HomeMy WebLinkAbout10 CONDITIONAL ASSIGNMENT & ASSUMPTION OF EXCLUSIVE NEGOTIATING AGREEMENT & FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT WITH OLIVERMCMILLAN TUSTIN LEGACY LLCAgenda Item 10
Reviewed:
AGENDA REPORT City Manager
Finance Director tNIIA,
MEETING DATE: MAY 15, 2018
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: CONDITIONAL ASSIGNMENT AND ASSUMPTION OF EXCLUSIVE
NEGOTIATING AGREEMENT AND FIRST AMENDMENT TO
EXCLUSIVE NEGOTIATING AGREEMENT WITH OLIVERMCMILLAN
TUSTIN LEGACY LLC
SUMMARY:
Modification of the Exclusive Negotiating Agreement (ENA) with OliverMcMillan Tustin
Legacy LLC to provide for: 1) a conditional extension of the negotiating period, 2)
modification of property boundaries, and, 3) modifications to the original ENA as
referenced in Conditional Approval Letters and the Cost Agreement. This City -owned
property is located at Tustin Legacy.
RECOMMENDATIONS:
Authorize the City Manager to execute the Conditional Assignment and Assumption of
ENA as well as the First Amendment to the ENA, subject to any non -substantive
modifications as may be deemed necessary and/or recommended by the City's special
real estate counsel or the City Attorney.
FISCAL IMPACT:
The original ENA required the City and Developer to fund up to $1 million each of
expenses related to the project and contribute $500,000 each for master planning. Under
the First Amendment, the City expenses are now capped at $700,000 and master
planning remains capped at $500,000 with the Developer funding all expenses beyond
the City caps.
CORRELATION TO THE STRATEGIC PLAN:
This action correlates to the City's Strategic Plan for Economic and Neighborhood
Development (Goal A).
BACKGROUND:
Agenda Report
Conditional Assignment and Assumption of ENA, First Amendment to ENA with OM
May 15; 2018
Page 2
On November 3, 2015, the City entered into an ENA with OM to negotiate the
development of an approximate 123 -acre area located in Disposition Package 7B and 3
at Tustin Legacy. The ENA terminates on November 3, 2018. This proposed First
Amendment would do the following:
1. Negotiating Entity. In 2017, OM and Brookfield Residential (Brookfield) formed a
Joint Venture known as OMBRP LLC (OMBRP). The new entity provided the
financial capacity to pursue the project at the scale and within the schedule
expected by the City. In February 2018, Brookfield acquired OM including its
assets. Because of the acquisition, a Conditional Assignment and Assumption
was required which acknowledges the transfer of all rights formerly held by OM
under the ENA to OMBRP, a wholly-owned Brookfield entity.
2. Development Area. During the course of preparing a master plan for the area it
was determined by City staff and the Developer that the development objectives
would best be met within an approximately 39 -acre footprint, all property outside
of that boundary is to be retained by the City, including the South Hangar (see
Exhibit F to Attachment 2).
The First Amendment also allows OMBRP to submit a concept plan and business
plan for the approximately 6.75 -acre "Conditional Property' along Tustin Ranch
Road (see Exhibit I to Attachment 2) by June 15, 2018 that may or may not be
approved by the City Manager. If approved, the Conditional Property will be added
to the overall project. If the plans are not submitted or approved, the Conditional
Property will not be considered part of the ENA.
3. Proposed Modifications to Original ENA Terms. The First Amendment
memorializes the following modifications:
a. New Milestones. The City and OMBRP established new milestones to
facilitate the planning and negotiation process with an outside date of
October 16, 2018 for DDA execution. The ENA termination date remains
November 3, 2018, however the City Manager now has the authority to
extend the termination date 90 days beyond November 3, 2018 under the
First Amendment.
b. City Expenses. Under the original ENA, the City was required to fund its
own expenses such as staff time, legal counsel and 3rd party consultants up
to $1 million dollars. The First Amendment lowers this cap to $700,000.
OMBRP will fund all expenses above and beyond the $700,000 cap up to
$1.8 million.
Agenda Report
Conditional Assignment and Assumption of ENA, First Amendment to ENA with OM
May 15, 2018
Page 3
c. Shared Costs. Under the original ENA, the City and Developer would each
spend up to $500,000 ($1 million total) on master planning. To date, each
party has spent approximately $112,000 ($225,000 total) of these shared
costs. The First Amendment now states that the balance of the shared costs
(approximately $775,000 between the two parties) must be used for park
(Hangar Park and Legacy Park) programming and planning. The $500,000
for shared costs was previously appropriated at the original ENA execution.
ohn bVchanan
or of Economic Development
K nneth Piguee
Management Analyst II
Attachments:
Ryan Swiontek
Senior Management Analyst
1. Conditional Assignment and Assumption of Exclusive Negotiating Agreement
2. First Amendment to Exclusive Negotiating Agreement
FIRST AMENDMENT TO
EXCLUSIVE NEGOTIATING AGREEMENT
FOR COMMUNITY CORE DEVELOPMENT
THIS FIRST AMENDMENT TO EXCLUSIVE NEGOTIATING AGREEMENT FOR
COMMUNITY CORE DEVELOPMENT ("Amendment" or "First Amendment to ENA") is
entered into this 15th day of May, 2018 (the "Amendment Effective Date") by and between the
City of Tustin ("City") and OMBRP LLC, a Delaware limited liability company ("Developer"),
with reference to the following:
RECITALS:
A. City and OliverMcMillan Tustin Legacy Inc., a Delaware corporation
("Predecessor -in -Interest") entered into an Exclusive Negotiating Agreement For Community
Core Development dated as of November 3, 2015 ("Original Agreement"), relating to the
redevelopment of an approximately 122.94 -acre portion of City's Tustin Legacy project
commonly known as the Community Core area ("Property"). The Original Agreement
contemplates that Developer's negotiations with City would ultimately result in Disposition and
Development Agreements ("DDA") and related documentation, whereby Developer would
acquire the Property for development in accordance with the Master Plan generated during the
term of the Original Agreement.
B. Developer was formed on December 11, 2017 as a joint venture between OM and
Brookfield Southern California Holdings LLC, a Delaware limited liability company
("Brookfield") and approved by the City pursuant to Section 6.4 of the Original Agreement in
December 2017.
C. As of February 1, 2018, an affiliate of Brookfield acquired all of Predecessor -in -
Interest's membership interest in Developer.
D. On May 1, 2018, pursuant to that certain Conditional Assignment And Assumption
Of Exclusive Negotiating Agreement Tustin Legacy Community Core ("Assignment") entered
into by and between Predecessor -in -Interest and Developer, Predecessor -in -Interest assigned and
Developer assumed, all of Predecessor -in -Interest's rights and obligations under the ENA as
further described in Section 5 of this Amendment.
E. The Original Agreement established a term of two (2) years from the Effective Date
thereof. Acting on authority granted by the Original Agreement, the City Manager extended the
term of the Original Agreement for the Additional Period and imposed certain additional milestone
requirements pursuant to a Master Plan/Business Plan approved by the City on November 3, 2017.
As so extended, the Additional Period and the Original Agreement now terminate on
November 3, 2018.
F. On November 3, 2017, City and Developer agreed to make changes to the
City/Developer Costs pursuant to the Cost Agreement (as defined below).
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G. Developer has submitted documentation with respect to certain of the Mandatory
Milestones established in Exhibit "C" of the Original Agreement and the City has acknowledged
satisfaction or conditional satisfaction of certain of the Mandatory Milestones as set forth in the
Conditional Approval Letters (as defined below).
H. The City and Developer desire to modify the term of the Original Agreement to
provide for a conditional extension of the Additional Period, to modify the boundaries of the
Property, to incorporate the terms and conditions set forth in the Conditional Approval Letters and
the Cost Agreement to memorialize various side agreements as further set forth in this
Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants, conditions and promises
set forth herein, the City and Developer agree as follows:
1. Definitions.
All capitalized terms used herein shall have the definitions given in the Original
Agreement, unless otherwise expressly stated herein.
2. Amendments to Text of Original Agreement.
2.1 Section 1.7. The last sentence of Section 1.7 of the Original Agreement is hereby deleted
in its entirety and replaced with the following.
"Subsequently, Developer and City have agreed the AP Property, as
further described below, shall (a) comprise approximately 39 net acres
of land comprised of a portion of Disposition Package 7B and a portion
of Disposition Package 3, of which approximately 14 acres comprises
the Sublease Property and the remainder comprises the Fee Property
and (b) shall not include the Hangar or the Property upon which the
Hangar is located. The proposed development of the AP Property as
described in this ENA and the Master Plan/Business Plan approved by
the City on November 3, 2018 and the Final Concept Plan approved by
the City on February 9, 2018 is referred to herein as the "Project'."
2.2 Section 1.8. The penultimate sentence of Section 1.8 of the Original Agreement is
hereby deleted in its entirety and replaced with the following:
"Although the Parties intended during the Initial Period to develop a
Master Plan for the entirety of the Property, the Parties have agreed that
during the Additional Period, this ENA and any Transaction
Documents entered into by the Parties shall apply solely to the Property
depicted on Exhibit "F" (the "AP Property").
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2.3 Section 2.1. In the third sentence of Section 2.1 of the Original Agreement, the words
"At the commencement of the Additional Period" are hereby deleted in their entirety and
replaced with "Upon approval by the City of the Final Business Plan (as described in
Exhibit "G"),".
2.4 Section 4.1. Section 4. 1, clause (b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following:
"(b) during the Additional Period, with respect to the Additional
Mandatory Milestones, the Transaction Documents and related
documents to be entered into between the City and Developer with
respect to the Transaction."
2.5 Section 4.2.1. In Section 4.2.1 of the Original Agreement, the words "set forth in Section
5" are hereby deleted in their entirety and replaced with "set forth on Exhibit "G", and as
further described in Section 5 of this Agreement,".
2.6 Section 4.2.2. Section 4.2.2 of the Original Agreement is hereby deleted in its entirety
and replaced with the following:
"4.2.2 Additional Period. Unless earlier terminated in accordance
with this ENA, the ENA Negotiating Period shall terminate on
November 3, 2018, which is the third (3`d) anniversary of the Effective
Date (as such date may be extended or earlier terminated in accordance
with this Section 4.2 or by written amendment to this ENA, the
"Additional Period"). The Parties acknowledge and agree that the
conditions precedent to commencement of the Additional Period have
been satisfied and that the Additional Period shall expire on November
3, 2018. During the Additional Period, the Developer shall comply
with the Mandatory Milestones set forth on Exhibit "G" and as further
described in Section 5 of the ENA for City Manager review and
approval. Subject to Section 4.2.3, Developer shall have the right to
request, by provision of written notice to City not later than October 1,
2018, and the City' Manager shall have the authority on behalf of the
City to agree to a ninety (90) day extension to the Additional Period.
If at the end of the Additional Period, Developer has not signed a DDA
and any other Transaction Documents requested by Developer to be
considered by the City Council, each in form and substance prepared
and approved by the City Manager in his or her sole discretion, then
this ENA and the ENA Negotiating Period shall automatically and
immediately terminate without further written notice."
2.7 Section 4.4.1. Section 4.4.1 of the Original Agreement is hereby deleted in its entirety
and replaced with the following:
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"4.4.1 Costs and Expenses Borne by City.
(a) Until such time as the City has expended Seven Hundred
Thousand Dollars ($700,000) for the City Preliminary Project
Expenses (the "City Expense Cap"), the City shall be fully responsible
for its own overhead, costs and expenses related to this ENA, the
Transaction Documents, the Property and the potential Project,
including, without limitation, fees and costs of the City's own third -
party consultants including financial advisors, engineers, including for
engineering studies associated with potential Project infrastructure,
environmental consultants, appraisers and legal counsel; participation
in and evaluation of the Parties planning and feasibility process in
contemplation of the proposed Project; costs incurred by or on behalf
of the City through September 30, 2017 for Hangar rehabilitation
studies incurred for Hangar studies (which does not include Hangar
construction drawings); periodic verification of compliance with the
then -current Specific Plan during development of the Master Plan, and
any and all other expenditures required in connection with the
implementation and/or termination of the ENA, the drafting,
negotiation and execution of the Transaction Documents, and other
acts carried out in contemplation of the proposed Project and drafting
and negotiation of the ENA, any amendments thereto, and the
Transaction Documents (collectively, the "City Preliminary Project
Expenses"). The total budget for City Preliminary Project Expenses
approved by the Parties is One Million Eight Hundred Thousand
Dollars ($1,800,000). From and after City's expenditure of funds equal
to the City Expense Cap, Developer shall be responsible to pay all City
Preliminary Project Expenses up to a total Developer expenditure of
One Million One Hundred Thousand Dollars ($1,100,000)
("Developer Cost Cap"). Notwithstanding anything to the contrary
set forth in this ENA, as the City Expense Cap has been fully funded,
City has no obligation to fund any City Preliminary Project Expenses
or to pay any other sums in furtherance of the transactions described in
the ENA. Unless otherwise agreed by the Parties in writing, Developer
shall have no obligation to fund City Preliminary Project Expenses in
excess of the Developer Cost Cap. Nothing herein shall limit the
obligation of Developer to pay amounts required to be paid by
Developer pursuant to the ENA, including without limitation, the
Developer Preliminary Project Expenses.
(b) The term "City Preliminary Project Expenses" does not
include, and the City Expense Cap and Developer Cost Cap shall not
be applicable to, (x) amounts payable by the City under Section 4.4.3
or (y) amounts paid for what otherwise be City Preliminary Project
Expenses but were incurred prior to the Effective Date, it being the
Parties' intent that only new money expended after the Effective Date
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count against the City Expense Cap and Developer Cost Cap.
Determination of costs, expenses, and fees constituting City
Preliminary Project Expenses shall be made by the City in its sole
discretion. Determination of costs, expenses, and fees constituting City
Preliminary Project Expenses shall be made by the City in its sole
discretion and Developer shall be entitled to receive summary notices
from the City setting forth the identity of the provider or cost and the
amounts attributable to each that constitute City Preliminary Project
Expenses at each time the City requests an increase in the ENA Deposit
pursuant to Section 4.4.1(c).
(c) Developer has submitted to City a good faith deposit in the
sum of Three Hundred Thousand Dollars ($300,000) (together with
any interest accruing thereon and any additional amount deposited as
set forth below in this Section 4.4.1, the "ENA Deposit") to cover City
Preliminary Project Expenses in excess of the City Expense Cap. The
ENA Deposit shall be deposited in an account in a bank or trust
company selected by the City. Interest shall accrue to any balances in
the account for the benefit of Developer and as additional security for
Developer's obligations hereunder. The ENA Deposit will be
expended by City to cover the City Preliminary Project Expenses, as
further described in Section 4.4.2 and the ENA Deposit will be depleted
accordingly. Until such time as Developer has funded the Developer
Cost Cap in full, each time the amount of funds in the ENA Deposit
account is depleted below Fifty Thousand Dollars ($50,000),
Developer shall be required to submit an additional Two Hundred and
Fifty Thousand Dollars ($250,000) to City which shall be credited by
the City to the ENA Deposit account. Amounts due to the City on
account of City Preliminary Project Expenses and deducted by the City
from the ENA Deposit are referred to herein as "City Expense
Payments".
(d) If the Parties enter into Transaction Documents, the
Unapplied Deposit Funds (defined below) shall be returned to
Developer, or at Developer's request, applied to any deposit required
as security for Developer's performance under the DDA. If the Parties
fail to enter into the Transaction Documents within the ENA
Negotiating Period or any subsequent Offer Period and Developer has
not negotiated diligently or in good faith or has not otherwise carried
out its obligations under this ENA, the City may retain the Unapplied
Deposit Funds unless a court of competent jurisdiction determines in a
final decision that the City has not negotiated in good faith as described
in Section 4.4. In all other cases, upon the expiration or termination of
the ENA, the City shall return the Unapplied Deposit Funds to
Developer. "Unapplied Deposit Funds" means the amount of the
ENA Deposit (including any additional funds deposited by Developer
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pursuant to this Section 4.4.1) remaining after the City has deducted
therefrom the full amount of the City Preliminary Project Expenses
incurred by the City to the date of termination of this ENA and, if
applicable, the Offer Period.
(e) Developer acknowledges that it is currently anticipated that
the Transaction Documents shall require an additional deposit in an
amount to be determined as security for the performance of Developer's
obligations under the Transaction Documents for the payment of
certain costs and expenses incurred by City. City and Developer
acknowledge that such amounts as paid by Developer towards such
costs and expenses of the City shall be taken into consideration in the
determination of the final land residual to calculate the purchase price
of the portions of the AP Property to be acquired in fee.
(f) From and after May 15, 2018 (being the effective date of the
First Amendment to ENA), the terms of this ENA, as amended, shall
supersede the terms of that certain Letter re: City Preliminary Project
Expenses dated November 3, 2017 executed by the Parties ("Cost
Agreement")."
2.8 Section 4.4.3.
(a) The second sentence of Section 4.4.3 of the Original Agreement is hereby
deleted in its entirety and replaced with the following:
"Unless otherwise agreed by the Parties in writing and subject to Section
6.8.2, Developer will be responsible for contracting with and directing
the selected consultants with consultation and agreement from the City.
It is agreed by the Parties that the City shall be responsible. for
contracting with and directing consultants for the Hangar park and
programming, with consultation and agreement by Developer."
(b) The fourth sentence of Section 4.4.3 of the Original Agreement is hereby
deleted in its entirety and replaced with the following:
"Developer shall be responsible for all additional Shared Costs once
the City has expended the City Share Cap."
2.9 Section 4.4.4. A new Section 4.4.4 is hereby added to the Original Agreement, as
follows:
"4.4.4 Use of Excess Shared Costs. City and Developer shall use
all remaining Shared Costs funds for park planning and programming.
The City shall take the lead in contracting with park (Hangar and
Legacy) programming and design firms. Developer and City shall
Tustin OM 1st Amendment to 6 City of Tustin /OMBRP, LLC
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equally share planning costs until the entirety of the City Share Cap has
been expended by the City."
2.10 Section 5.1. Section 5.1 of the Original Agreement is hereby deleted in its entirety and
replaced with the following:
"Section 5.1. Mandatory Milestones. Exhibit "C" of the ENA set
forth the original mandatory milestones for performance by Developer
of the tasks outlined in Section 5. During the Initial Period, the City
and Developer agreed to amend and restate the original mandatory
milestones and accordingly, Exhibit "C" is hereby declared to be of no
further force and effect and the revised mandatory milestones, which
are set forth on Exhibit "G", comprise the "Mandatory Milestones".
The Master Project Schedule and the Mandatory Milestones may be
amended in writing by the Parties from time to time. The date for
performance of any Mandatory Milestone may be extended by the City
Manager if there is a reasonable basis for such extension and so long
as such extension does not exceed the Additional Period. Failure of
Developer to timely meet its submittal obligations with respect to the
Mandatory Milestones shall constitute an event of default by Developer
under this ENA and may result in termination of the ENA and the ENA
Negotiating Period as determined solely by the City Manager."
2.11 Section 5.3. The introductory paragraph of Section 5.3 of the Original Agreement is
hereby deleted in its entirety and replaced with the following:
"The Master Plan shall be comprised of the Final Concept Plan, the
Preliminary Infrastructure Plan and the Entitlement Plan, each as
described below. Except as documented in the Conditional Approval
Letters (and as further set forth in Section 5.3.4), the requirements of
Section 5.3.1, Section 5.3.2 (which the Parties had previously agreed
to make the responsibility of Developer) and Section 5.3.3 have been
satisfied in full. The elements described in Section 5.3.4 and Section
5.4 comprise Mandatory Milestones to be satisfied during the
Additional Period as set forth on Exhibit "G"."
2.12 Section 5.3.4. A new Section 5.3.4 is hereby added to the Original Agreement, as
follows:
"Developer has submitted documentation with respect to the Mandatory
Milestones and the City has acknowledged satisfaction or conditional
satisfaction of certain of the Mandatory Milestones as set forth in the
following documents issued by City, each of which is attached as
Exhibit "H" (collectively, the,"Conditional Approval Letters"):
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1. November 3, 2017: ENA Master Plan and Business Plan Conditional
Approval;
2. February 9, 2018 Final Concept Plan approved by City in satisfaction
of the requirements in Section 5.3.1 of the ENA; and
3. April 6, 2018: Preliminary Infrastructure Plan Approval which
includes additional steps that Developer is required to undertake in
order to satisfy the requirements of the City under the ENA.
In order to satisfy the Mandatory Milestones, Developer shall comply
with the requirements in the Conditional Approval Letters.
Developer's failure to satisfy the conditions in the Conditional
Approval Letters within the time period set forth in the Mandatory
Milestones for performance shall be an event of default under the ENA,
subject to the notice and cure provisions of Section 9."
2.13 Section 5.4. The last sentence of Section 5.4 of the Original Agreement is hereby deleted
in its entirety and replaced with the following:
"Developer shall refine the Business Plan throughout the ENA
Negotiating Period and as further required by Sections 6.3 and 6.6 of
the ENA and the terms and conditions set forth in the Conditional
Approval Letters attached as Exhibit "H". Developer's failure to
satisfy the conditions set forth in Section 5.4 within the time period set
forth in the Mandatory Milestones for performance shall be an event of
default under the ENA, subject to the notice and cure provisions of
Section 9."
2.14 Section 6.4. Section 6.4 of the Original Agreement is hereby amended by addition of
the following sentence as the second sentence thereof:
"Developer shall, within ten (10) days of execution of the First
Amendment to ENA, submit in writing to the City the names of all of
Developer's lead negotiators who shall have authority to make
decisions on behalf of Developer."
2.15 Section 7.2. Section 7.2 of the Original Agreement is hereby deleted in its entirety and
replaced with the following:
"7.2 Principals and Offices of Developer. The principal offices
of Developer are located at: 3200 Park Center Drive, Suite 1000, Costa
Mesa, California 92626. The principals of Developer are as follows:
Brookfield Southern California Holdings LLC, a Delaware limited
liability company ("BSCH"); and
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Brookfield Residential OM Holdings LLC, a Delaware limited
liability company ("BROMH").
The lead negotiators (as described in Section 6.2 of the Original Agreement) shall be
Nicole Burdette for BSCH and Eric Buchanan for BROMH.
2.16 Section 10.7. The address of Developer as set forth in Section 10.7 of the Original
Agreement is hereby deleted in its entirety and replaced with the following:
"Developer: OMBRP LLC
c/o Brookfield Southern California Holdings LLC
Attention: Nicole Burdette, Senior Vice President
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Telephone: (714) 200-1672
Email: Nicole.Burdette@brookfieldrp.com
3. Additional Property May be Added By City Manager.
Developer and City hereby agree as follows with respect to the land depicted on Exhibit
"I" ("Conditional Property") containing approximately 6.75 net acres. Developer shall submit,
on or before June 15, 2018, a concept and business plan for development of the Conditional
Property. City Manager shall have the right, on behalf of City, to review and approve or
disapprove, in his sole discretion, the submitted concept and business plan. Upon approval of such
plans by the City Manager, the Conditional Property shall be added to the AP Property and
thereafter shall be considered part of the AP Property for all purposes under the ENA. If Developer
does not timely submit or following timely submittal, City Manager does not approve such concept
and business plans, the Conditional Property shall not be part of the AP Property. Until such time
(if at all) as the Conditional Property is added to the AP Property pursuant to this Section, City
shall have no obligations under the ENA with respect to the Conditional Property except as set
forth in this Section and, the ENA, including without limitation, Section 4.5.1, shall not apply to
the Conditional Property.
4. Modification to Exhibits.
4.1 Exhibit "D". Exhibit "D" (List of Sublease Property Parcels (LIFOC Parcels) and Fee
Property Parcels (Non-LIFOC Parcels) is hereby deleted in its entirety and replaced with
the Exhibit "D" (List of Sublease Property Parcels (LIFOC Parcels) and Fee Property
Parcels (Non-LIFOC Parcels for AP Property) attached hereto and incorporated herein
by reference.
4.2 Exhibit "F". Exhibit "F" (AP Property) attached hereto is hereby incorporated by
reference.
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4.3 Exhibit "G". Exhibit "G" (Mandatory Milestones) attached hereto is hereby
incorporated by reference and supersedes in its entirety Exhibit "C" and the milestones
established therein.
4.4 Exhibit "H". Exhibit "H" (Conditional Approval Letters) attached hereto is hereby
incorporated by reference.
4.5 Exhibit "I". Exhibit "I" (Conditional Approval Letters) attached hereto is hereby
incorporated by reference.
5. Representations and Warranties of Developer and Predecessor -in -Interest.
5.1 Notwithstanding any other provision of the ENA to the contrary, Developer warrants and
represents to the City that it has succeeded to all rights, title, and interest in the Original
Agreement and has assumed all obligations of Predecessor -in -Interest under the Original
Agreement.
5.2 Predecessor -in -Interest hereby represents and warrants to the City that pursuant to the
Conditional Assignment, Predecessor -in -Interest has assigned to Developer and
Developer has assumed all of Predecessor -in -Interest's rights, title, interest and
obligations in and to the Original Agreement and, if any, to the Property and, on behalf
of itself and its predecessors and successors in interest, other than Developer, and its
partners and joint venturers, Predecessor -in -Interest hereby relinquishes all right, claim
and interest, if any, with respect to the Original Agreement, this Amendment, the
Property, the AP Property and the Conditional Property.
6. Relinquishment of Rights in "Property" Other than "AP Property".
Developer hereby acknowledges and agrees that by execution of this ENA Amendment,
Developer on behalf of itself and its predecessors and successors in interest, including
Predecessor -in -Interest, and its partners and joint venturers, relinquishes all right, claim
and interest, if any, with respect to portions of the Property as may be set forth in the
ENA other than with respect to the AP Property described on Exhibit' F". Such
relinquishment includes relinquishment of the right to exclusively negotiate with the City
with respect to any portion of the Property other than the AP Property set forth on
Exhibit 'T". Developer hereby agrees to indemnify, defend, protect and hold harmless,
the City and its elected officials, employees, agents, representatives, consultants and
contractors, from and against any and against any and all claims, liens, encumbrances,
actions, losses, damages, liabilities, and/or expenses, including reasonable attorneys' fees
and related costs, arising in connection with, relating to, or resulting from (a) the Original
.Agreement, including without limitation the assertion by Predecessor -in -Interest of any
right, claim or interest in the Original Agreement, this Amendment, or all or any portion
of the Property, the AP Property and/or the Conditional Property, or (b) the assertion by
Developer of any right, claim or interest in any portion of the Property other than the AP
Property.
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7. Transfer.
Developer shall not make or create any voluntary or involuntary transfer, sale, assignment,
pledge, hypothecation or the like to any Person, including any transfer, sale, assignment, pledge
or hypothecation of Ownership Interests in Developer, or of its interest in this Agreement or any
part thereof ("Transfer"), nor shall any Person having an Ownership Interest in Developer
Transfer any such Ownership Interest without the prior written consent of the City, which consent
may be given in the sole discretion of the City. Any consent or approval of the City pursuant to
this Section 6 shall be as authorized by the City Council. In the absence of express written approval
by the City, no Transfer shall relieve Developer or any other party from any obligations pursuant
to this Agreement.
As used in this Section 7, the term "Person" shall mean any individual, partnership,
corporation (including, but not limited to, any business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture, or any other entity or association and
the term "Ownership Interests" shall mean shall mean the possession, directly or indirectly, of
voting securities or partnership, general partnership, membership or other ownership interests
(based upon value or vote) of a Person.
8. Miscellaneous.
8.1 Authority. The persons signing below represent that they have the authority to bind their
respective Party, and that all necessary approvals from their respective board of directors
and elected officials have been obtained.
8.2 Counterparts. This Amendment may be executed in any number of counterparts, each
of which will be deemed to be an original, but all of which together will constitute one
instrument. Facsimile and emailed signatures will be binding and effective.
8.3 Terms. Unless otherwise expressly indicated herein, all references in the Original
Agreement and in this Amendment to "this Agreement', "the Agreement" or the "ENA"
shall mean and refer to the Original Agreement as modified by this Amendment.
8.4 No Other Changes. Except as modified by the terms of this Amendment, the terms of
the Original Agreement shall remain unmodified and in full force and effect. Only those
provisions of the Original Agreement specifically amended herein shall be affected by
this Amendment. In the event of any conflict or inconsistency between the terms of the
Original Agreement and this Amendment, the terms of this Amendment shall control.
8.5 Effective Date of Amendment. The Amendment Effective Date first set forth above
shall be the effective date of this Amendment.
IN WITNESS WHEREOF, the City and Developer hereto have executed this Amendment as of
the Amendment Effective Date set forth above.
{remainder of page is blank/signatures commence on following page}
Tustin OM 1st Amendment to 11 City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
"CITY"
City of Tustin
Dated: By:
APPROVED AS TO FORM
By:
David Kendig
City Attorney
Armbruster Goldsmith & Delvac LLP
Special Real Estate Counsel to the City
Wo
Amy E. Freilich
Jeffrey C. Parker
City Manager
"DEVELOPER"
OMBRP LLC, a Delaware
limited liability company
By: Brookfield Southern California Holdings
LLC, a
Delaware limited liability company
Its: Managing Member
By: 1Ail
Name: NiGOle BUrd_tteu
Title:
e•
By:
Name: iA RI1:n�r�r � iT -h
Title:
Secretary
Tustin OM 1st Amendment to S-1 City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2)
(00000002)
Accepted and Agreed as to Section 5.2
OliverMcMillan Tustin Legacy, Inc., a
Delaware corporation
By:
Name:
Title:
Tustin OM 1 st Amendment to S-2 City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
EXHIBIT "D"
LIST OF SUBLEASE PROPERTY PARCELS (LIFOC PARCELS) AND FEE
PROPERTY PARCELS (NON-LIFOC PARCELS) FOR AP PROPERTY
Tustin OM 1 st Amendment to Exhibit "D" City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
APN
Owner or Ground Lessee
Status
430-371-27
City Of Tustin
Non LIFOC
430-371-28
City Of Tustin
LIFOC
430-371-61
City Of Tustin
Non LIFOC
430-381-38
City Of Tustin
LIFOC
430-381-39
City Of Tustin
LIFOC
430-381-40
City Of Tustin
LIFOC
430-381-41
City Of Tustin
LIFOC
430-381-43
City Of Tustin
Non LIFOC
430-381-65
City Of Tustin
Non LIFOC
430-381-66
City Of Tustin
LIFOC
430-381-67
City Of Tustin
Non LIFOC
430-381-68
City Of Tustin
LIFOC
430-381-69
City Of Tustin
LIFOC
430-381-74
City Of Tustin
Non LIFOC
430-381-75
City Of Tustin
LIFOC
Exhibit D
EXHIBIT "F"
AP PROPERTY
Tustin OM 1 st Amendment to Exhibit " ' City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
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EXHIBIT "G"
MANDATORY MILESTONES
1.
Financial Capacity Demonstrated*
November 17, 2017
2.
New Legal Entity(ies) Created*
December 15, 2017
3.
Final Concept Plan Approved*
(February 9, 2018
4.
Preliminary Infrastructure Plan Approved*
April 6, 2018
5.
Schedule of Performance Approved*
May 4, 2018
6.
Final Business Plan Approved
May 18, 2018
7.
Conceptual Park Designs Approved
July 13, 2018
8.
DDA Execution
< 1 Year (October 16, 2018)
*Completed except as to items specified in Conditional Approval Letters attached as
Exhibit "H".
Tustin OM 1 st Amendment to Exhibit "G" City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
EXHIBIT "H"
CONDITIONAL APPROVAL LETTERS
Tustin OM I st Amendment to Exhibit "H" City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
Office of the City Manager
November 3, 2017
OliverMcMillan Tustin Legacy, LLC
Attn: William Persky, CFO
7338 1h Avenue
San Diego, CA 92101
TUSTIN
BUILDING OUR FUTURE
HONORING OUR PAST
SUBJECT: ENA MASTER PLAN AND BUSINESS PLAN CONDITIONAL APPROVAL
Dear Mr. Persky:
The City is in receipt of the Master Plan and Business Plan submitted by Oliver McMillan (OM)
and Brookfield Residential (Brookfield) on October 3, 2017. City staff has reviewed the submittal
over the past month and believes that significant progress on the project has been made since
both parties entered into the Exclusive Negotiating Agreement (ENA). However, there remain a
number of unresolved items which will need further refinement and negotiation prior to execution
of a Disposition and Development Agreement (DDA) between the parties.
The City is only interested in further negotiating with the collective parties proposed in the Master
Plan Organizational Plan (OMBRP and Brookfield). Pursuant to Section 4.2.2 of the ENA, I am
conditionally approving the submitted Master Plan and Business Plan to allow the parties to enter
into the Additional Period (AP) of the ENA and continue negotiations. This conditional approval
is predicated upon the establishment and adherence to new AP Mandatory Milestones and due
dates as set forth below:
AP Mandatory Milestones:
1. Financial Capacity Demonstrated
2. New Legal Entity(ies) Created
3. Final Concept Plan Approved
4. Preliminary Infrastructure Plan Approved
5. Schedule of Performance Approved
6. Business Plan Approved
7. Conceptual Park Designs Approved
8. DDA Execution
2 Weeks (November 17, 2017)
6 Weeks (December 15, 2017)
14 Weeks (February 9, 2018)
22 Weeks (April 6, 2018)
26 Weeks (May 4, 2018)
28 Weeks (May 18, 2018)
36 Weeks (July 13, 2018)
< 1 Year (October 16, 2018)
These AP Mandatory Milestones are essential to moving the process forward. The date for
performance of any AP Mandatory Milestone may be extended by the City Manager if there is a
reasonable basis for such extension and so long as such extension does not exceed the
Additional Period. Failure of Developer to timely meet its submittal obligations with respect to the
AP Mandatory Milestones may result in termination of the ENA and the ENA Negotiating Period
as determined solely by the City Manager. Pursuant to Section 4.2.2 of the ENA the Negotiating
Period shall not extend beyond the third (31) anniversary of the Effective Date, by November 3,
300 Centennial Way, Tustin, CA 92780 • P: (714) 573-3010 0 F: (714) 838-1602 • www.tustinca.orlg
ENA Master Plan and Business Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018. All other provisions of the ENA remain in effect. Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone.
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed. The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project.
Sinc e,
cy.
J ,by . Parker
t M nager
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms:
Oliver McMillan Tustin Legacy, LLC.
William P. Persky
Chief Financial Officer
Brookfield Residential, Inc.
Adrian Foley
President & Chief Operations Officer
Attachment: City Comments on the Master Plan and Business Plan
CC (Via Email): Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Burdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendig, Woodruff, Spradlin & Smart
Amy Freilich, Armbruster Goldsmith & Delvac LLP
ENA Master Plan and Business Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018. All other provisions of the ENA remain in effect. Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone.
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed. The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project.
/Sie iy . Parker
Hager
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms:
Oliver McMillan Tustin Legacy, LLC.
i
- ---- ------- - --------
Wil4ar�-P-Rer-sk-r, �` c i�.;�-T� r:� t�/�1�t , �� L' C S
C1b ef-F-inaAaiaa-BffaceF
Brookfield Residential, Inc. Brookfield Homes Southern California LLC
I
Adrian Foley
President & Chief Operations Officer Nicole Burdette
Senior Vice President
Attachment: City Comments on the Master Plan and Business Plan
CC (Via Email): Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Burdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendig, Woodruff, Spradlin & Smart
Amy Freilich, Armbruster Goldsmith & Delvac LLP
OMBRP Master Plan and Business Plan Comments
Both the Master Plan and the Business Plan will serve as the basis for a Disposition and
Development Agreement for the Tustin Legacy Community Core project. The Master
Plan will be primary to the Business Plan. It is in the interest of the City to first create the
optimal Concept Plan (land use plan) which will then inform the Business Plan. Currently
the Concept Plan does not meet all of the City's expectations, consequently, the provided
Business Plan falls short of reflecting the City's vision for the project.
As noted previously, the for -sale products will need to be reworked in order to attain a
Concept Plan. Comments on the Business Plan contained herein remain broad and will
be more specific upon City approval of a Final Concept Plan. City staff would like to
schedule a meeting to review in detail and explain each of these items.
Master Plan
I. Concept Plan Refinement
Many of the Guiding Principles established by the City and Oliver McMillan for the
Community Core Area have been incorporated into the submitted Concept Plan.
However, outstanding areas for improvement exist in order to complete the Concept
Plan and comprehensively reflect the Guiding Principles. The City and Developer
will need to work diligently together in finalizing the plan which will inform the
feasibility analysis for the project.
Based on initial review of the submitted Master Plan, the City has identified the
following areas which will require further adjustment and planning in order to
achieve an acceptable Final Concept Plan.
1. Establish Plan Boundary
a. DDA Boundary
b. Concept Plan Boundary
c. Grading and Infrastructure Boundary
2. For -Sale Residential Product Development
a. Complement the Urban Grid
i. Units to Address the Street w/Ground Floor Living
ii. Avoid Internally focused Communities and Internal Drives
iii. Access via Alleyways and Paseos/Greenways
b. Unique Design to the Site Conditions
c. Product Segmentation Expansion (include a higher end product)
d. Community Facility
City Response to OMBRP Proposal
November 3, 2017
Page 2 of 5
e. Architectural Character (Contemporary)/Spec. Level
3. Mixed-Use/Retail
a. Mixed -Use Block 1 — Commitment to David Baker Design
b. Mixed -Use Block 2 — Design and Spec. Level
c. Avoid Novelty Architecture (Faux Control Tower Building)
4. Adjacent Land Uses (Outside of DDA Boundary)
a. Office use integration
b. Hospitality use integration
c. Appropriate Block Sizing and Uses
d. Joint -use Parking Plan/Locations (Interim vs. Permanent)
5. Public AccessNoid Space
a. Street Sections
b. Paseos
c. Pedestrian Realm
d. Placemaking
6, Legacy Park System
a. Hangar Park
b. Legacy Median Park
c. Legacy Park Connections/Transitions
d. Pedestrian Bridge Landings
7. Phasing Plan
a. DDA Property Development
b. City Property (Non -DDA Parcels) Development
c. Infrastructure
11. Preliminary Infrastructure Plan Preparation
Upon completion of a Final Concept Plan, Developer with assistance from the City
will finalize the Preliminary Infrastructure Plan. Advanced cost estimates will serve
as the basis for determining the fiscal feasibility threshold under the Business Plan.
III. Entitlement Plan
It is the intent of the City to continue the development of other portions of Tustin
Legacy regardless of the outcome of negotiations regarding this property. The City
City Response to OMBRP Proposal
November 3, 2017
Page 3 of 5
and Developer will need to evaluate the existing entitlements and development
potential in order to account for simultaneous development of all portions of
Neighborhood D. The transfer of entitlements/development potential between
Neighborhoods and Planning Areas at Tustin Legacy may be required. This
process should be accounted for in the project schedule.
Business Plan
IV. Business Plan/Term Sheet
The submitted Business Plan will need to be updated to reflect the Final Master
Plan, the proposed Business Plan by the developer provides a framework for
continued negotiations. During the Additional Period negotiations will continue until
acceptance of a term sheet by both the City and Developer or until early termination
of the Agreement or non-compliance with the newly agreed upon Additional Period
Mandatory Milestones. City evaluation of the Business Plan will review the liability
and risk associated with the proposed project for the City. There is an expectation
of a maximum price cap on the infrastructure investment. The following items will
require further dialogue and negotiation:
1. Appraisal — The City will convey property at not less than Fair Market Value as
determined through opinion by a qualified Appraiser.
2. For -Sale Residential
a. Base Purchase Price — TBD based on products.
b. Participation — The City's expectation of 50/50 after developer has met
an 8.5% Net Margin return threshold.
c. Payment Structure
d. LIFOC Mitigation Costs
3. Mixed -Use Blocks
a. Base Purchase Price — TBD
b. Participation — City expectation of 50150 after developer minimum return
threshold is met; developer minimum returns will need further discussion.
c. 3rd Party Debt Requirements — Obtaining third party debt shall not be a
condition to start the mixed-use buildings.. City will not allow third -party
debt on the construction loan to exceed 60% of the development costs.
4. Retail (Hangar Park)
a. Ground Lease Price — City will work with developer to negotiate a base
rent amount with annual increases and periodic adjustments (5 year
intervals suggested). City is not interested in percentage rents. Any use
City Response to OMBRP Proposal
November 3, 2017
Page 4 of 5
other than retail, such as Hotel and Office would need further discussion
and negotiation in light of industry standards for such uses.
b. Ground Lease (Retail) Term + Options — City expectation of 40 -year
lease term with extension options. Lease term will be based on
magnitude of improvements; however, City will not consider a 99 -year
lease.
c. Triggers to Commence Construction will be tied to adjacent site
commencement and completion schedules.
5. Tax Rate Structure — Maximum Rate will need to account for the City's ability to
provide for services to Tustin Legacy at a rate not less than that used Citywide
including the following:
a. Tax B (Services) CFD —mandatory tax associated with providing services
to the area will be determined by the City through the establishment of a
new or existing CFD.
b. Tax A (Facilities) CFD (City option) — City may use other debt options in
financing infrastructure.
c. TUSD Facilities CFD/buy down -- TUSD can impose a CFD tax; however,
City may opt to buy down the debt early or advance funding of TUSD
debt.
6. Interest associated with Developer Financed Infrastructure — Developer interest
accrued on infrastructure improvements at a rate not to exceed 6.125%
7. Infrastructure Financing — Further review of Land Credit based on Business Plan
including funding of infrastructure by City, complete or partial.
8. Non -Compete Blocks — The Developer proposed no details on the terms of a
non -compete for the identified parcels. City is not inclined to accept non-
compete terms which would hinder its ability to execute the Final Concept Plan.
9. Option Payments - Not addressed in the provided proposal. City expectation
of option payments on Mixed -Use Block 2.
10. Parking Lease — The leasing of required parking spaces on City -owned
property/facilities has not been addressed in the proposal. City has an
expectation of payment for required parking on City owned property/facilities
funded and operated by the City.
11. Market Analysis — Should be provided on a periodic basis with additional detail
to justify pricing. and rent levels.
12. Land Conveyance/Takedown — Conveyance will need to be tied to horizontal
improvements.
13. Mixed Use Block 2 Conveyance — Block 2 will not convey until Hangar Park
Retail has commenced construction. The outside option date on Block 2 will be
City Response to OMBRP Proposal
November 3, 2017
Page 5 of 5
the earlier of 36 months after Block 1 conveyance or 60 months after execution
of the DDA.
14. Developer Responsibilities
a. Funding of Project Expenses (City and Developer Expenses) — Currently
being addressed in a side letter.
b. Hangar Park Retail Triggers —Construction of Hangar Park and the Retail
within the park are to occur simultaneously. Any triggers to construction
commencement will be reciprocal.
15. City Responsibilities
a. City Import— No timetable of performance has been identified for the City
import requirements.
b. Hangar Studies — City will perform advanced planning and engineering
studies to evaluate Hangar rehabilitation and adaptive reuse.
c. Hangar Programming — City, in its sole discretion, may work with
Developer on programming of the Hangar. If Developer requires a more
active participation role in Hangar programming, then financial
participation in Hangar rehabilitation will be required.
d. LIFOC Permitting — City cannot guarantee Navy approval of
activities/uses within the LIFOC areas.
Office of the City Manager
February 9, 2018
Ms. Nicole Burdette
Brookfield Southern California Holdings LLC
3200 Park Center Drive, Suite 100
Costa Mesa, CA 92626
SUBJECT: FINAL CONCEPT PLAN APPROVAL
Dear Ms. Burdette:
The City is in receipt of the Final Concept Plan submitted by OMBRP LLC on February 8, 2018.
OMBRP and the City have worked closely together in recent months to develop this Final Concept
Plan, and substantial progress has been made. We agree that a number of items remain unresolved
and further refinement is needed; however, this Final Concept Plan does meet the goals and
objectives agreed to by both parties. City staff will continue to work with you on refining the
necessary details of the project.
By way of this letter, I am approving the Final Concept Plan to continue the planning process as
outlined in our November 3, 2017 letter (attached). Progress to date will be reviewed with the City
Council and any further direction on the plan will be conveyed to you by City staff. As you are
aware, the City Council will be the final approval authority for the project. We look forward to
continuing through the planning process with you on this important piece of Tustin Legacy.
Parker
City
Attachment: ENA Master Plan and Business Plan Conditional Approval Letter
CC: Matthew West, Deputy City Manager
John Buchanan, Director of Economic Development
David Kendig, City Attorney
Amy Freilich, Armbruster Goldsmith & Delvac, LLP
300 Centennial Way, Tustin, CA 92780 • P: (714) 573-3010 • F: (714) 838-1602 0 www.tustinca.org
Office of the City Manager
November 3, 2017
OliverMcMllian Tustin Legacy, LLC
Attn: William Persky, CFO
733 81' Avenue
San Diego, CA 92101
TUSTIN
BVIUMNO OUR FUTURE
HONORING OUR PAST
SUBJECT: ENA MASTER PLAN AND BUSINESS PLAN CONDITIONAL APPROVAL
Dear Mr. Persky:
The City is in receipt of the Master Plan and Business Plan submitted by Oliver McMillan (OM)
and Brookfield Residential (Brookfield) on October 3, 2017. City staff has reviewed the submittal
over the past month and believes that significant progress on the project has been made since
both parties entered into the Exclusive Negotiating Agreement (ENA), However, there remain a
number of unresolved items which will need further refinement and negotiation prior to execution
of a Disposition and Development Agreement (DDA) between the parties.
The City is only interested in further negotiating with the collective parties proposed In the Master
Plan Organizational Plan (OMBRP and Brookfield). Pursuant to Section 4.2.2 of the ENA, I am
conditionally aoarovina the submitted Master Plan and Business Planto allow the parties to enter
into the Additional Period (AP) of the ENA and continue negotiations. This conditional approval
is predicated upon the establishment and adherence to new AP Mandatory Milestones and due
dates as set forth below:
AP Mandatory Milestones:
1.
Financial Capacity Demonstrated
2 Weeks (November 17, 2017)
2.
New Legal Entity(les) Created
6 Weeks (December 15, 2017)
3.
Final Concept Plan Approved
14 Weeks (February 9, 2018)
4,
Preliminary Infrastructure Plan Approved
22 Weeks (April 6, 2018)
5.
Schedule of Performance Approved
26 Weeks (May 4, 2018)
6.
Business Plan Approved
28 Weeks (May 18, 2018)
7.
Conceptual Park Designs Approved
36 Weeks (July 13, 2018)
8,
DDA Execution
< 1 Year (October 16, 2018)
These AP Mandatory Milestones are essential to moving the process forward. The date for
performance of any AP Mandatory Milestone may be extended by the City Manager if there is a
reasonable basis for such extension and so long as such extension does not exceed the
Additional Period. Failure of Developer to timely meet its submittal obligations with respect to the
AP Mandatory Milestones may result in termination of the ENA and the ENA Negotiating Period
as determined solely by the City Manager. Pursuant to Secfion 4.2.2 of the ENA the Negotiating
Period shall not extend beyond the third (3rd) anniversary of the Effective Date, by November 3,
300 Centennial Way, Tustin, CA 92780 • P; (714) 573-3010 4 F; (714) 838-1602 • www.tustinca.org
ENA Master Pian and Business Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018. All other provisions of the ENA remain In effect. Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone,
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed, The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project.
;hnearker
er
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms;
Oliver McMillan Tustin Legacy, LLC.
William P, Persky
Chief Financial Officer
Brookfield Residential, Inc,
Adrian Foley
President & Chief Operations officer
Attachment: City Comments on the Master Plan and Business Plan
CC ( Via Email), Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Surdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendig, Woodruff, Spradlin & Smart
Amy Freilich, Armbruster Goldsmith & Delvac I_LP
ENA Master Plan and Business Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018. All other provisions of the PNA remain In effect, Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone.
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed, The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project,
Sinc e
IJ f, y Parker
M nager
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms:
Oliver McMillan Tustin Legacy, LLC.
r
uuiiva -P -Pere 14z1 C 13 c/ S S
Brookfield Residential, Inc. Brookfield Homes Southern California LLC
Y1 Wbklpe7-
Adrian Foley
President & Chief Operations Officer Nicole Burdette
Senior Vice President
Attachment: City Comments on the Master Plan and Business Plan
CC (Via Email): Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Burdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendig, Woodruff,. Spradlin & Smart
Amy Frellich, Armbruster Goldsmith & Delvac LLP
OMBRP Master Plan and Business Plan Comments
Both the Master Plan and the Business Plan will serve as the. basis for a Disposition and
Development Agreement for the Tustin Legacy Community Core project. The Master
Plan will be primary to the Business Plan. It is In the interest of the City to first create the
optimal Concept Plan (land use plan) which will then inform the Business Plan. Currently
the Concept Plan does not meet all of the City's expectations, consequently, the provided
Business Plan falls short of reflecting the City's vision for the project.
As noted previously, the for -sale products will need to be reworked in order to attain a
Concept Plan. Comments on the Business Plan contained herein remain broad and will
be more specific upon City approval of a Final Concept Plan. City staff would like to
schedule a meeting to review In detail and explain each of these items.
Master Plan
I. Concept Plan Refinement
Many of the Guiding Principles established by the City and Oliver McMillan for the
Community Core Area have been incorporated into the submitted Concept Plan..
However, outstanding areas for improvement exist In order to complete the Concept
Plan and comprehensively reflect the Guiding Principles. The City and Developer
will need to work diligently together in finalizing the plan which will inform the
feasibility analysis for the project.
Based on initial review of the submitted Master plan, the City has identified the
following areas which will require further adjustment and planning in order to
achieve an acceptable Final Concept Pian,
1. Establish Plan Boundary
a. DDA Boundary
b. Concept Plan Boundary
c. Grading and Infrastructure Boundary
2. For -Sale Residential Product Development
a. Complement the Urban Grid
I. Units to Address the Street w/Ground Floor Living
Ii. Avoid intemallyfocused Communities and Internal Drives
iii. Access via Alleyways and Paseos/Greenways
b. Unique Design to the Site Conditions
c. Product Segmentation Expansion (Include a higher end product)
d. Community Facility
City Response to OMBRP Proposal
November 3, 2017
Page 2 of 5
e. Architectural Character (Contemporary)/Spec. Level
3. Mixed-Use/Retail
a. Mixed -Use Block 1 — Commitment to David Baker Design
b. Mixed -Use Block 2 -- Design and Spec. Level
c. Avoid Novelty Architecture (Faux Control Tower Building)
4. Adjacent Land Uses (Outside of DDA Boundary)
a. Office use integration
b. Hospitality use integration
c. Appropriate Block Sizing and Uses
d. Joint -use Parking Plan/Locations (Interim vs. Permanent)
5. Public Access/Void Space
a. Street Sections
b. Paseos
c. Pedestrian Realm
d. Placemaking
6, Legacy Park System
a. Hangar Park
b. Legacy Median Park
c. Legacy Park Connections/Transdions
d. Pedestrian Bridge Landings
7. Phasing Plan
a. DDA Property Development
b. City Property (Non -DDA Parcels) Development
c. Infrastructure
II. Preliminary Infrastructure Plan Preparation
Upon completion of a Final Concept Plan, Developer with assistance from the City
will finalize the Preliminary Infrastructure Plan. Advanced cost estimates will serve
as the basis for determining the fiscal feasibility threshold under the Business Plan.
Ill. Entitlement Plan
It is the intent of the City to continue the development of other portions of Tustin
Legacy regardless of the outcome of negotiations regarding this property. The City
City Response to OMBRP Proposal
November 3, 2017
Page 3 of 5
and Developer will need to evaluate the existing entitlements and development
potential in order to account for simultaneous development of all portions of
Neighborhood D. The transfer of entitlements/development potential between
Neighborhoods and Planning Areas at Tustin Legacy may be required. This
process should be accounted for in the project schedule,
Business Plan
IV. Business Plan/Term Sheet
The submitted Business Plan will need to be updated to reflect the Final Master
Plan, the proposed Business Plan by the developer provides a framework for
continued negotiations. During the Additional Period negotiations will continue until
acceptance of a term sheet by both the City and Developer or until early termination
of the Agreement or non-compliance with the newly agreed upon Additional Period
Mandatory Milestones. City evaluation of the Business Plan will review the liability
and risk associated with the proposed project for the City. There is an expectation
of a maximum price cap on the infrastructure investment. The following Items will
require further dialogue and negotiation:
1. Appraisal — The City will convey property at not less than Fair Market Value as
determined through opinion by a qualified Appraiser.
2. For -Sale Residential
a. Base Purchase Price — TBD based on products.
b. Participation -- The City's expectation of 50/50 after developer has met
an 8.5% Net Margin return threshold.
c. Payment Structure
d. LIFOC Mitigation Costs
3. Mixed -Use Blocks
a. Base Purchase Price — TBD
b. Participation — City expectation of 50/50 after developer minimum return
threshold Is met; developer minimum returns will need further discussion.
c. 3rd Party Debt Requirements -- Obtaining third party debt shalt not be a
condition to start the mixed-use buildings. City will not allow third -party
debt on the construction loan to exceed 60% of the development costs.
4. Retail (Hangar Park)
a. Ground Lease Price — City will work with developer to negotiate a base
rent amount with annual increases and periodic adjustments (5 year
intervals suggested). City is not interested in percentage rents. Any use
City Response to OMBRP Proposal
November 3, 2017
Page 4 of S
other than retail, such as Hotel and Office would need further discussion
and negotiation in light of Industry standards for such uses.
b. Ground Lease (Retail) Term + Options — City expectation of 40 year
lease term with extension options. Lease tern will be based on
magnitude of improvements; however, City will not consider a 99 -year
lease,
c. Triggers to Commence Construction will be tied to adjacent site
commencement and completion schedules.
5. Tax Rate Structure —Maximum Rate will need to account for the City's ability to
provide for services to Tustin Legacy at a rate not less than that used Citywide
including the following:
a. Tax B (Services) CFD — mandatory tax associated with providing services
to the area will be determined by the City through the establishment of a
new or existing CFD.
b. Tax A (Facilities) CFD (City option) — City may use other debt options in
financing infrastructure.
c. TUSD Facilities CFD/buydown -- TUSD can impose a CFD tax; however,
City may opt to buy down the debt early or advance funding of TUSD
debt.
6. Interest associated with Developer Financed Infrastructure — Developer interest
accrued on infrastructure improvements at a rate not to exceed 5.125%
7. Infrastructure Financing — Further review of Land Credit based on Business Plan
including funding of infrastructure by City, complete or partial.
8, Non -Compete Blocks — The Developer proposed no details on the terms of a
non -compete for the identified parcels. City is not inclined to accept non-
compete terms which would hinder its ability to execute the Final Concept Pian.
9. Option Payments — Not addressed in the provided proposal. City expectation
of option payments on Mixed -Use Block 2.
10. Parking Lease — The leasing of required parking spaces on City -owned
property/facilities has not been addressed in the proposal. City has an
expectation of payment for required parking on City owned property/facilities
funded and operated by the City.
11, Market Analysis — Should be provided on a periodic basis with additional detail
to justify pricing and rent levels.
12. Land Conveyance/Takedown — Conveyance will need to be tied to horizontal
improvements.
13. Mixed Use Block 2 Conveyance — Block 2 will not convey until Hangar Park
Retail has commenced construction. The outside option date on Block 2 will be
City Response to OMBRP proposal
November 3, 2017
Page 5 of 5
the earlier of 36 months after Block 1 conveyance or 60 months after execution
of the DDA.
14, Developer Responsibilities
a. Funding of Project Expenses (City and Developer Expenses) -- Currently
being addressed in a side letter.
b. Hangar Park Retail Triggers —Construction of Hangar Park and the Retail
within the park are to occur simultaneously. Any triggers to construction
commencement will be reciprocal.
M City Responsibilities
a. City Import — No timetable of performance has been identified for the City
import requirements.
b. Hangar Studies -- City will perform advanced planning and engineering
studies to evaluate Hangar rehabilitation and adaptive reuse,
c. Hangar Programming — City, in its sole discretion, may work with
Developer on programming of the Hangar. If Developer requires a more
active participation role in Hangar programming, then financial
participation in Hangar rehabilitation will be required.
d. LIFOC Permitting — City cannot guarantee Navy approval of
activitiWuses within the LIFOC areas,
Office of the City Manager
April 6, 2018
Ms. Nicole Burdette
OMBRP LLC
c/o Brookfield Southern California Holdings LLC
3200 Park Center Drive, Suite 100
Costa Mesa, CA 92626
SUBJECT: PRELEVIINARY INFRASTRUCTURE PLAN APPROVAL
Dear Ms. Burdette-
TUSTIN
BUILDING OUR FUTURE
HONORING OUR PAST
Tile City is in receipt of the Preliminary Infrastructure Plan (Plan) submitted by OMBRP LLC on April 3,
2018. OMBRP and the City have worked closely together in recent months to develop this Plan, and
substantial progress has been made. We agree that a number of items remain unresolved and further
refinement is needed; however, this Plan does provide an order of magnitude of the infrastructure demand
to help inform the forthcoming Business Plan.
City staff does have concerns regarding the lack of development of the Landscape and Hardscape Plan to
this stage. Preliminary details on this scope of the project will need to be provided prior to submittal of the
Business Plan for City review. Both patties should continue to work on the phasing and structure of the
Parking Plan including the costs associated with implementation and future maintenance. As we progress,
the City would also like to obtain additional estimates on the required infrastructure and further discuss
some of the fees outlined in the budget. City staff looks forward to working through these items and others
with you as we continue to refine the necessary details of the project.
By way of this letter, I am approving the Preliminary Infrastructure Plan to continue the planning process
as outlined in our November 3, 2017 letter (attached). We look forward to continuing through the planning
process with you on this important piece of Tustin Legacy.
Sincer ly,
ffiyanagg
rker
r
Attachment: ENA Master Plan and Business Plan Conditional Approval Letter
cc: Matthew S. West, Assistant City Manager
John Buchanan, Director of Economic Development
David Kendig, City Attorney
Amy Freilich, Armbruster Goldsmith & Delvac, LLP
300 Centennial Way, Tustin, CA 92780 0 P: (714) 573-3010 • F: (714) 838-1602 0 www.tustinca.org
Office of the City Manager
November 3, 2017
OliverMcM€Ilan Tustin Legacy, LLC
Attn: William Persky, CFO
733 8'" Avenue
San Diego, CA 92101
TUSTIN
MIMING OUR FUTURE
HONORING OUR PAST
SUBJECT: ENA MASTER PLAN AND BUSINESS PLAN CONDITIONAL APPROVAL
Dear Mr. Persky:
The City is in receipt of the Master Plan and Business Plan submitted by Oliver McMillan (OM)
and Brookfield Residential (Brookfield) on October 3, 2017. City staff has reviewed the submittal
over the past month and believes that significant progress on the project has been made since
both parties entered into the Exclusive Negotiating Agreement (ENA). However, there remain a
number of unresolved Items which will need further refinement and negotiation prior to execution
of a Disposition and Development Agreement (DDA) between the parties.
The City is only interested in further negotiating with the collective parties proposed In the Master
Plan Organizational Plan (OMBRP and Brookfield), Pursuant to Section 4.2.2 of the ENA, I am
conditionally approving the submitted Master Plan and Business Plan to allow the parties to enter
into the Additional Period (AP) of the ENA and continue negotiations. This conditional approval
is predicated upon the establishment and adherence to new AP Mandatory Milestones and due
dates as set forth below:
AP Mandatory Milestones:
1. Financial Capacity Demonstrated
2. New Legal Entity(les) Created
3. Final Concept Plan Approved
4, Preliminary Infrastructure Plan Approved
5. Schedule of performance Approved
6. Business Pian Approved
7. Conceptual Park Designs Approved
8. DDA Execution
2 Weeks (November 17, 2017)
6 Weeks (December 16, 2017)
14 Weeks (February 9, 2018)
22 Weeks (April 6, 2018)
26 Weeks (May 4, 2018)
28 Weeks (May 18, 2018)
36 Weeks (July 13, 2018)
{ 1 Year (October 16, 2018)
These AP Mandatory Milestones are essential to moving the process forward. The date for
performance of any AP Mandatory Milestone may be extended by the City Manager If there is a
reasonable basis for such extension and so long as such extension does not exceed the
Additional Period, Failure of Developer to timely meet its submittal obligations with respect to the
AP Mandatory Milestones may result in termination of the ENA and the ENA Negotiating Period
as determined solely by the City Manager. Pursuant to Section 4.2.2 of the ENA the Negotiating
Period shall not extend beyond the third (31) anniversary of the Effective Date, by November 3,
300 Centennial Way, Tustin, CA 92780 e P, (714) 573-3010 0 R (714) 838-1602 0 www.tustinmor;
FNA Master Plan and Business Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018, All other provisions of the ENA remain in effect, Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone,
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed, The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project.
fnearker
er
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms;
Oliver McMillan Tustin Legacy, LLC,
William P. Persky
Chief Financial Officer
Brookfield Residential, Inc.
Adrian Foley
President & Chief Operations Officer
Attachment: City Comments on the Master Plan and Business Pian
CC {Via Email, Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Burdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendlg, Woodruff, Spradlin & Smart
Amy Freilich, Armbruster Goldsmith & Delvac LLP
BNA Master Plan and Buslness Plan Conditional Approval
November 3, 2017
Page 2 of 2
2018. All other provisions of the BNA remain In effect. Please sign and acknowledge below your
acceptance of the aforementioned AP Mandatory Milestones and terms prior to the due date of
the first AP Mandatory Milestone.
Please find the attached City comments on the submitted Master Plan and Business Plan which
will need to be addressed, The City of Tustin looks forward to working with OM and Brookfield to
enhance our partnership on the Community Core project,
fSincearker
er
Acknowledgment and Agreement with the AP Mandatory Milestones and Terms:
Oliver McMillan Tustin Legacy, LLC.
C Y-'q'Vt r� /d L Q� 13 c,/ S S
Brookfield Residential, Inc. Brookfield Homes Southern California LTC
Adrian Foley
President & Chief Operations Officer Nicole Burdette
Senior Vice President
Attachment: City Comments on the Master Plan and Business Plan
CC (Via Email): Morgan Dean Oliver, OM
Richard Paul Buss, OM
Adrian Foley, Brookfield Residential
Nicole Burdette, Brookfield Residential
John Buchanan, City of Tustin
David Kendig, Woodruff,. Spradlin & Smart
Amy Frellich, Armbruster Goldsmith & Delvac LLP
OMBRP Master Plan and Business Plan Comments
Both the Master Plan and the Business Plan will serve as the. basis for a disposition and
Development Agreement for the Tustin Legacy Community Core project. The Master
Plan will be primary to the Business Plan. It is In the interest of the City to first create the
optimal Concept Plan (land use plan) which will then inform the Business Plan. Currently
the Concept Plan does not meet all of the City's expectations, consequently, the provided
Business Plan falls short of reflecting the City's vision for the project.
As noted previously, the for -sale products will need to be reworked in order to attain a
Concept Plan, Comments on the Business Plan contained herein remain broad and will
be more specific upon City approval of a Final Concept Plan. City staff would like to
schedule a meeting to review in detail and explain each of these items.
Master Plan
I. Concept Plan Refinement
Many of the Guiding Principles established by the City and Oliver McMillan for the
Community Core Area have been incorporated into the submitted Concept Pian. .
However, outstanding areas for improvement exist in order to complete the Concept
Plan and comprehensively reflect the Guiding Principles. The City and Developer
will need to work diligently together in finalizing the pian which will inform the
feasibility analysis for the project.
Based on initial review of the submitted Master Plan, the City has identified the
following areas which will require further adjustment and planning in order to
achieve an acceptable Final Concept Plan,
1. Establish Pian Boundary
a. DDA Boundary
b. Concept Plan Boundary
c. Grading and Infrastructure Boundary
2. For -Sale Residential Product Development
a. Complement the Urban Grid
1. Units to Address the Street w/Ground Floor Living
ii. Avoid Internally focused Communities and Internal Drives
iii. Access via Alleyways and Paseos/Greenways
b. Unique Design to the Site Conditions
c. Product Segmentation Expansion (Include a higher end product)
d, Community Facility
City Response to OMBRP Proposal
November 3, 2017
Page 2 of 5
e. Architectural Character (Contemporary)/Spec. Level
3. Mixed-Use/Retail
a. Mixed -Use Block 1 — Commitment to David Baker Design
b. Mixed -Use Block 2 — Design and Spec. Level
c. Avoid Novelty Architecture (Faux Control Tower Building)
4. Adjacent Land Uses (Outside of DDA Boundary)
a. Office use integration
b. Hospitality use integration
c. Appropriate Block Sizing and Uses
d. Joint -use Parking Plan/Locations (Interim vs. Permanent)
5. Public Access/Void Space
a. Street Sections
b. Paseos
c. Pedestrian Realm
d. Placemaking
6. Legacy Park System
a. Hangar Park
b. Legacy Median Park
c. Legacy Paris Connections/Transitions
d. Pedestrian Bridge Landings
7. Phasing Plan
a. DDA Property Development
b. City Property (Non -DDA Parcels) Development
c. Infrastructure
ll. Preliminary Infrastructure Plan Preparation
Upon completion of a Final Concept Plan, Developer with assistance from the City
will finalize the Preliminary Infrastructure Plan. Advanced cost estimates will serve
as the basis for determining the fiscal feasibility threshold under the Business Plan.
III. Entitlement Plan
It is the intent of the City to continue the development of other portions of Tustin
Legacy regardless of the outcome of negotiations regarding this property. The City
City Response to OMBRP Proposal
November 3, 2017
Page 3 of S
and Developer will need to evaluate the existing entitlements and development
potential in order to account for simultaneous development of all portions of
Neighborhood D. The transfer of entitlements/development potential between
Neighborhoods and Planning Areas at Tustin Legacy may be required. This
process should be accounted for in the project schedule,
Business Plan
IV, Business PlanfTerm Sheet
The submitted Business Plan will need to be updated to reflect the Final Master
Plan, the proposed Business Plan by the developer provides a framework for
continued negotiations. During the Additional Period negotiations will continue until
acceptance of a term sheet by both the City and Developer or until early termination
of the Agreement or non-compliance with the newly agreed upon Additional Period
Mandatory Milestones, City evaluation of the Business Plan will review the liability
and risk associated with the proposed project for the City. There is an expectation
of a maximum price cap on the infrastructure investment. The following Items will
require further dialogue and negotiation:
1. Appraisal — The City will convey property at not less than Fair Market Value as
determined through opinion by a qualified Appraiser.
2. For -Sale Residential
a. Base Purchase Price — TBD based on products.
b. Participation — The City's expectation of 50/50 after developer has met
an 8.5% Net Margin return threshold,
c. Payment Structure
d. LIFOC Mitigation Costs
3. Mixed -Use Blocks
a. Base Purchase Price — TBD
b, Participation — City expectation of 50/50 after developer minimum return
threshold Is met; developer minimum retums will need further discussion.
c. 3rd Party Debt Requirements -- Obtaining third party debt shall not be a
condition to start the mixed-use buildings. City will not allow third -party
debt on the construction loan to exceed 60% of the development costs.
4. Retail (Hangar Park)
a. Ground Lease Price — City will work with developer to negotiate a base
rent amount with annual increases and periodic adjustments (5 year
intervals suggested). City is not interested in percentage rents. Any use
City Response to OMBRP Proposal
November 3, 2017
Page 4 of 5
other than retail, such as Hotel and Office would need further discussion
and negotiation in light of industry standards for such uses,
b, Ground Lease (Retail) Term + Options — City expectation of 40 -year
lease term with extension options. Lease term will be based on
magnitude of improvements; however, City will not consider a 99 -year
lease,
c, Triggers to Commence Construction will be tied to adjacent site
commencement and completion schedules.
5. TaxRate Structure — Maximum Rate will need to account for the Citys ability to
provide for services to Tustin Legacy at a rate not less than that used Citywide
including the following:
a. Tax B (Services) CFD —mandatory tax associated with providing services
to the area will be determined by the City through the establishment of a
new or existing CFD.
b. Tax A (Facilities) CFD (City option) — City may use other debt options in
financing infrastructure.
c. TUSD Facilities CFO/buy down — TUSD can impose a CFD tax; however,
City may opt to buy down the debt early or advance funding of TUSD
debt.
6. Interest associated with Developer Financed Infrastructure — Developer interest
accrued on infrastructure improvements at a rate not to exceed 6,126%
7. Infrastructure Financing — Further review of Land Credit based on Business Plan
including funding of infrastructure by City, complete or partial.
8. Non -Compete Blocks — The Developer proposed no details on the terms of a
non -compete for the identified parcels. City is not inclined to accept non-
compete terms which would hinder its ability to execute the Final Concept Plan.
9. Option Payments — Not addressed in the provided proposal. City expectation
of option payments on Mixed -Use Block 2.
10. Parking Lease — The leasing of required parking spaces on City -owned
property/facilities has not been addressed in the proposal. City has an
expectation of payment for required parking on City owned property/facilities
funded and operated by the City.
11. Market Analysis — Should be provided on a periodic basis with additional detail
to justify pricing and rent levels.
12. Land Conveyance/Takedown — Conveyance will need to be tied to horizontal
improvements.
13. Mixed Use Block 2 Conveyance — Block 2 will not convey untii Hangar Park
Retail has commenced construction. The outside option date on Block 2 will be
City Response to OMBRP Proposal
November 3, 2017
Page 5 of 5
the earlier of 36 months after Block 1 conveyance or 60 months after execution
of the DDA.
14, Developer Responsibilities
a. Funding of Project Expenses (City and Developer Expenses) -- Currently
being addressed in a side letter.
b. Hangar Park Retail Triggers Construction of Hangar Parr and the Retail
within the park are to occur simultaneously. Any triggers to construction
commencement will be reciprocal.
15, City Responsibilities
a. City Import — No timetable of performance has been identified for the City
import requirements.
b. Hangar Studies -- City will perform advanced planning and engineering
studies to evaluate Hangar rehabilitation and adaptive reuse.
c. Hangar Programming — City, in its sole discretion, may work with
Developer on programming of the Hangar. If Developer requires a more
active participation role In Hangar programming, then financial
participation in Hangar rehabilitation will be required.
d. LIFOC Permitting — City cannot guarantee Navy approval of
activities/uses within the LIFOC areas.
EXHIBIT "I"
CONDITIONAL PROPERTY
Tustin OM 1st Amendment to Exhibit "I" City of Tustin /OMBRP, LLC
ENA 5-10-2018 (agd)(2) (003)
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CONDITIONAL ASSIGNMENT AND ASSUMPTION OF
EXCLUSIVE NEGOTIATING AGREEMENT
Tustin Legacy Community Core
THIS CONDITIONAL ASSIGNMENT AND ASSUMPTION OF EXCLUSIVE
NEGOTIATING AGREEMENT ("Agreement"), dated for reference purposes as of May 1, 2018, is
entered into between OLIVERMcMILLAN TUSTIN LEGACY, LLC, a Delaware limited liability
company ("OM" or "Assignor"), and OMBRP LLC, a Delaware limited liability company ("OMBRP" or
"Assignee"), with reference to the following:
RECITALS:
OM as Developer and The City of Tustin ("City") are the parties to an Exclusive Negotiating
Agreement dated November 3, 2015 ("ENA"), relating to the redevelopment of an approximately
122.96 -acre portion of City's Tustin Legacy project commonly known as the Community Core area
("Property"). A copy of the ENA is attached hereto as Exhibit "A". The redevelopment of the Property
as contemplated by the ENA is referred to as the "Project". Initially capitalized terms not otherwise
defined in this Agreement have the same meanings as in the ENA.
The ENA contemplates that OM's negotiations with City would ultimately result in one or more
binding Disposition and Development Agreements (each, a "DDA") and related documentation, whereby
OM as Developer would acquire the Property for development in accordance with the Master Plan
generated during the term of the ENA.
On December 11, 2017, OM and Brookfield Southern California Holdings LLC, a Delaware
limited liability company ("Brookfield") formed OMBRP for the purpose of carrying out the
development of the Project.
As of February 1, 2018, an affiliate of Brookfield acquired, in addition to other assets of OM's
parent company and principals, all of OM's rights, title and interest in and to OM's membership interest in
OMBRP, such that Brookfield and its wholly owned affiliate, Brookfield Residential OM Holdings LLC,
a Delaware limited liability company, constitute all of the members of OMBRP.
In furtherance of the forgoing, OM desires to assign to OMBRP, and OMBRP desires to assume,
all of OM's rights and obligations under the ENA.
THE PARTIES AGREE:
Subject to the condition subsequent of Paragraph 3 below, Assignor assigns to Assignee,
on the terms and subject to the conditions set forth herein, all Assignor's right, title,
interest and obligations under the ENA and, if any, to the Property, and, on behalf of
itself and its predecessors and successors in interest, other than Developer, and its
partners and joint venturers, Predecessor In Interest hereby relinquishes all right, claim
and interest, if any, with respect to the Original Agreement, this Amendment and the
Property.
2. Subject to the condition subsequent of Paragraph 3 below, Assignee hereby assumes from
Assignor, on the terms and subject to the conditions set forth herein, all Assignor's right,
title, interest and obligations under the ENA and, if any, to the Property.
Assignee's address for notices and other communications under the ENA is:
OMBRP LLC
c/o Brookfield Southern California Holdings LLC
Attention: Nicole Burdette, Senior Vice President
3200 Park Center Drive, Suite 1000
Costa Mesa, California 92626
Telephone: (714) 200-1672'
Email: Nicole.Burdette@,brookfieldM.com
3. The assignment of Paragraph 1 is subject to the condition subsequent that City has signed
and delivered the Consent of City which follows the signatures of Assignor and Assignee hereunder. In
the absence of such City Consent, this partial assignment shall be rescinded and of no further force or
effect.
ASSIGNOR: OLIVERMcMILLAN TUSTIN LEGACY, LLC,
a Delaware limited ' bil'ty eo any
By:
Name: W l l a m P. rd
Title: C -C Vi=i Qrin Ct ccr0 Oyli r e,�—
ASSIGNEE: OMBRP LLC, a Delaware limited liability
Company
By: Brookfield Southern California Holdings LLC, a
Delaware limited liability company
Its: Mana , pg -Me
By:_ -
Name:
Title:
By:
Name:
Title:
CONSENT OF CITY
The undersigned City consents to the foregoing assignment and recognizes Assignee as the
Developer under the ENA, and agrees that all notices and other communications to Developer under the
ENA will be sent to Assignee.
DATE: THE CITY OF TUSTIN
By:_
Name:
Title:
2
"DEVELOPER"
OMBRP LLC, a Delaware
limited liability company
By: Brookfield Southern California Holdings
LLC, a
Delaware limited liability company
Its: Managing Member
By:— -
Name.
Title:
By:_
Name:
Title:
Accepted and Agreed as to Section 5.2
OliverMcMillan Tustin Legacy, Inc.,
a Delaware corporation
By:
Name: W i ! i.aM F -
Title:
r—oY7ccnC< v�Gv"
Tustin OM 1st Amendment to S-1 City of Tustin /OMBRP, LLC
ENA 5-8-2018 (agd) cln 5-9-18
EXHIBIT "A"
ENA
EXCLUSIVE NEGOTIATING AGREEMENT
FOR COMMUNITY CORE DEVELOPMENT
THIS EXCLUSIVE NEGOTIATING AGREEMENT FOR COMMUNITY CORE
DEVELOPMENT (this "ENA") is entered into as of November -&4 2015 (the "Effective Date")
by and between THE CITY OF TUSTIN (the "City") and OLIVERMCMILLAN TUSTIN
LEGACY, LLC, a Delaware limited liability company ("Developer"), with respect to certain land
referred to herein as the "Property" (defined below). The City and Developer (each individually
referred to herein as a "Party" and collectively referred to as the "Parties") hereby agree as
follows:
1. Introduction.
1.1 Pursuant -to the Defense Base Closure and Realignment Act of 1990 (Part A of Title
XXXIX of Public Law 101-510; 10 U.S.C. Section 2687 Note), as amended, the federal
government determined to close the Marine Corps Air Station -Tustin ("MCAS Tustin") located
substantially in the City of Tustin. In 1992, the City was designated as the Lead Agency or Local
Redevelopment Authority for preparation of a reuse plan for MCAS Tustin in order to facilitate
the closure of MCAS Tustin and its reuse in furtherance of the economic development of the City
and surrounding region. The MCAS Tustin Reuse Plan developed in accordance with this
procedure was adopted by the City Council of the City of Tustin (the "City Council") on October
17,1996 and amended in September, 1998 (the "Reuse Plan').
1.2 A Final Joint Environmental Impact Statement/Environmental Impact Report for
the Disposal and Reuse of MCAS Tustin (the "Final EIS/EIR") and Mitigation Monitoring and
Reporting Program for the Final EIS/EIR were adopted by the City on January 16, 2001. In March
2001, a record of decision was issued by the Department of the Navy (hereinafter, "Navy")
approving the Final EIS/EIR and the Reuse Plan. Subsequently, a Supplement to the Final EIR/EIS
and several Addenda to the Final EIS/EIR were approved by the City.
1.3 In May 2002, the Navy approved an "Economic Development Conveyance of
Property at MCAS Tustin" and agreed to convey 1,153 acres of MCAS Tustin to the City. On
May 13, 2002, a total of 977 acres, including a portion of the Property which is the subject of this
ENA, was conveyed -by the Navy to the City by quitclaim deed, in accordance with the provisions
of that certain Memorandum of Agreement by and between The United States of America (through
the Secretary of the Army or designee) and the City dated May 13, 2002 ("Memorandum of
Agreement" or "MOA"). The portion of the Property owned by the City in fee as of the Effective
Date is referred to herein as the "Fee Property." Additional acreage, including. the portion of the
Property referred to herein as the "Sublease Property," is currently under ground lease by the
City from the Navy pursuant to that certain Lease in Furtherance of Conveyance dated May 13,
2002 between the Navy, as ground lessor, and the City as ground lessee ("LIFOC"), The 1,153
acres of MCAS Tustin located within the City of Tustin and either conveyed by the Navy to the
City or subject to ground lease between the Navy and the City is referred to herein as "Tustin
Legacy."
1.4 On February 3, 2003, the City adopted an ordinance approving the MCAS Tustin
Specific Plan/Reuse Plan setting forth the zoning and entitlement framework for future
development of Tustin Legacy. Since its initial adoption, the City has approved numerous Specific
Tustin OM ENA v1010-12.2015(agM(4).docx '
Plan Amendments. All references in this ENA to the "Specific Plan" shall be deemed to refer to
the MCAS Tustin Specific Plan/Reuse Plan, as the same may be amended from time to time. The
Specific Plan conforms to and implements the Reuse Plan and the City's General Plan.
1.5 The City desires to effectuate development of Tustin Legacy through the sale and/or
ground lease of the Fee Property and sublease of the Sublease Property, and construction of
improvements on such property in accordance with applicable federal and local requirements.
Tustin Legacy shall be developed in accordance with all City requirements, including, without
limitation, the Reuse Plan and the Specific Plan,
1.6 The Disposition Strategy for Former Master Developer Footprint, Tustin Legacy
Project (April, 2011) adopted by the City Council provides,the City with the authority to directly
market portions of the Disposition Packages in order to more specifically direct and accelerate
development absorption. Consistent with the Disposition Strategy, City staff has identified
commercial and mixed use development companies with the qualifications, financial capacity and
experience to develop large scale mixed use communities at Tustin Legacy, utilizing evaluation
and screening criteria approved by the City Council, and has recommended consideration of
Developer's proposal by the City.
4.7 Developer has submitted a letter of interest dated February 3, 2015 (the "Letter of
Interest"), which is superseded in its entirety by this ENA, for acquisition by purchase and/or
ground lease of approximately 122.94 acres of land composed of all of Disposition Package 3 and
the portion of Disposition Package 7 west of Tustin Ranch Road and east of Armstrong Avenue
with the APN numbers and generally in the location depicted on the Site Map attached as
Exhibit "A" (the "Property"), of which approximately 59.62 acres comprises the Sublease
Property and the remainder comprises the Fee Property. The exact location and size of the Property
shall -be determined during the ENA Negotiating Period (defined below) and may be subject to
reduction in area as described in Section 1.8 and 1.9. Developer proposes development of the
Property with a mixed-use urban core, anchored with retail, hotel, residential, office, entertainment
and sports -based uses (to be defined during the ENA Negotiating Period but to specifically exclude
warehousing or manufacturing), and with special consideration to adaptive reuse of the historic
"Tustin hangar" located on the Sublease Property ("Hangar"), together with on-site and off-site
infrastructure, including tract and backbone infrastructure (as described in the City's adopted
Tustin Legacy Backbone Infrastructure Program) and an accompanying set of amenities to be
agreed by City and Developer, The proposed development of the Property described above and as
further described in this ENA is referred to herein as the "Project:'
1.8 Transaction; Property and AP Property. The City and Developer desire to
negotiate diligently and in good faith during the Initial Period (as defined in Section 4.2 below), a
Master Plan and Business Plan (each as defined below) for the Project meeting the requirements
described in Section 5, which if approved by the City Manager and Developer shall be the basis
for negotiation of the Transaction Documents (as defined below), Upon approval of the Master
Plan and Business Plan by the Developer and the City Manager, the City and Developer desire
during the Additional Period (as defined in Section 4.2 below below), to negotiate diligently and
the terms and conditions of (i) a binding disposition and development agreement ("DDA"), which
may include an option, with respect to the sale, ground lease and/or sublease, development and
operation of the Project (the "Transaction") and, (ii) a statutory development agreement ("DA")
which if agreed upon and executed will specify the vested rights and obligations and method of
2 Tustin OM ETIA v10 10-12-201S(agd)(4}docs
participation of the City and Developer with respect to the sale, ground lease and/or sublease,
development and operation of the Project. Although the Parties intend during the Initial Period to
develop a Master Pian for the entirety of the Property, upon completion and approval by the City
Manager of the Master Plan and the Business Plan, the Parties may determine that this ENA shall,
during the Additional Period, apply only to more limited portions of the Property to which the
Parties agree during the Initial Period (the "AP Property"). During the Additional Period, the
term "Property" as used herein shall mean the AP Property only.
1.9 Other City Negotiations on Other City Properties Not Precluded. Nothing
herein shall preclude the City from negotiating with other entities for other developments on other
City properties including, without limitation, other portions of Tustin Legacy that are not the
subject of this ENA. Further, following agreement by the Parties as to the boundaries of the AP
Property, and notwithstanding any Exclusivity Breach (as defined below) or Uncured Default (as
defined below) by the City under this ENA, the portions of the Property not included within the
AP Property shal no longer be subject to this ENA and the City shall not be precluded from
negotiating with other entities for development on such City property.
2. Agreement to Negotiate.
2.1 Transaction Documents. Notwithstanding that the terms of the Transaction are to
be negotiated, Developer and the City have agreed that the transactional documents to be
negotiated to describe the Transaction shall be in the form of a DDA and a DA, and may include
an option to lease or sublease and other transaction documents the necessity for and the form and
substance of which shall be agreed upon by the Parties each in its sole discretion (collectively, the
"Transaction Documents"). The City and Developer each desire to negotiate Transaction
Documents which if agreed upon and executed, shall set forth the terms and conditions pursuant
to which the Property shall be conveyed or leased by the City to Developer and developed by
Developer. At the commencement of the Additional Period, the City will prepare a draft of the
Transaction Documents and submit the draft documents to Developer for review and comment.
Developer acknowledges that the City expects that the DDA will include, among other things,
provisions related to releases, indemnities and remedies similar to those in disposition and
development .agreements and development agreements the City has entered into with other
developers at Tustin Legacy.
2.2 Purpose of ENA. The Parties acknowledge and agree that this ENA is for the sole
purpose of establishing and facilitating the initial basis for negotiation of the Transaction. This
ENA is not, and the Parties do not intend that this ENA be, a lease, purchase and sale agreement,
option or similar contract setting forth the essential terms of a land transaction (an "Essential
Terms Agreement"), Subject to the obligations and rights expressed in this ENA, unless and until
a DDA and any other agreed upon'Transaction Documents are approved as set forth in Section 2.4
and executed by both Parties, the Parties do not intend to be bound in any way to an Essential
Terms Agreement, nor do they intend to''be bound by any other agreement except for the specific
undertakings of each set forth in this ENA. Each Party acknowledges that subject to the cost
allocation provisions of* Section 4.4, this ENA is merely an agreement to enter into the ENA
Negotiating Period according to the concepts presented herein, reserving final discretion and
approval of any Transaction Documents by the City Council (or in the case of Developer, the
authorized representatives of Developer) as to actions required, if any.
Tustin OM ENA v10 10.12.2015(agd)(4).docx
2.3 Essential Terms Not Agreed. The City and Developer acknowledge that this ENA
is a 'framework for negotiation of essential terms of any transaction in an Essential Terms
Agreement; but that they have not herein agreed upon the essential terms or the material elements
of a transaction, including, without limitation, the purchase price, rent, the legal description of the
Property to be conveyed (including the amount of acreage and location of the land), the time, or
manner of and significant terms related to the conveyance, the conditions precedent to conveyance
(including without limitation, related to the design and entitlement of the Project), and the
requirements related to development of the Project, each of which is an essential component of the
transaction (collectively, the "Essential Terms"); (b) they do not intend this ENA to be a statement
of Essential Terms, which shall be the subject matter of their further negotiations, and (c) the
Essential Terms of the Transaction, if agreed to by the City and Developer, shall be set forth, if at
all, in a DDA and other Transaction Documents approved by the City Council (or in the case of
Developer, the authorized officers or members of Developer) and executed by authorized
representatives of each of the City and Developer. Further, Developer acknowledges that the
design of the proposed Project, the identity, stability and financial capacity of Developer and any
proposed manager/operator and end users of the Project, the boundaries and extent of the Property
and the terms and conditions of the sale and/or lease of the Property, if any, will be of material
concern to the, City and comprise part of the Essential Terms that are not yet agreed upon by the
Parties.
2.4 Effectiveness of Subseauent Agreements. No Transaction Document shall exist
or be binding unless and until each is fully executed by Developer and the City, approved by
counsel to each of the Cityand Developer as to form and approved by the City Council of the City
and by the authorized representatives of Developer. The Transaction Documents, and each of
them, shall become effective only after and if the agreements have been considered and approved
by the legislative body of the City and the City Council of the City after noticed public hearing
and compliance with the -California Environmental Quality Act ("CEQA"), as further described
below. Nothing in this ENA shall supersede or waive any discretionary or regulatory approvals
required to be obtained from the City pursuant to the Tustin City Code or the provisions of any
applicable California ("State") or federal law or regulation. The concurrence of the City
negotiators with the terms and provisions of a DDA and any other proposed Transaction
Documents shall not be construed or interpreted as the City approving or accepting such terms.
Such concurrence shall be viewed as nothing more than the willingness of the City negotiators to
recommend to the City Council that they approve such terms.
2.5 Assumption of Risk, City and Developer each assume the risk that,
notwithstanding this.ENA and good faith negotiations, the City and Developer may not enter into
any agreement due to their failure to agree upon the Master: Plan, the Business Plan or any other
plans described by this ENA, the Essential. Terms of the Transaction or any of the Transaction
Documents, Accordingly, except as specifically set forth in Section 2.7, neither Party will have
any liability to the other in the event that the Parties are unable to reach such a definitive agreement
with respect to the Transaction for any reason or no reason.
2.6 End of ENA Negotiating Period. If prior to the termination of the Initial Period,
the City Manager, or his or her designated representative (referred to herein as "designee"), and
Developer have not each approved a Master Plan and the Business Plan in form agreed to by the
other, then this ENA and the ENA Negotiating Period (as defined in Section 4.2), shall
4 Tustin OM ENA v10 10.12-2M(agd)(4).doox
automatically and immediately terminate without further written notice. If at the end of the
Additional Period (if applicable), Developer has not signed the DDA, then this ENA and the ENA
Negotiating Period shall automatically and immediately terminate without fixrther written notice.
Upon such' automatic termination and expiration of the ENA Negotiating Period and this ENA,
except as set forth in Section 2.7, neither Party shall have any further rights, remedies or
obligations to the other Party under this ENA and the Parties shall each be relieved -and discharged
from all further responsibility or liability under this ENA. If at the end of the Additional Period,
Developer has signed a DDA in form and substance acceptable to the City Manager or designee,
the.provisions of Section 4.3 regarding the Offer Period shall apply.
2.7 Termination and Survival of Provisions. Notwithstanding any other provision
of this ENA, this ENA and its terms are binding on the Parties until this ENA terminates and,
further, the provisions of Sections 3.5; 4.4.3; 4.5.3; 4.6, inclusive; 6.8.2; Sections 10.1 through.
10.5, inclusive; 10.9 and 10.12 shall survive the termination of this ENA and the Parties shall each
remain liable with respect to each of such surviving provisions for all obligations, fees, costs and
expenses thereunder incurred during or as a result of matters arising during the ENA Negotiating
Period and the Offer Period, if applicable.
3. Developer's Representations, Warranties and Agreements. Developer represents,
warrants and agrees as follows:
3.1 Expertise and Financial Oualif;cations. Developer, through its owners and
affiliates, has the necessary expertise, experience and financial capability to undertake
development of the.Property as contemplated by this ENA.
3.2 No Speculation in Land Holding. Developer's intended acquisition of the
Property and acquisition and its other intended undertakings pursuant to this ENA shall be used
for the timely development of the Property and not for speculation in land holding.
3.3 Experience. Developer's owners and affiliates are experienced in development
and understands the process and requirements required to make development projects such as the
Project described herein.
3.4 Long -Term Development Financing. Subject to the DDA, Developer is capable
of acquiring the Property and developing the Project utilizing equity capital and construction debt
financing.
3.5 Release. Except as specifically set forth in Sections 4.4.3, 4.5.3, 6.8.2 and 10.5,
Developer, on behalf of itself and its successors and assigns, hereby waives the right to recover
from and fully and irrevocably releases the City and its elected and appointed officials, employees,
agents, attorneys, affiliates, representatives, consultants, contractors, successors and assigns (the
"City Parties") with respect to any and all claims, actions, causes of action, demands, orders, or
other means of seeking or recovering losses, damages, liabilities, costs, expenses (including,
without limitation, attorneys' fees, consultant fees and court, arbitration and litigation costs) or
any other type of compensation, monetary payment or reimbursement of any kind or nature
whatsoever, direct or indirect, [mown or unknown, foreseen or unforeseen ("Claims") that
Developer or its officers, directors, employees, agents, representatives, tenants, prospective
tenants, consultants or contractors may now or hereafter have or incur relating to or arising from:
Tustin OM INA v10 10.12-2015(4gd)(4�doex
(a) any information provided by the City during the course of the selection or negotiation process,
(b) the terms of this ENA including, without limitation, the information set forth herein or the
termination hereof, (c)• the right to protest the terms of this ENA, (d) the process for selection of
Developer, or any modification or defect thereto, (e) the negotiation of or failure to negotiate the
Transaction Documents or the failure of the City to approve the Master Plan or the Business Plan
or to enter into any Transaction Document, (f) any condition of the Property, or any current or
future improvement thereon, known or unknown, including, without limitation, the environmental
condition of the Property ,or the extent or effect of any grading of the Property, (g) economic and
legal conditions on or affecting the Property or the improvements thereon; (h) any disputes, claims,
actions, causes of action, demands or orders arising between Developer and any third parties,
and/or (i) the actions or inaction of the Navy with respect to the LIFOC or any other agreements
between the City and the Navy, 6) the ability of the City or any third party to complete, or the
likelihood of the completion or actual completion of, any of the improvements and infrastructure
described by the General Plan, the Reuse Plan, the Specific Plan. the Tustin Legacy Backbone
Infrastructure Program, the agreements, environmental reports and statements listed on
Exhibit "E" ("Navy Documents") or any other plan or policy of the City or any other
governmental entity; (k) the compliance or non-compliance by the City or any third party,
including without limitation, the Navy, with respect to the Reuse Plan, the City's General Plan,
the Specific Plan, the LIFOC, the conveyance deeds from the Navy to the City and the other Navy
Documents, or any special restrictions or other covenants and agreements applicable to other
property at Tustin Legacy, or any other agreement or governmental restriction or plan affecting
Tustin Legacy; and/or (1) any action or inaction of the City or the City Parties in connection with
any of the foregoing (including, without limitation, the exercise by the City of its discretion,
decision or judgment with respect to the foregoing). Without limiting the generality of the
foregoing, the Developer acknowledges and agrees that (A) except as set forth in Section 4.5.3
with respect to an Exclusivity Breach or a, failure of the City to pay its share of Shared Costs when
due, its sole remedies under this ENA for a breach by the City of any obligation hereunder shall
be to terminate the ENA and (B) that this waiver and release includes, without limitation, a waiver
and release with respect to: (aa) any and all damages and/or monetary relief (whether based in
contractor in tort), including, without limitation, any right to claim direct, compensatory, reliance,
.special, indirect or consequential damages with respect to or, arising out of this ENA, and any other
rights or claims it may otherwise have at law or at equity, (bb) except as specifically set forth in
Sections 4.4.3, 4.5.3, 6.8.2 and 10.5, any right to payment or reimbursement from the City, (cc)
any right to specific performance for conveyance of or to claim any right of title or interest in the
Property or any portion thereof, and (dd) except as set forth in Section 4.5.1, the failure of the City
to negotiate in good faith pursuant to this ENA or to enter into the DDA or any other- Transaction
Documents. Nothing in the foregoing constitutes any waiver or release with respect to
environmental remediation or other obligations of the Navy under the LIFOC.
4, Negotiations.
4.1 Good Faith Negotiations. The City and Developer agree to negotiate with one
another diligently and in good faith (a) during the Initial Period to prepare the Master Plan and the
Business Plan for the Property and to carry out the other steps described by this ENA and (b) during
the Additional Period, if applicable, with respect to the Transaction Documents and related
documents to be entered into between the City and Developer with respect to the Transaction.
6 Tustin OM ENA vIO 10-12-201s(aA(4).aocx
4.2 Period of Negotiations. The "ENA Negotiating Period" shall be comprised of
the Initial Period and, if applicable, the Additional Period, each as described below.
4.2.1 Initial Period. For a period of two (2) years from the Effective Date (or as
earlier terminated in accordance with this Section 4.2 or by written amendment to this ENA, the
"Initial Period'). During the Initial Period, the Developer shall comply with the Mandatory
Milestones set forth in Section 5, including, without limitation, preparing the Master Plan and the
Business Plan for City Manager review and approval.
4.2.2 Additional Period. Provided that the City Manager approves the Master
Plan and the Business Plan during the Initial Period and unless earlier terminated in accordance
with this ENA, the ENA,Negotiating Period shall be automatically extended until the earlier of (a)
the date that is one .(l) year following approval by the City Manager of the Business Plan pursuant
to Section 4.2.1, subject to extensions as further provided in this Section 4.2.2 or (b) the third (3d)
anniversary of the Effective Date (as so extended or earlier terminated in accordance with this
Section 4.2 or by written amendment. to this ENA, the "Additional Period"). Subject to Section
4.2.3, the City Manager shall have the authority on behalf of the City to agree in writing to
extensions of the period :described in clause (a) above for up to two. additional sixty (60) day
periods, provided that (i) any such extension shall be effective only if in writing and signed by
authorized representatives of Developer and the City and (ii) no such extension shall extend the
ENA Negotiating Period,beyond the third (3d) anniversary of the Effective.Date. If at the end of
the Additional Period, Developer has not signed a DDA and any other Transaction Documents
requested by Developer to be considered by the City Council, each in form and substance prepared
and approved by the City Manager in his or her sole discretion, then this ENA and the ENA
Negotiating Period shall automatically and immediately terminate without further written notice.
4.2.3 Authority to Extend. The City hereby delegates to the City Manager, or
designee, the authority to agree to grant the extensions. specified in Section 4.2.2 upon
determination by the City Manager in his or her sole discretion that Developer has negotiated
diligently and in good faith and is not then in default under this ENA and that, reasonable and
sufficient progress has been made toward fulfillment of the requirements of this .ENA. Any
extension beyond the extensions that may be provided by action of the City Manager, as provided
in this Section, shall be granted by the City only upon approval by the City Council. No extension
of the ENA Negotiating Period shall be effective unless it is in writing.
4.2.4 Right to Terminate. At any time prior to the date that is six (6) months
before the termination of the Initial Period, either City or Developer may.terminate this ENA and
the ENA Negotiating Period in accordance with the procedure outlined below in the event that
during the course of the investigations and evaluation of the Property and the Project, either Party
determines in good faith that the Project is not.feasible or financeable. Upon making a preliminary
determination of infeasibility or non-financeability, a Party (the "Notifying Party") shall provide
the other Party (the "Responding Party") with a statement of the Notifying Party's reasoning,
whereupon the Responding Party (if it disagrees with the Notifying Party) will have a period of
sixty (60) days to review and respond with a proposal that would address the Notifying Party's
issues or otherwise modify the Project to enhance feasibility and fmanceability. Following timely
delivery of the Responding Party's responsive proposal, the Notifying Party shall have an
additional sixty (60) days in which to consider the proposal and (if necessary) offer its modification
or counterproposal to the proposal of the Responding Party. Following timely delivery of the
7 Tustin OM ENA v10 t042.20 ts(agd)(4).docx
Notifying Party's modification or counterproposal, the Parties shall during the ensuing sixty (60)
days endeavor to reach agreement on any remaining issues regarding the Project's feasibility or
financeability. If at the end of the third 60 -day period either Party remains, in its sole discretion,
unconvinced of the feasibility or financeability or the Project, then this ENA and the ENA
Negotiating Period will terminate upon the provision of written notice by such Party to the other
Party. In no event shall the process described in this Section 4.2.4 extend the Initial Period beyond
the period set forth in Section 4.2.1 (that is, two (2) years from the Effective Date.)
4.3 Processing of Plans and Transaction Documents: Offer Period.
4.3.1 Transaction Documents Offer Period. The execution by Developer of a
DDA in form and substance approved by City staff for submittal to the City Council shall constitute
an offer by Developer to purchase and/or ground lease or sublease the Property on the terms set
forth therein.. Developer hereby agrees that it shall not withdraw such offer (and such offer shall
remain in effect) for a period of sixty (60) calendar days following submittal of the executed DDA
or such longer period as the Parties may agree in writing pursuant to Section 4.3.2 ("Offer
Period"), in order to enable the City, in its sole discretion, as further described in Section 6.8.1,
to: (a) consider the environmental impacts of the proposed Project described in the Transaction
Documents as evaluated in compliance with CEQA; (b) determine whether it desires to enter into
the DDA and any additional Transaction Documents then executed and submitted by Developer;
(c) tape the actions necessary to authorize the City to execute the approved DDA and -any additional
Transaction Documents if the City desires to do so; and (d) execute the approved DDA and other
Transaction Documents. Subject to Section 4.3.5, if the Citybas not considered and approved the
DDA and, if applicable, any additional Transaction Documents requested by Developer by such
60th day or, at the end of any extension mutually agreed upon by the City and Developer.in writing,
then this ENA shall automatically and immediately terminate without further written notice.
4.3.2 Offer Period Extension. The City Manager shall have the authority on
behalf of the City to agree in writing to extensions of the Offer Period for up to an additional sixty
(60) calendar days. Approval of the City Council shall be required to extend the original Offer
Period for more than a total of sixty (60) calendar days. Any Offer Period extension shall be
effective only if in writing and signed by authorized representatives of Developer and the City.
4.3.3 Not Binding Until Formally Approved. Each of the Transaction
Documents shall not be approved or binding upon the Parties unless and until it is fully executed
by Developer and the City, approved by counsel of each Party as :to form, and approved by the
authorized representatives of Developer and by the City Council and following compliance with
CEQA.
4.3.4 Effect of Staff Recommendation. The concurrence of the City Manager
or designee with the terms and provisions of any of the Transaction Documents shall not be
construed or interpreted as the City approving or accepting such terms. Such concurrence shall be
viewed as nothing more than the willingness of the City Manager or designee to recommend
approval by the City Council.
4.3.5 Request for Modifications. If in the course of its deliberations, the City
Council requests modifications to the CEQA documents or the Transaction Documents, the Offer
Period shall be extended for a period of thirty (30) days and the Parties shall meet and confer
Tustin OM ENA v1010-12-2015(agd)(4j docu
during such a period, or subject to Section 4.3,1 or 4.3.2, such longer period as the Parties- may
mutually agree in writing, to address the City Council requested modifications and to permit
resubmittal of the CEQA document and/or any one or more of the Transaction Documents to the.
City Council. If the City Council shall fail to consider or shall disapprove the CEQA Documents
or the Transaction Documents, or any one thereof, during the Offer Period as so extended, this
ENA and the ENA Negotiating Period automatically and immediately terminate without further
written notice.
4.4 Costs.
4.4.1 Costs and Expenses Borne by the City. Subject to the following sentence,
the City shall be fully responsible for its own overhead, costs. and expenses related to this ENA,
the Transaction Documents, the Property and the potential Project, including, without limitation,
fees and costs of the City's own third -party consultants including financial advisors, preliminary
engineering studies associated with potential Project infrastructure, appraisers, legal counsel,
participation in and evaluation the Parties planning and feasibility process in contemplation of the
proposed Project, costs incurred by or on behalf of the City for Hangar rehabilitation studies (which
does not include Hangar construction drawings) and periodic verification of compliance with the
then -current Specific Plan during development of the Master Plan (collectively, the "City
Preliminary Project Expenses"). Notwithstanding anything to the contrary set forth in this ENA:
(i) except as set forth in Section 4.4.3, nothing herein shall obligate the City to expend any funds
in furtherance of this ENA and (ii) if the City does determine to expend funds, in no event shall
the City be obligated to pay more than the aggregate sum of One Million Dollars ($1`,000,000) for
the City Preliminary Project Expenses (the "City Expense Cap"). The term "City Preliminary
Project Expenses" does not include, and the City Expense Cap shall not be applicable to, (x)
amounts payable by the City under Section 4.4.3 or (y) amounts paid for what otherwise be City
Preliminary Project Expenses but were incurred prior to the Effective Date, it being the Parties'
intent that only new money expended after the Effective Date count against the City Expense Cap.
Determination of costs, expenses, and fees constituting City Preliminary Project Expenses shall be
made by the City in its sole discretion. The City shall have the right to cease making expenditures
for City Preliminary Project Expenses after forty five (45) days' notice to Developer if the City
determines that the City Preliminary Project Expenses required to comply with this ENA have
been or will be in excess of the City Expense Cap (a "City Expense Projected Overrun").
Following the City's .notice to Developer that there has been or may be a City Expense Projected
Overrun, Developer may, but shall not be obligated to, respond with a proposal to address the City
Expense Projected Overrun. If Developer, at its sole discretion, does not agree in writing to pay
City Expense Projected Overruns in full by the end of the forty-five (45) day notice period, then
this ENA and the ENA Negotiating Period shall automatically,and immediately terminate without
further written notice. City shall provide periodic expenditure reports, as agreed upon by the
Parties, to Developer summarizing City Preliminary Project Expenses. Notwithstanding any other
provision of this ENA, except as set forth in Section 4.4.3, the City shall have no obligation to pay
or incur any cost or expense over and above the City Expense Cap.
4.4.2 Costs and Expenses Borne by Developer. Subject to the following
sentence, Developer shall be fully responsible for (a) its own overhead, costs and expenses related
to this ENA, the Transaction Documents, the Property and the potential Project, including, without
limitation, its own staff costs and fees and costs of Developer's third -party consultants, architects,
9 Tustin OM ENA v10 10-12-2015(agd)(4).doex
engineers, legal counsel and financial advisors, for planning and design of the Project, preparing
Plans, submitting applications, conducting due diligence or property investigations and arranging
financing, and (b) third -party costs incurred by or on behalf of the City and/or Developer for
marketing efforts (collectively, the "Developer Preliminary Project Expenses"), all of which
shall be the financial responsibility of Developer. Developer acknowledges and agrees that the
City shall have no responsibility to pay or reimburse Developer for costs and expenses incurred
by Developer in connection with this ENA or the compliance by Developer with its obligations
under this ENA. Notwithstanding anything to the contrary set forth in this ENA: (i) except as set
forth in Section 4.4.3, nothing herein shall obligate the Developer to expend any funds in
furtherance of this ENA and (ii) if the Developer does determine to expend funds, in no event shall
the Developer be obligated to pay more than the aggregate sum of One Million Dollars
($1,000,000) for the Developer Preliminary Project Expenses (the "Developer Expense Cap").
The term "Developer Preliminary Project Expenses" does not include, and the Developer Expense
Cap shall not be applicable to, (x) amounts payable by Developer under Section 4.4.3; (y) amounts
due or payable pursuant to Sections 4.5.3, 4.6, 10.1 and/or 10.5 or (z) amounts paid for what
otherwise be Developer Preliminary Project Expenses but were incurred prior to the Effective
Date, it being the Parties' intent that only new money expended after the Effective Date count
against the Developer Expense Cap. Determination of costs, expenses, and fees constituting
Developer Preliminary Project Expenses shall be made by the Developer in its sole discretion.
Developer shall provide written notice to the City if, at any time during the ENA Negotiating
Period, it determines that the Developer Preliminary Project Expenses have or will, within a forty
five (45) day period, exceed the Developer Expense Cap ("Expense Cap Notice"). If within such
forty five (45) day period Developer does not -agree, in writing, to increase the Developer Expense
Cap and pay Developer Preliminary Project Expenses up to revised Developer Expense Cap, this
ENA and the ENA Negotiating Period shall automatically and immediately terminate without
further written notice. Developer shall provide periodic expenditure reports, as agreed upon by
the Parties, to City summarizing Developer Preliminary Project Expenses. From and after its
receipt of the Expense Cap Notice, the City shall have no obligation to continue to pay City
Preliminary Project Expenses unless and until Developer agrees in writing to increase the
Developer Expense Cap and pay Developer Preliminary Project Expenses up to revised Developer
Expense Cap.
4.4.3 Shared Costs and Expenses. Developer and City will mutually select and
agree upon design/planning consultants and the budget for the preparation of the Preliminary and
Final Concept Plans as described in Section 5.3.1 (collectively, the "Concept Plans") for the
Project. Subject to Section.6.8.2, Developer will be responsible for contracting with and directing
the selected consultants with consultation and agreement from the City. All third -party costs and
expenses associated with the development of the Concept Plans, comprising market research and
feasibility studies, architectural services and charrette costs and other costs agreed upon by the
Parties for development of the Concept Plans (the "Shared Costs'), shall be equally shared
between the Parties; provided that neither the scope of the work nor the budget shall be modified
in any manner without the approval of the City Manager in writing and the total City contribution
shall not exceed one-half of the budget amount approved by the City in writing-, and in no event
shaft such contribution exceed Five Hundred Thousand Dollars ($500,000) ('City Share Cap").
Developer shall be responsible for all additional Shared Costs once the City has expended the City
Share Cap; provided, however, that unless Developer elects to do so at its sole discretion,
Developer shall have no obligation to fund Shared Costs when Developer's contribution will
10 Tustin OM ENA v1010-12-201S(agd)(4docx
exceed Five Hundred Thousand Dollars ($500,000) ("Developer Share Cap"). Developer shall
provide the City, for City approval, copies of all work product and all invoices prepared by the
selected consultants and approved by the Developer. Until the City Share Cap has been funded by
the City, the City shall pay to Developer one-half of the amount set forth in any invoice applicable
to Shared Costs approved by the City within thirty calendar (30) days following City approval
thereof, which approval shall not be unreasonably withheld or delayed. Until the Developer Share
Cap has been funded by Developer, and thereafter only if Developer elects to contribute beyond
the Developer Share Cap, Developer shall promptly pay to the selected consultants all sums
invoiced within thirty (30) calendar days ,following its receipt and approval of each invoice for
Shared Costs, which approval shall not be unreasonably withheld or delayed, and in all events shall
pay to the consultants the amounts paid by the City pursuant to the preceding sentence within five
(5) calendar days following receipt thereof. In order to assure that contract amounts can be fully
paid by Developer, the Developer shall not enter into any contracts to be paid as Shared Costs for
which the aggregate sum exceeds $1 million unless Developer has agreed to pay the excess
amounts incurred over the City Share Cap .and Developer Share Cap.
4.5 Exclusivi • Good Faith Nggotiations and Remedies.
4.5.1 City Failure to Nmotiate in Good Faith. During the ENA Negotiating
Period and any applicable Offer Period, the City covenants and agrees to negotiate exclusively
with Developer and not to solicit another party or enter into any back-up or other agreement with
any other party regarding the development of the Property or any portion thereof without the
express written acknowledgement of Developer; provided that from and after the earlier of (a) the
designation of the AP Property by the City and Developer in writing or (b) the end of the Initial
Period, the foregoing covenant and agreement shall apply solely to the AP Property. The City
acknowledges and agrees that but for this exclusivity, Developer would not have entered into this
ENA. The City shall be deemed to be in breach of its obligation to negotiate in good faith only if
and upon a court of competent jurisdiction determination in a final decision (i.e., a decision not
appealed or not subject to appeal) that the City has breached this exclusivity covenant
("Exclusivity Breach"); an Exclusivity Breach shall be the sole means of breach by the City of its
obligation under this ENA to negotiate in good faith. Developer's sole remedy for an Exclusivity
Breach shall be as set forth in Section 4.5.3, and except as set forth in to that Section, the City shall
at no time have any obligation to pay -any of Developer's other costs or expenses incurred in
connection with this ENA. Developer acknowledges that (a) with respect to development of office
projects on property other than the Property owned by the City at Tustin Legacy, the City has been
asked and may agree, in its sole discretion, to restrict development of certain types of office product
on the Property and/or in other areas of Tustin Legacy in order to promote the ability of such office
developer to develop proposed office buildings (i.e., a non -compete), and (b) entry by the City into
such non -compete agreement with any third party developer at Tustin Legacy will not be a breach
of the City's obligations to negotiate exclusively and/or in good faith under this ENA. Developer
also acknowledges that the City routinely receives inquiries and proposals relating to Tustin
Legacy, and agrees that, among other things, the receipt and response to such inquiries and
proposals related to the Property shall not be an Exclusivity Default. The City may, in its
discretion, forward any such inquiries and proposals to the Developer for review.
4.5.2 Developer Failure to Negotiate in Good Faith. Developer's failure to
11 Tustin OM ENA v10 10-12-2015(agd)(4Mocx
submit to the City plans, reports, studies, investigations, applications and materials specified in
Section 5 and Section 6 of this ENA within the time periods specified therein, failure to provide
and maintain the insurance required by Section 4.6.2, abandonment of the Project or the
negotiations under this ENA, or breach of the representations, warranties and agreements set forth
in Section 3 shall be deemed to demonstrate Developer's failure to negotiate diligently and in good
faith and its failure to carry out its obligations hereunder and shall be defaults hereunder, which
shall mature into Developer Uncured Defaults only if not cured in accordance with Section 9.
4.5.3 Remedies for Breach of Attreement.
(a) Exclusivity Breach or other Uncured Default by City. Upon an
Exclusivity Breach by the City as determined by final court judgment as set forth in Section 4.5.1
, inasmuch as the actual damages to the Developer that would result from a breach by City of its
obligations under this ENA are uncertain and would be impractical or extremely difficult to
determine, Developer shall be entitled, as its sole remedy: (i) to receive payment from the City of
an amount (the "Exclusivity Breach Amount") equal to the lesser of (x) Shared Costs and out-
of-pocket
ut-
of pocket third -party Developer Preliminary Project Expenses actually incurred by Developer and
(y) Two Hundred and Fifty'Thousand Dollars ($250,000) and (u) to terminate this ENA (if not
previously automatically terminated) upon provision of written notice to the City. Upon any
allegation made by Developer of an Exclusivity Breach by the City, the City shall have the right,
but not the obligation, upon payment of the Exclusivity Breach Amount to Developer to terminate
this ENA upon written notice to the Developer, and to take assignment of the Plans and Contracts
upon payment of the amount set forth in Section 6.8.2, and to receive a bill of sale from Developer
as set forth therein and at no further cost or expense to the City. Developer hereby waives any and
all other rights and remedies with respect to an Exclusivity Breach or any other allegation by
Developer of breach or Uncured Default by the City hereunder other than the right to terminate
the.ENA upon provision of written notice to the City; provided that nothing herein shall be deemed
to preclude Developer f -om .seeking or receiving payment .for amounts which City is obligated to
pay pursuant to Sections 4.4.3 and/or 10.5.
(b). Uncured Default by Developer. Upon an Uncured Default by
Developer, inasmuch as the actual damages to the City that would result from a breach by
Developer of its obligations under this ENA are uncertain and would be impractical or extremely
difficult to determine, the City shall be entitled as its sole remedy: (i) to receive payment from
Developer of an amount. (the "Uncured Default Amount") equal to the lesser of (x) Shared Costs
and out-of-pocket third -party City Preliminary Project Expenses actually incurred by the City and
(y) Two Hundred and Fifty Thousand Dollars ($250,000) and (ii) to terminate this ENA (if not
_previously automatically terminated) upon provision of written notice to Developer. City hereby
waives any and all other rights and remedies with respect to an Uncured Default Amount or any
other allegation by City of breach or Uncured Default by the Developer hereunder other than the
right to terminate the ENA upon provision of written notice to the Developer, provided that nothing
herein shall be deemed to, preclude the City from seeking or receiving payment for amounts which
Developer is obligated to pay pursuant to Sections 4.4.3, 4.6, 10.1 and/or 10.5.
(c) Other Remedies. Except as set forth in Section 2.7 or this Section 4.5.3,
after termination of this ENA by either Party, neither Party shall have any further rights, remedies
or obligations to the other Party under -this ENA and the Parties shall each be relieved and
discharged from all further responsibility or liability under this ENA.
12 TisdnOM ENA v10 10.12-2015(aA(4).docx
(d) Limitation on Damages Payable by City. Developer acknowledges that
the City would not have entered into this ENA if the City could become liable for damages, or
specific performance under or with respect to this ENA or the proposed Transaction.
Consequently, and notwithstanding any other provision of this ENA or any actual default or default
alleged by Developer, including without limitation, any Uncured Default, except as set forth in
Section 4.5.3 and the following sentence, the City shall not be responsible for any payment
Developer or be liable in damages under this ENA, including for breach of this ENA to,Developer
or any third party. 'Nothing herein shall be deemed to preclude Developer from seeking payment
for amounts which City is obligated to pay pursuant to Sections 4.4.3, and/or 10.5, provided that
Developer shall not be entitled to any damages in addition to the actual amounts owed by the City
to Developer pursuant to such Sections.
(e) Additional Limitations on Damages. Each Party, on behalf of itself and
its successors and assigns, hereby expressly waives, releases and relinquishes any and all right to
any reimbursement and to any reliance, expectation, anticipation, indirect, consequential,
exemplary or punitive damages or damages or monetary remedies not otherwise specifically set
forth in this ENA.
(f) No Liens or Lis Pendens. Developer, on behalf of itself and its successors
and assigns, hereby expressly waives any and all rights to record a lis pendens or to otherwise
place a lien or restriction of any type upon or affecting the Property.
(g) Other Remedies and Restrictions. In the event the Parties enter into a
DDA, each Party, on behalf of itself and its successors and assigns, hereby expressly waives its
right to assert any breach by the other Party of the covenants of good faith and exclusivity in this
ENA.
4.6 Insuection; License.
4.6.1 Access License.
(a) The City hereby grants to Developer, for use by Developer and its
employees, representatives, agents, contractors and consultants (collectively, .the "Developer
Parties"), a license during the ENA Negotiating Period to enter upon the Property for purposes of
conducting a due diligence inspection, provided that Developer shall and shall cause the Developer
Parties to: (i) deliver to the City written evidence that Developer has procured the insurance
required under Section 4.6.2 prior to entry on the Property; (ii) give the City twenty-four. (24) hours
advance telephonic or written notice of any intended access which involves work on or may result
in any impairment of the use of the Property; (iii) access the Property in a safe manner; (iv)
conduct no invasive testing or boring without the written consent, of the City; (v) allow no
dangerous or hazardous condition created by Developer and/or the Developer Parties to continue
beyond the completion of such access; (vi) comply with all laws and obtain all permits required in
connection with such access; (vii) keep the Property free and clear of any and all liens of any kind
caused by Developer or the Developer Parties, including without limitation, mechanics' liens or
materialmen's liens related to Developer's access to or inspection of the Property; and (viii) conduct
inspections and testing, subject to the rights of any existing tenants or contractors doing work on
the Property, if any (which inspections and testing, if conducted at times other than normal
business hours, shall be conducted only after obtaining the City's consent, which shall not be
13 Tustin OM FNA v 1010-12-2015(ag(4) docx
unreasonably withheld) and in accordance with reasonable terms and conditions established by the
City. The limited license granted herein is revocable by the City during the continuation of any
breach of this ENA by Developer and shall be automatically revoked and terminated, without
further action of the City, upon the termination of this ENA or the ENA Negotiating Period.
(b) Additional Terms Applicable to Sublease Property. In addition, for the
Sublease Property, Developer acknowledges that the City's -rights to the property arise solely under
the LIFOC. Accordingly, Developer hereby agree as follows: (i) Developer shall be bound by
and perform all of: the terms and conditions to be performed by the City under the LIFOC to the
extent applicable to the Sublease Property and/or Developer's access under this ENA; (ii)
Developer shall comply with all covenants and conditions of the LIFOC respecting the City's use
and occupancy of the Sublease Property; (iii) Developer shall not do or permit anything to be done
in or on the Sublease Property which will cause the occurrence of a default by the City under the
LIFOC; and (iv) if the LIFOC expires or is terminated for any reason, including without limitation,
any default by the City or United States of America thereunder, or the United States of America's
election to exercise, any right to terminate, then the license granted by Section 4.6.1(a) shall
thereupon terminate with respect to the Sublease Property, without any liability to the City, as if
such date were the scheduled expiration date of the term of this access license.
4.6.2 Insurance. Developer shall obtain,, or cause the Developer Parties, with
respect to their access and investigative activities, to obtain, at Developer's or the Developer
Parties' sole cost and expense prior to commencement of any investigative activities on the
Property, a policy of commercial general liability insurance covering any and all liability of
Developer and the City arising out of Developer's investigative activities, in an amount of
$1,000,000 and issued by a company authorized by the Insurance Department of the State and
rated A, VII or better (if an admitted carrier) or A-, X (if offered by a surplus line broker) by the
latest edition of Best's Key Rating Guide. Such policy of insurance shall name the City, its officials
and employees as additional insured on the policy. Developer shall provide certificates of
insurance and insurer endorsements (or a copy of the signed policy binder, if applicable), signed
by a representative of the carrier evidencing the required insurance. Such policy of insurance shall
be kept and maintained in force during the ENA Negotiating Period and, if applicable, the Offer
Period and so long thereafter as necessary to cover any Claims by persons or property resulting
from any acts or omissions of Developer and/or the Developer Parties.
4.6.3 Indemni . Developer hereby agrees to indemnify, defend, protect and
hold the City and the City Parties free and harmless from and against any and all Claims arising
or resulting from or related to Developer's or the Developer Parties': (i) exercise of the license
provided in Section 4.6.1 including without limitation, entry onto or access to the Property; (ii)
exercise of any rights hereunder, including, without limitation, any inspections, surveys, tests or
studies performed by Developer or the Developer Parties; (iii) Developer's breach of the
provisions of Section 4.6.1 and/or 4.6.2, including, without limitation, the cost of cure, loss of the
LIFOC, and any attorneys' fees and disbursements incurred in connection with the foregoing; and
(iii) presence, activities or work on or- related to use of the Property and any mechanics' or
materialmen's liens arising with respect thereto, or bodily injury to or death of any person
(including, without limitation, any of the City Parties) or damage to or loss of use of property
resulting from the foregoing, save and except to the extent such Claims (x) result from the mere
discovery or disclosure of an existing condition or from the gross negligence or willful misconduct
14 Tustin OM ENA v10 10.12-2015(agd)(4) docx
of the City or its agents, employees or representatives or (y) are limited by Section 4.5(e).
4.6.4 Survival of Provisions. The insurance obligations in Section 4.6.2 and the
indemnification by Developer set forth in Section 4.6.3• shall survive the termination of this ENA
and, if applicable, the execution of the DDA and the closing and transfer to Developer and shall
not merge into any deed or ground lease conveying the Property.
S. Master Plan and Business Plan.
5.1 Master Proiect Schedule. Within three (3) months following the Effective Date,;
Developer will submit a comprehensive "Master Project Schedule" to the City which shall
generally conform to the mandatory milestone schedule attached as Exhibit "C", indicating when
the tasks listed in Section 5.2 and 5.3 will commence and be completed with greater specificity
than as set forth on Exhibit "C", which schedule shall be subject to. the review and approval of the
City and upon approval by the City, shall replace Exhibit "C" and establish the mandatory
milestones for performance by Developer of the tasks outlined in this Section 5 (the "Mandatory
Milestones'). The Master Project Schedule and the Mandatory Milestones may be amended in
writing by the Parties from time to time. The date for performance of any Mandatory Milestone
may be extended- by the City Manager if there is a reasonable basis for such extension and so long
as .such extension does not exceed the Initial Period. Failure of Developer to timely meet its
submittal obligations with respect to the Mandatory Milestones shall constitute an event of default
by Developer under this ENA. -
5.2 Preparation of Plans. Submittal by Developer of the deliverables listed below is
necessary to further define the scope of development, to evaluate the financial and market
feasibility of the Project and to development appropriate infrastructure plans, business plans and
additional entitlements as further described below. Accordingly, Developer shall deliver the
submittals described below in accordance with the Master Project Schedule. in addition to the
information described below, Developer understands and agrees that the City Manager reserves
the right at any time to reasonably request from Developer additional information, including data
and financial documents, to ascertain the depth of Developer's financial, development and
operations capability and its ability to develop the Property expeditiously, including, without
limitation, equity or loan commitments. The City Manager or designee will provide a reasonable
time in which Developer may obtain and submit to the City such additional information. The City
will cooperate with Developer in moving the Master Plan and Business Plan process forward in a
timely manner. The Parties acknowledge that the preliminary design materials and concept plans
to be provided by Developer pursuant to this Section are conceptual in nature and will be subject
to revision and refinement throughout the ENA Negotiating Period in order to achieve a plan for
the Project acceptable to each of the Parties.
5.3 Master Plan. The Master Plan shall be comprised of the Final Concept Plan, the
Preliminary Infrastructure Planand the Entitlement Plan, each as described below.
5.3.1 Preliminary Concept PIan.
(a) Preliminary Concept Plan Development. Prior to the date set forth in the
Master Project Schedule therefor, Developer shall prepare and submit to the City a "Preliminary
Concept Plan." The purpose of the Preliminary Concept Plan shall be to prepare an initial
15 Tustin OM ENA v1010.12-2015(aO(41doet
development and site plan for the immediate and future development of the entirety of the Property
including the programming of land uses and product types. The Project and the Preliminary
Concept Plan will propose a viable urban village mixed-use and Hangar redevelopment program
on the Property that provides "an urban village concept using a grid system that promotes.efficient
circulation and development" including some, if not all of the following uses: retail, hotel, sports,
entertainment, residential and office. Upon acceptance by the City, the Preliminary Concept PIan
shall form the initial conceptual design and development framework for negotiation of the
Essential Terms. The Preliminary Concept Plan shall include a preliminary project description (in
narrative form), conceptual architectural designs for the Project and Property and a fully
descriptive program of uses. The Preliminary Concept Plan shall include a proposed scope of work
and schedule of performance, including all key milestones for design and development and a
description of the phasing plan for the Project. The Preliminary Concept Plan shall identify any
modifications to the Specific Plan and any additional land use entitlements, permits and approvals,
including, but not limited to, site plan review, conditional use permits and/or Specific Plan
amendments required to achieve the proposed development and use program (collectively,
"Additional Entitlements").
(b) Evaluation and Further Development of Preliminary Concept Plan.
Upon approval by the City of the Preliminary Concept Plan and prior to the date set forth in the
Master Project Schedule, Developer shall, using the Preliminary Concept Plan as the baseline,
prepare the following in order to refine the development plan and develop a Final Concept Plan:
i. Evaluate traffic and circulation, prepare new urban street grid plans.
ii. Evaluate parking and prepare street and parking structure plans.
iii. Evaluate and coordinate infrastructure and utility plans.
iv. Evaluate open space and outdoor uses, and prepare park and public
amenity plans.
V. Evaluate and prepare conceptual adaptive re -use plans for the Hangar
currently leased by the City from the United States Department of the
Navy.
vi. Conduct a two day Planning and Design Charrette to evaluate mixed-
use development concepts, including the following:
Illustrative site plans,
2. Programmatic drawings ("block by block"),
3. Diagrammatic massing drawings, and
4. Project aerials with Sketch Up massing.
At the conclusion of this process and within the timeframe established by the Master
Project Schedule, Developer shall prepare an updated version of the Preliminary Concept Plan,
which shall, upon approval of the City, become the "Final Concept Plan" and shall form an
additional framework for the negotiation of the Transaction Documents. The Final Concept Plan
16 Tustin OM FNA 00 10-12-2015(ag(41doox
shall include preliminary revised design drawings and related documents containing the overall
plan for development of the Project including the following: preliminary site plan showing
building layout and dimensions, parking, landscaping and access on or related to each individual
parcel, conceptual building renderings and a development schedule.
5.3.2 Preliminary Infrastructure Plan_. Upon completion by Developer and
approval by the City Manager of the Final Concept Plan, the City, as a City Preliminary Project
Expense as set forth in and subject to the provisions of Section 4.4.1, shall cause the preparation
of a "Preliminary Infrastructure Plan" which shall set forth the: existing infrastructure associated
with the Property and shall describe on a,preliminary basis those improvements and engineering
required to implement the proposed Final Concept Plan, including, without limitation, backbone
infrastructure and additional on- and off-site infrastructure required for development of the Project.
City shall analyze the existing infrastructure and prepare a preliminary analysis of infrastructure
requirements, including a circulation, traffic, transportation and parking plan, a phasing plan (for
development of horizontal and vertical improvements) and a financing plan (including initial
construction cost estimates) for development of required infrastructure. The Developer shall
cooperate with the City in preparation of the Preliminary Infrastructure Plan, The Preliminary
Infrastructure Plan shall include analysis of the environmental and geotechnical condition of the
Property and identification. of cnvironunental issues to be resolved and associated cost estimates
and shall discuss the phasing of the infrastructure requirements for the Project required to achieve
the Final Concept Plan.
5.3.3 Entitlement Plan. Developer, as a Developer Preliminary Project Expense
as set forth in and subject to the provisions of Section 4.4.2, shall develop and submit with the
Final Concept Plan, an "Entitlement Plan" for the Project and the Property that shall include a
list and provide a timeline for obtaining all Additional Entitlements it will seek from the City.
5.4 Business Plan. Prior to the date set forth in the Master Project Schedule therefor,
Developer, as a Developer Preliminary Project Expense as set forth in and subject to the provisions
of Section 4.4.2; shall prepare and submit to the City the Master Plan and a "Business Plan" that
contains Developer's overall cost and revenue estimates, Project cost and revenue data including
information on the Project's financial return adequate to enable the City to evaluate Developer's
business offer and. economic feasibility of the proposed development of the Project, as proposed,
on the Property. The Business Plan shall be in the business plan format requested by the City and
shall analyze and describe the financial and organizational characteristics of the Project in detail
sufficient to support negotiation of the DDA and additional Transaction Documents. Specifically,
the Business Plan will:
i. include an organizational plan, a marketing program, a phasing and financing
plan, a public benefit- plan, a public financing plan, a feasibility analysis, a
project schedule, a project pro forma in electronic spreadsheet format,
ii. include documentation and descriptions of all key cost and revenue assumptions
and resulting f nancial.retums, and any additional supporting narrative,
iii. include Developer's plan for financing the Project and related financial
assurances,
17 Tustin OM ENA v10 10.12-2015(&W4�doex
iv. provide an overview of how the Project will commence, function, achieve
success, manage risk, raise capital and provide fiscal neutrality to the City of
Tustin, taking into account initial assessments of infrastructure cost and
phasing, environmental issues, market analysis, economic modeling, financial
modeling and other required technical studies, and
V. provide a disposition phasing plan that describes the timing and structure of the
proposed leasing and/or sale of Property.
Developer shall refine the Business Plan throughout the ENA Negotiating Period and as further
required by Sections 6.3 and 6.6.
5.5 Compliance with Existing Land Use and Zoning Requirements, LIFOC Parcel
Restrictions. The proposed Project to be negotiated hereunder shall include the development and
use of the Property consistent with the Reuse Plan, the City's General Plan, and the Specific Plan
unless otherwise specifically agreed by the City and Developer, each in its sole discretion.
Developer acknowledges that the parcels comprising the Sublease Property (each described on
Exhibit "D" attached hereto as "LIFOC") are subject to LIFOC Parcel restrictions and
development on the Sublease Parcels is subject to approval by the Navy in its sole discretion.
5.6 Terms of DDA and Other Transaction Documents to be Negotiated. Developer
and ,the City agree that it is their intent, upon entry into this ENA, to negotiate a DDA and, if
agreed by the Parties, additional Transaction Documents that are anticipated to address the
following terms and conditions and such, other terms and conditions as they may agree, and which
will be binding upon City and Developer and, to the extent provided therein, their successors and
assigns.
(a) As -Is Conveyance. While Developer should undertake its own
investigation to determine the presence of hazardous materials and suitability of the Property for
development, Developer acknowledges and agrees that if the Property is conveyed and or leased
by the City pursuant to a DDA and additional Transaction Documents, the Property shall be
conveyed on an "AS -IS, WHERE -IS AND WITH ALL FAULTS" basis, and Developer shall
be obligated to release, defend, indemnify and hold harmless the City with respect to its acquisition
and development of the Property and the condition of the Property, including without limitation
any and all land use, soil and environmental conditions of the Property but subject however to
preserved claims relating to environmental remediation by the Navy.
(b) Development. Developer shall design -and construct the Project on the
Property at its own cost and expense (subject to the City's obligations under Sections 4.4.1 and
4.4.3) in accordance with the scope of development and a schedule ofperformance to be negotiated
as part of the DDA and in accordance with plans and specifications prepared by Developer, and
approved by the City in accordance with such schedule of performance and in compliance with all
requirements and regulations of the City including, without limitation, applicable zoning.
(c) Product. Developer understands and acknowledges that the product
proposed for the Project will be subject to approval by the City, in its governmental and proprietary
capacity, and will be required to comply with applicable development standards in the General
Plan, the Specific Plan, the Additional Entitlements and any requirements contained in the
18 Tustin OM ENA v 10.10.12-20I5(agd)(4).d=
Transaction Documents.
(d) Community Facilities District (CFD). Developer acknowledges that the
City has formed a community services district for services to fund a portion of the City essential
services, including, without limitation, 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 by forming a community
facilities district pursuant to which is imposed a Special Tax `B" ("Tax B"). Developer
acknowledges and agrees that the term of Tax B imposed upon the Property and the buildings(s)
and improvements thereon shall be perpetual and shall not be time limited in any manner unless
determined by the City in its sole discretion. Developer acknowledges and agrees that its
development plan will not require use of CFD proceeds of any kind and that CFD proceeds will
not be used to reimburse Developer for any costs of the development including without limitation,
any infrastructure costs.
(e) _Applications. Developer shall prepare and process applications for and
obtain from the City and other federal, state and local jurisdictions, all applicable land use,
planning and zoning approvals for the proposed Project with the support of the City. These
approvals will be required to be consistent with the Specific. Plan, unless, as part of approval of
any application, modifications to the Specific Plan or any development standards are granted by
the City.
(f) Proiect Costs; Local Infrastructure (In -Tract). Project costs and
revenues will be separately analyzed. Funding of all Project costs will be the responsibility of
Developer without any cost or liability whatsoever to the City. Project costs for which Developer
will be responsible shall include, without limitation, all costs of planning, designing, entitling and
constructing the Project and all costs of any necessary local infrastructure improvements and
in -tract improvements required in,connection with development of the Project.
(g) Development Fees. In connection with its development of the Property,
Developer acknowledges that the Property will be subject, to applicable development fees,
including, but not limited to, those required by the City of Tustin, or other jurisdictions, such as
the Foothill/Eastem Corridor Fee, the Santa Ana/Tustin Transportation System. Improvement Area
(TSIA) fee, school impact fees by the Tustin Unified School District, current Orange County
School Facility Bonds (Measure G and Measure L), utility meter and connectionfees.
(h) Transfer and Assignment Restrictions. Developer acknowledges that the
DDA and/or the other Transaction Documents shall contain limitations on transfer and assignment
of the rights of Developer including, among other things, the right of the City to approve in its sole
discretion all assignments and transfers by Developer of interests in Developer, the Transaction
Documents, the Project or the Property (including any lease or sublease thereof).
(i) Mortgagee Limitations and Subordination. Developer acknowledges
that the DDA and/or the other Transaction Documents will impose restrictions on encumbrance of
the Property, the building(s) or any improvements thereon as collateral for Developer's mortgage
or construction loan, which, until such time as the City has issued a certificate of compliance
indicating completion of the Project, will prevent any mortgagee or foreclosure purchaser from
19 Tustin OM ENA v10 10.12-2015(agd)(4).doex
taking the Property free of the construction and other Project obligations set forth in the
Transaction Documents, which will not be subordinated to and will survive any foreclosure or
deed in lieu thereof.
(j) Remedies and Termination Rights. Developer acknowledges that the
DDA and/or the other Transaction Documents shall contain remedies and termination rights in
favor of the City for breach of the DDA and/or the other Transaction Documents, which shall
include, without limitation, rights of reverter in conveyed land.
(k) Purchase Price and/or Ground Lease. The basis for the Parties'
negotiations with respect to the purchase price and/or ground lease for the Property shall be
established based on the mutually agreed upon Business Plan.
(1) Insurance. Developer, and any permitted assignee(s), will be responsible
in conjunction with any DDA to provide commercial general liability, workers compensation,
builder's risk property insurance, and environmental insurance as further described on Exhibit `B"
attached hereto and to indemnify the City with respect to the environmental condition of the
Property, labor taws and other actions and activities of Developer with respect to the Project and
the Property.
6. Developer's Responsibilities.
6.1 Status Reports. As and when requested by the City, Developer agrees to make
oral and/or written reports advising the City and/or its staff of all matters and studies being made,
Developer's progress in analyzing the feasibility of the Project and Developer's compliance with
the requirements of this ENA, and such other information as may be requested by the City or its
staff.
6.2 Development Team. Developer shall, within ten (10) days of execution of this
ENA, submit in writing to the City the names of all of Developer's lead negotiators who shall have
authority to make decisions on behalf of Developer. During the ENA Negotiating Period,
Developer shall make qualified and authorized personnel available to actively participate in
negotiations.
6.3 Financial Status. Developer shall continue to be responsible for demonstrating to
the City Developer's financial capacity and. capability to perform its obligations under this ENA
and the proposed Transaction Documents. Developer shall submit any additional financial
information required to demonstrate Developer's financial capacity and capability to perform its
obligations under this ENA and the proposed Transaction Documents as requested by the City
within thirty (30) days of a request Developer shall identify with specificity the documents which
Developer wants the City to maintain as confidential documents and a statement as to why the
request is consistent and complies with the provisions of the Public Records Act of the State. If
confidentiality is requested and if nondisclosure under the Public Records Act is allowed, the
documents shall be delivered to and maintained by -the City and copies shall not be disseminated.
To the extent permitted by law, the City shall not make public disclosure of the documents. The
City's agents, negotiators and consultants may review the statements as necessary as long as such
Parties agree to maintain the confidentiality of such statements.
6.4 Assignment. If Developer Zetermines to joint venture or partner development of
20 Tustin OM ENA v1010-12-2013(agd)(4).docx
the Property, or if Developer determines to form a new legal entity to develop the Property,
Developer shall promptly inform the City of such determination and submit to the City the joint
venture's or partner's or new entity's most recent financial statements and the financial statements
of its key principals. The assignment of Developer's rights under this ENA to any new entity,
partnership or joint venture may be approved in writing by the City, provided that the City is
satisfied, in its sole discretion, that the new entity, partnership, or joint venture has the financial
capability to perform under this ENA and the proposed Transaction Documents.
6.5 Design Review/Entitlements. It is understood and agreed by Developer that the
quality, character and uses proposed for the Project are of particular importance to the City and
that planning and design review approval and other Additional Entitlements by the City in its
governmental capacity will be required for the development of the Property. Developer and the
proposed architect and engineer for the Project shall meet with representatives of-tlie'City to review
and come to a clear understanding of the planning and design criteria required by the City.
6.6 Additional Information. Developer understands and agrees that the City's
negotiating team reserves the right at any time to reasonably request from Developer additional
information, including data and commitments to ascertain the depth of Developer's capability and
desire to develop the Property expeditiously. The City's negotiating team will provide a reasonable
time in which Developer may obtain and submit to the City such additional information.
6.7 Contacts during Negotiation. Developer shall only negotiate with the City's
negotiating team as defined in writing by the City Manager or designee and with no other persons
unless expressly authorized to do so by the City's negotiating team. During the ENA Negotiating
Period, Developer shall not market or publicize the potential Project to the public or any third party
without the approval of the'City Manager or designee; provided that during the Additional Period,
Developer may include references to the potential Project in its website and general marketing
materials in ways designed to attract potential tenants and buyers of portions of the Project with
the prior consent of the City Manager in his or her reasonable discretion.
6.8 Environmental and Other Studies.
6.8.1 Environmental Requirements. Compliance with CEQA. is a legal
precondition to any final City action to approve and execute any Transaction Documents for the
Property. While the City has agreed to' process and reflect the terms of a proposed transaction in
Transaction Documents to be considered by the City for approval, the Parties agree that no
obligation to enter into such Transaction Documents, or any of them, or any transaction, shall exist
and no project or Transaction Documents shall be approved or deemed to be approved on the part
of any Party, until after the Project is reviewed by the City in accordance with the requirements of
CEQA. Developer shall cooperate with the City and abide by the City's environmental compliance
procedures and fee requirements, which include, but are not limited to, the obligation to deposit
funds to pay all of the City's costs of preparing any additional required environmental studies as
the City may determine, in its sole discretion, to be required. Developer,acknowledges that while
the City and Developer anticipate that the Project will be designed and constructed in a manner
generally consistent with.the Specific Plan, Reuse Plan and other City land use and zoning
requirements, existing entitlements and any Additional Entitlements may be required to develop
the Project. This ENA does not bind the City or any other governmental agency to grant or approve
any Additional Entitlements and the City strictly reserves its sole and absolute discretion to
21 Tustin OM ENA v10 10-12-2015(ag*4).dmx
consider, approve or disapprove said CEQA documents and Additional Entitlements. Developer
acknowledges that the City has the right, in its sole and absolute discretion, to not approve, or to
request modification to, the Project, the DDA and any other Transaction Documents and/or any
CEQA document prepared in connection therewith including the right to require the adoption of
additional mitigation measures, alternatives to the proposed action, including the no project
alternative or a Statement of Overriding Consideration. The City may, in its sole and absolute
discretion, also require further analysis of impacts. Developer agrees to finance and supply
information and otherwise assist the City as requested to enable the City to determine the
environmental impact of the proposed development of the Project as described by the Transaction
Documents and to prepare such additional environmental documents, if any, as may be needed to
be completed for the development.
6.8.2 Plans, Reports, Studies and Investigations. During the term of this ENA,
Developer shall promptly. provide to the City, copies of all plans, reports, studies: or investigations
(collectively, "Plans") prepared by or on behalf of Developer for development of the Project on
the Property, at no additional cost or expense to the City. Upon execution of each contract for
design and engineering of the Project (each, a "Contract" and collectively "Contracts")i
Developer shall conditionally assign each such contract and its interest in the .Plans developed
thereby to the City, pursuant to Assignment Agreement in form approved by the City and executed
by Developer, and shall cause each such consultant, engineer and contractor to consent in writing
to such conditionally assignment. Such assignment shall become effective upon termination of
this ENA, and except in the case of an Uncured Default or Exclusivity Breach by the City, without
additional cost or expense to the City. Upon termination of this ENA, Developer shall deliver to
the City copies of all Plans requested by the City together with a bill of sale therefor, provided that
Developer makes no representations, warrantee or guarantee regarding the completeness or
accuracy of the Plans, and Developer does not covenant to convey the copyright or other ownership
rights of third parties thereto. Such Plans shall thereupon be free of all claims or interests of
Developer or any liens or encumbrances. Upon the City's acquiring Developer's rights to any or
all of the Plans, the City shall be permitted to use, grant, license or otherwise dispose of such Plans
to any person or entity for development of the Property or any other purpose; provided, however,
that Developer and the preparers of such items shall have no liability whatsoever to the City or any
transferee of title to the Plans in connection with the use of the Plans. In the event that this ENA
terminates or is terminated by either Party, due to an Uncured Default of the City or an Exclusivity
Breach as provided in Section 4.5.3, and the City desires to acquire the Plans, then the City shall
be obligated to pay to the Developer the sum of Five Thousand Dollars ($5,000) as the sole
condition precedent to assignment of the Plans and Contracts to City and delivery by Developer
of the bill of sale described above..
6.8.3 Hazardous Materials Assessment. Developer acknowledges that, in
accordance with the City's acquisition of the Property from the Department of the Navy by
quitclaim, the Navy issued a Finding of Suitability for Transfer ("FOST') as further described on
Exhibit "E" for unrestricted use, subject to notification and restrictions set forth in the FOST, also
determining that the Property can be used with acceptable risk to human health and the
environment. The City would intend upon approval of a DDA and any other Transaction
Documents to sell and convey the Fee Property by quitclaim or to ground lease such property, and
to sublease the Sublease Property in the same manner as the parcels were conveyed to the City
including, without limitation, the covenants and warranties as identified in the Navy's quitclaim
22 Tustin OM EMA v10 10.12-2015(agd)(4�doax
deed and/or LIFOC, as applicable.
7. Developer.
7.1 Nature of Developer. Developer will be a corporation or such other business entity
(such as a limited liability company) as the City may approve upon such terms and conditions as
the City may request and the City and Developer may agree, as specified in the Transaction
Documents. Should another business entity be desired by Developer, subject to approval of the
City, Developer shall submit a copy of the applicable formation documents relating to Developer
and any corporate members of Developer (i.e., as applicable: articles of incorporation; partnership
agreement; and/or limited liability corporation articles of incorporation, statement of information
and operating agreement).
7.2 Principals and Offices of Developer. The principal offices of Developer are
located at 733 8th Avenue, San Diego, CA 92101. The principals of Developer are as follows:
Morgan Dene Oliver
James L. McMillan
Richard Paul Buss
William Persky
7.3 Developer's Consultants,and Professionals. Developer is required to make full
disclosure to the City of any changes to its principals.
8. City's Plans and Studies.
The City shall, within ten (10) business days of execution of this ENA and at no cost to
Developer, provide Developer with copies of the FOST and all. plans, reports, studies,
investigations and other materials the City may have pertinent to the Property provided,
however, that the City makes no representations, warrantee or guarantee regarding the
completeness or accuracy of such plans, reports, studies, investigations and other materials and
the City shall have no liability whatsoever to.Developer or any transferee of Developer in
connection with such plans and studies or the use thereof for any purpose.
9. Default and Termination.
Failure by either Party (a) to negotiate in good faith, (b) to negotiate exclusively, as
provided in Section 4.2, or (c) to perform any other of its obligations as provided in this ENA
shall constitute an event of default under this ENA. The non -defaulting Party shall give written
notice of a default to the defaulting Party, specifying the nature of the default and the action
required to cure the default. If the default remains uncured for twenty (20) days after the date of
such notice it shall be deemed an "Uncured Default," or, as set forth in Section 4.5.1, an
Exclusivity Breach, and the non -defaulting Party may terminate this ENA.
10. MisceIlaneous.
10.1 Real Estate Commissions. The Parties acknowledge that CBRE, Inc. ("Broker")
has introduced the Parties and that Developer is solely responsible for compensating Broker in
accordance with a separate written agreement between Developer and Broker. Developer
23 Tustin OM ENA r 10 10.12.201 S(sgd)(4) docx
represents for the benefit of the City that it has not engaged any broker, agent, or finder in
connection with this ENA and Developer agrees to hold the City and its representatives harmless
from any losses and liabilities arising from or in any way related to any claim by Broker or by any
broker, agent, or finder retained by Developer, regarding this ENA or the sale, ground lease or
development of the Property. City hereby represents for the benefit of Developer that it has not
engaged any broker, agent, or finder in connection with this ENA and City agrees to hold
Developer and its representatives harmless from any losses and liabilities arising from or in any
way related to any claim by any broker, agent, or finder retained by the City, other than Broker,
regarding this ENA or the sale, ground lease or development of the Property.
10.2 No City Duty. Except as expressly provided in Sections 4.4.3 and 4.5.3, the City
shall have no obligations -or duties hereunder and no liability whatsoever in the event the City and
Developer fail to agree upon or to execute a DDA and, if determined by either of the Parties, in its
sole discretion, that the same shall be required, any additional Transaction Documents.
10.3 Non -Liability of City Officials and Employees. No member, official,
representative, director, staff member, attorney or employee of the City shall be personally liable
to Developer or any successor in interest in the event of any default or breach by the City or for
any amount which may become due to Developer or to its successor, or on any obligations under
the terms of this ENA.
10.4 Entire Agreement. This ENA represents the entire agreement of the City and
Developer with respect to the matters set forth herein and supersedes any prior negotiations or
contemporaneous writings or statements. This ENA may not be amended except in writing signed
by each of the City and Developer hereunder.
10.5 Attorneys' Fees. If either the City or Developer brings an action or files a
proceeding in connection with the enforcement of its respective rights or as a consequence of any
breach by any Party -of its obligations hereunder, then the prevailing Party in such action or
proceeding shall be entitled to have its reasonable attorneys' fees paid by the losing Party, which
shall be payable (regardless of actual fees incurred) at the contractual hourly rate for City's
litigation counsel at the time the fees were incurred, but in no event more than $200 per hour.
10.6 Covenant Against Discrimination. Developer shall not discriminate against nor
segregate, any person or group of persons on account of sex, race, color, age, marital status,
religion, handicaps, creed, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or,enjoyment of the Property, nor shall Developer establish or permit any such
practice or practices of discrimination or segregation in the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property.
10.7 Notices/Submittals. All notices or submittals required or permitted hereunder
shall be delivered in person, by overnight courier, or by registered or certified mail, postage
prepaid, return receipt requested, or email to such Party at its address shown below, or to any other
place designated in writing by such Party. If a notice is sent by email, it shall be deemed given
when transmission is complete if a copy of the notice is also sent .to the recipient by overnight
courier for delivery within two (2) business days following the date of electronic transmission.
24 Tustin OM ENA 00 10-12-2015(agd)(4).docx
City:
John A. Buchanan
Deputy Director, Economic Development
City of Tustin
300 Centennial Way
Tustin, CA 92780
Email: jbuchanan cRtustinca.org
Jeffrey C. Parker
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Email: inarker(a)tustinca.org
And with a copy to: David E. Kendig
City Attorney
Woodruff Spradlin & Smart
555 Anton Blvd., Suite 1200
Costa Mesa, CA 92626
Email: dkendig(@wss-law.com
Developer:
OliverMcMillan Tustin Legacy, LLC
Attention: William Persky, CFO
733 8t' Avenue
San Diego, CA 92101
Email: bpersky(50tiverMcMillan.com
Any such notice or submittal shall be deemed received upon delivery, if delivered personally;
one (1) business day after delivery to the courier, if delivered by courier, and three (3) calendar
days after deposit into the United States mail if delivered by registered or certified mail.
10.8 Prohibition Against Assignments. This ENA shall not be assigned by Developer
without the consent of the City in its sole discretion. Any attempted or purported assignment by
Developer of this ENA without the consent of the City as aforesaid shall be void and a breach by
Developer of its obligation to.negotiate in good faith under this ENA.
10.9 No Third Party Beneficiaries. Execution of this ENA is not intended to create or
confirm any third party beneficiary rights in or create any liability on the part of either the City or
Developer to any third.parties. Nothing in this ENA, whether expressed or implied, is intended to
confer any rights or remedies under or by reason of this ENA on any persons other than Developer
and the City and their respective permitted successors and assigns, nor is anything in this ENA
intended to relieve or discharge the obligation or liability of any third persons to any Party to this
ENA, nor shall any provisions give any third persons any right of subrogation or action over or
against any Party to this ENA.
10.10 Effect of Disposition and Development Agreement. Following mutual execution
by the City and Developer of the Transaction Documents, this ENA shall be of no further force or
25 Tustin OM ENA v10 10-12-2015(Sgd)(4).dowc
effect, except that, unless otherwise agreed in writing by Developer and the City, the releases set
forth in Section 3.5, the insurance requirements set forth in Section 4.6.2 and the indemnities set
forth in Section 4.6.3 and 10.1 shall remain in effect with respect to matters or Claims arising
during the ENA Negotiating Period. In the event of any conflict between the provisions of this
ENA and any Transaction Documents approved by the City and Developer, the provisions of the
Transaction Documents shall for all purposes prevail.
10.11 Time is of the Essence. Time is of the essence with respect to all the express
conditions contained herein, including, without limitation, with respect to performance by
Developer of the Mandatory Milestones.
10.12 Confidentiality. The City and Developer represent and warrant that each shall
keep this ENA and all information and/or reports obtained from the other, or related to or
connected with the Property, the other Party, any third parties with whom the Parties may be
negotiating for lease or purchase of a portion of the Property, this ENA, and until presentation to
the City for approval, the Transaction Documents, confidential and will not disclose any such
information to any person or entity without obtaining the prior written consent of the other Party,
except that (a) the City shall have the right (i) to disclose any information contained in any third
party reports obtained by Developer and (ii) make disclosures to City's employees and independent
contractors, including, but not limited to consultants, financial planners, outside counsel,
contractors and experts as necessary in order to determine if the Project is feasible and financeable
and (b) Developer shall, have the right to make disclosures to Developer's employees and
independent contractors, including but not limited to consultants, financial planners, outside
counsel, and experts as necessary in order to determine if the Project is feasible and financeable.
Notwithstanding the foregoing, this ENA, the draft Transaction Documents and all other material
relating to this ENA. are subject to the provisions of the ,California Public Records Act
(Government Code Section 6250 et seq.) ("Act"). The City's use and disclosure of its agreements
and records are governed by the Act and nothing herein limits the City's right and obligation to
comply with the Act or with laws mandating public notice or disclosure of public records,
including without limitation, agendas, public hearings, staff reports and minutes produced in
connection therewith, including, without limitation, the Ralph M. Brown Act. The City makes no
representations nor warranties that writings and materials provided to or generated by the City
during negotiations will be exempt from the Public Records Act.
10.13 Governinn Law/Exclusive Venue. This ENA shall be interpreted in accordance.
with California law. The Parties agree that in the event of litigation, exclusive venue shall be in
Orange County, California.
10.14 Consent/Approval. Wherever in this ENA the consent or approval of the City, the
City Manager or designee, Developer or any of their designees is required, such consent or
approval may be given or denied in the sole and absolute discretion of the person or Party to which
such discretion is given.
10.15 Delegation of Duties. The City Manager shall have the authority, in his or her sole
discretion, to delegate the duties of City Manager hereunder to a designated representative.
10.16 Computation of Time Periods. If any date or time period specified in this ENA
is or ends on a Saturday, Sunday or federal, state or legal holiday, or on a day that the City is closed
26 Tugti, oM Eton vio 10-12-2015(agd)(4).dom
as part of an alternative work week, such date will automatically be extended until 5:00 p.m.,
Pacific Time, of the next City business day or of the next day which is not a Saturday, Sunday or
federal, state or legal holiday.
10.17 No Waiver. The waiver or failure to enforce any provision of this ENA by a Party
will not operate as a waiver of such Party's right to enforce future defaults or breaches of any such
provision or any other provision of this ENA..
10.18 Counteraarts. This ENA may be signed in one or more counterparts, each of
which shall constitute an original and all of which together shall constitute one and the same
agreement.
10.19 Sections: Exhibits. Unless otherwise indicated, references in this ENA to
Sections, clauses, exhibits, and schedules are to the same contained in or attached to this ENA
and all exhibits and schedules referenced in this. ENA are incorporated in this ENA by this
reference as though fully set forth in this Section.
IN WITNESS WHEREOF, the City and Developer hereto have executed this
ENA as of the Effective Date set forth above.
4.CITY»
City ofTust'
Dated: By:
•
64DEVELOPER"
OliverMcMillan T LLC
By:
i liam P. Pers
Chief Financial Officer
27 Tustin OM ENA v10 10.12-2015(agd)(4).doex
EXHIBIT "A"
General Depiction of Property
That certain property located in the City of Tustin, County of
Orange, California with Assessor Parcel numbers 430-371-18, 19,
20, 21, 22, 23, 241 25, 26, 27, 28, 29, 30, 31, 32, 33, 61, 62, 63, 64,
65, 66, 67 and 68; 430-381-38, 39, 40 (portion oo, 43 (portion of),
65, 66, 67, 68. (portion of), and 74.
28 Thalia OM ENA v1010-12.2015(a&V4).do"
A_8IMk9
PREPARED DATE 101OD2015
PREPARED BY
® i-IUNSAKER & ASSOCIATES
SCALE 1"=350 1 R V I N E, I N C.
NN*dW OVONESUMjLI11VE —
Tb- H*e • k*A G ts1 . "too mo- q •.04 50"
9
EXHIBIT 'V5
DDA INSURANCE REQUIREMENTS
1. Insurance.
1.1. Required Insurance.
Without limiting the City's rights to indemnification, Developer shall procure and maintain,
at its own cost and expense, and furnish or cause to be furnished to the City, evidence of the
following policies of insurance (complying with the requirements set forth below) naming.
Developer as insured and, with respect to the general liability and environmental liability insurance
required pursuant to Section 1.1.1 and Section 1.1.4 only, the City as additional insured. All
insurance required below shall be kept in force with respect to each such component of the
Property, the Project and/or the improvements,until issuance of a final Certificate of Compliance
by the City with respect thereto or for such longer period as is described below.
1.1.1. Liability Insurance. Commencing upon the effective date of the DDA, Developer
shall maintain or cause to be maintained commercial general liability, insurance, to protect against
loss from liability imposed by law for damages on account of personal injury, including death
therefrom, suffered or alleged to be suffered by any Person or Persons whomsoever on or about the
Property, the Project and/or the improvements and the business of Developer on the Property, or
in connection with the operation thereof, resulting directly or indirectly from any acts or activities
of Developer or anyone directly or indirectly employed or contracted with or acting for Developer,
or under its respective control or direction, and also to protect against loss from liability imposed
by law for damages to any property of any Person occurring on or about the Property., the Project
and/or the improvements or related to the Project and the business of Developer on the Property,
or in connection with the operation thereof, caused directly or indirectly by or from acts or activities
of Developer or any Person acting for Developer, or under its control or direction. Such insurance
shall also provide for and protect the City against incurring any legal cost in defending Claims for
alleged loss. Such insurance shall be maintained in full force and effect until issuance of the
Certificate of Compliance and so long thereafter as necessary. to cover any claims of damages
suffered by persons or property prior to issuance of the Certificate of Compliance, resulting from
any acts or omissions of Developer, Developer's employees, agents, contractors, suppliers,
consultants or other related parties. The amount of insurance required hereunder shall include
comprehensive general liability and personal injury with limits 'of at least Five Million Dollars
($5;000,000.00) and automobile liability with limits of at least Two Million Dollars
($2,000,000.00) combined single limit per occurrence. The insurance shall be issued by a company
permitted by the Insurance Department of the State and rated A -/Vii or better (if an admitted
carrier) or A -/X (if offered by a surplus. line broker), by the latest edition of Best's Key Rating
Guide. Such insurance may be provided by an umbrella insurance policy otherwise meeting the
requirements of this Section 1.
An accord certificate evidencing the foregoing and providing the following endorsements
signed by the authorized representative of the underwriter and approved by the City shall be
delivered within seven, (7) business days following the effective date of the DDA and annually
(upon request from the City) evidencing renewals of each policy until issuance of the Certificate
of Compliance for the Project. The endorsements shall provide as follows: (1) designate the City,
30 Twin OM FNA 001042.2015(agd)(4).doex
its elected and appointed officials, agents, representatives and employees as additional insureds on
the commercial general liability policies; (2) the commercial general liability insurance coverage
shall be primary, and not contribute with any insurance or self-insurance maintained by the City
and (3) a waiver of subrogation for the benefit of the City. The procuring of such insurance and
the delivery of policies, certificates or endorsements evidencing the same shall not be construed as
a limitation of Developer's obligation to indemnify the City Parties as required by the DDA.
1.1.2. Workers' Compensation Insurance. Commencing upon the effective date of the
DDA, Developer shall obtain, and thereafter maintain or cause to be maintained, -workers'
compensation insurance issued by a responsible carrier authorized under the laws of the State to
insure employers against liability for compensation under the. workers' compensation laws now in
force in California, or any laws hereafter enacted as an amendment or supplement thereto or in lieu
thereof. Such workers' compensation insurance shall cover all Persons employedby Developer in
connection with the Project and shall cover liability within statutory limits for compensation under
any such act aforesaid, based upon death or bodily injury claims made by, for or on behalf of any
Person incurring or suffering injury or death in connection withthe Project or the operation thereof
by Developer. Notwithstanding the foregoing, Developer may, in compliance with the laws of the
State and in lieu of maintaining such insurance, self -insure for workers' compensation in which
event Developer shall deliver to the City evidence that such self-insurance has been approved by
the appropriate State authorities. Developer shall also furnish (or cause to be furnished) to the City
evidence satisfactory to the City that any contractor with whom it has contracted for performance
of work on the Property or otherwise pursuant to the DDA carries workers' compensation insurance
required by law. The insurance policy, by endorsement signed by an authorized representative of
the underwriter, shall contain a waiver of subrogation. The insurance provided for under this
Section 1.1.2 shall be issued by a company rated B -/VIII or better or from the State Compensation
Fund.
1.1.3. Builder's Risk Insurance. Commencing upon the commencement of construction
by Developer of any improvements and continuing until such time as the City delivers a final
Certificate of Compliance, Developer shall obtain, or shall cause its contractor to obtain, and
thereafter maintain a builder's risk policy with respect to such improvements or maintain
comparable coverage through a property policy. Such insurance shall be maintained in an amount
not less than one hundred percent (100%) of the full insurable value of the building(s) and
improvements. The insurance provided for under this Section 1. 1.3 shall be provided by insurer(s)
permitted to do business in the State and with a Best's rating of B/NR or better.
1.1.4. Environmental Insurance. From and after the Close of Escrow, Developer shall
obtain and shall thereafter maintain environmental and pollution legal liability insurance coverage
for the Property, including coverage for loss, remediation expense and legal defense expenses, and
naming the City as a named insured to address pollution risks at the Property. Such, policy shall
include coverage relating to known pre-existing conditions and/or conditions that are discovered
during development on the Property. Such policy shall comply with the following requirements:
(a) The policy shall be written by the insurance company selected by Developer and
approved by the City, which approval shall not be unreasonably withheld, and which insurer(s)
shall have a Best's rating of A -/VII or better;
(b) The policy shall provide Five Million Dollars ($5,000,000) in coverage, subject to
31 Tustin OM ENA v10 10-12-201$(agd)(4).docx
a maximum One Million Dollar ($1,000,000) deductible per claim, to protect against Claims and
loss from liability relating to known and unknown conditions on the Property for a 10 -year term;
and
(c) The policy shall be paid for in full at the time of issuance and shall be endorsed as
non -cancelable by Developer without the written consent of the City in its sole discretion to such
cancellation and, to the extent available, shall contain amaiver of subrogation for the benefit of the
City. As such, Developer's obligation to maintain environmental insurance pursuant to this Section
1. 1.4 shall survive the termination of the DDA following the Close of Escrow for the term required
for such insurance policy pursuant to Section 1. 1.4(b),
(d) Developer shall name the City as an additional insured with respect to any additional
environmental and pollution legal liability insurance coverage Developer acquires for the Property,
the Property or any portion thereof and to the extent such policy is prepaid, shall not modify or
,terminate such policy following the termination of the DDA.
The provisions of this Section 1. 1.4 shall survive the termination of the DDA.
1.2. General Insurance Requirements.
1.2.1. For all policies or certificates, the insurer endorsements (or a copy of the policy
binder, if applicable) shall specifically identify the DDA and shall provide evidence that either (a)
Developer has paid for its premium in full for any policy that is currently in place, or (b) that said
insurance shall not be cancelled except if the City is given at least thirty (30) calendar days advance
written notice of any cancellation or termination of insurance by the insurer.
1.2.2. The term "full insurable value" as used in this Section 1 shall mean the cost
determined by mutual agreement of the Parties (excluding the cost of excavation, foundation and
footings below the lowest floor and without deduction for depreciation) of providing similar
improvements of equal size and providing the same habitability as the improvements immediately
before such casualty or other loss, but using readily -available contemporary components, including
the cost of construction, architectural and engineering fees, and inspection and supervision.
1.2.3. All insurance provided under this Section 1 shall be for the benefit of the Parties.
Developer agrees to timely pay all premiums for such insurance and, at its sole cost and expense,
to comply and secure compliance with all insurance requirements necessary for the maintenance
of such insurance. Developer agrees to submit certificates evidencing such insurance to the City
on an Accord form within seven (7) business days, following the effective date of the DDA, or,
with respect to coverage required by Section 1.1.4, the Close of Escrow. Upon request by the City,
within seven (7) calendar days, if practicable, after expiration of any such policy, certificates
evidencing renewal policies shall be submitted to the City, together with evidence of payment of
premiums.
1.2.4. If Developer fails or refuses to procure and maintain insurance as required by the
DDA, the City shall have the right, at the City's election, and upon ten (10) calendar days' prior
notice to Developer, to procure and maintain such insurance. The premiums paid by the City shall
be treated as a loan, due from Developer, to be paid on the fust calendar day of the month following
the date on which the premiums were paid. The City shall give prompt notice of the payment of
such premiums, stating the amounts paid and the name of the insured(s).
32 Tustin OM ENA Yio 10-12-2015(ag(4).doox
1.2.5. Since the insurance policies required by Section 1.1.4 will not be effective until after
the Close of Escrow, the evidence of insurance to be delivered by Developer to the City at the Close
of Escrow shall be- limited to a binder evidencing that the insurance required by Section 1. 1..4 will
become effective following the Close of Escrow.
2. Initially capitalized terms used in this Exhibit "A" and not otherwise defined in,the
ENA shall have the meanings set forth below:
2.1. "Certificate of Compliance" shall mean a certificate to be issued with respect to
the Property by the City upon completion by Developer of all of the buildings and improvements
and satisfaction of all'additional conditions precedent thereto with respect to the Property or Phase,
as the case may be, as described in the DDA.
2.2. "Close of Escrow" shall mean with respect to any portion of the Fee Property, the
date upon which the City shall convey such Fee Property to Developer, and with respect to any
portion of the Sublease Property, the effective date of a sublease of such Sublease Property by the
City to Developer.
2.3. "Governmental Authority" shall mean any and all federal, •State, county,
municipal and Iocal governmental and quasi -governmental bodies and authorities (including the
United States of America, the State of California and any political subdivision, public corporation,
district, joint powersauthority orother political or public entity) or departments thereof having or
exercising jurisdiction over the Parties, the Project, the Property or such portions of the foregoing
as the context indicates.
2.4. "Person" shall mean an individual, partnership, limited partnership, trust, estate,
association, corporation, limited liability company, joint venture, firm, joint stock company,
unincorporated association, Governmental Authority,, governmental agency or other entity,
domestic or foreign.
"State" shall mean the State of California.
33 'Iletin OM ENA v10 10-12-2015(4gd)(4)Amx
EXHIBIT "C"
MANDATORY MILESTONES
All terns not defined herein shall have the respective meanings ascribed to them in the
ENA to which this Exhibit "C" is attached. Unless otherwise °provided, all Mandatory
Milestones are measured from the Effective Date (for example, 8 months means the date which
is eight (8) months after the Effective Date).
1.
Master Project Schedule;
3 months.
2.
Programming Charrette
4 months
3.
Design Charrette
6 months
4.
Preliminary Concept Plans
12 months
5.
Master Plan/Business Plan
23 months
34 Tustin OM ENA v10 10-12-2015(agd)(4),docx
EXHIBIT "D"
LIST OF SUBLEASE PROPERTY PARCELS (LIFOC PARCELS) AND FEE
PROPERTY PARCELS (NON-LIFOC PARCELS)
APN
Owner or Ground Lessee
LIFOC/Nou LIFOC
430-371.18
City
Of Tustin
LIFOC
430-371-19
City
Of Tustin
LIFOC
430-371-20
City
Of Tustin
Non LIFOC
430-371-21
Ci
Of Tustin
LIFOC
430-371-22
Ci
Of Tustin
Nott LIFOC
430-371-25
City
Of Tustin
LIFOC
430-371-24
City
Of Tustin
LIFOC
430-371-25
City
Of Tustin
Non LIFOC
430-371-26
CityOf
Tustin
Non LIFOC
430-371727
City
Of Tustin
Non LIFOC
430-371-28
City
Of Tustin
LIFOC
430-371-28
City
Of Tustin
LIFOC
430-371-24
City
Of Tustin
Non LIFOC
430-371-30
City
Of Tustin
Non LIFOC
430-371-31
City
Of Tustin
Non LIFOC
430-371-32
Ci
Of Tustin
LIFOC
430-371-33
City
Of Tustin
Non LIFOC
430-371-61
City
Of Tustin
Non LIFOC
430-371-62
Ci
Of Tustin
LIFOC
430-371-63
City
Of Tustin
LIFOC
430-371-64
City
Of Tustin
LIFOC
430-371-65
City
Of Tustin
LIFOC
430-371-66
6ity
Of Tustin
LIFOC
430-371-67
Ciiy
Of Tustin
Non LIFOC
430-371-68
City
Of Tustin
Non LIFOC
430-381-38
dity
Of Tustin
LIFOC
430-381-39
City
Of Tustin
LIFOC
430-381-40
Ci
Of Tustin
tIFOC
430-381-43
city
Of Tustin
Non LIFOC.
430-381-65
City
Of Tustin
Non LIFOC
-430-381-66
City
Of Tustin
LIFOC
430-381-67
City
Of Tustin
Non LIFOC
430-381-68Cit
I
y Of Tustin.
IHOC
430-381-74
1 City
Of Tustin
Non LIFOC
35 075091.0039 48265960-9895 v. l l
EXHIBIT "E"
NAVY DOCUMENTS
1. Department of Navy "Final Environmental Baseline Survey" dated March 2001
2. Department of Navy findings and determinations that the Development Parcels were
suitable for transfer to the City, pursuant to the document entitled "Final Finding of
Suitability to Transfer For Parcels 23, 29, 34, 35, and 36, and Portions of 1, 16, 17,
24, 27, 28, 40 and 41 Marine Corps Air Station Tustin, California" dated April 22,
2002
3. Department of Navy findings and determinations that the Development Parcels were
suitable for lease to the City, pursuant to the document entitled "Finding of Suitability
to Lease for Carve -Out Areas 5,6,7,8,9, 10, and 11 Marine Corps Air Station Tustin,
California" dated April 26, 2002
4. Memorandum of Agreement between the United States of America and the City of
Tustin for the Conveyance of a Portion of the Former Marine Corps Air Station
Tustin dated as of May 13, 2002.
5. "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" dated May 13, 2002.
6. Quitclaim Deed G and Environmental Restriction Pursuant to Civil Code
Section 1471 dated May 13, 2002, that was Recorded on May 14, 2002 as Instrument
Number 20020404597
7. Quitclaim Deed for Parcels II -G-5 and II -H-9 and Environmental Restriction Pursuant
to Civil Code Section 1471 dated March 26, 2003, that was Recorded on May 9, 2003
as Instrument Number 2003000533361
8. Department of Navy findings and determinations that the Development Parcels were
suitable for transfer to the City, pursuant to the document entitled "Final Finding of
Suitability to Transfer Carve -Out 3, Portions of Carve -Out 5, and Carve -Out 7
Former Marine. Corps Air Station Tustin, California" dated April 2005
9. Quitclaim Deed for Parcels III -D-5; III -D-6, III -D-7, III -D-8, and III -G-4 dated
January 12, 2006, that was Recorded on February 8, 2006 as Instrument Number
2006000089845
10. "Final Soil Removal Activities Closure Report — Former Underground Storage Tank
(UST) Site 29A. Former Marine Corps Air Station Tustin, California" dated June
2010
36 075W1.0039 4826.5%0-9595 v, u
11. "Final Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) Five -Year Review Report for Former Marine Corps Air Station Tustin"
dated October 20.11
12. "Final CERCLA Five -Year Review Report Addendum, Operable Units, IA, IB
South, and 4B Low Concentration Sites (Installation Restoration Program Sites 13S,
3, 11, 13W, and.MMS-04) Former Marine Corps Air Station Tustin California" dated
March 2013
13. "Revised Draft Final Explanation of Significant Differences to the Final Record of
Decision/Remedial Action Plan Operable Unit -IA Former Marine Corps Air Station
Tustin" dated December 2014
14. "Revised Draft Final Explanation of Significant Differences to the Final Record of
Decision/Remedial Action PIan Operable Unit -1B IRP -3 — Paint Stripper Disposal
Area IRP -I2 — Drum Storage Area No. 2 Former Marine Corps Air Station Tustin"
dated December 2014
15. "Revised Draft Final Land Use Controls Remedial Design (LUC RD) Amendment
No. 1 Remedial Design Hydraulic Containment with Hot Spot Removal Operable
Units IA and 1B Former Marine Corps Air Station Tustin" dated December 2014
16. "Final Annual Performance Groundwater Monitoring Report (June. 2013 through
February 2014) Installation Restoration Program Sites.5S(a), 6, and the Mingled
Plumes Area — Operable Unit 4B Former Marine Corps Air Station Tustin" dated
January 2015
17. Navy "Responses to Comments", dated June 19, 2015, for "Revised Draft Final
Explanation of Significant Differences to The Final Record of Decision/Remedial
Action Plan, Operable� Unit- 1 A, Revised Draft Final Explanation of Significant
Differences to The Final Record of Decision/Remedial Action Plan, Operable Unit -
1 B, and Revised Draft Final Land Use Controls Remedial Design (LUC RD)
Amendment No. 1, at Former Marine Corps Air Station Tustin, Tustin, California.
December 2014."
18. Background Metals Information for Former MCAS Tustin
a. "Draft Final Background Concentrations of Metals Issue Paper Marine Corps
Air Station Tustin,. California" dated October 1996
b. "Proposed Site Specific Preliminary Remediation Goal for Cadmium
Tustin Legacy Community Partners LLC Former Marine Corps Air
Station' letter from Pacific States Environmental Contractors Inc. dated
May 4, 2009
c. "Background for Acceptable Cadmium Soil Concentration at MCAS Tustin"
memo from Pacific States Environmental Contractors Inc. dated June 16, 2011
37 075091,0039 4826-5%0-9895 v.II
A JRa CERTIFICATE OF LIABILITY INSURANCE
11!181208120 °°"'""
15
11/1812015
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. If SUBROGATION IS WANED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder in lieu of such endorsement(s).
PRODUCER
liant Insurance Services, Inc.
701 B Street
6th Floor
NAMTACT Mechelle Wilson
o E , 618-849-3805 FAX 619-699-2155
IL
AnnRiss. MWilson@alliant.com
INSU S AFFORDING COVERAGE NAIL Y
San Diego CA 92101
INSURER A;TravelersIndemnity Company of CT 26682
211/2016
INSURED OLIVLLC-01
INSURER B :Travelers Property Casualty Co of A 25674
INSURERc:ACE Property & Casualty Insurance C 20699
OliverMCMillan Tustin Legacy, LLC
INSURER D :
733 8th Ave
San Diego CA 92101
INSURER E
INSURER F
Deductible $$0
nmtcnw -00 rrvorreinwTe Iaf Ramro. 714384.34..58 RIFVI1QIf%1J MI HUIRFR-
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
LTR
TYPE OF INSURANCE
ADDLISLIUR
Jerry Craig,. Economic Development & Housing Manager
POLICY NUMBER
POLICY EFF
MID
POLICY EXP
0
LIMITS
B
X COMMERCIAL GENERAL LIABILITY
CLAIMS -MADE XI OCCUR
6309A03129A
2/1/2015
211/2016
EACH OCCURRENCE $1,000,000
DAMAGE
M TO RENTED SMagecturerwel $100,000
MED EXP (Any ane Pelson) $5,000
PERSONAL & ADV INJURY $1,000.000
GEMLAGGREGATE LIMIT APPLIES PER:
POLICY [:] JECY FX� LOC
OTHER
GENERAL AGGREGATE $2.000,000
PRODUCTS - COMPIOP AGG $2,000,000
Deductible $$0
A
AUTOMOBILE LIABILITY
X ANY AUTO
STOOISJNJED SCHEDULED
OS
X HIRED AUTOS X AUTONON-S
BA9A63129A
2/1/2016
2/112016
INGLE LIMIT
Me =V $1000,000
BODILY INJURY (Per persm) $
BODILY INJURY (Per accideri) $
PP er ,aided $
S
C
X
UMBRELLA LIAR
EXCESS LIAO
X
OCCUR
CLAIMS -MADE
G2783209A
2/1/2015
2/1/2016
EACH OCCURRENCE $100,000,000
AGGREGATE $100,000,000
DED I X I RETENTION 510,000
$
WORKERS COMPENSATION
AND EMPLOYERS' LIABILITY
ANY PROPMETORJPARTNeME-CUIIVE Y❑
OFFICERJMEMBER EXCLUDED?
(Mandalay In NH)
rdescribe under
DESCRIPTION OF OPERATIONS below
N 1 A
PER OTH-
E.C. EACH ACCIDENT $
E.L. DISEASE - EA EMPLOYEE $
EL. DISEASE - POLICY LIMIT $
DESCRIPTION OF OPERATIONS f LOCATIONS I VEHICLES (ACORD 1010 A"Uonat Remarks Schedule, may be attached K more space Is required)
The City of Tustin, its officials and employees and US Navy are additional insured with respects to general liability.
RE: Tustin Legacy Parcel numbers 430-371-18,19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 61, 62, 63, 64, 65, 66, 67 & 68;
430-381-38, 39,40 (portion of), 43 (portion of) 65, 66, 67, 68 (portion of), and 74.
t -at iCIr`ATR will nFR CANCFLLA110M
®1988.2014 ACORD CORPORATION. All rights reserved.
ACORD 26 (2014101) The ACORD name and logo are registered marks of ACORD
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED (N
Jerry Craig,. Economic Development & Housing Manager
ACCORDANCE WITH THE POLICY PROVISIONS.
City of Tustin
300 Centennial Way
AUTHORIZED REPRESENTA
e*
Tustin CA 92780
®1988.2014 ACORD CORPORATION. All rights reserved.
ACORD 26 (2014101) The ACORD name and logo are registered marks of ACORD
POLICY NUMBER: 6309A63129A
COMMERCIAL GENERAL. LIABILITY
CG 20 10 10 01
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT.CAREFULLY.
ADDITIONAL INSURED - OWNERS, LESSEES OR
CONTRACTORS - SCHEDULED PERSON OR
ORGANIZATION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Name of Person or Organization:
The City of Tustin, its officials and employees and US Navy
300 Centennial Way
Tustin CA 92780
(If no entry appears above, information required to complete this endorsement will *be shown in the Declarations as
applicable to this endorsement.)
A. Section II -- Who Is An Insured is amended to
include as an insured the person or organization
shown in the Schedule, but only with respect to
liability arising out of your ongoing operations
performed for that insured.
B. With respect to the insurance afforded to these
additional insureds, the following exclusion is
added:
2. Exclusions
This insurance does not apply to "bodily in-
jury" or "property damage" occurring after.
(1) All work, including materials, parts or
equipment furnished in connection with
such work, on the project (other than
service, maintenance or repairs) to be
performed by or on behalf of the addi-
tional Insured(s) at the site of the cov-
ered operations has been completed;
or
(2) That portion of "your work" out of which
the injury or damage arises has: been
put to its intended use by any person or
organization other than another con-
tractor or subcontractor engaged in
performing operations for a principal as
a part of the same project.
CG 20 10 10 01 0 ISO Properties, Inc., 2000 Page 1 of 1
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