HomeMy WebLinkAbout13 EXCLUSIVE NEGOTIATING AGREEMENT WITH FAMILY PROMISE OF ORANGE COUNTYAgenda Item 13
Reviewed.-
AGENDA
eviewed:AGENDA REPORT City Manager
Finance Director 6N A
MEETING DATE: NOVEMBER 6, 2018
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: ECONOMIC DEVELOPMENT DEPARTMENT
SUBJECT: EXCLUSIVE NEGOTIATING AGREEMENT WITH FAMILY
PROMISE OF ORANGE COUNTY
SUMMARY:
City Council approval is requested to enter into an Exclusive Negotiating Agreement
("ENA") with Family Promise of Orange County, Inc. ("Family Promise").
RECOMMENDATION:
The City Council authorize the City Manager to enter into an Exclusive Negotiating
Agreement by and between the City of Tustin and Family Promise.
FISCAL IMPACT:
City transaction expenses were budgeted into the Tustin Housing Authority's FY 2018-
2019 budget. Staff will negotiate the terms and conditions under which the property will
be conveyed and, if negotiations are successful, a Disposition and Development
Agreement will be presented to City Council for consideration.
COORELATION TO THE STRATEGIC PLAN:
The ENA with Family Promise aligns with Goal A — Economic and Neighborhood
Development, enhancing the vibrancy and quality of life in the community.
BACKGROUND:
The City owns an approximate four -tenths of an acre parcel at 1941 EI Camino Real.
Family Promise is proposing to purchase the property and build an apartment project
with seven units and a family resource center for the purposes of providing short-term
transitional housing for homeless families. In the proposed seven unit project, there will
be two (2) three-bedroom units, four (4) two-bedroom units and one (1) one -bedroom
unit. Family Promise will be partnering with HomeAid Orange County, Inc. to construct
the project.
Agenda Report
November 6, 2018
Page 2
Family Promise was established in February of 2012 with a mission to help families
experiencing homelessness achieve housing stability. They support families in
emergency and short-term housing programs and continue their support for two
additional years in the graduate support services program through partnerships with
over twenty (20) Orange County congregations, including Tustin -area congregations:
Aldersgate United Methodist Church; Church of the Foothills; Trinity United
Presbyterian; Tustin Presbyterian Church; and Congregation B'Nai Israel. Through their
housing programs, meals, and case management, they support 35-40 families a year by
providing over 2,000 emergency shelter nights and serving over 7,000 meals.
A summary of the proposed ENA is as follows:
• The purchase price for the property shall be consistent with and supported by an
appraisal of the property obtained by the City.
• The property will be transferred to Family Promise through a promissory note and
unsubordinated first deed of trust that will be forgiven over a period of 55 years
upon compliance with and subject to certain Declaration of Covenants and
Restrictions.
• Preference will be given to homeless families with ties to Tustin.
• The project will not be used for emergency shelter for the homeless.
• Family Promise will provide case management, computer and internet services,
counseling, financial literacy, educational assessment, and life skill classes to the
families.
Staff recommends that the City Council authorize the City Manager to execute an ENA
with Family Promise for a period of not more than ten (10) months, commencing upon
action by the City Council.
John uchanan
_13—erector of Economic Development
Jerry Craig°
Deputy Dire or of
Attachments: Exclusive Negotiating Agreement with Family Promise
Development
EXCLUSIVE NEGOTIATION AGREEMENT
BY AND BETWEEN THE CITY OF TUSTIN AND FAMILY PROMISE
OF ORANGE COUNTY
This EXCLUSIVE NEGOTIATION AGREEMENT ("Agreement") is entered into for
reference purposes as of , 2018 (the "Effective Date") by and between the CITY OF
TUSTIN (the "City") and FAMILY PROMISE OF ORANGE COUNTY, INC., a California
non-profit corporation ("Family Promise"). Each sometimes referred hereinafter as a "Party" and
collectively as the "Parties," the City and Family Promise agree as follows:
L Introduction.
1.1 The trend of homelessness in Orange County is currently on the rise and the City,
its residents and the community at large, have been and will continue to be directly impacted by
issues created by a growing homeless population and for the health, safety, and welfare of the
community, the City continually seeks solutions to mitigate the many and varied issues raised by
homelessness.
1.2 Family Promise is a non-profit organization, affiliated with a national namesake,
having a stated mission to assist homeless families achieve housing stability by providing short
term shelter, meals, case -management, and hospitality. Family Promise has developed and
implemented a housing and supportive services program providing short-term housing to families
that can pay some rent, but are unable to afford a market rate rent. During a family's stay in the
housing program, Family Promise takes a hands-on approach by providing support services and
monitoring so that the family may move out of homelessness into sustainable independence.
1.3 Family Promise has been gifted certain sums to acquire and build a short
term/transitional housing project, subject to City approval, in order to serve homeless families
within Orange County, in partnership with Shelter Providers of Orange County, Inc., dba HomeAid
Orange County, Inc. ("HomeAid").
1.4 The City owns certain vacant real property at 1941 El Camino Real, City of Tustin,
County of Orange, designated as Assessor's Parcel Number 500-071-12, consisting of
approximately 16,550 square feet (the "Property"). A legal description and site map of the
Property is attached hereto as Exhibit A.
1.5 Family Promise has made a proposal to develop the Property for short-
term/transitional housing for families with children, with preference given to those with ties to the
City, wherein Family Promise would be solely responsible for financing the. construction of the
project, obtaining all governmental permits and preparing environmental reports, complying with
all zoning and building regulations, and maintaining and operating the site. The project will serve
multiple families, have shared amenities and common space, and provide office space for Family
Promise's corporate operations. The proposed development of the Property described in this
paragraph and as further described in this Agreement is referred to hereinafter as the "Project".
1.6 Given the elevated housing and land values in Orange County, the City will
contribute the Property in exchange for an unsubordinated 55 -year forgivable loan, and Family
Promise will seek additional funding to purchase, build, and operate the proposed short
term/transitional housing Project.
1.7 The City and Family Promise enter into this Agreement in order to establish an
exclusive negotiating period to negotiate diligently and in good faith, the terms and conditions of
a Disposition and Development Agreement ("DDA") and Development Agreement ("DA"), which
if agreed upon and executed will specify the rights, obligations and method of participation of the
City and Family Promise with respect to the purchase and sale of the Property and the development
of the Project on the Property.
2. Agreement to Negotiate.
2.1 Terms and Conditions. The City and Family Promise each desire to negotiate a
DDA and DA, which if agreed upon and executed, shall set forth the terms and conditions pursuant
to which the Property shall be conveyed by the City to Family Promise and developed by Family
Promise.
2.2 DDA and DA. Notwithstanding that the terms of the purchase, sale and
development of the Property are to be negotiated, Family Promise and the City have agreed that
the transactional documents to be negotiated to describe the transaction shall be in the form of a
DDA and DA, and including, but not limited to, a Promissory Note, Deed of Trust, and Declaration
of Covenants, Conditions and Restrictions.
2.3 Not a Final Agreement. This Agreement (including all exhibits hereto) is solely
an exclusive right to negotiate and is not a final agreement. The City and Family Promise do not
intend this agreement to be a purchase, option, or similar contract and do not intend to be bound
in any way by this Agreement, other than to establish a period of exclusive negotiations during
which time each of the City and Family Promise shall negotiate with the other in good faith.
2.4 Standstill During Negotiations. The City agrees that during the Initial ENA
Negotiating Period (as defined below), or as this period may be extended, the (collectively, the
"ENA Negotiating Period"), that the City shall not market the Property to other interested parties
and Family Promise agrees during the ENA Negotiating Period that it shall not seek to acquire
other property, or develop the Project at another site.
2.5 Essential Terms Not Agreed. The City and Family Promise acknowledge that
although they have set forth a framework for negotiation of essential terms of a transaction:
(a) they have not herein agreed upon essential terms of a transaction, including, but not limited to,
those essential terms set forth in Section 5. 1.1 through Section 5.1.10; (b) they do not intend this
Agreement to be a statement of essential terms of the transaction, which shall be the subject matter
of their further negotiations; and (c) the essential terms of the transaction, if agreed to by the City
and Family Promise, shall be set forth, if at all, in a DDA and DA.
2.6 Effectiveness of Subsequent Agreements. The DDA and the DA shall not exist
and shall not be binding unless and until each is fully executed by Family Promise and the City,
approved by counsel to each of the City and Family Promise as to form, and approved by the City
Council of the City and by the authorized representatives of Family Promise. Nothing in this
Agreement shall supersede or waive any discretionary or regulatory approvals required to be
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obtained from the City pursuant to the Tustin City Code, or the provisions of any applicable State
or Federal law or regulation.
2.7 Public Hearings and Compliance. If the negotiations hereunder culminate in a
concurrence on a proposed draft of a DDA and DA, such DDA and DA will be considered for
approval by the City only after all required public hearings have been held and after compliance
with all applicable laws and ordinances. The concurrence of the City negotiators with the terms
and provisions of a proposed DDA and DA under any provisions of this Agreement shall not be
construed or interpreted as the City approving or accepting such terms. Such concurrence shall be
viewed as nothing more than the willingness of the City negotiators to recommend to the legislative
body of the City and the City Council that they approve such terms.
2.8 Assumption of Risk. The City and Family Promise each assume the risk that,
notwithstanding this Agreement and good faith negotiations, the City and Family Promise may not
enter into any agreement due to their failure to agree upon essential terms of the transaction.
Neither Party will have any liability to the other if the Parties are unable to reach such a definitive
agreement with respect to the proposed transaction for any reason, or for no reason.
3. Representations. Warranties and Agreements by Family Promise. Family Promise
represents, warrants, and agrees as follows:
3.1 Expertise and Financial Oualifications. Family Promise and its development
partners, have the necessary expertise, experience and financial capability to undertake
development of the Property as contemplated by this Agreement and understand the process and
requirements required to undertake development projects such as the Project.
3.2 No Speculation in Land Holding. Family Promise's acquisition of the Property
and its other intended undertakings pursuant to this Agreement shall be used for the timely
development of the Property, and accompanying infrastructure and amenities and not for
speculation in land holding.
3.3 Release. Except as specifically set forth in this Agreement at Section 4.4, Family
Promise hereby waives the right to recover from and fully and irrevocably releases the City and
its elected and appointed officials, employees, agents, representatives, attorneys, affiliates,
consultants, contractors, successors and assigns (the "City Parties") with respect to any and all
Claims that Family Promise 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: (a) the terms of this Agreement including, without limitation, the information set
forth herein or the termination hereof in accordance with the provisions herein; (b) the breach by
the City of its obligations under this Agreement; (c) the failure of the Parties or either of them to
agree upon the terms of the DDA, DA, or any other document; (d) any disputes, Claims, actions,
causes of action, demands or orders arising between Family Promise and any third parties; and/or
(e) any actions of the City or the City Parties in connection with any of the foregoing, including,
without limitation, the exercise by the City of its discretion, decision, judgment with respect to the
foregoing. This waiver and release includes, without limitation, a waiver and release with respect
to: (1) any and all damages and/or monetary relief (whether based in contract or in tort), including,
without limitation, any right to claim direct, compensatory, reliance, special, indirect,
consequential, expectation, anticipation, exemplary or punitive damages or losses; (2) any right to
payment or reimbursement from the City except as expressly set forth in this Agreement; (3) the
right to protest the terms of this Agreement, or the selection, or revocation of the selection of
Family Promise for exclusive negotiations with respect to the Property, including by termination
of this Agreement, and (4) except as set forth in Section 4.4, the failure of the City to negotiate in
good faith pursuant to this Agreement, or to enter into a DDA and/or DA.
The term "Claim" or "Claims" as used in this Section and Agreement shall mean 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, fees of
expert witnesses, consultant fees and court, arbitration and litigation costs), costs and expenses
attributable to compliance with judicial and regulatory orders and requirements, fines, penalties,
liens, taxes or any other type of compensation whatsoever, direct or indirect, known or unknown,
foreseen or unforeseen.
3.4 Survival of Provisions. The provisions of this Section 3 shall survive the
termination of this Agreement.
4. Negotiations.
4.1 Good Faith Negotiations. The City will prepare a draft of the DDA and DA and
submit the draft documents to Family Promise for review and comment. The City and Family
Promise agree that during the ENA Negotiating Period to exclusively negotiate with one another
diligently and in good faith to prepare a DDA and a DA and related documents to be entered into
between the City and Family Promise with respect to the purchase and sale and development of
the Property.
4.2 Period of Negotiations; Offer Period; Termination of Agreement.
4.2.1 Initial Period. The Parties agree to negotiate for a period of ten (10) months
from the Effective Date (the "Initial ENA Negotiating Period"). If at the expiration of the Initial
ENA Negotiating Period (or within any extension of time mutually approved by the City and
Family Promise in accordance with the terms of the Agreement), Family Promise has not signed a
DDA and DA in form and substance prepared and approved by the City in its sole discretion, then
this Agreement shall automatically terminate.
4,2.2 Request for Extension. Family Promise may request from the City an
extension of the Initial ENA Negotiating Period. The Initial ENA Negotiating Period may be
extended by the mutual consent of the City and Family Promise for up to two (2) additional periods
of sixty (60) calendar days each. Any further consent of the City to extend this Agreement shall
require the approval of the City Council.
4.2.3 Authority to Extend. The City hereby delegates to the City Manager, or his
or her designated representative, the authority to agree to grant the extensions specified in Section
4.2.2 upon determination by the City Manager or his or her designated representative in their sole
and absolute discretion that Family Promise has negotiated diligently and in good faith and that
reasonable and sufficient progress has been made toward fulfillment of the requirements of this
Agreement. No such extension of time shall be effective unless it is in writing.
4.2.4 Offer to Purchase. The execution by Family Promise of a negotiated form
of a DDA and DA and submittal of same to the City shall constitute an offer to purchase the
Property. Family Promise hereby agrees that it shall not withdraw such offer to purchase for a
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period of sixty (60) calendar days following submittal of the executed DDA and DA to the City.
Such offer shall remain in effect for a period of sixty (60) days to enable the City to (a) determine
whether it desires to enter the DDA and DA as presented; (b) take the actions necessary to
authorize the City to sign the DDA and DA if the City desires to do so; and (c) sign the DDA and
DA. If the City has not considered and approved the DDA and DA by the 60th day allotted for
herein, or, at the end of any extension mutually agreed upon by the City and Family Promise in
writing, then this Agreement shall automatically terminate.
4.2.5 Rights of the Parties to Earlier Terminate Agreement for Breach. Family
Promise may only terminate this Agreement and the ENA Negotiating Period upon providing
seven (7) calendar days' prior written notice to the City alleging breach of Section 4.4 by the City.
The City may terminate this Agreement upon providing seven (7) calendar days' prior written
notice to Family Promise alleging breach by Family Promise of any provision of this Agreement.
4.2,6 Earlier Terminate Due to Infeasibility or Non -Economic Transaction. Either
Party may terminate this Agreement and the ENA Negotiating Period upon providing seven (7)
calendar days' prior written notice to the other Party if during the course of negotiations, either
Party determines in good faith that based on the terms offered by the other, that it is unlikely to
reach agreement on the terms of the DDA and/or the DA or a Party determines that the terms
offered by the other Party do not meet its economic requirements.
4.3 Proiect Costs.
4,3.1 Costs and Expenses Borne by Family Promise. Family Promise
acknowledges and agrees that the City shall have no responsibility to pay or reimburse Family
Promise for costs and expenses incurred by Family Promise in connection with this Agreement,
the compliance by Family Promise with its obligations under this Agreement, the termination of
this Agreement or any other matters unless the City assumes any specific responsibilities in the
fully executed DDA. Costs and expenses for which Family Promise shall be responsible include,
without limitation, all costs and expenses incurred by Family Promise prior to or following
execution of this Agreement with respect to the Project, the Property, compliance with the terms of
this Agreement, the drafting, negotiation and execution of the DDA and the DA and all other
documents required thereby or related thereto and any and all third party fees and costs incurred
by Family Promise for legal counsel, financial, appraisal and other consultants in connection
therewith and all fees or deposits required of Family Promise for processing entitlement
applications, pursuing entitlements and complying with provisions of the CEQA implementing
regulations. This provision shall survive the termination of this Agreement.
4.4 Exclusivity; Good Faith Negotiations. During the ENA Negotiating Period, the
City covenants and agrees to negotiate exclusively with Family Promise and shall not solicit
another party for the Project or enter into any agreement with any other party regarding the
development of the Property or any portion thereof. The City acknowledges and agrees that but
for this exclusivity, Family Promise would not have entered into this Agreement. In the event a
court of competent jurisdiction determines in a final decision that the City has breached this
exclusivity covenant, the City shall be deemed to have failed to negotiate in good faith. For any
breach of the covenant of good faith by the City, provided a DDA has not been entered into
pursuant to this Agreement, Family Promise's sole remedy shall be the termination of this
Agreement and the return of any unearned deposits (together with interest accrued thereon) made
by Family Promise pursuant to this Agreement.
4.5 Inspection; License.
4.5.1 Access License. The City hereby grants to Family Promise, for use by
Family Promise and its employees, representatives, agents, contractors and consultants
(collectively, including Family Promise, the "Family Promise Parties"), a license during the term
of this Agreement to enter upon the Property for purposes of conducting a due diligence inspection,
provided that the Family Promise Parties shall: (a) deliver to the City written evidence that Family
Promise has procured the insurance required under Section 4.5.2; (b) provide the City forty-eight
(48) hours telephonic, or written notice of any intended access which involves work on or may
result in any impairment of the use of the Property; (c) access the Property in a safe and reasonable
manner; (d) conduct invasive testing or boring only after obtaining the written consent of the City
as to a detailed work plan for such testing, which consent shall not be unreasonably withheld; (e)
not create or allow any dangerous or hazardous conditions to be created on the Property; (f) comply
with all laws and ordinances, including obtaining all permits required in connection with such
access and/or testing; and (g) conduct inspections and testing, subject to the rights of any existing
neighbors, 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). The limited license granted herein is revocable by the City during
the continuation of any breach of this Agreement by Family Promise and shall be automatically
revoked and terminated, without further action of the City, upon the termination of this Agreement
or the ENA Negotiating Period.
4.5.2 Insurance. At Family Promise's sole cost and expense, the Family Promise
Parties shall obtain prior to commencement of any investigative and testing activities on the
Property, a policy of commercial general liability insurance covering any and all liability of Family
Promise and the City, arising out of Family Promise's investigative and testing activities, in an
amount of $1,000,000 per claim and in the aggregate and issued by a company authorized by the
Insurance Department of the State of California and rated A, VII or better (if an admitted carrier) or
A-, X (if offered, by a surplus line broker), by the latest edition of Best's Key Rating Guide and (b)
prior to commencement of any invasive testing or boring on the Property, shall cause each of the
Family Promise Parties carrying out such testing and/or boring to obtain a policy of professional
liability insurance and a pollution legal liability (PLL) policy, in each case in an amount of
$1,000,0000 per claim and in the aggregate. Such policy of insurance shall name "the City of
Tustin and its respective elected and appointed officials, agents, representatives and employees"
as additional insureds on the policy. Family Promise 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. In addition, Family Promise shall
cause its consultants entering onto the Property to maintain commercial general liability insurance
in an amount of at least $1,000,000. Such policies of insurance shall be kept and maintained in
force during the term of this Agreement and so long thereafter as necessary to cover any Claims
or damages by persons or property resulting from any acts or omissions of the Family Promise
Parties.
4,5.3 Indemnity. Family Promise hereby agrees to indemnify, defend, protect and
hold the City and its elected officials, employees, agents, representatives, consultants and
contractors free and harmless from and against any and all Claims arising in connection with or
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resulting from the Family Promise Parties' access to the Property or its exercise of its rights
hereunder, including, without limitation, any inspections, surveys, tests or studies performed by
the Family Promise Parties, save and except to the extent such Claims result from the gross
negligence or willful misconduct of the City or its agents, employees or representatives. The
Family Promise Parties shall keep the Property free and clear of any mechanics' liens or
materialmen's liens related to the Family Promise Parties' inspection of the Property. The
indemnification by Family Promise set forth in this Section 4.5.3 shall survive the termination of
this Agreement and the execution of the DDA and the closing and transfer to Family Promise of
the Property and shall not merge into any deed granted pursuant to the DDA.
5. ProFosed Development Concent.
5.1 Terms of DDA to be Nesotiated. Family Promise and the City agree that it is their
intent, upon entering into this Agreement, to negotiate a DDA, which is anticipated to address the
following terms and conditions and such other terms and conditions as they may agree, and which
will be binding upon the City and Family Promise and, to the extent provided therein, their
successors and assigns.
5, 1.1 Essential Terms. Family Promise shall acquire the Property from the City
and the terms and conditions of the conveyances, including, but not limited to, the manner of the
conveyance, the conditions precedent to conveyance, right of reversion, and the amount of the
purchase price, shall be determined as part of the negotiation of and detailed in the DDA or DA,
provided that Family Promise acknowledges and agrees that the following essential terms shall be
part of the DDA or DA:
(a) The purchase price for the Property shall be consistent with and supported
by an appraisal of the Property obtained by the City.
(b) The Property shall be transferred to Family Promise through a promissory
note and unsubordinated first deed of trust that shall be forgiven over a period of
55 years upon compliance with and subject to certain Declaration of Covenants and
Restrictions (DC&Rs) to be negotiated.
(c) The DC&Rs for the Property shall, at a minimum, include as follows: (i) a
right of reversion upon Family Promise failing to meet certain obligations under
the DC&Rs in operating and maintaining the Property; (ii) the homeless with ties
to the City shall receive preference by Family Promise in providing transitional
housing and supportive services at the Property, (iii) the Property shall not be used
for an emergency shelter for the homeless; (iv) Family Promise shall require one
member of each family residing at the Property to have regular and continuing
employment; (v) each family shall pay a percentage of their income each month for
rent and also to a savings account; and (vi) Family Promise shall provide case
management, computer and internet services, counseling, financial literacy,
educational assessment, and life skill classes to the families.
(d) The Property shall be developed with a transitional house consisting of up
to seven (7) units plus an office/resource center.
(e) The Property shall be developed to provide sufficient office space for
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Family Promise to use for their case management staff.
(f) The Property transfer shall occur if and only if Family Promise and its
development partners obtain full entitlements for the Property, including, but not
limited to, (i) Family Promise receiving final permits for grading and construction
and is ready and able to commence construction; (ii) Family Promise obtaining
conditional use permits, if necessary, for transitional and boarding housing, office
use within a residential zone, and joint use parking; (iii) final design review
approval; (iv) environmental review (CEQA) approval; (v) compliance with all
applicable City zoning and building code regulations, and (vi) as applicable,
approval by the City Council and Planning Commission.
(g) The Property transfer shall occur if and only if Family Promise and its
development partners demonstrate financial feasibility of the Project through the
establishment of necessary funding sources for the construction of the Project and
its ongoing operations and maintenance upon completion, including identifying
equity sources and lenders.
5.1,2 As -Is Conveyance. Family Promise may undertake its own investigation to
determine the presence of hazardous materials and suitability of the Property for development, but
Family Promise acknowledges and agrees that if the Property is conveyed by the City pursuant to
a DDA, the Property shall be conveyed on an "AS -IS, WHERE IS, WITH ALL FAULTS" basis,
and Family Promise shall be obligated to release, defend, indemnify and hold harmless the City
with respect to its acquisition and development of the Property and the condition of the Property,
including any and all land use, soil, and environmental conditions of the Property.
5.1.3 Development. Family Promise and its development partners shall design
and construct the Project on the Property at its own cost and expense in accordance with the scope
of development and a schedule of performance to be negotiated as part of the DDA and in
accordance with plans and specifications prepared by Family Promise, 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, all applicable zoning.
5.1.4 Construction of Off -Site Infrastructure. Other than as provided in the DDA,
Family Promise will be responsible for all costs of any necessary off-site improvements identified
by the City in the DDA, the DA or the Project entitlements. The off-site work may include
modifications to sidewalks, curbs, drainage, and parking on perimeter streets and will be further
defined and described as the planning effort for the Project evolves.
5.1.5 Applications. Family Promise shall prepare and process applications for
and obtain from the City and other federal, state and local jurisdictions, all applicable land use,
planning and zoning approvals for the proposed development with the support of the City. These
entitlements will be required to be consistent with the general plan and any applicable specific
plan, unless as part of approval of any application under the Tustin City Code modifications to
development standards are granted by the City.
5.1.6 Project Costs. Project costs and revenues will be separately analyzed and
funding of all Project costs will be the responsibility of Family Promise, as applicable.
5.1.7 Development Fees. In connection with its development of the Property,
Family Promise acknowledges that the Property will be subject to applicable development fees
imposed by the City or other jurisdictions, including, but not limited to, school impact fees and
school facility bonds by the Tustin Unified School District and utility meter and connection fees.
5,1,8 Transfer and Assignment Restrictions. Family Promise acknowledges that
the DDA shall contain limitations on transfer and assignment of the rights of Family Promise,
including the right of the City to approve in its sole discretion all assignments and transfers by
Family Promise of interests in Family Promise or in the DDA.
5.1,9 Mortgagee Limitations and Subordination. Family Promise acknowledges
that the DDA shall impose limitations on mortgages and mortgagees and shall require
subordination of any mortgage to the DDA and DA and other transaction documents as applicable.
5.1.10 Remedies and Termination Rights. Family Promise acknowledges that the
DDA shall contain remedies and termination rights in favor of the City for breach of the DDA,
which shall include without limitation, rights of reverter in the conveyed land.
6. Family Promise's Responsibilities.
6.1 Status Reports. Family Promise agrees to make oral and/or written reports once
each month advising the City and/or its staff of all matters and studies being made, including
Family Promise's progress in analyzing the feasibility of the Project as may be requested by the
City or its staff.
6. 1.1 Development Team. Family Promise and its development partners, shall,
within ten (10) days following the Effective Date, submit in writing to the City full disclosure of
the names of Family Promise's agents, authorized negotiators, professional employees, or other
associates of Family Promise who may be participants in development of the Project and other
relevant information concerning the above, such as addresses, telephone numbers, and employers.
Family Promise and its development partners shall also designate and submit in writing to the City
the names of all Family Promise's lead negotiators who shall have authority to make decisions on
behalf of Family Promise.
6.2 Financial Status. Family Promise and its development partners shall continue to
be responsible for demonstrating to the City that Family Promise has the financial capacity and
capability to perform its obligations under this Agreement and the proposed DDA. Family Promise
shall submit any additional financial information required to demonstrate that Family Promise, and
any guarantor, has the financial capacity and capability to perform its obligations under this
Agreement and the proposed DDA as requested by the City within thirty (30) days of a request.
Family Promise shall identify with specificity the documents which Family Promise wants the City
to maintain as confidential documents and a statement as to why the request for confidentiality is
consistent and complies with the provisions of the Public Records Act of the State of California.
If confidentiality is requested and if nondisclosure under the Public Records Act is allowed, the
documents shall be delivered to and maintained by the City and copies shall not be disseminated.
To the extent permitted by law, the City shall not make public disclosure of the documents. The
City's agents, negotiators and consultants may review the statements as necessary so long as such
parties agree to maintain the confidentiality of such statements. In no event shall the City be
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required to maintain as confidential any materials required by law to be disclosed by Family
Promise, or otherwise disclosed by Family Promise in connection with its public filings.
6.3 Assignment. If Family Promise determines that a joint venture or partner is
necessary to develop the Property, or if Family Promise determines to form a new legal entity to
develop the Property, Family Promise shall promptly inform the City of such determination and
submit to the Citythe joint venture's or partner's most recent financial statements and the financial
statements of its key principals. The assignment of Family Promise's rights under this Agreement
to any new entity, partnership, or joint venture must be approved in writing by the City and only
if the City is satisfied in its sole discretion, that the new entity, partnership, or joint venture has the
necessary expertise, experience, and financial capability to undertake development of the Property
as contemplated by this Agreement and to perform under this Agreement and proposed DA, as
well as identifying a guarantor that will have the financial capacity to guaranty Family. Promise's
obligations under the DDA and the DA.
6.4 Design Plans and Development Schedule. It is understood and agreed by Family
Promise that the quality, character, and uses proposed for the Project are of particular importance
to the City and that planning and design review approval and other entitlements by the City will
be required for the development of the Property. Family Promise has conceptually proposed to
develop the Property in accordance with the Site Plan attached hereto as Exhibit B. Family
Promise and the proposed architect and engineer for the Project shall meet with representatives of
the City to review and come to a clear understanding of the planning and design criteria required
by the City. Family Promise shall commence and complete all tasks required to be completed
within the times set forth in this Agreement and outlined in the Schedule of Performance attached
hereto as Exhibit D. Within forty-five (45) days after the Effective Date, Family Promise shall
submit a schedule for entitlement processing. Within one hundred twenty (120) days after the
Effective Date, Family Promise shall submit for approval of the City preliminary revised design
drawings and related documents containing the overall plan development of the Project, including
the following: preliminary site plan showing building layout and dimensions, parking,
landscaping, access, and floor plans; preliminary materials call -outs; and conceptual building
renderings.
6.5 Project Financial Pro Forma and Other Required Deliverables. Within ninety
(90) days after the Effective Date, Family Promise shall submit for approval by the City a business
plan and schedule, in a format as requested by the City, containing the following information:
(a) Project cost, including information on Family Promises ability to finance
the construction of the Project and the on-going operations of the Project that will enable the City
to evaluate the economic feasibility of the Project, as proposed, on the Property;
(b) a Project schedule for development and construction of the Property.
6.6 Additional Information. Family Promise understands and agrees that the City's
negotiating team reserves the right at any time to reasonably request from Family Promise
additional information, including data and commitments to ascertain the depth of Family Promise's
capability and desire to develop the Property expeditiously. The City's negotiating team will
provide a reasonable time in which Family Promise may obtain and submit to the City such
additional information.
10
6.7 Contacts During Negotiation. Family Promise shall only negotiate with the City's
negotiating team as defined in writing by the City Manager, or his or her designated representative,
and with no other persons unless expressly authorized to do so by the City's negotiating team.
During the ENA Negotiating Period, Family Promise shall make no statements to the media about
the proposed Project without the approval of the City Manager, or his or her designated
representative. Family Promise's failure to comply with the provisions of this section shall be
conclusive evidence that Family Promise has not "negotiated in good faith."
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 a DDA and DA for the Property.
Family Promise shall cooperate with the City and abide by the City's environmental compliance
procedures and fee requirements, which include, but are not limited to, the obligation to deposit
funds to pay all of the City's costs of preparing any additional required environmental studies as
may be determined.
6.8.2 Plans, Reports, Studies and Investigations. Family Promise shall provide
the City, without cost or expense to the City, copies of all plans, reports, studies or investigations
(collectively, "Plans") prepared by or on behalf of Family Promise for development of the Project
on the Property. All Plans shall be prepared at Family Promise's sole cost and expense. Plans
prepared by Family Promise's surveyor, geotechnical consultant(s) and hazardous materials
consultant(s) shall be certified in favor of the City and Family Promise. To the extent such
documents exist, the City shall provide copies of all purchase and acquisition records relating to
the Property as well as all documents regarding the condition of the Property, to include all prior
environmental reports, demolition and remediation records. If this Agreement is terminated for
any reason other than a material breach or default hereunder by the City, the City may request that
Family Promise, for consideration to be mutually agreed, transfer Family Promise's rights to any
or all Plans identified by the City, but in no event, shall the cost to the City exceed five hundred
dollars ($500.00). In order to assure that the City shall be able to acquire Family Promise's interest
in the Plans, the City and Family Promise agree as follows:
(a) All agreements with consultants and/or engineers shall state that
either (i) such work product is assignable, to the extent such work product is owned by the
applicable consultant or engineer, or (ii) Family Promise is the owner of the work product.
(b) Upon request from the City in connection with or following
termination of this Agreement, Family Promise shall deliver to the City copies of all Plans
requested by the City together with a bill of sale executed by Family Promise pursuant to which
Family Promise shall convey to the City all right, title and interest of Family Promise in and to the
Plans requested by the City, and such Plans shall be free of all claims or interests of Family Promise
or any liens or encumbrances, provided that Family Promise makes no representations, warrantee
or guarantee regarding the right to use such Plans or the completeness or accuracy of the Plans,
and Family Promise does not covenant to convey the copyright or other ownership rights of third
parties thereto.
(c) Upon the City's acquiring Family Promise'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 only; provided, however, that (i) if the City
11
desires to re -use the Plans, such Plans shall not identify Family Promise or, unless the City has
separately contracted with the consultant or engineer preparing the Plans, the preparing consultant
or engineer, as the source of the Plans, (ii) Family Promise shall have no liability whatsoever to
the City or any transferee of the City holding title to the Plans in connection with the use of the
Plans, and (iii) except with respect to Plans that are certified to the City, the City shall indemnify,
defend and hold Family Promise and its consultants harmless from any and all Claims arising or
resulting from the City's re -use of the Plans or any revision or alteration of the Plans.
6.9 Insurance. Family Promise, and any permitted assignee(s), will be responsible in
conjunction with any DDA to provide commercial general liability, workers compensation and
builder's risk property insurance as identified in Exhibit C.
7. The Developer.
7.1 Nature of Developer. The developer of the Property shall be Family Promise in
an anticipated partnership with Shelter Providers of Orange County, Inc., dba HomeAid Orange
County, Inc., ("HomeAid'), or such other business entities as the City may approve for this
transaction in its sole discretion, upon such terms and conditions as the City may request and the
City and Family Promise may agree. Subject to approval of the City, should Family Promise desire
another business entity to develop the Property, Family Promise shall submit a copy of all
requested and applicable formation and operating documents relating to that entity (i.e., articles of
incorporation, partnership agreement, bylaws, operating agreement, shareholder ledger, statement
of information, etc.) Family Promise acknowledges and agrees that the financial capacity of such
new entity shall be of critical importance to the City. Accordingly, the City shall have the right (a)
to review and approve the entity and its owners, including the financial capacity of each of the
foregoing and (b) to require, as a condition to execution of the DDA and to close of escrow for the
Property, security for performance of the obligations of such entity by Family Promise, or another
entity with assets meeting the requirements of the City and sufficient, in the determination of the
City in its sole discretion, to secure the development, construction and maintenance obligations of
Family Promise under the DDA and the DA. The foregoing security shall be provided by a
completion guaranty provided by such approved entity in a form acceptable to the City in its sole
discretion or by other instrument approved by the City in its sole discretion, as further described
in the DDA.
7.2 Offices of Family Promise and HomeAid. The principal offices of Family
Promise are located at 310 West Broadway, Anaheim, California 92805. The principals of Family
Promise are as follows:
Melody Mosley, President
Sue Currie, Secretary
Jodi Ristrom, CFO
The principal offices of HomeAid are located at 24 Executive Park, #100, Irvine, California
92614. The principals of HomeAid are as follows:
Brent Little, President
Scott Larson, Executive Director
Evan Miles, Project Manager
12
7.3 Family Promise's Consultants and Professionals. Family Promise is required to
make full disclosure to the City of any changes to its or HomeAid's principals, officers,
stockholders, partners, joint venturers, Project employees, and other associates and all other
pertinent information concerning Family Promise and HomeAid, as may be requested by the City
from time to time. Family Promise agrees to substitute or supplement any of its consultants and
professionals as reasonably requested by the City.
8. Family Promise's Financial Callacit 1.
8.1 Financial Capacity. Any additional financial information required to demonstrate
financial capacity and capability to perform the obligations under this Agreement of Family
Promise, if requested, shall be submitted to the City or its consultant as requested by the City for
the purposes of this Agreement.
8.2 Equi . Family Promise proposes to obtain its equity capital for development of
the Property from outside sources, including donations from religious and charitable organizations.
8.3 Construction Financing. Family Promise proposes to finance construction of the
Project with equity, governmental sources, and from a bank or other institutional lenders and
sources.
8.4 Bank and Other Financial References. Family Promise shall provide the City
with Family Promise's bank and other financial references as requested by the City from time to
time.
8.5 Full Disclosure. Family Promise will be required to make and maintain full
disclosure to the City of the methods of financing and the financing documents to be used in the
development of the Property and Project, including sustaining its operations on an on-going basis.
9. City's Responsibilities.
9.1 Environmental Requirements. Family Promise agrees to supply information and
otherwise assist the City as requested to enable the City to determine the environmental impact of
the proposed development of the Project as described by the DDA and DA and to prepare such
additional environmental documents, if any, as may be needed to be completed for the
development, including an Environmental Impact Statement/Environmental Impact Report
("EIS/EIR").
9.2 Assistance and Cooperation. The City shall cooperate with Family Promise by
providing appropriate information and assistance as reasonably requested by Family Promise.
9.3 Plans and Studies. The City shall, within ten (10) business days following the
Effective Date and at no cost to Family Promise, provide Family Promise with copies of all plans,
reports, studies, investigations and other materials the City may have pertinent to disposition of
the Property and/or development of the Project on the Property; provided, however, that the City
makes no representations, warrantee or guarantee regarding the completeness or accuracy of such
13
plans, reports, studies, investigations and other materials.
10. Miscellaneous.
10.1 Assistance and Cooperation. Family Promise and the City shall reasonably
cooperate with one another to achieve the objectives and purposes of this Agreement.
10.2 Real Estate Commissions. The City shall not be liable for any real estate
commission, finder's fee or any broker's fees which may arise from this Agreement. Family
Promise represents that it has not engaged any broker, agent, or finder in connection with this
Agreement and Family Promise agrees to hold the City and its representatives harmless from any
and all Claims arising from or in any way related to any claim by any broker, agent, or finder
retained by Family Promise regarding this Agreement or the sale or development of the Property
or any portion thereof. The provisions of this Section shall survive the termination of this
Agreement.
10.3 No City Duty. Except as expressly provided in this Agreement, the City shall have
no obligations or duties hereunder and no liability whatsoever in the event the City and Family
Promise fail to agree upon or to execute a DDA and a DA.
10.4 Non -Liability of City Officials and Employees. No member, official,
representative, director, staff member, attorney or employee of the City shall be personally liable
to Family Promise 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 Family Promise or to its successor, or on any obligations
under the terms of this Agreement.
10.5 Entire Agreement. This Agreement represents the entire agreement of the City
and Family Promise with respect to the matters set forth herein and supersedes any prior
negotiations or contemporaneous writings or statements. This Agreement may not be amended
except by a writing signed both by those persons authorized by the City and Family Promise.
10.6 Attorneys' Fees. If either the City or Family Promise brings an action or files a
proceeding relating to the enforcement of its respective rights, or as a consequence of any breach
by any party of its obligations hereunder, then the prevailing party in such action or proceeding
shall be entitled to have its reasonable attorneys' fees and out-of-pocket expenditures paid by the
losing party.
10.7 Covenant Against Discrimination. Family Promise 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 Family Promise 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.
10.8 Notices/Submittals. All notices or submittals required or permitted hereunder
shall be delivered in person, by overnight courier, or by registered or certified mail, postage
14
prepaid, return receipt requested to such party at its address shown below, or to any other place
designated in writing by such party.
City: City of Tustin
c/o Tustin Housing Authority
300 Centennial Way
Tustin, CA 92780
City of Tustin
c/o City Manager
300 Centennial Way
Tustin, CA 92780
Family Promise: Family Promise
310 West Broadway
Anaheim, California 92805
Any such notice or submittal shall be deemed received on the date of (a) delivery or refusal of such
delivery, if delivered personally; (b) one (1) day after delivery to the courier, if delivered by
courier; and (c) three (3) days after deposit into the United States mail, if delivered by registered
or certified mail.
10.9 Prohibition Against Assignments. This Agreement shall not be assigned by
Family Promise without the consent of the City in its sole discretion. Any attempted or purported
assignment by Family Promise of this Agreement without the consent of the City shall be void and
a breach by Family Promise of its obligation to negotiate in good faith under this Agreement.
10.10 No Third -Party Beneficiaries. Execution of this Agreement is not intended to
create or confirm any third -party beneficiary rights in or create any liability on the part of either
the City or Family Promise to any third parties.
10.11 Effect of Disposition and Development Agreement. Following mutual execution
by the City and Family Promise of a DDA and DA, this Agreement shall be of no further force or
effect, except for those provisions that the City and Family Promise have expressly stated survive
this Agreement such as the releases, indemnification, and the confidentiality provisions provided
for herein, which shall remain in effect with respect to Claims arising or accruing during the term
of this Agreement. In the event of any conflict between the provisions of this Agreement and any
DDA or DA approved by the City and Family Promise, the provisions of the DDA and DA shall
for all purposes prevail.
10.12 Confidentiality. The City and Family Promise represent and warrant that each
shall keep confidential all information and/or reports obtained from the other, or related to or
connected with the Property, the Project, the other party, or any other documents negotiated by the
City and Family Promise until presentation to the City for approval of the DDA and DA, and the
Parties will not disclose any such information to any person or entity without obtaining the prior
written consent of the other parties, except that the City shall have the right to disclose any
information contained in any third party reports obtained by Family Promise and Family Promise
shall have the right to make disclosures to Family Promise's employees, agents, potential funding
sources, and independent contractors, including, but not limited to, consultants, financial planners,
IRI
outside counsel, and experts as necessary in order to determine if the Project is feasible and
financeable. Notwithstanding the foregoing, (i) information which is or becomes in the public
domain, or which is required by any law, rule or regulation to be disclosed shall not be considered
confidential, and (ii) this Agreement, the draft DDA and DA and all other material relating to this
Agreement are subject to the provisions of the California Public Records Act (Government Code
Section 6250 et seq.). The City's use and disclosure of its agreements and records are governed
by the Public Records Act. The provisions of this Section shall survive the termination of this
Agreement.
10.13 Governing Law/Exclusive Venue. The Agreement shall be interpreted in
accordance with California law. The Parties agree that in the event of litigation, exclusive venue
shall be in Orange County, California.
10.14 Counterparts. This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together shall constitute one and the same
agreement.
10.15 Days Defined, Performance of Acts on Business Days. Unless otherwise
specifically set forth herein, all references to "days" in this Agreement shall mean and refer to
calendar days, provided that, in the event that the final date for payment of any amount or
performance of any act under this Agreement falls on a day on which the City of Tustin City Hall
is closed, such payment may be made or act performed on the next succeeding day upon which
City Hall is open.
{SIGNATURES ON FOLLOWING PAGE)
M
IN WITNESS WHEREOF, the City and Family Promise hereto have executed
this Agreement as of the date set opposite their signatures.
Dated:
APPROVED AS TO FORM
David Kendig
City Attorney
Dated:
"CITY"
CITY OF TUSTIN
LI -M
Jeffrey C. Parker
City Manager
"FAMILY PROMISE"
Family Promise of Orange County, Inc.
LIN
Melody Mosley, President
Dated: By:
Sue Currie, Secretary
17
Exhibit A
[Property Legal Description and Site Map]
1941 EL CAMINO REAL, TUSTIN, CA 92780
APN 500-071-12
THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF ORANGE, CITY OF TUSTIN, AS DESCRIBED AS FOLLOWS:
THE NORTHWESTERLY 230 FEET OF THE SOUTHEASTERLY 386 FEET OF THE
NORTHEASTERLY 210 FEET OF THE SOUTHWESTERLY 240 FEET OF THE SOUTH
QUARTER OF LOT 29 IN BLOCK 12 OF IRVINE'S SUBDIVISION, AS SHOWN ON A MAP
RECORDED IN BOOK 1, PAGE 88 OF MISCELLANEOUS RECORD MAPS, RECORDS OF
ORANGE COUNTY, CALIFORNIA.
Exhibit
Exhibit B
[Site Plan]
Exhibit
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Exhibit C
[DDA Insurance Requirements]
1. Insurance.
1.1. Required Insurance.
Without limiting the City's rights to indemnification, Family Promise 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
Family Promise as insured and, with respect to the general liability insurance required pursuant to
Section 1.1.1 only, the City as an 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.
L L L Liability Insurance. Commencing upon the effective date of the DDA,
Family Promise 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 Family Promise
on the Property, or in connection with the operation thereof, resulting directly or indirectly from
any acts or activities of Family Promise or anyone directly or indirectly employed or contracted
with or acting for Family Promise, 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 Family Promise on the Property, or in connection with the operation thereof, caused directly or
indirectly by or from acts or activities of Family Promise or any Person acting for Family Promise,
or under its control or direction. Such insurance shall also provide for and protect the City against
incurring any legal cost in defending Claims for alleged loss. Such insurance shall be maintained
in full force and effect until issuance of a 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 Family Promise, Family
Promise'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 Two Million Dollars ($2,000,000.00) 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 and annually (upon request from the
City) evidencing renewals of each policy until issuance of a Certificate of Compliance for the
Exhibit
Project. The endorsements shall provide as follows: (a) designate "the City of Tustin and its
respective elected and appointed officials, agents, representatives, and employees" as additional
insureds on the commercial general liability policies; (b) the commercial general liability insurance
coverage shall be primary, and not contribute with any insurance or self-insurance maintained by
the City; and (c) 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 Family Promise's obligation to indemnify the City Indemnified
Parties as set forth herein.
1.1.2. Workers' Compensation Insurance. Commencing upon the effective
date of the DDA, Family Promise 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 employed by
Family Promise in connection with the Project and shall cover liability within statutory limits for
compensation under any such act aforesaid, based upon death or bodily injury claims made by, for
or on behalf of any Person incurring or suffering injury or death in connection with the Project or
the operation thereof by Family Promise. Notwithstanding the foregoing, Family Promise may, in
compliance with the laws of the State and in lieu of maintaining such insurance, self -insure for
workers' compensation in which event Family Promise shall deliver to the City evidence that such
self-insurance has been approved by the appropriate State authorities. Family Promise 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, and each
renewal or replacement thereof, by endorsement approved by an authorized representative of the
underwriter, shall contain a waiver of subrogation against the City, and its council members,
officers, employees, attorneys and agents. The insurance provided for under this Section 1.1.2
shall be issued by a company rated B -/VIII or better or by the State Compensation Fund.
1.1.3. Builder's Risk Insurance. Commencing upon the commencement of
construction by Family Promise of any improvements on the Property and continuing until such
time as the City delivers a final Certificate of Compliance, Family Promise 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.
1.2. 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) Family Promise 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) days
advance written notice of any cancellation or termination of insurance by the insurer.
Exhibit
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. Family Promise 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. Family Promise agrees to submit certificates evidencing the
insurance required by Sections 1.1.1 and 1.1.2 to the City on an ACORD form within seven (7)
business days, following the effective date of the DDA, the insurance required by Section 1.1.3 on
or before commencement of construction. Within seven (7) days, after expiration of any such
policy, certificates and endorsements evidencing renewal policies shall be submitted to the City,
together with evidence of payment of premiums.
1.2.4. If Family Promise 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) days'
prior notice to Family Promise, to procure and maintain such insurance. The premiums paid by
the City shall be treated as a loan, due from Family Promise, to be paid on the first calendar day
of the month following the date on which the premiums were paid. The City shall give prompt
notice of the payment of such premiums, stating the amounts paid and the name of the insurer(s).
2. Initially capitalized terms used in this Exhibit that are not otherwise defined in the ENA
Agreement 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 Family Promise of the building and improvements
and satisfaction of all additional conditions precedent thereto with respect to the Property or
Project as the case may be, as described in the DDA.
2.2. "Close of Escrow" shall mean the close of escrow for the Property and the transfer
of fee title to the Property by the. City to Family Promise.
2.3. "Governmental Authority" shall mean any and all federal, State, county,
municipal and local governmental and quasi -governmental bodies and authorities (including the
United States of America, the State of California and any political subdivision, public corporation,
district, joint powers authority or other political or public entity) or departments thereof having or
exercising jurisdiction over the Parties, the Project, the Property 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.
Exhibit
2.5. "State" shall mean the State of California.
Exhibit
Exhibit D
Schedule of Performance
ITEM OF PERFORMANCE
TIME FOR PERFORMANCE
1
Family Promise submits proof of
Within 7 days of the Effective Date
Insurance: an Accord certificate and
endorsements (Exhibit C, Section 1.1.1).
2..
Family Promise submits in writing to the
Within 10 days of the Effective Date
City full disclosure of the names of Family
Promise's agents, authorized negotiators,
professional employees, or other associate
of Family Promise who may be
participants in development of the Project
(Section 6.1.1).
3.
The City shall provide Family Promise
Within 10 days of the Effective Date
with copies of all plans, reports, studies,
investigations and other materials the City
may have pertinent to disposition of the
Property and/or development of the Project
on the Property (Section 9.3).
4.
Family Promise shall submit a schedule
Within 45 days of the Effective Date
for entitlement processing (Section 6.4).
5.
Family Promise shall submit for approval
Within 90 days of the Effective Date
by the City a business plan and schedule
(Section 6.5).
6.
Family Promise shall submit for
Within 120 days of the Effective Date
approval of the City preliminary revised
design drawings and related documents
containing the overall plan development
of the Project. (Section 6.4).
Exhibit