HomeMy WebLinkAboutPC RES 4465 RESOLUTION NO. 4465
A RESOLUTION OF THE PLANNING COMMISSION OF
THE CITY OF TUSTIN RECOMMENDING THAT THE CITY
COUNCIL ADOPT ORDINANCE 1532, APPROVING
DEVELOPMENT AGREEMENT 20220002, TO ACCEPT
THE VOLUNTARY PROVISION OF COMMUNITY PUBLIC
BENEFITS, BY INCLUDING TWO (2) AFFORDABLE
HOUSING UNITS FOR VERY-LOW INCOME
HOUSEHOLDS AND PAYMENT OF AN AFFORDABLE
HOUSING IN-LIEU FEE RELATIVE TO THE
CONSTRUCTION OF A 40-UNIT RESIDENTIAL
CONDOMINIUM PROJECT AT 17802 AND 17842 IRVINE
BOULEVARD
The Planning Commission does hereby resolve as follows:
1. The Planning Commission finds and determines as follows:
A. That a proper application has been submitted to the City of Tustin (the
City) Community Development Department by Intracorp SoCal-1 LLC for a
General Plan Amendment (GPA) 2022-0001, Zone Change (ZC) 2022-
0001, Design Review (DR) 2022-0004, Density Bonus requests for one (1)
Concession relating to the reduction of the required front yard setback along
Irvine Boulevard and a Waiver to allow a reduction in required common
open space, a Development Agreement (DA) 2022-0002, and a
Subdivision Map (SUB 2022-0002) 1 Tentative Tract Map (TTM No.
19224) to construct forty (40) three-story residential units, including two (2)
affordable units, on approximately 2.07 acres. The project would also
include an enclosed, two-car garage and private open space for each unit,
ten (10) guest surface parking spaces, and common open space areas.
The project would also require the demolition of two (2) existing two-story
office buildings currently located on 17802 and 17842 Irvine Boulevard.
B. That a public hearing was duly called, noticed, and held on said application
on December 13, 2022, by the Planning Commission.
C. That TCC Section 9611 requires the applicant and the City to enter into a
DA for the voluntary provision of community public benefits that include two
(2) affordable housing units for very-low income households and payment
of an affordable housing in-lieu fee.
D. That the proposed voluntary provision of community public benefits, by
including two (2) affordable housing units for very-low income households
and payment of affordable housing in-lieu fee, is in the best interest of the
public in that it increases the diversity in available housing for existing and
Resolution No. 4465
Page 2
new residents in the City of Tustin.
E. That the application for a DA is governed by 65864 et seq. of the
Government Code and Sections 9600 to 9619 of the TGG. In accordance
with TCC 9611, the Planning Commission must make a recommendation
on the proposed DA to the City Council. The DA attached hereto as Exhibit
A can be supported by the following findings:
1. That the DA is consistent with GPA 2022-0001 and ZC 2022-
0001 and the project will be consistent with the objectives,
policies, general land uses and programs specified in the
General Plan in that residential uses are permitted uses within
the High Density Residential (HDR) land use designation and
the Multi-Family Residential (R-3) zoning district.
2. That the project is compatible with the uses authorized in the
district in which the property is located.
3. That the project is in conformity with the public necessity, public
convenience, general welfare and good land use practices in
that the project would provide thirty-eight (38) market rate units
and two (2) affordable housing units for very-low income
households for new and existing Tustin residents thereby
providing additional options of housing types to the City's house
stock.
4. The project will not be detrimental to the health, safety and
general welfare. The project will comply with the TCC,
mitigation measures and conditions of approval and other
regulations to ensure that the project will not be detrimental to
the community.
5. The project will not adversely affect the orderly development of
property in that the proposed project is orderly, well designed
and equipped with the necessary infrastructure and amenities
to support existing and future residents and businesses in the
City.
6. That the approval of the DA will provide for the payment of
affordable housing in-lieu fee.
7. A Fiscal Impact Analysis was prepared and submitted along
with the DA which verifies that the project will have a positive
fiscal impact on the City over and above that of the current
commercial and office uses.
Resolution No. 4465
Page 3
F. That an Initial Study was prepared to evaluate the potential environmental
impacts associated with DA 2022-0002 that concluded, with mitigation
measures, potential significant impacts can be reduced to a level of
insignificance and a draft Mitigated Negative Declaration (MND) was
prepared.
II. The Planning Commission hereby recommends that the City Council adopt
Ordinance No. 1532 approving DA 2022-0002, to accept the voluntary provision of
community public benefits, by including two (2) affordable housing units for very-
low income households and payment of in-lieu relative to the construction of a 40-
unit residential condominium project at 17802 and 17842 Irvine Boulevard, as
identified in Exhibit A attached hereto.
PASSED AND ADOPTED by the Planning Commission of the City of Tustin, at a regular
meeting on the 13th day of December 2022.
DAVID J. ME LO, JR.
Chairperson
JUST N'A L. W LLKOM
Plan ng Commission Secretary
Exhibit A: Draft DA 2022-0002
Exhibit B: Draft Ordinance 1532
Resolution No. 4465
Page 4
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF TUSTIN )
I, Justina L. Willkom, the undersigned, hereby certify that I am the Planning
Commission Secretary of the City of Tustin, California, that Resolution No. 4465 was
duly passed and adopted at a regular meeting of the Tustin Planning Commission, held
on the 13th day of December, 2022.
PLANNING COMMISSIONER AYES: Chu, Higuchi, Kozak, Mason, Mello (5)
PLANNING COMMISSIONER NOES:
PLANNING COMMISSIONER ABSTAINED:
PLANNING COMMISSIONER ABSENT:
JUST A L. WILLKOM
Planning Commission Secretary
EXH I BIT A: DRAFT DA 2022-0002
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Clerk
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE W
This Agreement is recorded at the
request and for the benefit of the City of
Tustin and is exempt from the payment
of a recording fee pursuant to
Government Code§§ 6103 and 27383.
DEVELOPMENT AGREEMENT
(2022-0002)
between
CITY OF TUSTIN
and
INTRACORP SOCAL-1, LLC,
a California limited liability company
Approval Date: , 2022
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DEVELOPMENT AGREEMENT BETWEEN THE CITY OF TUSTIN r
AND INTRACORP SOCAL-1, LLC
WITH RESPECT TO PROPERTY LOCATED AT 17802 AND 17842 IRVINE BLVD.
This Development Agreement (the "Agreement") is entered into as of , 2022, by and
between the City of Tustin, a California municipal corporation (the "City"), and Intracorp Socal-1,
LLC, a California limited liability company ("Owner"). At times, the City and Owner are referred
to jointly within this Agreement as the "Parties" and individually as a "Party."
RECITALS
A. To strengthen the public planning process, encourage private participation in comprehensive
planning, and reduce the economic risk of development, the Legislature of the State of
California adopted the "Development Agreement Statute," Sections 65864 et seq., of the
California Government Code. The Development Agreement Statute authorizes the City to
enter into development agreements with persons or entities having legal or equitable
interests in real property to establish predictability for both City and the property owner in
the development process.
B. Pursuant to the Development Agreement Statute, in 1984 the City adopted Ordinance No.
923 establishing the requirements for the approval of Development Agreements in the City.
Those requirements, as amended and current through the execution of this Agreement, are
set forth in Article 9, Chapter 6, Sections 9600 and following, of the Tustin City Code (the
"Tustin City Code"). The application for and approval of this Agreement were made pursuant
to those provisions of the Tustin City Code.
C. Owner holds equitable title to the real property described in Exhibit A to this Agreement(the
"Property") and depicted on Exhibit B and expects to acquire legal title to the Property
subsequent to the approval of the "Project" described in Recital E below.
D. The Property consists of 2.07 acres and is located at 17802 and 17842 Irvine Boulevard in
the City.At the time of the approval of this Agreement,the Property is occupied by two office
buildings totaling approximately 45,000 square feet.
E. Owner desires to demolish the two existing office buildings and improve the Property with
forty(40) residential units comprised of eighteen duplexes and four single-family residences,
as well as related ancillary improvements (the "Project"). In addition to its application -for— — — --
approval of this Agreement, Owner has filed with the City its request for approval of the
following discretionary actions pertaining to the Property (the "Project Approvals"):
• General Plan Amendment (GPA 2022-0001) to amend General Plan Land Use
designation from Professional Office (PO) to High Density Residential (HDR);
• Zone Change (ZC 2022-0001) to change the Zoning designation from Retail Commercial
District (Cl) with a Parking Overlay(P)to Multi-Family Residential (1113);
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• Subdivision Map (SUB 2022-0002) /Tentative Tract Map (TTM No. 19224) to subdivide
the existing two (2) lots to one (1) lot for condominium purposes;
• Design Review(DR 2022-0004)for a 40-unit three-story townhome development(within
18 duplexes and 4 single-family detached units) to include 38 market rate and 2
affordable (50%AMI)units, community gathering and BBQ areas; and demolition of two
existing two-story office buildings;
• Density Bonus request with five (5) percent of units identified as very-low income
housing with a request for Concession to reduce the required front yard setback along
Irvine Boulevard from ten (10) feet to six (6) foot, and a Waiver to reduce the required
common open space from 12,000 square feet to 10,531 square feet;
• Density Bonus Housing Incentive Agreement to memorialize the density bonus,
provision of very-low income housing, payment of in-lieu fee and the granting of the
requested Concession and Waiver; and
• Development Agreement (DA 2022-0002) to document the provision of community
public benefits.
F. The Project Approvals have been evaluated pursuant to the California Environmental Quality
Act ("CEQA") as reflected in Mitigated Negative Declaration dated September, 2022 (the
"MND").
G. The Project will provide specific and valuable public benefits to the City and its residents,
addressed in Section 3 below.
H. The City's Planning Commission (the "Planning Commission") and City Council each have (i)
given notice of their intention to consider this Agreement,(ii) conducted public hearings on
this Agreement as required by the Government Code and the Tustin City Code,and (iii)found
the provisions of this Agreement to be consistent with the General Plan and the Tustin City
Code as of the Approval Date.
I. On , 2022,the Planning Commission held a duly noticed public hearing at which
the Planning Commission recommended approval of this Agreement to the City Council.
J. On , 2022, the City Council adopted the MND.
K. On , 2022, the City Council adopted Ordinance No, approving this
Agreement (the "Adopting Ordinance").
AGREEMENT
The City and Owner agree as follows:
1. Defined Terms. As used within this Agreement, the following capitalized terms shall have
the meanings set forth in this Section 1:
a. "Adopting Ordinance" means Ordinance No. approving this Agreement.
1737761.1
b "Affordable In Lieu Fee" means the payment to be made by Owner to the City
pursuant to Section 3b below.
C. "Affordable Units" means residential units affordable to very low income households
to be sold by Owner pursuant to Section 3a below.
d. "Agreement"means this Development Agreement between the City and Owner. The
term "Agreement" shall include any amendment properly approved and executed
pursuant to Section 9615 of the Tustin City Code and Section 10 of this Agreement.
e. "Approval Date" means the date on which the City Council conducted the first reading
of the ordinance adopting this Agreement.That date is
f. "Applicable Fees" means those fees and fee programs (i) set forth within the
Applicable Rules, (ii) uniformly applied to all development projects within the City as
of the Approval Date, and (iii) from which Owner is not otherwise exempt.
g. "Applicable Rules" means the Existing Land Use Regulations and all Subsequent
Development Approvals.
h. "CEQA" means the California Environmental Quality Act.
i. "City"shall mean the City of Tustin, California.
j. "Day" means a calendar day unless specifically stated as a "business day."
k. "Development Approvals" shall mean all non-legislative permits, entitlements, and
other approvals granted or issued by the City for the use of,construction upon,and/or
development of the Property. For the purposes of this Agreement, Development
Approvals include the following actions, including revisions, addenda, amendments,
and modifications to these actions:
+ Tentative Map and other approvals under the Subdivision Map Act and the
City's subdivision code found in Article 9, Chapter 3 of the Tustin City Code;
Site plan and architectural review;
+ Sewer and water connection permits and agreements;
• Grading, encroachment, and building permits;
• Certificates of compliance, lot line adjustments, and boundary adjustments;
+ Street drainage, utility, stormwater, landscape and other improvement
permits and agreements;
+ Occupancy permits;
• Density Bonus request (e.g. Concession/Waiver);
• Density Bonus Housing Incentive Agreement; and
• Environmental review (e.g., CEQA) documents for the Project.
L J
1737761.1
L "Effective Date" means the date on which the last of the following events has
occurred:
• The Adopting Ordinance becomes operative under Government Code Section
36937; and
• Owner has notified City in writing that Owner has obtained legal title to the
Property.
m. "Exhibit" means an exhibit to this Agreement unless otherwise specified. All Exhibits
are deemed incorporated within this Agreement.
n. "Existing Land Use Regulations" means all Land Use Regulations in effect on the
Approval Date, including the General Plan and applicable zoning. Changes to Land Use
Regulations occurring between the Approval Date and the Effective Date shall not be
considered part of the Existing Land Use Regulations without Owner's prior written
consent. The GPA and the Zone Change shall be considered changes to Land Use
Regulations which, by virtue of this Agreement, have Owner's consent.
o. "General Plan"shall mean the general plan of the City.
p. "Include" and its derivatives such as "including" shall be deemed to incorporate the
phrase "without limitation," "but not limited to," and their grammatically correct
equivalents, unless specifically set forth as "includes only" or an equivalent phrase.
q. "Land Use Regulations" shall mean all legislative acts, including ordinances,
resolutions, codes, rules, regulations, and official policies of the City, governing the
development and use of land, including the permitted use of land, the density or
intensity of use, subdivision requirements, timing and phasing of development, the
maximum height and size of buildings,the provisions for reservation or dedication of
land for public purposes, and the design, improvement, construction, initial
occupancy standards and specifications, and impact, building, processing, affordable
housing, and all otherfees applicable to the development of land within the City. Land
Use Regulations include the General Plan and the Tustin City Code.
r. "MND" means that Mitigated Negative Declaration dated J 2022,
prepared for the Project pursuant to CEQA.
S. "Owner" means Intracorp Socal-1, LLC, and its respective successors and assigns with
respect to all or any portion of the Property or this Agreement.
t. "Owner's Vested Right" means Owner's guaranteed right to develop the Property as
set forth in this Agreement, as set forth in Section 4 below.
u. The "Parties" means the City and Owner. A"Party" means either the City or Owner.
V. "Periodic Review" means the City's review of Owner's good faith compliance with the
terms of this Agreement pursuant to Government Code Section 65865.1, as set forth
in Section 10 below.
W. The"Project" means the development of the Property through the construction of a
new,townhome residential development project that would include forty (40)three-
story residential units, including two (2)affordable units, on approximately 2.07 acres
located at 17802 and 17842 Irvine Blvd. The Project would also include an enclosed,
two-car garage and private open space for each unit,eleven (11)guest surface parking
spaces, and common open space areas.The Project would also require the demolition
of two(2)existing two-story office buildings currently located on the subject Property.
X. The"Property" means the real property described in Exhibit A.
y. "Qualified Lender"shall have the meaning assigned to such term in Section 14 below.
Z. "Subsequent Development Approvals" means all Development Approvals for the
Project which are approved, granted, or issued after the Approval Date and which are
required or permitted by the Existing Land Use Regulations, the Subsequent Land Use
Regulations to which Owner has consented in writing, and this Agreement.
aa. "Subsequent Land Use Regulations" means those Land Use Regulations which are
both adopted and effective after the Approval Date and which are not incorporated
within the definition of Existing Land Use Regulations.
bb. "Term" means the term of this Agreement as set forth in Section 2 below.
2. Term of Agreement. This Agreement shall become operative and commence upon the
Effective Date and shall remain in effect for a term of six (6) years (the "Term"), unless the
Term is modified by mutual written consent of the City and Owner. Upon the expiration of
the Term, this Agreement shall be deemed terminated and of no further force and effect.
3. Public Benefits.As addressed in Recital G above, in consideration of the granting to Owner
of Owner's Vested Right, Owner shall provide the following Public Benefits:
a. Affordable for Sale Units. In addition to paying the Affordable In Lieu Fee described
in Section 3b below, Owner shall provide two units(equal to five percent of base units
in the Project)for initial sale to very low income households (the "Affordable Units").
These units shall be provided consistent with the Continuing Affordability provisions
of Section B9931 of the City's Voluntary Workforce Housing Incentive Program set
forth in Article 9, Chapter 9B of the Tustin City Code, Incentives for the Development
of Affordable Housing set forth in Article 9, Chapter 1 of the Tustin City Code as
amended by the State's Density Bonus Law.
-b. ,4ffordable T Deu F'eC_ Owner shall pay to the City a voluntary workforce homlrrg
incentive program in-lieu fee in the amount calculated pursuant to Tustin City Code
Section B9923b1 by "...Multiplying the voluntary workforce housing incentive
program in-lieu fee by one-half (%) the number of base units provided on-site..." [(
Program in-Lieu Fee) x (Base Units Provided On-site/2)]. (the "Affordable In Lieu
Fee"). The Affordable In Lieu Fee for each residential unit shall be paid upon the
issuance of the building permit for that unit. Subject to Section 5a below,the program
in-lieu fee amount used to calculate the Affordable In Lieu Fee for the Project shall be
L._.a
1737761.1
the greater of either$13,801, or the then applicable in-lieu fee approved by the City
Council for the workforce housing incentive program in.effect on the Approval Date.
4. Vested Right to Develop the Project. Owner shall have the vested right to complete
development of the Project on the Property to the extent and in the manner provided in
the Applicable Rules and this Agreement ("Owner's Vested Right"). Owner's Vested Right
includes the right to build on the Property forty(40) residential units and such appurtenant
facilities as are permitted by the Applicable Rules. Owner's Vested Right and this
Agreement are intended to limit, to the degree specified in this Agreement and permitted
under State law, the City's ability to regulate development of the Project and the Property
during the Term.
a. Permitted Uses and Development Standards. During the Term, the permitted uses of
the Property, the development standards for the Project, the maximum height of any
buildings constructed within the Project, the number of residential units permitted
within the Project, and the provisions for reservation of dedication of land for public
purposes shall be as set forth in the Applicable Rules.
b. Phasing and Project Completion Date. Owner may develop the Project in accordance
with the Phasing Plan dated December 13, 2022,and maintained on file with the City's
Community Development Director ("Director"), and as the same may be amended at
the request to Owner and with the written approval of the Director, which approval
may shall not be unreasonably withheld.The Project shall be completed by the end of
the Term.
C. Implementing Actions. To enable Owner to complete the Project consistent with
Owner's Vested Right,the City agrees that the City shall:
• Expeditiously process all Subsequent Development Approvals and Subsequent
Land Use Regulations (i) needed, in Owner's judgment, to implement
development of the Project and (ii) consistent with the Applicable Rules; and
• Take such other actions that are (1) requested by Owner and (ii) consistent with
the terms of this Agreement.
d. Changes to Applicable Rules. Any change in the Applicable Rules which is adopted or
becomes effective after the Approval Date, no matter how adopted or enacted, shall
not be applicable to or binding upon Owner, the Project, or the Property, unless
approved in writing by Owner. A "change in the Applicable Rules" shall include any
new ordinance, resolution, policy, or other enactment, no matter how adopted or
enacted, which is not contained in the Applicable Rules as of the Approval Date.
A change in the Applicable rules includes those actions which would directly or
indirectly:
1737751.1
• Limit or reduce the density or intensity of the Project, or otherwise require any
reduction in the height, number, size or square footage of lots, structures or
buildings;
• Expand or increase Owner's obligations with respect to the provision of parking
spaces, streets, roadways and/or any other public or private improvements,
structures or dedications of land or with respect to payments of monetary
exactions;
• Limit, delay, or control the timing or phasing of the construction or development
of the Project in any manner; or
• Limit the design, improvement or construction standards or specifications or the
location of buildings, structures, grading or other improvements relating to the
development of the Project in a manner which is inconsistent with or more
restrictive than the.Applicable Rules.
If there is a change in the Applicable Rules to which Owner has consented in writing,
Owner's Vested Right shall include the right to complete the Project consistent with
that change.
5. Development, Impact, Processing,and Other Fees.
a. Applicable Fees. Only those fees and fee programs (i) set forth within the Applicable
Rules, (ii) uniformly applied to all development projects within the City as of the
Approval Date, and (iii) from which Owner is not otherwise exempt may be charged
to Owner, the Property, or the Project with respect to the development of the
Property, impacts related to the Project or development projects generally, the
processing of applications, the issuance of permits, the provision of services, the
maintenance of property, or any other matter related to the Property or the Project
(the "Applicable Fees").
b. Limitation on Increase of Fees. Except as expressly provided elsewhere within this
Agreement, all Applicable Fees to be paid with respect to development of the
Property shall not be fixed and shall be charged in the amounts set forth in the City's
then current Comprehensive Fee Schedule, as the same may be amended from time
to time.
6. Term of Ma (s) and Other Project Approvals.
a. Subdivision Maps. Pursuant to Government Code Section 66452.6 and any other
applicable provisions of the Government Code, the term of the Tentative Map and
any other subdivision or parcel map that is approved for all or any portion of the
Property shall be extended to a date coincident with the Term and, where not
prohibited by State law, with any extension of the Term, unless a longer term would
result under otherwise applicable State or local law.
1737761.1
b. Other Development Approvals. Pursuant to Government Code Section 65863.9, all
Development Approvals for any portion of the Project shall automatically be extended
for the longer of (i) the term of the Tentative Map and (ii) the term of any other
subdivision or parcel map that is approved for all or any portion of the Property.
Pursuant to Section 6a, those terms shall be the same as the Term of this Agreement.
7. Public Services.Subject to Owner's compliance with all Project conditions of approval,City
acknowledges and agrees that City will have sufficient capacity in its infrastructure,
services, and utility systems for traffic circulation, sewer collection, sewer treatment,
sanitation service and, except for reasons beyond City's control, water supply, treatment,
distribution and service, and drainage, to accommodate the Project as provided in this
Agreement.To the extent the City itself renders such services or provides such utilities,the
City shall grant or issue hookups or service to the Project.
8. Other Governmental Permits and Fees. The City shall cooperate with Owner's efforts to
obtain such other permits and approvals as may be required by or from other governmental
or quasi-governmental agencies (including, but not limited to, districts and special districts
providing flood control, sewer, and fire protection, and the Regional Water Quality Control
Board) having jurisdiction over the Project in connection with the development of, or
provision of services to, the Property. The City shall, from time to time at the request of
Owner, attempt with due diligence and in good faith to enter into binding agreements with
any such entity necessary to assure the availability of such permits and approvals or
services, provided such agreements are reasonable. The City shall use its best efforts to
work with other governmental and quasi-governmental agencies so as to limit to the
maximum extent possible the imposition of additional fees, dedications, or exactions by or
through such other agencies.
9. Modification or Cancellation by Mutual Consent.The following provisions shall govern the
amendment and/or cancellation of this Agreement (collectively, an "Amendment"),
provided that any Amendment must comply with the Development Agreement Statute.
a. General. Pursuant to the Development Agreement Statute, an Amendment may
occur through the mutual written consent of the Parties or their respective successors
in interest. Public notice of the Parties' intention to enter into an Amendment shall be
as provided by Government Code Section 65867. Any Amendment shall be subject to
the provisions of Government Code Section 65867.5.
b. Amendments of Applicable Rules. Any amendment to or change in the Applicable
Rules shall not require an Amendment to this Agreement, provided that Owner has
consented in writing to the amendment or change in the Applicable Rules.
C. Minor Changes. The provisions of this Agreement require a close degree of
cooperation between the Parties and"Minor Changes"to the Project may be required
from time to time to accommodate design changes, engineering changes, and other
refinements related to the details of the Parties' performance. "Minor Changes" shall
1737761.1
mean changes to the Project that are otherwise consistent with(i)the Tustin City Code
and the General Plan and Design Review (DR-2022-0004) and (ii) do not result in a
change in the type of use of the Property, an increase in the density or intensity of
use, significant new or increased environmental impacts that cannot be mitigated, or
violations of any applicable health and safety regulations in effect on the Approval
Date.
d. Operating Memoranda, The Parties shall document their mutual consent to adopting
"Minor Changes"through their signing of an "Operating Memorandum" reflecting the
Minor Changes. Neither the Minor Changes nor any Operating Memorandum shall
require public notice or hearing. The Director, City Manager, and City Attorney shall
be authorized to determine whether proposed modifications and refinements are
"Minor Changes" subject to Section 10c or, rather, more significant changes requiring
an Amendment.The City Manager shall execute any Operating Memoranda and may
do without City Council action.
10. Periodic Review.
a. General. City shall review this Agreement once during every twelve(12)month period
following the Effective Date for compliance with the terms of this Agreement as
provided in Government Code Section 65865.1 and Tustin City Code Section 9617, as
the same may be amended from time to time. Owner (including any successor to the
owner executing this Agreement on or before the date the Effective Date) shall pay
City a reasonable fee in an amount City may reasonably establish from time to time
to cover the actual and necessary costs for the annual review. City's failure to timely
provide or conduct an annual review shall not constitute a Default hereunder by City.
b. Owner Obligation to Demonstrate Good Faith Compliance. During each annual review
by City, Owner is required to demonstrate good faith compliance with the terms of
the Agreement. Owner agrees to furnish such evidence of good faith compliance as
City, in the reasonable exercise of its discretion, may require,thirty (30) days prior to
each anniversary of the Effective Date during the Term.
C. Procedure. The City shall conduct its annual review of the Agreement in accordance
with Tustin City Code Section 9617, as the same may be amended from time to time.
d. Annual Review a Non-Exclusive Means for Determining and Requiring Cure of Owner's
Default. The annual review procedures set forth in this Article 6 shall not be the
exclusive means for City to identify a Default by Owner or limit City's rights or
remedies for any such Default.
11. Events of Default.
a. General Provisions. In the event of any default, breach, or violation of the terms of
this Agreement ("Default"), the Party alleging a Default shall have the right to deliver
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a written notice (each, a "Notice of Default") to the defaulting Party. The Notice of
Default shall specify the nature of the alleged Default and a reasonable manner and
sufficient period of time (ten (10) days if the Default relates to the failure to timely
make a monetary payment due hereunder and thirty (30) days in the event of non-
monetary Defaults) in which the Default must be cured (the "Cure Period"). Owner
or City, as applicable, shall have the ability to contest the validity of the Default for a
period of five (5) days after Owner or City receives the written Notice of Default. The
Parties shall meet and confer in good faith for fifteen (15) days to attempt to resolve
the validity of the Notice of Default. If the Parties are unable to resolve the validity of
the Notice of Default after this meet and confer period, the Cure Period timeframes
specified in this Section 11 shall apply. During the Cure Period,the Party charged shall
not be considered in Default for the purposes of termination of this Agreement or
institution of legal proceedings. If the alleged Default is cured within the Cure Period,
then the Default thereafter shall be deemed not to exist. If however,a non-monetary
Default cannot be cured within such thirty (30) day period, as long as the defaulting
Party does each of the following:
i. notifies the non-defaulting Party in writing with a reasonable
explanation as to the reasons the asserted Default is not curable within the
thirty (30)day period;
H. notifies the non-defaulting Party in writing of the defaulting Party's
proposed course of action to cure the Default;
iii. promptly commences to cure the Default within the thirty(30) day
period;
iv. makes periodic written reports to the non-defaulting Party as to
the progress of the program of cure; and
V. diligently prosecutes such cure to completion,
then the non-defaulting Party shall grant in writing the defaulting Party such
additional time as determined by the non-defaulting party as reasonably necessary to
cure such Default.
b. City's Remedies. In the event of a Default by Developer under this Agreement that is
not cured during the Cure Period, City,at its option, may institute legal action to cure,
correct or remedy such Default, enjoining any threatened or attempted violation,
enforce the terms of this Agreement by specific performance, or pursue any other
legal or equitable remedy. Furthermore, City, in addition to or as an alternative to
exercising the remedies in this Section 11, in the event of a material default by
Developer, may give notice of its intent to terminate or modify this Agreement
pursuant to Tustin City Code Section 9618, in which event the matter shall be
scheduled for consideration and review by the City Council. The decision of the City
1737761.1
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Council shall be final, subject only to judicial review pursuant to California Code of
Civil Procedure Section 1094.S(b ).
C. Default by City/Owner's Limited Remedies. In the event of a Default by City under
this Agreement that is not cured during the Cure Period, Owner's remedies shall be
limited to bringing an action for specific performance to compel the City to perform
its obligations and/or to remedy the consequences to Owner of the failure of the City's
material representations.
12. Delay for Events Beyond the Parties' Control. The timely performance by either Party of
its obligations under this Agreement shall be excused and the Term shall be extended for
periods equal to the time during which a delay in performance is caused by reason of any
event beyond the control of City or Owner. Examples of such events include acts of nature
(such as fire, mud, rain, floods, earthquakes, pandemics), enactment of new conflicting
federal or state laws or regulations (such as the listing of a species as threatened or
endangered), judicial actions (such as the issuance of restraining orders and injunctions), ,
or damage to work in process by reason of riots, strikes, significant vandalism, or other
similar occurrences.
If either Party seeks excuse from performance, it shall provide written notice of the delay
to the other Party within thirty(30)days after the commencement of the delay. If the delay
or default, whether material or immaterial, is beyond the control of City or Owner it shall
be excused and an extension of time for such cause shall be granted in writing for the
period of the enforced delay, or longer as may be mutually agreed upon.Any disagreement
between the Parties with respect to whether this Section 13 applies to a particular event
or delay is subject to the filing by either Party of an action for judicial review of the matter,
including requests for declaratory and/or injunctive relief.
13. Lender Protection Provisions.
a. Notice of Default. Any notice of any default by Owner which is provided to Owner
pursuant to this Agreement shall also be sent to any lender that has made a loan then
secured by a deed of trust against all or a portion of the Property, provided that the
lender has first (a) given the City written notice of the lender's election to receive
copies of default notices and (b) provided to the City a recorded copy of its applicable
deed of trust. Any lender that has taken these steps is referred to within this
Agreement as a "Qualified Lender." A Qualified Lender does not include the maker of
a loan solely to the owner of a single family residential unit within the Property.
b. Right of a Qualified Lender to Cure a Default. If Owner fails to timely cure any default
under this Agreement within the time periods set forth in this Section below, then the
City shall send a written notice of that failure to each Qualified Lender. After receiving
that notice, each Qualified Lender shall have the right to cure any such default on the
same terms as Owner has the right to cure a default under Section 12a above. The
Qualified Lender's time in which to commence a cure begins on the date of its receipt
1737761.1
of the written notice.If the nature of the default is such that a Qualified Lender cannot
reasonably cure the default without being the owner of all or the applicable portion
of the Property, the Qualified Lender shall be deemed to be diligently pursuing the
cure of any such default if (i) the Qualified Lender(s) is (are) proceeding to foreclose
the lien of its deed of trust against all or the applicable portion of the Property and (ii)
after completing that foreclosure promptly commences the cure of the default and
thereafter diligently pursues that cure to completion.
C. Exercise of City's Remedies. Notwithstanding any other provision of this Agreement,
the City shall not exercise any right or remedy it may have under this Agreement or
otherwise arising out of a default by Owner and/or a Qualified Lender has the right
under this Agreement to cure that default.
d. No Impairment of Development Agreement to Mortgage. A default by Owner shall
not subordinate, invalidate or defeat the lien of any mortgage held by a lender.
Neither a breach of any obligation secured by any mortgage held by a lender or other
lien against the mortgaged interest, nor a judicial foreclosure, trustee's sale, or
acceptance of a deed in lieu of foreclosure (collectively, a "Foreclosure") under any
mortgage or other lien, shall defeat, diminish, render invalid or unenforceable, or
otherwise impair Owner's rights or obligations, or constitute a default, under this
Agreement. In no event shall a Foreclosure or other exercise by a lender of its pre-or
post-Foreclosure rights in connection with a mortgage require any consent or
approval by the City.
e. Lender's Obligations with Respect to the Property. Notwithstanding anything to the
contrary in this Agreement, no lender shall have any obligations or other liabilities
under this Agreement unless and until that lender acquires title to the portion of the
Property that was subject to the applicable mortgage. Further, no lender shall have
any obligations or liabilities under this Agreement solely because it holds a mortgage
or an interest in Owner.
14. Recordation of this Agreement. Pursuant to Government Code Section 65868,5, the City
Clerk shall cause a copy of this Agreement to be signed by the appropriate representatives
of the City and recorded with the Office of the County Recorder of Orange County,
California,within ten (10)days after the Effective bate. The failure of the City to sign and/or
record this Agreement shall not affect the validity of and binding obligations set forth
within this Agreement,or modify or amend the Effective Date or the expiration of the Term.
15. No_Third_Party Beneficiaries. This Agreement is entered into for the sole protection and
benefit of the City, Owner, and their respective successors and assigns. No other person
or entity shall have any right of action based upon any provision of this Agreement.
16. Changes_in_Federal and State Law. The Property may be subject to subsequently enacted
state or federal laws or regulations which preempt local regulations or mandate the
1737761.1
adoption of local regulations that conflict with the Applicable Rules. Upon discovery of such '
a subsequently enacted federal or state law, City or Owner shall provide the other Party
with written notice containing a copy of the state or federal law or regulation and a written
explanation of the legal or regulatory conflict created. Within ten (10) days after receipt of
that notice, City and Owner shall meet and confer in good faith in a reasonable attempt to
modify this Agreement, as necessary, to comply with such federal or state law or
regulation. In such negotiations, City and Owner agree to preserve the terms of this
Agreement and the Owner's Vested Right to the maximum feasible extent while resolving
the conflict. City agrees to cooperate with Owner in resolving the conflict in a manner which
minimizes any financial impact to Owner. Any delays caused by such changes in state or
federal law shall be considered delays beyond the control of City or Owner pursuant to
Section 14.above.
17. Assignment.
a. Permitted Transfers. Owner shall have the right,upon approval of City,which approval shall
not be unreasonably withheld, to sell, transfer or assign (hereinafter, collectively, a
"Transfer")Owner's interest in this Agreement and the Property, in whole or in part,to a third
party acquiring an interest or estate in the Property or any portion thereof(such successor, a
"Permitted Transferee") and such successor, as of the effective date of the Transfer, shall
become the "Owner" under this Agreement; provided, however, that no such Transfer shall
violate the provisions of the Subdivision Map Act (Government Code Section 66410 et seq.)
or City's local subdivision ordinance and each Transfer shall be made in strict compliance with
the conditions precedent set forth in Sections 18b and 18c City shall promptly consider any
Transfer request submitted by Owner.
b, City Approval of Transferee. Prior to the completion of any proposed Transfer, Owner(as
transferor)shall;
L notify City, in writing, of such proposed Transfer and, in order to
permit the City to make an informed decision to approve or disapprove the
Transfer, provide to the City such financial statements and evidence of the
proposed Transferee's fitness, experience and ability (or that of its senior
managerial personnel) to comply with the obligations assumed; and
ii. deliver to City a written assignment and assumption, executed in
recordable form by the transferring and successor Owner and in a form
subject to the reasonable approval of the City Attorney of City (or
designee), pursuant to which the transferring Owner assigns to the
successor Owner and the successor Owner assumes from the transferring
Owner all of the rights and obligations of the transferring Owner with
respect to the Property, or interest in the Property, or portion thereof to
be so Transferred, including in the case of a partial Transfer the obligation
to perform such obligations that must be performed outside of the
Property so Transferred that are a condition precedent to the successor
1737761.1
Owner's right to develop the portion of the Property so Transferred. Any
Permitted Transferee shall have all of the same rights, benefits, duties,
obligations, and liabilities of Owner under this Agreement with respect to
the portion of, or interest in, the Property sold, transferred, and assigned
to such Permitted Transferee; provided, however, that in the event of a
Transfer of less than all of the Property,or interest in the Property, no such
Permitted Transferee shall have the right to enter into an amendment of
this Agreement that jeopardizes or impairs the rights or increases the
obligations of the Owner with respect to the balance of the Property.
c. Ongoing Liability of Transferor, Notwithstanding any Transfer, the transferring
Owner shall continue to be jointly and severally liable to City, together with the
successor Owner, to perform all of the transferred obligations set forth in or arising
under this Agreement unless there is full satisfaction of all of the following
conditions, in which event the transferring Owner shall be automatically released
from any and all obligations with respect to the portion of the Property so
Transferred; (i) the transferring Owner no longer has a legal or equitable interest in
the portion of the Property so Transferred other than as a beneficiary under a deed
of trust; (ii)the transferring Owner is not then in Default under this Agreement and
no condition exists that with the passage of time or the giving of notice, or both,
would constitute a Default hereunder; (iii)the transferring Owner has provided City
with the notice and the fully executed written and recordable assignment and
assumption agreement required as set forth in Section 18b; and (iv) the successor
Owner either (A) provides City with substitute security equivalent to any security
previously provided by the transferring Owner to City to secure performance of the
successor Owner's obligations hereunder with respect to the Property, or interest
in the Property, or the portion of the Property so Transferred or (B) if the
transferred obligation in question is not a secured obligation, the successor Owner
either provides security reasonably satisfactory to City or otherwise demonstrates
to City's reasonable satisfaction that the successor Owner has the financial
resources or commitments available to perform the transferred obligation at the
time and in the manner required under this Agreement and the Development
Regulations for the Project. In the case of partial Transfers, a default under this
Agreement by Owner shall not be considered or acted upon by the City as a default
by the Permitted Transferee and shall not affect the Permitted Transferee's rights
or obligations hereunder. Likewise, a default by a Permitted Transferee shall not be
considered or acted upon by the City as a default by Owner and shall not affect
Owner's retained rights and obligations hereunder, Notwithstanding the foregoing,
if a breach of this Agreement involves an obligation jointly held by both Owner and
a Permitted Transferee, the City may avail itself of the remedies specified in Section
11 against both the Owner and Permitted Transferee.
18. Indemnification Obligations of Owner.
1737761.1
a, indemnity Arising from Acts or Omissions of Developer. Except to the extent caused
by the intentional misconduct or actively negligent acts, errors or omissions of City
or one or more of City's officials, employees, agents, attorneys and contractors
(collectively,the "City's Affiliated Parties"), Owner shall indemnify, defend,and hold
harmless City and City's Affiliated Parties from and against all actions, suits, claims,
liabilities, losses, damages, penalties, obligations and expenses (including but not
limited to attorneys' fees, expert witness fees and court costs) (collectively, a
"Claim")that may arise,directly or indirectly,from the acts,omissions,or operations
of Owner or Owner's officers, agents, contractors, subcontractors, agents, or
employees in the course of Development of the Project or any other activities of
Owner relating to the Property or pursuant to this Agreement. City shall have the
right to select and retain counsel to defend any Claim filed against City and/or any
of City's Affiliated Parties, and Owner shall pay the reasonable cost for defense of
any Claim. The indemnity provisions in this Section 19a shall be effective on the
date on which the Adopting Ordinance is approved by the City Council and shall
survive expiration of the Term or earlier termination of this Agreement.
b. Third Party Litigation. In addition to its indemnity obligations setforth in Section 19b
Owner shall indemnify, defend, and hold harmless City and City's Affiliated Parties
from and against any Claim against City or City's Affiliated Parties seeking to attack,
set aside, void, or annul the approval of the Project, this Agreement, the Adopting
Ordinance, any actions taken pursuant to CEQA with respect thereto, and the
approval of any permit or entitlement granted pursuant to this Agreement. Said
indemnity obligation shall include, without limitation, payment of attorney's fees,
expert witness fees, and court costs. City shall promptly notify Owner of any such
Claim and City shall cooperate with Owner in the defense of such Claim. City shall
be entitled to retain separate counsel to represent City against the Claim and the
City's defense costs for its separate counsel shall be included in Owner's indemnity
obligation, provided that such counsel shall reasonably cooperate with Owner in an
effort to minimize the total litigation expenses incurred by Owner. City's separate
counsel's billing rates shall be identical to the rates City pays for its typical municipal
litigation rates for legal challenges of the variety being defended. Provided that
Owner has then paid in full all sums due to the City or its counsel incurred pursuant
to this Section and otherwise fully performed its indemnity obligations hereunder,
Owner shall be entitled to retain the same, The indemnity provisions in this
Section 19b shall be effective on the date on which the Adopting Ordinance is
approved by the City Council and shall survive expiration of the Term or earlier
termination of this Agreement.
C. Labor Laws. Owner shall carry out the construction of the Project, including all
improvements, in conformity with all applicable federal and state labor laws and
regulations and shall investigate the applicability of and, if and to the extent
applicable, pay prevailing wages meeting the requirements of such laws and
regulations; provided that Owner reserves the right to reasonably contest such laws
�. _J
1737761.1
and regulations. Owner hereby agrees that, with respect to the Project, Owner shall
be fully responsible for determining whether the foregoing wage requirements are
applicable and agrees to indemnify, defend and hold the City and its elected and
appointed officials, employees, agents, attorneys, affiliates, representatives,
contractors, successors and assigns free and harmless from and against any and all
Claims arising from or related to compliance by Owner or Owner's officers, directors,
employees, agents, representatives, consultants and/or contractors (at every tier) in
construction of the Project with the prevailing wage requirements imposed by any
applicable federal and State labor law.
19. Sale or Lease of Individual Lots or Homes.The sale or lease of an individual lot or Dome to
an end user is not subject to the provisions of Section 19 above. Rather, upon such a sale,
(i) the acquiring or leasing party shall be deemed to have no obligations under this
Agreement and (ii) the individual lot shall no longer be subject to or burdened by this
Agreement.
20. Covenants Run With the Land. Subject to any express exceptions contained within this
Agreement, this Agreement shall run with the land and shall be binding upon and inure to
the benefit of the Parties' respective successors and assigns (including all Transferees).
21. Miscellaneous Provisions.
a. Notices. All notices which are allowed or required to be given under this Agreement
("Notices") shall be in writing and (i) be deemed given and received when personally
delivered or (ii) be deemed given when deposited in the U.S. mail, with postage
prepaid, to be sent by registered, certified, or overnight mail service and deemed
received on the second business day after such mailing.
The addresses for Notices are as follows and may be changed by delivery of a Notice
to these addresses:
If to City: City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
If to Owner: Intracorp Socal-1, LLC
895 Dove Street, Suite 400
Newport Beach, California 92660
Attention:
with a copy to: Cox, Castle & Nicholson LLP
3121 Michelson Drive
Suite 200
1737761.1
r 1
Irvine, CA 92612-5678
Attention:Tim Paone
b. Severability. If any part of this Agreement is declared invalid for any reason, that
invalidity shall not affect the validity of the rest of this Agreement, provided that the
Owner's Vested Right and the Public Benefits are not materially diminished.
c. Entire Agreement;Conflicts with Applicable Rules. With respect to the subject matter
of this Agreement, this Agreement represents the entire agreement between the
Parties and supersedes all prior agreements and understandings, whether oral or
written, between the Parties.
d. Not Acting as Agents. In entering into and performing under this Agreement, each of
the Parties is acting as an independent entity and not as an agent of the other in any
respect. Nothing contained within this Agreement or in any document executed in
connection with this Agreement shall be construed as making the City and Owner joint
venturers, partners, or employer/employee.
e. Attorneys'Fees. In any judicial proceeding, arbitration, or mediation (collectively, an
"Action") between the Parties that seeks to enforce the provisions of this Agreement
or arises out of this Agreement, the prevailing Party shall recover all of its actual and
reasonable costs and expenses, regardless of whether they would be recoverable
under California Code of Civil Procedure Section 1033.5 or California Civil Code
Section *1717 in the absence of this Agreement. These costs and expenses include
court costs, expert witness fees, attorneys' fees, and costs of investigation and
preparation before initiation of the Action. The right to recover these costs and
expenses shall accrue upon initiation of the Action, regardless of whether the Action
is prosecuted to a final judgment or decision. The maximum hourly rate for attorneys
which are recoverable under this Section 22e is$200/hour.
f. Waiver. All waivers of performance must be in a writing signed by the Party granting
the waiver. There are no implied waivers. Failure by City or Owner to insist upon the
strict performance of any provision of this Agreement, irrespective of the length of
time for which such failure continues, shall not constitute a waiver of the right to
demand strict compliance with the same or any other provision of this Agreement in
the future. A written waiver affects only the specific matter waived and defines the
performance waived and the duration of the waiver.
g. Time of Essence. Time is of the essence of this Agreement, and all performances
required under this Agreement shall be completed within the time periods specified.
h. Estoppel Certificate. Within ten (10) business days following a written request by
either of the Parties,the other Party shall execute and deliver to the requesting Party
a statement (an "Estoppel Certificate") certifying that:
1737761.1
+ Either (i) this Agreement is unmodified and in full force and effect or (ii) there
have been specified (date and nature) modifications to the Agreement, but it
remains in full force and effect as modified; and
Either(i) there are no known current uncured Defaults under this Agreement or
(ii) that the responding Party alleges that specified (date and nature) defaults or
Defaults exist.
The Estoppel Certificate also shall provide any other reasonable information
requested. The failure to timely deliver this statement shall constitute a conclusive
presumption that this Agreement is in full force and effect without modification,
except as may be represented by the requesting Party, and that there are no uncured
defaults or Defaults in the performance of the requesting Party, except as may be
represented by the requesting Party. Owner shall pay to City all reasonable
administrative costs incurred by City in connection with the issuance of an Estoppel
Certificate prior to City's issuance of the Estoppel Certificate.
I. Choice of Low;Jurisdiction; Venue.This Agreement shall be interpreted under the laws
of the State of California and any question or controversy arising out of or in any way
related to this Agreement shall be governed by the law of the State of California. Any
legal proceeding commenced with respect to any question or controversy arising out
of or in any way related to this Agreement shall be filed and prosecuted in the Superior
Court for Orange County, California.
This Agreement has been signed by the Parties on the dates indicated below.
OWNER Intracorp Socai-1, LLC
By:
Name:
Its:
Date:
CITY City of Tustin, a municipal corporation of the State
of California
By:
Name:
Its:
Date:
1737761.1
r...1
Exhibit "A"
Description of Property
Real property in the City of Tustin, County of Orange, State of California, described as follows:
PARCEL A:
PARCELS 2 AND 3 IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, ON THE
MAP FILED 1N BOOK 31, PAGE 14 OF PARCEL MAPS, RECORDS OF SAID COUNTY.
PARCEL B:
A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS, PUBLIC UTILITIES AND DRAINAGE
PURPOSESOVER, UNDER, ALONG, ACROSS AND THROUGH THE NORTHERLY 25.00 FEET OF THE
SOUTHERLY 45.00 FEET OF PARCEL 10N THE MAP FILED IN BOOK 31, PAGE 14 OF PARCEL MAPS,
RECORDS OF SAID COUNTY.
APN: 401-141-13 and 401-141-57
1737761.1
Exhibit "B"
Depiction of Property (Site Plan)
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TIM E
..ps4�frf1ufe4Plant Gount__.,.
_ .. FKURN A
1 NT R A CORP Conceptual Lardscape Plan
LAND 17802 keine Blvd.
C.O N C E.ft N TUSTIN,CA
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1737761,1
EXHIBIT B: DRAFT ORDINANCE
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Clerk
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
This Agreement is recorded at the
request and for the benefit of the City of
Tustin and is exempt from the payment
of a recording fee pursuant to
Government Code §§ 6103 and 27383.
DEVELOPMENT AGREEMENT
(2022-0002)
between
CITY OF TUSTIN
and
INTRACORP SOCAL-1, LLC,
a California limited liability company
Approval Date: . 2022
1737761.1
DEVELOPMENT AGREEMENT BETWEEN THE CITY OF TUSTIN
AND INTRACORP SOCAL-1, LLC
WITH RESPECT TO PROPERTY LOCATED AT 17802 AND 17842 IRVINE BLVD.
This Development Agreement (the "Agreement") is entered into as of , 2022, by and
between the City of Tustin, a California municipal corporation (the "City"), and Intracorp Socal-1,
LLC, a California limited liability company ("Owner"). At times, the City and Owner are referred
to jointly within this Agreement as the "Parties" and individually as a "Party,"
RECITALS
A. To strengthen the public planning process,encourage private participation in comprehensive
planning, and reduce the economic risk of development, the Legislature of the State of
California adopted the "Development Agreement Statute," Sections 65864 et seq., of the
California Government Code. The Development Agreement Statute authorizes the City to
enter into development agreements with persons or entities having legal or equitable
interests in real property to establish predictability for both City and the property owner in
the development process.
B. Pursuant to the Development Agreement Statute, in 1984 the City adopted Ordinance No.
923 establishing the requirements for the approval of Development Agreements in the City.
Those requirements, as amended and current through the execution of this Agreement, are
set forth in Article 9, Chapter 6, Sections 9600 and following, of the Tustin City Code (the
"Tustin City Code"). The application for and approval of this Agreement were made pursuant
to those provisions of the Tustin City Code.
C. Owner holds equitable title to the real property described in Exhibit A to this Agreement(the
"Property") and depicted on Exhibit B and expects to acquire legal title to the Property
subsequent to the approval of the "Project" described in Recital E below.
D. The Property consists of 2.07 acres and is located at 17802 and 17842 Irvine Boulevard in
the City.At the time of the approval of this Agreement,the Property is occupied by two office
buildings totaling approximately 45,000 square feet.
E. Owner desires to demolish the two existing office buildings and improve the Property with
forty(40)residential units comprised of eighteen duplexes and four single-family residences,
as well as related ancillary improvements (the "Project"). In addition to its application for
approval of this Agreement, Owner has filed with the City its request for approval of the
following discretionary actions pertaining to the Property (the "Project Approvals"):
• General Plan Amendment (GPA 2022.0001) to amend General Plan Land Use
designation from Professional Office (PO)to High Density Residential (HDR);
• Zone Change (ZC 2022-0001) to change the Zoning designation from Retail Commercial
District (Cl) with a Parking Overlay (P) to Multi-Family Residential (113);
1737761.1
• Subdivision Map (SUB 2022-0002) /Tentative Tract Map (TTM No. 19224) to subdivide
the existing two (2) lots to one (1) lot for condominium purposes;
• Design Review(DR 2022-0004)for a 40-unit three-story town home development(within
18 duplexes and 4 single-family detached units) to include 38 market rate and 2
affordable (50%AMI) units, community gathering and BBQ areas;and demolition of two
existing two-story office buildings;
• Density Bonus request with five (5) percent of units identified as very-low income
housing with a request for Concession to reduce the required front yard setback along
Irvine Boulevard from ten (10) feet to six (G) foot, and a Waiver to reduce the required
common open space from 12,000 square feet to 10,531 square feet;
• Density Bonus Housing Incentive Agreement to memorialize the density bonus,
provision of very-low income housing, payment of in-lieu fee and the granting of the
requested Concession and Waiver; and
• Development Agreement (DA 2022-0002) to document the provision of community
public benefits.
F. The Project Approvals have been evaluated pursuant to the California Environmental Quality
Act ("CEQA") as reflected in Mitigated Negative Declaration dated September, 2022 (the
"MND").
G. The Project will provide specific and valuable public benefits to the City and its residents,
addressed in Section 3 below.
H. The City's Planning Commission (the "Planning Commission") and City Council each have (i)
given notice of their intention to consider this Agreement, (ii) conducted public hearings on
this Agreement as required by the Government Code and the Tustin City Code,and (iii)found
the provisions of this Agreement to be consistent with the General Plan and the Tustin City
Code as of the Approval Date.
I. On , 2022,the Planning Commission held a duly noticed public hearing at which
the Planning Commission recommended approval of this Agreement to the City Council.
J. On , 2022, the City Council adopted the MND.
K. On , 2022, the City Council adopted Ordinance No. approving this
Agreement (the "Adopting Ordinance").
AGREEMENT
The City and Owner agree as follows;
1. Defined Terms. As used within this Agreement, the following capitalized terms shall have
the meanings set forth in this Section 1:
a. "Adopting Ordinance" means Ordinance No. approving this Agreement.
1737761.1
b. "Affordable In Lieu Fee" means the payment to be made by Owner to the City l
pursuant to Section 3b below.
C. "Affordable Units" means residential units affordable to very low income households
to be sold by Owner pursuant to Section 3a below.
d. "Agreement" means this Development Agreement between the City and Owner. The
term "Agreement" shall include any amendment properly approved and executed
pursuant to Section 96 .5 of the Tustin City Code and Section 10 of this Agreement.
e. "Approval Date"means the date on which the City Council conducted the first reading
of the ordinance adopting this Agreement. That date is
f. "Applicable Fees" means those fees and fee programs (i) set forth within the
Applicable Rules, (ii) uniformly applied to all development projects within the City as
of the Approval Date, and (iii) from which Owner is not otherwise exempt.
g. "Applicable Rules" means the Existing Land Use Regulations and all Subsequent
Development Approvals.
h. "CEQA" means the California Environmental Quality Act.
L "City" shall mean the City of Tustin, California.
j. "Day" means a calendar day unless specifically stated as a "business day."
k. "Development Approvals" shall mean all non-legislative permits, entitlements, and
other approvals granted or issued by the City for the use of,construction upon,and/or
development of the Property. For the purposes of this Agreement, Development
Approvals include the following actions, including revisions, addenda, amendments,
and modifications to these actions:
• Tentative Map and other approvals under the Subdivision Map Act and the
City's subdivision code found in Article 9, Chapter 3 of the Tustin City Code;
• Site plan and architectural review;
• Sewer and water connection permits and agreements;
• Grading, encroachment, and building permits;
• Certificates of compliance, lot line adjustments, and boundary adjustments;
• Street, drainage, utility,stormwater, landscape and other improvement
permits and agreements;
• Occupancy permits;
• Density Bonus request (e.g. Concession/Waiver);
• Density Bonus Housing Incentive Agreement; and
• Environmental review(e.g., CEQA) documents for the Project.
1737761.1
1. "Effective Date" means the date on which the last of the following events has
occurred:
• The Adopting Ordinance becomes operative under Government Code Section
36937; and
• Owner has notified City in writing that Owner has obtained legal title to the
Property.
m. "Exhibit" means an exhibit to this Agreement unless otherwise specified. All Exhibits
are deemed incorporated within this Agreement.
n. "Existing Land Use Regulations" means all Land Use Regulations in effect on the
Approval Date,including the General Plan and applicable zoning.Changes to Land Use
Regulations occurring between the Approval Date and the Effective Date shall not be
considered part of the Existing Land Use Regulations without Owner's prior written
consent. The GPA and the zone Change shall be considered changes to Land Use
Regulations which, by virtue of this Agreement, have Owner's consent.
o. "General Plan" shall mean the general plan of the City.
p. "Include" and its derivatives such as "including" shall be deemed to incorporate the
phrase "without limitation," "but not limited to," and their grammatically correct
equivalents, unless specifically set forth as "includes only" or an equivalent phrase.
q. "Land Use Regulations" shall mean all legislative acts, including ordinances,
resolutions, codes, rules, regulations, and official policies of the City, governing the
development and use of land, including the permitted use of land, the density or
intensity of use, subdivision requirements, timing and phasing of development, the
maximum height and size of buildings, the provisions for reservation or dedication of
land for public purposes, and the design, improvement, construction, initial
occupancy standards and specifications, and impact, building, processing, affordable
housing, and all other fees applicable to the development of land within the City. Land
Use Regulations include the General Plan and the Tustin City Code.
r. "MND" means that Mitigated Negative Declaration dated 2022,
prepared for the Project pursuant to CEQA.
S. "Owner" means Intracorp Socal-1, LLC, and its respective successors and assigns with
respect to all or any portion of the Property or this Agreement.
t. "Owner's Vested Right" means Owner's guaranteed right to develop the Property as
set forth in this Agreement, as set forth in Section 4 below.
u. The"Parties" means the City and Owner. A"Party" means either the City or Owner.
v. "Periodic Review" means the City's review of Owner's good faith compliance with the
terms of this Agreement pursuant to Government Code Section 65865.1, as set forth
in Section 10 below.
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W. The "Project" means the development of the Property through the construction of a 1
new, townhome residential development project that would include forty(40) three-
story residential units, including two (2)affordable units, on approximately 2.07 acres
located at 17802 and 17842 Irvine Blvd. The Project would also include an enclosed,
two-car garage and private open space for each unit, eleven (11)guest surface parking
spaces,and common open space areas.The Project would also require the demolition
of two (2)existing two-story office buildings currently located on the subject Property.
X. The "Property" means the real property described in Exhibit A.
Y, "Qualified Lender"shall have the meaning assigned to such term in Section 14 below.
Z. "Subsequent Development Approvals" means all Development Approvals for the
Project which are approved, granted,or issued after the Approval Date and which are
required or permitted by the Existing Land Use Regulations,the Subsequent Land Use
Regulations to which Owner has consented in writing, and this Agreement.
aa. "Subsequent Land Use Regulations" means those Land Use Regulations which are
both adopted and effective after the Approval Date and which are not incorporated
within the definition of Existing Land Use Regulations.
bb. "Term" means the term of this Agreement as set forth in Section 2 below.
2. Term of Agreement. This Agreement shall become operative and commence upon the
Effective Date and shall remain in effect for a term of six (6) years (the "Term"), unless the
Term is modified by mutual written consent of the City and Owner. Upon the expiration of
the Term, this Agreement shall be deemed terminated and of no further force and effect.
3. Public Benefits. As addressed in Recital G above, in consideration of the granting to Owner
of Owner's Vested Right, Owner shall provide the following Public Benefits:
a. Affordable for Sale Units. In addition to paying the Affordable In Lieu Fee described
in Section 3b below, Owner shall provide two units(equal to five percent of base units
in the Project)for initial sale to very low income households (the "Affordable Units").
These units shall be provided consistent with the Continuing Affordability provisions
of Section B9931 of the City's Voluntary Workforce Housing Incentive Program set
forth in Article 9, Chapter 9B of the Tustin City Code, Incentives for the Development
of Affordable Housing set forth in Article 9, Chapter 1 of the Tustin City Code as
amended by the State's Density Bonus Law.
b. Affordable In Lieu Fee. Owner shall pay to the City a voluntary workforce housing
incentive program in-lieu fee in the amount calculated pursuant to Tustin City Code
Section B9923b1 by "...Multiplying the voluntary workforce housing incentive
program in-lieu fee by one-half (%) the number of base units provided on-site..." [(
Program In-Lieu Fee) x (Base Units Provided On-site/2)). (the "Affordable In Lieu
Fee"). The Affordable In Lieu Fee for each residential unit shall be paid upon the
issuance of the building permit forthat unit. Subject to Section 5a below,the program
in-lieu fee amount used to calculate the Affordable In Lieu Fee for the Project shall be
i�..J
1.737761.1
the greater of either$13,801, or the then applicable in-lieu fee approved by the City
Council for the workforce housing incentive program in effect on the Approval Date.
4. Vested Right to Develop the Project. Owner shall have the vested right to complete
development of the Project on the Property to the extent and in the manner provided in
the Applicable Rules and this Agreement ("Owner's Vested Right"). Owner's Vested Right
includes the right to build on the Property forty(40) residential units and such appurtenant
facilities as are permitted by the Applicable Rules. Owner's Vested Right and this
Agreement are intended to limit, to the degree specified in this Agreement and permitted
under State law,the City's ability to regulate development of the Project and the Property
during the Term.
a. Permitted Uses and Development Standards. During the Term, the permitted uses of
the Property,the development standards for the Project, the maximum height of any
buildings constructed within the Project, the number of residential units permitted
within the Project, and the provisions for reservation of dedication of land for public
purposes shall be as set forth in the Applicable Rules.
b. Phasing and Project Completion Date. Owner may develop the Project in accordance
with the Phasing Plan dated December 13, 2022, and maintained on file with the City's
Community Development Director ("Director"), and as the same may be amended at
the request to Owner and with the written approval of the Director, which approval
may shall not be unreasonably withheld.The Project shall be completed by the end of
the Term.
C. Implementing Actions. To enable Owner to complete the Project consistent with
Owner's Vested Right, the City agrees that the City shall:
• Expeditiously process all Subsequent Development Approvals and Subsequent
Land Use Regulations (i) needed, in Owner's judgment, to implement
development of the Project and (ii) consistent with the Applicable Rules; and
• Take such other actions that are (i) requested by Owner and (ii) consistent with
the terms of this Agreement.
d. Changes to Applicable Rules. Any change in the Applicable Rules which is adopted or
becomes effective after the Approval Date, no matter how adopted or enacted, shall
not be applicable to or binding upon Owner, the Project, or the Property, unless
approved in writing by Owner. A "change in the Applicable Rules" shall include any
new ordinance, resolution, policy, or other enactment, no matter how adopted or
enacted, which is not contained in the Applicable Rules as of the Approval Date.
A change in the Applicable rules includes those actions which would directly or
indirectly;
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• Limit or reduce the density or intensity of the Project, or otherwise require any
reduction in the height, number, size or square footage of lots, structures or
buildings;
• Expand or increase Owner's obligations with respect to the provision of parking
spaces, streets, roadways and/or any other public or private improvements,
structures or dedications of land or with respect to payments of monetary
exactions;
• Limit,delay, or control the timing or phasing of the construction or development
of the Project in any manner; or
• Limit the design, improvement or construction standards or specifications or the
location of buildings, structures, grading or other improvements relating to the
development of the Project in a manner which is inconsistent with or more
restrictive than the Applicable Rules.
If there is a change in the Applicable Rules to which Owner has consented in writing,
Owner's Vested Right shall include the right to complete the Project consistent with
that change.
5. Development, Impact, Processing,and Other Fees.
a. Applicable Fees. Only those fees and fee programs (i) set forth within the Applicable
Rules, (ii) uniformly applied to all development projects within the City as of the
Approval Date, and (iii) from which Owner is not otherwise exempt may be charged
to Owner, the Property, or the Project with respect to the development of the
Property, impacts related to the Project or development projects generally, the
processing of applications, the issuance of permits, the provision of services, the
maintenance of property, or any other matter related to the Property or the Project
(the "Applicable Fees").
b. Limitation on Increase of Fees. Except as expressly provided elsewhere within this
Agreement, all Applicable Fees to be paid with respect to development of the
Property shall not be fixed and shall be charged in the amounts set forth in the City's
then current Comprehensive Fee Schedule, as the same may be amended from time
to time.
6. Term of Map(s) and Other Project Approvals.
a. Subdivision Maps. Pursuant to Government Code Section 66452.6 and any other
applicable provisions of the Government Code, the term of the Tentative Map and
any other subdivision or parcel map that is approved for all or any portion of the
Property shall be extended to a date coincident with the Term and, where not
prohibited by State law, with any extension of the Term, unless a longer term would
result under otherwise applicable State or local law.
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b. Other Development Approvals. Pursuant to Government Code Section 65863.9, all
Development Approvals for any portion of the Project shall automatically be extended
for the longer of (i) the term of the Tentative Map and (ii) the term of any other
subdivision or parcel map that is approved for all or any portion of the Property.
Pursuant to Section 6a,those terms shall be the same as the Term of this Agreement.
7. Public Services.Subject to Owner's compliance with all Project conditions of approval,City
acknowledges and agrees that City will have sufficient capacity in its infrastructure,
services, and utility systems for traffic circulation, sewer collection, sewer treatment,
sanitation service and, except for reasons beyond City's control, water supply, treatment,
distribution and service, and drainage, to accommodate the Project as provided in this
Agreement.To the extent the City itself renders such services or provides such utilities,the
City shall grant or issue hookups or service to the Project.
8. Other Governmental Permits and Fees. The City shall cooperate with Owner's efforts to
obtain such other permits and approvals as may be required by orfrom other governmental
or quasi-governmental agencies (including, but not limited to, districts and special districts
providing flood control, sewer, and fire protection,and the Regional Water Quality Control
Board) having jurisdiction over the Project in connection with the development of, or
provision of services to, the Property. The City shall, from time to time at the request of
Owner, attempt with due diligence and in good faith to enter into binding agreements with
any such entity necessary to assure the availability of such permits and approvals or
services, provided such agreements are reasonable. The City shall use its best efforts to
work with other governmental and quasi-governmental agencies so as to limit to the
maximum extent possible the imposition of additional fees, dedications, or exactions by or
through such other agencies.
9. Modification or Cancellation by Mutual Consent.The following provisions shall govern the
amendment and/or cancellation of this Agreement (collectively, an "Amendment"),
provided that any Amendment must comply with the Development Agreement Statute.
a. General. Pursuant to the Development Agreement Statute, an Amendment may
occur through the mutual written consent of the Parties or their respective successors
in interest. Public notice of the Parties'intention to enter into an Amendment shall be
as provided by Government Code Section 65867. Any Amendment shall be subject to
the provisions of Government Code Section 65867.5.
b. Amendments of Applicable Rules. Any amendment to or change in the Applicable
Rules shall not require an Amendment to this Agreement, provided that Owner has
consented in writing to the amendment or change in the Applicable Rules.
C. Minor Changes. The provisions of this Agreement require a close degree of
cooperation between the Parties and "Minor Changes"to the Project may be required
from time to time to accommodate design changes, engineering changes, and other
refinements related to the details of the Parties'performance. "Minor Changes"shall
17377&1,1
mean changes to the Project that are otherwise consistent with (i)the Tustin City Code
and the General Plan and Design Review (DR-2022-0004) and (ii) do not result in a
change in the type of use of the Property, an increase in the density or intensity of
use, significant new or increased environmental impacts that cannot be mitigated, or
violations of any applicable health and safety regulations in effect on the Approval
Date.
d. Operating Memoranda. The Parties shall document their mutual consent to adopting
"Minor Changes"through their signing of an "Operating Memorandum" reflecting the
Minor Changes. Neither the Minor Changes nor any Operating Memorandum shall
require public notice or hearing. The Director, City Manager, and City Attorney shall
be authorized to determine whether proposed modifications and refinements are
"Minor Changes" subject to Section 10c or, rather, more significant changes requiring
an Amendment. The City Manager shall execute any Operating Memoranda and may
do without City Council action.
10. Periodic Review.
a. General. City shall review this Agreement once during every twelve(12) month period
following the Effective Date for compliance with the terms of this Agreement as
provided in Government Code Section 65865.1 and Tustin City Code Section 9617, as
the same maybe amended from time to time. Owner(including any successor to the
owner executing this Agreement on or before the date the Effective Date) shall pay
City a reasonable fee in an amount City may reasonably establish from time to time
to cover the actual and necessary costs for the annual review. City's failure to timely
provide or conduct an annual review shall not constitute a Default hereunder by City.
b. Owner Obligation to Demonstrate Good Faith Compliance. During each annual review
by City, Owner is required to demonstrate good faith compliance with the terms of
the Agreement. Owner agrees to furnish such evidence of good faith compliance as
City, in the reasonable exercise of its discretion, may require,thirty (30) days prior to
each anniversary of the Effective Date during the Term.
C. Procedure. The City shall conduct its annual review of the Agreement in accordance
with Tustin City Code Section 9617, as the same may be amended from time to time.
d. Annual Review a Non-Exclusive Means for Determining and Requiring Cure of Owner's
Default. The annual review procedures set forth in this Article 6 shall not be the
exclusive means for City to identify a Default by Owner or limit City's rights or
remedies for any such Default.
11. Events of Default.
a. General Provisions. In the event of any default, breach, or violation of the terms of
this Agreement ("Default"), the Party alleging a Default shall have the right to deliver
3737761.1
a written notice (each, a "Notice of Default") to the defaulting Party. The Notice of
Default shall specify the nature of the alleged Default and a reasonable manner and
sufficient period of time (ten (10) days if the Default relates to the failure to timely
make a monetary payment due hereunder and thirty (30) days in the event of non-
monetary Defaults) in which the Default must be cured (the "Cure Period"). Owner
or City, as applicable, shall have the ability to contest the validity of the Default for a
period of five (5) days after Owner or City receives the written Notice of Default. The
Parties shall meet and confer in good faith for fifteen (15) days to attempt to resolve
the validity of the Notice of Default. If the Parties are unable to resolve the validity of
the Notice of Default after this meet and confer period, the Cure Period timeframes
specified in this Section 11 shall apply. During the Cure Period, the Party charged shall
not be considered in Default for the purposes of termination of this Agreement or
institution of legal proceedings. If the alleged Default is cured within the Cure Period,
then the Default thereafter shall be deemed not to exist. If however,a non-monetary
Default cannot be cured within such thirty (30) day period, as long as the defaulting
Party does each of the following;
I. notifies the non-defaulting Party in writing with a reasonable
explanation as to the reasons the asserted Default is not curable within the
thirty (30) day period;
ii. notifies the non-defaulting Party in writing of the defaulting Party's
proposed course of action to cure the Default;
iii. promptly commences to cure the Default within the thirty(30) day
period;
iv, makes periodic written reports to the non-defaulting Party as to
the progress of the program of cure; and
V. diligently prosecutes such cure to completion,
then the non-defaulting Party shall grant in writing the defaulting Party such
additional time as determined by the non-defaulting party as reasonably necessary to
cure such Default.
b. City's Remedies. In the event of a Default by Developer under this Agreement that is
not cured during the Cure Period, City,at its option, may institute legal action to cure,
correct or remedy such Default, enjoining any threatened or attempted violation,
enforce the terms of this Agreement by specific performance, or pursue any other
legal or equitable remedy. Furthermore, City, in addition to or as an alternative to
exercising the remedies in this Section 11, in the event of a material default by
Developer, may give notice of, its intent to terminate or modify this Agreement
pursuant to Tustin City Code Section 9618, in which event the matter shall be
scheduled for consideration and review by the City Council. The decision of the City
1737761.1
Council shall be final, subject only to judicial review pursuant to California Code of
r �
Civil Procedure Section 1094.5(b).
C. Default by City/Owner's Limited Remedies. In the event of a Default by City under
this Agreement that is not cured during the Cure Period, Owner's remedies shall be
limited to bringing an action for specific performance to compel the City to perform
its obligations and/or to remedy the consequences to Owner of the failure of the City's
material representations.
12. Delay for Events Beyond the Parties' Control. The timely performance by either Party of
its obligations under this Agreement shall be excused and the Term shall be extended for
periods equal to the time during which a delay in performance is caused by reason of any
event beyond the control of City or Owner. Examples of such events include acts of nature
(such as fire, mud, rain, floods, earthquakes, pandemics), enactment of new conflicting
federal or state laws or regulations (such as the listing of a species as threatened or
endangered),judicial actions (such as the issuance of restraining orders and injunctions), ,
or damage to work in process by reason of riots, strikes, significant vandalism, or other
similar occurrences.
If either Party seeks excuse from performance, it shall provide written notice of the delay
to the other Party within thirty(30)days after the commencement of the delay. If the delay
or default, whether material or immaterial, is beyond the control of City or Owner it shall
be excused and an extension of time for such cause shall be granted in writing for the
period of the enforced delay, or longer as may be mutually agreed upon.Any disagreement
between the Parties with respect to whether this Section 13 applies to a particular event
or delay is subject to the filing by either Party of an action forjudicial review of the matter,
including requests for declaratory and/or injunctive relief.
13. Lender Protection Provisions.
a. Notice of Default. Any notice of any default by Owner which is provided to Owner
pursuant to this Agreement shall also be sent to any lender that has made a loan then
secured by a deed of trust against all or a portion of the Property, provided that the
lender has first (a) given the City written notice of the lender's election to receive
copies of default notices and (b) provided to the City a recorded copy of its applicable
deed of trust. Any lender that has taken these steps is referred to within this
Agreement as a "Qualified Lender."A Qualified lender does not include the maker of
a loan solely to the owner of a single family residential unit within the Property.
b. Right of a Qualified Lender to Cure a Default. If Owner fails to timely cure any default
under this Agreement within the time periods set forth in this Section below, then the
City shall send a written notice of that failure to each Qualified Lender.After receiving
that notice, each Qualified lender shall have the right to cure any such default on the
same terms as Owner has the right to cure a default under Section 12a above. The
Qualified Lender's time in which to commence a cure begins on the date of its receipt
1737761.1
of the written notice. If the nature of the default is such that a Qualified Lender cannot
reasonably cure the default without being the owner of all or the applicable portion
of the Property, the Qualified Lender shall be deemed to be diligently pursuing the
cure of any such default if (1) the Qualified Lender(s) is (are) proceeding to foreclose
the lien of its deed of trust against all or the applicable portion of the Property and (ii)
after completing that foreclosure promptly commences the cure of the default and
thereafter diligently pursues that cure to completion.
C. Exercise of City's Remedies. Notwithstanding any other provision of this Agreement,
the City shall not exercise any right or remedy it may have under this Agreement or
otherwise arising out of a default by Owner and/or a Qualified Lender has the right
under this Agreement to cure that default.
d. No Impairment of Development Agreement to Mortgage. A default by Owner shall
not subordinate, invalidate or defeat the lien of any mortgage held by a lender.
Neither a breach of any obligation secured by any mortgage held by a lender or other
lien against the mortgaged interest, nor a judicial foreclosure, trustee's sale, or
acceptance of a deed in lieu of foreclosure (collectively, a "Foreclosure") under any
mortgage or other lien, shall defeat, diminish, render invalid or unenforceable, or
otherwise impair Owner's rights or obligations, or constitute a default, under this
Agreement. In no event shall a Foreclosure or other exercise by a lender of its pre-or
post-Foreclosure rights in connection with a mortgage require any consent or
approval by the City.
e. Lender's Obligations with Respect to the Property. Notwithstanding anything to the
contrary in this Agreement, no lender shall have any obligations or other liabilities
under this Agreement unless and until that lender acquires title to the portion of the
Property that was subject to the applicable mortgage. Further, no lender shall have
any obligations or liabilities under this Agreement solely because it holds a mortgage
or an interest in Owner.
14. Recordation of this Agreement. Pursuant to Government Code Section 65868,5, the City
Clerk shall cause a copy of this Agreement to be signed by the appropriate representatives
of the City and recorded with the Office of the County Recorder of Orange County,
California,within ten (10)days afterthe Effective Date. The failure of the City to sign and/or
record this Agreement shall not affect the validity of and binding obligations set forth
within this Agreement,or modify or amend the Effective Date or the expiration of the Term.
15. No Third Party Beneficiaries. This Agreement is entered into for the sole protection and
benefit of the City, Owner, and their respective successors and assigns. No other person
or entity shall have any right of action based upon any provision of this Agreement.
16. Changes in Federal and State Law.The Property may be subject to subsequently enacted
state or federal laws or regulations which preempt local regulations or mandate the
1737761.1
adoption of local regulations that conflict with the Applicable Rules. Upon discovery of such r
a subsequently enacted federal or state law, City or Owner shall provide the other Party
with written notice containing a copy of the state or federal law or regulation and a written
explanation of the legal or regulatory conflict created. Within ten (10) days after receipt of
that notice, City and Owner shall meet and confer in good faith in a reasonable attempt to
modify this Agreement, as necessary, to comply with such federal or state law or
regulation. In such negotiations, City and Owner agree to preserve the terms of this
Agreement and the Owner's Vested Right to the maximum feasible extent while resolving
the conflict.City agrees to cooperate with Owner in resolving the conflict in a manner which
minimizes any financial impact to Owner. Any delays caused by such changes in state or
federal law shall be considered delays beyond the control of City or Owner pursuant to
Section 14 above,
17. Assignment.
a. Permitted Transfers. Owner shall have the right, upon approval of City,which approval shall
not be unreasonably withheld, to sell, transfer or assign (hereinafter, collectively, a
"Transfer")Owner's interest in this Agreement and the Property,in whole or in part,to a third
party acquiring an interest or estate in the Property or any portion thereof(such successor,a
"Permitted Transferee") and such successor, as of the effective date of the Transfer, shall
become the "Owner" under this Agreement; provided, however, that no such Transfer shall
violate the provisions of the Subdivision Map Act (Government Code Section 66410 et seq.)
or City's local subdivision ordinance and each Transfershail be made in strict compliance with
the conditions precedent set forth in Sections 18b and 18c City shall promptly consider any
Transfer request submitted by Owner.
b. City Approval of Transferee. Prior to the completion of any proposed Transfer, Owner (as
transferor)shall:
i. notify City, in writing, of such proposed Transfer and, in order to
permit the City to make an informed decision to approve or disapprove the
Transfer, provide to the City such financial statements and evidence of the
proposed Transferee's fitness, experience and ability (or that of its senior
managerial personnel) to comply with the obligations assumed; and
ii. deliver to City a written assignment and assumption, executed in
recordable form by the transferring and successor Owner and in a form
subject to the reasonable approval of the City Attorney of City (or
designee), pursuant to which the transferring Owner assigns to the
successor Owner and the successor Owner assumes from the transferring
Owner all of the rights and obligations of the transferring Owner with
respect to the Property, or interest in the Property, or portion thereof to
be so Transferred, including in the case of a partial Transfer the obligation
to perform such obligations that must be performed outside of the
Property so Transferred that are a condition precedent to the successor
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Owner's right to develop the portion of the Property so Transferred. Any
Permitted Transferee shall have all of the same rights, benefits, duties,
obligations, and liabilities of Owner under this Agreement with respect to
the portion of, or interest in, the Property sold, transferred, and assigned
to such Permitted Transferee; provided, however, that in the event of a
Transfer of less than all of the Property,or interest in the Property, no such
Permitted Transferee shall have the right to enter into an amendment of
this Agreement that jeopardizes or impairs the rights or increases the
obligations of the Owner with respect to the balance of the Property.
c. Ongoing Liability of Transferor. Notwithstanding any Transfer, the transferring
Owner shall continue to be jointly and severally liable to City, together with the
successor Owner,to perform all of the transferred obligations set forth in or arising
under this Agreement unless there is full satisfaction of all of the following
conditions, in which event the transferring Owner shall be automatically released
from any and all obligations with respect to the portion of the Property so
Transferred: (i) the transferring Owner no longer has a legal or equitable interest in
the portion of the Property so Transferred other than as a beneficiary under a deed
of trust; (ii)the transferring Owner is not then in Default under this Agreement and
no condition exists that with the passage of time or the giving of notice, or both,
would constitute a Default hereunder; (iii)the transferring Owner has provided City
with the notice and the fully executed written and recordable assignment and
assumption agreement required as set forth in Section 18b; and (iv) the successor
Owner either (A) provides City with substitute security equivalent to any security
previously provided by the transferring Owner to City to secure performance of the
successor Owner's obligations hereunder with respect to the Property, or interest
in the Property, or the portion of the Property so Transferred or (B) if the
transferred obligation in question is not a secured obligation, the successor Owner
either provides security reasonably satisfactory to City or otherwise demonstrates
to City's reasonable satisfaction that the successor Owner has the financial
resources or commitments available to perform the transferred obligation at the
time and in the manner required under this Agreement and the Development
Regulations for the Project. In the case of partial Transfers, a default under this
Agreement by Owner shall not be considered or acted upon by the City as a default
by the Permitted Transferee and shall not affect the Permitted Transferee's rights
or obligations hereunder. Likewise,a default by a Permitted Transferee shall not be
considered or acted upon by the City as a default by Owner and shall not affect
Owner's retained rights and obligations hereunder. Notwithstanding the foregoing,
if a breach of this Agreement involves an obligation jointly held by both Owner and
a Permitted Transferee,the City may avail itself of the remedies specified in Section
11 against both the Owner and Permitted Transferee.
18. Indemnification Obligations of Owner.
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a. Indemnity Arising from Acts or Omissions of Developer. Except to the extent caused
by the intentional misconduct or actively negligent acts, errors or omissions of City
or one or more of City's officials, employees, agents, attorneys and contractors
(collectively,the"City's Affiliated Parties"), Owner shall indemnify, defend,and hold
harmless City and City's Affiliated Parties from and against all actions, suits, claims,
liabilities, losses, damages, penalties, obligations and expenses (including but not
limited to attorneys' fees, expert witness fees and court costs) (collectively, a
"Claim")that may arise,directly or indirectly,from the acts,omissions,or operations
of Owner or Owner's officers, agents, contractors, subcontractors, agents, or
employees in the course of Development of the Project or any other activities of
Owner relating to the Property or pursuant to this Agreement. City shall have the
right to select and retain counsel to defend any Claim filed against City and/or any
of City's Affiliated Parties, and Owner shall pay the reasonable cost for defense of
any Claim. The indemnity provisions in this Section 19a shall be effective on the
date on which the Adopting Ordinance is approved by the City Council and shall
survive expiration of the Perm or earlier termination of this Agreement.
b. Third Party Litigation. In addition to its indemnity obligations set forth in Section 19b
Owner shall indemnify, defend, and hold harmless City and City's Affiliated Parties
from and against any Claim against City or City's Affiliated Parties seeking to attack,
set aside, void, or annul the approval of the Project, this Agreement, the Adopting
Ordinance, any actions taken pursuant to CEQA with respect thereto, and the
approval of any permit or entitlement granted pursuant to this Agreement. Said
indemnity obligation shall include, without limitation, payment of attorney's fees,
expert witness fees, and court costs. City shall promptly notify Owner of any such
Claim and City shall cooperate with Owner in the defense of such Claim. City shall
be entitled to retain separate counsel to represent City against the Claim and the
City's defense costs for its separate counsel shall be included in Owner's indemnity
obligation, provided that such counsel shall reasonably cooperate with Owner in an
effort to minimize the total litigation expenses incurred by Owner. City's separate
counsel's billing rates shall be identical to the rates City pays for its typical municipal
litigation rates for legal challenges of the variety being defended. Provided that
Owner has then paid in full all sums due to the City or its counsel incurred pursuant
to this Section and otherwise fully performed its indemnity obligations hereunder,
Owner shall be entitled to retain the same. The indemnity provisions in this
Section 19b shall be effective on the date on which the Adopting Ordinance is
approved by the City Council and shall survive expiration of the Term or earlier
termination of this Agreement.
C. Labor Laws. Owner shall carry out the construction of the Project, including all
improvements, in conformity with all applicable federal and state labor laws and
regulations and shall investigate the applicability of and, if and to the extent
applicable, pay prevailing wages meeting the requirements of such laws and
regulations; provided that Owner reserves the right to reasonably contest such laws
1737761.1
I
and regulations. Owner hereby agrees that, with respect to the Project, Owner shall
be fully responsible for determining whether the foregoing wage requirements are
applicable and agrees to indemnify, defend and hold the City and its elected and
appointed officials, employees, agents, attorneys, affiliates, representatives,
contractors, successors and assigns free and harmless from and against any and all
Claims arising from or related to compliance by Owner or Owner's officers, directors,
employees, agents, representatives, consultants and/or contractors (at every tier) in
construction of the Project with the prevailing wage requirements imposed by any
applicable federal and State labor law.
19. Sale or Lease of Individual Lots or Homes.The sale or lease of an individual lot or home to
an end user is not subject to the provisions of Section 19 above. Rather, upon such a sale,
(i) the acquiring or leasing party shall be deemed to have no obligations under this
Agreement and (ii) the individual lot shall no longer be subject to or burdened by this
Agreement.
20. Covenants Run With the Land. Subject to any express exceptions contained within this
Agreement, this Agreement shall run with the land and shall be binding upon and inure to
the benefit of the Parties' respective successors and assigns (including all Transferees).
21. Miscellaneous Provisions.
a. Notices. All notices which are allowed or required to be given under this Agreement
("Notices") shall be in writing and (i) be deemed given and received when personally
delivered or (ii) be deemed given when deposited in the U.S. mail, with postage
prepaid, to be sent by registered, certified, or overnight mail service and deemed
received on the second business day after such mailing.
The addresses for Notices are as follows and may be changed by delivery of a Notice
to these addresses:
If to City: City of Tustin
300 Centennial Way
Tustin, CA 92780
Attention: City Manager
If to Owner: Intracorp Socal-1, LLC
895 Dove Street, Suite 400
Newport Beach, California 92660
Attention:
with a copy to: Cox, Castle& Nicholson LLP
3121 Michelson Drive
Suite 200
1737761.1
Irvine, CA 92612-5678 r ,
Attention:Tim Paone
b. Severability. If any part of this Agreement is declared invalid for any reason, that
invalidity shall not affect the validity of the rest of this Agreement, provided that the
Owner's Vested Right and the Public Benefits are not materially diminished.
C. Entire Agreement; Conflicts with Applicable Rules. With respect to the subject matter
of this Agreement, this Agreement represents the entire agreement between the
Parties and supersedes all prior agreements and understandings, whether oral or
written, between the Parties.
d. Not Acting as Agents. In entering into and performing under this Agreement, each of
the Parties is acting as an independent entity and not as an agent of the other in any
respect. Nothing contained within this Agreement or in any document executed in
connection with this Agreement shall be construed as making the City and Owner joint
venturers, partners, or employer/employee.
e. Attorneys'Fees. In any judicial proceeding, arbitration, or mediation (collectively, an
"Action") between the Parties that seeks to enforce the provisions of this Agreement
or arises out of this Agreement, the prevailing Party shall recover all of its actual and
reasonable costs and expenses, regardless of whether they would be recoverable
under California Code of Civil Procedure Section 1033.5 or California Civil Code
Section 1717 in the absence of this Agreement. These costs and expenses include
court costs, expert witness fees, attorneys' fees, and costs of investigation and
preparation before initiation of the Action. The right to recover these costs and
expenses shall accrue upon initiation of the Action, regardless of whether the Action
is prosecuted to a final judgment or decision. The maximum hourly rate for attorneys
which are recoverable under this Section 22e is$200/hour.
f. Waiver. All waivers of performance must be in a writing signed by the Party granting
the waiver. There are no implied waivers. Failure by City or Owner to insist upon the
strict performance of any provision of this Agreement, irrespective of the length of
time for which such failure continues, shall not constitute a waiver of the right to
demand strict compliance with the same or any other provision of this Agreement in
the future. A written waiver affects only the specific matter waived and defines the
performance waived and the duration of the waiver.
g. Time of Essence. Time is of the essence of this Agreement, and all performances
required under this Agreement shall be completed within the time periods specified.
h. Estoppel Certificate. Within ten (10) business days following a written request by
either of the Parties, the other Party shall execute and deliver to the requesting Party
a statement (an "Estoppel Certificate") certifying that:
J
1737761.1
• Either (i) this Agreement is unmodified and in full force and effect or (ii) there
have been specified (date and nature) modifications to the Agreement, but it
remains in full force and effect as modified; and
• Either (i) there are no known current uncured Defaults under this Agreement or
(li) that the responding Party alleges that specified (date and nature) defaults or
Defaults exist.
The Estoppel Certificate also shall provide any other reasonable Information
requested. The failure to timely deliver this statement shall constitute a conclusive
presumption that this Agreement is in full force and effect without modification,
except as may be represented by the requesting Party, and that there are no uncured
defaults or Defaults in the performance of the requesting Party, except as may be
represented by the requesting Party. Owner shall pay to City all reasonable
administrative costs incurred by City in connection with the issuance of an Estoppel
Certificate prior to City's issuance of the Estoppel Certificate.
I. Choice of Low,Jurisdiction; Venue.This Agreement shall be interpreted under the laws
of the State of California and any question or controversy arising out of or in any way
related to this Agreement shall be governed by the law of the State of California. Any
legal proceeding commenced with respect to any question or controversy arising out
of or in any way related to this Agreement shall be filed and prosecuted in the Superior
Court for Orange County, California.
This Agreement has been signed by the Parties on the dates indicated below.
OWNER Intracorp Socal-1, LLC
By:
Name:
Its:
Date:
CITY City of Tustin, a municipal corporation of the State
of California
By:
Name:
Its:
Date:
1737761,1
r_1
Exhibit "A"
Description of Property
Real property in the City of Tustin, County of Orange, State of California, described as follows:
PARCEL A:
PARCELS 2 AND 3 IN THE CITY OF TUSTIN, COUNTY OF ORANGE, STATE OF CALIFORNIA, ON THE
MAP FILED IN BOOK 31, PAGE 14 OF PARCEL MAPS, RECORDS OF SAID COUNTY.
PARCEL B:
A NONEXCLUSIVE EASEMENT FOR INGRESS, EGRESS, PUBLIC UTILITIES AND DRAINAGE
PURPOSESOVER, UNDER, ALONG, ACROSS AND THROUGH THE NORTHERLY 25.00 FEET OF THE
SOUTHERLY 45.00 FEET OF PARCEL 1 ON THE MAP FILED IN BOOK 31, PAGE 14 OF PARCEL MAPS,
RECORDS OF SAID COUNTY.
APN:401-141-13 and 401-141-57
1737761.1
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