HomeMy WebLinkAbout12 ENA FOR TUSTIN LEGACY DISPOSITION PACKAGES 1A NORTH & 2AMEETING DATE: JUNE 19, 2012
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: CITY MANAGER'S OFFICE
SUBJECT: APPROVAL OF AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH
THE IRVINE COMPANY FOR TUSTIN LEGACY DISPOSITION
PACKAGES 1A NORTH AND 2A
SUMMARY
The City Council recently reviewed price, terms and payment for Disposition Packages
2A and 1A North and directed staff to prepare an Exclusive Agreement to Negotiate with
The Irvine Company for disposition and development of Disposition Packages 2A and
1A North in the Tustin Legacy Project.
RECOMMENDATION
Authorize the City Manager to execute the attached Exclusive Agreement to Negotiate
( "ENA ") between the City of Tustin and The Irvine Company, subject to any non -
substantive modifications as may be determined necessary and /or recommended by the
City's special real estate counsel or the City Attorney.
FISCAL IMPACT
With execution of the ENA, a $100,000 good faith deposit will be delivered to the City to
fund the transactional expenses anticipated to be incurred by the City during the
negotiation of a Disposition and Development Agreement ( "DDA ") and a Development
Agreement ( "DA ") and any other agreements directly associated with the projects.
There may be near to long -term financial impacts of any subsequent DDA and DA
which will be driven by the intensity of development and the number of low and
moderate income units required to be accommodated in total on the two sites. These
fiscal impacts will be evaluated during the negotiation process and reported with any
recommended DDA and DA.
BACKGROUND
In April 2011, the City Council adopted a revised Disposition Strategy for approximately
820 acres of undeveloped property within the Tustin Legacy Project. Under the revised
Agenda Report
June 19, 2012
Page 2
Disposition Strategy, the City assumed an executive role in marketing "Disposition
Packages' or parcel groupings within the Tustin Legacy Project, based largely on
financeability and backbone infrastructure and local infrastructure obligations being
assigned to specific disposition packages. The revised Disposition Strategy was
intended to take advantage of the success of completed development and major
infrastructure investment at Legacy. City staff have proceeded with the developer
selection process on four disposition package sites identified in the attached Early
Disposition Package exhibit (Disposition Package 1A North, 2A, 1B and the westerly
portion of 1C).
As part of Step 1 in the developer selection process for Disposition Package 2A and 1A
North (two apartment sites), the City Council in the fall of 2011 confirmed three
respondents to advance to the Step 2 Request for Proposal ( "RFP") process based on
the screening recommendations of an expert panel. The short- listed developers invited
to respond to each RFP included:
Disposition Package 2A
The Irvine Company
Archstone New Development Holdings, LP
BRE Properties
Disposition Package 1A North
The Irvine Company
St. Anton Partners
Bridge Housing
Developers under provisions of the RFP, were also permitted to team with other entities
including, but not limited to parties invited to participate in the RFP process. Responses
to the RFPs were received from the firms indicated below. BRE Properties withdrew
late in the RFP process for a number of business reasons and declined to submit an
RFP response.
Disposition Package 2A
1. The Irvine Company with St. Anton Letter Agreement
2. Archstone with Jamboree Housing
Disposition Package 1A North
1. Bridge Housing
2. St. Anton Partners with The Irvine Company Letter Agreement
Agenda Report
June 19, 2012
Page 3
Responses to the RFPs were intensively reviewed and analyzed by staff and City
consultants. The Technical Evaluation Team was comprised of staff from the City
Manager's Office /Successor Agency, Community Development and Public Works
Departments, special real estate counsel, Amy Freilich, and representatives from RBF
Consulting and SMS Architects. The technical analysis was conducted based on the
RFP responses and the identified Evaluation Criteria contained in the RFPs which
included:
• Responsiveness to RFP Submittal Requirements
• Development Entity and Experience
• Approach to Developing the Site
• Financial Capacity
• Purchase Order and Business Plan /Financial Feasibility
• Implementation
• Reference Checks /Interview
Based on the evaluation process, the specific terms, conditions and purchase price
applicable to specific proposals were reviewed by the Tustin City Council. Based on
this review, the City Council directed the staff to prepare an Exclusive Agreement to
Negotiate ( "ENA ") with The Irvine Company for Disposition Package 2A and 1A North,
with the acknowledgement that St. Anton was determined to be an eligible assignee by
The Irvine Company on Disposition Package 1A North.
Package 2A is a vacant, City -owned property of approximately 20 acres in size which is
located on the west side of Tustin Ranch Road at the northwest corner of Walnut
Avenue and is to be developed with multiple family apartments. Disposition Package
1A North is also a vacant, City owned property of approximately 12.779 in size, of which
8.073 acres will be developed with multiple family apartments and 4.706 acres with a
proposed private park. The Disposition Package 1A North site is located adjacent to the
east side of the future Tustin Ranch Road project at its intersection with Legacy Road
and is also bounded on the east by a portion of the future Park Avenue, all of which are
currently under construction.
During the ENA period, the term and conditions of a Disposition and Development
Agreement for the two Disposition Package sites will be negotiated. Provisions of City
Ordinance No. 1402 also require preparation and execution of a Development
Agreement prior to or concurrent with City approval of any development project.
A summary of major terms to be negotiated during the ENA negotiation period between
the parties include:
• Terms and conditions of conveyance
Agenda Report
June 19, 2012
Page 4
• The conveyance of property in an "as -is -where is -and with all faults" condition
• Development and construction of the projects at no cost and expense to City
• The product mix and density transfer /density bonuses that must be applied for
and granted for the projects
• Tustin Legacy Backbone Infrastructure Program costs
• Local infrastructure costs transfer and assignment restrictions
• Mortgage limitations and subordination
• Remedies and termination rights
The ENA negotiating period is 150 days which may be extended to permit approval of
the DDA and DA. In consideration of the designation of St. Anton as a permitted
assignee in the ENA, the ENA includes an acceptance and agreement by St. Anton as it
applies to specific provisions of the Agreement.
Christine Shingleton
Assistant Executive Dir or
Attachments: Disposition Packages Exhibit
Exclusive Agreement to Negotiate (Disposition Package 2A and
Disposition Package 1A North)
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EXCLUSIVE AGREEMENT TO NEGOTIATE
(DISPOSITION PACKAGE 2A AND DISPOSITION PACKAGE 1A NORTH)
THIS EXCLUSIVE AGREEMENT TO NEGOTIATE (DISPOSITION PACKAGE
2A and DISPOSITION PACKAGE IA NORTH) ( "Agreement ") is entered into this day
of , 2012 (the "Effective Date ") by and between THE CITY OF TUSTIN (the
"City ") and The Irvine Company, a Delaware limited liability company ( "Developer "), with
respect to certain land referred to herein as the "2A Property" and the "1A North Property"
(defined below). The City and Developer hereby agree as follows:
1.0 Introduction.
1.1 Pursuant to the Defense Base Closure and Realignment Act of 1990, (Part A of
Title XXXIX of Public Law 101 -510; 10 U.S.C. Section 2687 Note), as amended, the federal
government determined to close the Marine Corps Air Station - Tustin ( "MCAS Tustin ") located
substantially in the City of Tustin. In 1992, the City was designated as the Lead Agency or
Local Redevelopment Authority for preparation of a reuse plan for MCAS Tustin in order to
facilitate the closure of MCAS Tustin and its reuse in furtherance of the economic development
of the City and surrounding region. The MCAS Tustin Reuse Plan developed in accordance with
this procedure was adopted by the City Council of the City of Tustin (the "City Council') on
October 17, 1996 and amended in September, 1998 (the "Reuse Plan').
1.2 A Final Joint Environmental Impact Statement/Environmental Impact Report for
the Disposal and Reuse of MCAS Tustin (the "Final EIS/EIR ") and Mitigation Monitoring and
Reporting Program for the Final EIS/EIR were adopted by the City on January 16, 2001. In
March 2001, a record of decision was issued by the Department of the Navy (hereinafter,
"Navy ") approving the Final EIS /EIR and the Reuse Plan. Subsequently, a Supplement to the
Final EIR/EIS and an Addendum to the Final EIS /EIR were approved by the City.
1.3 In May 2002, the Navy approved an "Economic Development Conveyance of
Property at MCAS Tustin" and agreed to convey 1,153 acres of MCAS Tustin to the City. On
May 13, 2002, a total of 977 acres, including the 2A Property and the I North Property which
are the subject of this Agreement, was conveyed by the Navy to the City by quitclaim deed, in
accordance with the provisions of that certain Memorandum of Agreement by and between The
United States of America (through the Secretary of the Army or designee) and the City dated
May 13, 2002 ( "Memorandum of Agreement' or "MOA "). Additional acreage is currently
under ground lease by the City from the Navy. The portion of MCAS Tustin located within the
City of Tustin and currently owned by the City or subject to ground lease between the Navy and
the City is referred to herein as "Tustin Legacy ".
1.4 On February 3, 2003, the City adopted an ordinance approving the MCAS Tustin
Specific Plan/Reuse Plan setting forth the zoning and entitlement framework for future
development of Tustin Legacy. Since its initial adoption, the City has approved numerous
Specific Plan Amendments. All references in this Agreement to the "Specific Plan' shall be
deemed to refer to the MCAS Tustin Specific Plan/Reuse Plan, as the same may be amended
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from time to time. The Specific Plan conforms to and implements the Reuse Plan and the City's
General Plan.
1.5 The City desires to effectuate development of Tustin Legacy through the sale and
development of such property in accordance with applicable federal and local requirements.
Tustin Legacy shall be developed in accordance with all City requirements, including, without
limitation, implementing redevelopment plans, the Reuse Plan and the Specific Plan.
1.6 In December 2011, the City issued two Request for Proposals ( "RFPs ") seeking a
developer for each of Disposition Package 2A /2B and Disposition Package IA North and
permitting respondents to coordinate by written agreement to support transfer or redistribution of
all or a portion of the affordable housing obligations associated with the respective disposition
packages.
1.7 Developer submitted a proposal for purchase and development of the property
described in Disposition Package 2A dated February 24, 2012 (and declined to submit a proposal
for purchase and sale of the property described as Disposition Package 213). A proposal dated
February 24, 2012 was received from St. Anton Partners, LLC ( "St. Anton ") in connection with
the RFP for Disposition Package IA North. As permitted by the RFPs, each of Developer and
St. Anton submitted with its proposal a joint cooperative agreement dated February 24, 2012,
setting forth the intent of Developer and St. Anton to coordinate and support transfer of
affordable housing obligations between the properties. The RFP submittals were amended by
letter dated April 16, 2012 from Developer and acknowledged and agreed to by St. Anton further
describing the proposed cooperative agreement between the Developer and St. Anton.
1.8 The property described by Disposition Package 2A is comprised of a portion of
property referred to in the Reuse Plan as Parcel 14 and in the Navy transfer documents as Navy
Deed Parcels "D" and "G ", and is further legally described and depicted on the Site Map
attached hereto as Exhibit A (the "2A Property"). The property described by Disposition
Package ]A North is comprised of a portion of property referred to in the Reuse Plan as Parcel
27 and in the Navy transfer documents as "I -H -1, I -H -7, and II -H -9 ", and is further legally
described and depicted on the Site Map attached as Exhibit B (the "IA North Property" and
collectively with the 2A Property, the "Property").
1.9 Developer's proposal for purchase and development of the property described for
Disposition Package 2A proposed development of 533 multiple family apartment homes at a
density of approximately 25.91 units per acre and a complete accompanying set of amenities to
be constructed by Developer. As amended on April 16, 2012, the proposal for purchase and
development of the property described for Disposition Package 1 A North proposed development
of 225 multiple family apartments at a density of approximately 27.87 units per acre, and a
complete accompanying set of amenities to be developed under oversight of Developer by St.
Anton, which has been pre - qualified by the City as a vertical builder and permitted assignee for
vertical development of Parcel IA North (the "Permitted Assignee "), The proposed
development of the Property described above and as further described in this Agreement is
referred to herein as the "Project ". Under the Tustin City Code, the Project will require a
density bonus and density transfer between the 2A Property and the I North Property.
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1.10 To facilitate the negotiations, to assure that only one applicant requests the density
transfer /density bonus and to provide a single point of contact for negotiation of the DDA and
the DA, St. Anton has agreed with Developer, and the City has acknowledged that, Developer
shall be the sole party conducting negotiations with the City. As further set forth below, St.
Anton shall have no rights under this Agreement.
1.11 The City and Developer desire, for the period set forth herein, to negotiate
diligently and in good faith, the terms and conditions of a disposition and development
agreement ( "DDA ") and development agreement ( "DA ") which if agreed and executed will
specify the rights, obligations and method of participation of the City and Developer with respect
to the sale and development of the Property and the development thereon of the Project.
2.0 Agreement to Negotiate.
2.1 Terms and Conditions. The City and Developer each desire to negotiate a
DDA and DA which if agreed upon and executed, shall set forth the terms and conditions
pursuant to which the 2A Property shall be conveyed by the City to Developer and developed
by Developer, and the IA North Property shall be conveyed by the City to Developer or
caused by Developer to be conveyed to its Permitted Assignee and developed in accordance
with the DDA and DA requirements. Under the DDA, unless otherwise determined by the
City in its sole discretion, Developer shall have the right and the obligation to assign its right
to acquire and to carry out the vertical construction of the portions of the Project on the IA
North Property to the Permitted Assignee.
2.2 DDA and DA. Notwithstanding that the terms of the purchase and sale and
development of the Property are to be negotiated, Developer and the City have agreed that the
transactional documents to be negotiated to describe the transaction shall be in the form of a
DDA and DA.
2.3 ENA Not a Final Agreement. This Agreement (including all exhibits hereto)
is solely an exclusive right to negotiate and is not a final agreement. The City and Developer
do not intend this agreement to be a purchase, option or similar contract or to be bound in any
way by this Agreement, other than to establish a period of exclusive negotiations during
which time each of the City and Developer shall negotiate with the other in good faith. The
City shall not market the Property to other interested parties and Developer hereby agrees that
it shall not withdraw any offer made by it pursuant to Section 4.2.4.
2.4 Essential Terms Not Agreed. City and Developer acknowledge that although
the parties have set forth a framework for negotiation of essential terms of any transaction: (a)
they have not herein agreed upon essential terms of a transaction, including, e.g., price, terms
and timing of transfer of the Property; (b) they do not intend this Agreement to be a statement
of essential terms of the transaction, which shall be the subject matter of their further
negotiations, and (c) the essential terms of the transaction, if agreed to by the City and
Developer, shall be set forth, if at all, in a DDA and DA approved and executed by authorized
representatives of each of the City and Developer and with additional agreements, if any,
between Developer and St. Anton, required and approved by the City in its sole discretion,
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governing the rights and responsibilities of St. Anton with respect to acquisition and vertical
construction of the Project on the 1 A North Property.
2.5 Effectiveness of Subsequent Agreements. The DDA and the DA shall not
exist and shall not be binding unless and until each is fully executed by Developer and the
City, approved by counsel to each of the City and Developer as to form and approved by the
City Council of the City and by the managing members of Developer, The DDA and DA shall
become effective only after and if the agreements have been considered and approved by the
legislative body of the City and the City Council of the City after noticed public hearing.
Nothing in this Agreement shall supersede or waive any discretionary or regulatory approvals
required to be obtained from the City pursuant to the Tustin City Code or the provisions of
any applicable State or Federal law or regulation.
2.6 Public Hearings and Compliance. If the negotiations hereunder culminate in
Developer and the City's negotiations concurring on the terms and provisions of a DDA and
DA, such DDA and DA will be considered for approval by the City only after all required
public hearings have been held and after compliance with all applicable laws and ordinances.
The concurrence of the City negotiators with the terms and provisions of a proposed DDA and
DA under any provisions of this Agreement shall not be construed or interpreted as the City
approving or accepting such terms. Such concurrence shall be viewed as nothing more than
the willingness of the City negotiators to recommend to the legislative body of the City and
the City Council that they approve such terms.
2.7 Assumption of Risk. City and Developer each assume the risk that,
notwithstanding this Agreement and good faith negotiations, the City and Developer may not
enter into any agreement due to their failure to agree upon essential terms of the transaction.
Neither party will have any liability to the other in the event that the parties are unable to
reach such a definitive agreement with respect to the proposed transaction for any reason or
no reason.
3.0 Developer's Representations, Warranties and Agreements. Developer represents,
warrants and agrees as follows:
3.1 Expertise and Financial Qualifications. Developer has the necessary
expertise, experience and financial capability to undertake development of the 2A Property
and to oversee the City pre - qualified Vertical Builder on the IA North Property and that St.
Anton has the necessary expertise, experience and financial capacity to undertake vertical
development of the 1 A North Property as contemplated by this Agreement;
3.2 No Speculation in Land Holding. Developer's intended acquisition of the 2A
Property and acquisition (or transfer to the Permitted Assignee of its right to acquire) the ]A
North Property and its other intended undertakings pursuant to this Agreement shall be used
for the timely development of the 2A Property and the I North Property, and accompanying
infrastructure and amenities and not for speculation in land holding;
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3.3 Experience. Developer is experienced in development and understands the
process and requirements required to make development projects such as the Project described
herein; and
3.4 Long -Term Development Financing. Developer is capable of providing
financing for the development of the 2A Property without the necessity of third party
financing. Developer or its Permitted Assignee intends to commit to the provision of long-
term development financing for the I North Property from a potential reputable, institutional
lender, as may be approved by the City.
3.5 Release. Except as specifically set forth in Section 4.4, Developer hereby
waives the right to recover from and fully and irrevocably releases the City and its elected
officials, employees, agents, representatives, consultants and contractors (the "City Parties ")
with respect to any and all claims, actions, causes of action, demands, orders, or other means
of seeking or recovering losses, damages, liabilities, costs, expenses (including, without
limitation, attorneys' fees, consultant fees and court, arbitration and litigation costs) or any
other type of compensation that Developer and/or its Permitted Assignee may have or incur
(a) pursuant to the RFP selection process, the RFP's or any modification or defect thereto, or
any information set forth therein, (b) with respect to the terms of this Agreement including,
without limitation, the information set forth herein or the termination hereof, (c) any disputes,
claims, actions, causes of action, demands or orders arising between Developer and St. Anton,
and /or (d) any actions of the City or the City Parties in connection with any of the foregoing
(including, without limitation, the exercise by the City of its discretion, decision, judgment
with respect to the foregoing). This waiver and release includes without limitation, a waiver
and release with respect to (x) any and all damages and/or monetary relief (whether based in
contract or in tort), including, without limitation, any right to claim direct, compensatory,
reliance, special, indirect or consequential damages, ((y) the right to protest the RFP and/or
the terms or selection process pursuant to the RFP and (z) the failure of the City to negotiate
in good faith pursuant to this Agreement or to enter into a DDA and /or DA.
3.6 Survival of Provisions. The provisions of this Section 3 shall survive the
termination of this Agreement.
4.0 Negotiations.
4.1 Good Faith Negotiations. The City will prepare a draft of the DDA and DA
and submit the draft documents to Developer for review and comment. The City and
Developer agree for the period set forth in Section 4.2 to exclusively negotiate with one
another diligently and in good faith to prepare a DDA and a DA and related documents to be
entered into between the City and Developer with respect to the purchase and sale and
development of the 2A Property and the 1 A North Property.
4.2 Period of Negotiations.
4.2.1. Initial Period. The Parties agree to negotiate for a period of one hundred
fifty (150) days from the Effective Date, subject to extensions as further provided in this
Section 4.2. If on the 150th day from the Effective Date (or within any extension of time
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mutually approved by the City and Developer in accordance with the terms of the Agreement),
Developer has not signed a DDA and DA in form and substance prepared and approved by the
City in its sole discretion, then this Agreement shall automatically terminate.
4.2.2 Request for Extension. Developer may request from the City an extension
of the 150 -day exclusive negotiation period. The City will determine whether reasonable and
sufficient progress has been made toward fulfillment of the requirements of this Agreement in its
consideration of any extension. The 150 -day exclusive negotiation period may be extended by
the mutual consent of the City and Developer for up to two (2) additional periods of thirty (30)
days each.
4.2.3 Authority to Extend. The City hereby delegates to the City Manager or
Assistant Executive Director the authority to agree to grant the extensions specified in Section
4.2.2 upon determination by the City Manager or his or her designee in their sole and absolute
discretion that Developer has negotiated diligently and in good faith and that reasonable and
sufficient progress has been made toward fulfillment of the requirements of this Agreement. No
such extension of time shall be effective unless it is in writing.
4.2.4 Offer to Purchase. The execution by Developer of a form DDA and DA
shall constitute an offer to purchase the 2A Property and the IA North Property. Developer
hereby agrees that it shall not withdraw such offer to purchase for a period of sixty (60) days
following submittal of the executed DDA and DA to the City. Such offer shall remain in effect
for a period of sixty (60) days to enable the City to (a) determine whether it desires to enter into
such a DDA and DA; (b) take the actions necessary to authorize the City to sign the DDA and
DA if the City desires to do so; and (c) sign the DDA and DA. If the City has not considered and
approved the DDA and DA by such 60th day or, at the end of any extension mutually agreed
upon by the City and Developer in writing, then this Agreement shall automatically terminate.
4.3 Deposits and Costs.
4.3.1 Good Faith Deposit. Prior to the execution of this Agreement by the City,
Developer has submitted to the City a good faith deposit in the sum of One Hundred Thousand
Dollars ($100,000) (the "ENA Deposit ") in the form of a check to the City to ensure that
Developer will proceed diligently and in good faith to negotiate and perform all of Developer
obligations under this Agreement and to also be applied to cover any City Transaction Expenses
(defined below) incurred by the City after the Effective Date of this Agreement. The ENA
Deposit shall be deposited in an account in a bank or trust company selected by the City. Interest
shall accrue to any balances in the account for the benefit of Developer and as additional security
for Developer's obligations hereunder. The ENA Deposit will be expended to cover the City's
costs during the DDA negotiation process, and the ENA Deposit will be depleted accordingly.
Each time the amount of funds in the ENA Deposit account is depleted below Fifty Thousand
Dollars ($50,000), Developer shall be required to submit an additional Fifty Thousand Dollars
($50,000) to City which shall be credited by the City to the ENA Deposit account.
4.3.2 City Transaction Expenses. From and after the Effective Date, the ENA
Deposit may be used by the City to pay the City's third party predevelopment costs including,
without limitation, third party consultants, outside counsel, and any other expenditures required
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in connection with the drafting, negotiation and execution of the DDA or termination of this
Agreement, including any and all City third party fees and costs incurred by legal counsel,
financial and other consultants ( "City Transaction Expenses "). City Transaction Expenses do not
include any fees or deposits required of Developer for processing entitlement applications or
complying with provisions of the California Environmental Quality Act (`CEQA ") or its State
CEQA implementing regulations. 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.
4.3.3 Return of Deposit Under Specified Conditions. If the Parties enter into a
DDA within the time period identified in Section 4.2 of this Agreement, the City shall return any
remaining unused funds in the ENA Deposit account to Developer or Developer can apply it to
any additional deposit required as security for the performance under the DDA. If the Parties fail
to enter into the DDA within the time period identified in Section 4.2 of this Agreement or any
extension thereto, the City may retain any remaining unused portions of the ENA Deposit only if
Developer has not negotiated diligently or in good faith or has not carried out its obligations
under this Agreement and the City has negotiated diligently and in good faith and has carried out
its obligations under this Agreement. The Developer's failure to submit to the City plans,
reports, studies, investigations, applications and materials specified in Section 5 and Section 6 of
this Agreement within the time periods specified therein, shall be deemed to demonstrate
Developer's failure to negotiate diligently and in good faith and its failure to carry out its
obligations hereunder. If Developer has failed to do so, inasmuch as the actual damages which
would result from a breach by Developer of its obligations under this Agreement are uncertain
and would be impractical or extremely difficult to determine, the City shall be entitled to retain
any remaining unused portions of the original $50,000 ENA Deposit plus interest, if any, which
has accrued thereon, as liquidated and agreed damages.
4.3.4 Not Sole Remedy of City. Subject to Section 11.6 of this Agreement, by
the initials of their respective signatories hereunder, the City and Developer acknowledge and
agree that forfeiture of the original amount of the deposit (together with any interest earned and
accrued thereon) is not in lieu of any other relief, right or remedy to which the City might be
entitled by reason of Developer's default.
CITY'S INITIALS DEVELOPER'S INITIALS
4.3.5 Additional DDA Deposit. Developer acknowledges that it is currently
anticipated that the DDA shall require an additional deposit in an amount to be determined as
security for the performance of Developer's obligations under the DDA.
4.3.6 Costs and Expenses Borne by Developer. Developer acknowledges and
agrees that the City shall have no responsibility to pay or reimburse Developer for costs and
expenses incurred by Developer in connection with this Agreement or the compliance by
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Developer with its obligations under this Agreement unless the City assumes any specific
responsibilities in the fully executed DDA. Costs and expenses for which Developer shall be
responsible include all pre - contractual expenses described in the RFP, all City Transaction
Expenses and all costs and expenses incurred by Developer with respect to compliance with the
terms of this Agreement.
4.3.7 Developer Right to Terminate. Developer may terminate this Agreement
in the event that during the course of the investigations and evaluation of the Property and the
Project, it determines in good faith that the Project is not feasible or financeable. The City shall
return the deposit (less any costs of the City associated with negotiation of the DDA from the
Effective Date together, with any interest accrued thereon) to Developer upon termination of the
Agreement in the event Developer has negotiated in good faith hereunder and materially
complied with the terms hereof.
4.3.8 Payment of Outstanding Amounts. Upon a termination of this Agreement
other than as set forth in Section 4.3.3, to the extent that the funds provided by Developer to pay
the City Transaction Expenses are not sufficient to pay all City Transaction Expenses, Developer
shall promptly fund the amount remaining unpaid to the City.
4.3.9 Survival of Provisions. The provisions of this Section 4.3 shall survive the
termination of this Agreement.
4.4 Exclusivity. During the period of exclusive negotiation, the City covenants and
agrees to negotiate exclusively with Developer and shall not solicit another party for the Project
or enter into any agreement with any other party regarding the development of the Property or
any portion thereof. The City acknowledges and agrees that but for this exclusivity, Developer
would not have entered into this Agreement. In the event a court of competent jurisdiction
determines in a final decision that the City has breached this exclusivity covenant, the City shall
be deemed to have failed to negotiate in good faith and, provided a DDA has not been entered
into pursuant to this Agreement, Developer's sole remedy shall be the return of the good faith
deposit (together with interest accrued thereon) and any other deposits made by Developer
pursuant to this Agreement.
4.5 Inspection; License.
4.5.1 Access License. The City hereby grants to Developer, for use by the
Permitted Assignee and the employees, representatives, agents, contractors and consultants of
Developer and the Permitted Assignee (collectively, the "Developer Parties "), a license during
the term of this Agreement to enter upon the Property for purposes of conducting a due diligence
inspection, provided that Developer shall and shall cause the Developer Parties to: (a) deliver to
the City written evidence that Developer has procured the insurance required under Section
4.5.2; (b) give the City twenty -four (24) hours telephonic or written notice of any intended
access which involves work on or may result in any impairment of the use of the 2A Property or
the lA North Property; (c) access the 2A Property and the IA North Property in a safe manner;
(d) conduct no invasive testing or boring without the written consent of the City; (e) allow no
dangerous or hazardous condition created by Developer and /or the Developer Parties to continue
beyond the completion of such access; (f) comply with all laws and obtain all permits required in
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connection with such access; and (g) conduct inspections and testing, subject to the rights of any
existing tenants or contractors doing work on the 2A Property and/or the IA North Property, if
any (which inspections and testing, if conducted at times other than normal business hours, shall
be conducted only after obtaining the City's consent, which shall not be unreasonably withheld).
The limited license granted herein is revocable by the City during the continuation of any breach
of this Agreement by Developer and shall be automatically revoked and terminated, without
further action of the City, upon the termination of this Agreement or any period of exclusive
negotiation hereunder.
4.5.2 Insurance. Developer shall obtain, or cause the Developer Parties, with
respect to their access and investigative activities, to obtain, at Developer's or the Developer
Parties' sole cost and expense prior to commencement of any investigative activities on the 2A
Property and the IA North Property, a policy of commercial general liability insurance covering
any and all liability of Developer and the City arising out of any investigative activities, in an
amount of $1,000,000 and provided by a carrier reasonably approved by the City. Such policy of
insurance shall be kept and maintained in force during the term of this Agreement and so long
thereafter as necessary to cover any claims of damages suffered by persons or property resulting
from any acts or omissions of Developer and /or the Developer Parties.
4.5.3 Indemnity. Developer hereby agrees to indemnify, defend protect and
hold the City and its elected officials, employees, agents, representatives, consultants and
contractors free and harmless from and against any and all claims, costs and /or Losses arising in
connection with or resulting from Developer's or the Developer Parties' access to the Property or
its exercise of its rights hereunder, including, without limitation, any inspections, surveys, tests
or studies performed by Developer or the Developer Parties, save and except to the extent such
claims result from the gross negligence or willful misconduct of the City or its agents, employees
or representatives. Developer shall keep the Property free and clear of any mechanics' liens or
materialmen's liens related to Developer's inspection of the Property. The indemnification by
Developer set forth in this Section 4.5.3 shall survive the termination of this Agreement and the
execution of the DDA and the closing and transfer to Developer and /or its Permitted Assignee
and shall not merge into any deed granted pursuant to the DDA.
5.0 Proposed Development Concent.
5.1 Compliance with Existing Land Use and Zoning Requirements. The
proposed Project to be negotiated hereunder shall include the development and use of the
Property consistent with the MCAS Tustin Reuse Plan, the General Plan, and the Specific
Plan and any approved Density Bonuses granted under the Tustin City Code.
5.2 Terms of DDA to be Negotiated. Developer and the City agree that it is their
intent, upon entry into this Agreement, to negotiate a DDA which is anticipated to address the
following terms and conditions and such other terms and conditions as they may agree, and
which will be binding upon City and Developer and, to the extent provided thereby, their
respective successors and assigns, including without limitation, the Permitted Assignee.
5.2.1 Essential Terms. Developer shall acquire the 2A Property from the City
and shall acquire for further conveyance to, or cause the City to convey the IA North Property
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to, Developer's Permitted Assignee. The terms and conditions of these conveyances, including
but not limited to the manner of conveyances, the conditions precedent to conveyance and the
amount of the purchase price, shall be determined as part of the negotiation of and detailed in the
DDA.
5.2.2 As -Is Conveyance. While Developer should undertake its own
investigation to determine the presence of hazardous materials and suitability of the Property for
development, Developer acknowledges and agrees that if the Property is conveyed by the City
pursuant to a DDA, the Property shall be conveyed on and 'AS -IS, WHERE -IS AND WITH
ALL FAULTS" basis, and Developer shall be obligated to release, defend, indemnify and hold
harmless the City with respect to its acquisition and development of the Property and the
condition of the Property, including any and all land use, soil and environmental conditions of
the Property.
5.2.3 Development. The Developer, and /or its Permitted Assignee with respect
to the IA North Property, shall design and construct the Project on the Property at its own cost
and expense in accordance with the scope of development and a schedule of performance to be
negotiated as part of the DDA and in accordance with plans and specifications prepared by
Developer and/or its Permitted Assignee, under oversight by Developer, and approved by the
City in accordance with such schedule of performance and in compliance with all requirements
and regulations of the City including, without limitation, applicable zoning.
5.2.4 Product Mix and Density Transfer /Density Bonus. Developer understands
and acknowledges that the product mix proposed for the Project will be subject to approval by
the City, in its governmental capacity, of a Density Bonus, and any necessary City entitlement
approvals requested. The actual number of units will be based on compliance with development
standards in the Specific Plan and any requirements contained in the DDA and any approved
Density Bonuses granted under the Tustin City Code, including any incentives and/or
development standard modifications granted under the City's Density Bonus Ordinance. The
Project will include construction and maintenance for rental for a period of 55 years (pursuant to
affordable housing covenant approved by the City in its sole discretion) of 37 affordable housing
units on the 2A Property and 225 affordable dwelling units on the IA North Property. The 37
affordable housing units on the 2A Property will all be at the Moderate Income Level. The
distribution of the affordable units on the IA North Property shall be as follows: 88 Very Low -
Income Units, 73 Low Income Units, and 64 Moderate Income Units. Developer has agreed to
negotiate with the City the actual location by product type of the affordable housing units.
Developer acknowledges that the foregoing shall require grant of a density bonus and density
transfer from the City and agrees that in requesting a density bonus and density transfer, it will
not request any financial incentives from the City.
5.2.5 Tustin Legacy Backbone Infrastructure Program Costs.
(a) In connection with development of the Property, Developer shall
have a Fair Share Obligation to make a contribution to the Tustin Legacy Backbone
Infrastructure Program, as a fair share contribution to the Tustin Legacy Backbone Infrastructure
Program. The Fair Share Obligation allocated to the 2A Property is currently estimated at
$15,300,644 with any Fair Share Obligation and its costs to be adjusted at building permit stage
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based on cost adjustments based on refined design information, updates to the benefit analysis or
availability of any outside funding sources and adjustments in the construction cost index, as
appropriate. A credit will be applied to Developer's Fair Share Obligation based on Developer's
completion of Tustin Legacy Backbone Infrastructure improvements required to be installed by
Developer and as originally identified in the RFP. Currently, estimates for these Backbone
Infrastructure Improvements are $17,395,020.
(b) In connection with development of the IA North Property,
Developer or its Permitted Assignee, as applicable, shall have a Fair Share Obligation to make a
contribution to the Tustin Legacy Backbone Infrastructure Program, as a Fair Share Contribution
to the Tustin Legacy Backbone Infrastructure Program. The Fair Share Obligation allocated to
the IA North Property is currently estimated at $4,324,393 with any Fair Share Obligation and
its costs to be adjusted at building permit stage based on costs adjustments based on refined
design information, updates to the benefit analysis or availability of any outside funding sources
and adjustments in the construction cost index, as appropriate.
5.2.6 Local Infrastructure. The Developer, or its Permitted Assignee, will also
be responsible for all costs of any necessary Local Infrastructure Improvements and in -tract
improvements as identified for each of the 2A Property and the 1 A North Property in the relevant
RFPs.
5.2.7 Applications. Developer shall prepare and process applications for and
obtain from the City and other federal, state and local jurisdictions, all applicable land use,
planning and zoning approvals for the proposed development with the support of the City. These
entitlements will be required to be consistent with the Specific Plan, unless as part of approval of
any Density Bonus application under the Tustin City Code incentives and /or modifications to
development standards are granted by the City.
5.2.8 Project Costs. Project costs and revenues will be separately analyzed and
funding of all project costs will be the responsibility of Developer, or its Permitted Assignee, as
applicable.
5.2.9 Effect of Affordable Housing Financing. Developer anticipates
implementation of the Project without the need for any expenditure by or loans from the City.
However, in the event that state legislation is adopted that permits the Tustin Housing Authority
to commit available low and moderate income housing funds to development of affordable
housing on the IA North Property, Developer agrees that it would negotiate with the City an
increase in any purchase price for the IA North Property based on any financial incentives that
might be available to be applied to the Project by the Tustin Housing Authority.
5.2.10 Development Fees. In connection with its development of the Property,
Developer acknowledges that the Property will be subject to applicable development fees,
including but not limited to those required by the City of Tustin, or other jurisdictions such as the
Foothill /Eastern Corridor Fee, the Santa Ana/Tustin Transportation System Improvement Area
(TSIA) fee, school impact fees by the Tustin Unified School District (TUSD) or Santa Ana
Unified School District (SUSD), current Orange County School Facility Bonds (Measure G and
Measure L), utility meter and connection fees. Developer also acknowledges that the Property
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may be subject to a future community facilities district for financing of school facilities to
benefit Tustin pursuant to an agreement between the City and the Tustin Unified School District
regarding the transfer of school sites.
5.2.11 Transfer and Assignment Restrictions. Developer acknowledges that the
DDA shall contain limitations on transfer and assignment of the rights of Developer including
the right of the City to approve in its sole discretion all assignments and transfers by Developer
of interests in Developer or in the DDA.
5.2.12 Mortgagee Limitations and Subordination. Developer acknowledges that
the DDA shall impose limitations on mortgages and mortgagees and shall require subordination
of any mortgage to the DDA and DA and other transaction documents as applicable.
5.2.13 Remedies and Termination Rights. Developer acknowledges that the
DDA shall contain remedies and termination rights in favor of the City for breach of the DDA,
which shall include without limitation, rights of reverter in conveyed land.
6.0 Developer's Responsibilities.
6.1 Status Reports. Developer agrees to make bi- weekly oral and /or written
reports advising the City and /or its staff of all matters and studies being made, including
Developer's progress in analyzing the feasibility of the Project as may be requested by the City
or its staff.
6.2 Development Team. Developer shall, within ten (10) days of execution of
this Agreement, submit in writing to the City full disclosure of the names of Developer's agents,
authorized negotiators, professional employees or other associates of Developer who may be
participants in development of the Project and other relevant information concerning the above,
such as addresses, telephone numbers and employers. Developer shall also designate and submit
in writing to the City the names of all Developer's lead negotiators who shall have authority to
make decisions on behalf of Developer.
6.3 Financial Status. Developer shall continue to be responsible for demonstrating
to the City Developer's financial capacity and capability to perform its obligations under this
Agreement and the proposed DDA. Developer shall submit any additional financial information
required to demonstrate Developer's financial capacity and capability to perform its obligations
under this Agreement and the proposed DDA as requested by the City within thirty (30) days of
a request. Developer shall identify with specificity the documents which 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. If
confidentiality is requested and if nondisclosure under the Public Records Act is allowed, the
documents shall be delivered to and maintained by the City and copies shall not be disseminated.
To the extent permitted by law, the City shall not make public disclosure of the documents. The
City's agents, negotiators and consultants may review the statements as necessary as long as
such parties agree to maintain the confidentiality of such statements.
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6.4 Assignment. If Developer determines to joint venture or partner development of
the 2A Property or the I North Property, or if Developer determines to form a new legal entity
to develop either the 2A Property or the I North Property, Developer shall promptly inform the
City of such determination and submit to the City the joint venture's or partner's most recent
financial statements and the financial statements of its key principals. The assignment of
Developer's rights under this Agreement to any new entity, partnership or joint venture may be
approved in writing by the City, provided that the City is satisfied in its sole discretion, that the
new entity, partnership, or joint venture has the financial capability to perform under this
Agreement and the proposed DA.
6.5 Design Review/Entitlements. It is understood and agreed by Developer that the
quality, character and uses proposed for the Project are of particular importance to the City and
that planning and design review approval and other entitlements by the City will be required for
the development of the 2A Property and the IA North Property. Developer and the proposed
architects for the project 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. Within 20 days after the
Effective Date, Developer shall submit a schedule for entitlement processing. Within sixty (60)
days after the Effective Date, Developer shall submit for approval of the City preliminary revised
design drawings and related documents containing the overall plan for development of
Developer's Project including the following: preliminary site plan showing building layout and
dimensions, parking, landscaping and access on or related to each individual parcel, floor plans,
preliminary materials call -outs and conceptual building renderings and a development schedule.
6.6 Proiect Financial Pro Forma. Within sixty (60) days after the Effective Date,
Developer shall submit revised overall cost and revenue estimates, project cost and revenue data
including information on Project's financial return adequate to enable the City to evaluate
Developer's Business offer and economic feasibility of the proposed development of the Project,
as proposed, on the Property. The information submitted shall be in the same Business Plan
format provided in response to the Request for Proposal for Disposition Package 2A and
Disposition Package I or as otherwise requested by the City. The financial pro formas for each
project shall reflect any comments the City provides to Developer on the preliminary site plan.
6.7 Additional Information. Developer understands and agrees that the City's
negotiating team reserves the right at any time to reasonably request from Developer additional
information, including data and commitments to ascertain the depth of Developer's capability
and desire to develop the Property expeditiously. The City's negotiating team will provide a
reasonable time in which Developer may obtain and submit to the City such additional
information.
6.8 Contacts During Negotiation. Developer shall only negotiate with the City's
negotiating team as defined in writing by the City Manager or Assistant Executive Director and
with no other persons unless expressly authorized to do so by the City's negotiating team.
During the period of negotiations, Developer shall make no statements to the media about the
proposed Project without the approval of the City Manager or Assistant Executive Director. The
Developer's failure to comply with the provisions of this Section shall be conclusive evidence
that Developer has not "negotiated in good faith."
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6.9 Environmental and Other Studies.
6.9.1 Environmental Requirements. Compliance with CEQA is a legal
precondition to any final City action to approve and execute a DDA and DA for the 2A Property
and the IA North Property. Developer shall cooperate with the City and abide by the City's
environmental compliance procedures and fee requirements, which include, but are not limited
to, the obligation to deposit funds to pay all of the City's costs of preparing any additional
required environmental studies as may be determined.
6.9.2 Plans, Reports, Studies and Investigations. Developer shall provide the
City, without cost or expense to the City, copies of all plans, reports, studies or investigations
(collectively, "Plans ") prepared by or on behalf of Developer for development of the Project on
the 2A Property and the IA North Property. All Plans shall be prepared at Developer's, or its
Permitted Assignee's sole cost and expense. If this Agreement is terminated for any reason other
than a material breach or default hereunder by the City, the City may request that Developer, for
consideration to be mutually agreed, transfer Developer's rights to any or all Plans identified by
the City, but in no event shall the cost to the City exceed five hundred dollars ($500.00). Upon
such request, Developer shall deliver to the City copies of all Plans requested by the City
together with a bill of sale therefore, provided that Developer makes no representations,
warrantee or guarantee regarding the completeness or accuracy of the Plans, and Developer does
not covenant to convey the copyright or other ownership rights of third parties thereto. Such
Plans shall thereupon be free of all claims or interests of Developer or any liens or
encumbrances. Upon the City's acquiring Developer's rights to any or all of the Plans, the City
shall be permitted to use, grant, license or otherwise dispose of such Plans to any person or entity
for development of the Property or any other purpose; provided, however, that Developer shall
have no liability whatsoever to the City or any transferee or title to the Plans in connection with
the use of the Plans
6.9.3 Hazardous Materials Assessment. Developer acknowledges that, in
accordance with the City of Tustin's acquisition of the Property from the Department of the
Navy by quitclaim, the Navy found and determined that there was no contamination on the
Property and issued a Finding of Suitability for Transfer ( "FOST ") dated April 22, 2002. The
City would intend upon approval of a DDA to sell and convey by quitclaim in the same manner
as the parcels were conveyed to the City to include the covenants and warranties as identified in
the Navy's quitclaim deed attached in the RFP.
6.9.4 Insurance. The Developer, and any permitted assignee(s), will be
responsible in conjunction with any DDA to provide commercial general liability, workers
compensation, builder's risk property insurance, and environmental insurance as identified in the
RFP.
7.0 The Developer.
7.1 Nature of Developer. Developer will be The Irvine Company, LLC or such
other business entity (such as another limited liability corporation) as the City may approve for
Disposition Package 2A, and Developer is intended to assign its interest in development of the
IA North Property to the Permitted Assignee, upon such terms and conditions as the City may
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request and the City and Developer may agree, as specified in the DDA and DA. Concurrently
with its execution of the DDA and DA, Developer shall submit a copy of the applicable
formation documents relating to Developer and any corporate members of Developer (i.e., as
applicable: articles of incorporation; partnership agreement; and /or limited liability corporation
articles of incorporation, statement of information and operating agreement), and that of
Developer's Permitted Assignee.
7.2 Offices of Developer. The principal offices of Developer are located at 550
Newport Center Drive, Newport Beach, CA 92660. The principals of Developer are as follows:
Dan Young, President, Community Development
Chris Marsh, Executive Vice - President, Development
Bryan Austin, Vice President, Project Management
7.3 The Developer's Consultants and Professionals. Developer is required to make
full disclosure to the City of any changes to its principals, officers, stockholders, partners, joint
venturers, Project employees, and other associates and all other pertinent information concerning
Developer and its associates, or its Permitted Assignee, as identified in its RFP responses.
Developer agrees to substitute or supplement any of its consultants and professionals as
reasonably requested by the City.
8.0 The Developer's Financial Capacity.
8.1 Financial Capacity. Any additional financial information required to
demonstrate financial capacity and capability to perform the obligations under this Agreement of
Developer, or its Permitted Assignee, if requested, shall be submitted to the City or its consultant
as requested by the City for the purposes of this Agreement.
8.2 Equity. Developer proposes to obtain its equity capital for development of the
2A Property from in -house financing. Developer's Permitted Assignee proposes to obtain its
equity capital for development of the I North Property from Developer, and from a variety of
funding sources including tax- exempt housing revenue bonds proposed to be issued by the
California Statewide Communities Development Authority ( CSCDA), and private funding
sources. Developer understands that the closing and conveyance of property will not be
contingent on receipt of any outside funding from either CSCDA or other sources.
8.3 Construction Financing. Developer proposes to finance project costs for
development of the 2A Property with 100% equity and its Permitted Assignee proposes
construction financing for development of the IA North Property from CSCDA bond proceeds
for the development and from a reputable, institutional lender as may be approved by the City.
8.4 Lone -Term Development Financing. Developer is capable of providing
financing for the development of the 2A Property without the necessity of third party financing.
The Developer's Permitted Assignee intends to commit to the provision of long -term
development financing for the 1 A North Property from a potential reputable, institutional lender,
as may be approved by the City.
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8.5 Bank and Other Financial References. The Developer's bank and other
financial references are as set forth in Developer's RFP submission. Developer's Permitted
Assignee's financial references are set forth in the response of St. Anton to the Disposition IA
North Package RFP.
8.6 Full Disclosure. Developer and its Permitted Assignee will be required to make
and maintain full disclosure to the City of the methods of financing and the financing documents
to be used in the development.
9.0 City's Responsibilities.
9.1 Environmental Requirements. A final Environmental Impact
Statement/Environmental Impact Report ( "EIS /EIR ") has been prepared and certified for the
MCAS Tustin Reuse Plan. Developer agrees to finance and supply information and otherwise
assist the City as requested to enable the City to determine the environmental impact of the
proposed development of the Project as described by the DDA and DA and to prepare such
additional environmental documents, if any, as may be needed to be completed for the
development.
9.2 Assistance and Cooperation. The City shall cooperate with Developer by
providing appropriate information and assistance as reasonably requested by Developer.
9.3 Plans and Studies. The City shall, within ten (10) business days of execution of
this Agreement and at no cost to Developer, provide Developer with copies of all plans, reports,
studies, investigations and other materials the City may have pertinent to Disposition Package
2A or Disposition Package IA and /or development of the Project on the Property provided,
however, that the City makes no representations, warrantee or guarantee regarding the
completeness or accuracy of such plans, reports, studies, investigations and other materials.
9.4 FOST. The City agrees to provide a copy of the FOST to Developer within 10
days following the Effective Date.
10.0 Representations, Warranties and Agreements of St. Anton. St. Anton represents,
warrants and agrees as follows (defined terms set forth in this Section shall have the meanings
set forth elsewhere in this Agreement):
10.1 Expertise and Financial Capability. St. Anton has the necessary expertise,
experience and financial capability to acquire and undertake development of the IA North
Property if assigned such rights by Developer, is experienced in development and understands
the process and requirements required to develop projects such as the Project described herein.
Nonetheless, St. Anton recognizes that its proposal was not individually selected, but was
selected due to the cooperative agreement with Developer and the agreement of Developer to
undertake the responsibility for acquisition and development of master infrastructure for the
Property as set forth in this Agreement.
10.2 Not a Party to Agreement. St. Anton is not a party to this Agreement, has no
direct or third party beneficiary rights under this Agreement and shall look solely to Developer
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with respect to any claims it may have with respect to assignment of the 1 A North Property, the
entitlement of such property or the construction of the components of the Project thereon.
10.3 Financial Status and Additional Information. Notwithstanding that St. Anton
is designated as a Permitted Assignee, St. Anton acknowledges that such status will be subject to
continuing review by the City with respect to the financial capability and ability of St. Anton to
obtain financing and to develop the IA North Property expeditiously as required by the DDA.
Therefore, to the extent requested by the City and as a condition precedent for the benefit of the
City to any transfer by Developer of its rights to acquire and develop Parcel 1 A North, St. Anton
shall provide to the City such additional information, including without limitation, data and
commitments, as the City may request from time to time to:
(a) demonstrate to the City St. Anton's continuing financial capacity and
capability to perform the obligations allocated to the purchaser and developer of the IA North
Property under the DDA; and
(b) ascertain the depth of St. Anton's capability and desire to develop the ]A
North Property expeditiously.
The City's negotiating team will provide a reasonable time in which St. Anton may obtain and
submit to the City such additional information.
In connection with the foregoing, St. Anton shall have the right identify with specificity the
documents which St. Anton 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. If confidentiality is requested and if nondisclosure under
the Public Records Act is allowed, the documents shall be delivered to and maintained by the
City and copies shall not be disseminated. To the extent permitted by law, the City shall not
make public disclosure of the documents. The City's agents, negotiators and consultants may
review the statements as necessary as long as such parties agree to maintain the confidentiality of
such statements.
10.4 Chanlle in Ownership or Personnel. St. Anton shall promptly make full
disclosure to the City of any changes to its principals, officers, stockholders, partners, and /or
joint venturers, Project employees, and other associates and all other pertinent information
concerning St. Anton and its associates as identified in its RFP responses. St. Anton agrees to
substitute or supplement any of its consultants and professionals as reasonably requested by the
City.
10.5 Plans, Reports, Studies and Investigations. St. Anton shall provide the City,
without cost or expense to the City, copies of all plans, reports, studies or investigations
(collectively, "1A North Plans ") prepared by or on behalf of St. Anton for development of the
Project on the ]A North Property. All IA North Plans shall be prepared at Developer's, or St.
Anton's, sole cost and expense. If this Agreement is terminated for any reason other than a
material breach or default hereunder by the City, the City may request that St. Anton, for
consideration to be mutually agreed, transfer St. Anton's rights to any or all IA North Plans
identified by the City, but in no event shall the cost to the City exceed five hundred dollars
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($500.00). Upon such request, St. Anton shall deliver to the City copies of all IA North Plans
requested by the City together with a bill of sale therefore, provided that St. Anton makes no
representations, warrantee or guarantee regarding the completeness or accuracy of the IA North
Plans, and St. Anton does not covenant to convey the copyright or other ownership rights of third
parties thereto. The 1 A North Plans shall thereupon be free of all claims or interests of St. Anton
or any liens or encumbrances. Upon the City's acquiring St. Anton's rights to any or all of the
I North Plans, the City shall be permitted to use, grant, license or otherwise dispose of such I
North Plans to any person or entity for development of the IA North Property or any other
purpose; provided, however, that St. Anton shall have no liability whatsoever to the City or any
transferee or title to the 1 A North Plans in connection with the use of the 1 A North Plans.
10.6 Real Estate Commissions. St. Anton has not engaged any broker, agent, or
finder in connection with the RFP or Parcel IA North and agrees to hold the City and its
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 St. Anton regarding this Agreement or the sale
or development of the I North Property.
10.7 Confidentiality. St. Anton shall keep this Agreement and any and all information
and/or reports obtained from the City and /or Developer or related to or connected with the
Property , the other parties, this Agreement, and until presentation to the City for approval, the
DDA and DA or any other documents negotiated by the City and Developer, confidential and
will not disclose any such information to any person or entity without obtaining the prior written
consent of City and Developer, except that the City shall have the right to disclose any
information contained in any third party reports obtained by St. Anton and St. Anton shall have
the right to make disclosures to Developer. Notwithstanding the foregoing, this Agreement, the
draft DDA and DA and all other material relating to this Agreement are subject to the provisions
of the California Public Records Act (Government Code Section 6250 et seq.). The City's use
and disclosure of its agreements and records are governed by this Act.
10.8 Assumes Risk. St. Anton assumes the risk that the City and Developer may not
enter into any agreement due to City and Developer's failure to agree upon essential terms of the
transaction.
10.9 Principals and Office. The principal office of the Permitted Assignee is 4630
Campus Drive, Suite 111, Newport Beach, CA 92660. The principals of the Permitted Assignee
are as follows:
Steve Eggert, Co -owner
Peter Germis, Co -owner
Trish Malone, Senior Project Manager
Steve Rawson, Project Manager
10.10 Release. St. Anton hereby waives the right to recover from and fully and
irrevocably releases the City and the City Parties with respect to any and all claims, actions,
causes of action, demands, orders, or other means of seeking or recovering losses, damages,
liabilities, costs, expenses (including, without limitation, attorney's fees, consultant fees and
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court, arbitration and litigation costs) or any other type of compensation that St. Anton may have
or incur (a) pursuant to the RFP selection process, the RFP's, or any modification or defect
thereto, or any information set forth therein, (b) with respect to the terms of this Agreement,
including , without limitation, the information set forth herein or the termination hereof, (c) any
disputes, claims, actions, causes of action, demands or orders arising between Developer and St.
Anton, and/or (d) any actions of the City or City Parties in connection with the foregoing
(including, without limitation, the exercise by the City of its discretion, decision or judgment
with respect to the foregoing). This waiver and release includes without limitation, a waiver and
release with respect to (x) any and all damages and/or monetary relief (whether based in contract
or in tort), including, without limitation, any right to claim or receive direct, compensatory,
reliance, special, indirect or consequential damages, (y) the right to protest the RFP and/or the
terms of the selection process pursuant to the RFP and (z) the failure of either the Developer or
the City to negotiate in good faith pursuant to this Agreement or to enter into a DDA and /or DA.
10.11 Survival of Provisions. The provisions of this Section 10 shall survive the
termination of this Agreement.
11.0 Miscellaneous.
11.1 Assistance and Cooperation. Developer and the City shall reasonably cooperate
with one another to achieve the objectives and purposes of this Agreement
11.2 Real Estate Commissions. The City shall not be liable for any real estate
commission, finder's fee or any broker's fees which may arise from this Agreement. Developer
represents that neither it nor St. Anton has engaged any broker, agent, or finder in connection
with this Agreement and Developer agrees to hold the City and its 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 Developer or St. Anton, or either of them, regarding this Agreement or the sale
or development of the 2A Property or the 1 A North Property. The provisions of this Section 11.2
shall survive the termination of this Agreement.
11.3 No City Duty. Except as expressly provided above in Section 4.3.3, the City
shall have no obligations or duties hereunder and no liability whatsoever in the event the City
and Developer fail to agree upon or to execute a DDA and a DA.
11.4 Non - Liability of City Officials and Employees. No member, official,
representative, director, staff member, attorney or employee of the City shall be personally liable
to Developer or any successor in interest in the event of any default or breach by the City or for
any amount which may become due to Developer or to its successor, or on any obligations under
the terms of this Agreement.
11.5 Entire Agreement. This Agreement represents the entire agreement of the City
and Developer with respect to the matters set forth herein and supersedes any prior negotiations
or contemporaneous writings or statements. This Agreement may not be amended except in
writing signed by each of the City and Developer hereunder.
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11.6 Attorneys' Fees. If either the City or Developer brings an action or files a
proceeding in connection with the enforcement of its respective rights or as a consequence of any
breach by any party of its obligations hereunder, then the prevailing party in such action or
proceeding shall be entitled to have its reasonable attorneys' fees and out -of- pocket expenditures
paid by the losing party.
11.7 Covenant Against Discrimination. Developer shall not discriminate against nor
segregate, any person or group of persons on account of sex, race, color, age, marital status,
religion, handicaps, creed, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the 2A Property or the IA North Property, nor shall
Developer establish or permit any such practice or practices of discrimination or segregation in
the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the 2A Property or the 1 A North Property.
11.8 Notices /Submittals. All notices or submittals required or permitted hereunder
shall be delivered in person, by overnight courier, or by registered or certified mail, postage
prepaid, return receipt requested to such party at its address shown below, or to any other place
designated in writing by such party.
Christine Shingleton, Assistant Executive Director
City of Tustin
City: 300 Centennial Way
Tustin, CA 92780
Jeffrey C. Parker, City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Dan Young, President
Irvine Company, Community Development
Developer: 550 Newport Center Drive
Newport Beach, CA 92660
11.9 Any such notice or submittal shall be deemed received upon delivery, if delivered
personally; one (1) day after delivery to the courier, if delivered by courier; and three (3) days
after deposit into the United States mail if delivered by registered or certified mail.
11.10 Prohibition Against Assignments. This Agreement shall not be assigned by
Developer without the consent of the City in its sole discretion. Any attempted or purported
assignment by Developer of this Agreement without the consent of the City as aforesaid shall be
void and a breach by Developer of its obligation to negotiate in good faith under this Agreement.
11.11 No Third Party Beneficiaries. Execution of this Agreement is not intended to
create or confirm any third party beneficiary rights in or create any liability on the part of either
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the City or Developer to any third parties. Specifically, St. Anton shall not be a third party
beneficiary to this Agreement.
11.12 Effect of Disposition and Development Agreement. Following mutual
execution by the City and Developer of a DDA and DA, this Agreement shall be of no further
force or effect, except that unless otherwise agreed in writing by Developer and the City, the
releases set forth in Sections 3.5 and 10.10, the indemnities set forth in Section 4.5.3, Section
10.6 and Section 11.2 and the confidentiality provisions of Section 10.7 and Section 11.12 of this
Agreement shall remain in effect with respect to claims arising during the term of this
Agreement. In the event of any conflict between the provisions of this Agreement and any DDA
or DA approved by the City and Developer, the provisions of the DDA and DA shall for all
purposes prevail.
11.13 Confidentiality. The City and Developer represent and warrant that each shall
keep this Agreement and all information and/or reports obtained from the other, or related to or
connected with the Property, the other parties, this Agreement, and until presentation to the City
for approval, the DDA and DA or any other documents negotiated by the City and Developer,
confidential and will not disclose any such information to any person or entity without obtaining
the prior written consent of the other parties, except that the City shall have the right to disclose
any information contained in any third party reports obtained by Developer and Developer shall
have the right to make disclosures to St. Anton and Developer's and St. Anton's employees and
independent contractors, including but not limited to consultants, financial planners, outside
counsel, and experts as necessary in order to determine if project is feasible and financeable.
Notwithstanding the foregoing, this Agreement, the draft DDA and DA and all other material
relating to this Agreement are subject to the provisions of the California Public Records Act
(Government Code Section 6250 et seq.). The City's use and disclosure of its agreements and
records are governed by this Act. The provisions of this Section shall survive the termination of
this Agreement.
11.14 Governing Law/Exclusive Venue. The Agreement shall be interpreted in
accordance with California law. The Parties agree that in the event of litigation, exclusive venue
shall be in Orange County, California.
1 1.15 Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the City and Developer hereto have executed this
Agreement as of the date set opposite their signatures.
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"CITY"
City of Tustin
Dated: By:
Jeffrey C. Parker
City Manager
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Dated:
"DEVELOPER"
The Irvine Company LLC, a Delaware limited
liability company
IC
Dated:
In consideration of the designation of St. Anton
as a Permitted Assignee in this Agreement, the
following provisions of this Agreement are
ACCEPTED AND AGREED BY ST. ANTON:
Section 1.10, Section 10 (inclusive of Sections
10.1 through 10.10) and Sections 11.9, 11.10
and 11.11 of this Agreement only.
St. Anton Partners, LLC
IN
Steven L. Eggert
Co -Owner
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Dan Young
President
2A Property Legal Description and Site Map
Lots 29, 30, 38, 39, N, and W W W W of Tract No. 17404 in the City of Tustin, County of Orange,
State of California as shown on a map filed in Book 884, Pages 1 to 14, Official Records of
Orange County, California.
1756 WW J LOT 0
C `��RNFR LOT D LOT P
\ LOT 0000
40 \ Rom\
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39 27
3 38 '
37 0
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3 6 LO
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25
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TRACT NO. 17404
IN THE CITY OF TUSTIN, COUNTY OF ORANGE
STATE OF CALIFORNIA
Exhibit B
1A North Property Legal Description and Site Map
Lots 20, MMM, NNN, and PPP of Tract No. 17404 in the City of Tustin, County of Orange,
State of California as shown on a map filed in Book 884, Pages 1 to 14, Official Records of
Orange County, California.
LOT R / LOT III
LOT 0 /
17 or OD ,
D
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24 y
LOT MMM 6
LOT PPP CZ
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23
TRACT NO, 17404
IN THE CITY OF TUSTIN, COUNTY OF ORANGE
STATE OF CALIFORNIA