deemed an amendment of this Agreement as a whole nor require the
Recording of an amendment of the Memorandum of DDA.
Further Assurances
17.4. Each of the Parties hereto shall execute and deliver, at their
own cost and expense, any and all additional papers, documents, or instruments, and shall do any
and all acts and things reasonably necessary or appropriate in connection with the performance
of its obligations hereunder in order to carry out the intent and purposes of this Agreement.
Rights and Remedies Are Cumulative
17.5. Except with respect to rights and
remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the
Parties are cumulative, and the exercise by either Party of one or more such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other Party. Except as otherwise
specifically set forth in this Agreement, wherever a Party has a right to damages for the Material
Default of another Party: (a) such damages shall be limited to direct (actual) damages for the
default of the other Party, and (b) each of the Parties, on behalf of itself and its successors and
assigns, hereby expressly waives, releases and relinquishes any and all right to any expectation,
anticipation, indirect, consequential, exemplary or punitive damages.
Notices, Demands and Communications between the Parties
17.6. All notices,
demands, consents, requests and other communications required or permitted to be given under
this Agreement shall be in writing and shall be deemed conclusively to have been duly given (a)
when hand delivered to the other Party; (b) three (3) Business Days after such notice has been
sent by U.S. Postal Service via certified mail, return receipt requested, postage prepaid, and
addressed to the other Party as set forth below; (c) the next Business Day after such notice has
been deposited with an overnight delivery service reasonably approved by the Parties (Federal
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Express, Overnite Express, United Parcel Service and U.S. Postal Service are deemed approved
by the Parties), postage prepaid, addressed to the Party to whom notice is being sent as set forth
below with next-business-day delivery guaranteed, provided that the sending Party receives a
confirmation of delivery from the delivery service provider; or (d) when received by the recipient
Party when sent by facsimile transmission or email at the number or email address set forth
below; provided, however, that notices given by facsimile or email shall not be effective unless
either (i) a duplicate copy of such notice is promptly sent by any method permitted under this
Section 17.7 other than by facsimile or email, or (ii) the receiving Party delivers a written
confirmation of receipt for such notice either by facsimile, email or any other method permitted
under this Section. Any notice given by facsimile or email shall be deemed received on the next
-Business
Day. Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
If to the City: Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
and Attention: Assistant City Manager
Facsimile: (714) 838-1602
Email: cshingleton@tustinca.org
With a copy to: City of Tustin City Attorney
Woodruff Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attn: Doug Holland
Facsimile: (714) 835-7787
Email: dch@wss-law.com
If to the Developer:
Robert D. Olson
R.D. Olson Development
2955 Main Street, Suite 300
Irvine, CA 92614
Facsimile: (949) 271-1081
Email: bob.olson@rdodevelopment.com
With a copy to:
Robert A. Olson
R.D. Olson Development
2955 Main Street, Suite 300
Irvine, CA 92614
Facsimile: (949) 271-1081
r
Email:aolson@rdodevelopment.com
Any Party may by written notice to the other Party in the manner specified in this
Agreement change the address to which notices to such Party shall be delivered.
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Force Majeure Delay
17.7.
Definition of Force Majeure DelayForce Majeure Delay
17.7.1.
mean the occurrence of any of the following events when such event is beyond the control of the
of such Party or any consultant, contractor or other Person for whom such Party may be
contractually or legally responsible, which directly, materially and adversely affects (a) the
ability of the claiming Party to meet its non-monetary obligations under this Agreement,
including the deadlines imposed by the Schedule of Performance, or (b) the ability of the
Developer to Complete the Project, and which events (or the effect of which events) could not
have been avoided by due diligence and use of reasonable efforts by the Party claiming Force
Majeure Delay:
Civil Unrest
(a). An epidemic, blockade, quarantine, rebellion, war,
insurrection, act of terrorism, strike or lock-out, riot, act of sabotage, civil commotion, act of a
public enemy, freight embargo, or lack of transportation;
Unforeseeable Conditions
(b). Reasonably unforeseeable physical condition
of the Property including the presence of Hazardous Materials;
Casualty
(c). Fire, earthquake or other casualty, in each case only if causing
material physical destruction or damage on the Property;
Litigation
(d). Any lawsuit seeking to restrain, enjoin, challenge or delay any
issuance of any Entitlement or restraining, enjoining, challenging, or delaying construction of the
Project, which is vigorously defended by the claiming Party and which is finally determined in a
manner which restricts the ability of such Party to perform its material obligations hereunder or
which results in an injunction against such Party restricting its ability to so perform during the
pendency of such litigation and which directly impairs the ability of the claiming Party to
perform despite the best efforts of such Party to do so, provided however that the foregoing shall
any Close of Escrow, which are governed by
Article 7 and Section 14.1;
Change of Law
(e). The passage of a referendum or initiative that results in
the inability of such Party to perform its material obligations hereunder;
Change in Governmental Requirements
(f). Any change in Governmental
Requirements or adoption of any new Governmental Requirements which is materially
inconsistent with Governmental Requirements in effect as of the Effective Date; and
Weather
(g). Unusually severe weather conditions not reasonably
anticipatable for the City of Tustin, based upon U.S. Weather Bureau climatological reports for
the months included plus a report indicating average precipitation, temperature, etc. for the last
ten (10) years from the nearest reporting station.
Limitation
17.7.2shall be limited to the
matters listed Section 17.7.1 above and specifically excludes from its definition the following
matters which might otherwise be considered Force Majeure Delay:
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Entitlements
(a). The suspension, termination, interruption, denial or failure
to obtain or nonrenewal of any Entitlement, permit, license, consent, authorization or approval
which is necessary for the development of the Project, except for any such matter resulting from
a lawsuit or referendum as described in Section 17.7.1(d) or (e);
Foreseeable Changes in Governmental Requirements
(b). Any change in a
Governmental Requirements which was proposed or was otherwise reasonably foreseeable at the
Effective Date;
Failure to Perform Obligations
(c). Failure of the Developer or any
Successor Owner to perform any obligation to be performed by the Developer or any Successor
Owner hereunder as the result of adverse changes in the financial condition of Developer or such
Successor Owner, as applicable;
Failure to Provide Financial Security
(d). Failure of the Developer or any
Successor Owner to provide financial security required by this Agreement when due or to submit
evidence of financing of the Project or to perform any obligation to be performed by the
Developer or any Successor Owner hereunder as the result of adverse changes in market
conditions unless the Developer or such Successor Owner demonstrates to the satisfaction of the
Assistant City Manager or designee in its sole discretion that (x) the Developer or such
Successor Owner was unable to obtain such financing despite making best efforts to do so, and
(y) such financing is unavailable on terms which are commercially feasible because of generally
applicable economic conditions affecting the credit market which then exist.
Failure to Submit and Require Documentation
(e). Failure to submit
documentation as and when required by this Agreement;
Failure to Submit Basic Concept Plan, Other Plans and Entitlements
(f).
Failure to submit a Basic Concept Plan and Concept Plan and Design Review submittals, and/or
submittals for other Entitlements required for construction of the Improvements and/or
development of the Project on the Property when required pursuant to the Schedule of
Performance;
Failure to Maintain Required Insurance
(g). Failure to acquire, maintain
and submit evidence of insurance policies as required by Article 11;
Failure to Execute Documents
(h). Failure to execute documents; and
(i)All other matters not caused by the other Party and not listed in Section
17.7.2(a) through (h).
Unavoidable Delay
17.7.3shall mean Force
Majure Delay, excluding the following items: (i) Section 17.7.1(b); (ii) Section 17.7.1(c);
(iii) Section 17.7.1(f); and (iv) Section 17.7.1(g).
ProcedureFirst Party
17.7.4it is entitled
Second
to
Party
in writing within thirty (30) calendar days from the date upon which the First Party
79
becomes aware of such Force Majeure Delay, describing the Force Majeure Delay, when and
how the First Party obtained knowledge thereof, the date the event commenced, the steps the
First Party anticipates taking to respond to such Force Majeure Delay, and the estimated delay
resulting from such Force Majeure Delay and response. The extension for Force Majeure Delay
discretion. If the First Party fails to
notify the Second Party in writing of its request for a given Force Majeure Delay within the
thirty (30) calendar days specified above, there shall be no extension for such Force Majeure
Delay.
Extension of Time Periods
17.7.5. The Closing Dates shall only be extended
by Unavoidable Delays (but not by any other Force Majeure Delay), or as provided in Article 7.
Not Applicable to Reversion Action Dates
17.7.6. The Reversion Action
Dates shall not be extended for Force Majeure Delay.
Conflict of Interest
17.8. No appointed or elected official or employee of the City
shall have any personal interest, direct or indirect, in this Agreement nor shall any official or
employee participate in any decision relating to the Agreement which affects his interests or the
interests of any corporation, partnership, or association in which he is directly or indirectly
interested. The Developer warrants that it has not paid or given and will not pay or give any
third person any money or other consideration for obtaining this Agreement, and the City
warrants that no City official, officer or employee has a financial interest in this Agreement in
violation of Government Code Section 1090.
Nonliability of City Officials and Employees
17.9. No elected or appointed official,
representative, employee, agent, consultant, legal counsel or employee of the City shall be
personally liable to the Developer, or any successor in interest in the event of any default or
breach by the City for any amount which may become due to the Developer or successor or on
any obligation under the terms of this Agreement.
Inspection of Books and Records
17.10. The City shall have the right at all reasonable
times, upon ten (10) calendar days written notice, to inspect the books and records of the
Developer pertaining to the Property as pertinent to the purposes of this Agreement. The
Developer shall also have the right at all reasonable times to inspect the books and records of the
City, upon ten (10) calendar days written notice, pertaining to the Property as pertinent to the
purposes of this Agreement.
Consents and Approvals
17.11.
Consent
17.11.1. In any instance in which a Party shall be requested to
required by any of the provisions of this Agreement, such consent or approval shall be given in
writing. In addition, whenever not expressly otherwise stated: (a) the City, when acting in its
Governmental Capacity shall be permitted to utilize its sole discretion with respect to matters
requiring its approval; (b) the City, when acting in its Proprietary Capacity shall not
unreasonably withhold, condition or delay its approvals with respect to matters requiring its
80
approval hereunder; and (c) Developer shall not unreasonably withhold, delay or condition its
consent with respect to matters requiring its approval hereunder.
Deemed Submitted
17.11.2. Any matter required by this Agreement to be
submitted to the City shall be deemed submitted upon the submittal to the Assistant City
Manager or designee.
Action Taken
17.11.3. Following its approval by the City, this Agreement
shall be administered by any designee of the City Manager or the Assistant City Manager.
Except where the terms of this Agreement expressly require the approval of a matter or the
taking of any action by the City Council, any matter to be approved by the City shall be deemed
approved, and any action to be taken by the City shall be deemed taken, upon the written
approval by the Assistant City Manager (or designee). The City Manager, the Assistant City
Manager or designee shall have the authority to issue interpretations with respect to this
Agreement and to determine whether any action requires the approval of the City Council. All
waivers, amendments or modifications of this Agreement shall require the approval of the City
Council.
No Real Estate Commissions
17.12. The City shall not be liable for any real estate
commissions, brokerage fees or finders fees which may arise from this Agreement. The
Developer represents that it has engaged no broker, agent or finder in connection with this
Agreement or the transactions identified in this Agreement, other than disclosed to City in
writing prior to the Effective Date. The Developer hereby agrees to indemnify and hold the City
and its elected and appointed officials, employees and representatives harmless from any losses
and liabilities arising from or in any way related to any claim by any broker, agent, or finder
retained by the Developer regarding this Agreement or development of the Project or the
transactions identified in this Agreement or the purchase or sale of other property at or adjacent
to the Property. The City represents that it has engaged no broker, agent, or finder in connection
with this Agreement or the transactions identified in this Agreement.
Date and Delivery of Agreement
17.13. Notwithstanding anything to the contrary
contained in this Agreement, the Parties intend that this Agreement shall be deemed effective,
executed and delivered for all purposes under this Agreement and for the calculation of any
statutory time periods based on the date an agreement between the Parties is effective, executed
and/or delivered, as of the Effective Date.
Constructive Notice and Acceptance
17.14. Every Successor Owner and each and
every Person claiming by, through or under Developer or any Successor Owner is and shall be
conclusively deemed to have consented and agreed to every provision contained herein, whether
or not any reference to this Agreement is contained in the instrument by which such Person
acquired an interest in the Project or Property.
Survival of Covenants, Representation and Warranties
17.15. Subject to Sections
9.4.4 and 12.3, the covenants, representations and warranties, and indemnities specified in this
Agreement shall survive any investigation made by any Party hereto and the closing of the
transactions contemplated hereby.
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Construction and Interpretation of Agreement
17.16.
Construction
17.16.1. The language in all parts of this Agreement shall in all
cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for
or against any Party. The Parties hereto acknowledge and agree that this Agreement has been
tion
over a considerable period of time, that each Party has been given the opportunity to
independently review this Agreement with legal counsel, and that each Party has the requisite
experience and sophistication to understand, interpret, and agree to the particular language of the
provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the
interpretation of this Agreement, this Agreement shall not be interpreted or construed against the
Party preparing it; instead other rules of interpretation and construction shall be utilized. The
provisions of California Civil Code Section 1654 are specifically waived by each Party hereto.
Effect of Invalidity or Unenforceability
17.16.2. If any term or provision of
this Agreement, the deletion of which would not adversely affect the receipt of any material
benefit by any Party hereunder, shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby and each other term
and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by
law. It is the intention of the Parties hereto that in lieu of each clause or provision of this
Agreement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement an
enforceable clause or provision as similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible.
Conclusivity of Certain Matters
17.16.3. Any matters or facts included in
Article 1 shall be conclusively deemed true.
Captions
17.16.4. The captions of the articles sections and clauses in this
Agreement are inserted solely for convenience and under no circumstances are they or any of
them to be treated or construed as part of this instrument.
References
17.16.5. References in this instrument and in the Attachments
any riders,
schedules, exhibits, addenda and attachments hereto (which are hereby incorporated in this
Agreement by this reference) and all other documents expressly incorporated by reference in this
an, refer to and include
the covenants, obligations and undertakings existing pursuant to this Agreement and any riders,
schedules, exhibits, addenda, attachments or other documents affixed to or expressly
incorporated by reference in this instrument.
Gender, Singular and Plural
17.16.6. As used in this Agreement and as the
context may require, the singular includes the plural and vice versa and the masculine gender
includes the feminine and vice versa.
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Includes and Including
17.16.7. As used in this Agreement the words
, respectively,
References to Articles, Sections, Paragraphs, Clauses, Exhibits,
17.16.8
Attachments and Schedules
. Unless otherwise indicated, references in this Agreement to
articles, sections, paragraphs, clauses, exhibits, attachments and schedules are to the same
contained in or attached to this Agreement and all attachments and schedules referenced in this
Agreement are incorporated in this Agreement by this reference as through fully set forth in this
Section 17.16.8.
Time of Essence
17.17. Time is of the essence with respect to all provisions of this
Agreement in which a definite time for performance is specified; provided, however, that the
foregoing shall not be construed to limit or deprive a Party of the benefits of any cure period or
Force Majeure Delay expressly provided for in this Agreement.
Fees and Other Expenses
17.18. Except as otherwise provided in this Agreement,
each of the Parties hereto shall pay its own fee
and costs, in connection with negotiation and preparation of this
Agreement and compliance with its terms.
No Partnership
17.19. Nothing contained in this Agreement shall be deemed or
construed to create a partnership, joint venture or any other relationship between the Parties
hereto other than purchaser and seller and landlord and tenant according to the provisions
contained in this Agreement, or cause the City to be responsible in any way for the debts or
obligations of the Developer.
Compliance with Law
17.20. The Developer agrees to comply with all the
requirements now in force, or which may thereafter be in force, of all municipal, county, State
and federal authorities, pertaining to the Property and the Improvements as well as operations
conducted thereon.
Binding Effect
17.21. This Agreement and terms, provisions, promises, covenants
conditions and restrictions contained herein shall be binding upon and shall inure to the benefit
of the Parties hereto and their respective heirs, legal representatives, successors and assigns.
No Third Party Beneficiaries
17.22. This Agreement has been made and entered into
solely for the benefit of the Parties to this Agreement and their respective successors and
permitted assigns. Nothing in this Agreement confers any rights or remedies on any other
Person. Nothing in this Agreement relieves or discharges the obligation or liability of any third
Persons to any Parties to this Agreement.
Counterparts
17.23. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Agreement shall not be effective until the execution and delivery by the Parties of at least one set
of counterparts. The Parties agree to recognize execution of this Agreement by facsimile
signatures; provided, however, that such execution by facsimile shall not be effective unless a
83
manually executed copy of the signature page is promptly sent by U.S. Postal Service, postage
prepaid or is hand delivered, and such manually signed page is actually received by the other
Party within five (5) calendar days of its execution. The Parties hereby authorize each other to
detach and combine original signature pages and consolidate them into a single identical original.
Any one of such completely executed counterparts shall be sufficient proof of this Agreement.
Authority of Signatories to Agreement
17.24. Each person executing this Agreement
represents and warrants that he or she is duly authorized and has legal capacity to execute and
deliver this Agreement on behalf of the Party for which such execution is made.
Entire Agreement, Waivers and Amendments
17.25.
Duplicate Originals
17.25.1. This Agreement is executed in three (3)
duplicate originals, each of which is deemed to be an original.
Entire Agreement
17.25.2. This Agreement, including the Attachments
hereto, together with any related documents referred to or incorporated by reference in this
Agreement, constitute the entire agreement between the Parties with respect to the subject matter
hereof. This Agreement supersedes and replaces any and all prior agreements, proposed
agreements, negotiations and communications, oral or written, and contains the entire agreement
between the Parties as to the subject matter hereof and any and all prior agreements,
understandings or representations are hereby terminated and canceled in their entirety. Each
Party hereby acknowledges that no other Party hereto, nor its agents or attorneys, have made any
promises, representations or warranties whatsoever, expressed or implied, not contained in this
Agreement, to induce such Party to execute this Agreement, and each Party acknowledges that it
has not executed this Agreement in reliance on any such promise, representation or warranty not
contained in this Agreement.
No Waiver
17.25.3. No waiver of any provision or consent to any action under
this Agreement shall constitute a waiver of any other provision or consent to any other action,
whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or
commit a Party to provide a waiver in the future except to the extent specifically set forth in
writing. All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities for the City and the Developer and all amendments hereto must be in
writing and signed by the appropriate authorities of the City and the Developer.
Confidentiality
17.26. Subject to the provisions of the California Public RecordsAct
agreements and records, the City and the Developer hereby agree that each shall keep
confidential information provided by the other and denominated as confidential and will not
disclose any such information to any person or entity without obtaining the prior written consent
of the other Party, except that the City shall have the right to disclose any information contained
in any third party reports obtained by the Developer and required to be disclosed by it pursuant
to law.
Proprietary and Governmental Roles; Actions by Parties
17.27. Except where
clearly and expressly provided otherwise in this Agreement, the capacity of the City in this
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Agreement shall be as owner, lessor, assembler, redeveloper and/or seller of property only
Proprietary Capacity
City, shall be limited to that capacity and shall not relate to, constitute a waiver of, supersede or
otherwise limit or affect the exercise by the City of its governmental authority with respect to
any matter related to this Agreement and shall include the regulation and entitlement of the
Property pursuant to Governmental Requirements, including enacting laws, inspecting structures,
reviewing and issuing permits, and all of the other legislative and administrative or enforcement
Governmental Capacity
functions of each pursuant to federal, state or local
addition, nothing in this Agreement shall supersede or waive any discretionary or regulatory
approvals required to be obtained from the City under applicable Governmental Requirements.
[signature page follows]
85
IN WITNESS WHEREOF, the City and the Developer have signed this Agreement as of
the date set forth below.
CITY OF TUSTIN
Dated: _______________________________ By: _________________________________
City Manager
ATTEST
By: __________________________________
Pamela Stoker
City Clerk
Dated: ________________________________
APPROVED AS TO FORM
City Attorney
By: __________________________________
Doug Holland
DEVELOPER
OLSON REAL ESTATE GROUP, INC.
(dba R.D. Olson Development)
By: __________________________________
Robert D. Olson
President
By: __________________________________
__________________________________
___________________________________
86
LIST OF ATTACHMENTS
ATTACHMENT 1 GLOSSARY OF DEFINED TERMS
ATTACHMENT 2 LEGAL DESCRIPTIONS OF PARCEL 2, PARCEL 3 AND
WATER WELL PARCEL
ATTACHMENT 3 SITE PLAN AND DEPICTION OF LOT LINE ADJUSTMENT
ATTACHMENT 4 Omitted
ATTACHMENT 5 SCHEDULE OF PERFORMANCE
ATTACHMENT 6 SCOPE OF DEVELOPMENT
ATTACHMENT 7 PRELIMINARY PLANS
ATTACHMENT 8 MEMORANDUM OF DDA
ATTACHMENT 9 FORM OF QUITCLAIM DEED
ATTACHMENT 10 FORM OF DECLARATION OF RECIPROCAL EASEMENTS,
COVENANTS, CONDITIONS AND RESTRICTIONS,
INCLUDING ENVIRONMENTAL RESTRICTIONS
ATTACHMENT 11 SUBORDINATION AND INTERCREDITOR AGREEMENT
ATTACHMENT 12 FORM OF ASSIGNMENT OF ARCHITECT CONTRACT
ATTACHMENT 13 PROHIBITED USERS AND USES
ATTACHMENT 14 CERTIFICATE OF COMPLIANCE
ATTACHMENT 15 ASSIGNMENT AND ASSUMPTION AGREEMENT
ATTACHMENT 16 CITY ESTOPPEL
ATTACHMENT 17 PRELIMINARY TITLE REPORTS
87
ATTACHMENT NO. 1
GLOSSARY OF DEFINED TERMS
For purposes of this Agreement, the following capitalized terms shall have the following
meanings:
Affiliate
ctly Controlling, Controlled by or
under common Control with another Person; (2) any Person owning or Controlling fifty-one
percent (51%) or more of the outstanding voting securities of such other Person; and (3) if that
other Person is an officer, director, member or partner, any company for which such Person acts
in any such capacity.
Agreement
-01 (Tustin
Gateway Project) including all Attachments attached hereto.
ALTA Policy
of insurance as such term is used in Section 6.4.
shall have the meaning set forth in Section 15.3.3.
Approved Project Plans
which govern development of improvements on the Property , including approval by the City in
its Proprietary Capacity of Basic Concept Plans under Section 8.5.6 of the Agreement, approval
of plans by the City in its Governmental Capacity pursuant to the Concept Plan and Design
Review process and approval by the City of construction levels drawings as required to obtain
the Entitlements.
have the meaning set forth in Section 4.5.4.
Assistant City Manager
Christine Shingleton, or her successor in such
capacity, or other designee as identified in writing by the City Manager.
Bankruptcy Proceeding
United States Bankruptcy Code or any similar state or federal statute for the relief of debtors as
described under Section 15.19.
Basic Concept Plan
shall mean the submittals by Developer to the City for purposes of
satisfaction of the Concept Plan and Design Review approval, provided that Basic Concept Plan
submittals shall be reviewed by the City in its Proprietary Capacity (as opposed to the Concept
Plan and Design Review submittals which are reviewed by the City Development Department
under the Governmental Capacity of the City.)
Business Day(s)
hall mean any day on which City Hall is open for business and shall
specifically exclude Fridays when City Hall is officially closed, Saturday, Sunday or a legal
holiday.
88
CEQA
regulations and guidelines, contained in Cal. Public Resources Code Section 21000 et seq., and
Cal. Code of Regulations, title 14, Section 15000 et seq., respectively.
Certificate of Compliance
Property or any Phase thereof by the City upon Completion by Developer of all of the
Improvements and satisfaction of all additional Conditions Precedent thereto with respect to the
Property or Phase, as the case may be, as described in Article 9. A Certificate of Compliance
Change in Ownership
mean any direct or indirect sale, any execution of a
contract or other agreement to sell or option to purchase such membership interest, stock,
partnership interest or other beneficial interest, or any assignment or pledge of such membership
interest, stock, partnership interest or other beneficial interest, including any assignment or
pledge for security purposes.
City
powers and responsibilities as described in Section 1.4.1.
City Phase 1 Closing Conditions
Section 7.2.2.
City Phase 2 Closing Conditions
Section 7.3.2.
City Code
as the
same may be amended from time to time.
City Costs Deposit
Section 1.7.
City Council
City Dedication Parcels
all have the meaning set forth in Section 1.3.2.
City Estoppel
substantially in the form and
substance of that attached hereto as Attachment No. 16, to be executed and delivered by the City
to a Permitted Mortgagee in conjunction with the making of a Construction Loan that is a
Permitted Mortgage.
City Hall
300 Centennial Way, Tustin, California.
City Lien
h in Section 15.2.
City Title Policy
Title Company in connection with this Agreement.
89
City Transaction Expense
Section 1.7.
ClaimClaims
l mean any and all claims, actions, causes of action, demands,
orders, or other means of seeking or recovering losses, damages, liabilities, costs, expenses
costs), costs and expenses attributable to compliance with judicial and regulatory orders and
requirements, fines, penalties, liens, taxes, or any type of compensation whatsoever, direct or
indirect, known or unknown, foreseen or unforeseen.
Class A User
all mean a person engaged in or performing a Class A Use.
Class A Uses
Development and such additional uses as the City may approve in writing from time to time in
its sole discretion upon written application by the Developer.
Close of Escrow
Escrow, as the context requires.
Closing Conditions
Conditions.
Closing Date
of the Phase 1 Escrow or the Phase 2
Escrow, as applicable.
CLTA Policy
described in Section 6.2.
Community Development Department
e Community Development
Department of the City of Tustin, California.
CompleteCompletion
constructed in Phases, with respect to a given Phase, the point in time when all of the following
shall have occurred with respect to the Project or such Phase: (1) the Improvements with respect
thereto have been completed in accordance with this Agreement; (2) the issuance of a permanent
certificate of occupancy by the City or, to the extent a certificate of occupancy is not required by
the City for a particular Improvement, the equivalent final inspection, signoff or other permit
activity with respect to such Improvement, (3) the Recording of a Notice of Completion
(California Civil Code Section 3043)
contractor; (4) a certification by the Project Architect that such Improvements (with the
and substantially in accordance with the approved plans and specifications; and (5) any
paid, settled or otherwise extinguished, discharged, released, waived, bonded around or insured
against.
Concept Plan and Design Review
collectively the concept plan review
required by the Specific Plan and the site plan and design review approvals as required by the
City Code, which shall be part of the Entitlements.
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Conditions Precedent
Section 9.4.2.
Construction Bond
both a labor and material bond and a payment and
performance bond, each in a penal sum of not less than one hundred percent (100%) of the
scheduled cost of construction of the Improvements, and naming the City as a co-obligee. Said
bonds, if issued, shall be issued by an insurance company which is licensed to do business in
published in the Federal Register by the Audit Staff Bureau of Accounts, U.S. Treasury
Department and for amounts which are not in excess of the acceptable amount set forth on such
list for the respective surety. The insurance company shall have a rating equivalent to a Best
rating of A or FSC rating of 9.
Construction Loan
shall have the meaning set forth in Section 2.2.3.
Construction Loan Conditions Letter
Section 4.5.2(c).
ControlControlledControlling
any Person to
presumption that control with respect to a corporation or limited liability company is the right to
exercise, directly or indirectly, more than fifty percent (50%) of the voting rights granted to all
equity holders in the controlled corporation or limited liability company. It shall be a
presumption that control with respect to a partnership, trust, other entity or association, is the
sole action) the direction of the management or policies of the controlled entity.
shall mean that certain Declaration of Reciprocal Easements, Covenants,
Conditions and Restrictions, Including Environmental Restrictions Pursuant to Civil Code
Section 1471 in the form and substance of the document attached hereto as Attachment No. 10,
to be executed by the City and acknowledge in Recordable form and Recorded at the Phase 1
Close of Escrow, immediately prior to the Recording of the Quitclaim Deed of the Phase 1
Property.
Default
the context
requires.
Default Rate
n an interest rate of eight percent (8%) per annum, compounded
annually, but in no event in excess of the maximum legal rate.
Defaulting Party
Default or in Material Default.
Determination Date
have the meaning set forth in Section 15.3.3.
Developer
, a California corporation doing
business as R.D Olson Development, as of the Effective Date of the Agreement, or any
Successor Owner following any Transfer or Change in Ownership pursuant to a Permitted
Transfer approved by the City as described in Section 1.4.2.
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Developer Affiliate
Olson Entity and that is owned 100% by the Olson Entity.
Developer Closing Payment
have the meaning set forth in Section 4.2.4.
Developer Phase 1 Closing Conditions
Section
7.2.1.
Developer Phase 2 Closing Conditions
n Section
7.3.1.
Developer Representatives
Section 5.2.
Developer Title Policy
Development Parcels
Section 1.3.1.
Disapproved Exception
shall mean any item or exception shown on a Supplemental
Title Report disapproved in writing by the Developer, not previously included in the Preliminary
Title Report and/or Title Commitments as described in Section 6.3.
shall have the meaning set forth in Section 1.3.1.
shall mean the price paid by Developer for the acquisition of the
rights granted pursuant to the Declaration in favor of Developer as identified in Section 4.2.2.
Effective Date
e the meaning set forth in the first paragraph of this
Agreement.
ENA
Exclusive Agreement to Negotiate dated November 2,
2010, by and between the City and the Developer as the same may be amended.
End User
perating a business in any Improvement (including
any retail building or retail space) on any Development Parcel, whether such Person holds a fee
interest, ground leasehold interest, or other leasehold interest in such Development Parcel or
portion thereof.
Entitlements
other Governmental Authority as a condition of subdivision and development of the Property and
construction of Improvements and shall include any and all entitlements, licenses, permits or
other approvals required by the City or any other Governmental Authority as a condition to
development of the Property and construction of the Improvements, including any Lot Line
Adjustment, the Concept Plan and Design Review approval, any conditional use permit required
to permit shared parking on the Property, demolition, grading, and building permits.
Entitlement Approval Date
the Property to be developed by Developer with the Project have been granted by the City, and
no lawsuit has been filed to challenge such entitlements within the statute of limitations or, if a
92
lawsuit has been filed, the date on which the lawsuit is finally adjudicated and is unappealable or
has been settled and dismissed with prejudice.
Environmental Agency
Agency; the California Environmental Protection Agency and all of its sub-entities, including
any Regional Water Quality Control Board, the State Water Resources Control Board, the
Department of Toxic Substances Control, the South Coast Air Quality Management District, and
the California Air Resources Board; the City; any Fire Department or Health Department with
jurisdiction over the Property; and/or any other federal, State, regional or local governmental
agency or entity that has or asserts jurisdiction over Hazardous Substance Releases or the
presence, use, storage, transfer, manufacture, licensing, reporting, permitting, analysis, disposal
or treatment of Hazardous Materials in, on, under, about, or affecting the Project.
Environmental Laws
rules, regulations, requirements, orders, directives, guidelines, or permit conditions, in existence
as of the Effective Date or as later enacted, promulgated, issued, modified or adopted, regulating
or relating to Hazardous Materials, and all applicable judicial, administrative and regulatory
decrees, judgments and orders and common law, including those relating to industrial hygiene,
public safety, human health, or protection of the environment, or the reporting, licensing,
permitting, use, presence, transfer, treatment, analysis, generation, manufacture, storage,
discharge, Release, disposal, transportation, Investigation or Remediation of Hazardous
Materials. Environmental Laws shall include the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.)
CERCLA
source Conservation and Recovery Act, as amended, (42 U.S.C.
RCRA
Section
(33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15 U.S.C.
Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the California
Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section 25100
(Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280 (Underground
Storage of Hazardous Substances) of the California Health and Safety Code; and the California
Water Code, Sections 13000 et seq.
Escrow
shall have the meaning set forth in Section 4.3.
Escrow Holder
Fair Market Value
Section 15.3.3.
of all construction and development required to be undertaken by Developer in accordance with
this Agreement as described in Section 9.1.
Financing Contingency
have the meaning set forth in Section 5.2.
Financing Contingency Deadline
have the meaning set forth in Section 5.2.
Financing Plan
Section 4.5.1.
93
FIRPTA Affidavit
in Real Property Act.
First Party
Section 17.7.3.
Force Majeure Delay
Section 17.7.1 as limited by
Section 17.7.2.
Foreclosure
thereunder), whether by judicial proceedings, by virtue of any power of sale under the Permitted
Mortgage, by acceptance of a deed-in-lieu of foreclosure, or by any other conveyance of all or
any portion of the Property and/or Improvements by other appropriate proceedings in the nature
of a foreclosure, resulting in the Transfer of all or any portion of the Property and/or
Improvements to (a) any Permitted Mortgagee, (b) any entity that Controls Permitted Mortgagee,
is Controlled by Permitted Mortgagee, or is Controlled by an entity that also Controls Permitted
Mortgagee, (c) any participating lender in the Construction Loan (excluding Developer or any
Affiliate of Developer), and/or (d) any agent for one or more of the lenders in clauses (a) through
(c) under the Permitted Mortgage that secures the Construction Loan.
Full Insurable Value
Section 11.2.2.
General Plan
Governmental Authority
shall mean any and all federal, State, county, municipal and
local governmental and quasi-governmental bodies and authorities (including the United States
of America, the State of California and any political subdivision, public corporation, district,
joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over the Parties, the Project, the Property, the City Dedication Parcels or
such portions thereof as the context indicates.
Governmental Capacity
have the meaning set forth in Section 17.28.
Governmental Requirements
regulations, standards, guidelines and other requirements issued by any Governmental Authority
having jurisdiction over the Parties, the Project, the Improvements and/or the Property or any
component thereof and including the City Code, the Specific Plan, the Entitlements, and the
Approved Project Plans.
Hazardous Materials
(a) Hazardous SubstanceHazardous MaterialHazardous Waste
Toxic Substance under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. subsection 9601, et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. subsection 5101, et seq., or
the Resource Conservation and Recovery Act, 42 U.S.C. subsection 6901, et seq.;
94
(b) Extremely Hazardous WasteHazardous WasteRestricted
Hazardous Waste subsections 25115, 25117, or 25122.7 of the California
Health and Safety Code, or is listed or identified pursuant to subsection 25140 or
44321 of the California Health and Safety Code;
(c) Hazardous MaterialHazardous SubstanceHazardous Waste
Toxic Air ContaminantMedical Waste 25281, 25316,
25501, 25501.1, 117690 or 39655 of the California Health and Safety Code;
(d) OilHazardous Substance
Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section 1321,
as well as any other hydro carbonic substance or by-product;
(e) Hazardous WasteExtremely Hazardous Waste
Acutely Hazardous Waste11 of Title 22 of the
California Code of Regulations;
(f) Listed by the State of California as a chemical known by the State to cause
cancer or reproductive toxicity pursuant to Section 25249.9(a) of the California
Health and Safety Code;
(g) A material which due to its characteristics or interaction with one or more
other substances, chemical compounds, or mixtures damages or threatens to
damage, health, safety, or the environment, or is required by any law or public
agency to be remediated, including remediation which such law or public agency
requires in order for the property to be put to any lawful purpose;
(h) Any material whose presence would require remediation pursuant to the
guidelines set forth in the State of California Leaking Underground Fuel Tank
Field Manual, whether or not the presence of such material resulted from a
leaking underground fuel tank;
(i) Pesticides regulated under the Feral Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. subsection 136 et seq.;
(j) Asbestos, PCBs and other substances regulated under the Toxic
Substances Control Act, 15 U.S.C. subsection 2601 et seq.;
(k)
---level radioactive
materials or radioactive wastes, however produced, regulated under the Atomic
Energy Act, 42 U.S.C. subsection 2011 et seq., the Nuclear Waste Policy Act, 42
U.S.C. subsection 10101 et seq., or pursuant to the California Radiation Control
Law, California Health and Safety Code Section 114960 et seq.;
95
(l) Regulated under the Occupational Safety and Health Act, 29 U.S.C.
subsection 651 et seq., or the California Occupational Safety and Health Act,
California Labor Code subsection 6300 et seq.; and/or
(m) Regulated under the Clean Air Act, 42 U.S.C. subsection 7401 et seq. or
pursuant to Division 26 of the California Health and Safety Code.
Improvements
Section 1.2.
Indemnified Parties
agents, attorneys, affiliates, employees, contractors and representatives as described in
Section 10.1.
Injured Party
mean the party that is injured by a Defaulting Party as such is set
forth in Section 13.1.
Investigation(s)
monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or surveying
of or concerning the Property or any adjacent or affected properties, including the air, soil,
surface water, and groundwater, and the surrounding population or properties, or any of them, to
characterize or evaluate the nature, extent or impact of Hazardous Materials.
Key Employees
forth in Section 2.3.3.
Lease
lease, sublease or license any Improvement or portion thereof, including any retail building or
space, and, as a verb, shall mean the leasing by Developer of any Improvement or portion
thereof, including any Retail Space, to a tenant.
Lot Line Adjustment
Section 1.2.
Material Default
rth in Section 13.2.2.
Memorandum of DDA
recorded against the Property as required in Section 1.8.
Mortgage
taxable or tax exempt funds from a governmental agency or other security interest and the
documents governing a sale-leaseback transaction, together with all loan documents related
thereto.
Mortgagee
lenders acting in such capacity) under any indenture of mortgage, deed of trust, trustee of bonds,
governmental agency which is a grantor of funds, and, with respect to any Development Parcel
which is the subject of a sale-leaseback transaction, the Person acquiring fee title.
96
Mortgagor
case of a sale-leaseback transaction).
Notice of Completion
the Completion of each Improvement, as required pursuant to California Civil Code
Section 3093.
Olson Entity
shall mean any Person in which Robert D. Olson owns not less than 51%
of the equity interests with voting rights and which is Controlled by Robert D. Olson.
Opening of Escrow
Section 4.3.
Parties
Party
shall mean either of the City or the Developer, individually, as parties to this
Agreement.
Permitted Exceptions
aning set forth in Section 6.2 as may be
modified by Section 6.3.
Permitted Mortgage
grant of taxable or tax-exempt funds from a governmental agency or other conveyance of a
security interest in the Property or any portion thereof, to a Permitted Mortgagee or the
conveyance of the Property or any portion thereof to the Permitted Mortgagee or its Successor
Owner or purchaser in connection with a Foreclosure which satisfies all of the criteria set forth in
Article 2 and Article 16.
Permitted Mortgagee
Section 2.2.3 and accordingly entitled to the Permitted Mortgagee protections provided by this
Agreement. For purposes of any acts under a Permitted Mortgage with respect to and/or
any wholly-owned subsidiary thereof designated by the Permitted Mortgagee to take title to the
foreclosed property. The participation, securitization or assignment of a loan (or any portion
thereof) by a Permitted Mortgagee (acting in an individual capacity or as agent for other lenders)
shall not give rise to any requirement that each lender participating in such participation,
securitization or assignment itself be a Permitted Mortgagee (acting in an individual capacity or
as agent for other lenders), so long as (a) at the inception of the loan, the originating and agent
lender is a Permitted Mortgagee, and (b) at the time of any subsequent assignment of the loan,
the successor owner and agent lender is a Permitted Mortgagee.
Person
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign and shall include each and every member, partner, owner, shareholder,
creditor and investor in any of the foregoing entities.
Phase
Property (and, as applicable, adjacent portions of the Property) and which is to be developed at
97
one time, as set forth agreed in accordance with the terms of the Agreement as part of the
Approved Project Plans and Entitlements.
Phase 1Close of Escrow
of fee title to Parcel A and Parcel B by the City to the Developer pursuant to Quitclaim Deed,
and execution and recordation of the additional documents associated therewith, including the
Declaration, as more fully set forth in Article 7, which shall take place on the Phase 1 Closing
Date.
Phase 1 Closing Date
the date set forth in Section 7.1.1 for the Phase 1
Close of Escrow or such later date as may be agreed by the Parties pursuant to Section 7.1.3.
Phase 1 Deposit
Section 4.2.4.
Phase 1 Property
Section 4.1.1.
Phase 1 Purchase Price
Section 4.2.3.
Phase 2Close of Escrow
of fee title to Parcel C by the City to the Developer pursuant to Quitclaim Deed and the
additional documents associated therewith as more fully set forth in Article 7, which shall take
place on the Phase 2 Closing Date.
Phase 2 Closing Date
the date set forth in Section 7.1.2 for the Phase 2
Close of Escrow or such later date as may be agreed by the Parties pursuant to Section 7.1.3.
Phase 2 Deposit
Section 4.2.4.
Phase 2 Property
Section 4.1.3.
Phase 2 Purchase Price
Section 4.2.3.
Potential Default
Section 13.1 or any other event
that with the passage of time or the giving of notice or both could result in the occurrence of a
Material Default.
Preliminary Plan(s)
forth in Section 8.6.3.
Preliminary Title Reports
Section 6.2.
shall have the meaning set forth in Section 16.2.
Products
Section 13.3.2.
Prohibited Use
mean any use, whether by Developer, a Tenant or any other
entity, set forth on Attachment No.13, which use shall be prohibited on the Property.
Prohibited User
Attachment No. 13.
98
shall have the meaning set forth in Section 1.2.
Project Architect
each architect or engineer, as applicable, designated in
writing by the Developer for a particular product type or improvement.
Property
Section 1.3.
Capacity
Section 17.28.
Purchase Price
Section 4.2.1.
Purchase Price Deposit
to the City upon execution of the Agreement as described in Section 4.2.4.
Qualified Institutional Lender
association, federal association bank, savings and loan association, investment bank, state
chartered bank, lending institution, pension fund, insurance company or other institutional lender
which is duly established and in the business of financing the size and type of development
contemplated hereunder and which, in the reasonable opinion of the City, has a sufficient net
worth and liquidity position to meet the contemplated financing commitment. An institutional
stars or
higher from Bank Rate, Inc., or a similar rating from a rating service reasonably acceptable to the
City and is not included on any State, county or municipal list of banned or restricted vendors
and a net worth of Five Billion Dollars ($5,000,000,000) or more.
Quitclaim Deed
for the Phase 1 Close of Escrow, the quitclaim deed to
be executed and delivered by the City at the Phase 1 Close of Escrow to quitclaim all of the
Parcel A and Parcel B (subject to Section 4.1 and the terms of this Agreement)
to the Developer, and (b) for the Phase 2 Close of Escrow, the quitclaim deed to be executed and
delivered by the City at the Phase 2
Parcel C (subject to Section 4.1 and the terms of this Agreement) to the Developer, as the case
may be (subject to Section 4.1 and the terms of this Agreement), to the Developer. Each
Quitclaim Deed shall be in substantially the form and substance of the deed attached hereto as
Attachment No. 9, acknowledged and in Recordable form.
RDA Plan
Section 1.2.1.
RecordRecordingRecorded
specified instrument, or the current or past recording of the specified instrument, in the official
records of Orange County California.
Recordable
acknowledged and is otherwise in a form that would permit the Recordation thereof.
Release
respect to Hazardous Materials) shall mean any releasing, or threat of
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, migrating, disposing, or dumping into the environment.
99
Released Party
and shall have the meanings set forth in
Section 4.4.3.
Releasing Party
shall have the meaning set forth in Section 4.4.3.
Remediate Remediation
under Section 101(25) of CERCLA, and similar actions with respect to Hazardous Materials as
defined under comparable state and local laws, and any other cleanup, removal, containment,
abatement, recycling, transfer, monitoring, storage, treatment, disposal, closure, restoration or
other mitigation or remediation of Hazardous Materials or Releases required by any
Environmental Agency or within the purview of any Environmental Laws.
Repurchase Property
Section 15.4.1.
Retail Lease
aning set forth in Section 2.2.4 (a).
Retail Lease Transfer
have the meaning set forth in Section 2.2.5.
Retail Space
-standing
stand or kiosk that is Leased or is intended to be Leased for retail purposes, sales of goods or
services, restaurants or similar commercial (but not independent office, research or development)
purposes.
Retail Tenant
Development Parcels and thereunder operates (or is constructing improvements with the intent to
operate) a retail or other commercial business in such space.
Reversion Action Date
Section 15.4.2.
Reversion Event
g set forth in Section 15.4.
Revesting Conditions
Section 15.4.3.
Right of Purchase
Section 15.3.
Right of Reversion
Section 15.4.
Schedule of Performance
Attachment No. 5 to
the Agreement, setting forth the dates and time periods for submissions, approvals and actions,
including the construction of the Improvements.
Scope of Development
cription of the Project attached as
Attachment No. 6 to the Agreement.
Second Party
Section 17.7.3.
Selection Period
Section 15.3.
100
Specific Plan
cific Center East Specific Plan adopted
on February 19, 1991 (Ord. 1057) as the same has been or may be amended from time to time.
State
Subdivision Map Act
Cal. Government Code Section 66410 et seq.
Subordination Agreement
Section 2.2.3.
Subordination AgreementExpenseSection
1.7.1.
Subordination AgreementExpensehave the meaning set forth in
Section 1.7.1.
shall mean each and every Person owning or acquiring any right,
title or interest in or to all or any portion of the Property, but shall exclude Tenants under Retail
Leases.
Supplemental Title Report
Section 6.3.
Survey
Section 6.1.
shall have the meaning set forth in Section 6.1.
Termination Notice
Section 5.7.
Third Appraiser
Section 15.3.3.
Title Commitment
Section 6.2.
Title Company
Transfer
license, entry into an
operating agreement, concession, gift, hypothecation, mortgage, pledge or encumbrance, or other
similar conveyance (a) of any ownership interest in Developer or any entity that Controls or is
Controlled by Developer, or (b) of the Dethe Declaration,
all or any portion of the Property, the Improvements thereon, any other Property, or any portion
thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, or
any agreement to do so; the granting of any Mortgage, easement, license, lien or other
encumbrance and/or the execution of any installment land sale contract or similar instrument
affecting all or a portion of the Property, the Improvements thereon, or any portion thereof or
interest therein and shall also include Transfer of Control of the Developer, or any conversion of
the Developer to an entity form other than that of the Developer at the time of execution of this
Agreement.
101
Transfer of Control
any one or more of the following, whether made
directly or through an intermediary, and whether made in one transaction or in more than one
transaction during the Term and whether occurring as a single event or a series of events which
result, on a cumulative basis, in (1) if the Developer is a limited liability company, a change in
forty-nine percent (49%) or more of the managing members or the interests of the members
thereof in Developer or which reduces or adversely impacts the managerial powers of such
percentage of managing members or members; (2) if the Developer is a corporation, a change in
forty-nine percent (49%) or more of the directors of the Developer or of control of the voting
shares of the Developer which reduces or adversely impacts the managerial powers of such
percentage of directors; (3) if the Developer is a partnership, a change in forty-nine percent
(49%) or more of the general partner of the Developer or a change in control of the general
partnership interests of the Developer which reduces or adversely impacts the managerial powers
of such general partner; (4) if the Developer is other than a limited liability company, a
corporation or a partnership, any direct or indirect change in actual control or ownership of the
beneficial interests of the Developer; (5) any Change in Ownership, directly or indirectly, of
forty-nine percent (49%) or more in the management of General Partner or any entity or entities
that have a Controlling interest in Developer or any Controlling entity, whether such entity or
entities consist of limited liability companies, partnerships, corporations, individuals or other
structure; (6) a reduction or adverse effect upon the managerial powers of forty-nine percent
(49%) or more of General Partner, its managers, general partners, directors, individuals or other
Controlling entity of any entity or entities that have a Controlling interest in Developer , as
applicable, or (7) if the party having a Control of Developer is an individual, the person ceases to
have Control.
Transferable Products
Section 13.3.2.
Transferee
Successor Owner, Mortgagee or Permitted Mortgagee.
Unavoidable Delay
orth in Section 17.7.3.
Use Covenant
Section 12.3.
Water Well Parcel
Section 1.1.3.
102
ATTACHMENT NO. 2
LEGAL DESCRIPTIONS OF PARCEL 2, PARCEL 3, and
THE WATER WELL PARCEL
Parcels 2 and 3
Parcels 2, 3 and 4 of Parcel Map No. 2010-127 in the City of Tustin, County of Orange, State of
California, as shown on a map filed in Book 331, Pages 25-29 inclusive of Miscellaneous Maps,
in the Office of the County Recorder of Said County.
Water Well Parcel
A portion of the former Cal Trans right-of-
dated December 23, 2010, recorded in the Office of the County Recorder of Orange County by
Instrument No. 2010000695461 as shown on the attached Exhibit A and B, including only that
portion located with the City of Santa Ana and specifically excluding all portions within the City
of Tustin (which have been remapped with Parcel Map 2010-127).
Attachment 2 page 1
EXHIBIT `A'
LEGAL DESCRIPTION
DK000066-01-01
In the Cities of Tustin and Santa Ana, County of Orange, State of California being that
portion of the Rancho Santiago De Santa Ana, as described in the document recorded
June 28, 1884 in Book 3, Pages 420 through 423, inclusive, of Patents in the Office of the
County Recorder of Los Angeles County, State of California, together with those portions of
Lots 65 and 80, Block 10 of Irvine's Subdivision, as shown on the map filed in Book 1,
Page 88 of Miscellaneous Maps in the Office of the County Recorder of Orange County,
described as follows:
BEGINNING at the southwesterly terminus of that course in the southeasterly line of
Parcel 1 of the Grant Deed to the State of California recorded August 19, 1963 in Book 6680,
Page 242, Official Records of Orange County, having a bearing and distance of
"South 55°42'28" West 831.87 feet" (253.554 meters) [South 56°32'34" West for purposes of
this description]; thence along the southeasterly, easterly, and northeasterly lines of said
Parcel 1 the following six courses:
1. North 56°32'34" East 253.548 meters (831.85 feet);
2. North 89°57'41" East 46.229 meters (151.67 feet);
3. South 55°03'42" East 30.632 meters (100.50 feet);
4. North 40°39'01" East 3.356 meters (11.01 feet) to the
southwesterly line of Edinger Avenue, having a southwesterly half-
width of 12.192 meters (40.00 feet), as shown on Record of Survey
No. 2009-1084, filed in Book 236, Pages 21 through 23, inclusive,
of Records of Survey, in the Office of the County Recorder of
Orange County;
5. Along said southwesterly line of said Edinger Avenue,
North 49°21'06" West 144.777 meters (474.99 feet};
8/7/2010 Page I of 3
6. South 85°39'08" West 8.623 meters (28.29 feet) to the
southeasterly line of Newport Avenue, 18.288 meters (60.00 feet)
wide, as shown on the map filed in Book 34, Page 17 of Records of
Survey in the Office of the County Recorder of Orange County;
thence along said southeasterly line South 40°39'01" West 5.182 meters (17.00 feet) to a
point on a line lying 23.470 meters (77.00 feet) southwesterly of and parallel with said
centerline of Edinger Avenue; thence along said pazallel line North 49°21'06" West
9.162 meters (30.06 feet) to the beginning of a curve concave southwesterly having a radius
of 281.325 meters (923.00 feet), said curve lying 23.470 meters (77.00 feet) southwesterly of
and concentric with the curved centerline of Edinger Avenue, having a radius of
304.801 meters (1000.00 feet) as shown on Record of Survey No. 2009-1105, filed in
Book 239, Pages 26 through 28, inclusive, of Records of Survey, in the Office of the County
Recorder of said County; thence northwesterly along said curve 38.229 meters (125.43 feet)
through a central angle of 07°47'09"; thence South 17°46'19" West 66.995 meters
(219.80 feet); thence South 30°22' 18" West 208.139 meters (682.87 feet) to the POINT OF
BEGINNING.
Containing 19,095 squaze feet (205,536 squaze feet).
Reserving unto said grantor any and all abutters rights, including access rights, appurtenant to
the grantor's remaining property, in and to said freeway over and across the aforementioned
courses described as follows:
South 17°46' 19" West 66.995 meters (219.80 feet) and South 30°22' 18" West
208.139 meters (682.87 feet).
Distances as described above are grid distances. Ground distances may be obtained by
multiplying grid distances by the mean combination factor of the courses being described.
The mean combination factor for this conversion is 1.00002134.
8/78010 Page 2 of 3
Attached hereto and made a part thereof is a map entitled Exhibit "B". This map is for
informational purposes only and is subordinate in all respects to the above description.
This legal description was prepared by me or under my direction.
apt. L'~0
~g~ ~~AY 1. ~~ SG,P
l~-c-c.r.Yw,-+ ~.- G~Gt~o 8- o ~- Z o e ~' ar o
' a No. 5282 ~
Jeremy L. Evans, PLS 5282 Date ~` Exp. 12/31 /11 ~'
~F CALF
8/7/2010 Page 3 of 3
EXHIBIT
. RANCHO SANTIAGO DE SANTA
PATEN-rS BK 3 P6S '120-
.. B .,
,~ ~K'
C/L NEWPORT AVE. AS AY gp-55\ \~2 s~~° ~9g5~1
SHOWN ON RS 34/17 W 66' $0~
NEWPORT FREE SS PRO`..{(gITION \ t2~g~ C1
9.144m NEWPORT OSED \\
(30.0_0') AYENUE PROP 530° 2218 W(682.a~ ~
CITY OF SANT_A_ ANA 208•139rt' 1390,33) - -
CITY OF TUSTIN 118.g73m - - - -
L1
- - - - _ gg.1665A,) DK00006 6-01-01 L2 f
POB (292 POR. LOTS b5 i.': a0, BLOCK 10
IRVINE'S SU5DIVISIDN M.M. I/aa m
SE'LY LINE 6 19,095 SQ. ~. (205.536 SQ. FT,) ~ ~'
BKR6680 5 °32,34„e l SS°448'n fg3 DMAPRNOS EP20073AL ° ~
PG 242, O.R. SE 2 28"~, ~ 8S'~ N E
L >' k g
6k 6g8~lNPGpg42EL ' 6,g0, PG 242 OR) z ~r
r 1 NAL URDI;R Dr CDNDEMNAT I DI`I O. ~
CAS1; N0. 03CC07137 '-
1NS-r. ND. 20100001b3551; U.R.
N89° 57'41"E
46.229m
(151.67' > i
~'n• S55° 03'42"
30.632m
(100.50' )
N40° 39'01"E
3.356m
(11.01' )
CURVE DATA
DELTA RADIUS LENGTH
C1 07°47'09" 261.325m (923.00') 38.229m (125.43')
0' 100' 200' 300'
SCKE t" ~ 200'
DESCRIPTION
!N THE CITIES OF TUSTIN AND SANTA ANA,000NTY OF ORANGE,STATE OF CALIFORNIA BEING THAT
PORTION OF RANCHO SANTIAGO DE SANTA ANA, PATENTS BOOK 3, PAGES 420-423,IN THE OFFICE
OF THE COUNTY RECORDER OF LDS ANGELES COUNTY, TOGETHER WITH THOSE PORTIONS OF LOTS
65 AND 80, BLOCK 10, IRVINE'S SUBONISION, M.M.I/88.
R=1000.00'
(304.801m)
(1,000.00
RID PER RSB
' 239/26-28)
23.470m (77.00')
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SHEET 10F 1
SCALE 1"=200'
DRAFTED RTN/KVO
CHECKED JLE
DATE 8/06/10
JOB
NUMBER 2TU5011301
LINE DATA
BEARING DISTANCE
L1 S40°39'01"W 5.182m (17.00')
L2 S85°39'08"W 8.623m (28.29')
L3 N49°21'06"W 9.162m (30.06')
ATTACHMENT NO. 3
LOT LINE ADJUSTMENT MAP
Attachment 3 page 1
ATTACHMENT NO. 4
[OMITTED]
Attachment 4 Omitted
ATTACHMENT NO. 5
SCHEDULE OF PERFORMANCE
Gateway Disposition and Development Agreement (Hotel and Retail
Development) of which this Attachment is a part; reference
mean the Attachments to the DDA unless otherwise specified. Except as
otherwise noted, all capitalized terms defined within the DDA and the
Attachments shall retain the meanings as defined in the Disposition and
Development Agreement.
Action Timing
Execution of Agreement
1.
A.
B. City executes DDA
Within 5 calendar days following City Council
approval of Developer executed DDA
C.
Date of execution by City of DDA
D. City delivers executed DDA and
Within 5 calendar days following execution of
Attachments to Escrow
DDA by City
E. Developer delivers executed DDA and
Within 7 calendar days following action by
Attachments to Escrow
City on DDA, and resolution of any remaining
issues
F.Lot Line Adjustment
Within ____ days after Effective Date
Acquisition of Developer Fee Parcels
2.
A.Developer delivers evidence of
Condition precedent to the Phase 1 Close of
Escrow.
B.Developer delivers Purchase Price
Within 5 business days of execution of DDA.
Deposit to Escrow.
C.
The Phase 1 Close of Escrow
B).
D.
The Phase 2 Close of Escrow
of Parcel C.
Attachment 5 page 1
Action Timing
E.Developer approval of condition of
Prior to the end of the Due Diligence Period
title for Developer Parcels.
F.Developer delivers to City all required
7 calendar days prior to Phase 1 Close of
Closing submittals including
Escrow
insurance, evidence of financing, etc.
G. Developer delivery of balance of
1 day prior to Phase 1 Close of Escrow.
Phase 1 Purchase Price and all
document deliveries required for
Initial Close of Escrow, as applicable.
H. Developer delivery of balance of
1 day prior to Phase 2 Close of Escrow.
Phase 2 Purchase Price and all
document deliveries required for
Initial Close of Escrow, as applicable.
I. City delivery of all document
1 day prior to the Close of Escrow for the
deliveries required for Phase 1 and
applicable Phase.
Phase 2 Close of Escrow, as
applicable.
J. Closing Date for fee transfer of
Phase 1 Closing Date
Phase 1 Property.
K. Closing Date for fee transfer of
Phase 2 Closing Date
Phase 2 Property.
3. All Entitlement Approvals; City
Proprietary and City Design Approvals
A. Developer submits Lot Line
February 12, 2012
Adjustment, Concept Plan and Design
Review application, and conditional
use permit applications, as applicable,
which are with related drawings and
documents to City which are
considered by City as complete
B.City in its Governmental Capacity
considers and process the Lot Line
Adjustment, Concept Plan & Design
Review in typical time periods for
such process
Attachment 5 page 2
Action Timing
C.City causes the Recording of the Lot
Within 15 calendar days following approval of
Line Adjustment
the Lot Line Adjustment by City
Demolition, Grading and Building
4.
Permits; Bonds
A.Developer submits plans and
45 days after the Entitlement Approval Date.
application for any demolition and
rough grading permit on applicable
Phase 1 Property or Phase 2 Property
B.City issues Demolition Permit
Within 5 calendar days of approval by the
Community Development Department of
submittals required by Section 5.A and
following the Phase 1 Property Close of
Escrow. Initial Close of Escrow
C.Developer submits application for
Within 60 days after the Lot Line Adjustment
rough grading
has been completed
D.City issues permits for rough grading
After (a) the Community Development
Department approval of plans for rough
grading, and (b)
applicable permit fees, bonding for any
required infrastructure Work and satisfaction
of all conditions of approval
E.Developer submits final grading plans
Within 120calendar days after the Entitlement
and final construction and related
Approval Date.
documents to City for issuance of final
grading and building permits for the
First Phase Acquisition and Second
Phase Acquisitions.
D.City issues final grading and building
Within 15 calendar days following
permits consistent with any approved
Community Development Department
phasing
approval of final grading and building plans
ees and
satisfaction of all conditions of approval,
including provision to City of Performance
Bonds for Grading and any work in the Public
Right-of-way.
Attachment 5 page 3
Action Timing
Construction of the Improvements
5.
A. Developer commences rough grading
On or before the date that is the later of
of the Project Site
(i) 10 days after the Close of Escrow for the
applicable Phase and (ii) 10 days after the
receipt of the grading permit for the applicable
Phase.
B. Developer completes rough grading of
Within 60 calendar days following issuance of
the Project Site
rough grading permits by City
C. Developer commences final grading
Within 10 calendar days after completion of
rough grading
D. Developer commences vertical
On the date that is the earliest of (i) if final
construction
grading has been completed for the applicable
Phase of the Project, 10 days after the date on
which the City issues building permits for such
Phase of the Project, (ii) if final grading has not
been completed when building permits are
issued for the applicable Phase of the Project,
10 days after the date on which the final
grading of such Phase of the Project has been
completed and (iii) 20 full calendar months
after the Effective Date.
E. Completion of construction of the
Developer shall complete construction of
Improvements
Improvements no later than eighteen (18)
months following issuance of first building
permit for Improvements in the applicable
phase of property in the project.
Partial Certificates of Compliance
6.
A. Developer submits request for
Upon completion of improvements and
issuance of a Partial Certificate of
satisfaction of all Conditions Precedent set
Compliance by City
forth in DDA for the applicable Parcel(s) or
phase of development.
B.The City approves or disapproves the
Within 30 calendar days following submission
request for issuance of a Partial
of request for Partial Certificate of Compliance
Certificate of Compliance
and satisfaction of all conditions precedent set
forth in DDA
C. The City shall cause the Recording of
Within 10 calendar days following issuance of
the Partial Certificate of Compliance
Partial Certificate of Compliance by City
against the applicable Parcel(s)
Attachment 5 page 4
Action Timing
Final Certificate of Compliance
7.
A. Developer submits request for
Upon completion of Improvements and
issuance of the Final Certificate of
satisfaction of all Conditions Precedent set
Compliance by City
forth in DDA
B.The City approves or disapproves the
Within 30 calendar days following submission
request for issuance of the Final
of request for Final Certificate of Compliance
Certificate of Compliance
and satisfaction of all conditions precedent set
forth in DDA
C. The City shall cause the Recording of
Within 10 calendar days following issuance of
the Final Certificate of Compliance
Final Certificate of Compliance by City
against all Parcels
Attachment 5 page 5
ATTACHMENT NO. 6
SCOPE OF DEVELOPMENT
1.0 General Information
The Developer Parcels are delineated on Attachment Nos. ____.
2.0 DeveloperImprovements
2.1 Definition of Improvements
The Developer shall construct or cause to be constructed on the Developer Parcels all of the
Improvements and shall construct or cause to be constructed to serve the Project certain private
and public infrastructure set forth in this Scope of Development or as required and approved by
the City, including without limitation, the City Planning Commission and City Council. This
Attachment presents the Scope of Development and minimal specific design criteria. Additional
requirements may be contained in conditions of approval of the entitlements for the Project.
The Improvements shall generally consist of the following:
2.1.1 Improvements. Developer shall complete the development of the Vertical
approximately 16,000 square feet of commercial space. It has been represented at this time that
the Developer is proposing a Hilton Homewoood Suites and Hilton Garden Hotel which would
meet the definition of a Class A Hotel. Any alteration of the proposed product by the Developer
shall require City approval. The hotels would comprise approximately 300 rooms combined for
the two hotels and an adequate number of parking spaces as required by the Specific Plan and
Tustin City Code and which may be defined by more detailed studies for the Project.
Improvements shall include, but not be limited to buildings, architectural amenities, parking,
security lighting, pedestrian amenities, and trash enclosures. Design of all Improvements shall
be consistent with requirements of the Pacific Center East Specific Plan, development standards
contained in Section 3 of this Attachment, and additional requirements contained in any
conditions of approval required for the Entitlements for the Project.
In design of the hotels, Developer has agreed that:
(i) The hotels will be of the quality of at least a three star select service hotel;
(ii) The hotels will be a minimum of 3 stories in an urban format with said format
reflected in the exterior and exterior designs;
(iii) The hotels will be the highest quality tier of each of the proposed hotel
product lines contemplated.
Attachment 6 page 1
2.1.2 Description of Hotel Operators and Retail Tenants.
(a) Developer shall be responsible for securing two hotel operators,
one for Parcel A and one for Parcel C. Developer shall diligently pursue obtaining a Marriott
Class A Uses
Residence Inn for Parcel A and a Hilton Garden Inn for Parcel C.
to hotels means both the Marriott Residence Inn and the Hilton Garden Inn are classified by
STR
Smit
considered by the City for Parcel A if Developer is unable to secure the franchise of a Hilton
Homewood Suites for Parcel A. Class A Uses with respect to hotels also means, for Parcel A,
the Marriott Residence Inn, Hyatt Summerfield Suites, Staybridge Suites, and Starwood
Element, all
operators will be considered by the City for Parcel C if Developer is unable to secure the
franchise of a Hilton Garden Inn for Parcel C. Class A Uses with respect to hotels means, for
Parcel C, are Hyatt Place, or the aLoft by Starwood, all of these alternative operators are
l operators. Any other alternative hotel operator, not named
in this section would only be considered by the City for either Parcel A or Parcel C if the
writing by the City in its sole discretion. Any such additional hotel flags shall only be deemed to
be Class A Uses with respect to hotels if approved in writing by the City in its sole discretion.
Class A Uses
(b) etail uses for Parcel B must be
(i) compatible, complimentary and supportive of (A)
Parcel A and on Parcel C, and (B)
gateway entry into the City of Tustin and (ii) approved in writing by the City.
with respect to retail exclude all Prohibited Uses or Prohibited Users (as defined in Attachment
No. 13).
2.1.3 Infrastructure Improvements. Developer shall be responsible for all
necessary private and public infrastructure and utilities including, without limitation:
a) All grading, on-site private streets, roadways driveways, alleyways, sidewalks;
b) All utilities including connection of all utilities, including but not limited to
sewer, domestic and reclaimed water, electrical, gas, telephone, cable and
telecommunication service connections from their origin as shown in the Pacific
Center East Specific Plan or as modified by private utility purveyors and as
approved by the Director of Public Works to the property line and from the
property line to the buildings and uses on the Developer Parcel;
c) Any common area landscape or hardscape improvements including the landscape
of lots, common areas on the Developer Parcel and other improvements within the
existing and proposed public right-of-way as may be required and approved by
the Planning Commission and City Council, as applicable, with approval of
Vesting Tentative and Final Tract Maps, Concept Plan approval, Design Review
any Conditional Use Permits, or other required entitlements.
Attachment 6 page 2
d) Developer shall be responsible for design and construction of certain
improvements within the public right-of-way including sidewalks, curb-cuts,
streetscape landscaping, and for any restoration of the public-right-way
necessitated by Developer construction activities as are specifically defined in the
Entitlement approvals for the Project.
2.1.4 Compliance with Codes and Conditions. The construction of
Improvements must be in compliance with the Pacific Center East Specific Planand all City of
Tustin planning, building, electrical, plumbing, mechanical, fire codes, public and private street
Tustin and any applicable governmental agency having jurisdiction including, but not limited to,
the Planning Commission and City Council approvals.
As more particularly described and provided in Section 8.4 of the Agreement, all final working
drawings, specifications, grading plans, soil reports, landscaping plans, color and finish schedules
shall be approved prior to start of the construction.
2.1.5 Compliance with DDA. The Developer shall comply with all provisions
of the Agreement related to the planning, design, construction, and operation of the
Improvements.
2.2 Schedule of Performance
The Developer shall commence and complete the Improvements by the respective times
established in the Schedule of Performance (Attachment No. 5).
3.0Development Standards
The Improvements shall be designed and developed as a planned development in which all
construction will have high architectural quality and character, both individually and in the
context of the surrounding area. All public spaces, open space, and individual yard areas shall be
designed, landscaped and developed with the same quality. Particular attention shall be paid to
enhancing pedestrian activities, the mass, scale, and bulk of the development shall be appropriate
to the site and to the selection of color and materials. The City and Developer will cooperate and
direct their consultants, architects and/or engineers to cooperate so as to ensure the continuity and
coordination necessary for the proper and timely completion of development of Improvements.
All of the Improvements shall conform to all applicable federal, state, county and city
regulations, the regulations of the Pacific Center East Specific Plan and the Tustin City Code and
the conditions of City resolutions.
The Developer acknowledges the responsibility to obtain any approvals required by any
governmental agency, utility or other agency, including the City, which has jurisdiction over all
jurisdiction shall be incorporated into the final design and noted in the construction documents
by the architects, engineers and other consultants. The Developer shall make all necessary
Attachment 6 page 3
applications by such time(s) as will be consistent with the timely commencement and completion
of various portions of the Improvements as identified in the Schedule for Performance. In
addition, the following development standards shall apply to the Developer Improvements:
3.1 Architecture and Project Design
The quality of materials, construction and amenities of the Project shall be equivalent or compare
favorably with the quality of materials, construction and amenities for upper end extended stay
and business hotels and adjacent retail development previously constructed by Developer. An
example of such projects include: Irvine Marriott Residence Inn, Burbank Marriott Residence
Inn, and Oceanside Marriott Residence Inn. The proposed Project should be built around a
framework of design elements, including a well thought out circulation system emphasizing
pedestrian friendly layout of buildings, parking and access driveways, an open space network
that provides focal points, creation of an architectural design framework and creation of a
landscape framework that establishes an element of continuity but separate identity for the
Project. Visual continuity should be achieved through high quality architectural treatments,
streetscape design, entry features, vertical elements, and Project landscaping.
Quality standards will include landscaping in accordance with a landscaping palette reasonably
approved by the City, appropriate front, rear and side architectural building features and roof top
screening of equipment, including upgraded exterior building materials on buildings visible to
the public from the State Route 55, Edinger Avenue, Newport Avenue, and the CalTrans Off-
Ramp or otherwise acceptable to the City in its reasonable discretion. Consistent architecture
style shall be evident in all elements of design, from all elevations of the structures and treatment
of roofs and parapets, down to smaller elements such as street furniture and trash enclosures.
Particular attention shall also be paid to massing, scale, color, and expression of such quality for
the Project shall be true to the distinctive and unique elements of Tustin, the Tustin Gateway area
further developed by the parties and approved by the City.
The Project shall also be designed in compliance with the guidelines, land use and development
standards, signage and off-street parking standards and all applicable provisions of the Pacific
Center East Specific Plan as well as all site plan design objectives and provisions.
3.2 Loading. Adequate loading and unloading space shall be provided as approved
by the City. Loading spaces visible from any abutting street to the Project shall be landscaped to
screen an unsightly or barren appearance consistent with requirements of the Pacific Center East
Specific Plan and/or Tustin City Code, as applicable.
3.3 Signs. Signs shall be designed to contribute positively to the environment. Signs
identifying the Project and individual building use will be permitted, but their height, size,
location, color, lighting and design shall be subject to City approval and must conform to
provisions of the Pacific Center East Specific Plan and/or Tustin City Code, as applicable and
shall be at a scale appropriate to the overall design of the Project.
Attachment 6 page 4
3.4 Screening. All outdoor storage of materials or equipment shall be screened to the
extent and manner required by the City of Tustin. Screening of air conditioning and other
equipment on the buildings shall be incorporated into the architectural design of the buildings.
3.5 Landscaping. The Developer shall provide and maintain landscaping within the
public right-of-way and within all setback areas along all street frontages and on the Developer
Parcels as required by the Pacific Center East Specific Plan, City Landscape Guidelines and
plans and drawings approved by the City.
3.6 Utilities. All utilities on the Developer Parcel shall be undergrounded.
Site Preparation and Demolition
4.0 . The Developer shall affect any site preparation
(including, without limitation, demolition and relocation of utilities) necessary for the provision
of the Horizontal and Vertical Improvements. All such work shall be a the sole cost and expense
of Developer except to the extent such work is pre-approved to be included in the Tustin
Gateway Backbone infrastructure and funded through provisions of the Agreement related to
such. Site preparation may consist of the following:
A.Demolition. Demolition activities shall include:
1.Insofar as necessary to provide the Improvements, the reduction and
removal of any structures and improvements from the Project Site not desired and
part of the Project, including subsurface structures and all debris and rubbish
resulting from such demolition.
2.Insofar as necessary to provide the Improvements, the removal of all
paving (including catch basins, curbs, gutters, driveways and sidewalks) within or
on the Site.
The City is not responsible in any way for the filling of any excavation, nor for
grading or compaction. Soil conditions shall be solely the responsibility of the
Developer.
B.Soil Conditions. The Developer assumes responsibility to deal with all portions
4
of the Agreement. It shall be solely the responsibility of Developer, at
Dev
conditions of the Site. In the event such investigation indicates the conditions are
not in all respects entirely suitable for the use or uses to be included in the Project,
then the City shall have no responsibility or obligation to take such action as may
be necessary to place the Developer Parcels and the soil conditions of the
Developer Parcels in all respects in a condition entirely suitable for the
development of the Site.
Attachment 6 page 5
C.Subdivision Compliance. The Developer shall be responsible for the preparation
and processing of a Lot Line Adjustment as may be required pursuant to the
Subdivision Map Act and Tustin City Code enacted pursuant thereto, and with
complying with conditions imposed as a condition of map approval.
Attachment 6 page 6
ATTACHMENT NO. 7
PRELIMINARY PLANS
Attachment 7 page 1
ATTACHMENT NO. 8
MEMORANDUM OF DDA
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FROM RECORDING
FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT 2011-01
(TUSTIN GATEWAY PROJECT)
This MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
Memorandum of DDA<________ __, 2011>
by
and between the CITY OF TUSTIN, a municipal corporation of the State of California (the
City
LOPMENT) a
Developer
entered into that certain Tustin Gateway Disposition and Development Agreement 2011-01
DDA
(Tustin Gateway Development) dated as of the DDA Effective Date (the
real property described below. The City and the Developer are sometimes referred to herein
PartyParties
not otherwise defined shall have the meanings ascribed to such terms in the DDA.
1.Property Affected by the DDA.
Property
1.1
legally described and depicted on attached hereto and incorporated herein by
reference:
(a) located immediately north of the SR-55 Freeway Ramp and
west of Newport Avenue consisting of approximately 2.27 acres of land;
(b)
consisting of approximately 5.27 acres of land,; and
(c) the Water Well Parcel, consisting of approximately .85 acres of land.
2
Developer shall process, on behalf of the City, pursuant to the Subdivision Map Act and
the City Code, a lot line adjustment of Parcel 2 and Parcel 3 in order to create three legally
Parcel AParcel BParcel C
s
Development Parcels
and incorporated herein by this reference. Subsequent to the lot line adjustment, and pursuant to
the terms of the DDA, the City intends (i) to establish by Declaration certain reciprocal
easements, and covenants, conditions and restrictions with respect to Parcel 2, Parcel 3 and the
Water Well Parcel, including creation of certain non-exclusive easement rights in favor of the
owners of the Development Parcels over certain portions of the Water Well Parcel (the
Easement Area
Parcels. The Development Parcels, together with the Easement Area are collectively referred to
Property
Property
1.2Exclusions from the Definition of Property
the following rights and interest which shall be explicitly reserved to the City [Developer to
provide preliminary title]:
(i)Any and all oil, oil rights, minerals, mineral rights, natural gas,
natural gas rights and other hydrocarbon by whatsoever name known, geothermal steam and all
products derived from any of the foregoing, that may be within or under the Development
Parcels together with the perpetual right of drilling, mining, exploring for and storing in and
removing the same from the Development Parcels or any other land, including the right to
whipstock or directionally drill and mine from lands other than the Development Parcels, oil or
gas wells, tunnels and shafts into, through or across the subsurface of the Development Parcels
and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and
beneath or beyond the exterior limits thereof, and to re-drill, re-tunnel, equip, maintain, repair,
deepen and operate any such well or mines; but without, however, the right to drill, mine, store,
explore or operate through the surface of the Development Parcels or otherwise materially
adversely affect the use or operation of the Development Parcels as anticipated in the DDA
(defined below).
(ii)Any and all water, water rights or interests therein appurtenant or
relating to the Development Parcels or owned or used by the GRANTOR in connection with or
with respect to the Development Parcels no matter how acquired by the GRANTOR, whether
such water rights shall be riparian, overlying, appropriative, littoral, percolating, prescriptive,
adjudicated, statutory or contractual, together with the perpetual right and power to explore, drill,
re-drill and remove the same from or in the Development Parcels, to store the same beneath the
surface of the Development Parcels and to divert or otherwise utilize such water, rights or
interests on any other property owned or leased by the GRANTOR; but without, however, any
right to enter upon or use the surface of the Development Parcels in the exercise of such rights or
otherwise materially adversely affect the use or operation of the Development Parcels as
anticipated in the DDA.
(iii)The rights of the City in and to the Water Well Parcel (including to
the use of the parcel for water and other utility purposes) other than as may be granted on a non-
e Declaration.
Attachment 8 page 3
(iv)From and after the dedication and acceptance by the City of any
such fee dedication(s) required by the City as a condition of approval of the Entitlements, the
Property
-of-way and any of the land
dedicated by Developer to and/or reserved by the City for any purpose, collectively referred to in
City Dedication Parcels.
The City Dedication Parcels shall, following
acceptance thereof by the City, be owned by the City and shall be utilized for public benefit or
purpose, including public roadways, right of way improvements, and related utilities, all of
which shall be constructed by the Developer as part of the Project.
1.3The DDA, this Memorandum of DDA, and all covenants, conditions,restrictions
and obligations set forth therein, in the Quitclaim Deed and the Declaration shall be binding upon
the Property and shall govern the use and development of the Property by the Developer and its
successors and assigns owning all or any portion thereof for the benefit of the City and the Water
Well Parcel and the successors and assigns of the City owning all or any portion thereof
2.Effect of DDA. The DDA imposes certain obligations, agreements, covenants,
conditions and restrictio
development, use, operation and ultimate disposition thereof, that run with the Property as
further set forth below. Among these obligations are the following:
(a)Certain restrictions on transfer, conveyance and/or assignment of the DDA
and/or all or any portion of the Property, whether voluntary or involuntary, and certain
restrictions on the Transfer of Control of Developer contained in Article 2 of the DDA, that
terminate upon execution and recordation by the City of the Final Certificate of Compliance or at
such earlier time as is specified in the DDA;
(b)Certain restrictions on Mortgages contained in Article 2 and Article 15 of
the DDA, that terminate upon execution and recordation by the City of the Final Certificate of
Compliance or at such earlier time as is specified in the DDA;
(c)The Releases contained in Section 4.4.3 of the DDA (copied verbatim in
the Quitclaim Deed and to be included in each subsequent deed with respect to the Property) that
remain in effect in perpetuity;
(d)The environmental indemnity and environmental provisions contained in
Sections 10.2 and 10.3 of the DDA (to be included in each subsequent deed with respect to the
Property) that remain in effect in perpetuity;
(e)The use covenants and restrictions contained in Section 12.1 of the DDA
that terminate with respect to each Development Parcel (a) upon the twenty fifth (25th)
anniversary of the earlier of the date of issuance of (i) a Partial Certificate of Compliance for that
Development Parcel or (ii) a Final Certificate of Compliance for the Property, but in no event
later than the fiftieth (50th) anniversary of the DDA Effective Date;
(f)The maintenance covenants contained in Section 12.2 of the DDA that
terminate with respect to each Development Parcel (a) upon the twenty fifth (25th) anniversary
of the earlier of the date of issuance of (i) a Partial Certificate of Compliance for that
Attachment 8 page 4
Development Parcel or (ii) a Final Certificate of Compliance for the Property, but in no event
later than the fiftieth (50th) anniversary of the DDA Effective Date;
(g)The non-discrimination covenants contained in Sections 12.4 of the DDA
that remain in effect in perpetuity;
(h)The Right of Purchase in favor of the City, contained in Section 15.3 of
the DDA (copied verbatim below), that terminates upon execution and recordation by the City of
the Final Certificate of Compliance or at such earlier time as is specified in the DDA; and
(i)The Right of Reversion in favor of the City contained in Section 15.4 of
the DDA (copied verbatim below), that terminates upon execution and recordation by the City of
the Final Certificate of Compliance or at such earlier time as is specified in the DDA.
(j)The right of the City (but not the obligation) contained in Section 16.14 of
the DDA to cure any default by Developer or its Successor Owner relative to any Mortgage
during the cure periods which apply to the Developer or its Assignee pursuant to the Mortgage
documents and any cure period which may apply to the City under applicable law.
3.Right of Purchase and Right of Reversion. For ease of reference only, the following
italicized Section is copied verbatim from the DDA:
[INSERT DDA SECTIONS 15.3 and 15.4 VERBATIM]
4.Effect on Mortgages; Right To Encumber. Notwithstanding any other provision of the
DDA, the Developer shall have the right to encumber the fee title to portions of the Property
owned by it with a Permitted Mortgage made by a Permitted Mortgagee subject to compliance
with the terms, conditions and limitations set forth in Article 2 and Article 16 of the DDA.
Mortgages complying with the terms of said section and entered into by Developer with
Permitted Mortgages
all Mortgages shall be subject and subordinate to the DDA, including, without limitation, the
5.Certificate of Compliance
Precedent set forth in Section 9.4 of the DDA with respect to issuance of a Partial or Final
Certificate of Compliance, the City shall furnish the Developer with the appropriate Certificate
of Compliance in recordable form upon written request therefor by the Developer. Such
Certificate of Compliance shall be binding upon the Parties to this Memorandum of DDA, their
Completion of the Improvements covered by such Certificate of Compliance and compliance
with all other conditions required by the DDA, subject only to such continuing terms of the DDA
and/or the obligations of the Developer as are set forth therein.
6.DDA and Memorandum of DDA Run With the Land. The DDA and this Memorandum
of DDA, including, without limitation, the provisions recited and set forth above, and all other
obligations, agreements, covenants, conditions and restrictions set forth in the DDA and this
Memorandum of DDA are hereby agreed by the Developer and the City to be covenants running
with the land and enforceable as equitable servitudes against the Property and are hereby
Attachment 8 page 5
declared to be and shall be binding upon the Property and the Developer and the successors and
assigns of the Developer owning all or any portion of the Property for the benefit of the City
Owned Property and the City and the successors and assigns of the City owning all or any
portion of the City Owned Property.
7.Acknowledgment and Assumption by Developer. By acceptance of the Quitclaim Deed,
the Developer hereby acknowledges and assumes all responsibilities placed upon the Developer
under the terms of the DDA.
8.Public Documents. The documents constituting the DDA are public documents and may
be reviewed at the official offices of the City.
9.Interpretation; Notice. This Memorandum of DDA is prepared for recordation and notice
purposes only and in no way modifies the terms, conditions, provisions and covenants of the
DDA. In the event of any inconsistency between terms, conditions, provisions and covenants of
this Memorandum of DDA and the DDA, the terms, conditions, provisions and covenants of the
DDA shall prevail.
10.Attachments. The Attachments attached to this Memorandum of DDA are hereby
incorporated by this reference into this Memorandum of DDA as though fully set forth in this
Section.
Attachment 8 page 6
IN WITNESS WHEREOF, the City and the Developer have signed this Memorandum of
DDA as of the DDA Effective Date.
Ý×ÌÇ ÑÚ ÌËÍÌ×Òô ÝßÔ×ÚÑÎÒ×ß
By:___________________________
_____________
City Manager
ATTEST: ___________________ Dated:________________________
Pamela Stoker
City Clerk
APPROVED AS TO FORM
Special Counsel for the City
_____________________
A Professional Corporation
By:___________________________
OLSON REAL ESTATE GROUP, INC.
a California Corporation
By:
Name:
Its:
By:
Name:
Its:
Attachment 8 page 7
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before me,____________________________________ ,
DateHere Insert Name and Title of the Officer
personally appeared ______________
Name(s) of Signer(s)
_____________________________________________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:_______________________________________
Signature of Notary Public
__
(SEAL)
Attachment 8 page 8
ATTACHMENT NO. 9
FORM OF QUITCLAIM DEED
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE RECORDED
AND TO BE EXEMPT FROM RECORDING
FEES PER GOVERNMENT CODE 6103 AND
27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
Mail Tax Statements to:
Olson Real Estate Group, Inc.
2955 Main Street, Suite 300
Irvine, CA 92614
QUITCLAIM DEED FOR PARCEL[(S)] [INSERT DEVELOPER PARCEL(S) BEING
QUITCLAIMED]AND COVENANTS, CONDITIONS AND RESTRICTIONS
This Quitclaim Deed For Parcel[(s)] [INSERT DEVELOPER PARCEL(S) BEING
Quitclaim Deed[_______], 2011
, by the City of
GRANTOR
favor of Olson Real Estate Group, Inc. (dba R.D. Olson Development) a California corporation
GRANTEE
(the
GRANTOR, for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, does hereby remise, release and forever quitclaim to the GRANTEE, all of
[Fill in for specific Development Parcel(s) being conveyed]
approximately acres, more or less,
[Insert Development Parcel(s) being quitclaimed]
more particularly described as on
Development
Exhibit attached hereto and incorporated herein by this reference (the
Parcels
EXCEPTING THEREOUT AND THEREFROM, however, and reserving to the
GRANTOR, its successors and assigns, together with the right to grant and transfer all or a
portion of the same, the following:
1.1 Any and all oil, oil rights, minerals, mineral rights, natural gas, natural gas rights
and other hydrocarbon by whatsoever name known, geothermal steam and all products derived
Attachment 9 page 1
from any of the foregoing, that may be within or under the Development Parcels together with
the perpetual right of drilling, mining, exploring for and storing in and removing the same from
the Development Parcels or any other land, including the right to whipstock or directionally drill
and mine from lands other than the Development Parcels, oil or gas wells, tunnels and shafts
into, through or across the subsurface of the Development Parcels and to bottom such
whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the
exterior limits thereof, and to re-drill, re-tunnel, equip, maintain, repair, deepen and operate any
such well or mines; but without, however, the right to drill, mine, store, explore or operate
through the surface of the Development Parcels or otherwise materially adversely affect the use
or operation of the Development Parcels as anticipated in the DDA (defined below).
1.2 Any and all water, water rights or interests therein appurtenant or relating to the
Development Parcels or owned or used by the GRANTOR in connection with or with respect to
the Development Parcels no matter how acquired by the GRANTOR, whether such water rights
shall be riparian, overlying, appropriative, littoral, percolating, prescriptive, adjudicated,
statutory or contractual, together with the perpetual right and power to explore, drill, re-drill and
remove the same from or in the Development Parcels, to store the same beneath the surface of
the Development Parcels and to divert or otherwise utilize such water, rights or interests on any
other property owned or leased by the GRANTOR; but without, however, any right to enter upon
or use the surface of the Development Parcels in the exercise of such rights or otherwise
materially adversely affect the use or operation of the Development Parcels as anticipated in the
DDA.
2. SUBJECT TO THE FOLLOWING NOTICES, COVENANTS, RESTRICTIONS, AND
CONDITIONS, which shall be binding upon and enforceable against the Development Parcels
and the GRANTEE, and its successors and assigns, in perpetuity:
2.1 This Quitclaim Deed is made by GRANTOR and GRANTEE agrees to accept
conveyance of the Development Parcels, subject to all covenants, conditions, restrictions,
easements, rights-of-way, reservations, rights, agreements and encumbrances of record,
including, without limitation, (a) that certain Disposition and Development Agreement 2011-01
(Tustin Gateway Project) dated _______, 2011 by and between GRANTOR and GRANTEE (the
DDA
the Official Records of Orange County on ________, 2011 as Instrument Number _______, (the
Memorandum of DDA
that certain Declaration of Reciprocal Easements,
Covenants, Conditions and Restrictions, Including Environmental Restrictions pursuant to Civil
Declaration
[immediately prior to the execution and recording of this Quitclaim Deed] [on ____________ as
Instrument No. ___________], which are covenants running with the land and are binding upon
GRANTEE and all successors and assigns of GRANTEE owning all or any portion of
Development Parcels for the benefit of the GRANTOR and its successors and assigns, unless or
until such responsibilities and obligations are released pursuant to the provisions of the aforesaid
documents. Each future transfer of conveyance of the Parcels or any portion thereof shall
include notice of the Declaration.
2.2 As further set forth in the DDA, the GRANTEE acknowledges that it has
examined the Development Parcels and is buying the Development Parcels from the GRANTOR
Attachment 9 page 2
and with all faults, which provisions shall survive the close of escrow related to this transaction
and do not merge with this Quitclaim Deed.
2.3 Grantee covenants and agrees for itself and its successors and assigns and each
and every person and entity claiming by, through or under Grantee and its successors and
assigns, that there shall be no discrimination against or segregation of any person, or group of
persons, on account of sex, race, color, religion, ancestry, national origin, disability, medical
condition, marital status, or sexual orientation in the sale, lease, transfer, use, occupancy, tenure
or enjoyment of the Parcels or any improvements thereon, nor shall Grantee itself or any person
claiming under or through it establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Parcels or in development of the improvements
thereon.
The terms of this Quitclaim Deed, including without limitation the provisions of
Sections3 of this Quitclaim Deed, are hereby agreed and declared by the GRANTEE and the
GRANTOR and declared to be covenants running with the land and enforceable as restrictions
and equitable servitudes against the Development Parcel, and are hereby declared to be and shall
be binding upon the Development Parcels and the GRANTEE and all successors and assigns of
the GRANTEE owning all or any portion of the Development Parcels for the benefit of
GRANTOR and the property owned by GRANTOR legally described on attached to
this Quitclaim Deed and incorporated herein by this reference and the successors and assigns of
the GRANTOR owning all or any portion of such property.
IN WITNESS WHEREOF, the GRANTOR, the CITY OF TUSTIN, has caused this
Quitclaim Deed to be executed on the day first above written.
CITY OF TUSTIN, CALIFORNIA
By:___________________________
___________________
City Manager
ATTEST: ___________________ Dated:________________________
Pamela Stoker
City Clerk
Attachment 9 page 3
APPROVED AS TO FORM
Special Counsel for the City
[INSERT LAW FIRM OR CITY ATTORNEY]
A PROFESSIONAL CORPORATION
By:___________________________
Attachment 9 page 4
ATTACHMENT NO. 10
DECLARATION OF RECIPROCAL EASEMENTS, COVENANTS, CONDITIONS
AND RESTRICTIONS, INCLUDING ENVIRONMENTAL RESTRICTIONS
Recording Requested By
And When Recorded, Return To:
Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: Assistant City Manager
DECLARATION OF RECIPROCAL EASEMENTS, COVENANTS,
CONDITIONS
AND RESTRICTIONS, INCLUDING ENVIRONMENTAL RESTRICTIONS
PURSUANT TO CIVIL CODE SECTION 1471
(Tustin, California)
This Declaration of Reciprocal Easements, Covenants, Conditions and
Declaration
Declaration Effective Date
of __________, 2011 , by The City of Tustin, a municipal
CityDeclarant
A. Declarant is the owner of that certain real property located in the City of Tustin,
County of Orange, California designated on the site plan attached as Exhibit E and referred to
Water Well Parcel
Exhibit A, upon which City intends
to construct certain water well improvements.
B.Declarant is also the Owner of that certain real property located in the City of
Tustin, County of Orange, California designated on the site plan attached as Exhibit E and
Parcel AParcel BParcel
each as legally described on Exhibit B, Exhibit C and Exhibit D,
respectively.
C.Subsequent to the execution of this Declaration, Declarant intends to convey to
Olson Real Estate Group, Inc., dba R.D. OLSON DEVELOPMENT, a California corporation
Developer
(whose principal office is 2955 Main Street, Suite 300, Irvine, CA 92614), by
quitclaim deed, all of its right, title and interest in and to Parcel A and Parcel B and, concurrently
with such transfer or thereafter in accordance with the provisions of the DDA (defined below),
Parcel C.
D.Prior to the transfer of the Development Parcels, Declarant desires (i) to establish
certain reciprocal easements, covenants, and conditions with respect to the Development Parcels
and the Water Well Parcel for ingress, egress, parking and other purposes for the benefit of each
of the Development Parcels and the Water Well Parcel and the Owners thereof (defined below)
Attachment 10 page 1
and (ii) to reserve certain utility easements in favor of the Water Well Parcel and the Owner
thereof, all as more fully described herein.
NOW, THEREFORE City hereby declares that the easements described herein
shall be conveyed and the covenants, conditions and restrictions shall be effective in the
manner and subject to the terms and conditions of this Declaration. All of the covenants
and restrictions set forth herein shall run with the land, shall be enforceable as equitable
servitudes, and shall be binding upon and for the benefit of the Parcels (defined below)
and all parties having or acquiring any right, title or interest in the Parcels, the Buildings
and/or the Water Well Facilities.
Section 1.Definitions
.
Building
1.1
Parcel, but shall exclude the Water Well Facilities.
Certificate of Compliance
1.2
the Property or any Phase thereof by the City upon Completion by Developer of all of the
Improvements and satisfaction of all additional Conditions Precedent thereto with respect to the
Property or Phase, as the case may be, as described in Article 9. A Certificate of Compliance
may be issued for a P
Claim(s)
1.3Section 3.7.
Class A User
1.4
Class A Uses
1.5only those hotel and retail
Exhibit G and such additional uses as the City may approve in writing from time to
time in its sole discretion upon written application by any Owner.
Default Rate
1.6
compounded annually, but in no event in excess of the maximum legal rate.
Defaulting Owner
1.7set forth in Section 7.2.
Default Notice
1.8Section 7.2.
Development Parcels
1.9
Development Parcels Easement Areas
1.10
the Parcel B Easement Area, and the Parcel C Easement Area, collectively.
DDA
1.11-01
(Tustin Gateway Project) by and between the City and Developer, dated ________________, as
the same may be amended from time to time.
Attachment 10 page 2
Easement Areas
1.12
Area, the Parcel C Easement Area and the Water Well Parcel Easement Area, collectively, or any
one or more thereof, upon which an easement is granted pursuant to this Declaration.
Easement Users
1.13
Users, the Parcel C Easement Users and the Water Well Parcel Users.
End User
1.14
any retail building or retail space) on any Development Parcel, whether such Person holds a fee
interest, ground leasehold interest, or other leasehold interest in such Development Parcel or
portion thereof.
Entitlements
1.15provals, entitlements, licenses
and/or permits required in connection with the development of the Buildings upon the
Development Parcels, including without limitation, lot line adjustments, concept plan and design
review approval, conditional use permit(s) required to permit shared parking on the Development
Parcels, and demolition, grading, and building permits legally required by the City or any other
governmental authority as a condition of subdivision and/or development of the Development
Parcels and construction of Improvements thereon.
Granting Owner
1.16Section 2.1.
Improvements
1.17
improvements constructed or to be constructed upon the Parcels and shall include all
infrastructure improvements and utilities required to be constructed or installed on or in
connection with the development of the Parcels, including (a) all public and private streets,
roadways, drives, alleyways, sidewalks and parking lots and (b) all utilities required for the
Project to the boundary of each building, structure or other improvement requiring such utility
access.
Indemnitees
1.18Section 3.7.
Indemnitor Owner
1.19Section 3.7.
Maintenance Parcel
1.20
Owner is a Responsible Owner and upon which such Responsible Owner shall be obligated to
perform the construction and maintenance of Improvements and to maintain insurance and
provide indemnities as described in this Declaration and shall be (a) with respect to each
Development Parcel and the Easement Area thereon, the Owner thereof, and (b) with respect to
the Water Well Parcel Easement Area, the Owner of Parcel C.
Owner
1.21
any portion thereof.
Owners
1.22
Parcel
1.23
C, when referred to individually.
Attachment 10 page 3
Parcel A
1.24 Recital B.
Parcel A Easement Area
1.25
Exhibit E attached upon which easements, including for pedestrian and vehicular ingress and
egress, parking and construction and maintenance, are granted by this Declaration, as the same
may be modified from time to time in accordance with this Declaration.
Parcel A Easement Users
1.26
their respective employees, invitees, licensees, designees and agents.
Parcel B
1.27Recital B.
Parcel B Easement Area
1.28
Exhibit E attached upon which easements, including for pedestrian and vehicular ingress and
egress, parking and construction and maintenance, are granted by this Declaration, as the same
may be modified from time to time in accordance with this Declaration.
Parcel B Easement Users
1.29 tenants and
their respective employees, invitees, licensees, designees and agents.
Parcel C
1.30 Recital B.
Parcel C Easement Area
1.31
Exhibit E attached upon which easements, including for pedestrian and vehicular ingress and
egress, parking and construction and maintenance, are granted by this Declaration, as the same
may be modified from time to time in accordance with this Declaration.
Parcel C Easement Users
1.32the Parcel C Owner and its tenants and
their respective employees, invitees, licensees, designees and agents.
Parcels
1.33
collectively.
Parking Areas
1.34pective Parcels as may be
established from time to time by the respective Owners of the Parcels to be used for the short
term parking of automobiles and other vehicles by the Easement Users. The initial Parking
Areas are depicted on Exhibit E.
PersonPersons
1.35
corporations, limited liability companies, firms, associations, joint ventures, or any other form of
business entity.
Prohibited Use
1.36other
End User, set forth on Exhibit G, which use shall be prohibited on the Parcels.
Prohibited User
1.37Exhibit G as Prohibited
Users.
Attachment 10 page 4
Responsible Owner
1.38
construction and maintenance of Improvements on a Parcel and to maintain insurance and
provide indemnities as described in this Declaration and shall be (a) with respect to each
Development Parcel, the Owner thereof, and (b) with respect to the Water Well Parcel Easement
Area, the Owner of Parcel C.
Shared Driveway
1.39Section 3.1.
Transfer
1.40
operating agreement, concession, gift, hypothecation, mortgage, pledge or encumbrance, or other
the Development Parcels, the Improvements thereon, or any portion thereof or interest therein,
whether voluntary, involuntary, by operation of law or otherwise, or any agreement to do so; the
granting of any Mortgage, easement, license, lien or other encumbrance and/or the execution of
any installment land sale contract or similar instrument affecting all or a portion of the
Development Parcels, the Improvements thereon, or any portion thereof or interest therein.
Utilities
1.41Section 2.4.
Utility Easement Area
1.42 Section 2.3.
Water Well Facilities
1.43l facilities, pumps, wells or other
incidental improvements and utilities determined by the City to be required or reasonably
necessary for the construction, operation, maintenance and use of one or more water wells on the
Water Well Parcel and shall include the Utilities and the protective fencing surrounding the
Water Well Facilities.
Water Well Parcel Easement Area
1.44
Parcel depicted on Exhibit E attached, upon which easements, including for pedestrian and
vehicular ingress and egress, parking and construction and maintenance, are granted by this
Declaration, as the same may be modified from time to time in accordance with this Declaration.
Water Well Parcel Easement Users
1.45
and its tenants and their respective employees, invitees, licensees, designees and agents.
Water Well Parcel
1.46Recital A.
Section 2.Easements.
2.1Access and Parking Easements over Development Parcels. Subject to the terms
and conditions of this Declaration, Declarant hereby establishes an appurtenant, non-exclusive
reciprocal easement in favor of each other Parcel and the Owner thereof, in, on, over, across and
through the Easement Areas (specifically, over the Parcel A Easement Areas, the Parcel B
Easement Areas, the Parcel C Easement Areas and the Water Well Easement Areas), for
(a) pedestrian and vehicular access, ingress and egress to and from each other Parcel and all
streets and roads (but excluding access to restricted highways), public or private, abutting such
Parcels, by Easement Users, including, but not limited to, ingress and egress for parking
Attachment 10 page 5
purposes, delivery and service trucks and for all other purposes described in this Declaration,
(b) parking by Easement Users on the portion of such Easement Areas designated as Parking
Areas (which are initially as depicted on Exhibit E and may be modified from time to time in
accordance with Article 3) and (c) repair, restoration and maintenance of the Easement Areas, if
undertaken pursuant to Section 7.2.
2.2Regulations Applicable to Access and Parking Easements. The foregoing grant of
access and parking easements includes the right of each Owner to permit its Easement Users to
utilize the easements granted herein in accordance with the following rules and requirements.
2.2.1Easement Users shall park within the Parking Areas established in each
Easement Area only. Parking by Easement Users is permitted only while conducting business on
the Parcels and the businesses operated therein.
2.2.2Each Owner shall take whatever legal action may be reasonably
necessary to prevent unauthorized parking on its Parcel.
2.2.3Each Owner shall require employees of tenants, contractors and
Parcel and not on
the right to park on the Development Parcels in connection with construction, installation,
maintenance, repair, replacement, operation and/or use of the Water Well Facilities and the
Utilities. Each Owner shall be responsible to inform all of its tenants, contractors and
subcontractors of these parking restrictions.
2.2.4Notwithstanding the reciprocal parking easement granted in Section 2.1,
the Owner of Parcel A shall provide on Parcel A all of the parking spaces that may be required
from time to time to satisfy all applicable governmental parking requirements for the use of
Parcel A and the Buildings thereon. The parking requirements in the preceding sentence may not
be satisfied with any parking spaces on Parcel B or on Parcel C, notwithstanding the fact that the
Owner of Parcel A and Easement Users may have parking rights on Parcel B and on Parcel C
under this Declaration.
2.2.5Notwithstanding the reciprocal parking easement granted in Section 2.1,
the Owner of Parcel B shall provide on Parcel B all of the parking spaces that may be required
from time to time to satisfy all applicable governmental parking requirements for the use of
Parcel B and the Buildings thereon. The parking requirements in the preceding sentence may not
be satisfied with any parking spaces on Parcel A or on Parcel C, notwithstanding the fact that the
Owner of Parcel B and Easement Users may have parking rights on Parcel A and on Parcel C
under this Declaration.
2.2.6Notwithstanding the reciprocal parking easement granted in Section 2.1,
the Owner of Parcel C shall provide, in some combination of spaces on Parcel C and spaces on
the Water Well Parcel, all of the parking spaces that may be required from time to time to satisfy
all applicable governmental parking requirements for the use of Parcel C and the Buildings
thereon. The parking requirements in the preceding sentence may not be satisfied with any
parking spaces on Parcel A or on Parcel B, notwithstanding the fact that the Owner of Parcel C
Attachment 10 page 6
and Easement Users may have parking rights on Parcel A and on Parcel B under this
Declaration.
2.2.7 Each Owner may only provide the number of so-
other reduced-size parking spaces on its Parcel as are permitted by the applicable governmental
parking requirements without taking into account the size or number of any parking spaces on
the other Parcels.
2.2.8Without limiting any other provision of this Declaration, all parking
spaces on a
(a) comply with the applicable
requirements of Sections 2.2.4, 2.2.5 and 2.2.6, and (b) always be maintained at the minimum
parking ratios required by the Tustin Municipal Code without application of any variance, unless
such ratio is reduced pursuant to the Entitlements after taking into consideration the effect of any
joint use/shared parking analysis approved by the City.
2.2.9Except as may be set forth in the DDA, the Easement Areas and the
access to and right to park thereon shall be made available to Easement Users at no charge.
2.2.10Notwithstanding any other provision of this Declaration to the contrary,
until such time as the improvements described in Section 3.2 are constructed by the Parcel C
Owner upon the Water Well Parcel, no Easement Users shall have any right of pedestrian or
vehicular access upon the Water Well Parcel Easement Area, and the Water Well Parcel Owner
shall have no obligation to provide parking or access upon the Water Well Parcel to the Owners
of the Development Parcels or their respective Easement Users pursuant to the easement granted
by Section 2.1.
2.3Reservation of Utility Easement. Declarant hereby establishes for the benefit of
the Water Well Parcel and the Owner thereof, an appurtenant, non-exclusive easement in, on,
over, under, across and through the portions of the Development Parcels depicted on Exhibit I
Utility Easement Areas
and legally described on Exhibit J (the
installation, operation, maintenance, modification, repair and replacement of utilities, including
without limitation, electric, telephone, water, gas, and sanitary sewer lines and facilities, and for
drainage facilities as may be hereafter required or determined by City to be reasonable necessary
to maintain, use and service improvements on the Water Well Parcel, including without
Utilities
2.4Reservation of Water Well Facilities Construction and Maintenance Easement.
Subject to the terms and conditions of this Declaration, Declarant hereby establishes, for the
benefit of the Water Well Parcel and the Owner thereof, an appurtenant, non-exclusive easement
in, on, over, across and through the Development Parcels for access, construction, installation,
operation, maintenance, modification, repair and replacement by Water Well Easement Users of
(a) the Utilities on the Utility Easement Areas, (b) the Water Well Facilities and other
improvements on the Water Well Parcel, (c) if undertaken pursuant to Section 7.2, the access
driveways, entries and exits on the Development Parcel Easement Areas. The foregoing
easement shall include the right of Water Well Easement Users to utilize the Development
Parcels for staging of such construction, installation, operation, maintenance, repair and
Attachment 10 page 7
replacement. All such work shall be undertaken in accordance with the provisions of Section 3.6
and 3.7.
2.5Reservation of Parcel C Construction and Maintenance Easement. Subject to the
terms and conditions of this Declaration, Declarant hereby establishes, for the benefit of Parcel C
and the Owner thereof, an appurtenant, non-exclusive easement in, on, over, across and through
the Water Well Parcel Easement Area for access, construction, installation, operation,
maintenance, modification, repair and replacement by Parcel C Easement Users of access
driveways, drive-aisles, entries and exits, parking, landscaping and hardscaping on the Water
Well Parcel Easement Area. All such work shall be undertaken in accordance with the
provisions of Section 3.6 and 3.7.
Section 3.Construction and Modification of Improvements.
3.1No Modification to Primary Shared Driveway Access. Notwithstanding any other
provision of this Declaration, no Owner may change the location of the primary shared entrance
and ingress and egress improvements to the Project from Newport Avenue as depicted on
Shared Driveway
Exhibit E the other Owners,
which consent shall not be unreasonably withheld, conditioned or delayed and without the prior
written consent of the City of Tustin (Department of Public Works), in its governmental
capacity.
3.2Parking and Access Improvements on Water Well Easement Area. Each Owner
shall be responsible for constructing all Improvements within the Development Parcel owned by
it as required for parking, access driveways, drive-aisles, entries and exits and landscaping and
hardscaping improvements at its sole cost and expense. In addition, the Owner of Parcel C shall
be responsible for constructing all Improvements within the Water Well Parcel Easement Area
required for parking, access driveways, drive-aisles, entries and exits and landscaping and
hardscaping improvements at its sole cost and expense.
3.3Obstructions and Fencing. Except to the extent required by public health and
safety regulations, no fence, division, partition, rail or obstruction of any type or kind shall ever
be placed, kept, permitted, or maintained between the Parcels or between any subsequent
division thereof which would prevent vehicle or pedestrian access from one Parcel to the others.
Notwithstanding the foregoing, the Owner of the Water Well Parcel shall have the right to fence
the Water Well Facilities provided it is outside the limits of the Water Well Parcel Easement
Area.
3.4Drive-Up Stacking. No business use on any Parcel shall contain a drive-up
service window or machine.
3.5Modifications to Initial Site Plan and Parking Plan. The Site Plan (Exhibit E) is
attached primarily to identify the locations of the Parcels, Easement Areas, the Shared Driveway
and the initial Parking Areas. Except as set forth in Section 3.1, an Owner may change, at any
time and from time to time, the location of Improvements identified on the Site Plan including,
the Buildings, Parking Areas and parking configuration on its Parcel subject to the restrictions
and limitations (including, without limitation, the parking ratio and other parking requirements
Attachment 10 page 8
under Section 2.2) set forth in this Declaration and in the DDA. An Owner may only alter or
modify the size, location and uses of any Buildings or structures on its Parcel (including the
orientation of the entrances thereto) if (a) the Parking Areas on such Parcel will conform to the
requirements of this Declaration (including, without limitation, the parking ratio and other
parking requirements under Section 2.2) and the DDA, (b) will be available for parking by the
Easement Users of all of the Parcels and (c) such changes does not materially reduce the overall
availability of parking, access and egress on Easement Areas or materially adversely affect any
other Owner.
3.6Interference by Construction. Unless otherwise permitted by this Declaration,
each Owner shall cause all staging of and all construction work performed by or on behalf of
not to cause any material increase in the cost of any construction by an Owner on any other
performed on the other Parcels, and (d) so as not to unreasonably interfere with and to minimize
disruptions of the access to, use, occupancy or enjoyment of the other Parcels by the other
Owners and their respective Easement Users. Any damage occurring to any Parcel as a result of
construction work on another Parcel shall be the responsibility of the Owner performing such
construction work or causing such construction work to be performed and shall be repaired
existed immediately prior to such work.
3.7Construction Indemnities. To the maximum extent permitted by law, each Owner
Indemnitor Owner
(an
and their respective Easement Users, officers, partners, shareholders members, managers,
Indemnitees
demands, losses, damages,
expenses and liabilities, causes of action, suits, claims, and judgments, including reasonable
Claims
claim, including without limitation, any action or proceedings brought thereon arising from or as
work performed, or the death of, or any accident, injury, loss or damage whatsoever caused to
any natural person, or to the property of any Person, as shall occur by reason of the performance
of any construction, or of any other work, by or at the request of the Indemnitor Owner or its
Easement Users, except to the extent of claims caused by the active negligence or willful
misconduct of the Indemnitees or any of them. The Indemnitees shall give the Indemnitor
Owner notice of any suit or proceeding entitling the Indemnitees or any of them to
indemnification pursuant to this Section 3.7 and the Indemnitor Owner shall defend the
Indemnitees in such suit or proceeding with counsel reasonably approved by the indemnitee
Owner.
Section 4.Use Restrictions.
4.1Use in General. Except for the use restrictions set forth in this Declaration, and
for the term thereof, the DDA, the Water Well Parcel and the Development Parcels may be used
for any lawful purpose. Nothing contained herein shall limit or impair the terms of any other
agreement between any Owner and any other entity (as between such parties), including, without
limitation, any use limitations that may be set forth in the DDA.
Attachment 10 page 9
4.2Covenants, Conditions and Restrictions. For the term described in Section 4.6
and without limiting the ability of the City to impose conditions on development or entitlement
of the Development Parcels as set forth in the DDA, the following covenants, conditions and
restrictions are hereby established by the City and shall run with the land for the periods set forth
in each case below and shall be binding upon the Development Parcels and each of them and the
Owners thereof and their respective successors and assigns and upon each and every Person
claiming by, through or under each such Owner or its successors and assigns for the benefit of
each of the Parcels and each Owner and its successors and assigns owning all or any portion
thereof:
(a)The Development Parcels and each part thereof shall be utilized only
for lawful uses typical for Class A Uses.
(b)No Owner nor any person claiming by, through or under any Owner,
including any End User, shall (i) use the Development Parcels or any portion thereof for any
Prohibited Use, or (ii) Transfer any Development Parcel or any portion thereof to any Prohibited
User.
(c)Each End User shall be a Class A User.
(d)All End Users shall be subject to this Declaration.
(e)Each Owner shall provide the City with written notice of the identity of
each End User and the intended operational location of such End User at least fifteen (15)
Business Days prior to execution of any lease or agreement, in order to permit the City to
confirm that the covenants set forth in Section 4.2 and Section 4.3 have not been violated. In the
event the City determines in its reasonable discretion that any proposed Lessee End User would
violate the use covenants set forth in Section 4.2 or Section 4.3 and the City provides Developer
with written notice of its determination on or before the date which is ten (10) Business Days
following its receipt of such notice, the Developer shall be prohibited from entering into a Lease
with such End User.
(f)Nothing in this Declaration shall (i) prohibit the City, in its sole
discretion, from approving an End User which is not a Class A User or (ii) obligate the City to
exercise its approval or enforcement rights with respect to the use covenants set forth herein, for
the benefit of the City or any third parties.
4.3Additional Covenant. No Owner shall engage in or permit any activity on the
Property that would violate this Declaration, the DDA, the Redevelopment Plan for South
Central Project Area, the Approved Project Plans, or any applicable Governmental Restrictions.
4.4Environmental Covenants, Conditions and Restrictions, including Environmental
Restrictions pursuant to Civil Code Section 1471. The DDA imposes certain covenants,
conditions and restrictions on the Developer Parcels, including the Release contained in
Section 4.4.3 of the DDA, certain environmental restrictions pursuant to Civil Code Section
1471that are set forth verbatim below in italics and each of which is hereby declared to be a
covenant running with the land. Within the italicized language below, certain terms shall have
the meanings set forth in Section 4.4.4.
Attachment 10 page 10
4.4.1Release. Section 4.4.3 of the DDA provides as follows:
4.4.3 Release. Save and except for the explicit representations, and warranties
of the City set forth in Section 3.3, Developer, on behalf of itself and each
Successor Owner and every Person claiming by, through or under the Developer
, as of the
Effective Date, and agrees to waive, as of each Close of Escrow, the right of each
Releasing Party to recover from, and fully and irrevocably releases, the City and
its elected and appointed officials, employees, agents, attorneys, affiliates,
Developer or any Releasing Party may now have or hereafter suffer or acquire
arising from or related to: (a) any information or documentation supplied by any
Property or any current or future improvement thereon, known or unknown by
any Releasing Party or any Released Party; (c) any construction defects, errors,
omissions or other conditions, latent or otherwise, including environmental
matters, as well as economic and legal conditions on or affecting the Property, or
any portion thereof; (d) the existence, Release, threatened Release, presence,
storage, treatment, transportation or disposal of any Hazardous Materials at any
time on, in, under, from, about or adjacent to the Property or any current or future
improvement thereon or any portion thereof; (e) claims of or acts or omission to
act of any Governmental Authority or any other third party arising from or related
to any actual, threatened, or suspected Release of a Hazardous Material on, in,
under, from, about, or adjacent to the Property or any current or future
improvement thereon, including any Investigation or Remediation at or about the
Property or any current or future improvement thereon; (f) the cost or extent of
the infrastructure work required to complete the Improvements; (g) school related
development fees and/or (h) any restriction on access to the Property for pre-
acquisition inspection; provided, however, that the foregoing release by the
Releasing Parties shall not apply to the extent that any Claim is the result of the
gross negligence, willful misconduct or fraud of the City or its elected and
appointed officials, employees, representatives, agents or consultants arising after
the Phase 1 Close of Escrow with respect to the Phase 1 Property or the Phase 2
Close of Escrow with respect to the Phase 2 Property. This release includes
Claims of which the Developer is presently unaware or which the Developer does
not presently suspect to exist which, if known by the Developer, would materially
veloper specifically
waives the provision of California Civil Code Section 1542, which provides as
follows:
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
Attachment 10 page 11
In this connection and to the extent permitted by law, the Developer on behalf of
itself, and the other Releasing Parties hereby agrees, represents and warrants,
which representation and warranty shall survive each Close of Escrow and the
termination of this Agreement and shall not be merged with any Quitclaim Deed,
that (x) it realizes and acknowledges that factual matters now unknown to it may
have given or may hereafter give rise to Claims or controversies which are
presently unknown, unanticipated and unsuspected, (y) the waivers and releases in
this Section 4.4.3 have been negotiated and agreed upon in light of that realization
and (z) the Developer, on behalf of itself and the other Releasing Parties,
nevertheless hereby intends to release, discharge and acquit the Released Parties
from any such unknown Claims and controversies which might in any way be
included as a material portion of the consideration given to the City by the
BY INITIALING BELOW, DEVELOPER ACKNOWLEDGES THAT (A) IT
HAS READ AND FULLY UNDERSTANDS THE PROVISIONS OF THIS
SECTION, (B) IT HAS HAD THE CHANCE TO ASK QUESTIONS OF ITS
COUNSEL ABOUT ITS MEANING AND SIGNIFICANCE, AND (C) IT HAS
ACCEPTED AND AGREED TO THE TERMS SET FORTH IN THIS
SECTION.
______________________ _______________________
This release shall run with the land for the benefit of the Water Well Parcel, the
City, and each Successor Owner owning all or any portion of such land and from
and after the acquisition thereof by Developer, burdening the Development
Parcels and the Successor Owners thereof owning all or any portion of such land
and all Persons claiming by, through or under the Developer or any Successor
Owner and, to further evidence its effectiveness with respect to Successor Owners
of the Property, shall be included in its entirety in each Quitclaim Deed.
4.4.2Environmental Indemnity. Section 10.2 of the DDA provides as
follows:
10.2 Environmental Indemnity. As a material part of the consideration for this
Agreement, and effective as to the Property and any portion thereof, upon the
y portion thereof, the Developer on
behalf of itself and Successor Owners and each and every Person claiming by,
through or under Developer or any Successor Owner, hereby agrees that
Developer and each Successor Owner shall, to the maximum extent permitted by
law, indemnify, protect, defend, assume all responsibility for and hold harmless
the Indemnified Parties from and against any and all Claims resulting or arising
from or in any way connected with the existence, Release, threatened Release,
presence, storage, treatment, transportation and/or disposal of any Hazardous
Materials on, in, under, from, about or adjacent to any portion or portions of said
lands, regardless whether any such condition is known or unknown now or upon
acquisition and regardless whether any such condition pre-exists acquisition or is
subsequently caused, created or occurring, provided, however, that neither the
Attachment 10 page 12
Developer nor any Successor Owner shall be responsible for (and such indemnity
shall not apply to) to the gross negligence or willful misconduct of the
Indemnified Parties. This environmental indemnity shall run with the land, shall
be included in the Quitclaim Deeds and shall be binding upon Developer and
Successor Owners; provided, however, that such indemnity shall not be binding
upon Tenants under leases.
4.4.3Claims Response. Section 10.4 of the DDA provides as follows:
10.4 Claim Response. In the event that any Environmental Agency or other
third party brings, makes, alleges, or asserts a Claim, arising from or related to
any actual, threatened, or suspected Release of Hazardous Materials on or about
the Property, including any Claim for Investigation or Remediation on the
Property, or such Environmental Agency or other third party orders, demands, or
otherwise requires that any Investigation or Remediation be conducted on the
Property, the Developer shall promptly upon its receipt of notice thereof, notify
the City in writing and hereafter shall promptly and responsibly respond to such
Claim. Further, upon receipt of such Claim, order, demand or requirement, the
Developer shall (a) take such reasonable measures, as necessary or appropriate, to
reasonably dissuade such Environmental Agency or other third party from
bringing, making, alleging, or asserting any Claim against the City arising from or
related to any actual, threatened, or suspected Release of Hazardous Material on
or about the Property, including any Claim for Investigation or Remediation on
the Property, and (b) request that the Environmental Agency not issue any order,
demand, or requirement to the City under any of the Environmental Laws, or any
other local, regional, State or federal law, or seek penalties or take other punitive
action against the City in connection with, arising from, or related to any actual,
threatened, or suspected Release of Hazardous Material on or about the Property,
including any Investigation or Remediation on or about the Property.
4.4.4Definitions For Section 4.4 Only. The following terms are defined
for use in this Section 4.4 only. Any term used in this Section 4.4 and not defined below in this
Section 4.4.4 shall have the meaning defined for such term in Section 1 of this Declaration.
Agreement
a.
Declaration;
Developer
b.: (i) with respect to Parcel A, the Owner of
Parcel A; (ii) with respect to Parcel B, the Owner of Parcel B; and (iii) with respect to Parcel C,
the Owner of Parcel C;
City-Owned Parcels
c.
Close of EscrowPhase 1 Close of Escrow
d.
Declaration Effective Date;
Attachment 10 page 13
Environmental Agency
e.the United States
Environmental Protection Agency; the California Environmental Protection Agency and all of its
sub-entities, including any Regional Water Quality Control Board, the State Water Resources
Control Board, the Department of Toxic Substances Control, the South Coast Air Quality
Management District, and the California Air Resources Board; the City; any Fire Department or
Health Department with jurisdiction over the Property; and/or any other federal, State, regional
or local governmental agency or entity that has or asserts jurisdiction over Hazardous Substance
Releases or the presence, use, storage, transfer, manufacture, licensing, reporting, permitting,
analysis, disposal or treatment of Hazardous Materials in, on, under, about, or affecting the
Project;
Environmental Laws
f.shall mean any federal, state,
regional or local laws, ordinances, rules, regulations, requirements, orders, directives, guidelines,
or permit conditions, in existence as of the Effective Date or as later enacted, promulgated,
issued, modified or adopted, regulating or relating to Hazardous Materials, and all applicable
judicial, administrative and regulatory decrees, judgments and orders and common law,
including those relating to industrial hygiene, public safety, human health, or protection of the
environment, or the reporting, licensing, permitting, use, presence, transfer, treatment, analysis,
generation, manufacture, storage, discharge, Release, disposal, transportation, Investigation or
Remediation of Hazardous Materials. Environmental Laws shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
CERCLA
Section 9601, et s
RCRA
amended, (33 U.S.C. Section 1251 et seq.); the Toxic Substances Control Act, as amended, (15
U.S.C. Section 2601 et seq.); the Hazardous Substances Account Act (Chapter 6.8 of the
California Health and Safety Code Section 25300 et seq.); Chapter 6.5 commencing with Section
25100 (Hazardous Waste Control) and Chapter 6.7 commencing with Section 25280
(Underground Storage of Hazardous Substances) of the California Health and Safety Code; and
the California Water Code, Sections 13000 et seq.;
Governmental Authority
g.any and all federal, State,
county, municipal and local governmental and quasi-governmental bodies and authorities
(including the United States of America, the State of California and any political subdivision,
public corporation, district, joint powers authority or other political or public entity) or
departments thereof having or exercising jurisdiction over the Owners or the the Parcels or such
portions thereof as the context indicates;
Attachment 10 page 14
Hazardous Materials
h.shall mean and include
the following:
(i)
c Substance
Response, Compensation and Liability Act of 1980, 42 U.S.C. subsection 9601, et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. subsection 5101, et seq., or the
Resource Conservation and Recovery Act, 42 U.S.C. subsection 6901, et seq.;
(ii)
of the California Health and Safety Code, or is listed or identified pursuant to subsection
25140 or 44321 of the California Health and Safety Code;
(iii)
25281, 25316, 25501, 25501.1, 117690 or 39655 of the California Health and Safety
Code;
(iv)
pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. Section
1321, as well as any other hydro carbonic substance or by-product;
(v)Listed or defined as a
of the California Code of Regulations;
(vi)Listed by the State of California as a chemical known
by the State to cause cancer or reproductive toxicity pursuant to Section 25249.9(a) of the
California Health and Safety Code;
(vii)A material which due to its characteristics or interaction
with one or more other substances, chemical compounds, or mixtures damages or
threatens to damage, health, safety, or the environment, or is required by any law or
public agency to be remediated, including remediation which such law or public agency
requires in order for the property to be put to any lawful purpose;
(viii)Any material whose presence would require
remediation pursuant to the guidelines set forth in the State of California Leaking
Underground Fuel Tank Field Manual, whether or not the presence of such material
resulted from a leaking underground fuel tank;
(ix)Pesticides regulated under the Feral Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. subsection 136 et seq.;
(x)Asbestos, PCBs and other substances regulated under
the Toxic Substances Control Act, 15 U.S.C. subsection 2601 et seq.;
Attachment 10 page 15
(xi)
---
radioactive materials or radioactive wastes, however produced, regulated under the
Atomic Energy Act, 42 U.S.C. subsection 2011 et seq., the Nuclear Waste Policy Act, 42
U.S.C. subsection 10101 et seq., or pursuant to the California Radiation Control Law,
California Health and Safety Code Section 114960 et seq.;
(xii)Regulated under the Occupational Safety and Health
Act, 29 U.S.C. subsection 651 et seq., or the California Occupational Safety and Health
Act, California Labor Code subsection 6300 et seq.; and/or
(xiii)Regulated under the Clean Air Act, 42 U.S.C.
subsection 7401 et seq. or pursuant to Division 26 of the California Health and Safety
Code.
Indemnified Parties
i.the City and its appointed and
elected officials, agents, attorneys, affiliates, employees, contractors and representatives;
Investigation
j.any observation, inquiry, examination,
sampling, monitoring, analysis, exploration, research, inspection, canvassing, questioning, and/or
surveying of or concerning the Property or any adjacent or affected properties, including the air,
soil, surface water, and groundwater, and the surrounding population or properties, or any of
them, to characterize or evaluate the nature, extent or impact of Hazardous Materials;
Property
k.;
Project
l.
carried out by the Owners on the Development Parcels;
Release
m.any releasing, or threat of releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching,
migrating, disposing, or dumping into the environment;
RemediateRemediation
n.
remedial action as defined under Section 101(25) of CERCLA, and similar actions with respect
to Hazardous Materials as defined under comparable state and local laws, and any other cleanup,
removal, containment, abatement, recycling, transfer, monitoring, storage, treatment, disposal,
closure, restoration or other mitigation or remediation of Hazardous Materials or Releases
required by any Environmental Agency or within the purview of any Environmental Laws;
State
o.an the State of California;
Successor Owner
p.each and every Person owning or
acquiring any right, title or interest in or to all or any portion of the Property, but shall exclude
tenants under retail leases;
4.5Obligation to Refrain from Discrimination. Each Owner covenants and agrees for
itself, and each and every Person claiming by, through or under such Owner, that there shall be
no discrimination against or segregation of any person, or group of persons, on account of sex,
Attachment 10 page 16
race, color, religion, ancestry, national origin, disability, medical condition, marital status, or
sexual orientation in the sale, lease, transfer, use, occupancy, tenure or enjoyment of the Parcels
or in development thereof, nor shall any Owner or any Person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Parcels or in development thereof.
4.6Duration of Covenants. The covenants set forth in Section 4.2, Section 4.3 and
Article 5 shall remain in full force and effect with respect to each Development Parcel until the
earlier of (a) twenty five (25) years following the recordation of a Certificate of Compliance for
such Parcel or (b) fifty (50) years from the date of recordation of this Declaration.
Section 5.Construction and Maintenance of Improvements.
5.1Maintenance Improvements. For the duration described in Section 4.6, each
Owner shall maintain or cause to be maintained the Improvements upon their respective Parcels
in the same aesthetic and sound condition or better as the condition of such Improvements at the
time the City issues a Certificate of Compliance therefor, excepting only reasonable wear and
tear and replacement of Improvements following casualties, such replacement to be consistent
with this Declaration and subject to all applicable City approvals and review. The standard for
the quality of maintenance of the Improvements required by this Declaration shall be met
whether or not a specific item of maintenance is listed below. However, representative items of
maintenance shall include: (i) maintenance, repair and replacement on a regular schedule,
consistent with like Class A hotel and retail development in Orange County, of private drives,
bike paths, alleyways, sidewalks, utilities (except to the extent owned or controlled by a utility
franchisee), common areas, landscaping, hardscaping and fountains; (ii) frequent and regular
inspection for graffiti or damage or deterioration or failure, and immediate repainting or repair or
replacement of all surfaces, fencing, walls, equipment, etc., as necessary; (iii) emptying of trash
receptacles and removal of litter; (iv) regular sweeping of roadways and sidewalks throughout
the Parcels; (v) fertilizing, irrigating, trimming and replacing vegetation as necessary;
(vi) cleaning windows on a regular basis; (vi) painting the Buildings on a regular program and
prior to the deterioration of the painted surfaces; (vii) conducting roof inspections on a regular
basis and maintaining roofs in a leak-free and weather-tight condition.
5.2Easement Area Maintenance. Each Responsible Owner shall cause to be
constructed and shall operate, manage, and maintain (or cause the same to be operated, managed
and maintained) the Maintenance Parcels for which it is responsible and the Improvements
thereon in a state of good repair, free of trash and debris and in a first class condition. The duties
of each such Responsible Owner shall include, without limitation, the following, which shall be
carried out in accordance with all governmental requirements, including without limitation, the
Entitlements:
5.2.1construction, maintenance, repair, and replacement of all paved
surfaces, in a level, smooth, and evenly covered condition, and repair and/or replacement thereof
with the type of surfacing material originally installed, or such substitute as shall in all respects
be at least equal to such original material in quality, use, appearance, and durability;
Attachment 10 page 17
5.2.2construction, maintenance, repair, and replacement as reasonably
necessary, of all curbs, curb-cuts, gutters, walkways, planters, cart corrals, and medians;
5.2.3painting and striping;
5.2.4construction, maintenance, repair, and replacement of all directional
signs, markers, lighting facilities, including the replacement of fixtures and bulbs;
5.2.5construction, maintenance, repair, and replacement of any and all
storm drains, storm water retention facilities, utility lines, water lines, sewers, and other utility
systems; it being understood that where repairs are necessary to prevent disruption of service to
any Owner, such repairs shall be undertaken immediately and without prior notice; and
5.2.6maintenance of all landscaped areas and replacement of shrubbery,
plantings, and flowers.
5.3Cost of Maintenance. All costs incurred by any Easement User in fulfilling the
obligations in Section 5.1 and this Section 5.2 shall be paid by the Responsible Owner of any
Development Parcel performing or causing the work to be performed on its respective Parcel(s);
and specifically the Owner of Parcel C (and NOT the Owner of the Water Well Parcel) shall be
responsible for the costs of fulfilling the duties set forth in this Declaration, including without
limitation, Section 5.1 and Section 5.2 with respect to the Water Well Parcel Easement Area.
5.4In the event that (a) any Responsible Owner fails to maintain the Improvements
upon its Maintenance Parcels in accordance with the standard for the quality of maintenance set
forth above, any other Owner shall have the right but not the obligation to enter upon such
Maintenance Parcel upon reasonable notice to the Responsible Owner, and, in the case of the
Water Well Easement Area, to the City, correct any violation, and hold the Responsible Owner
responsible for the cost thereof, and such cost, until paid, shall constitute a lien on the portion of
the Development Parcels owned by the Responsible Owner.
Section 6.General Provisions.
6.1Unauthorized Use and Closure of Easement Areas. Declarant hereby reserves for
the benefit of each Owner (a) the right to eject or cause the ejection from the Easement Areas
privileged to use such areas pursuant to this Declaration and (b) the right to close off the
Easement Areas on its Parcel for the absolute minimum period or periods of time as may be
legally necessary to prevent the acquisition of prescriptive rights by anyone (and only to the
extent there is no other legal means to be prevent the acquisition of such prescriptive rights);
provided, however, that prior to closing off any portion of all or any portion of the Easement
Areas or any portion thereof, such Owner shall give five (5) days prior written notice to the other
Owners of its intention to do so and shall coordinate such closing with the other Owners so that
no unreasonable interference with access, parking and/or the operation of the Parcels, the
Buildings and/or the Water Well Facilities shall occur.
Attachment 10 page 18
6.2Prohibition Against Granting Easements. No Owner, nor any Person not an
Owner, shall grant an easement or easements over any part of any Easement Area for the benefit
of any property not constituting a Parcel subject to this Declaration, without written authorization
of the City.
6.3Realty Taxes and Assessments. Each Owner shall pay, or cause to be paid when
due and prior to delinquency, all real estate taxes and assessments which may be levied,
assessed, or charged by any public authority against such Owne
provided, however, that, to the extent that any possessory use tax is levied by the County of
Orange or the State of California with respect to the use of the Water Well Parcel Easement Area
for parking, the Owner of Parcel C shall pay, when due and prior to delinquency, all possessory
interest taxes levied with respect to the Water Well Parcel Easement Area. If an Owner shall
deem any real estate tax or assessment (including the rate thereof or the assessed valuation of the
property) to be excessive or illegal, said Owner shall have the right, at its own cost and expense,
to contest the same by appropriate proceedings, and nothing contained in this Section 6.3 shall
require the owner to pay any such real estate tax or asses
Parcel would be immediately affected (by impairment of the use of the Easement Areas or any
portion thereof or otherwise) by such failure to pay (or bond); and (b) the amount or validity
thereof shall be contested in good faith. If the failure to pay (or bond) such tax would affect the
Owner, but not the obligation, to pay such tax and to hold the Owner of the Parcel for which
such tax is due responsible for all of the costs incurred by it with respect to payment of such tax
and such cost, until paid, shall constitute a lien on the portion of the Development Parcels owned
by the Owner responsible for such tax.
6.4Indemnification. To the maximum extent allowed by law, (a) (i) each Owner of a
Development Parcel shall indemnify, defend, and save each Indemnitee harmless for, from and
against any and Claims, arising from the injury or death to any person or damage to property that
shall indemnify each other Owner with respect to any breach of this Declaration by such Owner.
The foregoing indemnity shall not apply to Claims to the extent caused by the active negligence
or willful misconduct of the Indemnitees, or any of them. Notwithstanding anything to the
contrary in this Declaration, no Owner shall be liable to any other Owner for lost profits, reliance
or consequential damages that may occur to any other Owner or Parcel.
6.5Insurance. Each Owner of a Development Parcel shall with respect to the
Parcel(s) owned by it and the Owner of Parcel C shall with respect to the Water Well Parcel
Easement Area, at all times during the term of this Declaration, maintain or cause to be
maintained in full force and effect a comprehensive commercial general liability insurance policy
covering such Parcel and/or Easement Area with a financially insurance company or companies,
including coverage for any accident resulting in bodily injury to or death of any person and
consequential damages arising therefrom, and comprehensive property damage insurance, each
in an amount not less than $2,000,000 combined single limit per occurrence. All insurance
required shall be provided with an insurer licensed to do business in the State of California, with
a rating of at least A VII, according to the latest Best Key Rating Guide or A-X (if offered by a
surplus line carrier that is not admitted). All insurance shall be maintained on an occurrence
basis. Each insurance certificate and the insurance policy shall specifically identify this
Attachment 10 page 19
Declaration.
with respect to the Water Well Parcel Easement Area shall
name each other Owner as an additional insured. Each Owner shall furnish to each other Owner
requesting the same in writing, evidence that the insurance referred to in this Section 6.5 is in full
force and effect and that the premiums for such policy have been paid. Such insurance shall
provide that the same may not be canceled, reduced below the required minimum or materially
amended without at least thirty (30) days prior written notice being given by the insurer to all
other Owners.
6.6Blanket Insurance and Self-Insurance. Any insurance required to be carried
pursuant to Section 6.5 may be carried under a policy or policies covering other liabilities and
locations of an Owner; provided, however, that such policy or policies apply to the Parcels
required to be insured by Section 6.5 in an amount not less than the amount of insurance required
to be carried by such Owner with respect thereto.
6.7Release and Waiver of Subrogation. Each Owner for itself and its successors and
assigns shall release each other Owner (including the City) from and, to the extent legally
possible for it to do so on behalf of its insurer (if any), shall waive any liability for any loss or
damage to its property located upon the Parcels, which loss or damage is of the type covered or
required to be covered by fire and extended coverage insurance described in this Article 6,
irrespective of any negligence on the part of any other Owner which may have contributed to or
caused such loss. If the waiver of subrogation is not effective, each Owner covenants that it will
obtain for the benefit of the other Owner an express waiver of any right of subrogation which the
insurer (if any) of such Owner may acquire against the other Owner by virtue of the payment of
any such loss covered by such insurance (if any).
6.8
against the Parcel of an Owner, such Owner permitting or causing such lien to be filed shall
either pay the same and have it discharged of record, promptly, or to take such action as may be
required to reasonably and legally object to such lien, and to prevent the foreclosure of such lien.
Each Responsible Owner shall promptly cause to be removed or bonded against (such bonding to
liens, stop notices and/or bonded stop notices that are recorded and/or served by subcontractors,
sub-subcontractors (of all tiers) and suppliers against any Parcel owned by it and any
Maintenance Parcel for which it is responsible.
Section 7.Remedies
7.1Legal Action. If any of the Owners breaches any provision of this Declaration,
then the other Owner or Owners may institute legal action against the defaulting Owner for
specific performance, injunction, declaratory relief, damages, or any other remedy provided by
law. In addition to the recovery of any such sum or sums expended on behalf of the defaulting
Owner, the prevailing Owner shall be entitled to recover from the losing Owner such amount as
Owner in any such action.
Attachment 10 page 20
7.2Defaulting Owner
covenant, condition or restriction contained in this Declaration, or permits or suffers any
Parcel for which it is a Responsible Owner to violate any covenant, condition or restriction of
this Declaration, then in addition to any other remedy provided for in this Declaration, any other
Default Notice
for utility service interruptions or similar emergencies which shall not require advance notice or
cure periods hereunder, if the Defaulting Owner does not cure the violation within thirty (30)
days after receipt of the Default Notice, or if such default is of a kind which cannot reasonably
be cured within thirty (30) days, and the Defaulting Owner does not within such thirty (30) day
period commence to cure such default and diligently thereafter prosecute such cure to
completion, then the Owner that delivered the Notice of Default shall have the right to (i) pay
any sum owed by the Defaulting Owner to the party entitled to such payment, (ii) summarily
abate, remove or otherwise remedy any Improvement, and/or repair or modify any Improvement
violating the terms of this Declaration, and (iii) enter upon
the Maintenance Parcel, as the case may be, and perform any obligation of the Defaulting Owner
to be performed thereon. A Defaulting Owner shall pay to a non-defaulting Owner, within
twenty (20) days of written demand by the non-defaulting Owner (which demand is
accompanied by appropriate supporting documentation), an amount equal to all costs and
expenses incurred by such non-defaulting Owner in undertaking any of the actions permitted by
clauses (i) through (iii) in the preceding sentence, including without limitation, wages, benefits
and overhead allocable to the time expended by any employee of such Owner in taking such
actions, together with interest thereon at the rate equal to the Default Rate, from the date such
costs and expenses were advanced or incurred by the non-defaulting Owner. Each such cost,
until paid, shall constitute a lien on the applicable portion of the Property and the delinquent
amount of any payments due hereunder, together with any late charges or interest due on any
such delinquent payment, reasonable attorneys fees and
collection costs related to such delinquent payment, shall, to the greatest extent permitted by
applicable law, be a lien and charge upon the Parcels owned by the Defaulting Owner and shall
be a continuing lien upon such property in favor of the non-defaulting Owner undertaking the
work, effective as of the date of recordation of such lien.
7.3Personal Obligation. The terms, covenants and conditions of this Declaration
shall be binding upon, enforceable against, and enforceable by each Owner only with respect to
the respective successive periods in which each is an Owner and with respect to obligations
which accrue during their respective period of ownership. Each Owner and each and every
lessee and licensee of such Owner, by acceptance of the deed to, lease of or other conveyance of
all or a portion of a Parcel or Building or interest therein, shall be deemed to covenant and agree
to be personally bound by this Declaration. Any sum not paid, or other obligation not performed
incurred in connection with collection, shall be the personal obligation of the Person or Persons
who were the Owners and/or Easement Users of the Parcel at the time the payment or obligation
became due. The personal obligation shall not be released by any transfer of the Parcel
subsequent to the date such payment or obligation became due, but such obligation shall run with
the land and shall be binding upon any successor Owner.
Attachment 10 page 21
7.4Breach Shall Not Permit Termination. It is expressly agreed that no breach of this
Declaration shall entitle any Owner to cancel, rescind, or otherwise terminate this Declaration,
and such limitations shall not affect in any manner any other rights or remedies which the
Owners may have by reason of any breach of this Declaration.
7.5Breach - Effect on Mortgagee. Breach of any of the covenants or restrictions
contained in this Declaration shall not defeat or render invalid the lien of any mortgage or deed
of trust made in good faith, but all of the foregoing provisions, restrictions, and covenants shall
be binding and effective against any Owner of any Parcel, or any part thereof, whose title is
under deeds of trust. Notwithstanding any other provisions in this Declaration regarding notices
of default, the mortgagee of any Owner in default hereunder shall be entitled to notice of said
default, in the same manner that other notices are required to be given under this Declaration;
provided, however, that said mortgagee shall have, prior to the time of the default, notified in
with the notice requirements of Section 8.1.
7.6Remedies Cumulative. The rights and remedies given to any Owner by this
Declaration shall be deemed to be cumulative and no one of such rights and remedies shall be
exclusive of any of the others, or of any other right or remedy at law or in equity which any such
Owner might otherwise have by virtue of a default under this Declaration, and the exercise of
any other right or remedy.
Section 8.Miscellaneous.
8.1Notices. Any notice, payment, demand, offer or communication required or
permitted to be given by any provision of this Declaration shall be deemed to have been
sufficiently given or served for all purposes if sent by registered or certified mail, postage and
charges prepaid, or by Federal Express, or similar overnight carrier addressed (a) to the City, at
the addresses set forth below and (b) to the principal place of business of each other Owner or to
such other address as shall have been provided in writing by such Owner to the other Owners
pursuant to the notice provisions of this section, or (c) if unknown, to the last known address of
the person who appears as Owner of the Parcel in the Official Records of Orange County at the
time of such mailing. Any Owner may by written notice to each other Owner and, if not then an
Owner, to the City in the manner specified in this Section change the address to which notices to
such Party shall be delivered.
The address of the City and, unless the City ceases to be the Owner of the Water Well
Parcel, the Owner of the Water Well Parcel, for purposes of any notice shall be as follows:
If to the City: Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
Attachment 10 page 22
and Attention: Assistant City
Manager
Facsimile: (714) 838-1602
With a copy to: City Attorney
City of Tustin
Woodruff Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attention: Doug Holland
Facsimile: (714) 835-7787
Any notice given pursuant to this Section 8.1 shall be deemed to be given on the date of
delivery to the address set forth above as may be changed from time to time.
8.2Covenants Running with the Land; Binding Effect. All of the limitations,
covenants, conditions, easements, and restrictions contained herein shall attach to and run with
the Parcels and shall benefit or be binding upon the Owners of each Parcel and their respective
successors and assigns and upon each and every Person claiming by, through or under each such
Owner or its successors and assigns for the benefit of the other Parcels, its Owners and their
respective successors and assigns; provided, however, that, such limitations, covenants,
conditions, easements and restrictions shall be binding upon, enforceable against, and
enforceable by each Owner only with respect to the respective successive periods in which each
Owner holds fee title to its Parcel and with respect to obligations which accrue during their
respective period of ownership. This Declaration and all the terms, covenants and conditions
herein contained shall be enforceable as equitable servitudes in favor of the Parcels and any
portion thereof. This Declaration shall apply to and bind the respective successors in interest
thereof and are imposed upon the Parcels as a mutual equitable servitude in favor of said Parcels
and any portion thereof. In the event an Owner shall convey a portion of or all of its Parcel to a
new owner, such new owner shall be the Owner having rights and obligations hereunder as to the
Parcel or portion thereof conveyed, except for those obligations of the conveying Owner which
exist on the date of such conveyance, which shall remain binding on the conveying Owner until
satisfied. The conveying Owner shall be released from any future obligations with respect to the
Parcel or portion thereof conveyed, from the date of such conveyance.
8.3Duration. Except as otherwise provided herein, each easement, covenant,
condition and restriction contained in this Declaration shall be in perpetuity.
8.4Construction. The provisions of this Declaration shall be construed as a whole
according to their common meaning and not strictly for or against any Owner.
8.5Waiver of Default. No waiver of any default by any Owner to this Declaration
shall be implied from any omission by any other Owner to take any action in respect of such
default if such default continues or is repeated. No express written waiver of any default shall
affect any default or cover any period of time other than the default for the period of time
Attachment 10 page 23
specified in such express waiver. One or more written waivers of any default in the performance
of any term, provision, or covenant contained in this Declaration shall not be deemed to be a
waiver of any subsequent default in the performance of the same term, provision, or covenant, or
any other term, provision, or covenant contained in this Declaration. The consent or approval by
any Owner to or of any act or request by any other Owner requiring consent or approval shall not
be deemed to waive or render unnecessary the consent of or approval of any subsequent similar
acts or requests.
8.6Estoppel Certificate. Each Owner shall, that within ten (10) business days of the
written request of any other Owner, issue to such other Owner or to any prospective mortgage,
tenant, or p
(a) whether the Owner to whom the request has been directed knows of any default under this
Declaration and if there are known defaults specifying the nature thereof; (b) whether to its
knowledge this Declaration has been modified or amended in any way (and if it has, then stating
full force and effect.
8.7No Merger. If the ownership of both a dominant tenement and a servient
tenement with respect to any easement granted herein shall at any time become vested in one
Owner, this Declaration and the easements, covenants, conditions, restrictions and equitable
servitudes created hereby shall not be destroyed or terminated by application of the doctrine of
merger and such Owner shall continue to have and enjoy all of the rights and privileges of
Owner as to the separate interests.
8.8Effect on Third Parties. Except as herein specifically provided, no rights,
privileges, or immunities conferred upon the Owners by this Declaration shall inure to the
benefit of any third party (including, without limitation, Easement Users other than Owner); nor
shall any Easement User other than an Owner or any other third party be deemed to be a third
party beneficiary of any of the provisions contained herein.
8.9No Partnership. Neither this Declaration nor any acts of the Owners shall be
deemed or construed by the Owners, or any of them, or by any third person, to create the
relationship or principal and agent, or of partnership, or of joint venture, or of any association
between any Owners.
8.10Not a Public Dedication. Nothing herein contained shall be deemed to be a gift or
dedication of any portion of any Parcel to the general public or for the general public or for any
public purpose whatsoever, it being the intention of the Owners that this Declaration shall be
strictly limited to and for the purposes herein expressed.
8.11Modification. No modification, waiver, amendment, discharge or change of this
Declaration shall be valid unless the same is in writing and signed by the Owner of the Water
Well Parcel and the Owners of the majority of the square feet of land within the Development
Parcels. Any change, modification, amendment or rescission which is made without the written
consent of such Owners shall be null and void and of no effect. No consent or approval of any
Owner other than those Owners described in the first sentence hereof shall be required in order to
modify or amend any provisions of this Declaration.
Attachment 10 page 24
8.12Severability. In the event any term, covenant, condition, provision, or agreement
contained herein is held to be invalid, void, or otherwise unenforceable, by any court of
competent jurisdiction, such holding shall in no way affect the condition, provision, or agreement
contained herein.
8.13Governing Law. This Declaration and the obligations of the Owners hereunder
shall be interpreted, construed, and enforced in accordance with the laws of the State of
California.
8.14Terminology. All personal pronouns used in this Declaration, whether used in the
masculine, feminine, or neuter gender, shall include all other genders; the singular shall include
the plural and vice versa.
8.15Captions. Articles and section titles or captions contained herein are inserted as a
matter of convenience and for reference, and in no way define, limit, extend, or describe the
scope of this Declaration or any provisions hereof.
Attachment 10 page 25
8.16Exhibits. The following exhibits are attached to this Declaration and incorporated
herein by this reference as though fully set forth in this Section 8.16:
Exhibit A Legal Description of the Water Well Parcel
Exhibit B Legal Description of Parcel A
Exhibit C Legal Description of Parcel B
Exhibit D Legal Description of Parcel C
Exhibit E Site Plan and Map of Easement Areas
Exhibit F Legal Description and Map of Utility Easement Areas
Exhibit G Class A Uses and Prohibited Uses
Executed as of the date first written above.
CITY OF TUSTIN, CALIFORNIA
By: ___________________________
___________________
City Manager
ATTEST: ___________________ Dated: ________________________
Pamela Stoker
City Clerk
APPROVED AS TO FORM
Special Counsel for the City
[INSERT LAW FIRM OR CITY ATTORNEY]
A PROFESSIONAL CORPORATION
By: _____________________________
Attachment 10 page 26
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before me,____________________________________ ,
Date Here Insert Name and Title of the Officer
personally appeared
______________________________________________________________________________
Name(s) of Signer(s)
_____________________________________________________________________________ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:____________________________________
Signature of Notary Public
(SEAL)
Attachment 10 page 27
ATTACHMENT NO. 11
SUBORDINATIONAGREEMENT
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FROM RECORDING
FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SUBORDINATION OF DEED OF TRUST
AND MEMORANDUM OF INTERCREDITOR AGREEMENT
Agreement
1.Partiesdated [_____],
Lender
City
Tustin, California (the . The City and Lender are sometimes referred to in this
1.1. Recitals. The Recitals set forth below are hereby agreed and acknowledged
by the Lender to be true and correct and are incorporated into this Agreement and the agreements
of the Parties are based upon these Recitals.
1.2.The City and Olson Real Estate Group, Inc., a California corporation (dba
Developer
R.D. Olson Development) (have entered into that certain Disposition and
Development Agreement 2011-01 (Tustin Gateway Project) dated as of ____________, 2011
DDA
(the
y described on
Development Parcels
Exhibit attached hereto (the
1.3.Prior to the recordation of this Agreement, the City and Developer have
caused to be recorded against title to the Development Parcels in the official records of the
Official Records
Orange County Reco, in Orange County,
certain Memorandum of DDA, dated as of ________, 2011, recorded on _____, 2011 as
Memorandum
instrument No. 2011-_______ (the .
1.4.Pursuant to the DDA, the City agreed to sell to Developer the Development
Parcels, and Developer agreed to complete construction of certain improvements on the
Attachment 11 page 1
Development Parcels, within the time periods and subject to the additional terms and conditions
set forth in the DDA.
1.5.The City executed that certain Declaration of Reciprocal Easements,
Covenants, Conditions and Restrictions Including Environmental Restrictions Pursuant to Civil
Code Section 1471, dated as of ________, 2011, recorded on _____, 2011 as Instrument No.
Declaration
_______ (the
parking easements and certain utility easements over the Development Parcels and certain
adjacent parcels of land.
1.6.Pursuant to the DDA, the City executed that certain Quitclaim Deed, dated as
Quitclaim
of ________, 2011, recorded on _____, 2011 as Instrument No. _______ (the
Deed
certain reservation of rights in favor of the City.
1.7.Lender intends to make construction loan to Developer in the original
Construction Loan
[a portion of] the Development
Parcels, which Construction Loan shall be secured by that certain Construction Deed of Trust
with Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as of _____,
201_, with Developer as trustor, ________________as trustee, and Lender as beneficiary (the
Deed of Trust
d of Trust together with all
obligations under the Construction Loan and/or to add or remove collateral security therefrom, in
each case as the same may be modified or amended from time to time, are collectively referred to
1.8.The Deed of Trust, as the same may be modified or amended from time to
Mortgage
1.9.The DDA provides Developer with the ri
the Development Parcels with a Permitted Mortgage if the lender is a Permitted Mortgagee.
the terms, conditions and limitations set forth in Articles 2, 15 and 16 of the DDA, including
without limitation the DDA requirement that all Mortgages be and remain subject and
subordinate to the DDA (and to the Right of Purchase and the Right of Reversion in favor of the
City as set forth in the DDA).
1.10.Pursuant to the DDA, a Mortgage complying with the terms of Articles 2 and
15 of the DDA and entered into between Developer and a Permitted Mortgagee may be a
Permitted Mortgage. Lender desires that the City agree that, as of the date of this Agreement,
Lender is a Permitted Mortgagee and the Deed of Trust is a Permitted Mortgage.
1.11.The Parties desire to establish the terms and conditions for the subordination
of the Deed of Trust to (a) the DDA, (b) the reservation of rights in the Quitclaim Deed and
(c)
Party exercising its rights and remedies under the DDA, the Quitclaim Deed, the Declaration
and/or under the Security Documents, as applicable.
Attachment 11 page 2
NOW THEREFORE, in consideration of the foregoing recitals, the mutual covenants of
the Parties, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Parties, the City and Lender make the agreements set forth in
this Agreement.
2.Certain Definitions. Initially capitalized terms set forth in this Agreement and not
defined herein shall have the meanings set forth therefor in the DDA (and such definitions are
incorporated into this Agreement by this reference). The following defined terms have the
meanings set forth below for purposes of this Agreement.
Bankruptcy Proceeding
2.1.involving the
Developer under the United States Bankruptcy Code or any similar state or federal statute for the
relief of debtors.
City Rights
2.2.
Quitclaim Deed and the Declaration with respect to the Development Parcels.
DDA Termination Event
2.3. termination of the DDA as a
result of any of the following: (i) the City issues a Final Certificate of Compliance; (ii) the City
elects to terminate the DDA after any Material Default by Developer under the DDA;
(iii) Developer (in its capacity as a debtor-in-possession), a bankruptcy trustee, a receiver, or
Bankruptcy Proceeding; or (iv) the Successor Lender rejects, disaffirms, or fails to assume the
DDA after the Successor Lender acquires title to some or all of the Development Parcels though
a Foreclosure.
Developer Affiliates
2.4.
which executes any document or instrument in favor of Lender under or in connection with the
Construction Loan, including without limitation all guarantors, sureties, and parties providing
additional security or collateral for the Construction Loan.
Financing
2.5.
collateral assignment, hypothecation, or other encumbrance for security of a loan, a
sale/leaseback, or a lease for a term of less than ten years, of all or any portion of or an undivided
interest in the Development Parcels by the City after a Revesting Event.
Foreclosure
2.6.sure of the Permitted Mortgage (or any
sale thereunder), whether by judicial proceedings or by virtue of any power of sale or any
conveyance of all or any portion of the Development Parcels to any member of the Lender Group
through acceptance by such member of the Lender Group of a deed in lieu of foreclosure, and
any other appropriate proceedings in the nature thereof.
Lender Affiliate
2.7.
owned and controlled by Lender, or is owned and controlled by an entity that also owns and
controls Lender, (b) any participating lender in the Construction Loan (excluding Developer and
all Developer Affiliates), and (c) any agent for one or more of the lenders in clauses (a) and (b)
under any indenture of mortgage, deed of trust, or other security instrument in connection with
Attachment 11 page 3
the Construction Loan, in their capacity as a lender.
Lender Group
2.8.
Loan Documents
2.9.documents and instruments executed
by Developer and the Developer Affiliates in connection with the Construction Loan, all of
which are listed on Exhibit attached hereto and made a part hereof.
Net Financing Proceeds
2.10.
received by or on behalf of the City after a Revesting Event in connection with a Financing of
some or all of the Development Parcels, including, without limitation, proceeds of any loan,
refinancing or sale/leaseback; minus (ii) the actual costs and expenses of such Financing
and brokerage commissions) incurred by the City in connection with the Financing. If any
portion of the Financing consideration paid to the City is paid over time after the initial closing
of the Financing (such as future loan advances), then the calculation of Net Financing Proceeds
shall include only those payments actually received by the City from time to time pursuant to the
Financing. If the Financing is a lease or is otherwise an arrangement that requires the payment to
the City of consideration over time, then the calculation of Net Financing Proceeds shall include
only those payments actually received by the City from time to time under such lease or other
agreement. If the Financing is a sale/leaseback, then the calculation of Net Financing Proceeds
shall exclude all payments that must be made by the City to the entity that is the landlord under
the leaseback component of the Financing transaction.
Net Sale Proceeds
2.11.
received by or on behalf of the City after a Revesting Event in connection with a Transfer of
some or all of the Development Parcels, including, without limitation, proceeds of any sale, or
other disposition or liquidation; minus (b) the actual costs and expenses of sale (including
commissions) incurred by the City in connection with the Transfer. If any portion of the
consideration paid to the City in connection with a Transfer is in the form of a promissory note,
then the calculation of Net Sale Proceeds shall include only those payments actually received by
the City from time to time under the promissory note. If the Transfer is a lease or is otherwise an
arrangement that requires the payment of consideration over time, then the calculation of Net
Sale Proceeds shall include only those payments actually received by the City from time to time
under such lease or other agreement.
Replacement Developer
2.12.
excluding Developer and all Developer Affiliates, that: (a) is either (i) a Successor Lender or
(ii) a third party that acquires fee title to any portion of the Development Parcels from a
Successor Lender; (b) if required by the terms of the DDA, has been approved by the City to
assume the obligations of the developer under the DDA; and (c) has satisfied all of the conditions
in and has otherwise complied with the requirements of Article 2 of the DDA to assume the
obligations of the developer under the DDA.
Attachment 11 page 4
Successor Lender
2.13.
excluding Developer and all Developer Affiliates: Any person or entity who or which acquires
fee title to any portion of the Development Parcels through Foreclosure under the Security
Documents (including without limitation any member of the Lender Group), and the successors
and assigns of the foregoing if and to the extent that any such successor or assign acquires title
from any of the foregoing persons or entities.
Transfer
2.14.
transfer, disposition (including without limitation, any of the foregoing with respect to any air
rights or development rights that are part of the Development Parcels), or lease for a term of ten
years or longer of all or any portion of or an undivided interest in the Development Parcels by
the City after a Revesting Event (but excluding all Financings).
3.Subordination of the Security Documents. Lender hereby subordinates the lien of
the Security Documents, including without limitation the lien of the Deed of Trust, on the
Development Parcels to all of the following: (a) the City Lien created by the DDA and the City
Rights and Lender hereby agrees that the lien of the Security Documents shall at all times be
junior to all of the foregoing. For purposes of clarity and not in limitation of the foregoing
ion includes without limitation the subordination of the lien of the
Security Documents to all of the following: (v) the priority of the City Lien created by the
securing all payments made by the City under or pursuant to the DDA on behalf of Developer or
to cure defaults by Developer, or to remedy damage by Developer under the DDA, any of which
may constitute future advances that would be considered optional advances instead of obligatory
advances; (w) the Right of Purchase in favor of the City as set forth in Section 15.3 of the DDA;
(x) the Right of Reversion in favor of the City, as set forth in Section 15.4 of the DDA; and (y)
4.Exercise of Remedies by the City. If there occurs a Material Default by
Developer under the DDA, the City shall have the right to exercise all remedies available to it
pursuant to the DDA, including without limitation, the Right of Purchase set forth in
Section 15.3 of the DDA and/or the Right of Reversion set forth in Section 15.4 of the DDA,
subject to: (a) the cure rights of Lender as set forth in Section 15.4 of the DDA; and (b) the rights
of Lender set forth in Section 16.7 of the DDA.
4.1.Text of Right of Purchase and Right of Reversion. Lender enters into this
Agreement with the understanding that the City has the Right of Purchase and the Right of
Reversion under the DDA. For purposes of clarity in this Agreement, the entirety of
Section 15.3 of the DDA and of Section 15.4 of the DDA (as of the date of this Agreement) are
attached to this Agreement as Exhibi
4.2.Lien of Security Documents may be Affected.
4.2.1.The Lien of the Security Documents is Subordinate to the Right of
Purchase and to the Right of Reversion. Lender acknowledges and agrees that under certain
circumstances, the DDA allows the City to exercise the Right of Purchase or the Right of
Reversion. Accordingly, as a result of the subordination of the Security Documents to the Lien
of the DDA, if the City were to exercise the Right of Purchase and then repay certain amounts
Attachment 11 page 5
due under the Construction Loan, Lender would be obligated to execute a full reconveyance of
the Deed of Trust and otherwise remove the Security Documents as encumbrances to title to the
Development Parcels. In addition, as a result of the subordination of the Security Documents to
the Lien of the DDA, if the City were to exercise the Right of Reversion and a Revesting Event
occurs, such action would, by operation of law and the terms of this Agreement, eliminate the
lien of the Deed of Trust and otherwise remove the Security Documents as encumbrances to title
to the Development Parcels; provided that if a Revesting Event occurs, Lender shall have those
rights set forth below in Section 10 of this Agreement.
4.2.2. If any
Reversion Action Date occurs under the DDA, and provided that Lender has recorded a Request
for Notice Under Civil Code Section 2924, then prior to the City consummating a Revesting
Event, the City shall deliver written notice to Lender in accordance with Section 12 below (a
Default Notice
set forth in Section 15.4.3(a)
terms of Section 15.4.3 and Section 16.7 of the DDA. If Lender cannot timely complete the cure
to take title to all or any portion of the Development Parcels, then the City hereby grants to
Lender such reasonable additional time as may be necessary for Lender to consummate a
Foreclosure of some or all of the Development Parcels; provided that each member of the Lender
Group with the authority to prosecute a Foreclosure commences the activity that will result in a
Foreclosure within sixty (60) days after the date of the Default Notice and such member of the
Lender Group thereafter diligently and continuously prosecutes a Foreclosure to completion.
Notwithstanding anything to the contrary in this Section 4.2.2, if the Foreclosure is not
consummated on or before the date that is 365 days after the date of the Default Notice, then at
any time after such date (which shall not be extended by any Force Majeure Delay), the City may
(in its sole and absolute discretion and without any further notice to any member of the Lender
Group) consummate a Revesting Event.
5..
5.1.Notice of Mortgage Default. Lender hereby agrees that it shall provide notice
to the City pursuant to Section 12 below concurrently with the provision of any notice to
Developer of each event which is a default or breach under any Security Document or which
would trigger the commencement of any Developer cure periods under any Security Document.
5.2.to Cure. If there is an uncured default by Developer under
the Construction Loan or any of the Security Documents prior to the issuance by the City of a
Certificate of Compliance with respect to the Development Parcels, and if a Successor Lender
has not Transferred the Development Parcels to a Replacement Developer, the City may elect to
cure (at its option, to be exercised in its sole and absolute discretion), but shall not be obligated
ven (7) days prior to the date
on which the Transfer to the Replacement Developer is consummated. If the City elects to cure
actual costs and expenses incurred by the City in curing the default and any amounts paid by the
City Lien is prior to the lien of the Security Instruments).
Attachment 11 page 6
6.Foreclosure or Deed in Lieu of Foreclosure.
6.1.Foreclosure. If the Development Parcels (or any portion thereof) are sold,
transferred, assigned, conveyed by deed-in-lieu of foreclosure, leased or otherwise conveyed as a
result of a Foreclosure prosecuted under the Security Documents or if the Development Parcels
(or any portion thereof), then, with respect to the affected portion of the Development Parcels
and subject to the limitations in Section 7 below, the Successor Lender shall comply with the
provisions of the DDA applicable to the portion of the Development Parcels owned by the
Successor Lender, including without limitation, Section 16.6, Section 16.7 and Section 16.14 of
the DDA.
6.2.Limitations on Construction Obligation. Notwithstanding the foregoing in
Section 6.1, the Successor Lender s
obligations under the DDA to construct or complete any improvements or to guarantee such
construction or completion thereof. However, if the Successor Lender elects to construct any
improvements on the Development Parcels, the improvements may only be those improvements
that Developer would be permitted to construct under the DDA.
7.Successor Lender Obligations Prior to Transfer to Replacement Developer.
7.1.Protection of Improvements Already Constructed. A Successor Lender shall
be entitled to take such actions as are reasonably necessary to conserve or protect Improvements
completed on the date of Foreclosure; provided that such right shall not include any right to
undertake new construction (except to the extent necessary to protect exposed elements of such
previously constructed Improvements and in a manner consistent with such previously
constructed Improvements).
7.2.Limitation on Liability. A Successor Lender shall only be liable to the City
under the DDA after the date of Foreclosure to the extent of its interest (whether fee or
leasehold) in the portion of the Development Parcels and the Improvements thereon owned by
such Successor Lender.
7.3.Obligations of a Permitted Mortgagee in Possession. From and after the date
a Foreclosure is consummated, the Successor Lender shall be obligated to comply with only the
requirements of this Section 7.3 and the Successor Lender shall be obligated to perform the
following with respect to the portion of the Development Parcels owned by such Successor
Lender:
(a)Pay all past due real property taxes and assessments and keep
current the real property taxes and assessments imposed on the Development Parcels;
(b)
forth in any non-disturbance and /or attornment agreement or other similar agreement entered
into by and between Lender and any Retail Tenant or, if no such agreement is in effect for a
given Lease, keep such Lease in force and effect so long as there is no default thereunder as
defined in such Lease;
Attachment 11 page 7
(c)abate weeds and other hazards and nuisances on the
Development Parcels in a commercially reasonable manner including Investigations and
Remediation of Hazardous Materials as and to the extent required by Environmental Laws and
pursuing rights under any Environmental Insurance policy to cause the clean-up of the
Development Parcels in accordance with Environmental Laws;
(d)maintain commercially reasonable amounts of liability insurance
for the Development Parcels, and, if applicable, any other insurance required of Developer as
(e)erect and maintain barricades and fencing on the Development
Parcels as reasonably necessary to protect the public and the Improvements already constructed;
and
(f)maintain in a commercially reasonable manner (but in any event
subject to all Environmental Laws) erosion control on the Development Parcels and comply with
all water quality requirements applicable to the Development Parcels.
(g)promptly cause to be removed or bonded against (such bonding
to be by the provision of bonds satisfying California statutory requirements) any and all
stop notices and/or bonded stop notices that are recorded and/or served by
subcontractors, sub-subcontractors (of all tiers) and suppliers in connection with the Project.
(h)grant to representatives of the City the reasonable right of access
to all portions of the Development Parcels, without charges or fees, at normal construction
hours, including the inspection of the work being performed in constructing any Improvements
on the Development Parcels, including the inspection of the work being performed in
constructing the Improvements. The City agrees to indemnify, defend and hold the Successor
Owner harmless for any and all claims, liability and damages arising out of any such non-
governmental inspection or other activity on the Property by the City, or its agents, employees or
contractors permitted pursuant to this Section 7.3(h), except to the extent caused by the
negligence or willful misconduct of the Successor Owner.
Attachment 11 page 8
8.New Agreement.
8.1.1.Execution of New Agreement. If a Successor Lender (or any
member of the Lender Group) becomes a Replacement Developer, then either the City or such
Replacement Developer may deliver written notice to the other and request that the City and
such Replacement Developer enter into a new disposition and development agreement upon the
same terms, provisions, covenants and agreements set forth in DDA (as the same may at such
New Agreement
Transfers some or all of the Development Parcels to third party that is a Replacement Developer,
then either the City or such Replacement Developer may deliver written notice to the other and
request that the City and the Replacement Developer enter into a New Agreement. In any event,
o the New Agreement shall be subject to satisfaction of all of the
conditions in this Section 8.1. The terms of the New Agreement shall be subject to satisfaction
of the conditions in Section 8.1.1 and Section 8.1.2 shall be subject to the other requirements of
this Section 8.1.
8.1.2.Requirements for New Agreement. The City and the Successor
Lender or Replacement Developer, as applicable, shall be required to enter into the New
Agreement if:
(a)The City shall have provided written notice to the Successor
Lender or the Replacement Developer, as applicable, requesting the New Agreement within one
hundred twenty (120) days after the date of termination of the DDA; or
(b)A Replacement Developer has title to the Development Parcels on
the date of termination of the DDA, the Replacement Developer shall have provided written
notice to the City requesting the New Agreement within one hundred twenty (120) days after the
date of termination of the DDA; or
(c)Any member of the Lender Group is the Permitted Mortgagee on
the date of termination of the DDA, and all of the following conditions are satisfied: (i) if each
member of the Lender Group with the authority to prosecute a Foreclosure promptly commences
the activity that will result in a Foreclosure and such member of the Lender Group thereafter
diligently and continuously prosecutes a Foreclosure to completion; and either (x) if such
member of the Lender Group
Development Parcels within [____] full calendar months after the date of termination of the
DDA and the Replacement Developer provides written notice to the City requesting the New
Agreement within sixty (60) days after the date the Replacement Developer obtains title to the
Development Parcels or (y) the Successor Lender provides written notice to the City requesting
the New Agreement within [____] full calendar months after the date of termination of the DDA.
8.2.Priority of New Agreement. Concurrently with the execution of a New
Agreement, the Replacement Developer shall cause any person or entity that then has a lien on
the Development Parcels that is a security interest for any obligation of such Replacement
Developer to execute a subordination agreement on substantially the same terms as contained in
this Agreement, causing such secured party to subordinate its lien to the lien of (a) the City Lien
under the DDA, (b) the City Rights, (c) the New Agreement and any lien arising thereunder.
Attachment 11 page 9
8.3.. The Replacement Developer shall pay to the
City at the time of the execution and delivery of the New Agreement an amount equal to all
in connection with and the negotiation and execution of
the New Agreement.
9.Rights and Obligations of Permitted Mortgagees. Lender enters into this
Agreement with the understanding that Lender has certain rights as a Permitted Mortgagee under
the DDA and that the exercise of those rights are subject to the terms and conditions set forth in
the DDA, including without limitation the terms and conditions in Section 16.6 and Section 16.7
of the DDA (as of the date of this Agreement). For purposes of clarity in this Agreement, the
entirety of Section 16.6 and Section 16.7 of the DDA (as of the date of this Agreement) are
attached to this Agreement as
10.. If a Revesting Event occurs, all of
the Loan Documents shall have no effect with respect to the Development Parcels and the lien of
the Deed of Trust and all other Security Documents encumbering the Development Parcels shall
be eliminated by operation of law and the terms of this Agreement. Notwithstanding the
foregoing, if a Revesting Event occurs, the City shall comply with the terms of this Section 10
10.1.No Obligation to Sell or Lease Development Parcels. After a Revesting
Event, the City shall determine, in its sole and absolute discretion, whether to retain some or all
of the Development Parcels, sell, lease or otherwise convey some or all of the Development
Parcels, or enter into a public-private partnership for the ownership, development and operation
of the Development Parcels. In this regard, the City shall owe no duty to Lender or to any
Section 10.2
below. Rather, the City shall act in whatever manner it then determines to be in the best interest
of the citizens of the City with respect to the future use, enjoyment and/or economic value of the
Development Parcels.
10.2.Right to Receive Certain Payments.
10.2.1. Lender May Only Participate in Payments if No Foreclosure has
Occurred. The Parties intend that Lender shall have an election of remedies under this
Agreement if there occurs a Material Default by Developer under the DDA. Lender may, at its
election, pursue a Foreclosure and the exercise of all of its rights under the DDA and this
Agreement. If, after a Foreclosure is consummated, the City consummates a Revesting Event in
accordance with the terms of this Agreement, then the City shall thereafter be the sole owner of
the Development Parcel
entirety (including without limitation all rights under this Agreement), and no person or entity
shall have any right to receive any proceeds under Section 10.2.2.3 below. Conversely, if no
Foreclosure is consummated and the City consummates a Revesting Event in accordance with
the terms of this Agre
Agreement shall be to receive the proceeds that may be payable under Section 10.2.2.3 below, if
any.
Attachment 11 page 10
10.2.2.Revesting Event Without a Foreclosure by Lender. If a Revesting
Event occurs and the City consummates one or more Financings of some or all of the
Development Parcels, then all Net Financing Proceeds from such Financings shall be applied in
the following order of priority. Also, if a Revesting Event occurs and the City consummates one
or more Transfers of some or all of the Development Parcels, then all Net Sale Proceeds from
such Transfers shall be applied in the following order of priority. Regardless of the total
consideration received by the City in connection with any one Transfer of some or all of the
Development Parcels, the City shall only be obligated to apply the Net Sale Proceeds from such
Transfer in accordance with this Section 10.2.2 and all other consideration that is not part of the
Net Sale Proceeds shall be retained exclusively by the City. With respect to each Financing and
Transfer by the City, each level of payments set forth below shall be fully satisfied (taking into
account the Net Financing Proceeds from such Financing or the Net Sale Proceeds from such
Transfer, as applicable, and taking into account all disbursements of Net Financing Proceeds
from all prior Financings and all disbursements of Net Sale Proceeds from all prior Transfers)
before the City applies any Net Financing Proceeds or Net Sale Proceeds, as applicable, to the
next level of payment set forth below.
10.2.2.1.Delinquencies. First, to pay all delinquent real and
personal property taxes that accrued with respect to the Development Parcels prior to the date of
the Revesting Event.
10.2.2.2.Reimbursement of City Costs. Second, to reimburse the
City for all of the following: (i) costs and expenses incurred by the City (including the salaries
of personnel engaged in any such actions) in connection with the Revesting Event, and operation
and management of the Development Parcels prior to the Financing or Transfer; (ii) all unpaid
taxes, assessments, and water and sewer charges in connection with the Development Parcels;
(iii) any payments made or required to be made by the City to discharge a lien or prevent a lien
from at
ownership, development, operation and/or use of the Development Parcels or from any person
or entity claiming by, through or under Developer; (iv) all costs and expenses incurred by the
City (including the salaries of personnel engaged in any such actions) to design and/or construct
any improvements on the Development Parcels (or off-site) that Developer was obligated to
design and construct under the terms of the DDA; (v) all costs and expenses incurred by the City
(including the salaries of personnel engaged in any such actions) to secure, operate, maintain and
repair any improvements on the Development Parcels (or off-site); and (vi) any other amounts
owing from Developer to the City under or in connection with the DDA.
10.2.2.3.Equivalent Payment Level for Non-Foreclosed
Construction Loan. If no Foreclosure occurred prior to the Revesting Event, then third, to pay to
the member of the Lender Group der the Construction Loan on
the date of the Revesting Event, an amount equal to the sum calculated as follows: (a) the
outstanding balance of the Construction Loan as of the date of the Revesting Event, minus (b)
any default interest, and all other fees and premiums that may have accrued under the
Construction Loan and are included in the amount in clause (a), minus (c) all proceeds and other
consideration received by any member of the Lender Group from Developer or any Developer
Affiliate after the date of the Material Default by Developer under the DDA and prior to the date
of the Revesting Event, to the extent that such consideration is not reflected in the reduced
Attachment 11 page 11
balance of the Construction Loan under clause (a). Notwithstanding the foregoing, the
calculation of the outstanding balance of the Construction Loan as of the date of the Revesting
Event shall not include any loan advances, changes in the loan balance or other consideration due
to Lender under any New Loan Documents (as defined below in Section 13.4) unless such New
Loan Documents have been approved by the City in writing prior to the execution of such New
Loan Documents by Lender and Developer (or any Developer Affiliates). For purposes of
clarity, on the date of the Revesting Event, the Security Instruments will have been foreclosed
and eliminated from title to the Development Parcels, and the City will have no obligations under
Proceeds or Net Sale Proceeds to any member of the Lender Group under this level of payment
is a contractual obligation regarding such Net Financing Proceeds and Net Sale Proceeds that
arises solely under this Agreement and is not related to and does not arise out of the Loan
Docu
come due to a member of the Lender Group under this Section 10.2.2.3 shall not bear interest
and shall not increase over time, regardless of the date on which a Financing or a Transfer occurs
that results in Net Financing Proceeds or Net Sale Proceeds that the City is obligated to disburse
under this Section 10.2.2.3. If a Foreclosure occurred prior to the Revesting Event, then this
third level of payment shall not apply and no member of the Lender Group shall be entitled to
any disbursement of Net Financing Proceeds or Net Sale Proceeds under this Section 10.2.2.3.
10.2.2.4.Balance to the City. Fourth, any Net Financing Proceeds
and Net Sale Proceeds remaining after all of the above levels have been satisfied shall be
retained by the City; provided that if a Foreclosure occurred prior to the Revesting Event, then
no payments shall be made by the City to any party under Section 10.2.2.3.
11.Release of the City Dedication Parcels. Lender hereby agrees for the benefit of
the City that it shall release from the lien of the Security Documents and reconvey, without cost
or expense to the City, the City Dedication Parcels, provided that the parcels remaining subject
to the lien of the Security Documents after such release and reconveyance shall constitute legal
parcels in compliance with the Subdivision Map Act.
12.Notices, Demands and Communications between the Parties.
12.1.Notice Instructions. All notices, demands, consents, requests and other
writing and shall be deemed conclusively to have been duly given (a) when hand delivered to the
other Party; (b) three (3) Business Days after such notice has been sent by U.S. Postal Service
via certified mail, return receipt requested, postage prepaid, and addressed to the other Party as
set forth below; (c) the next Business Day after such notice has been deposited with an overnight
delivery service reasonably approved by the Parties (Federal Express, Overnite Express, United
Parcel Service and U.S. Postal Service are deemed approved by the Parties), postage prepaid,
addressed to the Party to whom notice is being sent as set forth below with next-business-day
delivery guaranteed, provided that the sending Party receives a confirmation of delivery from the
delivery service provider; or (d) when received by the recipient Party when sent by facsimile
transmission or email at the number or email address set forth below; provided, that notices
given by facsimile or email shall not be effective unless either (i) a duplicate copy of such notice
is promptly sent by any method permitted under this Section 12.1 other than by facsimile or
Attachment 11 page 12
email, or (ii) the receiving Party delivers a written confirmation of receipt for such notice either
by facsimile, email or any other method permitted under this Section. Any notice given by
facsimile or email shall be deemed received on the next Business Day if such notice is received
-Business Day.
Unless otherwise provided in writing, all Notices shall be addressed as follows:
If to the City: Tustin City Hall
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
and Attention: Assistant City
Manager
Facsimile: (714) 838-1602
Email:_____________________
With a copy to: City of Tustin City Attorney
Woodruff Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626
Attn: Doug Holland
Facsimile: (714) 835-7787
Email: _________________
If to the Lender at the address
set forth in a recorded Request
for Notice Under Civil Code
Section 2924b
And
With a copy to: _________________
_________________
Facsimile: ______________
Email: _________________
With a copy to (for legal
notices):
[FILL IN IF APPROPRIATE]
12.2.Any Party may by written notice to the other Party in the manner specified in
this Agreement change the address to which notices to such Party shall be delivered.
12.3.Each Successor Lender and Replacement Developer, within 10 days following
its acquisition of any interest in the Mortgage and/or the Property or any portion thereof, shall
and/or the Property and specifying an address to which notices to such party shall be sent. In the
absence of such written notice to the City, notices sent by City to Lender at the address described
Attachment 11 page 13
in Section 12.1 above or at the last address provided by Lender pursuant to Section 12.2 shall be
deemed to be notice to each Successor Lender and Replacement Developer.
12.4.Notice to Lenders. Nothing set forth in this Agreement shall modify the
provisions of Section 16.7 or Section 17.6 of the DDA, or of any other provision of the DDA
pertaining to notice.
13.Loan Documents.
13.1.City Receipt of Loan Documents. The City hereby acknowledges its receipt
of copies of the Loan Documents. Lender hereby represents and warrants to the City that the
Loan Documents are all of the documents and instruments executed between Lender and
Developer and/or all Developer Affiliates under or in connection with the Construction Loan.
13.2.Detailed List of Loan Documents Shall NOT be Recorded. The Parties shall
not record a copy of Exhibit when this Agreement is recorded in the Official Records.
13.3.
of the Loan Documents, the representations and warranties of Developer in the DDA regarding
the Loan Documents, and the representations and warranties of Lender in Section 13.1, and
subject to Section 13.4 below, the City hereby (a) consents to Developer entering into the
(as such term is
defined in the DDA) for the Development Parcels. City hereby approves the Deed of Trust, after
it is properly recorded as a first lien security instrument against title to the Development Parcels,
such term
Section 13.3
Section 16.2(a) of the DDA.
13.4.Modification or Amendment to Loan Documents. Lender shall deliver to the
City true, accurate and complete copies of all modifications, amendments, and novations to the
Loan Documents, as well as any new documents or instruments executed between Developer (or
any of the Developer Affiliates) and Lender in connection with the Construction Loan (all of the
Loan Document shall automatically be subordinate to the Lien of the DDA, without any further
action by the City. No terms or conditions of the New Loan Documents may modify or amend
the terms of this Agreement. If any of the New Loan Documents is a substitution, modification,
amendment or replacement of the Deed of Trust, any such New Loan Document shall not
constitute a Permitted Mortgage unless approved in advance by the City in writing and Lender
and the City execute and record against title to the Development Parcels a modification to this
14.Miscellaneous.
14.1.Modification. No amendment, change, modification or supplement to this
Agreement shall be valid and binding on the Parties unless it is represented in writing and signed
by all of Parties.
14.2.Applicable Law. This Agreement shall be governed by, interpreted under,
Attachment 11 page 14
construed and enforced in accordance with the laws of the State of California, irrespective of
-of-law principles.
14.3.Binding Effect. This Agreement and the terms, provisions, promises,
covenants and conditions hereof shall be binding upon and inure to the benefit of the Lender and
City and their respective heirs, legal representatives, successors and assigns.
14.4.Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Agreement shall not be effective until the execution and delivery by Lender and the City to at
least one set of counterparts. Lender and City hereby authorize each other to detach and
combine original signature pages and consolidate them into a single identical original. Anyone
of such completely executed counterparts shall be sufficient proof of this Agreement.
14.5.Exhibits. The following exhibits which are part of this Agreement are
attached hereto and each of which is incorporated herein by this reference as though set forth in
full:
Legal Description of the Development Parcels
List of Loan Documents
Sections 15.3 and 15.4 of DDA
Exh Sections 16.6 and 16.7 of DDA
{remainder of page is blank}
Attachment 11 page 15
IN WITNESS WHEREOF, the City and Lender have caused this Agreement to be duly
executed as of the day and year first above written.
LENDER
By:_____________________________________
Name: ___________________________________
Title: ____________________________________
City of Tustin, California
By:_______________________________________
___________________
City Manager
ATTEST:_________________________ Dated: __________________________, 2011
Pamela Stoker
City Clerk
APPROVED AS TO FORM
City Attorney
By:_______________________________
Attachment 11 page 16
State of California }
} ss.
County of Orange }
On ___________, 2011 before me, ___________________________________________
Insert name of Notary Public and title
()
personally appeared ____________________________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________________________________ (Seal)
Signature of Notary Public
Attachment 11 page 17
State of California }
} ss.
County of ______________ }
On ___________, 2011 before me, ___________________________________________
Insert name of Notary Public and title
()
personally appeared ____________________________________________________, who
proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in his/her
authorized capacity, and that by his/her signature on the instrument the person, or the entity upon
behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
__________________________________ (Seal)
Signature of Notary Public
Attachment 11 page 18
EXHIB
LEGAL DESCRIPTION OF DEVELOPER PARCELS
Attachment 11 page 19
LIST OF LOAN DOCUMENTS
DO NOT RECORD THIS PAGE
Doc Number Title of Document
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Attachment 11 page 20
SECTIONS 15.3 AND 15.4 OF THE DDA
15.3 Right of Purchase
time to time, at any time within one (1) year after the date that the Developer became in Material
Default (provided that upon Developer cure of such Material Default, such right shall cease with
respect to such Material Default only), by provision of written notice as described below, to
purchase any, or all of the Property in accordance with the following:
15.3.1 Purchase Price. The purchase price for such Property shall be the
lesser of (i) seventy-five percent (75%) of the Fair Market Value of the affected Property
determined in accordance with Section 15.3.3, which Fair Market Value shall be that of each
component of the Property in the condition it or they may be in as of the date of election to
purchase, and (ii) an amount which provides sufficient net sales proceeds to pay a Permitted
Mortgagee with a lien upon the Property being purchased the principal and accrued and unpaid
interest to the date of the Material Default secured by such Property, and no other costs or
expenses. The Parties agree that the Property acquired by the City shall be free and clear of all
Mortgages at the time of conveyance to the City. The Parties agree that the amount of reduction
in the Fair Market Value of the Development Parcel bears a reasonable relationship to the
damages which the Parties estimate may be suffered by the City as the result of the Developer's
default in the performance of its obligations under this Agreement, which damages would be
impractical or extremely difficult to quantify, that the reduction in the acquisition price as
compared with the Fair Market Value of the Property constitutes a reasonable estimate of the
damages of the City in such event, and that the remedy provided for herein is not a penalty or
forfeiture, and is a reasonable limitation on the Developer's potential liability as a result of such
default. In the event the City exercises its Right of Purchase as to all or any portion of the
Property, as provided in this Section 15.3, this Agreement shall, unless otherwise determined by
the City in its sole discretion, terminate with respect to such Property as may be purchased,
provided that the provisions of this Section shall survive the termination of the Agreement.
15.3.2 Process. If the City elects to repurchase all or any portion of the
Property the Parties shall: (a) within five (5) Business Days after the date of either the City's
election to purchase, or the Developer's notice to exercise its right to cause the purchase (but in
either event no earlier than the first date on which the City either has the right to purchase), open
an escrow with an escrow agent designated by the City for the purchase and sale, and shall
execute an escrow agreement that shall provide that the Developer shall pay all costs of the
escrow and shall include such usual and ordinary terms as are reasonably required by the escrow
agent and by the transaction; (b) no later than five (5) Business Days after the opening of escrow
(i) the Developer shall place into the escrow appropriate grant deeds conveying fee title to the
Development Parcel (so that the City shall acquire the Property free and clear of any and all
liens, claims and encumbrances other than claims other than monetary liens that were of title as
of the date of the Closing, and any liens, claims or encumbrances approved in writing by the
City) and (ii) the Parties shall commence the procedure specified in Section 15.3.1 to determine
the Fair Market Value of the affected Property as provided in Section 15.3.3; and (c) no later
Attachment 11 page 21
than twenty (20) Business Days after the Fair Market Value of such Property has been
determined, the City shall deposit into the escrow the purchase price, less the amount of any
monetary liens, including any Mortgage or Permitted Mortgage against the Property. The
escrow shall close, and title shall be conveyed to the City, no later than five (5) Business Days
after the City has deposited into escrow the purchase price. Concurrently with the close of
escrow, the Developer shall comply with its obligations under Section 13.3.
15.3.3 Determination of Fair Market Value
shall be determined by one or more real estate appraisers selected as hereafter provided, all of
whom shall be members of The Appraisal Institute with not less than ten (10) years experience in
appraisal of hotel and retail properties in Orange County, California. Within five (5) Business
writing of the Appraiser so selected. Each Appraiser shall deliver to both Parties their written
determinations of the fair market value of the Repurchase Property on the date that is twenty (20)
If the difference
between the fair market values determined by the Appraisers does not exceed ten percent (10%)
of the lesser of such appraised values, then the Fair Market Value shall be the average of the
appraisals. If, however, the difference between the appraisals shall exceed ten percent (10%) of
the lesser of such amounts, then the Appraisers shall, within five (5) Business Days following the
o determine the fair market value of the Repurchase Property within twenty (20)
days after selection of the Third Appraiser. If there is a third appraisal, the Fair Market Value for
the Repurchase Property shall be the average of the two (2) appraisals nearest in value. The
Parties shall each bear the cost of the Appraiser they select and shall share equally the cost of the
Third Appraiser. All such determinations of Fair Market Value shall be final and binding upon
the Parties.
15.3.4 No Release of Liability. In the event the City is to purchase any
portion of the Property by reason of the exercise by the City of its election to do so upon a
Material Default by the Developer, such purchase shall not terminate or release any liability or
obligations of the Developer with respect to said Property to return any written Due Diligence
Information to the City as provided in Section 13.3 and to indemnify the City as provided in
Section 5.5 and Article 10. In the event the City purchases any portion of the Property, under no
circumstances shall the Developer have any right or claim to, or against, the purchased Property
or any portion thereof. In addition, the Developer shall represent and warrant that all
Improvements on the purchased Property as of the date of purchase are constructed in conformity
with all applicable Governmental Requirements. Notwithstanding the purchase of any Property
by the City as provided in this Section 15.3, this Agreement shall remain in full force and effect
with respect to the portions of the Property not purchased by the City.
15.4 The Right of Reversion.
15.4.1 Right of Reversion. Following the Phase 1 Close of Escrow and
notwithstanding that such portion of the Property may be encumbered by one or more Mortgages
or Permitted Mortgages, in the event of the occurrence of any Reversion Action Date as
Attachment 11 page 22
described in Section 15.4.2, and in addition to its other rights as a result of the Material Default
by the Developer, the City shall have the right on the terms and subject to the conditions set
forth in this Section 15.4 to re-enter and take possession of the Property and/or Improvements or
revesting of the Property or any portion thereof by the City whether based on voluntary action of
the Developer or otherwise after notice by the City of its intent to exercise the Right of
Right of Reversion at any time on or after the occurrence of any of any one or more of the
Reversion Action Dates provided that the City has complied with the Revesting Conditions for
the benefit of a Permitted Mortgagee set forth in Section 15.4.3.
15.4.2 Defaults Triggering the Right of Reversion. After conveyance of title
or possession and prior to the recordation of a Certificate of Compliance for the Project, the City
may exercise the Right of Reversion with respect to all or any portion of the Property conveyed
to Develo
(a) Developer fails to Complete any Phase of the Project within
three (3) years from the Close of Escrow for such Phase, subject only to the notice provisions set
forth in Section 13.1.
(b) The Developer abandons or substantially suspends construction
of the Project for a period of one hundred eighty (180) consecutive calendar days, and such
becomes a Material Default in accordance with the notice and cure provisions of Section 13.2
(c) A Material Default arises because of a voluntary or involuntary
Transfer or Transfer of Control, including a Foreclosure affecting all or any portion of the
Property, by any Mortgagee, violating the requirements of this Agreement.
15.4.3 Revesting Conditions for Benefit of Permitted Mortgagee. Following
any Reversion Action Date but prior to the Revesting Event, the City shall provide to any
Permitted Mortgagee with the right to cure set forth in clause (a) below, and if the Permitted
Mortgagee cannot cure without taking title to all or any portion of the Property in order to effect
the Parties agree that time is of the essence with respect to the dates and deadlines set forth in
this Section 15.4.3 and that such Revesting Conditions shall not be subject to extension for Force
Majeure Delay.
(a) Provision by the City of notice in accordance with Section 17.7
to each Permitted Mortgagee having a Permitted Mortgage on the affected portion of the
Property, of a Material Default by the Developer remaining uncured after passage of the time
periods set forth in this Agreement for cure thereof by the Developer and failure of any Permitted
Mortgagee to cure such Material Default in accordance with Section 16.7.
(b) After a Permitted Mortgagee has obtained title to any portion
of the Property, failure by such Permitted Mortgagee to have within a period of one (1) year from
the date upon which the Permitted Mortgagee or its designee obtains title to such portion of the
Property either (i) to (x) assume all obligations of the Developer under this Agreement, including
Attachment 11 page 23
the obligation to construct the Improvements in accordance with a revised Schedule of
Performance agreed to by the Permitted Mortgagee or designee and the City and, thus, to step
into the role of Developer hereunder and (y) commence and diligently prosecute to Completion
the construction of the Improvements; or (ii) to sell the affected portion of the Property; or (iii)
complied with any of its obligations under Section 16.7 and, in the event of such failure, to have
cured such default within ninety (90) days of receiving written notice from the City in
accordance with Section 17.7.
Upon expiration of the time periods provided in clauses (a) and (b) above, if the
Permitted Mortgagee has failed to cure, City shall be entitled, without further action by any
Person, to complete the revesting of the Property and the Revesting Event.
15.4.4 Priority of the Right of Reversion.
(a) The Right of Reversion shall be senior in priority to any and all
liens, monetary encumbrances, and Mortgages, including Permitted Mortgages, encumbering
such Development Parcel or portion thereof, such that upon the Revesting Event all such liens,
encumbrances and Mortgages will be extinguished and the City will be revested of title to the
Property, or portion thereof, free and clear of all such liens, encumbrances and Mortgages.
(b) Notwithstanding anything to the contrary in this Agreement, if
a Revesting Event occurs, thereafter the City may determine, in its sole and absolute discretion,
whether to retain some or all of the Development Parcels, sell, lease or otherwise convey some or
all of the Development Parcels, or enter into a public-private partnership for the ownership,
development and operation of the Development Parcels. After a Revesting Event, the City shall
owe no duty or obligation to Developer, any Successor Owner, or any Permitted Mortgagee (or
any other Mortgagee) whatsoever, except only to the extent that City has any obligations to a
Permitted Mortgagee under the Subordination Agreement. Rather, the City shall act in whatever
manner it then determines to be in the best interest of the citizens of the City with respect to the
future use, enjoyment and/or economic value of the Development Parcels. After a Revesting
Event, if and to the extent that the City sells, leases or otherwise conveys some or all of the
Development Parcels, or enters into a public-private partnership for the ownership, development
and operation of the Development Parcels, then all consideration received by the City for any of
the foregoing shall be retained exclusively by the City, except to the extent that the City has an
obligation to disburse any such consideration (if any) under the terms of the Subordination
Agreement.
15.4.5 Termination of Right of Reversion. The Right of Reversion shall
not apply to any portion of the Property after the recordation by the City of a Certificate of
Compliance with respect to the Property.
Attachment 11 page 24
SECTIONS 16.6 AND 16.7 OF THE DDA
16.6 . If a Permitted Mortgagee acquires all or
any portion of the Property in a Foreclosure, the provisions of Section 2.2.5 and the
Subordination Agreement shall govern such acquisition and the rights and obligations of such
Permitted Mortgagee. If a Permitted Mortgagee does not acquire the portion of the Property
which was the subject of a Foreclosure action, or if it does acquire by Foreclosure such portion
of the Property but then subsequently Transfers all or any portion of such acquired portion of the
Property, then upon such Foreclosure: (a) all of the provisions contained in this Agreement shall
be binding upon and benefit the Transferee which acquires title to all or any portion of the
Property, and (b) provided that such Person assumes the obligations of the Developer under this
Agreement in accordance with Section 2.2.2, the City shall recognize such Transferee as the
Developer under this Agreement.
16.7 Mortgagee Protections. Each Permitted Mortgagee of a then-existing Permitted
Mortgage affecting a portion of the Property which has provided notice to the City as required by
Section 16.4 shall, until its Permitted Mortgage is satisfied of record or until written notice of
satisfaction is given by the Permitted Mortgagee to the City or it ceases to be a Permitted
Mortgagee, be entitled to the following:
16.7.1 Provision of concurrent notice of any default by any Party hereunder;
provided, however, that a failure of a Party to deliver a concurrent copy of such notice of default
to the Permitted Mortgagee shall not affect in any way the validity of the notice of default as it
relates to the defaulting Party, but in any subsequent proceedings arising from the notice of
default with respect to which there was a failure to provide the requested concurrent notice to the
Permitted Mortgagee, the interest of the Permitted Mortgagee and its lien upon the affected
Development Parcel shall not be affected in any way until such time as it has received proper
notice and all cure periods with respect thereto have expired, and provided, further, the giving of
any notice of default or the failure to deliver a copy to any Permitted Mortgagee shall in no event
create any liability on the part of the Person so declaring a default.
16.7.2 The right, but not the obligation, at any time prior to the earlier to
occur of exercise of the Right of Purchase and/or Right of Reversion, or the termination of this
Agreement and without payment of any additional penalty or assumption of the obligations of
Developer under this Agreement, to cure or remedy such Potential Default or Material Default,
to effect any insurance, to pay any amounts due to the City, to make any repairs or
improvements, to do any other act or thing required of Developer under this Agreement and to
do any act or thing which may be necessary and proper to be done in the performance and
observance of this Agreement to prevent termination of this Agreement. To carry out the
foregoing, the Developer hereby agrees that such Permitted Mortgagee and its agents and
contractors shall have full access to the Property for purposes of accomplishing any of the
foregoing. Any of the foregoing done by such Permitted Mortgagee shall be as effective to
prevent a termination of this Agreement or the exercise by the City of the Right of Purchase or
the Right of Reversion as the same would have been if done by Developer.
Attachment 11 page 25
16.7.3 Notwithstanding any other provision of this Agreement to the contrary,
if any Material Default shall occur which, pursuant to any provision of this Agreement, entitles
the City to terminate this Agreement and/or to exercise its Right of Reversion, the City shall not
be entitled to terminate this Agreement or to revest any portion of the Property unless (a) the
City, following the expiration of any periods of time given Developer in this Agreement to cure
such Material Default, shall have given written notice to such Permitted Mortgagee stating the
calendar days after delivery of such notice, such Permitted Mortgagee shall fail to either:
(i) cure the Material Default if the same consists of the nonperformance by
Developer of any covenant or condition of this Agreement requiring the payment of money by
Developer to the City, other than payments required under Sections 4.2 or Article 7 (provided,
however, that nothing set forth in this Agreement shall restrict or limit the right of City to
exercise its Governmental Capacity remedies with respect to the Entitlements or any bond issues
in favor of the City); and
(ii) if the Material Default is not of the type described in clause (i) above,
eithe
is capable of being cured within such ninety (90) calendar day period, (y) deliver a Construction
Bond to the City for all uncompleted Improvements; provided that the City shall have the right
(upon delivery by the City of a written demand and without the consent of any other Person) to
require the surety issuing the Construction Bond to commence the construction necessary to
complete the Improvements no later than twelve (12) full calendar months after the date of the
Construction Bond, or (z) commence, or cause any trustee under the Permitted Mortgage to
commence, and thereafter diligently pursue to completion, steps and proceedings to Foreclosure;
provided that except as extended by Section 16.7.4, such Foreclosure shall be completed within a
maximum of one (1) year following the commencement of such proceeding. Any Material
Default which does not involve a covenant or condition of this Agreement requiring the payment
of money by the Developer to the City shall be deemed cured if any Permitted Mortgagee shall
diligently pursue to completion Foreclosure and shall, upon acquiring fee title to all or any
portion of the Property, thereafter undertake its obligations (if any) with respect such portion of
the Property pursuant to Section 15.8.
16.7.4 If such Permitted Mortgagee is prohibited from commencing or
prosecuting Foreclosure by any process or injunction issued by any court or by reason of any
action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving
Developer (other than any such process, injunction or court action occurring in response to any
negligence or misfeasance of Permitted Mortgagee), the times specified in Section 16.7.3(ii)(y)
for commencing or prosecuting a Foreclosure or other proceedings shall be extended for the
period of the prohibition; provided that the Permitted Mortgagee shall have fully cured any
Material Default required by Section 16.7.3(ii)(x) above and shall continue to perform and/or
cure all such obligations as and when the same fall due. Notwithstanding anything to the
contrary in this Section 16.7, if the Foreclosure is not consummated on or before the date that is
365 days after the date of the Notice to Mortgagee, then at any time after such date (which shall
not be extended by any Bankruptcy of Developer or any Force Majeure delay), the City may (in
its sole and absolute discretion and without any further notice to any Mortgagee) consummate a
Revesting Event.
Attachment 11 page 26
16.7.5 No Permitted Mortgagee shall have the right to use the failure of the
City to provide notice to any other Mortgagee as a claim, defense or estoppel to application of
rtgage.
Attachment 11 page 27
ATTACHMENT NO. 12
ASSIGNMENT OF ARCHITECT'S CONTRACT,PLANS, SPECIFICATIONS
AND PERMITS
(With Architect's Consent and Certificate)
1. FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, Olson Real Estate Group, Inc. (dba R.D. Olson Development), a California
Developer
Developer pursuant to that certain Disposition and Development Agreement 2011-01 (Tustin
DDA
City
municipal corporation (""), relating to the acquisition certain real property in the City of
Property
Tustin, Orange County, California as described in the DD
Project
in the DDA, hereby collaterally assigns and transfers to the City, its successors and assigns, all
of:
a. Developer's rights in and to all plans and specifications for the Project together with
all amendments, modifications, supplements, general conditions and addenda thereto
Plans
relating to the
Architect
b.Developer's right, title and interest in that certain agreement dated__________, by
and between Developer and Architect, a true and complete copy of which is attached
Contract
hereto and incorporated herein by reference as
c.all permits obtained or to be obtained by or for the benefit of Developer relating to the
Permits
Architect consents to this Assignment, and has executed the Consent and Certificate attached
hereto as and incorporated herein by this reference.
2. Neither this Assignment nor any action or actions on the part of the City shall
constitute an assumption by the City of any of Developer's obligations under the Contract unless
and until the City shall have given written notice to Architect of its election to complete
construction of the Project following a default by Developer under the DDA and expiration of all
applicable cure periods thereunder, including, without limitation, cure periods provided to a
Permitted Mortgagee.
3. Developer shall continue to be liable for all obligations under the Contract and
Developer hereby agrees to perform each and all such obligations until the expiration of any
required notice and cure provisions set forth in Section 4 below.
Attachment 12 page 1
4. In the event of a default under the DDA after the giving of all required notice(s) to
the Developer and the expiration of any required cure period under the DDA, the City may elect
to reassign its rights to the Plans, the Permits and the specifications under the Contract to any
person or entity selected by the City to complete the Project with written notice to Developer and
Architect and payment to Developer of an amount (not to exceed $5,000.00) to reimburse
. Such
person or entity shall succeed to all of the rights and obligations of Developer thereunder without
the necessity of any consent from Developer or Architect and the City shall have no liability for
any failure of such person or entity to perform the obligations under the Contract; however, City
acknowledges and agrees that upon such failure by such person or entity, including, but not
limited to, failure to cure any defaults in payment owing to Architect under the Contract, all
right, title and interest in the Plans shall revert back to Architect until the failure(s) is cured.
Provided, further, that in the event the City reassigns its rights to the Plans to another person or
entity as aforesaid, the Architect's name shall not be used in connection therewith unless the
Architect so approves in writing.
5. Developer hereby represents and warrants to the City that (a) to the best of its
knowledge, the Contract is in full force and there are no material defaults thereunder by either
Developer or Architect, (b) it has received no written notice of the existence of an event has
occurred that would constitute a default under the Contract upon the giving of notice or the lapse
of time or both, and (c) Developer has made no previous assignment of, and has not granted any
security interest in, its rights to the Plans, the Permits or the specifications under the Contract,
except for a senior assignment to a Permitted Mortagagee.
6. Developer agrees that (a) except for assignments permitted under the DDA and
any assignment made to the lender under a Construction Loan, Developer will not assign,
transfer or encumber its rights to the Plans, the Permits or under the Contract so long as any
obligation of Developer under the DDA remains unsatisfied without the prior written consent of
the City, (b) other than change orders in the normal course of construction of the Project,
Developer will not agree to any material amendment of the Contract without the prior written
consent of the City, (c) Developer will not terminate the Contract or accept a surrender thereof,
or waive, excuse, condone or in any manner release or discharge Architect of or from the
obligations and agreements by Architect to be performed thereunder, in the manner and at the
place and time specified therein without the prior written consent of the City, and (d) it will
indemnify the City against any liabilities, losses, costs and expenses, including reasonable
attorneys' fees, that may be incurred by the City as a result of the exercise of its rights under this
Assignment prior to such time as the City assumes the Contract or assigns it to another developer
and except to the extent such liability, loss, cost or expense is caused by the gross negligence,
recklessness or intentional misconduct of the City.
7. Following an event of default under the DDA by Developer and the giving of all
required notice(s) and the expiration of any required cure period thereunder, with ten (10) days
prior notice to Developer, the City shall have the right at any time (but shall have no obligation)
to take in its name as the City may at the time or from time to time determine to be necessary to
cure any default under the Contract, to protect the rights of Developer or the City thereunder, or
enforce all rights of Developer under the Contract. The exercise of the City's rights hereunder
Attachment 12 page 2
shall not constitute a waiver of any of the remedies of the City under the DDA or any other
document or agreement or otherwise existing at law or otherwise.
DEVELOPER
Olson Real Estate Group, Inc. (dba R.D. Olson
Development), a ________________________
By: ___________________________
CITY
THE CITY OF TUSTIN, a municipal corporation
By: _________________________
APPROVED AS TO FORM:
Doug Holland, City Attorney
By: ________________________
Attachment 12 page 3
[Attached]
Attachment 12 page 4
CONSENT AND CERTIFICATE
R.D.
1.Consents to the assignment by Developer of the Plans (all defined terms herein shall have
the meaning defined in the Assignment), the Permits and the Contract to the City of
T
assignment and
2.Confirms to the City that (a) the Contract constitutes the entire agreement between the
undersigned and Developer relating to the Project, (b) the Contract is in full force and
effect with no defaults thereunder that have not been cured within the time allowed in the
Contract for notice to and opportunity on the part of Developer for curing such defaults,
(c) no event has occurred that would constitute a default under the Contract upon the
giving of notice or the lapse of time or both, (d) other than change orders made in the
normal course of the construction of the Project, no material modification shall be made
in the Contract without the prior written consent of the City, and (e) it is not aware of any
prior assignment of the Plans, the Permits or the Contract by Developer
3.Agrees to be bound by the provisions of the DDA restricting the ability of Developer to
make changes in the Plans without the prior written consent of the City but shall not be
4.Agrees that in the event of any default by Developer under the Contract after the giving
of any required notice(s) to the Developer and the expiration of any required cure period
under the DDA, the City shall have the right, but not the obligation, to cure said default
Developer or the undersigned, whichever is first received.
5.Agrees that in the event the City becomes the owner of the Project, or undertakes to
complete construction thereof, or assigns its rights to the Plans, the Permits and the
specifications under the Contract to another person or entity, or otherwise requires the use
of the Plans, the Permits, the City, its successors and assigns are authorized to use the
Plans, the Permits and the specifications without additional cost or expense beyond that
stated in the Contract, all rights under the Contract otherwise exercisable by Developer
may be exercised by the City or such successor or assign, and the undersigned will
perform its obligations in conformity with the Contract for the benefit of the City, its
successors or assigns, all of the foregoing conditioned on the requirement of payment to
the undersigned of all amounts due and owing to the undersigned pursuant to the Contract
at that time, and continued payment thereafter of sums as they become due under the
Contract.
Attachment 12 page 5
6.Represents to the City as follows:
(a) As represented in the Plans, the Development will comply with (1) all statutes,
rules, regulations and ordinances of all governmental agencies having jurisdiction
over the Project, including, without limitation, those relating to zoning, building,
pollution control and energy use; (2) all applicable covenants, conditions and
restrictions affecting the Site and the Project, and (3) the requirements of the
appropriate board of fire underwriters.
(b) Construction of the Project in accordance with the Plans will not result in any
encroachment on any adjoining property or on any surface easement.
(c) Architect is duly licensed to conduct its business in the jurisdiction where its
services are to be performed and will maintain such license in full force and effect
throughout the term of the Contract.
(d) The City shall have the right at any time to use all plans, specifications and
drawings from the Project prepared by or for the undersigned for the Project,
including, without limitation, the Plans, and the ideas, designs and concepts
contained therein, without payment of any additional fees or charges beyond those
due and owing under the Contract to the undersigned for such use.
(e) The undersigned is authorized to execute this Certificate and Consent on behalf of
Architect.
Architect hereby assigns to the City all of the undersigned's right, title and interest in, to
and under all subcontracts which are now or hereafter entered into by the undersigned in
furtherance of its obligations under the Contract; provided, however, that until a default occurs
by the undersigned under the Contract, the City shall not exercise any rights in the subcontracts
which are hereby assigned. The undersigned acknowledges that the City is relying on, among
other things, the Consent, confirmations, agreements and assurances provided herein in entering
into the DDA.
DATED:____________, 2011
[______________________________]
By: ___________________________
Print Name: ____________________
Title: ____________________
Attachment 12 page 6
ATTACHMENT NO. 13
PROHIBITED USES AND USERS
Prohibited Uses
adult cabarets, massage parlors (but not including massage services offered by a doctor, nurse
or chiropractor, or massage services offered by a hair salon, nail salon, barbershop or day spa
which have obtained authorized permits from the City as required by Tustin City Code), or nude
or partially nude entertainment
adult motels, thrift or budget motels, or transient occupancy residences
animal boarding, but not including overnight boarding of animals in connection with the
rendering of veterinarian services by an approved Minor or Major Retail End User
animal, grooming, or veterinary offices or animal hospital, unless part of an approved Minor or
Major Retail End User
auctions, unless pursuant to court order and as may be permitted under the Specific Plan or City
Code
auditoriums (other than a motion picture theatre) or other similar places of general assembly,
except as used by the theatre when not used to show motion pictures in down time and, except
for activities in common areas by means of tables, chairs and the like without charge and for
promotional events in the common areas as may be permitted under the Specific Plan or City
Code.
automotive sales, rentals, inspection or repair, or tire sales.
bingo parlors, bingo halls, or other establishments conducting games of chance
boat sales or rentals
businesses engaged in pest control, taxidermy, tattooing, appliance repair (but not including
repair services offered by an approved Major Retail User as a component of its business) or
other repair shops (except for jewelry repair, shoe repair, tailoring, camera repair, watch repair
or computer/electronic equipment repair or other repair incidental to another business)
churches, temples or other houses of religious worship, except that religious use of the movie
theater auditoriums in down time as may be permitted under the Specific Plan and City Code
-
the Entitlements
dumping or disposing of garbage or refuse, except in approved on-site trash enclosure or
disposal areas
Attachment 13 page 1
funeral homes or funeral parlors
grocery stores, supermarkets, mini-markets or mini-marts, convenience stores or similar food
retail operations, except for specific specialty or gourmet markets as may be approved in
writing by the City
-called) or facilities for the sale of drug paraphernalia
Liquor Stores
off-track betting parlors
pornographic or adult bookstores or other facilities for sale or display of pornographic material
as defined by the Tustin City Code
residential dwellings
second hand stores, thrift stores, pawn shops, or indoor or outdoor flea markets
self-service laundry facilities
traveling carnivals or fairs, except as may be approved for promotional events under the
Specific Plan or City Code
uses involving Hazardous Materials except for the types and in the amounts as may be
customary in a hotel or commercial retail development
uses not identified or permitted on the Project Site under provisions of the Specific Plan unless
a Specific Plan amendment or other entitlement for such use is approved by the City (temporary
use permits, conditional use permits, etc.)
uses which creates strong, unusual or offensive odors, fumes, dust or vapors, is a public or
private nuisance, emits noise or sounds which are objectionable due to the intermittence, beat,
frequency, shrillness or loudness, which creates an excessive quantity of dust or dirt, or creates
a hazardous condition
uses which materially increase fire, explosion, or radioactive hazards on the premises, including
the storage, display, or sale of explosives, fireworks or firearms, but not including the sale of
firearms and ammunitions by a sporting good stores which may be an approved Minor or
Major Retail User subject to any specific additional requirements of the Tustin City Code
Attachment 13 page 2
Prohibited Users
AM PM Mini-Marts
Circle K Convenience Store
3 Day Suit Broker
Payless Shoe Sources
99 Cent Store
Factory 2 U
Family Bargain Center
Play It Again Sports
ame
Any user that would not be permitted by the Specific Plan or the Prohibited Uses identified
above
Attachment 13 page 3
ATTACHMENT NO. 14
CERTIFICATE OF COMPLIANCE
CITY OF TUSTIN OFFICIAL
BUSINESS REQUEST
DOCUMENT TO BE
RECORDED AND TO BE
EXEMPT FORM RECORDING
FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
________________________________________________________________________
SPACE ABOVE THIS LINE FOR RECORDER'S USE
[] CERTIFICATE OF COMPLIANCE
PARTIAL/FINAL
FOR [] []
PHASE ___ OFINSERT APPLICABLE DEVELOPER PARCEL(S)
[]Certificate of
This PARTIAL/FINAL
Compliance
a municipal
City
Developer
reference to the following matters:
A. The City and the Developer have entered into that certain Tustin Gateway Project
Disposition and Development Agreement 2011-01 (Tustin Gateway Project) dated as of
DDA
Memorandum of Tustin Gateway Disposition and Development Agreement 2011-01 (Tustin
Memorandum of DDA
, 201_, and
recorded in the official records of Orange County, California as Instrument No.
______________. All initially capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the DDA.
B. Pursuant to the DDA, the Developer agreed to develop and construct certain
Improvements comprising the Project on that certain real property legally described on
Development Parcels
Exhibit
certain off-site infrastructure to be constructed by Developer.
C. Pursuant to Article 9 of the DDA, the City agreed to furnish to the Developer,
upon request therefor by the Developer, (a) a Partial Certificate of Compliance in recordable
form upon satisfaction of the Conditions Precedent to issuance thereof set forth in Section 9.4 of
the DDA relating to each Phase (including, without limitation, Completion of all Improvements
Attachment 14 page 1
for each such Phase in accordance with the terms and conditions of the DDA), and (b) a Final
Certificate of Completion in recordable form upon satisfaction of the Conditions Precedent to
issuance thereof set forth in Section 9.4 of the DDA relating to the Improvements for the Project
(including, without limitation, Completion of all Improvements for the Project on the Property in
accordance with the terms and conditions of the DDA).
D. The City has determined that the Developer has satisfied the Conditions Precedent
[]
set forth in Section 9.4 Partial/Final Certificate of
Compliance with respect to Parcel(s) __, [specify all Development Parcels or those specific
Certified
Parcels t
) and [If partial: Phase __ of] the Project.
NOW, THEREFORE, the City certifies as follows:
1. This Certificate of Compliance covers and applies to the Certified Parcel(s) and
[ ] [
If partial:that portion of the Improvements and the Project comprising Phase_____]If final:
Certified Improvements
2.
determination that the Developer has satisfactorily Completed all construction and development
[]
with respect to the Project/ Phase of the Project and perf
obligations set forth in Section 9.4 of the DDA for issuance of this Certificate.
[Applicable to Final Certificate of Compliance Only]
3. [Upon recordation of this
Certificate, the DDA shall terminate as to the Development Parcels and shall be of no further
force and effect and any Person then owning or thereafter purchasing, leasing, or otherwise
acquiring any interest in the Certified Parcel(s) shall not (because of such ownership, purchase,
lease or acquisition) incur any obligation or liability under the DDA with respect to the Certified
Parcels and/or the Certified Improvements, except that the following matters shall survive the
termination of the DDA each in accordance with its terms (except that general references to
compliance with the DDA shall not affect the termination of the DDA) as to the Certified
Improvements, the Certified Parcels and all Persons owning, leasing or occupying the Certified
Parcels and/or the Certified Improvements shall continue to be bound by the following matters,
which shall survive the termination of the DDA, shall not merge with any deed on any transfer of
any portion of the Development Parcels, and shall survive the issuance of this Certificate of
Compliance and all future Certificates of Compliance in perpetuity unless otherwise indicated in
the reference sections:
(a) The Declaration,
(b)The Quitclaim Deeds Special Restrictions,
(c)The provisions of the Memorandum of DDA which expressly survive the
termination of the DDA;]
[- OR -]
Attachment 14 page 2
Applicable to Partial Certificate of Compliance Only
3. [: A Partial Certificate of
Compliance shall have the effects set forth in Article 9 of the DDA and in other applicable
provisions of the DDA, and the City shall have no further proprietary right of review of design
pursuant to Section 8.6 of the DDA as to any Development Parcel for which a Partial Certificate
of Compliance shall have been issued.]
4. This Certificate of Compliance shall not constitute evidence of compliance with
or satisfaction of any obligation of the Developer to any holder of a mortgage, or deed of trust or
any insurer of a mortgage, or deed of trust securing money loaned to finance the Improvements
or any part thereof.
5. Issuance of this Certificate of Compliance shall not waive any rights or claim that
the City may have against any party for latent or patent defects in design, construction or similar
matters under any applicable law, nor shall it be evidence of satisfaction of any of the
6. This Certificate of Compliance is not a Notice of Completion as referred to in
California Civil Code Section 3093.
7. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the DDA or any other provisions of the documents incorporated
herein.
[]
IN WITNESS WHEREOF, the City has caused this Partial/FinalCertificate of
Compliance to be duly executed by its officer duly authorized as of the date first above written.
CITY OF TUSTIN
Dated:____________________ By:
Name:______________________________
Title:_______________________________
ATTEST:
By:
Name:___________________
Title:____________________
APPROVED AS TO FORM:
By:_________________________
Its:_________________________
Attachment 14 page 3
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before ___________________________________ _________,
DateHere Insert Name and Title of the Officer
personally appeared ______________ _____
Name(s) of Signer(s)
____________________________________________________________________________ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:____________________________________
Signature of Notary Public
(SEAL)
Attachment 14 page 4
ATTACHMENT NO. 15
ASSIGNMENT AND ASSUMPTION AGREEMENT
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT TO BE
RECORDED AND TO BE EXEMPT FROM
RECORDING FEES PER GOVERNMENT
CODE 6103 AND 27383.
Recording requested by and
when recorded mail to:
Assistant City Manager
The City of Tustin
300 Centennial Way
Tustin, CA 92780
SPACE ABOVE THIS LINE FOR RECORDER'S USE
ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment
Assignment Effective Date
ESTATE GROUP, INC. (dba R.D. OLSON DEVELOPMENT), a California corporation
DeveloperAssignee
with the consent of the CITY OF TUSTIN, a municipal corporation of the State of California
City
A. The City and Developer have entered into that certain Disposition and
Development Agreement 2011-01 (Tustin Gateway Project) dated as of ,
DDA
y Disposition and Development
Memorandum of DDA
Agreement 2011-
of ____________, 2011, was recorded against title to the real property then owned by
Developer on ____________, 20__ in the official records of Orange County, California
Official Records
DDA Documents
initially capitalized terms not otherwise defined in this Assignment shall have the
meanings ascribed to them in the DDA.
B. Pursuant to the DDA, Developer agreed to develop and construct on the
Development Parcels certain Improvements comprising the Project, and to construct
certain off-site infrastructure improvements.
C. The DDA imposes certain covenants, conditions, payment obligations and
restrictions on the Development Parcels and, prior to the filing of a Final Certificate of
the Develop
Attachment 15 page 1
respect to the off-site infrastructure improvements), all as set forth in the DDA.
D. Prior to conveyance of the Development Parcels to Developer, the City
executed and caused to be recorded that certain Declaration of Reciprocal Easements,
Covenants, Conditions and Restrictions, Including Environmental Restrictions
Declaration
_____, 2011 and recorded on ______, 2011 in the
Official Records as Instrument No. ____________.
[transfer][assign]
E. Developer desires to [ownership and/or control of the
Development Parcels, the Project, the Improvements, and/or its interest in the DDA and
Transfer Event
Article 2 of
the DDA, a Transfer must include, among other things, the execution and delivery of an
Assignment and Assumption Agreement. Developer and Assignee are entering into this
Assignment in order to fulfill the obligations of Developer and Transferee under Article 2
of the DDA.
F. Simultaneously with this Transfer Event, Developer is [conveying in
[specify name of deed and/or lease]
fee/leasing] to Assignee by those parcels or real
Conveyed Real Property
property more particularly described on
[is][is not]
and the Improvements thereon. The Conveyed Real Property the entirety of
the Development Parcels. The Conveyed Real Property and the Improvements thereon
Conveyed Property
NOW, THEREFORE, for good and valuable consideration, Developer and Assignee
agree as follows:
1.Assignment.
1.1.As of the Effective Date, Developer hereby assigns, conveys, transfers, bargains,
grants, sells and sets over to Assignee, as and to the extent owned or leased by Developer, the
Assigned Interests
(a)
under the DDA Documents arising from and after the Assignment Effective Date, including
(i) all benefits provided to and burdens imposed upon Developer pursuant to the DDA
Documents, and (ii) all benefits provided to and burdens imposed upon the Conveyed Real
Property and all improvements thereon and all personal property associated therewith pursuant to
the DDA Documents;
(b)all right, title , interest and obligation of Developer under the [list all other
contracts relating to the Conveyed Real Property];
(c)all entitlements, subdivision agreements and other agreements relating to
the development of the Conveyed Real Property, including without limitation those certain land
use approvals for the Project on the Development Parcels in Case Numbers: Case No. CPC 2011-
Attachment 15 page 2
___________; ENV-2011-______________; and Council File No. ________ (collectively, the
Entitlements
(d)all plans, specifications, maps, drawings, and other renderings owned by
Developer and relating to the Conveyed Real Property, the Project and the Entitlements or such
portion thereof as is subject to this Assignment;
(e)all warranties, claims, and any similar rights relating to and benefiting the
Conveyed Property or the rights and interests transferred pursuant to this Assignment, including,
without limitation, all warranties related to the grading of the Conveyed Real Property;
(f)all intangible rights, goodwill, and similar rights relating to the portion of
the Project that is subject to this Assignment and/or the Conveyed Property;
(g)all development rights relating to the Conveyed Property; and
(h)all other rights, claims, or awards relating to the Project and/or Conveyed
Property for any period subsequent to the date of this Assignment.
1.2.The Assigned Interests together with the Conveyed Property are collectively
Assigned Property
referred
2.Assumption.
2.1.Assignee, on behalf of itself and its successors and assigns, from and after the
date of this Assignment, hereby assumes and receives the Assigned Property and agrees with
Developer (and such agreement is expressly also made for the benefit of the City and may be
directly enforced by the City) as follows:
Assignee expressly assumes and shall be subject to all the obligations, conditions,
limitations and restrictions to which Developer and/or the Conveyed Property is subject under or
by reason of the Declaration and the DDA, including without limitation the provisions of the
release set forth in Section 4.4.3 of the DDA and the indemnities set forth in Article 10 of the
DDA;
Assignee expressly assumes and shall be subject to all the obligations, conditions,
limitations and restrictions to which Developer and/or the Conveyed Property is subject by
reason of the Entitlements; and
Assignee shall pay and perform all obligations of Developer set forth in the DDA
and the Declaration that relate to the Conveyed Property, including without limitation the
following obligations: (i) the obligation to construct the Improvements to be constructed on the
Conveyed Property in accordance with the Scope of Development and within the time period
specified in the Schedule of Performance; and (ii) the obligation to pay all sums required to be
paid by Developer under the DDA and the Declaration in connection with the ownership and/or
development of the Conveyed Property, to the extent such amounts have not been paid as of the
date of this Assignment.
Attachment 15 page 3
2.2.Assignee agrees that it shall remain fully responsible to perform and satisfy all of
the obligations and liabilities assumed by Assignee pursuant to Section 2.1 above regardless of
any of the following:
the value of the Assigned Property or the income to be derived therefrom;
(i)the existence or non-existence of any liens, easements, covenants,
conditions, restrictions, claims or encumbrances affecting the Conveyed Property (including
without limitation any of the foregoing arising from or related to the Entitlements, the
Declaration and/or the DDA);
(j)the suitability of the Conveyed Property and/or the Development Parcels
for any and all future development, uses and activities which Assignee or Developer may
conduct thereon, including the development of the Project described in the DDA;
(k)the habitability, merchantability or fitness for a particular purpose of the
Conveyed Property, the Assigned Interests and/or the Development Parcels;
(l)the manner, quality, state of repair or lack of repair of the Conveyed
Property and/or the Development Parcels;
(m)the nature, quality or condition of the Conveyed Property and/or the
Development Parcels including water, soil and geology;
(n)the compliance of or by the Conveyed Property and/or the Development
Parcels or its operation with any of the Entitlements or any Governmental Requirement,
including without limitation the California Environmental Quality Act and the Americans with
Disabilities Act of 1990;
(o)the manner or quality of the construction or materials, if any, incorporated
into any part of the Conveyed Property and/or the Development Parcels;
(p)the presence or absence of Hazardous Materials, at, on, under, or adjacent
to the Conveyed Property and/or the Development Parcels;
(q)the content, completeness or accuracy of the information, documentation,
studies, reports, surveys and other materials, delivered to Assignee by Developer or others in
connection with
and the transactions contemplated in the DDA;
(r)the conformity of the existing improvements on the Conveyed Real
Property and/or the Development Parcels, if any, to any plans or specifications for the Project or
the Development Parcels (whether or not such plans or specifications have been approved by the
City);
(s)compliance of the Conveyed Real Property and/or the Development
Parcels or the improvements thereon with past, current or future statutes, laws, codes,
ordinances, regulations or Governmental Requirements (including without limitation the
Attachment 15 page 4
Entitlements) relating to zoning, subdivision, planning, building, fire, safety, health or
environmental matters and/or covenants, conditions, restrictions or deed restrictions;
(t)the deficiency of any undershoring or of any drainage to, on or from the
Conveyed Property;
(u)the fact that all or a portion of the Conveyed Real Property and/or the
Development Parcels may be located on or near an earthquake fault line or falls within an
earthquake fault zone established under the Alquist-Priolo Earthquake Zone Act, California
Public Resources Code sections 262 1-2630 or within a seismic hazard zone established under
the Seismic Hazards Mapping Act, California Public Resources Code, sections 2690-2699.6 and
sections 3720-3725;
(v)the existence or lack of vested land use, zoning or building entitlement
affecting the Conveyed Real Property and/or the Development Parcels;
(w)the construction of improvements or infrastructure or lack of construction
of the same in areas within or adjacent to the Pacific Center East Specific Plan area, and if any
such construction has occurred, whether or not such construction is in accordance with design
guidelines, plans and specifications prepared therefor;
(x)the conditions, covenants and restrictions imposed upon the Assigned
Property or any portion thereof under the DDA and the Declaration; and
(y)with respect to any other matters.
3.Continuing Liability.
3.1.Notwithstanding the assignment in Section 1 of this Assignment and the
assumption in Section 2 of this Assignment, Developer is not released from, and remains fully
liable for all obligations and liabilities that have accrued prior to the Assignment Effective Date
under the DDA Documents, the Declaration and under the Entitlements, including without
limitation pursuant to any indemnity given by Developer under the DDA Documents, the
Declaration and/or under the Entitlements.
3.2. If the Conveyed Property is less than the entirety of the Developer Parcels held
by Developer on the date of this Assignment, then following the Assignment Effective Date,
Developer shall not be released from and shall remain fully liable for all obligations and
liabilities accruing with respect to the portion of the Development Parcels and Improvements
thereon and infrastructure related thereto that is not part of the Conveyed Property, and that arise
or accrue under the DDA Documents, the Declaration and the Entitlements, except to the extent
specifically set forth in this Assignment.
4.No Waiver or Modification.
Attachment 15 page 5
Nothing contained in this Assignment shall modify in any way any other provisions of
the DDA Documents and/or the Declaration. Assignee acknowledges that it is taking title to and
is assuming the Assigned Property subject to, among other things, the rights of the City and other
parties as described in the DDA and the Declaration.
5.Additional Documents.
Developer and Assignee shall each execute and deliver to the other party, upon demand,
such further documents, instruments and conveyances, and shall take such further actions as are
necessary or desirable to effectuate the intent and purposes of this Assignment. In addition to the
foregoing, Developer shall reasonably cooperate with Assignee, at the expense of Assignee, to
allow Assignee to submit and process any warranty claim under any warranty in which Assignee
obtained an interest as part of the Assigned Interests.
6.Miscellaneous.
6.1.Modification. No amendment, change, modification or supplement to this
Assignment shall be valid and binding on Developer or Assignee unless it is represented in
writing and signed by both Developer and Assignee. No amendment, change, modification or
supplement to this Assignment shall be deemed to be part of the consent or deemed to be
consented to by the City, unless the City executes a separate written consent to such amendment,
change, modification or supplement.
6.2.Applicable Law. This Assignment shall be governed by, interpreted under,
construed and enforced in accordance with the laws of the State of California, irrespective of
-of-law principles.
6.3.Binding Effect. This Assignment and the terms, provisions, promises, covenants
and conditions hereof shall be binding upon and inure to the benefit of Developer and Assignee
and their respective heirs, legal representatives, successors and assigns.
6.4.Counterparts. This Assignment may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. This
Assignment shall not be effective until the execution and delivery by Developer and Assignee of
at least one set of counterparts (together with an executed counterpart of the City
attached to this Assignment). A facsimile counterpart of this Assignment shall not be effective
unless an ink-signed original executed copy of the signature page of this Assignment is also
promptly delivered to the other party by U.S. Postal Service (postage prepaid) or by hand
delivery, and such ink-signed original executed page is actually received by the other party
within five (5) days of its execution. Developer and Assignee hereby authorize each other to
detach and combine original signature pages and consolidate them into a single identical original.
Any one of such completely executed counterparts shall be sufficient proof of this Assignment as
a duly and validly executed agreement.
6.5.City as Third Party Beneficiary. Developer and Assignee hereby acknowledge
and agree that until the Final Certificate of Compliance is recorded in the Official Records, the
City shall be an intended third party beneficiary under this Assignment and the City shall have
Attachment 15 page 6
the right to enforce the terms and provisions of this Assignment applicable to the City. Other
than the City, there shall be no third party beneficiaries of this Assignment.
6.6.Notices. All notices that the City may desire or is required to deliver to the
d/or the Entitlements, and pursuant to Section 16.7 of
[be delivered to Assignee only][be delivered to Developer and to Assignee]
the DDA, shall at
the following addresses:
Developer:
Attn:
Assignee:
Attn:
[signature page follows]
Attachment 15 page 7
IN WITNESS WHEREOF, Developer and Assignee each has caused this Assignment to
be duly executed by its officer duly authorized as of the date first above written.
DEVELOPER:
OLSON REAL ESTATE GROUP, INC. (dba R.D.
OLSON DEVELOPMENT)
a California Corporation
By:
Name
Title
By:
Name
Title
ASSIGNEE:
_____________________,
a _____________________ __________________
By:
Name:
Title:
By:
Name:
Title:
Attachment 15 page 8
ACKNOWLEDGMENT AND CONSENT BY CITY OF TUSTIN
By executing in the space set forth below, the City of Tustin hereby:
(a) Acknowledges receipt of the Assignment and Assumption Agreement (the
Assignment
(b) Consents to the making of the Assignment between Developer and Assignee,
subject to the terms and conditions set forth in the Assignment;
(c) This Consent by the City constitutes the consent required pursuant to Article 2 of
pursuant to Article 2 of the DDA; and
(c)Agrees that _________________ (the Assignee in the Assignment) shall be
[for all purposes][with respect only to the
Conveyed Property][or as
under the DDA from and after the Assignment Effective Date
required to be modified to address the specific terms of the Assignment]
.
[with respect to Transfer by Developer of the entirety of its interest in the
(d)
Development Parcels to Assignee only, otherwise modify to retain appropriate Developer
liability]
Acknowledges that Developer shall be released for matters first arising under the DDA
on or after the Agreement Effective Date set forth on the first page of the Assignment; provided
that in no event shall Developer be released from any obligation or liability of Developer under
the DDA and/or the Declaration that arose or accrued prior to the Agreement Effective Date
(including without limitation any obligation or liability pursuant to any indemnity made by
Developer to the City under the DDA Documents, the Declaration and/or the Entitlements).
(e)Acknowledges the new addresses for Notices under the DDA, the Declaration and
the Entitlements set forth in the Assignment.
This Consent by the City to the Assignment shall not constitute evidence of compliance
with or satisfaction of any obligation of Developer under the DDA Documents, or any other
agreement between Developer and the City.
Attachment 15 page 9
CITY:
CITY OF TUSTIN
Dated:____________________ By:
Name:
Title:
ATTEST:
By:
Name:
Title:
APPROVED AS TO FORM:
By:_________________________
Its:_________________________
Attachment 15 page 10
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before me,____________________________________ ,
DateHere Insert Name and Title of the Officer
personally appeared ______________
Name(s) of Signer(s)
_____________________________________________________________________________ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:____________________________________
Signature of Notary Public
(SEAL)
Attachment 15 page 11
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before me,____________________________________ ,
DateHere Insert Name and Title of the Officer
personally appeared ______________
Name(s) of Signer(s)
_____________________________________________________________________________ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:____________________________________
Signature of Notary Public
(SEAL)
Attachment 15 page 12
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On ______________________, before me,____________________________________ ,
DateHere Insert Name and Title of the Officer
personally appeared ______________
Name(s) of Signer(s)
_____________________________________________________________________________ ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:____________________________________
Signature of Notary Public
(SEAL)
Attachment 15 page 13
THE PROPERTY
Attachment 15 page 14
CONVEYED REAL PROPERTY
Attachment 15 page 15
ATTACHMENT NO. 16
CITY ESTOPPEL
___________, 20____
[LENDER /TENANT/PURCHASER]
Tustin Gateway Project
Re:
)]
Ladies and Gentlemen:
Project
Property
constructed on the land legally described in
The Project is subject to that certain Disposition and Development Agreement 2011-01
DDA
between the undersigned and Olson Real Estate Group, Inc. (dba R.D. Olson Development), a
Developer
Memorandum of Disposition and Development
Memorandum of DDA
____________, 2011, was recorded against title to the Property on ____________, 20__ in the
Official Records
official records of Orange County, California (t
______________. The DDA and the Memorandum of DDA are collectively referred to as the
Property Documents
the meanings ascribed to them in the DDA.
[cause Borrower to enter
You have informed the undersigned that Developer intends to
into the Loan with Lender][ sell a portion of the Property to Buyer][ enter into the Lease
with Tenant]Transaction
By its execution of this letter, the undersigned confirms that: (i) the Property Documents
are in full force and effect and have not been modified or amended, except as may be set forth on
Defaults under any of the Property Documents nor any facts which now, or after giving of notice
or the passage of time, or both, would constitute a Material Default under any of the Property
Documents or which would entitle the City to then exercise its Right of Reversion or Right of
Purchase under the DDA, except as may be set forth on attached hereto; and (iii) to
Attachment 16 page 1
offset presently existing under any of the Property Documents, except as may be set forth on
attached hereto.
like import, means that the facts in question are actually known (as opposed to imputed, inquiry
or constructive knowledge) to the representative of the City signing below, based upon such
The undersigned acknowledges that the parties to which this letter is addressed may rely
upon this letter in entering into the proposed Transaction. This letter is written in connection
only with the proposed Transaction and may be relied upon only by the parties to which it is
[and with respect to lenders only, together with their successors and assigns]
issued as to the
matters addressed herein. This estoppel may not be relied upon by any other party or for any
other purpose without the express written consent of the undersigned.
CITY OF TUSTIN, CALIFORNIA
By:___________________________
Christine Shingleton
Assistant City Manager
Attachment 16 page 2
Legal Description of the Property
Attachment 16 page 3
Exceptions to Estoppel
1._________________________
2._________________________
Attachment 16 page 4