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HomeMy WebLinkAbout03 WL HOMES/SALV ARMY 03-01-04 A G END A REPORT Agenda Item Reviewed: tfi= City Manager Finance Director 3 - MEETING DATE: MARCH 1, 2004 FROM: WILLIAM A. HUSTON, CITY MANAGER REDEVELOPMENT AGENCY STAFF TO: SUBJECT: APPROVAL OF AN AGREEMENT BETWEEN THE CITY OF TUSTIN, WL HOMES LLC, AND THE SALVATION ARMY SUMMARY Approval is requested of an Agreement between the City of Tustin, WL HOMES LLC and the Salvation Army to permit the Salvation Army to accomplish its goals and mission at an alternative location. RECOMMENDATION Subject to non-substantial modifications as may be determined necessary by the City's Special Counselor the City Manager prior to execution by all parties, approve and authorize the City Manager, or designee to execute the Agreement between the City of Tustin, WL HOMES LLC and the Salvation Army and to carry out all actions necessary to implement the Agreement including the execution of all related documents. FISCAL IMPACT The Fiscal Impact on the City was taken into consideration with the City's approval of DDA 03-03. No anticipated impacts on the City's general fund or on the Tustin Legacy Enterprise Fund are anticipated at this time. BACKGROUND As part of the Reuse Plan process for the Tustin Legacy project, the City worked with homeless providers and determined the needs of the homeless population, soliciting applications for anticipated surplus property at Tustin Legacy from applicants serving the needs of the homeless under the Base Closure Community and Redevelopment and Homeless Assistance Act of 1994 ( the 'Community Redevelopment Act"). In October 1996, the City entered into a Homeless Assistance Agreement with the Salvation Army and four other homeless providers as it related to each providers application for property at Tustin Legacy, as was amended by the First Amendment to the Homeless Assistance Agreement in February 1997 ("Homeless Agreements"). The Homeless Agreements contemplated that the City would, following conveyance of applicable portions of Tustin Legacy from the Navy to the City, convey a portion of the property to a private developer and preserve the flexibility regarding the ultimate methods by which facilities and services for the homeless providers would be accommodated. Pursuant to the Homeless Agreements, the Salvation Army had originally requested a no cost lease of 24 existing family housing units as transitional housing units on Reuse Plan Disposal Parcel 34. Both the Act and the provisions of the Homeless Agreements provided the City with the flexibility, at the discretion of the City, to provide substantially equivalent or comparable replacement premises at another location either at the former MCAS Tustin or elsewhere. On October 31, 2003, the City entered into a Disposition and Development Agreement (DDA-03-03) with WL Homes ("Developer") for the sale and development of Parcel 34 which included Developer's and City's obligations for compliance with the Homeless Agreements. On November 5, 2003, the Salvation Army indicated its willingness to discuss satisfaction of any obligations under the Homeless Assistance Act through locating substantial equivalent or comparable replacement premises other than on Parcel 34. On December 3, 2003 and on February 12, 2004, the Salvation Army, in writing indicated its desire to purse acceptance of substantially equivalent or comparable replacement premises. The following points provide a summary of the terms of the attached Agreement which is intended to accomplish the intent of the Homeless Agreements, and which is also consistent with the City's DDA with the Developer: . The Salvation Army would withdraw in writing its request for the 24 existing units on Parcel 34 at Tustin Legacy. . The Developer would acquire and convey to the Salvation Army 16 existing units located at 8081 ]'h Street, Buena Park ("Buena Park Property") at a cost of approximately $2,575,000. Provisions in the Agreement provide for a due diligence process through March 12 with escrow anticipated to close in early April. . The Developer would convey to the Salvation Army, 6 very low income multi- family housing units on Parcel 33 at Tustin Legacy (the "Tustin Property"). The Salvation Army's acceptance and use of these units would be subject to appropriate Affordability Housing Covenants, Affordable Housing Trust Deeds and Promissory Notes as required for affordable units in the DDA for Parcel 33. Conveyance of the 6 units would be in phases as identified in the Agreement. Under the provisions of DDA 03-03, the Developer's obligation for the purchase price for the Buena Park property was secured by a performance bond of $1,800,000 with the balance of the purchase price to be considered an authorized Parcel 34 development cost which was held back in the sale of Parcel 34 by the City in a separate trust escrow fund. The Cost of Developer's sale of the 6 units to the Salvation Army will be financed through a HUD Homeless Assistance Grant that the City has obtained. At the closing on each of the Tustin Units, a total purchase price of not to exceed $150,000 per unit (for a total not to exceed more than $900,000 for the Tustin property) will be deposited by the City in escrow for purchase of the Tustin Property. Staff will be available to respond to any questions on this matter. Attachment: Agreement City of Tustin Version 2/24/04 AGREEMENT BETWEEN THE SALVATION ARMY, THE CITY OF TUSTIN, CALIFORNIA, AND WL HOMES LLC CONCERNING TUSTIN OBLIGATIONS FOR CERTAIN HOUSING ACCOMMODATION AT THE FORMER MARINE CORPS AIR STATION TUSTIN THIS AGREEMENT (this "Agreement") is made and entered into this - day of , 2004 ("Effective Date"), by and between the CITY OF TUSTIN ("City"), a municipal corporation organized under the laws of the State of California, acting in its capacity as the Local Redevelopment Authority for the disposition and conveyance of portions of the former Marine Corps Air Station Tustin, California, WL HOMES LLC, a Delaware limited liability company ("Developer") located at 3121 Michelson Drive, Suite 200, Irvine, CA. 92612- 7672, the SALVATION ARMY, ("Provider"), a California corporation located at 180 East Ocean Boulevard, Long Beach, California 90802. The City, Developer and Provider are sometimes referred to herein individually as a "Party" and collectively as the "Parties." The Parties agree as follows: RECITALS A. Pursuant to the Defense Base Closure and Realignment Act of 1990 (Part A of Title XXIX of Public Law 101-510; US.C. Section 2687 Note), as amended (the "Base Closure Law"), the United States ("Government") determined to close the Marine Corps Air Station Tustin ("MCAS Tustin") located substantially within the City of Tustin. In 1992, the City was designated by the Office of Economic Adjustment on behalf of the Secretary of Defense as the local redevelopment authority ("LRA") for preparation of a reuse plan for MCAS Tustin in order to facilitate the closure of MCAS Tustin and its reuse in furtherance of the economic development of the City and surrounding region. B. In its capacity as the LRA, the City served as the lead agency for preparing the base reuse plan, the applicable environmental documents under California law, and other documents related to the planning for the civilian reuse of MCAS Tustin. The MCAS Tustin Reuse Plan ("Reuse Plan") and Homeless Assistance Submission was developed in accordance with federal procedures under the Base Closure Law and was adopted by the City of Tustin City Council on October 16, 1996 and amended by Errata in September 1998. C. As part of the Reuse Plan process, the City worked with homeless providers and reviewed available data to determine the needs of the homeless population, soliciting applications for surplus Government property from applicants serving the needs of the homeless under the Base Closure Community and Redevelopment and Homeless Assistance Act of 1994 (the "Community Redevelopment Act"). AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 2. D. In October 1996, the City entered into the Homeless Assistance Agreement with the Provider and four other homeless providers as it related to each individual homeless provider application for property at the former MCAS Tustin, as amended by the First Amendment to the Homeless Assistance Agreement in February 1997 ("Homeless Agreements"). E. The Reuse Plan, Homeless Assistance Submission and the Homeless Agreements were subsequently reviewed and approved by the United States Department of Housing and Urban Development. On February 3, 2003, the City approved and adopted the MCAS Tustin Specific PlanlReuse Plan by Ordinance No. 1257 setting forth the zoning and entitlement framework for future development of the former MCAS Tustin ("Specific Plan"). The portion of the former MCAS Tustin located within the City of Tustin is referred to herein as "Tustin Legacy". The Specific Plan conforms to and implements the Reuse Plan and the Tustin General Plan. F. A Final Joint Environmental Impact StatementlEnvironmentallmpact Report for the Disposal and Reuse of MCAS Tustin (the "Final EISÆIR") and Mitigation Monitoring and Reporting Program for the Final EISÆIR were adopted by the City on January 16, 2001. In March 2001, a Record of Decision was issued by the Department of the Navy (hereinafter, "Navy") approving the Final EISÆIR and the Reuse Plan. G. Pursuant to the authority provided by Section 2905(b)4 of the Base Closure Law and the implementing regulations of the Department of Defense (32 CPR Part 175), the Secretary of the Navy, on behalf of the United States of America, is authorized to convey surplus property at a closing installation to the LRA at no cost for economic development purposes. H. In May 2002, the Navy approved an Economic Development Conveyance of Property ("EDC") and agreed to convey 1153 acres of the former MCAS Tustin to the City. On May 13, 2002, a portion of this property was conveyed by the Navy to the City by Federal Deed, in accordance with the provisions of that certain Agreement Between the United States of America and the City of Tustin, California, for the Conveyance of a Portion of the Former Marine Corps Air Station Tustin ("Conveyance Agreement"), which sets forth the terms and conditions of the conveyance of portions of MCAS Tustin from the Navy to the City ("City Property"). A portion of the City Property was leased to the City by the Navy pursuant to the Conveyance Agreement and that certain Lease In Furtherance of Conveyance Between the United States of America and the City of Tustin, California for Portions of the Former Marine Corps Air Station Tustin (the "LIFOC"). I. The Conveyance Agreement as well as the Homeless Agreements contemplated that the City would, following conveyance of the applicable portions of the City Property from the Navy to the City, convey a portion of the City Property in accordance with the Reuse Plan and Specific Plan to a private developer and preserve flexibility regarding the ultimate methods AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 3. by which facilities and services for the Provider and other homeless providers would be accommodated. J. In early 2003, the City met with the Provider subsequently indicating in writing its desire to exercise the flexibility contained in the Homeless Agreements. On October 31, 2003, the City entered into a Tustin Legacy Disposition and Development Agreement for the sale and development of Parcel 34 to the Developer ("Parcel 34 DDA"). On November 13, 2003 Parcel 34 was conveyed by the City to Developer. Pursuant to Section 3.9.4 I of the Specific Plan, Developer is responsible for compliance with Homeless Accommodation provisions described in Section 2.36 and 2.4 of the Specific Plan, the Homeless Accommodation Submission and the Homeless Agreements as it affects the Provider (herein collectively referred to as the "Homeless Accommodation Documents"). Pursuant to the Homeless Accommodation Documents, the Provider requested originally a no cost lease of 24 units of existing family housing as transitional housing on Parcel 34. The Community Redevelopment Act and provisions of the Homeless Accommodation Documents provide City with the flexibility, at the discretion of the City, to provide substantially equivalent or comparable replacement premises at another location either at the former MCAS Tustin or elsewhere. K. On November 5, 2003, the Provider indicated its willingness to discuss satisfaction of any obligations to the Provider pursuant to the Homeless Agreements through assistance from Developer in locating substantially equivalent or comparable replacement premises other than on Parcel 34 at the former MCAS Tustin. After touring a number of potential replacement facilities, the Provider by letter to the City on December 3, 2003 indicated its desire to pursue acceptance of substantially equivalent or comparable replacement premises. L. The City, Developer, and Provider desire the Provider to (a) withdraw its application for property on Parcel 34 as described in the Homeless Agreements under the Community Redevelopment Act in exchange for Developer delivering to the Provider real property located in Buena Par, California, and (b) subject to the satisfaction by the City and Developer of their obligations under this Agreement, release the City and Developer from all liability and obligation under the Homeless Agreements and Homeless Accommodation Documents with the understanding that Developer's execution of this Agreement shall not make Developer a party to the Homeless Agreement or Homeless Accommodation Documents nor bind the Developer to any obligations thereunder which do not already bind the Developer. M. The City, Developer and the provider believe that the Provider Application as described in the Homeless Agreements and Homeless Accommodation Documents prepared under the Community Redevelopment Act will allow the optimal use and reutilization of the former MCAS Tustin property, while simultaneously allowing the Provider to more fully accomplish its goals and missions at an alternative location. AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 4. AGREEMENT 1.1 Orieinal Provider Application for Property. The property originally requested by the Provider in the Homeless Agreements and Homeless Submission Documents at the former MCAS Tustin is more specifically described in Exhibit A attached herein and was identified to be a portion of Reuse Plan Disposal Parcel 34 (legally described as Parcel I-B-1). In consideration of the foregoing premises and respective representations, warranties, agreements, covenants and conditions herein contained, and other good and valuable consideration the sufficiency of which is hereby acknowledged, the Provider, City and Developer agree as follows: 1. Description of Property. 1.2 Property To Be Conveyed. In full consideration for the Provider's (a) withdrawal of its application for a no-cost lease of certain real property under the Community Redevelopment Act, the Homeless Agreements and Homeless Submission Documents; (b) release of the Developer and City provided below and (c) Provider's performance of its other obligations under this Agreement, the Developer and City agree to the following: 1.2.1 Developer shall acquire and convey to the Provider or arrange for the direct conveyance thereof to Provider, and Provider agrees to accept by a grant deed, fee simple title, to the existing 16 unit existing apartment development located at 8081 7th Street, Buena Park, California, as more specifically described and shown on Exhibit B attached herein ("Buena Park Property"). Developer has executed an agreement to purchase the Buena Park Property ("Buena Park Agreement") from the current owner thereof ("Buena Park Owner"), a copy of which has been delivered to Provider. 1.2.2 Developer shall convey to the Provider and Provider agrees to accept by grant deed, fee simple title 6 very low income affordable multifamily housing units at the former MCAS Tustin on Parcel 33 (acquired by Developer pursuant to the Disposition and Development Agreement between Developer and the City dated March 10, 2003, as amended ("Parcel 33 DDA"), as more specifically described and shown on Exhibit C attached herein ("Tustin Units "), subject to Developer's right to relocate the Tustin Units on Parcel 33 as provided below.. 2. Oblil!ations of the Provider. 2.1 Withdrawal of Application. The Provider shall withdraw its original Application for a no cost lease of real property pursuant to the Community Redevelopment Act, the Homeless Agreements and Homeless Submission Documents. Concurrently with the execution of this Agreement, the Provider shall deliver to the Escrow Holder, as hereinafter defined, a notification addressed to the Secretary of the Depm:tment of Health and Human AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 5. Services, substantially in the form of Exhibit D attached hereto and incorporated herein by reference, officially withdrawing its rights to receive a no-cost lease of any real property at the former MCAS Tustin as originally described in the Homeless Agreements and Homeless Submission Documents as well as such other documents as may be reasonably required by the City to effectuate the withdrawal of the right to real property under a no-cost lease at the former MCAS Tustin. 2.2 Other Applicants. The Provider shall cooperate with the City to insure that no other entity, other than the Developer, shall obtain right or interest in the property at MCAS Tustin requested by Provider in the Homeless Agreements and Homeless Submission' Documents by reason of the Provider withdrawing its right to such property. 2.3 Prohibition on Further Applications. The Provider shall not acquire, apply for or otherwise seek to perfect any interest in any portion of the former MCAS Tustin or property at the former MCAS Tustin retained by the Government and not agreed to be conveyed to the Provider pursuant to this Agreement. Moreover, the Provider shall immediately take such steps as are necessary to comply with this paragraph and shall, upon the reasonable request of the City, execute such documents as may be necessary to indicates that it has no further interest in any property at the former MCAS Tustin. 2.4 Prohibition of Neeotiations with Other Parties. The Provider shall not, between the date of execution of this Agreement and the final "Close of Escrow", (as defined below), or subsequent to the Close of Escrow discuss, negotiate or enter into any transaction related to any real property at the former MCAS Tustin with any other parties. 2.5 Use of Tustin Units. Provider hereby agrees to use the Tustin Units for purposes of assisting the homeless and Very Low income families. Moreover, the provisions of California Redevelopment Law and the Disposition and Development Agreement for Parcel 33 between the City and Developer require the Developer to record against the Tustin Units an appropriate Affordable Housing Covenant and Affordable Housing Trust Deed, and Promissory Note ("Affordable Housing Note") which will be recorded concurrently with the closing of any conveyance of the Tustin Units to the Provider. The Affordable Housing Covenant, the Affordable Housing Trust Deed and the Affordable Housing Note shall be substantially in the forms attached as Attachments 12, 14 and 15 of the Parcel 33 DDA. Notwithstanding the foregoing, Provider acknowledges and agrees that the Declaration of Covenants, Conditions, Restrictions and Reservation of Easements ("CC&Rs") that will be recorded by Developer against Parcel 33 includes restrictions on use of residences, including without limitation a provision that no residencies in Parcel 33 may be leased, rented or occupied under any occupancy agreement or license for a period of less that 30 consecutive days and that all lease, rental or occupancy agreements must be in writing and made subject to the CC&Rs. Provider acknowledges and agrees that its use of the Tustin Units shall be subject to and must comply with all provisions of the CC&Rs. AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 6. Completion of Transfer and Conveyance Oblieations. 3.1 Escrow. Upon execution of this Agreement by the Parties, this Agreement shall constitute the joint escrow instructions of the Provider, Developer and City to open an escrow ("Escrow") at First American Title Company ("Escrow Holder") at 2 First American Way, Santa Ana, California 92707, Attention: Teresa Monaghan ("Escrow Officer"). Escrow Holder shall not prepare any further escrow instructions restating or amending this Agreement unless specifically so instructed by all Parties in writing. All supplemental escrow instructions must be in writing and signed by all parties and accepted by the Escrow Holder in order to be effective. Escrow shall be deemed open upon Escrow Holder's receipt of a fully executed copy of this Agreement. Escrow Holder shall notify the parties in writing of the date of opening of Escrow. 3.2 Conveyance of Buena Park Property. The Developer shall conveyor cause the Buena Park Property to be conveyed to the Provider as provided below ("Initial Closing "). 3.3 Provider's Due Dilieence on Buena Park Property. The Provider's obligation to acquire the Buena Park Property shall be contingent upon the Provider's approval of the results of such inspection, examination and other due diligence with regard to the Buena Park Property and its suitability for the intended use as the Provider may elect to conduct during the period commencing on the Effective Date and ending at 5:00 P.M. Pacific Time on March 12, 2004 (the "Due Diligence Period"), but excluding those items known by the Provider, expressly accepted by the Provider, or waived by the Provider. Developer shall deliver to Provider copies of all documents that it receives from others relating to the Buena Park Property which documents shall be delivered without representation or warranty of any kind. Provider is solely responsible for determining the affect, accuracy, completeness and truthfulness of such documentation. Provider's due diligence shall include, without limitation, an examination of the existing condition and repair of the Buena Park Property and all improvements, fixtures and equipment located thereon; that status, content and term of all leases and/or rental agreements affecting the Buena Park Property and all residential units therein and the compliance of the Buena Park Property with all applicable laws, ordinances, statutes and regulations. The Buena Park Agreement (a copy of which has been provided to Provider) includes a specific description of any personal property and or equipment on the Buena Park Property that will be removed by the Buena Park Property owner prior to the "Close of Escrow" as defined below. The Provider acknowledges and agrees that the Due Diligence Period is adequate time to complete such investigation. Since Provider is not a party to the Buena Park Agreement, all due diligence activities conducted by Provider shall be conducted in the presence of a representative of Developer and Provider shall not be entitled to conduct any destructive testing or other activities that are not allowed under the Buena Park Agreement. In addition, Provider shall not contact the Buena Park Owner or any tenants of the Buena Park Property without first providing Developer written notice of the information it wishes to obtain from the Buena Park Owner or such tenants and providing Developer with an opportunity to be present at any meetings or discussions with the Buena Park Owner. Any such AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 7. requests shall be subject to the Buena Park Agreement and the approval of the Buena Park Owner. The Buena Park Property shall be conveyed to Provider AS IS with all faults and without representation or warranty of any kind, express or implied, it being understood that the Buena Park Property is not owned by Developer or the City, Developer and the City have not conducted any due diligence activities regarding the Buena Park Property and that Provider will acquire the Buena Park Property based solely and only upon its due diligence investigations and not based upon any information, representations, warranties or assurances provided by the City or Developer. Neither the City nor Developer shall have any obligation or responsibility in connection with the repair, replacement, upgrade, maintenance or other improvement of the Buena Park Property or any portion thereof. 3.4 Provider's Due Dilil!ence on Tustin Units. Provider has already conducted its due diligence with respect to the Tustin Units and approves all aspects of the Tustin Units and does not require a due diligence period in connection therewith; provided however that Provider may, after receipt of written notice from Developer walk through each Tustin Unit before or after the Close of Escrow for same at a time designated by Developer. At such walk through, Provider and a representative of Developer shall prepare a Homeowner Orientation Report to be signed by Provider and Developer's representative identifying items or conditions which Provider and Developer agree are to be repaired by Developer within a reasonable period of time, no longer than six (6) months. Such items need not be repaired before the Close of Escrow, and if any such items are not repaired before the Close of Escrow, Provider may not extend or delay the Close of Escrow. Provider's failure for any reason (other than reasons beyond the control of Provider) to attend a walk through of the Tustin Unit as set forth above and/or execute a Homeowner Orientation Report shall constitute Provider's acceptance of the condition of the Tustin Unit. Notwithstanding the fact that the Developer is or may offer additional cost optional items and selections to the purchasers of other residences on Parcel 33, Developer is not offering Provider any additional cost optional items or selections in connection with the Tustin Units. In addition, all standard (no additional cost) options and selections regarding the Tustin Units, including, without limitation and as applicable, appliances, colors and materials generally identified by Developer in connection with the sale of residences in Parcel 33 shall, with respect to the Tustin Units, be made by Provider. 3.5 Buena Park Termination. On or before the expiration of the Due Diligence Period, Provider shall notify the Developer in writing of the Provider's election not to accept the Buena Park Property (the "Buena Park Termination Notice"). If the Developer does not receive the Buena Park Termination Notice by 5:00 p.m. on the last day of the Due Diligence Period, the Provider will be deemed to have waived all due diligence contingencies and shall be deemed to have accepted all aspects of the Buena Park Property, including, without limitation, those described in Section 3.3 above. If (a) Provider delivers the Buena Park Termination Notice to Developer as provided above or (b) if the Buena Park Termination Notice is not provided but, for any reason, the Buena Park Property owner fails to close escrow for the sale of the Buena Park Property to Developer by the "Initial Closing Date", as defined below, the Provider agrees to accept a cash payment in lieu of conveyance of the Buena Park Property in the amount of two AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 8. million five hundred seventy-five thousand ($2,575,000.00) dollars ("Cash Equivalent Replacement") which payment shall satisfy all of the Developer's and City's full obligations for the Buena Park Property as identified in this Agreement as though the Buena Park Property had been conveyed to Provider. In the event of the occurrence of either of the events described in (a) or (b) above, the Cash Equivalent Replacement shall be paid Provider at the Initial Closing. 3.6 Convevance of Tustin Units. The Developer shall commence construction of the Tustin Units within 6 months after the Initial Closing), shall diligently thereafter pursue construction and completion and shall complete construction and deliver same to the Tustin Units to the Provider in phases. The estimated dates for conveyance of the Tustin Units are as follows (all capitalized words and phases used in this Section which are not defined in this Agreement shall have the meanings given them in the Parcel 33 DDA): one Very Low Income unit in Phase 1 which Phase 1 unit completions currently estimated between December 2004 and April 2005; one Very Low Income unit in Phase 2 with Phase 2 unit completions currently estimated between December 2004 and April 2005; one Very Low Income unit in Phase 3 or 4 with Phase 3 and 4 completions currently estimated to sometime in 2005; one Very Low Income unit in Phase 5, one Very Low Income unit in Phase 6 and one Very Low Income unit in Phase 7 with completions of each of these Phases currently estimated between June and October of 2005. The location of each Tustin Unit in each Phase will be as specified on Exhibit "C" unless Developer, subject to written approval of the City pursuant to the Parcel 33 DDA, elects to change such location prior to the Close of Escrow for such Tustin Unit. In addition, the actual date of conveyance of the Tustin Unit will vary depending on the location of the applicable Tustin Unit selected by Developer. Provider agrees that the exact location of the Tustin Units is not of concern to Provider. Provider's failure or refusal to accept title to any or all of the Tustin Units in accordance with this Agreement shall not terminate, modify or release Provider from any of its other obligations, covenants or agreements under this Agreement, including without limitation, those set forth in Section 5.0 below. 3.7 Survev and Title Insurance. It shall be a condition precedent to the Provider's obligation to close Escrow on the Buena Park Property and Tustin Units that Escrow Holder issue a CLTA policy of title insurance in connection with the conveyance of the Buena Park Property and each Tustin Unit with coverage of such policy for the Buena Park Property to be equal to the purchase price of the Buena Park Property paid by Developer under the Buena Park Agreement and the coverage of such policy for each Tustin Unit shall be retail purchase price of the applicable Tustin Unit that would have been offered by Developer to the public had the Tustin Unit not been conveyed to Provider as such price is provided by Developer. The Provider shall also have the right to request and obtain an ALTA extended coverage owner's policy of insurance and any other title endorsements as the Provider deems necessary for the Buena Park Property or Tustin Units. Any such extended coverage or title endorsement requested by the Provider shall be procured at its sole cost and expense of Provider and the availability and issuance of same shall not be a condition to or delay the close of Escrow. Developer shall provide to Provider or its authorized agent any title report or title commitment and copies of title exceptions related to title of the Buena Park Property or Tustin Units that Developer has in its AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 9. possession. Title to the Tustin Units and Buena Park Property shall be delivered subject to (a) for the Buena Park Property, all exceptions to title of record at the time of expiration of the Due Diligence Period and for the each Tustin Unit all exceptions to title of record at the time of the Close of Escrow for such Tustin Unit; (b) with respect to the Tustin Units all instruments, documents and agreement that are to be placed of record against the Tustin Units under the Parcel 33 DDA; the CC&Rs and in connection with Developer's entitlement, development and/or marketing of residences on Parcel 33; (c) with respect to the Buena Park Property all leases and tenancy agreements executed prior to or after the date of this Agreement with respect to units in the Buena Park Property and (d) all monetary exceptions excluding taxes and assessments that are due and payable; mechanics liens and deeds of trust (other than required under (b) above). The CC&Rs require the payment of assessments by all owners of residences on Parcel 33. Provider will pay such assessments as provided in the CC&Rs. 4. Escrow Closing. 4.1 Closing Dates. The Initial Closing shall occur on April 9, 2004 ("Initial Closing Date"). The Initial Closing Date may be extended upon mutual agreement of the Parties and the Buena Park Owner. The Close of Escrow for each Tustin Unit shall be the date ("Subsequent Closing Date") which is 30 days following the issuance of a Certificate of Occupancy for the applicable Tustin Unit. As used in this Agreement, the "Close of Escrow" shall mean the date on which the applicable grant deed is recorded. 4.2 Providers Conditions Precedent to Closine. The Provider's obligations to close Escrow for the purchase the Buena Park Property and Tustin Units is subject to and conditioned upon the Provider's satisfaction or the Provider's written waiver, in its sole discretion, as to each of the following conditions to Close of Escrow ("Provider's Closing Conditions") on or before the Initial or Subsequent Closing Dates, as applicable (as applicable a "Closing Date"). 4.2.1 Document Deliveries. Delivery to Escrow Holder of the following documents no later than the business day immediately prior to the applicable Closing Date: a) the Grant Deed, executed by the Developer or, with respect to the Buena Park Property, the Buena Park Property owner (Provider agreeing in that case to accept the conveyance of the Buena Park Property directly from the owner thereof), acknowledged and in recordable form; b) a federal "FIRPTA" Affidavit executed by the Developer or with respect to the Buena Park property, the Buena Park Property owner; c) such proof of the Developer's and City's authority and authorization to enter into this Agreement and consummate the transactions contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 10. delivering any instruments, documents or certificates on behalf of the Developer and City to act for and/or bind the Developer and City as may be reasonably required by Escrow Holder and/or the Provider; and 1 2 3 4 5 6 7 8 4.2.2 Title Policv. 9 - CLTA Title Policy to the Provider. 10 11 12 13 14 15 . 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 d) such other documents or instruments as Escrow Holder may reasonably request to consummate the transaction contemplated in this Agreement. Escrow Holder shall have committed to issue the 4.2.3 Leases and Contracts. Provider shall be responsible for providing all tenants of the Buena Park Property with statutory notices regarding security deposits and other required matters. 4.3 Developer and Citv's Deliverv of Purchase Price: Other Costs. 4.3.1 No later than one (1) day prior to the Initial Closing Date, (a) the Developer shall deliver to Escrow by federal wire transfer the sum of $1,800,000 ("Developer Closing Payment"); (b) if the purchase price for the Buena Park Property ("Buena Park Purchase Price ") under the Buena Park Agreement is in excess of such amount, the City shall deposit into Escrow by federal wire transfer the difference between the Developer's Closing Payment and the Buena Park Purchase Price ("City Closing Payment") and (c) the City shall deposit any additional other sums required to pay Provider's closing costs which are not the obligation of the Provider. It is intended that the Close of Escrow for the Buena Park Property will occur simultaneously with the close of escrow under the Buena Park Agreement and that the funds deposited by the Developer Closing Payment and City Closing Payment (if any) will be transmitted to the escrow under the Buena Park Agreement to allow for such concurrent closing. 4.3.2 On or before each Subsequent Closing, the City shall transmit $150,000 to Escrow Holder, which sum shall be used as Provider's purchase price to include also all closing costs of the applicable Tustin Unit ("Tustin Unit Purchase Price") (for a total of not more than $900,000 for all Tustin Units) to be held in Escrow and released to Developer at the Close of Escrow. 4.4 Citv and Developer Closine Conditions. Not later than one (1) Business Day prior to the applicable Closing Date, Provider shall deposit into Escrow: 4.4.1 such proof of the Provider's authority and authorization to enter into this Agreement and consummate the transactions contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or delivering any instruments, documents or certificates on behalf of the Provider to act for and/or bind the Provider as may be reasonably required by Title Company and/or the Developer and City; 03-90772.4/10 AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 11. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 4.4.2 with respect to each Tustin Unit, fully executed and acknowledged Affordable Housing Note, the Affordable Housing Trust Deed, and the Affordable Housing Covenants; and 4.4.3 such other documents or instruments as Developer, City and Escrow Holder may reasonably request to consummate the transaction contemplated in this Agreement. 4.4.4 With respect to each Tustin Unit, Provider shall execute and deliver to Escrow Holder, for release to Developer at the Close of Escrow, all documentation prepared by or on behalf of Developer and generally required by Developer of purchasers of residences on Parcel 33, including without limitation the Supplemental Agreement; Receipt for Final Subdivision Public Report issued by the California Department of Real Estate; disclosure statements; Real Estate Agency Disclosure; Addendum Concerning Affiliated Title Insurer; Developer's Limited Warranty; First Year Customer Care Program; Maintenance Recommendations and Certification of Receipt of Documents (collectively "Tustin Documents" ). 4.5 Additional Closin2 Conditions. In addition to the provisions of Sections 4.2 through 4.5, the Close of Escrow on the Buena Park Property and on any of the Tustin Units shall be conditioned upon satisfaction of the following conditions, which shall be for the benefit of each of the Developer and the Provider: 4.5.1 Closine Cost Statement. Escrow Holder shall have delivered at least two (2) Business Days prior to the Closing Date a statement of costs to each of the Developer, City and Provider. 4.5.2 Supplementary Escrow Instructions. The Developer, City and the Provider shall have prepared and approved any supplemental Escrow instructions as may be needed. 4.5.3 Closin2 Certificate. The Developer, City and the Provider shall each submit to Escrow Holder a certificate stating that all Closing Conditions for its benefit have been satisfied or waived. 4.6. Procedures for Convevance of Propertv From Citv to Developer. 4.6.1 Costs and Expenses. The costs and expenses of Escrow shall be allocated as follows: a) Citv Costs. With respect to the Buena Park Property, the City shall pay (i) all documentary transfer taxes and one-half (1/2) of all Escrow fees and costs. 03-90772.4111 AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 12. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 b) Developer Costs. With respect to each Tustin Unit, the Developer shall pay (i) all documentary transfer taxes and document recording charges for the Grant Deeds, and other documents recorded at the Close of Escrow; (ii) all Escrow fees and costs; and (iii) the Developer's share of prorations, if any and as applicable. c) Provider Costs. The Provider shall pay for (i) the premium for the Provider's title policy as it relates to ALTA extended coverage and the cost of Provider's title endorsements, if any; (ii) the cost, if any, of any title insurance policy required by any Mortgagee of Provider; (iii) for the Buena Park Property only, the document recording charges for the Grant Deeds, and other documents recorded at the Close of Escrow; (iv) for the Buena Park Property only, one-half (112) of all Escrow fees and costs; and (v) the Provider's share of prorations, if any and as applicable. d) Consultant Costs. The Provider shall pay the fees of all consultants and employees (including lawyers, environmental, engineering and land use consultants) engaged by it. e) Other Costs. All costs and expenses related to the Close of Escrow not otherwise allocated in this Agreement shall be allocated between the Developer, City and the Provider, as applicable in accordance with the customary practice in Orange County, California. 4.6.2 Deliveries to Provider Upon Closine. With respect to the Buena Park Property, the Developer or Buena Park Owner, as applicable shall deliver to the Provider, on or prior to the Closing Date, outside of Escrow, the following items: a) Leases and Contracts. Originals of all leases and contracts affecting the Buena Park Property which have been provided to Developer by the Buena Park Property owner; provided however, that Provider shall not be obligated to assume any contracts affecting the Buena Park Property other than leases and rental agreements and other agreements that bind the Buena Park Property. 4.6.3 Prorations. a) General. Rentals, revenues and other income, if any, from the Buena Park Property shall be prorated in accordance with the Buena Park Agreement as though Provider was the purchaser under the Buena Park Agreement. b) Taxes. Current real property taxes and assessments shall be prorated as of the Close of Escrow based on the most current assessment issued by the Orange County Recorder. 03-90772.4112 AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 13. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 c) Method of Proration. All prorations shall be made in accordance with customary practice in Orange County, except as otherwise expressly provided in this Agreement. The Developer and the Provider agree to cause a schedule of prorations to be prepared prior to the applicable Closing Date. Such prorations, if and to the extent known and agreed upon as of the Close of Escrow, shall be paid by the Provider to the Developer or Buena Park Owner, as applicable (if the prorations result in a net credit to the Developer or Buena Park Owner, as applicable) or by the Developer or Buena Park Property owner, as applicable to the Provider (if the prorations result in a net credit to the Provider) by increasing or reducing the cash to be paid by the Provider at the Close of Escrow. Any such prorations not determined or not agreed upon as of the Close of Escrow shall be paid by the Provider to the Developer or Buena Park Owner, as applicable, or by the Developer or Buena Park Property owner, as applicable, to the Provider, as the case may be, in cash as soon as practicable following the Close of Escrow. A copy of the schedule of prorations as agreed upon by the Developer or Buena Park Property owner, as applicable and the Provider shall be delivered to Escrow Holder at least two (2) days prior to the Closing Date. All prorations provided for in this Section shall be on an "actual day" basis and a three hundred sixty-five (365) day year. 4.6.4 Disbursements and Other Actions bv Escrow Holder. At the Close of Escrow, subject to the satisfaction or waiver by the benefited party of the closing conditions, Escrow Holder shall promptly undertake all of the following in the manner indicated below: a) Funds. Debit or credit all matters addressed in this Agreement and prorate all matters and disburse to the Developer or Buena Park Property owner, as applicable the purchase price (as adjusted by the foregoing debits, credits and prorations) deposited with Escrow Holder. b) Recordine. Cause the Grant Deed and any other documents which the Developer, Provider and the City may mutually direct, or which may be required to be recorded by the terms of this Agreement and/or the Buena Park Agreement, as applicable, to be recorded in the Official Records, obtain conformed copies thereof and distribute same to the Developer, Provider and the City. c) Title Policv. Issue the title policy as described above to the Provider. d) Deliverv of Documents to Developer and Provider. Deliver to the Developer and the Provider original counterparts (and conformed copies, if applicable) of the Grant Deed, Tustin Documents; the FIRPT A Affidavit, the California Form 593-W, if applicable, and any other documents (or copies thereof) deposited into Escrow by the Developer, Provider or the City pursuant hereto, and deliver to the Developer, the City and the Provider a certified copy of their respective Escrow closing statements. 03-90772.4113 AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 14. e) Other Actions. Take such other actions as the Developer, the City, or Provider direct pursuant to mutually executed supplemental Escrow instructions. 1 2 3 4 5 6 7 8 9 10 5.1 Provider shall indemnify, protect, defend and assume all responsibility for 11 and hold harmless the Developer and it members and their respective employees, agents and 12 representatives, and the City and its appointed and elected officials, employees, contractors, 13 representatives and agents (collectively referred to as the "Indemnified Parties") with counsel 14 reasonably acceptable to the City and Developer, from and against any and all claims of loss, 15 damage and/or liability for personal injury, property damage or otherwise, resulting or arising 16 from or in any way in connection with the Buena Park Property and/or Tustin Units (with the 17 exception of Developer's obligations under the Limited Warranty which will be provided as part 18 of the Tustin Documents). The foregoing indemnity shall include reasonable attorneys' fees and 19 costs of court. However, the foregoing indemnity shall not apply to) any loss, damage or liability 20 to the extent it results from the gross negligence or willful misconduct of the Indemnified Parties. 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 f) Notice. All communications from the Escrow Holder shall be directed to the addresses and in the manner established in this Agreement for notices, demands and communications between the Parties. 5. Indemnification and Release. 5.2 Upon Provider's acquisition of the fee title to all or any portion of the Buena Park Property or Tustin Units, Provider shall, to the maximum extent permitted by law, indemnify, protect, defend, assume all responsibility for and hold harmless the Indemnified Parties from and against any and all claims resulting or arising from or in any way connected with the existence, release, threatened release, presence, storage, treatment, transportation and/or disposal of any Hazardous Materials at any time on, in, under, from, about or adjacent to any portion or portions of the Buena Park Property or Tustin Units, regardless whether any such condition pre-exists acquisition or is subsequently caused, created or occurring, provided, however, that Provider shall not be responsible (and such indemnity shall not apply) to the gross negligence or willful misconduct of the Indemnified Parties. This environmental indemnity shall be binding upon successors of the Provider owning all or any part thereof in accordance with Section 5.3 of this Agreement. 5.3 Release. Except for breach of the obligations of the City or Developer under this Agreement, Provider hereby waives and releases on its behalf all claims and demands against the Indemnified Parties for any loss, damage, injury or claim related to or arising in connection with the Homeless Agreement or Homeless Accommodation Documents. The foregoing waiver and release shall apply with respect to all losses before or after any Close of Escrow; and shall apply to losses incurred by the Indemnified Parties or their property as well as by Provider or any third parties and their property. 03-90772.4114 AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 15. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 PROVIDER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS LEGAL COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HA VE MA TERIALL Y AFFECTED HIS SETTLEMENT WITH THE DEBTOR." PROVIDER, BEING A WARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. Provider: (initials) (initials) Notices. 6. All notices or other communications between the parties required or permitted hereunder shall be in writing and personally delivered or sent by first class mail" or sent by reputable overnight courier (such as Federal Express, UPS or DHL) to the following addresses: If the Provider: Major Lee Lescano Salvation Army-Orange County Administration 10200 Pioneer Road Tustin, Ca. 92780 Phone: (714) 832-7100 Fax: (714) 832-2361 Major Allie Niles Salvation Army Territorial Headquarters 180 East Ocean Boulevard Long Beach, California 90802 Phone: (562) 491-8758 03-90772.4115 AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 16. 1 If the City: City of Tustin 300 Centennial Way Tustin, Ca. 92780 Attention: City: Manager & Assistant City Manager Phone: (714) 573-3107 Fax: (714) 838-1602 If the Developer: WL Homes LLC 3121 Michelson, suite 200 Newport Beach, Cal 92616 Attention: Mitchell Bradford Phone: (949) 265-2473 Fax: (949) 265-2573 If the Escrow Holder First American Title Company 2 First American Way Santa Ana, California 92707 Attention: Teresa Monaghan Phone: Fax: 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 A notice shall be effective on the date of personal delivery if personally delivered before 5:00 p.m., otherwise on the day following personal delivery, or on the date of receipt, if transmitted by electronic facsimile transmission (with electronic confirmation of receipt) prior to 5:00 p.m. or otherwise on the next business day, or two (2) business days following the date the notice is postmarked, if mailed, or on the day following delivery to the applicable overnight courier, if sent by overnight courier. Either party may change the address to which notices are to be given tó it by giving notice of such change of address in the manner set forth above for giving notice. 7. Miscellaneous Provisions. 7.1 Authoritv. The Parties each represent and warrant to each other that each is duly authorized and has legal capacity to execute and enter into this Agreement on behalf of the Parties for which execution is made. 7.2 Bindine Effect and Assienment. Except as otherwise provided herein, this Agreement is binding on the parties and their respective heirs, personal representatives, successors, and assigns. Without written consent of the Developer and City (which consent may be withheld in the sole discretion of the City and Developer), this Agreement is not assignable by the Provider, either in whole or part. 03-90772.4116 AGREEMENT BETWEEN THE SAL VA TION ARMY, TUSTIN AND WL HOMES LLC Page 17. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 7.3 No Third Partv Beneficiaries. This Agreement has been made and entered into solely for the benefit of the Parties to this Agreement and their respective successors and permitted assigns. Nothing in this Agreement confers any rights or remedies on any other person or persons. 7.4 Title of Parts and Sections. Any titles of the subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. 7.5 Applicable Law. This Agreement shall be interpreted under and pursuant to the laws of the State of California. 7.6 No Joint Venture or Partnership. Nothing contained in this Agreement shall be deemed or construed to create a partnership, joint venture or any other relationship between the Parties hereto than purchaser and seller according to the provisions contained in this Agreement or cause the City to be responsible in any way for the debts or obligations of the Provider or Developer. 7.7 Cooperation. This Agreement is intended to create a legally binding obligation between the Developer, Provider and City. Because time is of the essence, this Agreement outlines the obligations in short form but the Parties agree to cooperate reasonably to complete the transactions contemplated herein. 7.8 Real Estate Commissions. The City shall not be liable for any real estate commissions, brokerage fees or finders' fees that may arise from this Agreement. The Developer hereby agrees to indemnify and hold the Provider, the City and its elected and appointed officials, employees and representatives harmless from any and losses and liabilities arising from or in any way related to any claim by any broker, agent, or finder retained by Developer regarding this Agreement or the transactions contemplated by this Agreement. 7.9 Entire Aereement. This Agreement and Exhibits sets forth in all the covenants, provisions, contracts and understandings between the Parties and constitutes the entire understanding and agreement between the Parties and there are no other agreements, covenants, promises, contracts, conditions or understandings, either oral or written, between the Parties. This Agreement and its Exhibits is not subject to amendment, change, modification or supplement except by a written instrument, executed by each of the Parties hereto. 7.10 Date and Deliverv of Aereement. Notwithstanding anything to the contrary contained in this Agreement, the Parties intend that this Agreement shall be deemed effective upon its execution by each Party to the Agreement and the Effective Date shall be calculated from the execution date noted on the preamble to the Agreement. No memorandum or other evidence of this Agreement shall be recorded. 03-90772.4117 AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 18. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 7.11 Multiple Orieinals: Counterparts. This Agreement may be executed in multiple originals, each of which is deemed an original, and may be signed in counterparts. follows: 03-90772.4118 7.12 Exhibits. The Exhibits are attached and made a part of this Agreement as A. B. Property Requested Originally by Provider. Description of 16 Unit Apartment Development Located at 8081 71Íl Street, Buena Park, California, to be Accepted by Provider. Description of 6 Very Low Income Affordable Multifamily Housing Units at the Former MCAS Tustin to be Accepted by Provider. Provider Withdrawal Notice to Department of Health and Human Services. c. D. [SIGNATURE PAGE FOLLOWS] AGREEMENT BETWEEN THE SALVATION ARMY, TUSTIN AND WL HOMES LLC Page 19. 1 2 3 IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date first set forth above. "Provider" SALVATION ARMY, a California corporation By: By: Title: Title: "Developer" WL HOMES LLC, Delaware limited liability company By: By: Dated: By: ATTEST: Dated: By: Steve Kabel President, Southern California Region Mitchell Bradford Vice President, Southern California Region "City" William Huston, City Manager Pamela Stoker City Clerk APPROVED AS TO FORM: Special Counsel for the City of Tustin By: 4 03-90772.4119 George Schlossberg Kutak Rock LLP Exhibit A Description of Property Originally Requested by Provider General Location: Reuse Plan Disposal Parcel 34 Legal Description: a portion of Parcel I-B-l Units to be Transferred: 24 existing, two bedroom units to be transferred to the Salvation Army by a no-cost lease with a minimum term of 20 years with two, optional 5 year lease extensions, subject to all terms of the Homeless Assistance Agreement dated October 1996, as subsequently amended by the First Amendment to the Homeless Assistance Agreement dated February, 1997 (the "Homeless Agreements") Exhibit B Description of Buena Park Property Address: 8081 7th Street, Buena Park Assessor's Parcel No: 070-011-16 Legal Description: The southerly 150 feet of Lot 3, measured along the Westerly line of said Lot of Tract 983 as per map recorded in Book 32, Page 49 of Miscellaneous Maps, in the office of the County recorder of said Orange County. Exhibit C Description of Tustin Park Property General Location: Edinger and Harvard, City of Tustin Tentative Tract Map: 16474 Units to Be Conveyed: Shown on Site Plan attached to this Exhibit C and incorporated herein as part of the Exhibit, as may be modified based on the Agreement: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Exhibit D Provider Withdrawal Notice to Department of Health and Human Services The Salvation Army 10200 Pioneer Road Tustin, California 92782 [DATE] Honorable Tommy G. Thompson Secretary Department of Health and Human Services 200 Independence Avenue, S.W. Washington, D.c. 20201 Re: Withdrawal of Application for EmergencvlTransitional Housing - MCAS Tustin Dear Secretary Thompson: I am writing in my official capacity on behalf of the Salvation Army, a California Corporation, to withdraw all of the Salvation Army's applications to acquire buildings and land at the former Marine Corps Air Station, Tustin, California, ("MCAS Tustin") made pursuant to and under the authority of the Defense Base Closure and Realignment Act of 1990, as amended (Pub.L.No. 101-510), Title V of the Stewart B. McKinney Homeless Assistance Act (42 US.C.§11301 ~~, and the Base Closure Community Redevelopment and Homeless Assistance Act of 1994 (Pub.L.No. 103-421), including but not limited to the application for twenty-four (24) existing family housing units as emergency/transitional housing in the northeast housing area at MCAS Tustin. 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 Thank you for your kind assistance. Yours very truly, The Salvation Army By: Major Lee Lescano Orange County Coordinator cc: Bill, Huston, Tustin City Manager Christine Shingleton, Assistant Tustin City Manager George R. Schlossberg, Esq.