HomeMy WebLinkAbout09 SECOND READING AND ADOPTION OF ORDINANCE NO. 1471 (FLIGHT AT THE LEGACY)Agenda Item 9
AGENDA REPORT Reviewed.
City Manager
Finance Director N/A
MEETING DATE: NOVEMBER 15, 2016
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: ERICA N. RABE, CITY CLERK
SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 1471
SUMMARY:
Ordinance No. 1471 amends the Tustin City Code (TCC) by approving Development
Agreement (DA) 2016-001 to facilitate the development and conveyance of an
approximate 38 -acre site within the boundaries of WAS Tustin Specific Plan. The DA
was intended to further the purpose and intent of the General Plan and Specific Plan,
and FEIS/FEIR and will ensure the orderly implementation of infrastructure and
development. The DA includes a schedule of performance and obligations that ensure
adequate local infrastructure programs are in place to support the proposed
development.
RECOMMENDATION:
Have second reading by title only and adoption of Ordinance No. 1471 (roll call vote).
BACKGROUND:
On November 1, 2016, the City Council had first reading by title only of the following
Ordinance:
ORDINANCE NO. 1471
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, APPROVING
DEVELOPMENT AGREEMENT (DA) 2016-001 BETWEEN THE CITY OF TUSTIN
AND FLIGHT VENTURE LLC TO FACILITATE THE DEVELOPMENT OF AN
APPROXIMATELY 870,000 SQUARE FOOT PHASED COMMERCIAL MIXED-USE
DEVELOPMENT WITHIN PORTION OF PLANNING AREA 9-12 OF THE MCAS
TUSTIN SPECIFIC PLAN
ORDINANCE NO. 1471
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, APPROVING DEVELOPMENT AGREEMENT (DA)
2016-001 BETWEEN THE CITY OF TUSTIN AND FLIGHT
VENTURE LLC TO FACILITATE THE DEVELOPMENT OF AN
APPROXIMATELY 870,000 SQUARE FOOT PHASED
COMMERCIAL MIXED-USE DEVELOPMENT WITHIN
PORTION OF PLANNING AREA 9-12 OF THE MCAS TUSTIN
SPECIFIC PLAN
The City Council of the City of Tustin does hereby ordain as follows:
SECTION 1. The City Council finds and determines as follows:
A. That proper application has been submitted by Flight Venture LLC. for
the project, which includes a phased commercial mixed use
development with a retail food hall and conference center consisting of
a total of 870,000 square feet to be developed in two phases on
approximately 38 acre site currently owned by the City of Tustin within a
portion of Planning Areas 9-12 of the MCAS Tustin Specific Plan.
B. That MCAS Tustin Specific Plan Section 4.2.9 requires all private
development at MCAS Tustin to obtain a Development Agreement in
accordance with Section 65864 et seq. of the Government Code and
Sections 9600 to 9619 of the Tustin City Code. In compliance with Tustin
City Code Section 9611, the Tustin Planning Commission must make a
recommendation on the proposed Development Agreement to the City
Council.
C. That a public hearing was duly called, noticed, and held on said
application on September 27, 2016, by the Planning Commission. The
Planning Commission adopted Resolution No. 4321 recommending
that the City Council adopt Ordinance No. 1471.
D. That a public hearing was duly called, noticed, and held on said
application on October 18, 2016, by the City Council. The City Council
continued the item to November 1, 2016.
E. On January 16, 2001, the City of Tustin certified the Program Final
Environmental Impact Statement/Environmental Impact Report
(FEIS/EIR) for the reuse and disposal of MCAS Tustin. On December 6,
2004, the City Council adopted Resolution No. 04-76 approving a
Supplement to the FEIS/EIR for the extension of Tustin Ranch Road
between Walnut Avenue and the future alignment of Valencia North Loop
Road. On April 3, 2006, the City Council adopted Resolution No. 06-43
approving an Addendum to the FEIS/EIR. And, on May, 13, 2013, the
City Council adopted Resolution No. 13-32 approving a second
Ordinance No. 1471
DA 2016-001
Page 2
Addendum to the FEIS/EIR. The FEIS/EIR along with its Addenda and
Supplement is a program EIR under the California Environmental Quality
Act (CEQA). The FEIS/EIR, Addenda and Supplement considered the
potential environmental impacts associated with development on the
former Marine Corps Air Station, Tustin.
An Environmental Checklist (Resolution No. 16-59) has been prepared
and concluded that this action does not result in any new significant
environmental impacts or a substantial increase in the severity of any
previously identified significant impacts in the FEIS/EIR. Moreover, no
new information of substantial importance has surfaced since certification
of the FEIS/EIR.
F. That the Development Agreement can be supported by the following
findings:
1. The project is consistent with the objectives, policies, general
land uses and programs specified in the General Plan and the
MCAS Tustin Specific Plan in that office uses and retail
commercial are permitted uses within a portion of Planning Area
9-12 of Neighborhood E.
2. The project is compatible with the uses authorized in the district
in which the real property is located (Planning Areas 9-12) in that
similar and compatible uses are envisioned within the close
proximity of the project site.
3. The project is in conformity with the public necessity, public
convenience, general welfare, and good land use practices in that
the project would provide for employment center and commercial
development for new and existing Tustin residents thereby
providing additional convenience and choices for employment
and shopping and dining.
4. The project will not be detrimental to the health, safety, and
general welfare. The project will comply with the MCAS Tustin
Specific Plan, Tustin City Code, and other regulations to ensure
that the project will not be detrimental in any way.
5. The project will not adversely affect the orderly development of
property in that the proposed project is orderly, well designed,
and equipped with necessary infrastructure and amenities to
support existing and future residents and businesses in Tustin
Legacy.
Ordinance No. 1471
DA 2016-001
Page 3
6. The project will have a positive fiscal impact on the City in that
the provisions of the proposed Development Agreement and
conditions of approval will ensure that the project will have a
positive fiscal impact on the City.
G. The approval of the Development Agreement shall become null and void
if the Tustin Legacy Disposition and Development Agreement
Cornerstone 1 is not approved..
SECTION 2. The City Council hereby approves Development Agreement 2016-001
attached hereto as Exhibit A and subject to final approval of the City
Attorney.
SECTION 3. Severability. If any section, subsection, sentence, clause, phrase, or
portion of this ordinance is for any reason held to be invalid or
unconstitutional by the decision of any court of competent jurisdiction,
such decision shall not affect the validity of the remaining portions of
this ordinance. The City Council of the City of Tustin hereby declares
that it would have adopted this ordinance and each section, subsection,
sentence, clause, phrase, or portion thereof irrespective of the fact that
any one or more sections, subsections, sentences, clauses, phrases, or
portions be declared invalid or unconstitutional.
PASSED AND ADOPTED, at a regular meeting of the City Council for the City of
Tustin on this 1St day of November, 2016.
JOHN NIELSEN
Mayor
ERICA N. RABE
City Clerk
Ordinance No. 1471
DA 2016-001
Page 4
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF TUSTIN )
ORDINANCE NO. 1471
Erica N. Rabe, City Clerk and ex -officio Clerk of the City Council of the City of Tustin,
California, does hereby certify that the whole number of the members of the City
Council of the City of Tustin is 5; that the above and foregoing Ordinance No. 1471
was duly and regularly introduced at a regular meeting of the Tustin City Council,
held on the 1St day of November, 2016 and was given its second reading, passed,
and adopted at a regular meeting of the City Council held on the day of
2016 by the following vote:
COUNCILMEMBER AYES:
COUNCILMEMBER NOES:
COUNCILMEMBER ABSTAINED:
COUNCILMEMBER ABSENT:
ERICA N. RABE
City Clerk
Published:
EXHIBIT A
Development Agreement 2016-001
CITY OF TUSTIN OFFICIAL BUSINESS
REQUEST DOCUMENT BE RECORDED
AND BE EXEMPT FROM PAYMENT OF A
RECORDING FEE PER GOVERNMENT
CODE 6103 AND 27383
RECORDING REQUESTED BY AND WHEN
RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, California 92780
Attn: City Clerk
Space Above This Line Reserved for Recorder's Use Only
TUSTIN LEGACY CORNERSTONE I DEVELOPMENT AGREEMENT
THIS TUSTIN LEGACY DEVELOPMENT AGREEMENT ("Agreement") is entered
into effective as of the Effective Date (as defined below) by and between the CITY OF TUSTIN,
a California municipal corporation ("City"), and FLIGHT VENTURE LLC, a Delaware limited
liability company (as further defined in Section 1.1.28, "Developer"). The City and Developer are
collectively referred to herein as the "Parties" and individually as a "Party."
RECITALS
A. To strengthen the public planning process, encourage private participation in
comprehensive planning, and reduce the economic risk of development, the Legislature of the
State of California adopted the "Development Agreement Statute," Section 65864 et seq., of the
Government Code. The Development Agreement Statute authorizes the City to enter into an
agreement with any person having a legal or equitable interest in real property and to provide for
development of such property and to establish certain development rights therein. In addition,
Section 4.2.9 of the Specific Plan (as defined below) for MCAS Tustin states: "prior to issuance of
any permits or approval of any entitlements within the Specific Plan area, all private development
shall first obtain a Development Agreement in accordance with Section 65864 et seq. of the
Government Code and Sections 9600 to 9619 of the Tustin City Code." Pursuant to the
authorization set forth in the Development Agreement Statute, the City has enacted procedures for
entering into development agreements which are contained in Tustin City Code Sections 9600 to
9619.
B. The City and Developer intend, concurrently with the execution of this Agreement,
to enter into the Tustin Legacy Disposition and Development Agreement Cornerstone I
(applicable to portions of Neighborhood E, also referred to as Planning Areas 9-12, of the Specific
Plan), as the same may be amended from time to time ("DDA") pursuant to which City shall agree
to sell, and Developer shall agree to buy and develop, certain real property, all as more specifically
set forth in the DDA.
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C. Pursuant to the DDA, Developer has an equitable and/or legal interest in the
Property (as defined below) in that it has the contractual right to purchase the Property from the
City for development of the Project (as defined below) in two phases, comprising Phase 1 and
Phase 2, as further described in the DDA.
D. Pursuant to Government Code Section 65864, the State Legislature has found and
determined that:
"(a) The lack of certainty in the approval of development projects can result in a
waste of resources, escalate the cost of... development to the consumer, and discourage
investment in and commitment to comprehensive planning which would make maximum efficient
utilization of resources at the least economic cost to the public.
(b) Assurance to the applicant for a development project that upon approval of
the project, the applicant may proceed with the project in accordance with existing policies, rules
and regulations, and subject to conditions of approval, will strengthen the public planning process,
encourage private participation in comprehensive planning, and reduce the economic costs of
development."
In accordance with the legislative findings set forth in Government Code Section 65864,
the City wishes to attain certain public objectives that will be furthered by this Agreement. This
Agreement will provide for the orderly implementation of the General Plan of the City ("General
Plan"), and the phased development and completion of the Project in accordance with the DDA
and the Specific Plan (as defined below). This Agreement will further a comprehensive planning
objective contained within the City's General Plan, which is:
"To promote an economically balanced community with complimentary and
buffered land uses to include industrial, commercial, professional, multi -family and single- family
development."
E. The DDA, the Specific Plan and the development under the DDA and the Specific
Plan require a substantial early investment of money and planning and design effort by Developer.
Without the protection provided by this Agreement, uncertainty that the Project may be completed
in its entirety could result in a waste of public resources, escalate the cost of public improvements,
and discourage Developer's participation in those certain public improvements specified in the
DDA and the Specific Plan. Developer's participation in the implementation of the DDA and the
Specific Plan will result in a number of public benefits. These benefits require the cooperation and
participation of the City and Developer and could not be secured without mutual cooperation in
and commitment to the comprehensive planning effort that has resulted in the DDA and the
Specific Plan.
F. Developer wishes to avoid certain development risks and uncertainties that would,
in the absence of this Agreement, deter and discourage Developer from making a commitment to
implement the DDA and the Specific Plan. These are as follows:
1. It is generally the law in California that, absent extraordinary
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circumstances or the approval of a vesting subdivision map, an owner of the land does not obtain a
vested right to improve land until the issuance of a building permit for the improvements and
commencement of substantial construction pursuant to that permit. The result is a disincentive for
landowners to invest monies in the early completion of major infrastructure and other public
improvements as part of any project or in early comprehensive planning and design studies.
2. Development under the DDA and the Specific Plan requires a substantial
early investment of money and planning and design effort by Developer. Uncertainty about City's
land use policies, rules and regulations could result in a waste of private resources, escalate the
cost of certain public improvements, and escalate costs of proposed commercial land uses.
G. The following assurances are of vital concern to Developer to offset or remove the
disincentives and uncertainties set forth in Paragraph F above:
1. Assurance to Developer that, in return for Developer's commitment to the
development of the Property that is contained in the DDA, any approved entitlements, and the
Specific Plan, the City will in turn remain committed to the Existing Entitlement Approvals (as
defined below);
2. Assurances to Developer that as Developer becomes obligated for the costs
of designing and constructing the public and private improvements included in the DDA and the
Specific Plan, and makes dedications, Developer will become entitled to rely upon the Vested
Rights (as defined below) in the development of the Property; and
3. Assurances to Developer that in the City's administration of the Existing
Entitlement Approvals, Developer will be allowed, consistent with the DDA and the Specific Plan,
to develop the commercial land uses and intensities identified in the DDA and the Specific Plan.
These assurances provide for cooperation and participation of the City and Developer and could
not be secured without mutual cooperation in and commitment to the comprehensive planning
effort that has resulted in the DDA and the Specific Plan.
H. The Development Agreement Statute authorizes local agencies to enter into
binding development agreements with persons having legal or equitable interests in real property
for the development of such property. The City wishes to enter into a development agreement with
Developer to secure the Public Benefits (as defined below) and additional consideration described
in this Agreement, and Developer wishes to enter into a development agreement with the City to
avoid the development risks and uncertainties and to obtain the assurances described above.
I. This Agreement is intended to be, and shall be construed as, a development
agreement within the meaning of the Development Agreement Statute. This Agreement is
intended to augment and further the purposes and intent of the Parties in the implementation of the
DDA and the Specific Plan. This Agreement, as a device for the implementation of the Existing
Entitlement Approvals and the Specific Plan, will eliminate uncertainty in planning for and secure
the orderly development of the Project, ensure a desirable and functional community environment,
provide effective and efficient development of public facilities, infrastructure, and services
appropriate for the development of the Project, assure attainment of the maximum effective
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utilization of resources within the City, and provide other significant public benefits to the City
and its residents by otherwise achieving the goals and purposes of the Development Agreement
Statute. In exchange for these benefits to the City, Developer desires to receive the assurance that
it may proceed with development of the Project in accordance with the terms and conditions of this
Agreement and the Applicable Rules, all as more particularly set forth herein.
J. The City has determined that this Agreement and the Project are consistent with the
General Plan and the Specific Plan and that this Agreement complies with the findings established
by Tustin City Code Section 9611, in that the Agreement:
1. Is consistent with the objectives, policies, general land uses and programs
specified in the General Plan and the Specific Plan.
2. Is compatible with the uses authorized in the district in which the real
property is located (variously described as Planning Area 9-12 and Neighborhood E of the Specific
Plan). Note: the Project (as defined below) complies with the uses authorized by the Specific
Plan.
3. Is in conformity with the public necessity, public convenience, general
welfare, and good land use practices. Note: the Project will enhance community development,
provide commercial and retail uses within walking distance of existing and planned housing,
support economic development and activity in the vicinity of the Project.
4. Will not be detrimental to the health, safety, and general welfare. Note:
compliance with the Specific Plan, Tustin City Code, and other regulations will ensure that the
Project will not be detrimental in any way.
5. Will not adversely affect the orderly development of property. Note: the
Project is orderly and well designed.
6. Will have a positive fiscal impact on the City. Note: the provisions of the
DDA will ensure that the Project will have a positive fiscal impact on the City.
K. On September 27, 2016, the Planning Commission held a public hearing on this
Agreement, made certain findings and determinations with respect thereto, and recommended to
the City Council of the City that this Agreement be approved. On 2016, the City
Council held a public hearing on this Agreement, considered the recommendations of the Planning
Commission, and adopted Ordinance No. approving this Agreement and authorizing its
execution.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals, which are incorporated herein
by this reference, and for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
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DEFINITIONS AND EXHIBITS.
1.1 Definitions. The following terms when used in this Agreement shall be defined as
follows:
Any capitalized word or term used in this Agreement shall have the definition or meaning
ascribed to such word or term as provided in the DDA, unless the word or term is expressly
provided in this Section 1.1 of this Agreement or otherwise expressly defined in this Agreement, in
which event such word or term shall have the definition or meaning as provided herein. All
capitalized terms not specifically defined in the DDA or this Agreement shall be interpreted by the
Director of Community Development of the City.
1.1.1 "Action" is defined in Section 9.10.
1.1.2 "AD/CFD" is defined in Section 3.1.1.
1.1.3 "Administrative Amendment" is defined in Section 2.5.2.
1.1.4 "Agreement" is defined in the introductory paragraph.
1.1.5 "Applicable Rules" means (a) the Existing Land Use Regulations of the
City; (b) the Future Rules that are not in conflict (as defined in Section 3.6.2) with the Vested
Rights; (c) the Future Rules made applicable to the Project and/or the Property pursuant to
Section 3.6.2 or Section 3.10; (d) the Existing Entitlement Approvals, and (e) the Subsequent
Entitlement Approvals to which the Project and/or the Property or development and use thereof are
made subject to pursuant to the terms of this Agreement.
1.1.6 "Applications" is defined in Section 3.11.2.
1.1.7 "Approved Plans" mean, collectively: (a) the Existing Entitlement
Approvals which govem development of improvements on the Property, including approval of
plans by the City in its Governmental Capacity pursuant to the Concept Plan and Design Review
process; (b) the Basic Concept Plans approved by the City in its Proprietary Capacity pursuant to
Section 8.4.7 of the DDA; and (c) approval by the City of construction levels drawings as required
to obtain the Entitlement Approvals.
1.1.8 "Approved Transfer" is defined in Section 2.4.
1.1.9 "Basic Concept Plan" means the submittals by Developer to the City for
purposes of satisfaction of the Concept Plan and Design Review approval and shall include the
Phasing and proposed product mix, 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.)
1.1.10 "Building" means each building and structure on the Property.
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1.1.11 "Building Pad" means any legally subdivided lot comprising a portion of
the Property (other than parcels for roadways to be owned by a property owners' association) and
proposed to be owned by a Person (as defined below) other than the City.
1.1.12 "Business Day(s)" means any day on which City Hall is open for business
and shall specifically exclude Saturday, Sunday or a legal holiday.
1.1.13 "CC&Rs" means a set of covenants, conditions and restrictions required by
the Entitlement Approvals to be prepared by Developer, approved by the City and recorded against
the Property.
1.1.14 "Certificate" is defined in Section 4.4.
1.1.15 "Certificate of Compliance" means a certificate to be issued with respect to
each Phase upon Completion by Developer of all of the Improvements and satisfaction of all
additional Conditions Precedent thereto with respect to the Property or relevant portion of the
Property pursuant to the provisions of the DDA. The term Certificate of Compliance shall mean
and include a Partial Certificate of Compliance issued as to any Building Pad as further provided
by the DDA.
1.1.16 "City" is defined in the introductory paragraph.
1.1.17 "City Manager" means Mr. Jeffrey Parker, or his successor in such
capacity, or other designee as identified in writing by the City Manager.
1.1.18 "City Processing Fees" means (a) all fees and charges imposed by the City
under the then current regulations for processing applications and requests for permits, approvals,
and other actions and monitoring compliance with any permits issued or approvals granted,
including all applicable processing and permit fees to cover the reasonable cost to the City of (i)
processing and reviewing applications and plans for any Entitlement Approvals, site review and
approval, administrative review, and similar fees imposed to recover the City's costs associated
with processing, reviewing, and inspecting Project applications, plans and specifications, (ii)
inspecting the work constructed or installed by or on behalf of Developer, and (iii) monitoring
compliance with any requirements applicable to Development of the Project, and (b) all costs
incurred by the City in the performance of necessary studies and reports in connection with the
foregoing and its obligations under this Agreement.
1.1.19 "Claiming Party" is defined in Section 9.11.1.
1. 1.20 "Common Area Improvements" mean the driveways, parking lots, internal
street lighting, Parcel perimeter landscaping and open space plazas as approved in the Approved
Plans, as will be further described in the CC&Rs.
1.1.21 "Complete" and "Completion" mean with respect to the Project or, if the
Project is constructed in Phases, with respect to a given Phase, or if a Building Pad is eligible for its
own Certificate of Compliance, such Building Pad, the point in time when all of the following shall
have occurred with respect to the Project, such Phase or such Building Pad: (a) the Improvements
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with respect thereto have been substantially completed in accordance with the DDA; (b) the
issuance of a certificate of occupancy for core and shell, exterior staircase and balcony systems
and common restrooms by the City or, to the extent a certificate of occupancy is not required by or
available from the City for a particular Improvement, the equivalent inspection, signoff or other
permit activity with respect to such Improvement, (c) the Recording of a Notice of Completion
(California Civil Code Section 3043) by Developer or such Party's contractor; (d) a certification
by the Project Architect that such Improvements (with the exception of minor "punch list" items)
have been completed in a good and workmanlike manner and substantially in accordance with the
Approved Plans and specifications; and (e) all contractors, subcontractors, laborers, suppliers,
Architects, and engineers who performed work on the relevant Improvements either (i) shall have
been paid in full and shall have executed final unconditional lien waivers or (ii) any mechanic's
and/or materialmen's liens that have been recorded or stop notices that have been delivered have
been paid, settled or otherwise extinguished, discharged, released, waived, bonded around or
insured against, or (iii) the statutory period for filing liens with respect to such Improvements shall
have expired without any liens being filed.
1. 1.22 "Concept Plan and Design Review" mean collectively the concept plan
review required by the Specific Plan and the site plan and design review approvals required by the
City Code, which shall be part of the Entitlement Approvals.
1.1.23 "Costs" is defined in Section 9.10.
1. 1.24 "Damages" is defined in Section 5.3.
1. 1.25 "DDA" is defined in Recital B.
1.1.26 "Decision" is defined in Section 9.10.
1. 1.27 "Defaulting Party" is defined in Section 5.1.
1.1.28 "Developer" is defined in the introductory paragraph and includes each and
every Successor In Interest of Developer.
1. 1.29 "Development Agreement Statute" is defined in Recital A.
1.1.30 "Development Permits" means all ministerial permits, certificates and
approvals which may be required by the City or any other Governmental Authority for the
development and construction of the improvements for the Project, including any engineering
permits, grading permits, foundation permits, construction permits, encroachment permits,
building permits or other permits as may be necessary pursuant to Chapter 4 of the Specific Plan
and/or the City Code and which shall be obtained and maintained in each case in accordance with
this Agreement, the DDA, the Applicable Rules and any required environmental mitigation.
1.1.31 "Effective Date" means the date that is thirty (30) days after the date of
approval (second reading) by the City Council of the City's ordinance approving this Agreement.
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1.1.32 "EIR" means the Final Environmental Impact Statement/Final
Environmental Impact Report for the Disposal and Reuse of MCAS Tustin (Final EIS/EIR) and
Mitigation Monitoring and Reporting Program for the Final EIS/EIR adopted by the City on
January 16, 2001 as subsequently modified and supplemented, including by one or more
supplements and addenda to the Final EIR/EIS approved by the City.
1.1.33 "End User" means a Person operating a business in any Improvement
including any Building or leasable space within a Building, whether such Person holds a fee
interest in a Building Pad, a ground leasehold interest in a Building Pad, or is leasing office or
other space in a Building.
1.1.34 "Entitlement Approvals" means all discretionary land use approvals and
entitlements including Specific Plan amendments, tentative and final parcel and tract maps,
Conditional Use Permits, preliminary and master sign programs, minor modification for increased
building height, the Concept Plans and Design Review approvals as may be applicable for
proposed specific uses(s) in connection with development of the Property and all conditions of
approval legally required by the City and any other Governmental Authority as a condition to
subdivision of the Property, development of the Property, and construction of the improvements in
accordance with this Agreement. Entitlement Approvals shall be comprised of the Existing
Entitlement Approvals and the Subsequent Entitlement Approvals.
1.1.35 "Existing Entitlement Approvals" means all Entitlement Approvals
approved or issued prior to the Effective Date and including the approvals listed on Exhibit "D" to
this Agreement, which are a matter of public record on the Effective Date.
1.1.36 "Existing Land Use Regulations" means the Land Use Regulations in effect
on the Effective Date, including the General Plan, the Tustin City Code, the Specific Plan, and all
other ordinances, resolutions, rules, and regulations of the City governing development and use of
the Property in effect as of the Effective Date.
Section 9.11.2.
1.1.37 "Force Majeure Delay" is defined in Section 9.11.1 as limited by
1.1.38 "Future Rules" is defined in Section 3.6.2.
1.1.39 "GBA" means the gross square footage of buildings calculated in
accordance with the Existing Land Use Regulations.
1. 1.40 "General Plan" is defined in Recital D.
1.1.41 "Governmental Authority" 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, college and/or school district, joint powers authority or other political or public entity) or
departments thereof having or exercising jurisdiction over the Parties, the Project, the Property or
other property upon which Developer is obligated to construct Improvements or such portions of
the foregoing as the context indicates.
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1. 1.42 "Governmental Capacity" means the exercise by the City of its
governmental authority with respect to any matter related to this Agreement which 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 functions of each pursuant to federal, state or local law.
1. 1.43 "Governmental Requirements" mean all laws, statutes, codes, ordinances,
rules, regulations, standards, guidelines and other requirements issued by any Governmental
Authority having jurisdiction over, governing, applying to or other affecting the Parties, the
Project, the Improvements, the Property and/or other property upon which Developer is obligated
to construct Improvements or any component thereof and including the City Code, the Specific
Plan, the Entitlement Approvals, the Development Permits and the Approved Plans, in all events
subject to the terms of this Agreement.
1.1.44 "Horizontal Improvements" means (a) the Minimum Horizontal
Improvements and (b) all grading work, infrastructure improvements and utilities required to be
constructed or installed on or in connection with the development of the Property as further
described in the Scope of Development attached as Attachment 8 to the DDA and depicted on
Attachment 9 to the DDA comprised of: (i) on-site and off-site infrastructure improvements
including roadways, drives, alleyways, sidewalks, curb cuts and landscaping, (ii) development of
and/or upgrade to existing utility infrastructure (whether on-site or off-site) required to serve the
portion of the Property then under development to the boundary of each Building Pad,
(iii) Common Area Improvements on the Parcel then under development and (iv) all dry and wet
utility extensions sidewalks and drives, walls, fences and landscaping on a Building Pad, and shall
include all improvements required by Parcel Map No. 2015-168 and Vesting Tentative Tract Map
No. 18003, each and every Entitlement condition and Development Permit and all other
Governmental Requirements as a condition to development of the Project, all as generally depicted
on Attachment 3 (including Attachment 3A and Attachment 313, if applicable) to the DDA.
1. 1.45 "Improvements" means the Horizontal Improvements and the Vertical
Improvements.
1. 1.46 "Landscape Installation and Maintenance Agreement" means that certain
agreement pursuant to which Developer agrees to undertake the landscape and maintenance
obligations set forth therein for the benefit of the City.
1. 1.47 "Land Use Regulations" means all laws, statutes, ordinances, resolutions,
codes, orders, rules, regulations and official policies of the City governing the development and
use of land, including the permitted uses of the Property, the density or intensity of use,
subdivision requirements, timing and phasing of development, the maximum height and size of
proposed buildings, and the provisions for reservation or dedication of land for public purposes.
1.1.48 "License Agreements" means one or more limited licenses issued to
Developer by the City upon City -owned property for purposes of construction, including grading,
construction of the Minimum Horizontal Improvements, and installation of utilities on the Phase 2
Parcel, and provision of Phase 1 construction parking on the Phase 2 Parcel.
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1. 1.49 "Minimum Horizontal Improvements" means that portion of the Horizontal
Improvements comprised of (a) the rough grading work for Phase 1 and the precise grading work
for the Phase 1 Improvements; (b) those certain on-site and off-site above -grade and below -grade
infrastructure improvements and utilities and utility systems required to be constructed or installed
on or in connection with the development of the Property as further described as the "Minimum
Horizontal Improvements" set forth in the Scope of Development attached as Attachment 8 to the
DDA (as the same may be further depicted on Attachment 9 to the DDA) and (c) the Minimum
Landscape Improvements.
1.1.50 "Minimum Landscape Improvements" means the landscaping and
hardscaping improvements required to be built in connection with Phase 1 pursuant to the
Landscape Installation and Maintenance Agreement in the locations depicted on the exhibit to the
Landscape Installation and Maintenance Agreement depicting such improvements.
1.1.51 "Mortgage" means any indenture of mortgage or deed of trust,
hypothecation, pledge, assignment for security purposes, bond, grant of taxable or tax exempt
funds from a governmental agency or other security interest affecting the Property or any portion
thereof or any documents constituting or relating to a sale-leaseback transaction, together with all
loan documents related thereto, but excluding any community facilities districts, assessment
districts, landscape and lighting districts or other assessments created or imposed by any
Governmental Authority.
1. 1.52 "Mortgagee" means any mortgagee, beneficiary (or any agent for one or
more 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 the Property or any
portion thereof which is the subject of a sale-leaseback transaction, the Person acquiring fee title.
1.1.53 "Non -Defaulting Party" is defined in Section 5.1.
1. 1.54 "Option" means the Developer's option to acquire the Phase 2 Property, as
further provided by the DDA.
1.1.55 "Option Year" means each successive twelve (12) month period obtained
pursuant to the Option provisions of the DDA.
1. 1.56 "Other Agreements" mean the Quitclaim Deed(s), the Special Restrictions,
the Memorandum of DDA, the Landscape Installation and Maintenance Agreement, the CC&Rs,
and the License Agreements.
1. 1.57 "Parcel" means individually, either the Phase 1 Parcel or the Phase 2 Parcel.
1. 1.58 "Parcels" means, collectively, the Phase 1 Parcel and the Phase 2 Parcel.
1. 1.59 "Party" and "Parties" are defined in the introductory paragraph.
1. 1.60 "Person" means an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
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unincorporated association, Governmental Authority, governmental agency or other entity,
domestic or foreign.
1. 1.61 "Phase" means Phase 1 or Phase 2, individually.
1.1.62 "Phase 1" means the development authorized and/or required by the
Entitlement Approvals in connection with the development of the Improvements upon the
Property that will, upon recording thereof, comprise Parcel 1 of Parcel Map No. 2015-168,
including the Phase 1 Horizontal Improvements and the Public Benefits set forth on Exhibit "C".
1. 1.63 "Phase 1 Horizontal Improvements" mean the Horizontal Improvements
required in connection with development, construction and operation of the Phase 1 Project which
shall include the entirety of the Minimum Horizontal Improvements.
1. 1.64 "Phase 1 Parcel' means Parcel 1 of Parcel Map No. 2015-168, as the same
is legally described on Exhibit "A" and depicted on Exhibit "B".
1.1.65 "Phase 1 Term" is defined in Section 2.3.1(a).
1.1.66 "Phase 2" means the development authorized and/or required by the
Entitlement Approvals in connection with the development of the Improvements upon the
Property that will, upon recording thereof, comprise Parcel 2 of Parcel Map No. 2015-168,
including the Phase 2 Horizontal Improvements and the Public Benefits set forth on Exhibit "C" to
the extent same are not completed as part of Phase 1.
1.1.67 "Phase 2 Horizontal Improvements" mean the Horizontal Improvements
required in connection with development, construction and operation of the Phase 2 Project, which
shall include the Minimum Horizontal Improvements to the extent the same are not completed by
Developer of Phase 1 in accordance with the requirements of the DDA or this Agreement.
1. 1.68 "Phase 2 Parcel' means Parcel l of Parcel Map No. 2015-168, as the same
is legally described on Exhibit "A" and depicted on Exhibit `B".
1.1.69 "Phase 2 Term" is defined in Section 2.3.1(b).
1. 1.70 "Phases" means Phase 1 and Phase 2, collectively.
1. 1.71 "Plan Check and Inspection Fees" means the fees and costs incurred by the
City with respect to its provision of Plan Check and Inspection Services for the Project, which
shall be billed to Developer by City and paid by Developer to City in accordance with
Section 3.13.1(b) of this Agreement.
1. 1.72 "Plan Check and Inspection Services" means the services performed by
City staff and its third party inspectors, engineers and consultants, if any, to carry out and complete
plan check, perform inspections, and monitor Developer compliance with the Applicable Rules, as
needed for review and issuance of encroachment permits, excavation permits, grading permits,
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mechanical, electrical and plumbing permits and building permits requested by Developer in
connection with the Project.
1.1.73 "Prevailing Party" is defined in Section 9.10.
1.1.74 "Project" means the development of the Property contemplated by the
Entitlement Approvals (as such Entitlement Approvals may be further defined, enhanced or
modified pursuant to the provisions of this Agreement), which provide for a phased commercial
development consisting of up to 870,000 GBA of office, retail, conference and/or other
commercial development, together with ancillary parking and landscaping amenities, in all cases
not exceeding the maximum heights allowed by the Entitlement Approvals.
1. 1.75 "Project Fair Share Contribution" means the fair share of the Tustin Legacy
Backbone Infrastructure Program to be contributed by Developer with respect to the Project, as
further described in the DDA.
1. 1.76 "Property" means the real property described on Exhibit "A" and shown on
Exhibit `B" to this Agreement, which is described and depicted in two Phases --Phase 1 and Phase
2.
1.1.77 "Proprietary Capacity" means the capacity of the City as owner, lessor,
assembler, redeveloper and/or seller of property only.
1.1.78 "Public Benefit Improvements" shall have the meaning set forth in
Exhibit "C."
1.1.79 "Public Benefits" means those public benefits to be provided by the
Developer and the Project as described in Section 3.1 and 3.20 of this Agreement that comprise
enforceable additional consideration to the City for this Agreement.
1.1.80 "Reacquired Property" means all or any portion of the Phase 1 Parcel or
Phase 2 Parcel (as applicable), (b) any Improvements thereon, (c) all Entitlement Approvals and
other development rights, consents, authorizations, variances, waivers, licenses, permits,
certificates and approvals from any governmental or quasi -governmental authority, as applicable
and (d) all other appurtenant rights applicable to the respective Property, including the interest in
any ground leases encumbering the respective Property that is repurchased by the City pursuant to
Section 16.3 of the DDA or that reverts to the City pursuant to Section 16.4 of the DDA.
1. 1.81 "Reservation of Authority" means the rights and authority excepted from
the assurances and rights provided to Developer under this Agreement and reserved to the City
under Section 3.10.
1. 1.82 "Roadway and Utility Easement Agreement" means that certain reciprocal
easement agreement executed by the Parties, acknowledged and in Recordable form and in form
and substance acceptable to Developer and City, each in its sole discretion, granting reciprocal
easements for vehicular ingress and egress, utility access, and construction of uncapped roadway
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and related landscaping, across that portion of the Property depicted on Attachment 21 of the
DDA.
1.1.83 "Scope of Development" means the description of the Project and
Improvements attached as Attachment 8 to the DDA.
1.1.84 "Schedule of Performance" means the document attached as Attachment 7
to the DDA, setting forth the dates and time periods for submissions, approvals and actions,
including the construction and Completion of the Improvements
1.1.85 "Second Party" is defined in Section 9.11.3.
1.1.86 "Specific Plan" means the City's MCAS Tustin Specific Plan/Reuse Plan,
as amended, and as the same may be further amended from time to time.
1. 1.87 "State" means the State of California.
1.1.88 "Subsequent Entitlement Approvals" means Entitlement Approvals, if any,
approved by the City subsequent to the Effective Date in connection with development of the
Property or the Project.
1.1.89 "Successor In Interest" means any Person having a legal or equitable
interest in the whole of the Property, or any portion thereof.
1. 1.90 "Tax A" is defined in Section 3.1.1(a).
1.1.91 "Tax B" is defined in Section 3.1.1(b).
1. 1.92 "Term" means with respect to Phase 1, the Phase 1 Term, and with respect
to Phase 2, the Phase 2 Term.
1. 1.93 "Tustin City Code" means the municipal code of the City of Tustin.
1.1.94 "Tustin Legacy Backbone Infrastructure Program" means the program
adopted by the City to finance and construct Tustin Legacy backbone infrastructure located off of
the Property, including Tustin Legacy roadway improvements; traffic and circulation mitigation to
support the Tustin Legacy project; domestic and reclaimed water; sewer; telemetry; storm drains
and flood control channels; utilities backbone (electricity, gas, telephone, cable,
telecommunications, etc.) (as such program is in effect as of the Effective Date).
1. 1.95 "Vertical Improvements" means all of the Buildings, landscaping and other
improvements (including, among other things, parking lots and parking structures), other than the
Horizontal Improvements, to be constructed or installed on the Property, consistent with the
Specific Plan, the Reuse Plan, the Approved Plans, the Entitlement Approvals, the Design
Guidelines and the Development Permits and as further described in the DDA.
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1.1.96 "Vested Rights" means the rights granted to Developer pursuant to this
Agreement upon its acquisition of each Phase of the Property to develop the Property so acquired
in accordance with, and subject to the terms and conditions of this Agreement, the Existing
Entitlement Approvals and any Subsequent Entitlement Approvals approved by the City and made
applicable to the Property pursuant to the terms of this Agreement.
1.2 Exhibits. The following documents are attached to, and by this reference made a
part of, this Agreement:
Exhibit "A" — Legal Description of the Property (Phase 1 and Phase 2)
Exhibit "B" — Map Showing Property (Phase 1 and Phase 2)
Exhibit "C" — Public Benefit Improvements
Exhibit "D" — Existing Entitlement Approvals
2. GENERAL PROVISIONS.
2.1 Binding Effect of Agreement. The Property is hereby made subject to this
Agreement. Development of the Property is hereby authorized and shall be carried out only in
accordance with the terms of this Agreement.
2.2 Interests in Property. The City and Developer agree that Developer's right to
acquire the Property pursuant to the DDA creates a sufficient legal and/or equitable interest in
order to enter into this Agreement. If Developer fails to acquire any portion of the Property, then
this Agreement shall automatically no longer be effective as to such portion of the Property
concurrently with the date upon which Developer's rights to acquire such portion of the Property
expire.
2.3 Term.
2.3.1 The term of this Agreement shall commence on the Effective Date and shall
extend as to each Phase for the period set forth below, unless otherwise extended by the parties in
writing or earlier terminated in accordance with the provisions of this Agreement:
(a) with respect to Phase 1, the term (the "Phase 1 Term") shall
terminate upon the date that is five (5) years from the Effective Date, as such date may be
automatically extended during the period of any Force Majeure Delay established pursuant to
Section 9.11, provided that in no event, after taking into account any such Force Majeure Delay,
shall the Phase 1 Term be extended beyond the eighth (8th) anniversary of the Effective Date; and
(b) with respect to Phase 2, the term (the "Phase 2 Term") shall
terminate upon the occurrence of any of the following dates, provided that in no event, after taking
into account any Force Majeure Delay, shall the Phase 2 Term be extended beyond the fifteenth
(15th) anniversary of the Effective Date:
(i) the date upon which the Option terminates without exercise thereof,
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or
(ii) if the Option is exercised in the first through eighth Option Year, the
date that is four (4) years from the date of exercise of the Option, as such date
may be automatically extended during the period of any Force Majeure Delay
established pursuant to Section 9.11, for a maximum of three (3) additional
years; or
(iii) if the Option is exercised after the eighth Option Year, the date that
is thirteen (13) years from the Effective Date; as such date may be automatically
extended during the period of any Force Majeure Delay established pursuant to
Section 9.11 for a maximum of two (2) additional years.
2.3.2 Notwithstanding any other provision of this Agreement, unless otherwise
agreed by the Parties in writing, this Agreement shall automatically terminate upon the date that is
one hundred and eighty (180) days following the Effective Date if the DDA has not then been
executed by the City and Developer.
2.3.3 Notwithstanding the provisions of Section 2.3.1(b)(1), in the event the
Option terminates pursuant to the terms of the DDA prior to exercise thereof by the Developer
pursuant to the terms of the DDA, the City shall have the right to unilaterally extend the Phase 2
Term without approval of the Developer and if the City reacquires any portion of the Property the
City shall have the right to unilaterally extend the Term with respect to the portion of the Property
it has so acquired.
2.4 Assi nment. Any attempt to convey, assign or transfer any right or interest in this
Agreement except in strict compliance with this Section 2.4 shall be null and void and of no force
and effect. A conveyance, assignment or transfer carried out in accordance with this Section 2.4
and approved by the City as required by this Section 2.4 is referred to herein as an "Approved
Transfer".
2.4.1 Assignment and Notification. The rights, interests and obligations
conveyed and provided herein to Developer benefit and are appurtenant to the Property.
Developer has the right to sell, assign and transfer any and all of its rights and interests and to
delegate any and all of its duties and obligations hereunder subject to and in accordance with the
following conditions:
(a) Prior to the recordation of the Certificate of Compliance for each
Phase (or, if applicable, Building Pad), the rights and interests of Developer under this Agreement
as to such Phase (or, if applicable, Building Pad) may not be Transferred except in strict
compliance with the provisions of Section 2 of the DDA, which are incorporated herein by this
reference as though fully set forth in this Agreement, and, to the extent required thereby,
Developer shall secure the written consent of the City to each such Transfer.
(b) From and after recordation of the Certificate of Compliance for
each Phase (or, if applicable, Building Pad), the rights and interests of Developer under this
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Agreement as to such Phase (or, if applicable, Building Pad) may not be conveyed, assigned, or
transferred without the written consent of the City to each such conveyance, assignment or
transfer, which consent of the City shall not be unreasonably withheld or delayed.
(c) The rights and interests of Developer under this Agreement with
respect to a Phase may be conveyed, transferred or assigned only as an incident of the conveyance,
transfer or assignment of the portion of the Property to which they relate, including any transfer or
assignment pursuant to a foreclosure of a Mortgage or a deed in lieu of a foreclosure;
(d) Prior to conveyance, assignment or transfer of the rights and
interests of Developer under this Agreement in connection with the conveyance of the Property or
a portion thereof, Developer shall notify the City in writing of each conveyance, assignment or
transfer of the portions of the Property to which the conveyance, assignment or transfer will be
appurtenant, and the name and address (for purposes of notices hereunder) of the transferee or
assignee, together with the corresponding Building Pads;
(e) The assignee or transferee shall assume all of Developer's
obligations under this Agreement and the Entitlement Approvals as they relate to the portion of the
Property so assigned and/or transferred, which shall include, for avoidance of doubt: (1) all such
obligations expressly applicable to the portion of the Property and the Project acquired by such
assignee or transferee; (2) all obligations imposed by this Agreement and the Entitlement
Approvals as a condition to construction of the Project, including completion of the Public
Benefits, to the extent applicable to or a requirement of development of the portion of the Property
and the Project so acquired; (3) the requirement to satisfy all other conditions under this
Agreement, the DDA, the Other Agreements and the Entitlement Approvals applicable to the
development of the portion of the Property and the Project so acquired; and (4) all obligations
imposed on "Developer" under this Agreement and all conditions imposed by the Entitlement
Approvals to the extent applicable to the portion of the Property so acquired or as a requirement
thereof, whether or not specifically identified as applicable to the Phase or portion of the Project so
acquired (collectively, the "Transferred Obligations"); provided, however, that nothing in this
subsection (e) shall require the assignee or transferee of a portion of the Project constituting less
than an entire Phase (such as a transferee of one Building Pad) to assume any obligations of
Developer that Developer expressly retains pursuant to the terms of the assignment or transfer
agreement between the Developer and the assignee/transferee; and
(f) The assignee or transferee shall have entered into an Assignment
Agreement if required by the DDA.
2.4.2 Subiect to Terms of Agreement. Following a conveyance, assignment or
transfer of any of the rights and interests of Developer set forth in this Agreement in accordance
with Section 2.4.1, the assignee's or transferee's exercise, use, and enjoyment of the Property shall
be subject to the terms of this Agreement to the same extent as if the assignee or transferee were
Developer.
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2.4.3 Release of Developer Upon Transfer. Notwithstanding the conveyance,
assignment or transfer of portions or all of the Property or rights or interests under this Agreement,
Developer shall continue to be obligated under this Agreement with respect to Developer's
obligations and the other duties and obligations of Developer under this Agreement unless and
until released or partially released by the City in writing, which release or partial release shall
apply only with respect to obligations of Developer following the effective date of the assignment
or Transfer and shall be granted by the City only upon the full satisfaction by Developer of each
and every one of the following conditions:
(a) Developer is not then in default under this Agreement;
(b) The City has consented to the assignment or transfer if required
under Section 2.4.1 of this Agreement;
(c) The assignment or transfer is not a Transfer to an Affiliate or other
Transfer or Transfer of Control for which the DDA expressly provides that Developer shall not be
released from its obligations under the DDA;
(d) The conveyance, assignment or transfer conveys, assigns or
transfers all of Developer's interest in the portion of the Property being transferred, the DDA and
the Other Agreements (to the extent then applicable to such portion of the Property) and this
Agreement, including the Transferred Obligations applicable thereto;
(e) The assignee or transferee has assumed in writing all duties and
obligations as to which Developer is requesting to be released pursuant to an assignment and
assumption agreement approved by the City; and
(i) The assignee or transferee is financially able to assume the
obligations proposed for assignment and has demonstrated to the reasonable satisfaction of the
City that adequate resources have been committed to the full performance of such obligations.
2.4.4 Effect of Right of Repurchase or Right of Reversion. In the event the City
exercises its Right of Reversion or Right of Repurchase, then effective upon the date of acquisition
by the City of the Reacquired Property, such reversion shall release the Developer previously
owning the Reacquired Property from (a) all prospective liability and obligations of Developer
under this Agreement applicable to the Reacquired Property and (b) only as and to the extent set
forth in the DDA, including Sections 16.3.4 and 16.4.5 thereof, those obligations and liabilities
that predate the date of acquisition by the City of the Reacquired Property.
2.5 Amendment or Cancellation of Agreement.
2.5.1 Generally. This Agreement may be amended or cancelled in whole or in
part only in the manner provided for in Government Code Section 65865.1 or 65868 and Tustin
City Code Section 9615. This provision shall not limit any remedy of the City or Developer as
provided by this Agreement. Any Party may propose an amendment to or cancellation, in whole or
in part, of this Agreement. Any amendment or cancellation shall be by mutual consent of the
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Parties except as provided otherwise in this Agreement, in Government Code Section 65865.1, or
in the Tustin City Code.
2.5.2 Administrative Amendments. Any amendment to this Agreement which
does not relate to (a) the Term of this Agreement, (b) permitted uses of the Project, (c) provisions
for the reservation or dedication of land, (d) the conditions, terms, restrictions and requirements
relating to Subsequent Entitlement Approvals of the City, (e) revisions to Public Benefits (other
than to the time for performance of such Public Benefits) or (f) monetary exactions of Developer,
shall be considered an "Administrative Amendment"; notwithstanding anything to the contrary
contained herein, changes to definitions and/or references to Exhibits and/or Attachments
necessary or helpful to conform this Agreement to the provisions of the DDA (as the DDA may be
amended from time to time) shall be considered Administrative Amendments and may be
approved in accordance with this Section 2.5.2. The City Manager or his or her designee is
authorized to execute Administrative Amendments on behalf of the City and no action by the City
Council (e.g. noticed public hearing) shall be required before the Parties may enter into an
Administrative Amendment. The determination of whether a proposed amendment is an
Administrative Amendment as defined in this Section 2.5.2 shall be made in the sole judgment of
the City Manager, or designee, and the City Manager, or designee, reserves the right to refer any
matter to the City Council and/or to require a noticed public hearing on a proposed Administrative
Amendment in which event the City's Planning Commission shall conduct a noticed public
hearing to consider whether the proposed Administrative Amendment should be approved or
denied, and shall make a recommendation to the City Council on the matter. In such event, the
City Council shall conduct a noticed public hearing to consider the request and the Planning
Commission's recommendation on the matter. At the conclusion of the public hearing, the City
Council may approve, deny, or conditionally approve the amendment.
2.5.3 Consent to Amendments. In the case of amendments affecting portions of
the Property, only the consent of the owner of such portion of the Property shall be required so
long as the amendment does not diminish the rights appurtenant to or increase the burdens upon
any other portion of the Property. Any Future Rule applicable pursuant to this Agreement and any
amendment of the City Land Use Regulations including to the General Plan, applicable Specific
Plan or the City's zoning ordinance, shall not require amendment of this Agreement. Instead, any
such amendment shall be deemed to be incorporated into this Agreement at the time that such
amendment is approved by the appropriate City decision maker, so long as such amendment is
consistent with this Agreement.
2.5.4 Termination.
(a) This Agreement, or the portion thereof so affected, shall be deemed
terminated and of no further effect upon the occurrence of any of the following events:
(i) As to Phase 1, expiration of the Phase 1 Term as set forth in
Section 2.3.1(a);
(ii) As to Phase 2, expiration of the Phase 2 Term as set forth in
Section 2.3.1(b);
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(iii) As to both Phase 1 and Phase 2, pursuant to the provisions of
Section 2.3.2;
(iv) Prior to the termination in clause (i) or (ii) of this
subsection (a), upon entry of a final courtjudgment not subject to further appeal
setting aside, voiding or annulling the adoption of the City ordinance approving
this Agreement;
(v) The adoption of a referendum measure overriding or
repealing the City ordinance approving this Agreement where such measure is
not subject to further appeal;
(vi) As to each Phase or other portion of the Property for which a
Certificate of Compliance is sought pursuant to the DDA, upon Completion of
the entirety of the Project and the Public Benefits required in connection with
such Phase in accordance with the terms of this Agreement, the DDA, the
Entitlement Approvals and the Applicable Rules, including issuance of all
required occupancy permits and acceptance by the City or applicable public
agency of all required public improvements and dedications, compliance with
all obligations of Developer under this Agreement and City issuance of a
Certificate of Compliance pursuant to the DDA, the City Manager shall have
the authority in his or her sole discretion to terminate this Agreement as to the
Phase or other portion of the Property for which the Certificate of Compliance
has been recorded;
(vii) Due to termination by the City in accordance with
Section 4.3 or Section 5; or
(viii) Upon mutual written agreement of the City and Developer.
(b) The City shall have the right, but not the obligation, to terminate this
Agreement as to the portion of the Property re -acquired by it pursuant to the Right of Repurchase,
the Right of Reversion or any action in lieu thereof pursuant to the DDA.
(c) Termination of this Agreement shall not constitute termination of
any other Entitlement Approvals for the Property. Upon the termination of this Agreement as to
any portion of the Property, no Party shall have any further right or obligation hereunder with
respect to such portion of the Property except with respect to any obligation to have been
performed prior to such termination or with respect to any default in the performance of the
provisions of this Agreement which has occurred prior to such termination or with respect to any
obligations which are specifically set forth as surviving this Agreement. The City and Developer
shall cooperate, at no cost to the City, in executing in recordable form any document that the City
has approved to confirm the termination of this Agreement as to any such portion of the Property.
2.6 Notices, Demands and -Communications between the Parties. All notices,
demands, consents, requests and other communications required or permitted to be given under
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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 United States mail via certified mail, return receipt requested, postage prepaid, and
addressed to the other Party as set forth below; or (c) the next Business Day after such notice has
been deposited with a national overnight delivery service reasonably approved by the Parties
(Federal 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 with
next Business Day delivery guaranteed, provided that the sending Party receives a confirmation of
delivery from the delivery service provider. Unless otherwise provided in writing, all notices
hereunder shall be addressed as follows:
If to the City: Jeffrey C. Parker, City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Fax: (714) 838-1602
Email: jparker@tustinca.org
With a copy to: David Kendig
Woodruff Spradlin & Smart, APC
555 Anton Boulevard, #1200
Costa Mesa, CA 92626
Fax: (714) 415-1183
Email: dkendig@wss-law.com.
If to Developer: David Binswanger and Matt Howell
Flight Venture LLC
c/o Lincoln Property Company Commercial,
Inc.
915 Wilshire Boulevard, Suite 2050
Los Angeles, CA 90017
Fax: (213) 538-0901
Email: dbinswanger(a�lpc.com and
matt.howell@lpc.com
With a copy to: Parke Miller
Flight Venture LLC
c/o Lincoln Property Company Commercial,
Inc.
114 Pacifica, Suite 370
Irvine, CA 92618
Fax: (949) 333-2131
Email:pmiller@lpc.com
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Agreement 9-15-2016 (PC) final
With a copy to: Gregory S. Courtwright
Lincoln Property Company Commercial, Inc.
2000 McKinney Avenue, Suite 1000
Dallas, TX 75201
Fax: (214) 740-3460
Email: gcourtwright@lpc.com
With a copy to: Mark Potter
Alcion Ventures
One Post Office Square, Suite 3150
Boston, MA 02109
Fax: (617) 603-1001
Email: mpotter@alcionventures.com
With a copy to: Amy Forbes
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue, Suite 4900
Los Angeles, CA 90071
Fax: (213) 229-6151 / (213) 229-6128
Email: aforbes@gibsondunn.com
With a copy to: Michael Glazer
Goodwin Procter LLP
Exchange Place
53 State Street
Boston, MA 02109
Fax: (617) 523-1231
Email: mglazer@goodwinprocter.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.
3. DEVELOPMENT OF THE PROPERTY.
3.1 Public Benefits. This Agreement provides assurances that the Project described by
this Agreement will be achieved and developed in accordance with the Applicable Rules and this
Agreement, and subject to the City's Reservation of Authority. The Parties believe that such
orderly development of the Project will provide the benefits to the City and additional regional
public benefits, including: increased tax revenues, installation of on-site and off-site
improvements, and creation and retention of jobs. In addition Developer will provide the
following additional Public Benefits which constitute specific additional consideration for this
Agreement for the benefit of the City:
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3.1.1 Community Facilities District Formation. The City has previously
established a Community Facilities District for Tustin Legacy ("AD/CFD") that includes the
Property within its boundaries.
(a) Capital Facilities. Developer acknowledges and agrees that its
development plan for the Project will not require use of community facility district proceeds,
including proceeds from the AD/CFD and that neither assessment district nor community facilities
district proceeds will be used to reimburse Developer for its development costs in connection with
the Project, including Project Fair Share Contribution or Project specific construction or
infrastructure costs. Accordingly, Developer waives its right to fund all or any portion of the
development of the Project pursuant to a Community Facilities District, including pursuant to any
Special Tax for the development of facilities within the Tustin Legacy Backbone Infrastructure
Program pursuant to the existing AD/CFD ("Tax A"), and the City agrees that Tax A shall not be
applicable to the Property or the Improvements thereon and Developer shall have no obligation or
liability on account thereof. The City agrees that neither the Property nor the Improvements shall
be subject to or encumbered by Tax A because Developer's obligation to pay the fair share of the
Tustin Legacy Backbone Infrastructure Program shall be satisfied by payment of the Purchase
Price under the DDA and Section 3.1.2 below (which Purchase Price is inclusive of the obligation
to pay the Developer's fair share of the Tustin Legacy Backbone Infrastructure Program with
respect to the Project).
(b) Tax B. As part of the AD/CFD the City has previously established
Special Tax `B" pursuant to AD/CFD 13-01 ("Tax B"), the proceeds of which shall be used by the
City to fund a portion of the City essential services, including police and fire protection,
ambulance and paramedic services, recreation programs and services, street sweeping, traffic
signal maintenance and the maintenance of City -owned parks, parkways and open spaces, lighting,
flood control and storm drain services and other City services and facilities at Tustin Legacy. Tax
B is and shall be a tax and lien upon the Property and the Improvements in accordance with the
terms of the instruments governing the AD/CFD and Tax B and the term of Tax B imposed upon
the Property and the Improvements is and shall be perpetual and shall not be time limited in any
manner unless determined by the City in its sole discretion. Developer and each Successor In
Interest of Developer shall pay the Tax B amounts due with respect to the Property when due to the
City. Tax B shall be in lieu of any other assessments, special taxes, fees or charges that may
otherwise be charged on account of the types of services covered thereby. Developer
acknowledges that the term of Tax B imposed upon the Property and the Improvements thereon
does not contain a fixed termination date, and that the City ordinance adopting Tax B provides that
it shall continue as long as necessary to meet the Special Tax Requirement for Service set forth in
the City ordinance adopting Tax B.
(c) No Further Restrictions. Notwithstanding the provisions of
Section 3.1.1(a) and (b), the City shall not be prohibited by the terms of this Agreement from
subjecting the Property and/or the Improvements thereon to any increase in ad valorem real
property tax pursuant to a City of Tustin -wide election, provided that nothing herein shall be
construed to constitute a waiver by Developer of its right or ability to dispute or oppose passage of
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a City of Tustin -wide bond or tax, the proposed formation or amendment of any special district or
taxing authority, or the imposition of any such tax by such special district or taxing authority, or
any amendment to the Rate and Method of Apportionment for Tax B, or its right to dispute the
assessed valuation of all or any portion of the Property owned by it.
3.1.2 Project Fair Share Contribution. The Purchase Price for the Property under
the DDA is inclusive of the obligation to pay the Project Fair Share Contribution with respect to
the Project and accordingly, upon payment in full of the Purchase Price under the DDA, Developer
shall be credited in full with payment of its fair share of the Tustin Legacy Backbone Infrastructure
Program fees comprising the Project Fair Share Contribution and thereafter no further obligation
shall be imposed on Developer of the Project in connection with the Tustin Legacy Backbone
Infrastructure Program.
3.1.3 Public Benefit Improvements. Developer shall complete the Public Benefit
Improvements listed on Exhibit "C" within the time periods set forth therein.
Notwithstanding anything to the contrary in this Agreement, if any payment under this
Section is not made or any obligation requiring performance is not performed by Developer, the
City may withhold further issuance of building permits and other approvals, including final maps,
for the Project until such time as Developer has made the required payment or undertaken the
required performance.
3.2 Developer Objectives. In accordance with the legislative findings set forth in
Government Code Section 65864, the Developer wishes to obtain reasonable assurances that the
Project may be developed in accordance with the Applicable Rules and Existing Entitlement
Approvals and with the terms of this Agreement and subject to the City's Reservation of
Authority. To the extent of Project development, and as provided by Section 3.5.2, Developer
anticipates making capital expenditures or causing capital expenditures to be made in reliance
upon the DDA and this Agreement. In the absence of this Agreement, Developer would have no
assurance that it can complete the Project for the uses and to the density and intensity of
development set forth in this Agreement and the Existing Entitlement Approvals. This
Agreement, therefore, is necessary to assure Developer that the Project will not be (1) reduced or
otherwise modified in density, intensity or use from what is set forth in the Existing Entitlement
Approvals, (2) subjected to new rules, regulations, ordinances or official policies or plans except
for Future Rules made applicable pursuant to the terms of this Agreement.
3.3 Mutual Objectives. Development of the Project in accordance with this
Development Agreement will provide for the orderly development of the Property in accordance
with the objectives set forth in the General Plan and the Specific Plan. Moreover, a development
agreement for the Project will eliminate uncertainty in planning for and securing orderly
development of the Property, assure installation of necessary improvements, assure attainment of
maximum efficient resource utilization within the City at the least economic cost to its citizens and
otherwise achieve the goals and purposes established by Government Code Section 65864.
Additionally, although development of the Project in accordance with this Agreement will restrain
the City's land use or other relevant police powers, this Agreement provides the City with
sufficient reserved powers during the Term to remain responsible and accountable to its residents.
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In exchange for these and other benefits to the City, the Developer will receive assurance that the
Project may be developed during the Term of this Agreement in accordance with the Applicable
Rules, Entitlement Approvals and Reservation of Authority, subject to the terms and conditions of
this Agreement.
3.4 Applicability of the Agreement. This Agreement does not: (a) grant density or
intensity in excess of that otherwise established in the Existing Entitlement Approvals;
(b) eliminate future discretionary actions relating to the Project that are either required by the
Applicable Rules or requested by Developer pursuant to applications initiated and submitted by
Developer after the Effective Date; (c) guarantee that Developer will receive any profits from the
Project; (d) amend the DDA, the Other Agreements, the Specific Plan or the General Plan or
(e) protect the Developer, the Project or the Property from the applicability of any increases in
development fees or City Processing Fees. In addition, except as specifically set forth in Sections
3.6.2 and 3. 10, this Agreement does not protect the Developer, the Project or the Property from the
applicability of any Future Rules (i) imposed pursuant to the City's Reservation of Authority or (ii)
if not imposed pursuant to the City's Reservation of Authority, adopted by the City and not in
conflict (as defined in Section 3.6.2) with Existing Land Use Regulations.
3.5 Agreement and Assurance on the Part of the Developer. In consideration for the
City's entering into this Agreement, and as an inducement for City to obligate itself to carry out the
covenants and conditions set forth in this Agreement, and in order to effectuate the premises,
purposes and intentions set forth in this Agreement, Developer hereby agrees as follows:
3.5.1 Project Development. Developer agrees that it will use commercially
reasonable efforts, in accordance with its own business judgment and taking into account market
conditions and economic considerations, to undertake any development of the Project in
accordance with the terms and conditions of the DDA, this Agreement and the Existing
Entitlement Approvals.
3.5.2 Additional Obligations of Developer as Consideration for this Agreement.
In addition to the obligations identified in Section 3. 1, the development assurances provided by
Developer in this Agreement and the resulting construction of the Project will result in the
following:
(a) Construction of a commercial development of up to 870,000 GBA
within Neighborhood E of the MCAS Tustin Specific Plan, consistent with this Agreement, the
Applicable Rules, the Entitlement Approvals and the DDA, including in accordance with the
Schedule of Performance set forth in the DDA.
(b) Construction of all Improvements identified in the DDA in
accordance with the Schedule of Performance set forth in the DDA.
(c) Completion of all Public Benefit Improvements identified on
Exhibit "C" in accordance with the Schedule of Performance set forth in the DDA and
Exhibit "C".
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(d) Compliance with the DDA, the Applicable Rules and Entitlement
Approvals, state and federal law, all mitigation measures, including measures imposed pursuant to
the California Environmental Quality Act ("CEQA"), all Development Permits and all conditions
of approval associated with the foregoing.
(e) Payment of all required development and inspection related fees
pursuant to the terms and conditions set forth in the DDA, the Other Agreements and this
Agreement; provided, however, that Developer's sole obligation with respect to the Project Fair
Share Contribution shall be as set forth in Section 3.1.2.
3.6 Agreement and Assurances on the Part of City. In consideration for Developer
entering into this Agreement, as an inducement for Developer to obligate itself to carry out the
covenants and conditions set forth in this Agreement, and in order to effectuate the purpose of this
Agreement, the City hereby agrees as follows:
3.6.1 Applicable Regulations; Vested Right to Develop. To the maximum extent
permitted by law, as to each Phase, Developer has the vested right for the Term applicable to such
Phase to develop the Project subject to the terms and conditions of this Agreement, the Applicable
Rules, state and federal law, and the Existing Entitlement Approvals and any Subsequent
Entitlement Approvals approved by the City, in each case subject to the City's Reservation of
Authority and subject to the additional terms and conditions set forth in the DDA and the Other
Agreements. Other than as expressly set forth herein, during the Term applicable to each Phase,
the terms and conditions of development applicable to such Phase of the Property, including the
permitted uses of the Property, the density and intensity of use, maximum height and size of
proposed buildings, the design, improvement and construction standards and specifications
applicable to the development of the Property, including any changes authorized pursuant to
Section 3.6.2, the subdivision of land and requirements for infrastructure and public
improvements, other terms and conditions of the Project, and the provisions for the reservation and
dedication of land as needed for public purposes pursuant to Governmental Requirements, shall be
those set forth in the DDA and the Other Agreements, the Applicable Rules, and the Entitlement
Approvals. In connection therewith and subject to the terms of this Agreement including the
Reservation of Authority, Developer shall have the Vested Right to carry out and develop the
Property in accordance with the Applicable Rules and the Entitlement Approvals and the
provisions of this Agreement, including Section 3.10.4..
3.6.2 Changes Authorized by the City. To the extent any changes in the Existing
Land Use Regulations, or any provisions of future General Plans, Specific Plans, Tustin City Code
or other rules, regulations, ordinances or policies of the City (whether adopted by means of
ordinance, initiative, referenda, resolution, policy, order, moratorium, or other means, adopted by
the City Council, Planning Commission, or any other board, commission, agency, committee, or
department of the City, or any officer or employee thereof) following the Effective Date
(collectively, "Future Rules") are not in conflict with the Vested Rights, such Future Rules shall be
applicable to the Project. For purposes of this Section 3.6.2, the word "conflict" means Future
Rules that would (a) frustrate in a more than insignificant way the intent or purpose of the
Applicable Rules in relation to the Project; (b) materially increase the cost of performance of, or
preclude compliance with, any provision of the Vested Right; (c) delay in a more than insignificant
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way development of the Project; (d) limit or restrict the availability of public utilities, services,
infrastructure of facilities (for example, but not by way of limitation, water rights, water
connection or sewage capacity rights, sewer connections, etc.) to the Project; (e) impose limits or
controls in the rate, timing, phasing or sequencing of development of the Project; (f) limit the
permitted uses of the Property from those permitted by the Existing Entitlement Approvals, the
DDA and the Other Agreements; (g) reduce the maximum height or size of any permitted
buildings; or (h) impose additional obligations in connection with the reservation or dedication of
land for public purposes beyond the requirements identified in the DDA from those permitted by
the Entitlement Approvals.
Notwithstanding the foregoing, any Future Rule that conflicts with the Applicable Rules
shall nonetheless apply to the Property if, and only if one of the following apply: (i) it is consented
to in writing by Developer; (ii) it is determined by the City and evidenced through findings
adopted by the City Council that the change or provision is reasonably required in order to prevent
a condition dangerous to the public health or safety as set forth in Section 3.10.2; (iii) it is required
by changes in State or Federal law as set forth in Section 3.10.1; (iv) it consists of revisions to, or
new building regulations permitted by Section 3.10.3; or (v) it is otherwise expressly permitted by
this Agreement.
3.6.3 Availability of Public Services. To the maximum extent permitted by law
and consistent with its authority, the City shall use commercially reasonable efforts to assist
Developer in reserving such capacity for sewer and water services as may be necessary to serve the
Project, at no cost or expense to the City.
3.6.4 Allocation of Development Rights Under Specific Plan. The City hereby
acknowledges that it has allocated to the Property and reserved for development of the Project a
total of 870,000 GBA of commercial floor area from the total Specific Plan Planning Area 9-12
authorization of commercial floor area.
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3.7 Effect of Agreement on Subsequent Entitlement Approvals. The City shall accept
for processing and review and take action on all applications for Subsequent Entitlement
Approvals as provided in Section 3.9. In connection with any Subsequent Entitlement Approval,
the City shall exercise discretion in the same manner as it exercises its discretion under its police
powers, including the Reservation of Authority; provided however, that such discretion shall not
prevent development of the Project as set forth in this Agreement.
3.8 Timing of Development. The timing of development will be as set forth in the
DDA. Since the California Supreme Court held in Pardee Construction Co. v. City of Camarillo
(1984) 37 Cal. 3d 465, that the failure of the parties therein to provide for the timing of
development resulted in a later adopted initiative restricting the timing of development to prevail
over such parties' agreement, it is the Parties' intent to cure that deficiency by acknowledging and
providing that Developer will adhere to the terms of the DDA regarding the timing of
development.
3.9 Subsequent Entitlement Approvals; Changes and Amendments.
3.9.1 The Parties acknowledge that refinement and further development of the
Project may require Subsequent Entitlement Approvals and may demonstrate that changes are
appropriate and desirable in the Existing Entitlement Approvals. Entitlement Approvals (except
for this Agreement, the amendment process for which is set forth in Section 2.5) may be amended
or modified from time to time, but only at the written request of Developer or with the written
consent of Developer (at its sole and absolute discretion). All amendments to the Entitlement
Approvals shall automatically become part of the Applicable Rules.
3.9.2 In the event Developer finds that a change in, or addition to, the Existing
Entitlement Approvals is necessary or appropriate, Developer shall apply for a Subsequent
Entitlement Approval to effectuate such change or addition and the City shall process and act on
such application in accordance with the Applicable Rules, except as otherwise provided by this
Agreement, including the Reservation of Authority. If approved, any such change in, or addition
to, the Existing Entitlement Approvals shall thereafter be deemed to be an Existing Entitlement
Approval and a Vested Right for all purposes of this Agreement without requiring an amendment
to this Agreement and may be further changed, or added to, from time to time as provided in this
Section.
3.9.3 Notwithstanding any other provision of this Agreement, Developer
acknowledges that the Concept Plans and Design Review granted with respect to the Project prior
to the Effective Date are applicable to Phase 1 only. The Concept Plans and Design Review as to
Phase 2 are illustrative in nature; accordingly, Subsequent Entitlement Approval comprised of
Design Review approval shall be required as a condition precedent to Phase 2 development. The
City Community Development Department shall determine, in its sole discretion, whether
consideration of such approvals shall be made by director's determination or by referral to the City
Planning Commission. In all cases, such approvals shall be subject to the provisions of the Tustin
City Code regarding appeal.
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3.10 Reservation of Authority. Notwithstanding any other provision of this Agreement
to the contrary, the Future Rules described in this Section 3.10 shall apply to and govern
development of the Property and Project to the extent set forth herein.
3.10.1 Overriding State and Federal Laws. The City shall not be precluded from
adopting and applying Future Rules to the Property and the development of the Project to the
extent that such Future Rules are required to be applied by State or Federal laws or regulations and
which would override Developer's Vested Rights as set forth in this Agreement, provided
however, that (a) Developer does not waive its right to challenge or contest the validity of such
State or Federal rules or regulations; and (b) such Future Rules, if otherwise in conflict with the
Vested Rights (as described in Section 3.6.2) shall only be applied to the Project and development
of the Project to the extent necessary to comply with such new State or Federal law or regulation.
In the event that such State or Federal law or regulation (or Future Rules undertaken pursuant
thereto) prevents or precludes substantial compliance with one or more provisions of the Existing
Land Use Regulations or this Agreement, the Parties agree to consider in good faith amending or
suspending such provisions of this Agreement as may be necessary to comply with such State or
Federal laws (or Future Rules), provided that no Party shall be bound to approve any amendment
to this Agreement unless this Agreement is amended in accordance with the procedures applicable
to the adoption of development agreements as set forth in the Development Agreement Statute and
Tustin City Code and each Party retains full discretion with respect thereto.
3.10.2 Public Health and Safety. Nothing in this Agreement shall preclude the
City Council from adopting and applying Future Rules that the City Council finds are reasonably
necessary to protect persons on the Property or in the immediate community, or both, from
conditions dangerous to their health or safety notwithstanding that the applications of such Future
Rules or other similar limitation would result in the impairment of Developer's Vested Rights
under the Agreement or the Existing Land Use Regulations. In determining whether any such
Future Rules are reasonably necessary to protect persons as set forth above, the City Council shall
make findings, based on evidence presented to and accepted by the City Council that the changes
are reasonably necessary to protect the public health or safety. The provisions of this
Section 3.10.2 do not apply to any measure adopted by initiative.
3.10.3 Uniform Construction Codes and Regulations. Policies and rules governing
engineering and construction standards and specifications applicable to public and private
improvements, including all uniform codes adopted by the City and any local amendments to those
codes adopted by the City in the future shall apply to the Project and Property.
3.10.4 Police Power. In all respects not provided for in this Agreement, the City
shall retain full rights to exercise its police powers to regulate development of the Project and
Property. Any uses or development requiring a concept plan, design review, tentative tract map,
conditional use permit, variance, or other Entitlement Approvals in accordance with Existing Land
Use Regulations shall require a permit or approval pursuant to this Agreement and
notwithstanding any other provision set forth herein, this Agreement is not intended to vest
Developer's right to issuance of such permit or approval.
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3.11 Processing.
3.11.1 Subdivisions. A subdivision, as defined in Government Code
Section 66473.7, shall not be approved unless a tentative map for the subdivision complies with
the provisions of said Section 66473.7. This provision is included in this Agreement to comply
with Section 65867.5 of the Government Code.
3.11.2 Subsequent Entitlement Approvals. The City shall employ all lawful
actions capable of being undertaken by the City to promptly (a) accept all complete applications
for Subsequent Entitlement Approvals (collectively, "Applications") and (b) process and take
action upon Applications in accordance with the Applicable Rules with a goal of completing the
review within time frames identified in the DDA; provided however, that the City shall not be
deemed in default under this Agreement should such time frame(s) not be met. To the extent that
Developer desires that the City plan check or process an Application on an expedited basis and to
the extent that it requires an additional expense beyond the customary expense applicable to the
general public, the City shall inform Developer of such additional expense, including the cost of
overtime and private consultants and other third parties. If acceptable to Developer, Developer
shall pay the additional cost and the City shall use good faith efforts to accelerate the processing
time utilizing overtime and the services of private consultants and third parties to the extent
available. Upon the written request of Developer, the City shall inform Developer of the necessary
application requirements for any requested City approval or requirement relating to the Project.
3.11.3 Filings. Developer shall exercise reasonable efforts to file applications for
Development Permits and Entitlement Approvals within the time frames and schedules as
generally outlined in the DDA and shall exercise reasonable efforts to attempt to obtain
Development Permits and Entitlement Approvals within the time frames identified in the DDA;
provided, however, that failure solely to comply with such time frame(s) shall not be deemed to be
a default under this Agreement.
3.11.4 Cooperation. The City and Developer shall cooperate in processing all
applications for permits and approvals for the Project, provided, however, that such cooperation
shall not include any obligation of the City to incur any un -reimbursed expense, and the City shall
be entitled, subject to the terms of this Agreement, the DDA and Developer's rights hereunder, to
exercise all discretion to which it is entitled by law in processing and issuing any permits and
approvals for the Project.
3.11.5 Approvals. Notwithstanding any administrative or judicial proceedings,
initiative or referendum concerning any of the Entitlement Approvals, the City shall process
applications for permits and approvals as provided herein to the fullest extent allowed by law and
Developer may proceed at its sole risk with development of the Project pursuant to the DDA, the
Other Agreements, the Applicable Rules and Entitlement Approvals to the fullest extent allowed
by law. Notwithstanding the foregoing, Developer acknowledges and agrees that the City reserves
its discretion to approve or disapprove all Subsequent Entitlement Approvals with respect to the
Project and that nothing in this Agreement will be construed as circumventing or limiting the
City's discretion with respect thereto or with respect to the environmental review required by
CEQA. Such reservation of discretion will apply to all contemplated legislative and quasi-judicial
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actions including approval of land use entitlements, CEQA compliance, code enforcement and the
making of findings and determinations required by law and the City may, in its sole and absolute
discretion, elect not to approve, adopt or certify any requested Subsequent Entitlement Approvals
based on CEQA review or other discretionary factors.
3.12 Com. This Agreement does not modify, alter or change the City's obligations
pursuant to CEQA. Developer acknowledges that the City is required by State law to comply with
CEQA in the consideration and approval of any Subsequent Entitlement Approval and/or any
amendment to this Agreement. The EIR, which has been certified by the City as being in
compliance with CEQA, addresses the potential environmental impacts of the entire Project as it is
described in the Existing Entitlement Approvals. Nothing in this Agreement shall require or be
construed to require CEQA review of ministerial approvals. It is agreed that, in acting on any
discretionary Subsequent Entitlement Approvals for the Project, the City shall rely on the EIR to
satisfy the requirements of CEQA to the extent permissible by CEQA. In the event that any
additional CEQA documentation is legally required for any discretionary Subsequent Entitlement
Approval for the Project, then the scope of such documentation shall be focused, to the extent
possible consistent with CEQA, on the specific subject matter of the Subsequent Entitlement
Approval and the City shall conduct such CEQA review as expeditiously as possible, at
Developer's expense. Nothing herein shall restrict or limit the obligation of Developer to pay for
and implement any additional mitigation measures or conditions of approval imposed as a result of
such CEQA and any Subsequent Entitlement Approval process.
3.13 Fees.
3.13.1 Processing Fees and Charges.
(a) The City shall have the right to charge and Developer shall be
required to pay all City Processing Fees which shall, except as otherwise specifically set forth in
Section 3.13.1(b), be paid at the generally applicable rates in effect at the time such City
Processing Fees are due.
(b) With respect to Plan Check and Inspection Services only, the City
shall be entitled to charge and Developer shall reimburse the City for its costs to make available
City staff, including the City Attorney, and third party engineers and consultants, if any, as
required to complete, process, and review plans and applications, complete plan check, perform
inspections, and monitor Developer compliance with the requirements of this Agreement and the
Applicable Rules. Not later than ten (10) business days following approval by the City of this
Agreement, and as a condition to the effectiveness of this Agreement, Developer shall deliver to
the City in cash or cash equivalent funds, a deposit in an amount reasonably requested by City
which shall be based on the City's estimate of staff and third party consultant time required to
complete and perform plan check and inspections (the "City Costs Deposit"). The City Costs
Deposit shall be deposited by the City in an account in a bank or trust company selected by the City
and with no requirement that such account be interest bearing. If any interest is paid on such
account, such interest shall accrue to any balances in the account for the benefit of the City. If at
any time prior to the latest to occur of (a) issuance of the final Certificate of Compliance for the
Property; (b) the issuance of the final certificate of occupancy for a Building on the Property; or
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(c) termination of the DDA (the "Final Date"), the amount of funds in the City Costs Deposit
account is depleted below Ten Thousand Dollars ($10,000), then Developer shall be required to
pay to the City each time an additional Twenty Thousand Dollars ($20,000) or such other amount
as the City may specify as required in City's estimation to cover the cost of Plan Check and
Inspection Fees, which shall be credited to the City Costs Deposit. Each such payment shall be
deposited by the City into the City Costs Deposit account and shall be applied to reduce the
amount of Plan Check and Inspection Fees incurred by the City. The City Costs Deposit has been
established to fund the Plan Check and Inspection Fees incurred by the City and may be used by
the City for such purpose, and shall be depleted accordingly. Immediately upon incurring any Plan
Check and Inspection Fees or costs or receipt of an invoice from third parties for same, the City
shall have the right to deduct the amounts due it on account thereof from the City Costs Deposit. A
monthly accounting of deductions documenting staff time spent to process and review plans and
applications, complete plan check, perform inspections, and monitor Developer compliance, along
with documentation evidencing any other deductions from the City Costs Deposit shall be
provided by City to Developer. The City Costs Deposit shall be retained by the City until the Final
Date specified above and the remaining amount of the City Costs Deposit then held by the City, if
any, shall be promptly returned by the City to Developer thereafter, provided that the return of
such funds shall not terminate the obligations of Developer to pay all City Processing Fees arising
or incurred prior to the Final Date. Developer shall pay any outstanding amounts due with respect
to the City Processing Fees to the City within thirty (30) calendar days following receipt of an
invoice from the City therefor, provided that the City shall first apply the amount of the City Costs
Deposit, if any, then held by it in satisfaction of such invoice, and shall reflect the amount of such
credit on the invoice. If at any time prior the Final Date, Developer shall assign or convey the
Phase 2 Property and the Phase 2 Project separately from the Phase 1 Property and Phase 1 Project;
the Option terminates without exercise thereof; or the City, pursuant to exercise of the Right of
Repurchase or Right of Reversion or action in lieu thereof pursuant to the DDA takes or transfers
title to the Phase 2 Property and the Phase 2 Project separately from the Phase 1 Property and
Phase 1 Project, the City shall establish a separate deposit account for Phase 2 in the amount
specified above. In such event, all of the foregoing provisions shall separately apply to Phase 1
and to Phase 2, and the "Final Date" with respect to each such Phase shall be the date upon which
both conditions (a) and (b), or condition (c) alone, to achievement of such date have occurred with
respect to the applicable Phase.
3.13.2 Development Fees. The City shall have the right to impose, and Developer
shall pay, all development fees adopted by the City at the time of issuance of building permits for
the Project.
3.13.3 Project Fair Share Contribution. The Project Fair Share Contribution
(relating to the Tustin Legacy Backbone Infrastructure Program) to be contributed by Developer
with respect to the Project shall be Fourteen Million Three Hundred Seventy -Two Thousand Eight
Hundred Forty -Two Dollars ($14,372,842) which amount shall be paid as a component of the
Purchase Price for the Property pursuant to the DDA. The Contribution shall be paid at a rate of
$8.53 per land square foot, and shall be equal to Six Million Four Hundred Ninety -Nine Thousand
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Three Hundred and Forty -Seven Dollars ($6,499,347) for Phase 1 and Seven Million Eight
Hundred Seventy -Three Thousand Four Hundred Ninety -Five Dollars ($7,873,495) for Phase 2.
3.14 Dedications. Developer acknowledges and agrees that it may be required to make
certain dedication to the City and other public agencies as required by (a) the Entitlement
Approvals, including the approved tentative parcel map, (b) the Applicable Rules, (c) the DDA
and the Other Agreements, (d) the EIR and subsequent CEQA documents, if any, adopted by the
City in connection with any Subsequent Entitlement Approval, and (e) as required pursuant to
Developer's assumption of the City's MCAS Tustin obligations under the "Agreement Between
the City of Irvine and the City of Tustin Regarding the Implementation, Timing, Funding of
Transportation/Circulation Mitigation for the MCAS Tustin Project" and the "Amendment to the
Joint Exercise of Powers Agreement Between the City of Santa Ana and the City of Tustin
Regarding the Tustin -Santa Ana Transportation Improvement Authority".
3.15 Regulation by Other Public Agencies. It is acknowledged by the Parties that other
public agencies not within the control of the City possess authority to regulate aspects of the
Project and development of the Property separately from or jointly with the City and this
Agreement does not limit the authority of such other public agencies. The City agrees to cooperate
fully, at no out of pocket cost to the City, with Developer in obtaining any required permits or
compliance with the regulations of other public agencies provided such cooperation is not in
conflict with any laws, regulations or policies of the City.
3.16 Tentative Parcel Map and Tract Map Extension. Any subdivision map, heretofore
or hereafter approved in connection with development of the Property, shall be eligible for
extensions of time as provided in Government Code Section 66452.6, except that any extension
shall be consistent with any applicable performance schedule as provided or established in the
DDA and shall not be deemed or considered in any way an extension of any Developer rights or
obligations under the DDA.
3.17 Recording of Final Map. Development of the Project will require approval by the
City of the Final Map. Developer acknowledges and agrees that the City will not issue a building
permit for any building pads, until such time as (a) a final parcel map has been approved by the
City and Recorded and (b) the City and Developer have entered into a Subdivision Improvement
Agreement in form approved by the City in its Governmental Capacity.
3.18 (Quimby Fees and Park Fees. All fees required in connection with the Project
pursuant to the Quimby Act, California Government Code Section 66477, if any, are included
within the Project Fair Share Contribution and Developer shall not have any additional liability on
account thereof.
3.19 Compliance with Legal Requirements. Prior to the issuance of any certificate of
occupancy for any Building constructed on a Building Pad, Developer shall satisfy all applicable
requirements of the Tustin Municipal Code, Specific Plan, and conditions of approval of the
Entitlement Approvals relating to or necessary for such Building prior to the issuance of a
certificate of occupancy for such Building, including compliance with the Americans with
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Disabilities Act and necessary Horizontal Improvements, including Common Area Improvements,
to support such Building.
3.20 Required Completion of Horizontal Improvements.
(a) Developer shall complete all Phase 1 Horizontal Improvements prior to the
issuance of the final certificate of occupancy for the final Building to be constructed within Phase
1 or the issuance of a Certificate of Compliance for Phase 1 (whichever occurs first).
(b) Developer shall complete all Phase 2 Horizontal Improvements prior to the
issuance of the final certificate of occupancy for the final Building to be constructed within Phase
2 or the issuance of a Certificate of Compliance for Phase 2 (whichever occurs first).
(c) Developer shall complete all landscaping and irrigation improvements that
had been assured through the provision of bonds, guarantees, cash collateral, or other instruments
pursuant to Exhibit "C" of this Agreement prior to the issuance of the final certificate of
occupancy for the final Building to be constructed within Phase 1 (or if it occurs first, the final
certificate of occupancy for the final Building to be constructed within Phase 2), or the issuance of
a Certificate of Compliance for all of Phase 1 (or, if it occurs first, the issuance of a Certificate of
Compliance for all of Phase 2) (whichever occurs first).
4. ANNUAL REVIEW.
4.1 Timing and Annual Review. The City Council shall review Developer's
performance under this Agreement at least every twelve (12) months from the Effective Date until
expiration of the Agreement. In connection with such periodic review, both the City and
Developer shall have a reasonable opportunity to assert matters which either believes have not
been undertaken in accordance with this Agreement, to explain the basis for such assertion, and to
receive from the other Party a justification of its position on such matters.
4.2 Review Procedure. The City shall provide notice to Developer and deliver to
Developer a copy of all public staff reports, documents and related exhibits concerning the City's
review of Developer's performance hereunder at least thirty (30) calendar days prior to any date
proposed for City Council review of performance under the Agreement.
4.2.1 Good Faith Compliance. Developer shall demonstrate good faith
compliance with the terms of this Agreement and shall furnish evidence of good faith compliance,
as the City, in its reasonable exercise of its discretion, may require. Evidence of good faith
compliance may include the following:
(a) conformance with the DDA, including the Scope of Development
and Schedule of Performance;
(b) conformance with the requirements of the Specific Plan; and
(c) conformance with provisions of this Agreement identified by the
City.
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4.2.2 Response. Developer shall have the opportunity to be heard and respond to
the City's evaluation of Developer's performance, either orally or in a written statement, at
Developer's election.
4.2.3 Non -Compliance. If, as a result of its periodic review as described in
Section 4. 1, the City Council finds and determines, on the basis of substantial evidence, that the
Developer has not complied in good faith with the terms or conditions of this Agreement, the City
Council may commence proceedings to enforce, modify, or terminate this Agreement.
4.2.4 Referral. The City Council may refer the matter to the Planning
Commission for further proceedings or for a report and recommendation.
4.3 Modification or Termination. If the City Council determines to proceed with
modification or termination of this Agreement, the City Council shall give notice to Developer of
its intention to do so. The Notice shall contain all information required by Tustin City Code
Section 9618. At the time and place set for the hearing on modification or termination, the City
Council may refer the matter back to the Planning Commission for further proceedings or for a
report and recommendation. The City Council may take such action as it deems necessary to
protect the interests of the City, including but not limited to, the receipt of additional evidence as to
Developer's compliance with the terms of this Agreement. The decision of the City Council shall
be final, subject only to judicial review pursuant to California Code of Civil Procedure
Section 1094.5(b).
4.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic review,
Developer is found to be in compliance with this Agreement, the City shall, upon request of the
Developer, issue a Certificate (the "Certificate") to Developer stating that after the most recent
periodic review and based upon the information known or made known to the City Council that:
(a) this Agreement remains in effect, and (b) Developer is not in default. The Certificate shall be
in recordable form, shall contain information necessary to communicate constructive record notice
of the finding of compliance, and shall state the anticipated date of commencement of the next
periodic review. Developer may record the Certificate with the County Recorder. If the City does
not find Developer to be in compliance with this Agreement, it shall not be obligated to issue the
Certificate.
DEFAULT, REMEDIES, AND TERMINATION.
5.1 Default Procedure. A non -defaulting Party (the "Non -Defaulting Party") at its
discretion may elect to declare a default under this Agreement in accordance with the procedures
hereinafter set forth for any failure or breach of any other Party ("Defaulting Party") to perform
any material duty or obligation of said Defaulting Party in accordance with the terms of this
Agreement. However, the Non -Defaulting Party must provide written notice to the Defaulting
Party setting forth the nature of the breach or failure and the actions, if any, required by the
Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed to be in
"default" of its obligations set forth in this Agreement if the Defaulting Party has failed to take
action and cure the default within fifteen (15) calendar days after the date of such notice (for
monetary defaults) or within thirty (30) calendar days after the date of such notice (for
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non -monetary defaults). If, however, a non -monetary default cannot be cured within such thirty
(30) calendar day period, as long as the Defaulting Party does each of the following:
(a) provides the Non -Defaulting Party in writing a reasonable explanation as to
the reasons the asserted default is not curable within the thirty (30) calendar day period;
(b) notifies the Non -Defaulting Party in writing of the Defaulting Party's
proposed course of action to cure the default;
(c) promptly commences to cure the default within the thirty (30) calendar day
period;
(d) makes periodic written reports to the Non -Defaulting Party as to the
progress of the program of cure; and
(e) diligently prosecutes such cure to completion,
then the Non -Defaulting Party shall grant in writing the Defaulting Party such additional time as
determined by the Non -Defaulting Party as reasonably necessary to cure such default.
Notwithstanding any provision to the contrary contained herein, (1) the Developer shall not be
declared in default under this Agreement solely because of Developer's default under the DDA
and/or Other Agreements. Developer's failure to comply with the terms and conditions of the
DDA and/or Other Agreements or Developer's failure to complete the Project in accordance with
the schedules set forth in the DDA (provided that to the extent the provisions of this Agreement are
the same as those contained in the DDA and/or the Other Agreements, then breach of such
provisions in this Agreement shall be an independent breach of this Agreement) and (2) subject to
Sections 2.4.3 and 2.4.4, if Developer has conveyed, assigned or transferred a portion of the
Property pursuant to an Approved Transfer, then from and after the effective date of such
conveyance, assignment or transfer, any determination that a Party is in default with respect to
matters arising subsequent to such transfer date shall be effective only as to the Party to whom the
determination is made and the portions of the Property in which such Party has an interest.
5.2 City's Remedies. In the event of an uncured default by Developer under this
Agreement, the City, at its option, may institute legal action to cure, correct or remedy such
default, enjoining any threatened or attempted violation, enforce the terms of this Agreement by
specific performance, or pursue any other legal or equitable remedy. Furthermore, the City, in
addition to or as an alternative to exercising the remedies in this Section 5.2, in the event of a
material default by Developer, may give notice of its intent to terminate or modify this Agreement
pursuant to Section 4.3, in which event the matter shall be scheduled for consideration and review
by the City Council in the manner set forth in Section 4.3.
5.3 Developer's Remedies. In the event of an uncured default of the City under this
Agreement, Developer shall be entitled to any or all of the following remedies: (a) seeking
mandamus or special writs, injunctive relief, or specific performance of this Agreement;
(b) modification or termination of this Agreement; or (c) seeking any other remedy available at
law or in equity, provided, however, except as provided in Section 9.10 below and subject to such
further limitations on this provision contained in the DDA and/or the Other Agreements, the
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Developer agrees and covenants on behalf of itself and its successors and assigns, not to sue the
City for damages or monetary relief for any breach of this Agreement or arising out of or
connected with any dispute, controversy or issue regarding the application or effect of this
Agreement, or for general, special, compensatory, expectation, anticipation, indirect,
consequential, exemplary, or punitive damages ("Damages") arising out of or connected with any
dispute, controversy, or issues regarding the application or effect of this Agreement, the DDA, the
Other Agreements, the Applicable Rules, or any Development Permits or Entitlement Approvals
sought in connection with development or use of the Property or Project, or any portion thereof.
Developer acknowledges that the City would not have entered into this Agreement if the City
could be held liable for Damages for any default or breach arising out of this Agreement and that
Developer has adequate remedies other than Damages to secure the City's compliance with its
obligations under this Agreement. Therefore, Developer agrees that the City, its officers,
employees and agents shall not be liable for any Damages and that this Section shall apply to all
Successors In Interest of Developer.
5.4 Third Party Legal Challenges. In the event of any legal action instituted by a third
party challenging the validity or enforceability of any provision of this Agreement, the Applicable
Rules, the DDA, or Entitlement Approvals for the Project or the approval of any CEQA document
prepared in connection with the foregoing, Developer agrees, at its sole cost and expense, to
defend (with counsel reasonably acceptable to the City), indemnify, and hold harmless the City, its
officers, employees, agents, and consultants, from any claim, action, or proceeding against the
City, its officers, agents, and employees, which seeks to attack, set aside, challenge, void, or annul
an approval of the City Council, the Planning Commission, or any other decision-making body,
including staff, concerning the Project. The City agrees to promptly notify Developer of any such
claim or action filed against the City and to cooperate in the defense of any such action. Developer
shall also indemnify and hold harmless the City and its agents, officials and employees from and
against all claims, losses, or liabilities assessed or awarded against the City by way of judgment,
settlement, or stipulation. The City may elect to participate in the defense of any such action under
this condition.
6. INDEMNITY BY DEVELOPER.
Developer agrees to indemnify, defend, and hold harmless the City, the City's designees,
and their respective elected and appointed officials, boards, commissions, agents, contractors, and
employees from and against any and all actions, suits, claims, liabilities, losses, damages,
penalties, obligations and expenses (including attorney's fees and costs) which may arise, directly
or indirectly, from the acts, omissions, or operations of Developer or Developer's agents,
contractors, subcontractors, agents, or employees pursuant to this Agreement, but excluding any
loss resulting from the intentional or active negligence of the City, the City's designee, or each of
their respective elected and appointed officials, boards, commissions, officers, agents, contractors,
and employees. Developer shall select and retain counsel reasonably acceptable to the City to
defend any action or actions and Developer shall pay the cost thereof. The indemnity provisions
set forth in this Agreement shall survive termination of the Agreement.
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7. MORTGAGEE PROTECTION.
The Parties hereto agree that this Agreement shall not prevent or limit Developer, in any
manner, from encumbering the Property or any portion thereof or any improvement thereon by any
Mortgage securing financing with respect to the Property; provided that nothing herein shall
modify or amend the restrictions set forth in the DDA with respect to Mortgages. Any Mortgagee
holding a Mortgage that is not prohibited by the DDA shall be entitled to the following rights and
privileges:
(a) This Agreement shall be superior and senior to any lien placed upon the Property or
any portion thereof after the date of recording of this Agreement, including the lien of any
Mortgage. Notwithstanding the foregoing, neither entering into this Agreement nor a breach of
this Agreement shall defeat, render invalid, diminish or impair the lien of any Mortgage on the
Property made in good faith and for value, unless otherwise required by law, and any acquisition or
acceptance of title or any right or interest in or with respect to the Property or any portion thereof
by a Mortgagee (whether pursuant to foreclosure, trustee's sale, deed in lieu of foreclosure, lease
termination or otherwise) shall be subject to the terms and conditions of this Agreement and any
such Mortgagee who takes title to the Property or any portion thereof shall be entitled to benefits
arising under this Agreement.
(b) Each Mortgagee of any Mortgage encumbering the Property, or any part thereof,
and which is not securing the interest of an End User shall upon written request in writing to the
City, be entitled to receive written notice from the City of results of the Annual Review and of any
default by Developer in the performance of Developer's obligations under this Agreement
concurrently with delivery of same to Developer and shall have the right, but not the obligation, to
cure the default during the remaining cure period allowed such Party under this Agreement
(including any extended cure period necessary in order to allow the Mortgagee to obtain title to the
Property and cure the default). Notwithstanding the foregoing, the failure of the City to deliver a
concurrent copy of such notice of default to a Mortgagee shall not affect in any way the validity of
the notice of default as it relates to the Developer, 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.
(c) Any Mortgagee who comes into possession of the Property, or any part thereof,
pursuant to foreclosure of the Mortgage or deed in lieu of such foreclosure, shall take the Property,
or part thereof, subject to the terms of this Agreement. Notwithstanding any other provision of this
Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to
perform any of Developer's obligations or other affirmative covenants of Developer hereunder, or
to guarantee such performance; except that (i) the Mortgagee shall have no right to develop the
Property without fully complying with the terms of this Agreement, the DDA, the Applicable
Rules and Entitlement Approvals and (ii) to the extent that any covenant to be performed by
Developer is a condition precedent to the performance of a covenant by the City, the performance
thereof shall continue to be a condition precedent to the City's performance hereunder.
Notwithstanding anything to the contrary contained above in this Section, any Mortgagee
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shall be subject to all of the terms of the DDA, to the extent applicable pursuant to the DDA to such
Mortgagee.
INTENTIONALLY DELETED.
MISCELLANEOUS PROVISIONS.
9.1 Recordation of Agreement. This Agreement and any amendment or cancellation
thereof shall be recorded with the Orange County Recorder by the City Clerk within ten (10)
calendar days after the City executes this Agreement, as required by Section 65868.5 of the
Government Code. If the Parties to this Agreement amend or cancel this Agreement as provided
for herein and in Government Code Section 65868, or if the City terminates or modifies this
Agreement as provided for herein and in Government Code Section 65865.1 for failure of
Developer to comply in good faith with the terms or conditions of this Agreement, the City Clerk
shall have notice of such action recorded with the Orange County Recorder.
9.2 Entire Agreement. This Agreement, the DDA and the Other Agreements set forth
and contain the entire understanding and agreement of the Parties with respect to the matters set
forth herein, and there are no oral or written representations, understandings or ancillary
covenants, undertakings or agreements which are not contained or expressly referred to herein. No
testimony or evidence of any such representations, understandings or covenants shall be
admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this Agreement.
9.3 Severability. If any term, provision, covenant or condition of this Agreement shall
be determined invalid, void or unenforceable, the remainder of this Agreement shall not be
affected thereby to the extent such remaining provisions are not rendered impractical to perform
taking into consideration the purposes of this Agreement.
9.4 Interpretation and Governing Law. This Agreement and any dispute arising
hereunder shall be governed and interpreted in accordance with the internal laws of the State of
California without reference to choice of law or conflicts of law provisions. This Agreement shall
be construed as a whole according to its fair language and common meaning to achieve the
objectives and purposes of the Parties hereto, and the rule of construction to the effect that
ambiguities are to be resolved against the drafting Party shall not be employed in interpreting this
Agreement, all Parties having been represented by counsel in the negotiation and preparation
hereof. The decision of the City Council shall be final, subject only to judicial review pursuant to
California Code of Civil Procedure Section 1094.5(b).
9.5 Section Headings. All Section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
9.6 Construction.
9.6.1 References to Sections, Clauses and Exhibits. Unless otherwise indicated,
references in this Agreement to sections, clauses and exhibits are to the same contained in or
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attached to this Agreement and all exhibits referenced in this Agreement are incorporated in this
Agreement by this reference as though fully set forth in this Section.
9.6.2 Singular and Plural. As used herein, the singular of any word includes the
plural and vice versa.
9.6.3 Includes and Including. As used in this Agreement the words "include" and
"including" mean, respectively, "include, without limitation" and "including, without limitation".
9.7 Time of Essence. Subject to the following sentence, time is of the essence in the
performance of each provision of this Agreement. Whenever action must be taken (including the
giving of notice or the delivery of documents) under this Agreement during a certain period of time
or by a particular date that ends or occurs on a non -Business Day, then such period or date shall be
extended until the immediately following Business Day.
9.8 Waiver. Failure by a Party to insist upon the strict performance of any of the
provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon
the default of the other Party, shall not constitute a waiver of such Party's right to insist and
demand strict compliance by the other Party with the terms of this Agreement thereafter.
9.9 No Third Party Beneficiaries. This Agreement is made and entered into for the sole
protection and benefit of the Parties and their successors and assigns. No other person shall have
any right of action based upon any provision of this Agreement.
9.10 Attorneys' Fees. If any Party to this Agreement institutes any action, suit,
counterclaim or other proceeding for any relief against another Party, declaratory or otherwise
(collectively an "Action"), 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, warranties or obligations on the part of the other Party to this Agreement, then the
Prevailing Party in such Action shall be entitled to have and recover of and from the other Party all
costs and expenses of the Action, including (a) the Prevailing Party's reasonable attorneys' fees
(which, if the Prevailing Party is the City, shall be payable at the actual contractual hourly rate for
the City's litigation counsel at the time the fees were incurred, and which with respect to both the
City and the Developer shall in no event be more than $200 per hour) and (b) costs actually
incurred in bringing and prosecuting such Action and/or enforcing any judgment, order, ruling or
award (collectively, a "Decision") granted therein, all of which shall be deemed to have accrued on
the commencement of such Action and shall be paid whether or not such Action is prosecuted to a
Decision. Any Decision entered in any final judgment shall contain a specific provision providing
for the recovery of all costs and expenses of suit, including reasonable attorneys' fees and expert
fees and costs (collectively "Costs") incurred in enforcing, perfecting and executing such
judgment. For the purposes of this paragraph, Costs shall include in addition to Costs incurred in
prosecution or defense of the underlying action, reasonable attorneys' fees, costs, expenses and
expert fees 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. "Prevailing
Party" within the meaning of this Section 9.10 includes a Party who agrees to dismiss an Action in
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consideration for the other Party's payment of the amounts allegedly due or performance of the
covenants allegedly breached, or obtains substantially the relief sought by such Party.
9.11 Force Majeure.
9.11.1 "Force Majeure Delay" means the occurrence of any of the following
events when such event is beyond the control of the Party claiming Force Majeure Delay
("Claiming Party") and such Party's officers, directors, employees, contractors, consultants,
agents and representatives and is not due to an act or omission of Claiming Party or its officers,
directors, employees, contractors, consultants, agents or representatives, 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 Developer to Complete the Project, and which events (or the effect of which events)
reasonably could not have been avoided by due diligence and use of commercially reasonable
efforts by the Claiming Party:
(a) Civil Unrest. 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;
(b) Unforeseeable Conditions. Reasonably unforeseeable physical
condition of the Property including the presence of Hazardous Materials;
(c) Casual . Fire, earthquake, or other casualty, in each case only if
causing material physical destruction or damage on the Property;
(d) Litigation. Any lawsuit seeking to restrain, enjoin, challenge or
delay any issuance of any Entitlement Approval or seeking to restrain, enjoin, challenge, or delay
construction of the Project which is defended by the Claiming Party;
(e) W-eather. 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; and
9.11.2 Limitation. The term "Force Majeure Delay" shall be limited to the matters
listed in Section 9.11.1 above and specifically excludes from its definition the following matters
which might otherwise be considered Force Majeure Delay:
(a) Entitlements. The suspension, termination, interruption, denial or
failure to obtain or nonrenewal of any Entitlement Approval or Development Permit, license,
consent, authorization or other permit or approval which is necessary for the development of the
Project, except for any such matter resulting from a lawsuit as described in Section 9.11.1(d);
(b) Foreseeable Changes in Governmental Requirements. Any change
in Government Requirements which was proposed prior to the Effective Date;
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(c) Failure to Perform Obligations. Failure of Developer to perform
any obligation to be performed by Developer as the result of adverse changes in the financial
condition of Developer or any other Person.;
(d) Failure to Provide Financial Security. Failure of Developer 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 Developer hereunder as
the result of adverse changes in market conditions;
(e) Failure to Submit Required Documentation. Failure to submit
documentation as and when required by this Agreement;
(f) Failure to Submit Entitlement Applications. Failure to timely
submit applications for any Entitlement Approval or Development Permit required for
construction of the Improvements or development of the Project on the Property when required
pursuant to the Schedule of Performance; and
(g) Failure to Execute Documents. Failure of the Claiming Parry to
execute documents; and
(h) Other Matters. All other matters not caused by the Second Party and
not listed in Section 9.11.1.
9.11.3 If the Claiming Party believes that an extension of time is due to Force
Majeure Delay, it shall notify the other Party (the "Second Party") in writing within thirty (30)
calendar days from the date upon which the Claiming Party becomes aware of such Force Majeure
Delay, generally describing the Force Majeure Delay and its date of commencement. Upon
written request from the Second Party, the Claiming Party shall promptly provide the following
information with respect to such Force Majeure Delay: a more detailed description of the Force
Majeure Delay, when and how the Claiming Party obtained knowledge thereof, the steps the
Claiming Party anticipates taking to respond to such Force Majeure Delay, and the estimated delay
resulting from such Force Majeure Delay and response and such other information as the Second
Party may reasonable request. The extension for Force Majeure Delay shall be granted or denied
in the Second Party's reasonable discretion. If the Claiming 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, any such extension for such Force Majeure Delay shall be at the sole discretion of
the Second Party.
9.11.4 Time periods for performance of any obligations under this Agreement may
be extended for Force Majeure Delay, except that in no event shall the Term of this Agreement be
extended by an event of Force Majeure Delay beyond the time period set forth in the applicable
subsection of Section 2.3.1.
9.12 Successors and Assigns. The burdens of this Agreement shall be binding upon, and
the benefits of this Agreement shall inure to the City and its successors and assigns and Developer
and its successors and assigns. All provisions of this Agreement shall be enforceable as equitable
servitudes and constitute covenants running with the land. Each covenant to do or refrain from
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doing some act hereunder with regard to development of the Property: (a) is for the benefit of and
is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof,
and (c) is binding upon Developer and each Successor In Interest of Developer during its period of
ownership of the Property or any portion thereof and for such longer period as such Party may
have liability hereunder. Notwithstanding the foregoing, upon acquisition of the Property or any
portion thereof by the City pursuant to exercise of the Right of Repurchase or Right of Reversion
or action in lieu thereof pursuant to the DDA, the City shall have the right in its sole discretion to
terminate this Agreement as to the portion of the Property so acquired._
9.13 Counterparts. This Agreement may be executed by the Parties in counterparts,
which counterparts shall be construed together and have the same effect as if all of the Parties had
executed the same instrument.
9.14 Jurisdiction and Venue. Any action at law or in equity arising under this
Agreement or brought by a Party hereto for the purpose of enforcing, construing or determining
the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the
County of Orange, State of California, or the United States District Court for the Central District of
California, Santa Ana Division, and the Parties hereto waive all provisions of law providing for the
filing, removal or change of venue to any other court.
9.15 Project as a Private Undertaking. It is specifically understood and agreed by and
between the Parties hereto that the development of the Project is a private development, that
neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an
independent contracting entity with respect to the terms, covenants and conditions contained in
this Agreement. No partnership, joint venture or other association of any kind is formed by this
Agreement. The only relationship between the City and Developer with respect to this Agreement
is that of a government entity regulating the development of private property and the developer of
such property.
9.16 Further Actions and Instruments. Each of the Parties shall cooperate with and
provide reasonable assistance to the other to the extent contemplated hereunder in the performance
of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.
Upon the request of either Party at any time, the other Party shall promptly execute, with
acknowledgment or affidavit if reasonably required, and file or record such required instruments
and writings and take any actions as may be reasonably necessary under the terms of this
Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or
consummate the transactions contemplated by this Agreement.
9.17 Estoppel Certificate. Any Party hereunder, may at any time, deliver a written
notice to the other Party requesting such first Party to certify in writing that, to the best knowledge
of the certifying Party: (a) this Agreement is in full force and effect and a binding obligation of
the Party; (b) this Agreement has not been amended or modified either orally or in writing, or if so
amended, identifying the date and nature of the amendments to this Agreement, and, in each case,
that the Agreement remains in full force and effect (including as amended or modified if
applicable), and a continuing binding obligation of the Party; and (c) the requesting Party is not in
default in performance of its obligations set forth in the Agreement, or if the Party is in default,
Tustin Cornerstone I Development 42 City of Tustin/Cornerstone I
Agreement 9-15-2016 (PC) final
provide a description of the nature of such default(s). A Party receiving a request hereunder shall
execute and return such certificate within thirty (30) calendar days following receipt thereof. The
party to whom such certificate is addressed, including any third party or Mortgagee, shall be
entitled to rely on the certificate. Developer shall pay to the City all costs incurred by the City in
connection with the issuance of estoppel certificates.
9.18 Authority to Execute. The person or persons executing this Agreement on behalf of
each Party warrants and represents that he or she/they have the authority to execute this Agreement
on behalf of such Party and warrants and represents that he or she/they has/have the authority to
bind such Party to the performance of its obligations hereunder.
9.19 Non -liability of City Officials and City Employees. No elected or appointed
official, representative, employee, agent, consultant, legal counsel or employee of the City shall be
personally liable to Developer for any amount which may become due to Developer under the
terms of this Agreement._
9.20 No Merger. As of the Effective Date, the Property is owned in fee by the City, and
portions of the Property may continue to be owned in fee by the City during the Term or may be
conveyed by the City to one or more Developers and subsequently reconveyed to the City during
the Term. Except as expressly set forth below, there shall be no merger of any rights, interests or
estates created by this Agreement as a result of the ownership by the City of all or any portion of
the Property and no merger shall occur with respect to any portion of the Property unless and until
the City and all persons and entities at the time having a legal and/or equitable ownership interest
in such portion of the Property shall join in a written instrument affecting such merger and shall
duly record the same. Notwithstanding the foregoing, if the City repurchases or revests any
portion of the Property as a result of its exercise of the Right of Repurchase or Right of Reversion
under the DDA, the City shall have the right, in its sole discretion, to merge its interests under this
Agreement, to terminate this Agreement as to the Property so repurchased or revested, to modify
the provisions of this Agreement related to the Property so repurchased or revested or to take other
actions affecting this Agreement or the rights of the City in and to the revested Property, without
the approval of any other person or entity.
[SIGNATURES CONTAINED ON FOLLOWING PAGE]
Tustin Cornerstone I Development 43 City of Tustin/Cornerstone I
Agreement 9-15-2016 (PC) final
SIGNATURE PAGE
TO DEVELOPMENT AGREEMENT
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and
year set forth below.
ATTEST:
By:
Erica Rabe
City Clerk
Dated:
APPROVED AS TO FORM:
Office of the City Attorney
By:
David E. Kendig, Esq.
"City"
City of Tustin, California
Lo
Mayor
"Developer"
By:
Name:
Its:
By:
Name:
Its:
Tustin Cornerstone I Development Agreement S-1 City of Tustin/Comerstone I
9-15-2016 (PC) final
EXHIBIT "A"
TO DEVELOPMENT AGREEMENT
LEGAL DESCRIPTION OF PROPERTY'
Phase 1 Parcel: Parcel 1 as shown on Parcel Map 2015-168, filed for record in the Office of the
Recorder of the County of Orange, California on 2016 in Book of
Maps at Page
Phase 2 Parcel: Parcel 2 as shown on Parcel Map 2015-168, filed for record in the Office of the
Recorder of the County of Orange, California on 2016 in Book of
Maps at Page
Legal Description to be confirmed and finalized upon recordation of Parcel Map 2015-168, prior to
execution of this Agreement.
Tustin Cornerstone I Development Exhibit A City of Tustin/Comerstone I
Agreement 9-15-2016 (PC) final Page 1
EXHIBIT `B"z
TO DEVELOPMENT AGREEMENT
MAP SHOWING PROPERTY AND ITS LOCATION
[see map attached]
` Depiction to be confirmed and finalized upon recordation of Parcel Map 2015-168, prior to
execution of this Agreement.
Tustin Cornerstone 1 Development Exhibit B City of Tustin/Comerstone I
Agreement 9-15-2016 (PC) final Page 1
EIISEMENT_7DETAIL
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EXHIBIT "C"
TO DEVELOPMENT AGREEMENT
PUBLIC BENEFIT IMPROVEMENTS
As additional Public Benefits, Developer shall design and construct the following Public Benefit
Improvements as set forth below and in the DDA and in accordance with the requirements of the
applicable conditions of approval, if any, set forth in the Entitlement Approvals.
Each of the following Public Benefit Improvements shall be completed prior to the issuance of the
first certificate of occupancy for a Building within the Property, as further described below, and in
all events shall be completed prior to the date that is four (4) years after the Effective Date, subject
to the Force Majeure Delay provisions of this Agreement, provided that in no event shall the
period for completion of the Public Benefit Improvements be extended beyond the Phase 1 Term.
Modifications to the schedule may be made with the approval of the City Community
Development Director in his or her sole discretion.
1. Developer shall be responsible for the design and construction of full width improvements to
the public portion of Flight Way from Barranca Parkway to the entrance of the Property
including utilities, curb adjacent sidewalks on both sides of the street, and street lights along
both sides of the street. The landscape and irrigation system adjacent to the Property
between Barranca Parkway and the Food Hall Building shall be completed or completion
shall otherwise be assured through the provision of bonds, guarantees, cash collateral, or
other instruments or means satisfactory to the City Community Development Director.
2. Developer shall be responsible for the design and construction of a traffic signal at the
intersection of the public portion of Flight Way and Barranca Parkway.
Intersection enhancement shall include the creation of left turn lane on Barranca Parkway to
Flight Way, additions of signal apparatus including loops and interconnects, signing and
striping modifications as necessary, and restoration of landscape medians impacted by
left -turn enhancements or median modifications.
3. Developer shall be responsible for the design and construction of the improvements to
Barranca Parkway from the public portion of Flight Way to Armstrong Avenue. Developer
shall design and construct the decelerating and accelerating lane and meandering sidewalk
on Barranca Parkway along project frontage from Armstrong Avenue to Flight Way. The
landscape and irrigation system adjacent to the Property along Barranca Parkway from Flight
Way to Armstrong Avenue as approved for Phase 1 of the Project from back of curb to
landscape set back limits shall be completed or completion shall otherwise be assured
through the provision of bonds, guarantees, cash collateral, or other instruments or means
satisfactory to the City Community Development Director.
4. Developer shall be responsible for the design and construction of the improvements to
Armstrong Avenue from Legacy Park to Barranca Parkway, including curb adjacent
sidewalks adjacent to the Property. Developer shall also provide final/finish surface course
Asphalt Rubber Hot Mix (ARHM) paving on Armstrong Avenue from Warner Avenue to
Barranca Parkway, traffic striping and raise any manhole to grade. The landscape and
irrigation system adjacent to the Property along Armstrong Avenue from Legacy Park to
Barranca Parkway as approved for Phase 1 of the Project from back of sidewalk to landscape
Tustin Cornerstone I Development Exhibit C City of Tustin/Comerstone I
Agreement 9-15-2016 (PC) final Page 1
set back limits shall be completed or completion shall otherwise be assured through the
provision of bonds, guarantees, cash collateral, or other instruments or means satisfactory to
the City Community Development Director. Developer shall additionally construct the curb
adjacent sidewalk along the west side of Armstrong Avenue from Legacy Park to Warner
Avenue. Developer shall install signal conduit, pull boxes and cable for a future traffic
signal at the intersection of Airship Avenue and Armstrong Avenue.
5. Developer shall be responsible for the design and construction of a four-way traffic signal,
including loops, interconnects, and radar detection system at the intersection of southerly
project entrance and Armstrong Avenue.
6. Developer shall design and construct the public storm drain system, wet utilities, and dry
utilities along Flight Way connecting to and crossing Legacy Park (Tract No. 17144, Lots
"AA" and "BB"), and the public storm drain system along the north side of Phase 1 adjacent
to the Food Hall Building in the locations required pursuant to the DDA and the Entitlement
Approvals. Developer shall provide the necessary utility and access easement to the City.
7. Developer shall be responsible for the design and construction of the improvements to
Airship Avenue between Barranca Parkway and Armstrong Avenue, including utility
improvements, street lighting and curb adjacent sidewalks in the locations required pursuant
to the DDA and the Entitlement Approvals. Developer shall also provide final/finish surface
course ARHM paving, traffic striping and raise any manhole to grade. The landscape and
irrigation system adjacent to the Property as approved for Phase 1 of the Project shall be
completed or completion shall otherwise be assured through the provision of bonds,
guarantees, cash collateral, or other instruments or means satisfactory to the City Community
Development Director.
8. Developer shall be responsible for the design and construction of the improvements to the
private portion of Flight Way between the entrance of the Property and Armstrong Avenue,
including utility improvements, street lighting and curb adjacent sidewalks, except that
between Airship Avenue and Armstrong Avenue sidewalk improvements need only be
constructed on the north side of Flight Way. Developer shall also provide final/finish surface
course ARHM paving, traffic striping and raise any manhole to grade. The landscape and
irrigation system adjacent to the Property as approved for Phase 1 of the Project shall be
completed or completion shall otherwise be assured through the provision of bonds,
guarantees, cash collateral, or other instruments or means satisfactory to the City Community
Development Director.
9. Construction of interim landscaping on Phase 2, as more specifically set forth in the DDA
and the Landscape Installation and Maintenance Agreement, as and when required thereby.
Such landscaping shall be completed or completion shall otherwise be assured through the
provision of bonds, guarantees, cash collateral, or other instruments or means satisfactory to
the City Community Development Director.
10. A public access easement for public access over to Legacy Park along with the ingress and
egress over those certain private streets and pedestrian paseos designated in the Entitlement
Approvals and the Roadway and Utility Easement Agreement shall be provided and
identified. This shall be provided at no cost to the City and be subject to the review and
approval by the City.
11. Developer shall submit legal descriptions and sketches of the areas below, prepared by a
California Licensed Civil Engineer or California Licensed Land Surveyor, current Title
Tustin Cornerstone I Development Exhibit C City of Tustin/Cornerstone I
Agreement 9-15-2016 (PC) final Page 2
Report, applicable back up documents, and plan check deposit to the City Public Works
Department for review and approval.
a. Easements for emergency vehicle access and public services ingress and egress
purposes over the private streets and driveways shall be provided, at no cost to the
City.
b. Developer shall dedicate public access and maintenance easements to the City for
sidewalks along the public and private portions of Flight Way and Airship
Avenue, Barranca Parkway and Armstrong Avenue, at no cost to the City.
Developer shall dedicate an easement for pedestrian ingress and egress connecting
Airship Avenue and Legacy Park through Lot 1, as generally depicted on Vesting
Tentative Tract Map No. 18003.
Tustin Cornerstone I Development Exhibit C City of Tustin/Cornerstone I
Agreement 9-15-2016 (PC) final Page 3
EXHIBIT "D"
TO DEVELOPMENT AGREEMENT
EXISTING ENTITLEMENT APPROVALS
• Development Agreement (DA) 2016-001
• Concept Plan (CP) 2016-001
• Design Review (DR) 2016-001
• Subdivision (SUB) 2016-02/Tentative Parcel Map (TTM) 2015-168
• Conditional Use Permit 2016-01 (Alcoholic Beverages — Type 47)
• Conditional Use Permit 2016-02 (Joint Use Parking)
• Conditional Use Permit 2016-15 (Live Entertainment)
• Conditional Use Permit 2016-23 (Projection of Mechanical Equipment)
• Minor Adjustment 2016-01 (10% Reduction - Parking)
• Minor Adjustment 2016-02 (10% Increase - Building Height)
Tustin Cornerstone I Development Exhibit D City of Tustin/Comerstone I
Agreement 9-15-2016 (PC) final Page 1