HomeMy WebLinkAboutORD 1566 (2025)Docusign Envelope ID: AE055DBB-5F56-4850-A156-16DE4C41 DA1 E
ORDINANCE NO. 1566
A ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA,
APPROVING DEVELOPMENT AGREEMENT (DA) 2024-0004 BETWEEN THE
CITY OF TUSTIN, CALIFORNIA, AND MERITAGE HOMES OF CALIFORNIA, INC.
TO ACCEPT THE VOLUNTARY PROVISION OF COMMUNITY PUBLIC
BENEFITS, BY INCLUDING FOUR AFFORDABLE HOUSING UNITS FOR VERY -
LOW INCOME HOUSEHOLDS, A PUBLIC AMENITY SPACE INCLUDING PUBLIC
ART AND GATEWAY SIGNAGE AT THE CORNER OF RED HILL AVENUE AND
SAN JUAN, ON -STREET PUBLIC PARKING BAYS ALONG RED HILL AVENUE, A
NEW TRAFFIC SIGNAL, AND ASSOCIATED OFF -SITE IMPROVEMENTS FOR A
NEW RESIDENTIAL CONDOMINIUM DEVELOPMENT PROJECT THAT WOULD
INCLUDE 73 RESIDENTIAL CONDOMINIUM UNITS, INCLUDING FOUR (4)
AFFORDABLE UNITS, ON APPROXIMATELY 3.39 ACRES AT 13751 AND 13841
RED HILL AVENUE
The City Council of the City of Tustin does ordain as follows:
The City Council finds and determines as follows:
A. That on September 7, 2021 the City of Tustin approved Development
Agreement (DA) 2021-001 with Space-IAG-1, LLC for the development of a
mixed -use development consisting of 137 residential apartment units and
7,000 square feet of commercial space (Red Hill Mixed Use Project). The Red
Hill Mixed Use Project (previously entitled project) included a DR-2021-002
DA 2021-001, SUB 2021-001/ Vesting TTM 17822, and Density Bonus Law
Concession and Waiver Requests.
That on March 6, 2025, the City received a formal request from Craig
Swanson of the Space-IAG-1, LLC to withdraw and voluntarily terminate the
Vesting TTM 17822, DA 2021-001 and Master Sign Plan. The request
provides that the voluntary termination is contingent upon obtaining all
required discretionary approvals for the newly proposed Compass at Red Hill
Project (proposed project).
That Section 9615 of the Tustin City Code provides for amendments or
cancellation in whole or in part to a development agreement upon adoption of
an ordinance and mutual consent of all parties to the development agreement.
B. That a proper application has been submitted to the City of Tustin (the City)
Community Development Department by Meritage Homes of California, Inc.
for a Residential Allocation Reservation (RAR) 2025-0001, Design Review
(DR) 2024-0014, Development Agreement (DA) 2024-0004, Subdivision
(SUB) 2024-0005/ Tentative Tract Map (TTM) No. 19361, and Density Bonus
Requests with the provisions of five percent of units identified as very -low
income housing with a request for density bonus of twenty (20) percent (61
Ordinance No. 1566
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base units, plus 12 density bonus units); one (1) concession to remove the
requirement for a commercial component (Flexible Format Retail and Mixed -
Use); and use of State Density Bonus Law parking standards; to construct a
new, residential condominium development project that would include
seventy-three (73) units in nine (9) buildings, including four (4) affordable
units, on approximately 3.39 acre site located at 13751 and 13841 Red Hill
Avenue of the Red Hill Avenue Specific Plan (RHASP). The project would also
include an enclosed, two -car garage and private open space for each dwelling
unit, a total of 18 guest surface parking spaces, common open space areas,
landscaping, and an approximately 3,200 square foot (SF) public amenity
space including public art and gateway signage at the corner of Red Hill
Avenue and San Juan Street. The project is located at 13751 and 13841 Red
Hill Avenue within the Red Hill Avenue Specific Plan (RHASP, SP-13).
C. That applications for DAs shall be processed in accordance with Section and
Article 9, Chapter 6, DAs, of the Tustin City Code (TCC).
D. That pursuant to the RHASP Section 6.7.1 (A)(10), the developer consents to
enter into a mutually agreeable Development Agreement requested by the
City to ensure the voluntary provision of community public benefits, by
including four (4) affordable housing units for very low-income households,
an approximately 3,200 square foot public amenity space including public
art and gateway signage, on -street public parking bays along Red Hill
Avenue, a new traffic signal on Red Hill Avenue at the project entry, and
associated off -site improvements.
E. That the proposed voluntary provision of community public benefits is in the
best interest of the public in that it increases the diversity in available housing
for existing and new residents in the City of Tustin.
F. That Section 65864 et seq. of the Government Code and Sections 9600 to
9619 of the TCC authorize the Tustin City Council to enter into a DA. In
accordance with TCC 9611, the City Council 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:
That the DA is consistent with the General Plan designation and
zoning district and the project will be consistent with the objectives,
policies, general land uses and programs specified in the General Plan
in that residential and non-residential uses are permitted uses within
the RHASP General Plan land use designation and the RHASP zoning
district.
2. That the project is compatible with the uses authorized in the district in
which the property is located.
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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 69 market rate units and four (4) 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 housing stock.
4. The project will not be detrimental to the health, safety and general
welfare. The project will comply with the RHASP and TCC, as
applicable pursuant to State Density Bonus Law, 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 four (4) Very Low Income units.
7. A Fiscal Impact Statement 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 currently vacant site.
G. That the provisions of DA 2024-0004 are consistent with RHASP and the
policies of the General Plan, as evidenced by the following findings:
1. That the project is adjacent to and surrounded by other residential and
commercial uses promoting pedestrian -oriented development and a
walkable community.
2. That residential uses are beneficial and compatible with adjacent uses
consistent with the overall vision, goals and intent of the RHASP.
3. That the project would provide a new traffic signal and pedestrian
crosswalk at the project entry, and Class II bike along the project
frontage on Red Hill Avenue and to implement the City's vision for more
bikeway and pedestrian access and connectivity in the Specific Plan
area.
4. That the project would implement the goals and objectives of the
RHASP by providing enhanced streetscape improvements and a
public amenity space with gateway signage, new crosswalks that
connect to the commercial center across the street, new sidewalks,
and internal pedestrian connectivity to common open space areas. The
project implements the following:
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a. Goal 1. Enhance streetscape, landscape, and public amenities
throughout the Specific Plan area.
b. Objective 1-3. Encourage a "sense of place" within the Specific
Plan area through quality site design, architectural design, and
public improvements.
c. Goal 2. Improve visual and functional connections and linkages
between Red Hill Avenue, surrounding residential
neighborhoods, adjacent public and institutional uses, and
Interstate 5.
d. Objective 2-1. Identify ways to improve and enhance linkages
and connections between new development in the Specific Plan
area and surrounding neighborhoods.
e. Goal 5. Improve pedestrian and bike accessibility and vehicular
circulation to minimize potential conflicts between different
users and improve mobility throughout the Specific Plan area
and connectivity with the greater community.
f. Objective 6-1. Promote the development and maintenance of
adequate parking facilities commensurate with parking
demand.
g. Goal 8. Ensure development within the Specific Plan area is
sensitive to and compatible with surrounding land uses.
H. That the proposed project is consistent with the General Plan Housing
Element Goal 1 in that the project would facilitate the provision of an
adequate supply of housing to meet the need for a variety of housing types
and the diverse socio-economic needs of all community residents and
supports State Housing Law as implemented by the Regional Housing
Needs Assessment (RHNA). The project provides for sixty-nine (69)
market -rate for sale units and four (4) affordable units.
In furtherance of Goal 1 of the Tustin General Plan Housing Element, the
applicant will provide four (4) Very Low Income units, on a site identified on
the City's Site Inventory.
That the applicant requested use of a Community Facilities District (CFD)
program through the California Municipal Finance Authority (CMFA) to
finance public facilities and development impact fees (DIF); and
That CMFA has established the Bond Opportunities for Land Development
Program (the "BOLD Program") to allow the financing of certain public
facilities and/or certain DIF levied by local agencies in the State to finance
public facilities, through the levy of special taxes under the Mello -Roos
Community Facilities Act of 1982, as amended (the "Act"); and
That the City of Tustin is currently a member of CMFA in good standing,
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such that only a new City Council Resolution is necessary to authorize
participation in BOLD program.
That on October 16, 2018, the Tustin City Council certified the Final
Program Environmental Impact Report (EIR) for the Red Hill Avenue
Specific Plan (RHASP) (SCH # 2017041031).
K. That the City has prepared an Addendum to the Certified EIR for the Project
pursuant to CEQA Guidelines Section 15164 because none of the
conditions identified in Section 15162 that would trigger the need to prepare
a subsequent or supplemental EIR have occurred and because the Project
is a later activity within the scope of the RHASP Program EIR pursuant to
CEQA Guidelines Section 15168. The project would be required to comply
with applicable mitigation measures identified in the RHASP EIR/MMRP
and incorporated by reference in the Addendum.
L. That a public hearing was duly called, noticed, and held for RAR 2025-0001,
DR 2024-0014, DA 2024-0004, SUB 2024-0005/TTM No. 19361, Density
Bonus request and concession on May 13, 2025, by the Planning
Commission where the Planning Commission motioned to approve the
recommendation to the City Council.
M. That a public hearing was duly called, noticed, and held on said application
on June 3, 2025, by the City Council.
The City Council hereby adopts Ordinance No. 1566 approving DA 2024-0004, to
accept the voluntary provision of community public benefits, by including four (4)
affordable housing units for very low-income households, an approximately 3,200
square foot public amenity space including public art and gateway signage at the
corner of Red Hill Avenue and San Juan Street, on -street public parking bays along
Red Hill Avenue, a new traffic signal on Red Hill Avenue at the project entry, and
associated off -site improvements, relative to the construction of a new, residential
condominium development at 13751 and 13841 Red Hill Avenue, as identified in
Exhibit A attached hereto.
PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular
meeting on the 17th day of June 2025.
FSigned by:
6o6, mt sw,
J N8L''IrN,
Mayor Pro Tern
Ordinance No. 1566
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DS
Signed by:
F'
EMCADWYASTJDA,
City Clerk
APPROVED AS TO FORM:
DOCUS'gned by:
City Attorney
/msd/
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF TUSTIN
I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is 5; that the above and foregoing Ordinance No. 1566 was duly and
regularly introduced at a regular meeting of the Tustin City Council, held on the 3rd day
of June 2025, and was given its second reading, passed, and adopted at a regular
meeting of the City Council held on the 17th day of June 2025 by the following vote:
COUNCILMEMBER AYES: Nielsen, Gallagher, Schnell, Fink (4)
COUNCILMEMBER NOES: (0)
COUNCILMEMBER ABSTAINED: (0)
COUNCILMEMBER ABSENT: Lumbard (1)
COUNCILMEMBER RECUSED: (0)
DS
—Signed by:
fV'i(a gA'SVJA
ERICA✓ . YASUDA,
City Clerk
Exhibit A: DA 2024-0004
Ordinance No. 1566
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Clerk
(Space Above This Line Is for Recorder's Use Only)
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
(2024-0004)
between
CITY OF TUSTIN
and
MERITAGE HOMES OF CALIFORNIA, INC.
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TABLE OF CONTENTS
Page
1.
Definitions........................................................................................................................2
2.
General Provisions.........................................................................................................6
2.1
Binding Effect of Agreement; Authorized Use of Property ..........................6
2.2
Developer Representations and Warranties Regarding Ownership of
the Property and Related Matters Pertaining to this Agreement................6
2.3
Term.....................................................................................................................6
3.
Development of Project.................................................................................................7
3.1
Development Regulations for the Project Approvals....................................7
3.2
Development Regulations; Developer's Vested Rights and City's
Reservation of Discretion With Respect to Subsequent Development
Approvals.............................................................................................................
8
3.3
Other Governmental or Quasi -Governmental Permits.................................9
3.4
No Conflicting Enactments...............................................................................9
3.5
Reservations of Authority................................................................................10
3.6
Applicable Approvals.......................................................................................12
3.7
City Acceptance of Developer Improvements and Obligations ................12
3.8
CFD provisions
4.
Public
Benefits..............................................................................................................13
4.1
Provision of Public Benefits............................................................................13
4.2
Effect of Public Benefits Default....................................................................14
5.
Enforcement
..................................................................................................................14
6.
Annual Review of Developer's Compliance With Agreement...............................14
6.1
General..............................................................................................................14
6.2
Developer Obligation to Demonstrate Good Faith Compliance................15
6.3
Procedure..........................................................................................................15
6.4
Annual Review a Non -Exclusive Means for Determining and
Requiring Cure of Developer's Default.........................................................15
7.
Events of Default..........................................................................................................15
7.1
General Provisions...........................................................................................15
7.2
City's Remedies................................................................................................16
7.3
Developer's Remedies....................................................................................16
7.4
Waiver................................................................................................................17
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TABLE OF CONTENTS
Page
7.5
Additional City Remedy for Developer's Default.........................................17
7.6
No Personal Liability of City or Developer Officials, Employees, or
Agents................................................................................................................17
7.7
Recovery of Legal Expenses by Prevailing Party in Any Action...............17
8.
Force Majeure...............................................................................................................17
9.
Cooperation
in the Event of Legal Challenge..........................................................18
9.1
Indemnity Arising From Acts or Omissions of Developer ..........................18
9.2
Third Party Litigation........................................................................................18
9.3
Environmental Indemnity................................................................................20
9.4
Labor Laws........................................................................................................20
10.
Assignment
....................................................................................................................20
10.1
Right to Transfers.............................................................................................20
10.2
Transfers Permitted Without City Consent...................................................21
10.3
City Consideration of Requested Assignment.............................................21
10.4
City Approval of Transferee............................................................................21
10.5
Assignment and Assumption Agreement.....................................................21
10.6
Liability of Transferor and Transferee...........................................................22
11.
Mortgagee Rights.........................................................................................................22
11.1
Encumbrances on Property............................................................................22
11.2
Mortgagee Protection......................................................................................22
11.3
Mortgagee Not Obligated................................................................................22
11.4
Notice of Default to Mortgagee; Right of Mortgagee to Cure....................23
12.
Miscellaneous Terms...................................................................................................23
12.1
Notices...............................................................................................................23
12.2
Project as Private Undertaking......................................................................24
12.3
Cooperation.......................................................................................................24
12.4
Estoppel Certificates........................................................................................24
12.5
Rules of Construction......................................................................................25
12.6
Time Is of the Essence....................................................................................25
12.7
Waiver................................................................................................................25
12.8
Counterparts.....................................................................................................25
12.9
Entire Agreement.............................................................................................25
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TABLE OF CONTENTS
Page
12.10
Severability........................................................................................................25
12.11
Developer Deposit............................................................................................25
12.12
Construction......................................................................................................26
12.13
Successors and Assigns; Constructive Notice and Acceptance ..............26
12.14
No Third Party Beneficiaries...........................................................................27
12.15
Applicable Law and Venue.............................................................................27
12.16
Section Headings.............................................................................................27
12.17
Incorporation of Recitals and Exhibits..........................................................27
12.18
Recordation.......................................................................................................27
12.19
Administrative Amendments...........................................................................28
12.20
Authority to Execute.........................................................................................28
EXHIBITS
Exhibit A
Legal Description of Property
Exhibit B
Site Plan
Exhibit C
On Street Parking/Off-site Improvement Conceptual Plan
Exhibit D
Public Amenity Space Conceptual Plan
Exhibit E
Assignment and Assumption Agreement
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DEVELOPMENT AGREEMENT
(2024-0004)
(Pursuant to California Government Code sections 65864-65869.5)
This DEVELOPMENT AGREEMENT (the "Agreement") is dated for reference purposes
as of the —th day of , 2025, and is being entered into by and between the CITY OF
TUSTIN, a municipal corporation ("City"), and MERITAGE HOMES OF CALIFORNIA, INC., a
California corporation ("Developer"). City and Developer are sometimes collectively referred to in
this Agreement as the "Parties" and individually as a "Party." All terms defined in the Agreement
shall have the same meaning when used herein.
RECITALS
A. Developer has an equitable interest in real property constituting 3.389 aces located
in the City of Tustin, County of Orange, State of California, located at 13751 and 13841 Red Hill
Avenue in the Red Hill Avenue Specific Plan (RHASP) (APN # 500-141-09 & 500-141-10) as
legally described on Exhibit A and depicted on Exhibit B attached to this Agreement (the
"Property"). The Property is owned by Space-IAG-I, LLC, a Delaware limited liability company
("Space"), and Developer is in escrow to acquire the Property from Space.
B. Developer is proposing to develop the Property as a residential townhome
development with 73 residential units (as further defined in Section 1 below, the "Project").
C. 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.
D. On December 3, 1984, the City Council adopted Ordinance No. 923, codified at
Section 9600 et seq. of the Tustin Code Regarding Development Agreements (the "Development
Agreement Ordinance"). This Agreement is consistent with the Development Agreement
Ordinance.
E. Developer shall provide public benefits as provided in this Agreement as
consideration for this Agreement.
F. The following land use entitlements and agreements for the Project are being
adopted and approved by the City Council concurrently with its approval of this Agreement
("Applicable Approvals"):
(1) Final Approval of Residential Allocation Reservation (RAR) 2025-0001, (61
base residential units).
(2) Design Review (DR) 2024-0014.
(3) Development Agreement (DA) 2024-0004.
(4) Subdivision (SUB) 2024-0005/Tentative Tract Map (TTM) No.19361.
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(5) Density Bonus request with five (5) percent of units identified as very low-
income housing; one (1) concession to remove the requirement for a
commercial component (Flexible Format Retail and Mixed -Use); Twenty
percent (20%) density bonus (12 units);
(6) Senate Bill 330 Preliminary Application (PR) 2024-0002.
G. City has determined that this Agreement and the Project are consistent with the
City's General Plan and that the Development Agreement complies with the findings established
by the Development Agreement Ordinance, in that the Agreement:
1. Is consistent with the objectives, policies, general land uses and
programs specified in the General Plan.
2. Is compatible with the uses authorized in the district in which the real
property is located.
3. Is in conformity with the public necessity, public convenience, general
welfare, and good land use practices.
4. Will not be detrimental to the health, safety, and general welfare.
5. Will not adversely affect the orderly development of Property.
6. Will have a positive fiscal impact on the City.
H. On , 2025, City's Planning Commission held a public hearing on this
Agreement, made findings and determinations with respect to this Agreement, and recommended
to the City Council that the City Council approve this Agreement.
I. On , 2025, the City Council held a public hearing on this Agreement and
considered the Planning Commission's recommendations and the testimony and information
submitted by City staff, Developer, and members of the public. On , 2025, consistent
with applicable provisions of the Development Agreement Statute and Development Agreement
Ordinance, the City Council adopted its Ordinance No. (the "Adopting Ordinance"), finding
this Agreement to be consistent with the City of Tustin General Plan and approving this Agreement
and authorizing its execution.
AGREEMENT
NOW, THEREFORE, City and Developer agree as follows:
Definitions.
In addition to any terms defined elsewhere in this Agreement, the following terms when
used in this Agreement shall have the meanings set forth below:
"Action" shall have the meaning ascribed in Section 7.7 of this Agreement.
"Affordable Units" means residential units affordable to very low income households to be
sold by Owner pursuant to Section 4.1.7 below.
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"Adopting Ordinance" shall have the meaning ascribed in Recital I of this Agreement.
"Agreement" shall mean this Development Agreement.
"Agreement Date" shall mean the date this Agreement is recorded in the Office of the
Orange County Recorder.
"Applicable Approvals" shall have the meaning ascribed in Recital F of this Agreement.
"CEQK shall mean the California Environmental Quality Act (California Public Resources
Code sections 21000-21177) and the implementing regulations promulgated thereunder by the
Secretary for Resources (California Code of Regulations, Title 14, Section 15000 et seq.), as the
same may be amended from time to time.
"Cam" shall mean the City of Tustin, a California city, and any successor or assignee of the
rights and obligations of the City of Tustin hereunder.
"City Council" shall mean the governing body of the City of Tustin.
"City's Affiliated Parties" shall have the meaning ascribed in Section 9.1 of this Agreement.
"Claim" shall have the meaning ascribed in Section 9.1 of this Agreement.
"Cure Period" shall have the meaning ascribed in Section 7.1 of this Agreement.
"Damages" shall have the meaning ascribed in Section 7.3 of this Agreement.
"Default" shall have the meaning ascribed to that term in Section 7.1 of this Agreement.
"Develop" or "Development" shall mean to improve or the improvement of the Property for
the purpose of completing the structures, improvements, and facilities comprising the Project,
including but not limited to: grading; the construction of infrastructure and public facilities related
to the Project, whether located within or outside the Property; the construction of all of the private
improvements and facilities comprising the Project; the preservation or restoration, as required of
natural and man-made or altered open space areas; and the installation of landscaping. The
terms "Develop" and "Development," as used herein, do not include the maintenance, repair,
reconstruction, replacement, or redevelopment of any structure, improvement, or facility after the
initial construction and completion thereof.
"Developer" shall mean Meritage Homes of California, Inc., and any successor or
assignee to all or any portion of the right, title, and interest of the Project.
"Development Agreement Ordinance" shall mean Chapter 6, Part 1, Section 9600 et seq.
of the Tustin City Code.
"Development Agreement Statute" shall mean California Government Code sections
65864-65869.5, inclusive, as the same may be amended from time to time.
"Development Exactions" shall mean the requirement of City in connection with or
pursuant to any ordinance, resolution, rule, or official policy for the dedication of land, the
construction or installation of any public improvement or facility, or the payment of any fee or
charge in order to lessen, offset, mitigate, or compensate for the impacts of development of the
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Project on the environment or other public interests, except as specifically excluded from such
definition pursuant to Section 3.5.4.
"Development Limitation" shall have the meaning ascribed in Section 2.3.3.
"Development Plan" shall mean all of the land use entitlements, approvals and permits
approved by the City for the Project on or before the Agreement Date, as the same may be
amended from time to time consistent with this Agreement. Such land use entitlements, approvals
and permits include, without limitation, the Development Regulations, to the extent provided under
this Agreement, the Applicable Approvals and all conditions of approval and all mitigation
measures approved for the Project on or before the Agreement Date.
"Development Regulations" shall mean the following regulations as they are in effect as
of the Effective Date and to the extent they govern or regulate the development of the Property:
the General Plan; the Development Plan; and, to the extent not expressly superseded by the
Development Plan or this Agreement, all other land use and subdivision regulations governing
the permitted uses, density and intensity of use, design, improvement, and construction standards
and specifications, procedures for obtaining required City permits and approvals for development,
and similar matters that may apply to development of the Project on the Property during the Term
of this Agreement that are set forth in the Red Hill Avenue Specific Plan and the Tustin City Code
dealing with buildings and construction, subdivisions and inclusionary housing, and planning,
zoning and density bonus. Notwithstanding the foregoing, the term "Development Regulations,"
as used herein, does not include any City ordinance, resolution, code, rule, regulation or official
policy governing any of the following: (i) the conduct of businesses, professions, and occupations;
(ii) taxes and assessments; (iii) the control and abatement of nuisances; (iv) the granting of
encroachment permits and the conveyance of rights and interests which provide for the use of or
the entry upon public property; or (v) the exercise of the power of eminent domain.
"Effective Date" shall mean the later of the following two dates: (i) thirty (30) days after
the date the Adopting Ordinance is approved by the City Council; or (ii) the date Developer
acquires fee titled ownership of the Property. Promptly after the Effective Date occurs, the Parties
agree to cooperate in causing an appropriate instrument to be executed and recorded against the
Property memorializing the Effective Date.
"Environmental Laws" means all federal, state, regional, county, municipal, and local laws,
statutes, ordinances, rules, and regulations which are in effect as of the Effective Date, and all
federal, state, regional, county, municipal, and local laws, statutes, rules, ordinances, rules, and
regulations which may hereafter be enacted and which apply to the Property or any part thereof,
pertaining to the use, generation, storage, disposal, release, treatment, or removal of any
Hazardous Substances, including without limitation the following: the Comprehensive
Environmental Response Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601,
et sec., as amended ("CERCLA"); the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901, et sec., as amended
("RCRA"); the Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.
Sections 11001 et seg., as amended; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seg., as amended; the Clean Air Act, 42 U.S.C. Sections 7401 et seg., as
amended; the Clean Water Act, 33 U.S.C. Section 1251, et seq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq., as amended; the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 et seg., as amended; the Federal Safe
Drinking Water Act, 42 U.S.C. Sections 300f et seg., as amended; the Federal Radon and Indoor
Air Quality Research Act, 42 U.S.C. Sections 7401 et seg., as amended; the Occupational Safety
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and Health Act, 29 U.S.C. Sections 651 et seq., as amended; and California Health and Safety
Code Section 25100, et seg.
"General Plan" shall mean City's General Plan in effect on the Effective Date.
"Hazardous Substances" means any toxic substance or waste, pollutant, hazardous
substance or waste, contaminant, special waste, industrial substance or waste, petroleum or
petroleum -derived substance or waste, or any toxic or hazardous constituent or additive to or
breakdown component from any such substance or waste, including without limitation any
substance, waste, or material regulated under or defined as "hazardous" or "toxic" under any
Environmental Law.
"Mortgage" shall mean a mortgage, deed of trust, sale and leaseback arrangement, or
any other form of conveyance in which the Property, or a part or interest in the Property, is pledged
as security and contracted for in good faith and for fair value.
"Mortgagee" shall mean the holder of a beneficial interest under a Mortgage or any
successor or assignee of the Mortgagee.
"Notice of Default" shall have the meaning ascribed in Section 7.1 of this Agreement.
"Party" or "Parties" shall mean either City or Developer or both, as determined by the
context.
"Project" shall mean all on -site and off -site improvements that Developer is authorized
and/or required to construct with respect to the Property, as provided in this Agreement, the
Applicable Approvals, and the Development Regulations, as the same may be modified or
amended from time to time consistent with this Agreement and applicable law in order to carry
out the Development Plan.
"Property" shall have the meaning ascribed in Recital A of this Agreement.
"Public Benefits" means those public benefits to be provided by the Developer and the
Project as described in Section 4 of this Agreement that comprise enforceable additional
consideration to City for this Agreement.
"Subsequent Development Approvals" shall mean all discretionary development and
building approvals that Developer is required to obtain to Develop the Project on and with respect
to the Property after the Effective Date consistent with the Development Regulations and this
Agreement, with the understanding that except as expressly set forth herein City shall not have
the right subsequent to the Agreement Date and during the Term of this Agreement to adopt or
impose requirements for any such Subsequent Development Approvals that do not exist as of the
Agreement Date.
"Term" shall have the meaning ascribed in Section 2.3.1 of this Agreement.
"Termination Date" shall have the meaning ascribed in Section 2.3.2 of this Agreement.
"Transfer" shall have the meaning ascribed in Section 10.1 of this Agreement.
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2. General Provisions.
2.1 Binding Effect of Agreement; Authorized Use of Property.
The Property is hereby made subject to this Agreement. Development of the Property is
hereby authorized and shall be carried out in accordance with the terms of this Agreement and
the Development Regulations and the Applicable Approvals, which establish the permitted uses
of the Property, the density and intensity of use, the maximum height and size of proposed
buildings on the Property and provisions for reservation and dedication of land for public
purposes. For avoidance of doubt, the permitted uses on the Property are residential and ancillary
residential uses in connection with such uses as described by the Applicable Approvals.
2.2 Developer Representations and Warranties Regarding Ownership of the Property
and Related Matters Pertaining to this Agreement.
Developer and each person executing this Agreement on behalf of Developer hereby
represents and warrants to City as follows: (i) that Developer has an equitable interest to acquire
fee simple title to the Property as of the Effective Date; (ii) if Developer is a legal entity that such
entity is duly formed and existing and is authorized to do business in the State of California; (iii) if
Developer is a natural person that such natural person has the legal right and capacity to execute
this Agreement; (iv) that all actions required to be taken by all persons and entities comprising
Developer to enter into this Agreement have been taken and that Developer has the legal authority
to enter into this Agreement; (v) that Developer's entering into and performing its obligations set
forth in this Agreement will not result in a violation of any obligation, contractual or otherwise, that
Developer or any person or entity comprising Developer has to any third party; (vi) that neither
Developer is the subject of any voluntary or involuntary bankruptcy or insolvency petition; and (vii)
that Developer has no actual knowledge of any pending or threatened claims of any person or
entity affecting the validity of any of the representations and warranties set forth in clauses (i)-(vi),
inclusive, or affecting Developer's authority or ability to enter into or perform any of its obligations
set forth in this Agreement.
2.3 Term.
2.3.1 The term of this Agreement (the "Term") shall commence on the Effective
Date and shall extend until the Termination Date (as defined below). Following the Termination
Date, this Agreement shall be deemed terminated and of no further force and effect; provided
however, that said termination of the Agreement shall not affect any right or duty emanating from
the Applicable Approvals or any Subsequent Development Approvals.
2.3.2 The "Termination Date" shall be the earliest of the following dates: (i) the
fifth (5th) anniversary of the Effective Date, which may be extended pursuant to Sections 2.3.3 or
2.3.4; (ii) the date of termination of this Agreement by the City in accordance with Article7 of this
Agreement and/or Sections 65865.1 and/or 65868 of the Development Agreement Statute; (iii) the
date upon which Developer completes the Project and the Public Benefits in accordance with the
terms of this Agreement, the Applicable Approvals and the Development Regulations, including
Developer's complete satisfaction, performance, and payment, as applicable, of all Development
Exactions, the issuance of all required final occupancy permits for residential units on the
Property, and acceptance by City or applicable public agency(ies) or private entity(ies) of all
required public improvements; (iv) the date of entry of a final court judgment not subject to further
appeal setting aside, voiding or annulling the adoption of the Adopting Ordinance; or (v) the date
of adoption of a referendum measure overriding or repealing the Adopting Ordinance that is not
subject to further appeal.
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2.3.3 Notwithstanding the Parties' expectation that there will be no limit or
moratorium upon the Project's development or the issuance of building or other development
related permits ("Development Limitation") during the Term, the Parties understand and agree
that various third parties may take action causing a de facto Development Limitation.
Consequently, the Term and the obligations imposed pursuant to this Agreement and the
expiration date of all Applicable Approvals shall be extended day for day for any delay arising
from or related to a timely filed lawsuit challenging the validity or legality of the Adopting
Ordinance, this Agreement, and/or any of the Applicable Approvals, until the date on which said
challenge is finally resolved in favor of the validity or legality of the Adopting Ordinance, this
Agreement, and/or the Applicable Approvals, whether such finality is achieved by a final non -
appealable judgment, voluntary or involuntary dismissal (and the passage of any time required to
appeal an involuntary dismissal), or binding written settlement agreement. Each Party shall
promptly notify the other Party to this Agreement upon learning of any Development Limitation.
2.3.4 Unless otherwise agreed by the City Council in its sole discretion, the
maximum Term of this Agreement shall be five (5) years from the Effective Date, subject to (i) any
tolling(s) of the Term pursuant to Section 2.3.3 of the Agreement; or (ii) the issuance of one five
(5) year mandatory automatic extension of the Term if Developer has pulled the twenty fifth (251n)
building permit for the Project prior to the expiration of the Term and Developer is not in breach
under the terms of the Agreement.
2.3.5 Notwithstanding any provision to the contrary herein, in the event that, for
any reason whatsoever, Developer fails to acquire fee simple title to the Property ("Fee Title")
within 210 days following the date the Adopting Ordinance is approved ("Fee Title Deadline"),
Developer or City may elect, in each Party's sole and absolute discretion, and upon written notice
to the other Party within sixty (60) days following the Fee Title Deadline, to terminate this
Agreement and the Applicable Approvals. Effective upon such termination by either Party, this
Agreement and the Applicable Approvals shall be of no further force or effect. If such termination
occurs, the parties agree that all "applicable approvals" which were obtained by Space in
connection with its project on the Property, shall automatically be reinstated. Notwithstanding the
foregoing, any such reinstatement shall not extend the original term of the Applicable Approvals.
3. Development of Project.
3.1 Development Regulations for the Project Approvals.
3.1.1 Life of the Project Approvals. Developer shall have the right but not the
obligation to develop the Project under the terms of the Project Approvals, including this
Agreement. Following approval of RAR 2025-0001 and the Applicable Approvals all construction
related permits for the Project, including demolition, grading, and building permits, must be
obtained during the life of the Tentative Tract Map ("TTM"). Following building permit issuance,
construction on the first building must commence within 180 days, except if this time period is
automatically extended pursuant to Article 8. Other time extensions may be considered at the
discretion of the City Community Development Director ("Director"), not to be unreasonably
withheld, conditioned, or delayed. Developer's precise grading permit application shall comply
with all requirements specified in City Code section 8909. The allocation of the 61 base residential
units to the Project shall expire and the units redeposited into the Residential Allocation Bank for
use by other projects if the first construction -related permit is not obtained within the required time
limits or approved for extension, or the permit is not utilized, as evidenced by the commencement
of construction, including grading, within the time allowed pursuant to this Section 3.1.1.
Notwithstanding the foregoing, if the City alters the RAR process to provide that an RAR recipient
has more time to use an RAR than provided in this Agreement, Developer shall be provided an
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equivalent extension of time to use its RAR. If the City rescinds the code provision of RAR
requirement, Developer's RAR shall not expire.
3.1.2 Purpose. Developer has expended and will continue to expend substantial
amounts of time and money planning and preparing for Development of the Project. Developer
represents and City acknowledges that Developer would not make these expenditures without
this Agreement, and that Developer is and will be making these expenditures in reasonable
reliance upon its vested rights to Develop the Project as set forth in this Agreement. For this
reason, City agrees to process all Subsequent Development Approvals expeditiously, and within
the time provided by Government Code section 65913.3. City shall prioritize the processing of all
Subsequent Development Approvals to ensure that the purpose of this Agreement is not
frustrated.
3.1.3 Amendments. Developer may apply to City for permits or approvals
necessary to modify or amend the Development specified in the Project Approvals, provided that
the request does not propose an increase in the maximum density, intensity, height, or size of
proposed structures, or a change in use that generates more peak hour traffic or more daily traffic
and, in addition, Developer may apply to City for approval of minor amendments to existing
tentative tract maps, tentative parcel maps, or associated conditions of approval, consistent with
the City Code. This Agreement does not constitute a promise or commitment by City to approve
any such permit or approval, or to approve the same with or without any particular requirements
or conditions, and City's discretion with respect to such matters shall be the same as it would be
in the absence of this Agreement.
3.1.4 Fees. Consistent with Government Code section 66007, Development
Impact Fees shall be paid on the date of the final inspection, or the date the certificate of
occupancy is issued, whichever occurs first. Development Impact Fees shall be paid on a pro rata
basis for each dwelling when it receives its final inspection or certificate of occupancy, whichever
occurs first. The term "Development Impact Fees" means those fees imposed or levied by the
City with respect to development and/or its impacts pursuant to applicable governmental
requirements, including Government Code Sections 66000 et seq., including impact fees, fees or
charges for the construction of public improvements or facilities, park and recreation fees, linkage
fees, exactions, assessments, fair share charges, or other similar impact fees or charges imposed
on or in connection with new development. Development Impact Fees do not include (1) City
Processing Fees, as defined in Section 3.4.2, or (2) regional pass -through fees imposed by other
agencies and charged by the City. Notwithstanding the foregoing, due to Developer's submission
of a preliminary application, which was deemed complete, pursuant to Government Code sections
65895.5 and 65941.1, the Development Impact Fees applicable to the Project are those
Development Impact Fees, in both fee category and rate, which were in place the date Developer
submitted its preliminary application, and these Development Impact Fees shall remain in effect
throughout the Term.
3.2 Development Regulations; Developer's Vested Rights and City's Reservation of
Discretion With Respect to Subsequent Development Approvals.
3.2.1 Other than as expressly set forth in this Agreement, during the Term of this
Agreement, (i) Developer shall have the vested right to Develop the Project on and with respect
to the Property in accordance with the terms of the Development Regulations, the Applicable
Approvals and this Agreement and (ii) City shall not prohibit or prevent development of the
Property on grounds inconsistent with the Development Regulations or this Agreement.
Notwithstanding the foregoing, nothing herein is intended to limit or restrict City's discretion with
respect to (i) review and approval requirements contained in the Development Regulations,
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(ii) exercise of any discretionary authority City retains under the Development Regulations, (iii) the
approval, conditional approval, or denial of any Subsequent Development Approvals that are
required for Development of the Project as of the Effective Date, or (iv) any environmental
approvals that may be required under CEQA or any other federal or state law or regulation in
conjunction with any Subsequent Development Approvals that may be required for the Project,
and in this regard, as to future actions referred to in clauses (i)-(iv) of this sentence, City reserves
its full discretion to the same extent City would have such discretion in the absence of this
Agreement. In addition, it is understood and agreed that nothing in this Agreement is intended to
vest Developer's rights with respect to any laws, regulations, rules, or official policies of any other
governmental agency or public utility company with jurisdiction over the Property or the Project;
or any applicable federal or state laws, regulations, rules, or official policies that may be
inconsistent with this Agreement and that override or supersede the provisions set forth in this
Agreement, and regardless of whether such overriding or superseding laws, regulations, rules, or
official policies are adopted or applied to the Property or the Project prior or subsequent to the
date on which the City Council approves the Adopting Ordinance. Concerning any denials of any
Subsequent Development Approvals, the City shall base such denials solely upon an application
of the Development Regulations, the Applicable Approvals or this Agreement.
3.2.2 Developer has expended and will continue to expend substantial amounts
of time and money planning and preparing for Development of the Project. Developer represents
and City acknowledges that Developer would not make these expenditures without this
Agreement, and that Developer is and will be making these expenditures in reasonable reliance
upon its vested rights to Develop the Project as set forth in this Agreement.
3.2.3 Developer may apply to City for permits or approvals necessary to modify
or amend the Development specified in the Development Regulations, provided that the request
does not propose an increase in the maximum density, intensity, height, or size of proposed
structures, or a change in use that generates more peak hour traffic or more daily traffic and, in
addition, Developer may apply to City for approval of minor amendments to existing tentative tract
maps, tentative parcel maps, or associated conditions of approval, consistent with the Tustin City
Code. This Agreement does not constitute a promise or commitment by City to approve any such
permit or approval, or to approve the same with or without any particular requirements or
conditions, and City's discretion with respect to such matters shall be the same as it would be in
the absence of this Agreement.
3.3 Other Governmental or Quasi -Governmental Permits.
Developer shall apply for such other permits and approvals as may be required by non -
City governmental or quasi -governmental agencies having regulatory jurisdiction over the Project
(such as public utilities or special districts, or other federal or state resource agencies) to the
extent required for the development of, or provision of, services and facilities to the Project as set
forth in the Development Plan. The City shall cooperate with and assist Developer in obtaining
such permits and approvals, and, where necessary in making application for such approvals or
permits. Developer shall be solely responsible for all costs and shall be responsible for the
processing of all such permits.
3.4 No Conflicting Enactments.
Except to the extent City reserves its discretion as expressly set forth in this Agreement
(including, without limitation, as set forth in Section 3.5 of this Agreement), during the Term of this
Agreement, the City shall not apply to the Project or the Property any ordinance, policy, rule,
regulation, or other measure relating to Development of the Project that is enacted or becomes
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effective after the Agreement Date to the extent it conflicts with this Agreement. In Pardee
Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, the California Supreme Court held
that a construction company was not exempt from a city's growth control ordinance even though
the city and construction company had entered into a consent judgment (tantamount to a contract
under California law) establishing the company's vested rights to develop its property consistent
with the zoning. The California Supreme Court reached this result because the consent judgment
failed to address the timing of development. The Parties intend to avoid the result of the Pardee
case by acknowledging and providing in this Agreement that Developer shall have the vested
right to Develop the Project on and with respect to the Property at the rate, timing, and sequencing
that Developer deems appropriate within the exercise of Developer's sole subjective business
judgment, provided that such Development occurs in accordance with this Agreement, the
Applicable Approvals and the Development Regulations, notwithstanding adoption by City's
electorate of an initiative to the contrary after the Agreement Date. No City moratorium or other
similar limitation relating to the rate, timing, or sequencing of the Development of all or any part
of the Project and whether enacted by initiative or another method, affecting subdivision maps,
building permits, occupancy certificates, or other entitlement to use, shall apply to the Project to
the extent such moratorium or other similar limitation restricts Developer's vested rights in this
Agreement or otherwise conflicts with the express provisions of this Agreement.
3.5 Reservations of Authority.
Notwithstanding any other provision set forth in this Agreement to the contrary, the laws,
rules, regulations, and official policies set forth in this Section 3.5 shall apply to and govern the
Development of the Project on and with respect to the Property.
3.5.1 Procedural Regulations. Procedural regulations relating to hearing bodies,
petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals,
and any other matter of procedure shall apply to the Property, provided that such procedural
regulations are adopted and applied City-wide or to all other properties similarly situated in City.
3.5.2 Processing and Permit Fees. City shall have the right to charge and
Developer shall be required to pay (a) all applicable processing and permit fees to cover the
reasonable cost to City of (i) processing and reviewing applications and plans for any Applicable
Approvals, Subsequent Development Approvals, building permits, excavation and grading
permits, encroachment permits, plan checking, site review and approval, administrative review,
and similar fees imposed to recover City's costs associated with processing, reviewing, and
inspecting Project applications, plans and specifications, (ii) inspecting the work constructed or
installed by or on behalf of Developer, and (iii) monitoring compliance with any requirements
applicable to Development of the Project, in each case at the rates in effect at the time fees are
due and (b) all costs incurred by the City performance of necessary studies and reports in
connection with the foregoing and its obligations under this Agreement (collectively, the "City
Processing Fees").
3.5.3 Consistent Future City Regulations. City ordinances, resolutions,
regulations, and official policies governing Development which do not conflict with the
Development Regulations, or with respect to such regulations that do conflict, where Developer
has consented in writing to the regulations, shall apply to the Property.
3.5.4 Development Exactions Applicable to Property. During the Term of this
Agreement, unless otherwise prohibited or limited under state law, Developer shall be required to
satisfy and pay all Development Exactions at the time performance or payment is due to the same
extent and in the same amount(s) that would apply to Developer and the Project in the absence
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of this Agreement; provided, however, that to the extent the scope and extent of a particular
Development Exaction for the Project has been established and fixed by City in this Agreement
or the conditions of approval for any of the Applicable Approvals or Development Regulations
approved on or before the Effective Date, the City shall not alter, increase, or modify said
Development Exaction in a manner that is inconsistent with this Agreement or such conditions of
approval for any of the Applicable Approvals or such Development Regulations without
Developer's prior written consent or as may be otherwise required pursuant to overriding federal
or state laws or regulations (Section 3.5.5 hereinbelow). Notwithstanding any other provision of
this Agreement, nothing in this Agreement is intended or shall be deemed to vest Developer
against the obligation to pay any of the following (which are specifically excluded from the
definition of "Development Exactions") in the full amount that would apply in the absence of this
Agreement: (i) City's normal fees for processing, environmental assessment and review, tentative
tract and parcel map review, plan checking, site review and approval, administrative review,
building permit, grading permit, inspection, and similar fees imposed to recover City's costs
associated with processing, reviewing, and inspecting project applications, plans, and
specifications; (ii) fees and charges levied by any other public agency, utility, district, or joint
powers authority, regardless of whether City collects those fees and charges; or (iii) community
facility district special taxes or special district assessments or similar assessments, business
license fees, bonds or other security required for public improvements, transient occupancy taxes,
sales taxes, property taxes, sewer lateral connection fees, water service connection fees, new
water meter fees, park fees and the New Construction Tax (as described in Section 2601 of the
Tustin City Code.)
3.5.5 Overriding Federal and State Laws and Regulations. Federal and state
laws and regulations that override Developer's vested rights set forth in this Agreement shall apply
to the Property, together with any City ordinances, resolutions, regulations, and official policies
that are necessary to enable City to comply with the provisions of any such overriding federal or
state laws and regulations, provided that (i) Developer does not waive its right to challenge or
contest the validity of any such purportedly overriding federal, state, or City law or regulation; and
(ii) upon the discovery of any such overriding federal, state, or City law or regulation that prevents
or precludes compliance with any provision of this Agreement, City or Developer shall provide to
the other Party a written notice identifying the federal, state, or City law or regulation, together
with a copy of the law or regulation and a brief written statement of the conflict(s) between that
law or regulation and the provisions of this Agreement. Promptly thereafter City and Developer
shall meet and confer in good faith in a reasonable attempt to determine whether a modification
or suspension of this Agreement, in whole or in part, is necessary to comply with such overriding
federal, state, or City law or regulation. In such negotiations, City and Developer agree to
preserve the terms of this Agreement and the rights of Developer as derived from this Agreement
to the maximum feasible extent while resolving the conflict. City agrees to cooperate with
Developer at no cost to City in resolving the conflict in a manner which minimizes any financial
impact of the conflict upon Developer. City also agrees to process in a prompt manner
Developer's proposed changes to the Project and any of the Development Regulations as may
be necessary to comply with such overriding federal, state, or City law or regulation; provided,
however, that the approval of such changes by City shall be subject to the sole discretion of City,
consistent with this Agreement.
3.5.6 Public Health and Safety. Any City ordinance, resolution, rule, regulation,
program, or official policy that is necessary to protect persons on the Property or in the immediate
vicinity from conditions dangerous to their health or safety as reasonably determined by City,
based upon objective identified written health or safety standards, policies or conditions as they
existed on the Effective Date, shall apply to the Property, even though the application of the
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ordinance, resolution, rule regulation, program, or official policy would result in the impairment of
Developer's vested rights under this Agreement.
3.5.7 Uniform Building Standards. Existing and future building and building -
related standards set forth in the uniform codes adopted by City and any local amendments to
those codes adopted by the City, including without limitation building, plumbing, mechanical,
electrical, housing, swimming pool, and fire codes, and any modifications and amendments
thereof shall all apply to the Project and the Property to the same extent that the same would
apply in the absence of this Agreement.
3.5.8 Public Works Improvements. To the extent Developer constructs or installs
any public improvements, works, or facilities, the City standards in effect for such public
improvements, works, or facilities at the time of City's issuance of a permit, license, or other
authorization for construction or installation of same shall apply.
3.4.8 No Guarantee or Reservation of Utility Capacity. Notwithstanding any
other provision set forth in this Agreement to the contrary, nothing in this Agreement is intended
or shall be interpreted to require City to guarantee or reserve to or for the benefit of Developer or
the Property any utility capacity, service, or facilities that may be needed to serve the Project,
whether domestic or reclaimed water service, sanitary sewer transmission or wastewater
treatment capacity, downstream drainage capacity, or otherwise, and City shall have the right to
limit or restrict Development of the Project if and to the extent that City reasonably determines
that inadequate utility capacity exists to adequately serve the Project at the time Development is
scheduled to commence. Notwithstanding the foregoing, City covenants to provide utility services
to the Project on a non-discriminatory basis (i.e., on the same terms and conditions that City
undertakes to provide such services to other similarly situated new developments in the City of
Tustin as and when service connections are provided and service commences).
3.6 Applicable Approvals.
3.6.1 Subdivision Map. Pursuant to Government Code Section 66452.6 and any
other applicable provisions of the Government Code, the term of the TTM 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.
3.6.2 Life of Other Applicable Approvals. The term of all other Applicable
Approvals shall be automatically extended such that these Applicable Approvals remain in effect
for a period of time at least as long as the Term of this Agreement.
3.6.3 State Density Bonus Law. Nothing in this Agreement limits Developer's
ability to request State Density Bonus Law benefits, including concessions, incentives, and
waivers, to the fullest extent allowed by State Density Bonus Law.
3.7 City Acceptance of Developer Improvements and Obligations
To the extent any of Developer's performance obligations under this Agreement require
acceptance or acknowledgment from the City upon completion by Developer, City shall promptly
provide written notice of such acceptance or acknowledgement to Developer as evidence of
Developer's satisfaction of said obligation, City's acceptance not to be unreasonably withheld
consistent with the terms of this Agreement. Written notice may take the form of a letter, permit,
certificate of completion, certificate of occupancy, or any other form.
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3.8 Community Facilities District
3.8.1 Formation of the CFD
3.8.1.1 Formation. Developer shall, pursuant to the Mello Roos Act, submit a
petition to the City or, alternatively, to the California Municipal Financing Authority ("CMFA") for
participation in CMFA's Bond Opportunities for Land Development ("BOLD") program, or similar
CFD authority and associated program, for the formation of a community facilities district, the
boundaries of which shall include those of the Property ("CFD"). If the City prefers that CMFA
form the CFD, City shall approve a resolution authorizing the use of the BOLD program, and
Developer may submit an application for formation of a CFD through the BOLD program. The
agency that forms the CFD for the Property, shall be referred to in this Section 3.8 as the
"Issuer." If City is the Issuer, City shall initiate the CFD formation process promptly following
submission of Developer's petition and compliance with Section 53318(d) of the Mello -Roos
Act, and shall use good faith, diligent efforts to timely form the CFD. Developer agrees to
cooperate in the formation and agrees to vote in favor of the formation of the CFD for which it
has petitioned. If CMFA, or similar CFD authority is the Issuer, City agrees to cooperate and
participate, as needed, with Developer and CMFA, or similar CFD authority, in the formation of
the CFD, including providing its consent and approval of a joint community facilities agreement
("JCFA") with CMFA.
3.8.1.2 Authorized Uses. The CFD shall be authorized to finance (i) public
infrastructure required to be constructed under the Development Agreement, including without
exception, public streets, highways, and bridges, and other related improvements such as
grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and
parkway landscaping related thereto, water facilities, storm drain facilities, sewer facilities,
public parks, landscaping, electrical facilities, (collectively, "Authorized Facilities"), and (ii)
Development Impact Fees.
3.8.1.3 Joint Community Facilities Agreements. In addition to the JCFA
described above, the Issuer may enter into a JCFA with another Governmental Entity that will
own or operate any of the Authorized Facilities. If the City is the Issuer, the City and Developer
agree that to the extent required for compliance with the Mello Roos Act, they will each take all
steps reasonably necessary to procure the authorization and execution of any such JCFA with
any such Governmental Entity before the issuance of any CFD Bonds (as defined below) that
will finance Authorized Facilities that will be owned or operated by such Governmental Entity.
The City and Developer do not currently anticipate that any of the Authorized Facilities will be
owned by a Governmental Entity other than the City.
3.8.1.4 Notice of Special Tax Lien. Special Taxes shall be secured by
recordation in the Official Records of the County of Orange of a continuing lien against the
Property.
3.8.1.5 RMA. Developer and the Issuer shall cooperate in developing the rate
method and apportionment of Special Taxes for the CFD ("RMA") and each shall use good -faith
reasonable efforts at all times to furnish timely to the other, or to obtain and then furnish timely
to the other, any information reasonably necessary to develop the RMA. The RMA shall provide,
in part, (i) for the levy of a special tax ("Special Tax") in an amount requested by Developer,
provided that the total effective property tax rates for residential units to be built on the Property
do not exceed 2% of the estimated value of such units, (iii) that the Special Tax may increase
annually by up to 2%, commencing July 1 following the fiscal year commencement of the levy,
and continuing each fiscal year thereafter, (iv) the levying of Special Taxes to accumulate funds
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to pay directly for acquisition or construction of Authorized Facilities before CFD Bonds have
been issued, and at the discretion of the Issuer, following the issuance of CFD Bonds and after
bond debt service has been paid, and (v) the prepayment in full, or in part, of the Special Taxes.
3.8.2 Issuance of CFD Bonds
3.8.2.1 Issuance. Upon the request of the Developer to have bonds secured
by the levy of Special Taxes ("CFD Bonds") issued, the City shall cooperate with the Developer
and Issuer in any such issuance. If the City is the Issuer, promptly following Developer's
request, Developer and the City shall meet with the City and its public financing consultants to
determine the reasonable and appropriate issuance date and the amount of the issuance, and
thereafter, use good faith, diligent efforts to timely have the CFD Bonds issued, including the
scheduling of necessary public hearings and/or City Council approvals related thereto. If CMFA
is the Issuer, the City agrees to cooperate in the process and agrees that under no
circumstances will it hinder or prevent the issuance of the CFD Bonds. In connection with CFD
Bonds, the Parties agree to the following:
3.8.2.2 Value -to -Lien Ratio. The appraised or assessed value -to -lien ratio
required for the issuance of CFD
the Developer and Issuer.
Bonds shall be three to one (3:1), or otherwise approved by
3.8.2.3 Coverage Ratio. The CFD Bonds shall have a debt service coverage -
ratio of one hundred ten percent (110%), unless otherwise approved by the Developer and the
Issuer.
3.8.2.4 Term. The CFD Bonds shall have a term of not less than thirty (30)
years and not more than forty (40) years, unless otherwise approved by the Developer and
Issuer.
3.8.2.5 Credit Enhancement. The City shall not require the Developer to
provide a letter of credit or other credit enhancement as security for the payment of Special
Taxes in the CFD in connection with the issuance of CFD Bonds, or otherwise.
3.8.3 Acquisition Agreement.
Prior to, or contemporaneously with, the approval of a resolution to issue the CFD Bonds,
Developer and the Issuer shall enter into an Acquisition Agreement that shall apply to the
acquisition and construction of the Authorized Facilities and reimbursement of Fees and have
such agreement brought before City Council for approval.
3.8.4 Citv Council/Governina Board Authorization
Notwithstanding the foregoing, it is acknowledged and agreed by the Parties that nothing
contained in this Section 3.8 shall be construed as committing or requiring the City Council or the
governing body of CMFA, if applicable, to authorize and approve the formation of the CFD and/or
the issuance of the CFD Bonds.
3.8.5 No Other Land -Secured Financin
Except to the extent explicitly permitted under this Agreement, the City shall not initiate the
formation of any new land -secured financing district involving the levy of special taxes or
assessments on the Property.
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4. Public Benefits.
4.1 Provision of Public Benefits.
Developer shall provide the following public benefits which shall constitute additional
consideration for this Agreement for the benefit of the City ("Public Benefits"):
4.1.1 Public Amenities. The Project includes an approximately 3,500 square foot
public amenity space located at the southwest corner of San Juan Avenue and Red Hill Avenue
that is easily accessible to the public and includes a decorative wall, seating, landscaping, and
lighting, as more specifically identified on Exhibit D, or such alternative amenities as may be
approved by the Director of Community Development and the Director of Parks & Recreation (the
"Public Amenity Space"). The Public Amenity Space shall be privately owned and be accessible
to the public. Developer shall have the right to reasonably limit the hours the Public Amenity
Space can be used by the public, and Developer shall have the right to place reasonable
limitations on the uses of the Public Amenity Space. Developer shall complete construction of
the Public Amenity Space prior to issuance of the seventieth (70th) building permit for the Project.
Developer shall maintain, or, following formation thereof, shall cause the homeowners'
association for the Project ("HOX) to maintain, the Public Amenity Space at the sole cost of the
Developer or HOA, as applicable, and such obligation shall be set forth in the CC&Rs for the
Project. Prior and as a condition to recording of the final map, the City shall have the right to
review and approve the CC&Rs in order to, among other things, confirm the aforesaid
maintenance obligations are set forth therein.
4.1.2 On -Street Parking. Provision of on -street vehicular parking spaces
immediately adjacent to Red Hill Avenue in front of the proposed project). Per the Red Hill Avenue
Specific Plan, the ultimate condition of southbound Red Hill Avenue in front of the proposed
project will comprise of the following and as conceptually depicted in Exhibit C ("On -Street
Parking/Off-site Improvement Conceptual Plan"):
• a ten (10) foot median,
• an 11'-10'-10' travel lanes,
• a nine (9) foot bike lane [including three (3) foot buffer],
• a 9' on -street public parking, and
• a six (6) foot sidewalk.
An alternative can be negotiated based on mutual agreement with the parties and subject to
review and approval by the City Engineer.
4.1.3 Design and construction of traffic signal at the intersection of Red Hill
Avenue and the main project entrance including traffic signal and any equipment associated with
the installation and any surface improvements associated with the new signalized intersection
along the east side of Red Hill Avenue.
4.1.4 Gateway Signage. Construction and installation of gateway signage
designating the corridor as the beginning of the Red Hill Avenue Specific Plan area at the
southwest corner of San Juan Street and Red Hill Avenue, as identified in the RHASP. Said
signage shall be subject to the review and approval by the Community Development Department.
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4.1.5 Public Art. As addressed in Section 5.6.3 of the RHASP, Developer
shall agree to provide an art program, as described herein (the "Public Art"). An art consultant,
mutually selected by the parties, shall be responsible for selecting the Public Art for the Project
("Art Program Consultant"). The Art Program Consultant may use other consultants to perform
Public Art. Developer and the Art Program Consultant shall use reasonable efforts to solicit input
from the City regarding the selection of the Public Art. Per RHASP Section 5.6.3, Public Art shall
be subject to review and approval by the Director. Developer shall provide the Public Art
application/submission to the City within 270 days of the issuance of the Project's first building
permit, The Parties agree to act in good faith to agree upon the Public Art. If the Director does not
approve the Public Art within 90 days of submission by Developer, then Developer, at its sole
option, may choose to pay the City $100,000 to be used by the City to provide public art outside
the Project site. Such payment shall constitute complete compliance with this Section 4.1.4. If
the Parties agree upon the Public Art, the Public Art shall be completed prior to issuance of the
Project's final certificate of occupancy.
4.1.6 Park Fee Credit. Developer shall dedicate an easement, either on the
Final Map of the TTM or by separate instrument, providing public access to the Public Amenity
Space during typical City park hours. Due to Developer's dedication and construction of the
Public Amenity Space, Developer shall receive a credit ("Park Fee Credit") against fees owed to
provide parkland, as permitted by City Code section 9331, subdivision (d)(6) on a per square
foot basis for the actual square footage of land comprising the Public Amenity Space and value
of the improvements thereon on the date that the Park Fee Credit is provided. Developer may
apply the Park Fee Credit against Developer's obligation to pay the required Park Fee, which
otherwise would be paid at issuance of building permit issuance. Upon dedication of the
easement and completion of the Public Amenity Space, the Parties shall determine the actual
amount of the Park Fee Credit, and determine what additional Park Fees, if any, will have to be
paid by Developer for the remainder of the Project.
4.1.7 Affordable for Sale Units. Developer shall provide four of the 61 base 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 Article 9, Chapter 1 of the
City Code, beginning with Section 9111 and be subject to equity sharing requirements in
accordance with Government Code Section 65915 and as further specified in an Affordable
Housing Covenant and Equity Sharing Agreement recorded against the Affordable Units.
4.2 Effect of Public Benefits Default.
Notwithstanding any other provision of this Agreement to the contrary, if any payment
under this Article 4 is not made or any obligation requiring performance is not timely performed
by Developer, subject to the provisions of Section 7.1 of this Agreement, the City may withhold
further issuance of building permits or other approvals, including final maps, for the Project and
the Property, until such time as Developer has made the required payment or undertaken the
required performance.
5. Enforcement.
Unless this Agreement is amended, canceled, modified, or suspended as authorized
herein or pursuant to California Government Code Section 65869.5, this Agreement shall be
enforceable by either Party despite any change in any applicable general or specific plan, zoning,
subdivision, or building regulation or other applicable ordinance or regulation adopted by City
(including by City's electorate) that purports to apply to any or all of the Property.
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6. Annual Review of Developer's Compliance With Agreement.
6.1 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. Developer (including any successor to the owner executing this Agreement on or before
the Effective Date) shall pay City a reasonable fee in an amount City may reasonably establish,
based upon City's actual costs, 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.
6.2 Developer Obligation to Demonstrate Good Faith Compliance.
During each annual review by City, Developer is required to demonstrate good faith
compliance with the terms of the Agreement. Upon City request, which shall be issued no later
than thirty (30) days prior to the anniversary of the Effective Date during the Term, Developer
agrees to furnish such evidence of good faith compliance in a written report.
6.3 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.
6.4 Annual Review a Non -Exclusive Means for Determining and Requiring Cure of
Developer'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 Developer or limit City's rights or remedies for any such Default.
The annual review procedures set forth in City Code Section 9617 (as of the Effective Date) and
this Article 6 shall supplement and shall not replace the provision of Article 7 of this Agreement
whereby either City or Developer may, at any time, assert matters which either Party believes
have not been undertaken in accordance with this Agreement by delivering a written Notice of
Breach and following the procedures set forth in Section 7.1.
7. Events of Default.
7.1 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 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"). In the event
of a 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 7.1 shall apply. In addition, in the case of an alleged default by Developer,
Developer may appeal such Notice of Default to the City Council, which shall conduct a noticed
public hearing on the Notice of Default. If the City Council denies the appeal and determines that
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the Notice of Default was properly issued, the timeframes specified in this Section 7.1 shall apply;
provided, however, that such determination shall not preclude Developer from challenging such
claimed default in any Action and the City Council's determination shall not be given any special
deference by the adjudicator in such Action. 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 defaulting Party shall have such additional time as is reasonably necessary to cure such
Default.
7.2 City's Remedies.
In the event of a Default by Developer under this Agreement that is not cured during the
Cure Period, City shall be entitled to any or all of the following remedies: (1) Seeking mandamus
or special writs, injunctive relief, or specific performance of this Agreement; (2) termination of this
Agreement; or (3) Seeking any other remedy available at law or in equity, provided, however,
except as provided in Section 7.7 below with respect to recovery of legal expenses, City agrees
and covenants on behalf of itself and it successors and assigns, not to sue Developer for damages
or monetary relief for any breach of this Agreement or arising out of or connected with any dispute,
controversy or issue regarding the application or effect of this Agreement, or for general, special,
compensatory, expectation, anticipation, indirect, consequential, exemplary or punitive damages
("Damages") arising out of or connected with any dispute, controversy, or issues regarding the
application or effect of this Agreement, the Applicable Approvals, the Development Plan, the
Development Regulations, any Subsequent Development Approvals, or any permits or
entitlements sought in connection with development or use of the Property or Project, or any
portion thereof. City acknowledges that Developer would not have entered into this Agreement if
Developer could be held liable for Damages for any default or breach arising out of this Agreement
and that City has adequate remedies other than Damages, to secure Developer's compliance
with its obligations under this Agreement. Therefore, City agrees that Developer, its officers,
employees and agents shall not be liable for any Damages and that this Section shall apply to
any successor, assignee or transferee of the Developer. The limitation of Damages specified in
this Section 7.2 does not preclude City from recovering from Developer all costs and expenses,
including attorneys' fees, specified in Section 7.7 of this Agreement. Furthermore, City, in addition
to or as an alternative to exercising the remedies in this Section 7.2, 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
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and review by the City Council. The decision of the City Council shall be final, subject only to
judicial review pursuant to California Code of Civil Procedure Section 1094.5(b).
7.3 Developer's Remedies.
In the event of a Default by City under this Agreement that is not cured during the Cure
Period, Developer shall be entitled to any or all of the following remedies: (1) Seeking mandamus
or special writs, injunctive relief, or specific performance of this Agreement; (2) termination of this
Agreement; or (3) Seeking any other remedy available at law or in equity, provided, however,
except as provided in Section 7.7 below with respect to recovery of legal expenses, Developer
agrees and covenants on behalf of itself and it successors and assigns, not to sue City for
damages or monetary relief for any breach of this Agreement or arising out of or connected with
any dispute, controversy or issue regarding the application or effect of this Agreement, or for
Damages arising out of or connected with any dispute, controversy, or issues regarding the
application or effect of this Agreement, the Applicable Approvals, the Development Plan, the
Development Regulations, any Subsequent Development Approvals, or any permits or
entitlements sought in connection with development or use of the Property or Project, or any
portion thereof. Developer acknowledges that City would not have entered into this Agreement if
City could be held liable for Damages for any default or breach arising out of this Agreement and
that Developer has adequate remedies other than Damages, to secure City's compliance with its
obligations under this Agreement. Therefore, Developer agrees that City, its officers, employees
and agents shall not be liable for any Damages and that this Section shall apply to any successor,
assignee or transferee of the Developer. The limitation of Damages specified in this Section 7.3
does not preclude Developer from recovering from City all costs and expenses, including
attorneys' fees, specified in Section 7.7 of this Agreement. In addition, Developer shall have the
right to sue City for monetary damages based upon an alleged breach of Section 4.1.6 of this
Agreement.
7.4 Waiver.
Failure or delay by either Party in delivering a Notice of Default shall not waive that Party's
right to deliver a future Notice of Default of the same or any other Default.
7.5 Additional City Remedy for Developer's Default.
In the event of any Default by Developer, in addition to any other remedies which may be
available to City, whether legal or equitable, City shall be entitled to retain any Development
Exactions applicable to the Project or the Property, including any fees, grants, dedications, or
improvements to public property which it may have received prior to Developer's Default without
recourse from Developer or its successors or assigns.
7.6 No Personal Liability of City or Developer Officials, Employees, or Agents.
No City or Developer official, employee, or agent shall have any personal liability
hereunder for a Default by City or Developer of any of its obligations set forth in this Agreement.
7.7 Recovery of Legal Expenses by Prevailing Party in Any Action.
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
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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..
8. Force Maieure.
Neither Party shall be deemed to be in Default where failure or delay in performance of
any of its obligations under this Agreement is caused, through no fault of the Party whose
performance is prevented or delayed, by floods, earthquakes, other acts of God, fires, wars, riots
or similar hostilities, pandemics, epidemics, strikes or other labor difficulties, state or federal
regulations or court actions, action or inaction by the State or any public agency, utility, district, or
joint powers authority other than City, or other similar or related items outside of such Party's
reasonable control (financial inability expressly excluded). Except as specified above,
nonperformance shall not be excused because of the act or omission of a third person.
Performance by any Party of its obligations hereunder shall be excused and the required date for
performance thereof shall be extended day for day during any period of "Permitted Delay" as
hereinafter defined. For purposes hereof, Permitted Delay shall mean delay beyond the
reasonable control and without the fault of the Party claiming the delay (and despite the good faith
efforts of such Party). Any Party claiming a Permitted Delay shall notify the other Party (or Parties)
in writing of such delay within 30 days after the commencement of the delay, which notice shall
specify the nature and estimated length of the Permitted Delay ("Permitted Delay Notice"). An
extension of time hereunder for any Permitted Delay shall be for the period of the Permitted Delay
and shall be deemed granted if the Party receiving the Permitted Delay Notice does not object to
such extension in writing, as not complying with the provisions of this Section, within 15 days after
receiving the Permitted Delay Notice. Upon such an objection, the Parties shall meet and confer
within 30 days after the date of the objection in a good faith effort to resolve their disagreement
as to the existence and length of the Permitted Delay.
9. Cooperation in the Event of Legal Challenge
9.1 Indemnity Arisina From Acts or Omissions of Devel
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"), Developer 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 from the
acts, omissions, or operations of Developer or Developer's officers, agents, contractors,
subcontractors, agents, or employees in the course of Development of the Project or any other
activities of Developer relating to the Property or pursuant to this Agreement. The indemnity
provisions in this Section 9.1 shall be effective on the date on which the Adopting Ordinance is
approved by the City Council and shall survive the Termination Date. Notwithstanding the
foregoing, Developer's indemnity obligations specified in this Section 9.1 regarding Developer's
design, construction or dedication of public improvements shall terminate one (1) year after City
accepts Developer's offer of dedication of public improvements.
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9.2 Third Party Litigation.
9.2.1 Cooperation in Defense. In the event of any administrative, legal or
equitable action instituted by a third party challenging the validity of any provision of this
Agreement, the procedures leading to its adoption, or the Applicable Approvals for the Project,
Developer and City each shall have the right, in its sole discretion, to elect whether or not to
defend such action, to select its own counsel and to control its participation and conduct in the
litigation in all respects permitted by law. If both Parties elect to defend, the Parties hereby agree
to affirmatively cooperate in defending said action and to execute a joint defense and
confidentiality agreement to share and protect information, under the joint defense privilege
recognized under applicable law. As part of the cooperation in defending an action, City and
Developer shall coordinate their defense to make the most efficient use of legal counsel and to
share and protect information. Developer and City shall each have sole discretion to terminate
its defense at any time. If Developer elects not to defend any such third -party action, City retains
the option to undertake such defense, including selecting and employing independent defense
counsel at its own expense, without any Developer obligation to indemnity or defend City. If the
Parties both determine to defend the action and enter into a joint defense and confidentiality
agreement, Developer agrees to pay for defense counsel for City; provided, however, Developer
shall jointly participate in the selection of such counsel. 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. The City shall not settle any third -party litigation of Applicable
Approvals without Developer's consent, which consent shall not be unreasonably withheld,
conditioned or delayed.
9.2.2 Actions Furthering the Protect During Litigation. The filing of any third -party
lawsuit(s) against City or Developer relating to this Agreement, the Applicable Approvals or other
development issues affecting the Property shall not delay or stop the development, processing or
construction of the Project or approval of any Subsequent Development Approvals, unless the
third party obtains a court order preventing the activity. City shall not stipulate to or cooperate in
the issuance of any such order. Developer understands the risk of proceeding with development
during third -party litigation and will not seek reimbursement from the City of Processing Fees or
other amounts expended on development during third -party litigation regardless of the outcome
of that litigation. Notwithstanding the foregoing, if such litigation results in an outcome which
enables Development of the Project to proceed, Developer may recover any sums City owes
Developer due to Developer's construction of oversized public facilities, pursuant to any
reimbursement agreement entered into between the parties.
9.2.3 Revision to Project After Legal Action. In the event of a court order issued
as a result of a successful legal challenge, City shall, to the extent permitted by law or court order,
in good faith seek to comply with the court order in such a manner as will maintain the integrity of
the Applicable Approvals and avoid or minimize to the greatest extent possible (i) any impact to
the development of the Project as provided for in, and contemplated by this Agreement, or (ii) any
conflict with the this Agreement or frustration of the intent or purpose of this Agreement.
9.2.4 Defense of Agreement. City shall take all actions that are necessary or
advisable to uphold the validity and enforceability of this Agreement. If this Agreement is
adjudicated or determined to be invalid or unenforceable, City agrees, subject to all legal
requirements, to consider modifications to this Agreement to render it valid and enforceable to
the extent permitted by applicable law.
9.2.5 Indemnification. In addition to its indemnity obligations set forth in
Section 9.1, Developer shall indemnify, defend, and hold harmless City and City's Affiliated
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Parties from and against any third -party 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 of the Development Regulations for the Project (including without limitation any
actions taken pursuant to CEQA with respect thereto), any Subsequent Development Approval,
or 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 Developer of any such Claim and City shall cooperate with
Developer 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 Developer's indemnity obligation, provided that such counsel shall reasonably
cooperate with Developer in an effort to minimize the total litigation expenses incurred by
Developer, as more specifically stated in Section 9.2.1, including that if Developer elects not to
defend any such third -party action but City wishes to undertake such defense, Developer shall
have no obligation to indemnity or defend City The indemnity provisions in this Section 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. Notwithstanding the
foregoing, Developer's indemnity obligations specified in this Section 9.2.5 regarding Developer's
design, construction or dedication of public improvements shall terminate one (1) year after City
accepts Developer's offer of dedication of public improvements. This Section 9.2.5 is intended to
be interpreted consistent with Government Code section 66474.9.
9.3 Environmentallndemn
In addition to its indemnity obligations set forth in Section 9.1, Developer shall indemnify,
defend, and hold harmless City and City's Affiliated Parties from and against any and all Claims
for personal injury or death, property damage, economic loss, statutory penalties or fines, and
damages of any kind or nature whatsoever, including without limitation attorney's fees, expert
witness fees, and court costs, based upon or arising from any of the following: (i) the actual or
alleged presence of any Hazardous Substance on or under any of the Property in violation of any
applicable Environmental Law; (ii) the actual or alleged migration of any Hazardous Substance
from the Property through the soils or groundwater to a location or locations off of the Property;
and (iii) the storage, handling, transport, or disposal of any Hazardous Substance on, to, or from
the Property and any other area disturbed, graded, or developed by Developer in connection with
Developer's Development of the Project. The indemnity provisions in this Section 9.3 shall be
effective on the date on which the Adopting Ordinance is approved by the City Council or
Developer acquires the Property, whichever is later, and shall survive the Termination Date. For
purposes of this Section 9.3, "Hazardous Substance" means any Hazardous Substance as
defined in Section 1, above, that is or was used, stored, placed on the Property by Developer, or
exposed or exacerbated by Developer in conjunction with Project development.
9.4 Labor Laws.
Developer shall carry out the construction of the Project, including all improvements, in
conformity with all Development Regulations including 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 Developer
reserves the right to reasonably contest such laws and regulations. Developer hereby agrees
that, with respect to the Project, Developer shall be fully responsible for determining whether the
foregoing wage requirements are applicable and agrees to indemnify, defend and hold the City
and City's Affiliated Parties free and harmless from and against any and all Claims arising from
or related to compliance by Developer or Developer's officers, directors, employees, agents,
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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 laws.
10. Assignment.
10.1 Right to Transfers.
Developer shall have the right to sell and convey all or a portion of the Property and, upon
approval of City, which approval shall not be unreasonably withheld, conditioned, or delayed to
transfer or assign (hereinafter, a "Transfer" or "Transfers") Developer's interest in this Agreement,
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"); provided, however, that no sale and
conveyance of all or a portion of the Property 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
10.3 and 10.4.
Any Permitted Transferee shall have all of the same rights, benefits, duties, obligations,
and liabilities of Developer under this Agreement that are assigned to such Permitted Transferee
with respect to the portion of, or interest in, the Property conveyed to such Permitted Transferee;
provided, however, that in the event of a conveyance 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 Developer
with respect to the balance of the Property.
The requirement for City consent of a Transfer of this Agreement relates to a Transfer to
one or more entities that will undertake some or all of the Project development or construction
and does not extend to any conveyance of all or a portion of the Property, including, without
limitation, conveyances to governmental entities, future residents, tenants, or a homeowners'
association.
10.2 Transfers Permitted Without City Consent. Notwithstanding Section 10.1, the
following Transfers of this Agreement shall not require City consent: (i) transactions for financing
purposes, including as needed to secure funds necessary for Project construction, and (ii)
transactions with a "Developer Affiliate," with is an entity or person that is directly or indirectly
controlling, controlled by, or under common control with Developer. In the event of a Transfer of
all or any portion of this Agreement to a Developer Affiliate, Developer shall provide notice to the
City in the form of the Assignment and Assumption Agreement, as defined in Section 10.5, within
ten (10) days after the Transfer.
10.3 City Consideration of Requested Assignment. When consent of a Transfer of this
Agreement is required, the City agrees that it will not unreasonably withhold, condition, or delay
approval of a request for approval of a Transfer of this Agreement made pursuant to this Article
10 that requires City approval, provided the Developer delivers written notice to the City
requesting such approval, consistent with Section 10.4.
10.4 City Approval of Transferee.
Within thirty (30) days after the effective date of any proposed Transfer of this Agreement requiring
City consent, Developer (as transferor) shall:
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Notify the City, in writing, of such proposed Transfer, consistent with
Section 10.3; and
ii. Deliver to the City an Assignment and Assumption Agreement, as
defined in Section 10.5.
Within five (5) days after the receipt of Developer's written notice requesting City approval of a
Transfer of this Agreement, the City shall either approve or disapprove the proposed Transfer or
shall respond in writing by stating what further information, if any, the City reasonably requires to
determine the request complete and determine whether or not to grant the requested approval.
Upon receipt of such a response, Developer shall promptly provide to the City the requested
information. Within five (5) days after the receipt of such information, the City shall approve or
disapprove the requested Transfer of this Agreement. If no response is received from the City
with the requisite time period set for in this Section 10.4, the Transfer is deemed approved.
10.5 Assignment and Assumption Agreement. Prior to any Transfer of this Agreement
(whether or not a Transfer requiring the City's consent), Developer shall give written notice to City
of the Assignment and satisfactory evidence that the assignee has assumed in writing through an
assignment and assumption agreement all of the Developer's obligations set forth in this
Agreement materially in the form attached hereto as Exhibit E (an "Assignment and Assumption
Agreement").
10.6 Liability of Transferor and Transferee.
Notwithstanding any Transfer, the transferring Developer shall continue to be jointly and
severally liable to City, together with the successor Developer, 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 Developer shall be automatically released
from any and all obligations with respect to the portion of this Agreement Transferred and the
portion of the Property conveyed in connection therewith: (i) the transferring Developer no longer
has a legal or equitable interest in the portion of the Property so conveyed other than as a
beneficiary under a deed of trust; (ii) the transferring Developer 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; and (iii) the transferring Developer has provided City with
the Assignment and Assumption Agreement. In the case of partial Transfers of this Agreement, a
default under this Agreement by Developer (as Transferor) 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 Developer (as Transferor) and shall not affect
Developer's retained rights and obligations hereunder. Notwithstanding the foregoing, if a breach
of this Agreement involves an obligation jointly held by both Developer and a Permitted
Transferee, the City may avail itself of the remedies specified in Sections 7.1 and 7.2 against both
the Developer and Permitted Transferee.
11. Mortgagee Rights.
11.1 Encumbrances on Property.
The Parties agree that this Agreement shall not prevent or limit Developer in any manner
from encumbering the Property, any part of the Property, or any improvements on the Property
with any mortgage, deed of trust or other security device securing financing with respect to the
Property ("Mortgage"). Notwithstanding section 12.4, the City shall provide to any mortgagee an
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estoppel certificate in form and content reasonably acceptable to the City within ten (10) days of
written request therefor.
11.2 Mortgagee Protection.
No breach of this Agreement shall defeat, render invalid, diminish, or impair the lien of any
Mortgage made in good faith and for value. Any acquisition or acceptance of title or any right or
interest in the Property or part of the Property by a Mortgagee (whether due to foreclosure,
trustee's sale, deed in lieu of foreclosure, lease termination, or otherwise) shall be subject to all
of the terms and conditions of this Agreement. Any Mortgagee who takes title to the Property or
any part of the Property shall be entitled to the benefits arising under this Agreement.
11.3 Mortgagee Not Obligated.
Notwithstanding the provisions of this Section 11, a Mortgagee will not have any obligation
or duty under the terms of this Agreement to perform the obligations of Developer or other
affirmative covenants of Developer, or to guarantee this performance except that: (i) the
Mortgagee shall have no right to develop the Project under the Development Regulations without
fully complying with the terms of this Agreement; and (ii) to the extent that any covenant to be
performed by Developer is a condition to the performance of a covenant by City, that performance
shall continue to be a condition precedent to City's performance.
11.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure.
Each Mortgagee shall, upon written request to City, be entitled to receive written notice
from City of: (i) the results of the annual review of compliance specified in Article 6 of this
Agreement, and (ii) any default by Developer of its obligations set forth in this Agreement.
Each Mortgagee shall have a further right, but not an obligation, to cure any Default within
thirty (30) days after receiving a Notice of Default with respect to a monetary Default and within
sixty (60) days after receiving a Notice of Default with respect to a non -monetary Default. If the
Mortgagee can only remedy or cure a non -monetary Default by obtaining possession of the
Property, then the Mortgagee shall have the right to seek to obtain possession with diligence and
continuity through a receiver or otherwise, and to remedy or cure the non -monetary Default within
sixty (60) days after obtaining possession and, except in case of emergency or to protect the
public health or safety, City may not exercise any of its judicial remedies set forth in this
Agreement to terminate or substantially alter the rights of the Mortgagee until expiration of the
sixty (60)-day period. In the case of a non -monetary Default that cannot with diligence be
remedied or cured within sixty (60) days, the Mortgagee shall have additional time as is
reasonably necessary to remedy or cure the Default, provided the Mortgagee promptly
commences to cure the non -monetary Default within sixty (60) days and diligently prosecutes the
cure to completion.
12. Miscellaneous Terms.
12.1 Notices.
Any notice or demand that shall be required or permitted by law or any provision of this
Agreement shall be in writing. If the notice or demand will be served upon a Party, it either shall
be personally delivered to the Party; deposited in the United States mail, certified, return receipt
requested, and postage prepaid; or delivered by a reliable courier service that provides a receipt
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showing date and time of delivery with courier charges prepaid. The notice or demand shall be
addressed as follows:
TO CITY: City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: City Manager
With a copy to: Woodruff & Smart
555 Anton Boulevard, Ste 1200
Costa Mesa, CA 92626
Attn: David E. Kendig, Esq.
TO DEVELOPER: MLC/Meritage Homes
5 Peters Canyon Rd Suite 310
Irvine, CA 92606
Attn: Johanna Crooker
With a copy to: Allen Matkins Leck Gamble Mallory Natsis LLP
2010 Main Street, Eighth Floor
Irvine, CA 92614
Attn: John Condas
Either Party may change the address stated in this Section 12.1 by delivering notice to the
other Party in the manner provided in this Section 12.1, and thereafter notices to such Party shall
be addressed and submitted to the new address. Notices delivered in accordance with this
Agreement shall be deemed to be delivered upon the date received, as evidenced by the
customary receipt of delivery as provided above.
12.2 Project as Private Undertaking.
The Development of the Project is a private undertaking. Neither Party is acting as the
agent of the other in any respect, and each Party is an independent contracting entity with respect
to the terms, covenants, and conditions set forth in this Agreement. This Agreement forms no
partnership, joint venture, or other association of any kind. The only relationship between the
Parties is that of a government entity regulating the Development of private property by the owner
of the property.
12.3 Cooperation.
Each Party shall cooperate with and provide reasonable assistance to the other Party to
the extent consistent with and necessary to implement this Agreement. Upon the request of a
Party at any time, the other Party shall promptly execute, with acknowledgement or affidavit if
reasonably required, and file or record the required instruments and writings and take any actions
as may be reasonably necessary to implement this Agreement or to evidence or consummate the
transactions contemplated by this Agreement.
12.4 Estoppel Certificates.
At any time, either Party may deliver written notice to the other Party requesting that the
other Party certify in writing that, to the best of its knowledge: (i) this Agreement is in full force and
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effect and is binding on the other Party; (ii) this Agreement has not been amended or modified
either orally or in writing or, if this Agreement has been amended, the Party providing the
certification shall identify the amendments or modifications; and (iii) the requesting Party is not in
Default in the performance of its obligations under this Agreement and no event or situation has
occurred that with the passage of time or the giving of Notice or both would constitute a Default
or, if such is not the case, then the other Party shall describe the nature and amount of the actual
or prospective Default.
The Party requested to furnish an estoppel certificate shall execute and return the
certificate within thirty (30) days following receipt.
12.5 Rules of Construction.
The singular includes the plural; the masculine and neuter include the feminine; "shall" is
mandatory; and "may" is permissive.
12.6 Time Is of the Essence.
Time is of the essence regarding each provision of this Agreement as to which time is an
element.
12.7 Waiver.
The failure by a Party to insist upon the strict performance of any of the provisions of this
Agreement by the other Party, and failure by a Party to exercise its rights upon a Default by the
other Party, shall not constitute a waiver of that Party's right to demand strict compliance by the
other Party in the future.
12.8 Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be
identical and may be introduced in evidence or used for any other purpose without any other
counterpart, but all of which shall together constitute one and the same agreement.
12.9 Entire Agreement.
This Agreement constitutes the entire agreement between the Parties and supersedes all
prior agreements and understandings, both written and oral, between the Parties with respect to
the subject matter addressed in this Agreement.
12.10 Severability.
The Parties intend that each and every obligation of the Parties is interdependent and
interrelated with the other, and if any provision of this Agreement or the application of the provision
to any Party or circumstances shall be held invalid or unenforceable to any extent, it is the
intention of the Parties that the remainder of this Agreement or the application of the provision to
persons or circumstances shall be rendered invalid or unenforceable. The Parties intend that
neither Party shall receive any of the benefits of the Agreement without the full performance by
such Party of all of its obligations provided for under this Agreement. Without limiting the
generality of the foregoing, the Parties intend that Developer shall not receive any of the benefits
of this Agreement if any of Developer's obligations are rendered void or unenforceable as the
result of any third party litigation, and City shall be free to exercise its legislative discretion to
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amend or repeal the Development Regulations applicable to the Property and Developer shall
cooperate as required, despite this Agreement, should third party litigation result in the
nonperformance of Developer's obligations under this Agreement. In such a situation, City shall
not receive any of the benefits of this Agreement. The provisions of this Section 12.10 shall be
effective on the date on which the Adopting Ordinance is approved by the City Council and shall
not survive the Termination Date.
12.11 Developer Deposit.
Developer shall, within thirty (30) business days after the later of the Effective Date and
Developer's acquisition of fee title to the Property, deliver to the City in cash or cash equivalent
funds, a deposit in the amount requested by the City based on the City's estimated City
Processing Fees including staff time required to complete plan check and perform inspections
(the "City Costs Deposit"), which amount shall be deposited by City in an account in a bank or
trust company selected by the City and with no requirement that such account be interest bearing.
If any interest is paid on such account, such interest shall accrue to any balances in the account
for the benefit of the City. If at any time prior to the issuance of the final certificate of occupancy
for a residential unit on the Property, the amount of funds in the City Costs Deposit account is
depleted below Ten Thousand Dollars ($10,000), Developer shall be required to deposit with the
City each time an additional Twenty Thousand Dollars ($20,000) or such other amount as the City
may specify as required in City's estimation to cover the cost of City Processing Fees, including
as required to complete plan check and perform inspections, which shall be credited to the City
Costs Deposit. Each such payment shall be deposited by the City into the City Costs Deposit
account and shall be applied to City Processing Fees. The City Costs Deposit has been
established to fund the City Processing Fees and shall be used by the City for such purpose and
shall be depleted accordingly. Immediately upon incurring any City Processing Fees or costs or
receipt of an invoice from third parties for same, the City shall have the right to deduct the amounts
due it on account thereof from the City Costs Deposit The City Costs Deposit shall be retained
by the City until the date of issuance of the final certificate of occupancy for a residential unit on
the Property and the remaining amount of the City Costs Deposit then held by the City, if any,
shall be promptly returned by the City to Developer thereafter, provided that the return of such
funds shall not terminate the obligations of Developer to pay all City Processing Fees arising or
incurred prior to issuance of the final certificate of occupancy for the final residential unit on the
Property. Developer shall pay any outstanding amounts due with respect to City Processing Fees
to the City within thirty (30) calendar days following receipt of an invoice from the City therefor,
provided that the City shall first apply the amount of the City Costs Deposit, if any, then held by it
in satisfaction of such invoice, and shall reflect the amount of such credit on the invoice.
12.12 Construction.
This Agreement has been drafted after extensive negotiation and revision. Both City and
Developer are sophisticated parties who were represented by independent counsel throughout
the negotiations or City and Developer had the opportunity to be so represented and voluntarily
chose to not be so represented. City and Developer each agree and acknowledge that the terms
of this Agreement are fair and reasonable, taking into account their respective purposes, terms,
and conditions. This Agreement shall therefore be construed as a whole consistent with its fair
meaning, and no principle or presumption of contract construction or interpretation shall be used
to construe the whole or any part of this Agreement in favor of or against either Party.
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12.13 Successors and Assigns; Constructive Notice and Acceptance.
The burdens of this Agreement shall be binding upon, and the benefits of this Agreement
shall inure to, all successors in interest to the Parties to this Agreement. All provisions of this
Agreement shall be enforceable as equitable servitudes and constitute covenants running with
the land. Each covenant to do or refrain from doing some act hereunder with regard to
Development of the Property: (i) is for the benefit of and is a burden upon every portion of the
Property; (ii) runs with the Property and each portion thereof; and (iii) is binding upon each Party
and each successor in interest during its ownership of the Property or any portion thereof. Every
person or entity who now or later owns or acquires any right, title, or interest in any part of the
Project or the Property is and shall be conclusively deemed to have consented and agreed to
every provision of this Agreement. This Section 12.13 applies regardless of whether the
instrument by which such person or entity acquires the interest refers to or acknowledges this
Agreement and regardless of whether such person or entity has expressly entered into an
Assignment and Assumption Agreement as provided for in Article 10 or is a Permitted Transferee
under this Agreement.
12.14 No Third Party Beneficiaries.
The only Parties to this Agreement are City and Developer. This Agreement does not
involve any third party beneficiaries, and it is not intended and shall not be construed to benefit
or be enforceable by any other person or entity.
12.15 Applicable Law and Venue.
This Agreement shall be construed and enforced consistent with the internal laws of the
State of California, without regard to conflicts of law principles. Any action at law or in equity
arising under this Agreement or brought by any Party for the purpose of enforcing, construing, or
determining the validity of any provision of this Agreement shall be filed and tried in the Superior
Court of the County of Orange, State of California, or the United States District Court for the
Central District of California. The Parties waive all provisions of law providing for the removal or
change of venue to any other court.
12.16 Section Headings.
All Section headings and subheadings are inserted for convenience only and shall not
affect construction or interpretation of this Agreement.
12.17 Incorporation of Recitals and Exhibits.
All of the Recitals are incorporated into this Agreement by this reference. Exhibits A, B
C, D and E are attached to this Agreement and incorporated by this reference as follows:
EXHIBIT
DESCRIPTION
DESIGNATION
A
Legal Description of Property
B
1. Site Plan
e
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EXHIBIT
DESIGNATION
DESCRIPTION
C
On Street Parking/Off-site Improvement
Conceptual Plan
D
Public Amenity Space Conceptual Plan
E
Assignment and Assumption Attachment
12.18 Recordation.
The City Clerk of City shall record this Agreement and any amendment, modification, or
cancellation of this Agreement in the Office of the County Recorder of the County of Orange within
the period required by California Government Code Section 65868.5. The date of recordation of
this Agreement shall not modify or amend the Effective Date or Termination Date.
12.19 Administrative Amendments.
Any amendment to this Agreement which does not relate to the Term, permitted uses of
the Project, provisions for the utilization of Residential Allocation Reservation, Development
Exactions, the conditions, terms, restrictions and requirements relating to the Applicable
Approvals or Public Benefits shall be considered an "Administrative Amendment". The City
Manager or his/her assignee is authorized to execute Administrative Amendments on behalf of
City and no action by the Planning Commission or the City Council (and no noticed public hearing)
shall be required before the Parties may enter into an Administrative Amendment. However, if in
the judgment of the City Manager it is determined that a proposal is not an Administrative
Amendment or that the proposed Administrative Amendment should be considered by the
approval bodies of the City, the City's Planning Commission shall conduct a noticed public hearing
to consider whether the Administrative Amendment should be approved or denied, and shall make
a recommendation to the City Council on the matter. The City Council shall conduct a noticed
public hearing to consider the request and the Planning Commission's recommendation on the
matter. At the conclusion of the public hearing, the City Council may approve, deny, or
conditionally approve the amendment.
12.20 Authority to Execute.
The person or persons executing this Agreement on behalf of each Party warrants and
represents that he or she/they have the authority to execute this Agreement on behalf of such
Party and warrants and represents that he or she/they has/have the authority to bind such Party
to the performance of its obligations hereunder.
[Signature page follows]
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ATTEST:
Erica N. Yasuda, City Clerk
APPROVED AS TO FORM:
David E. Kendig, City Attorney
SIGNATURE PAGE TO
DEVELOPMENT AGREEMENT
"DEVELOPER"
Meritage Homes of California, Inc.
By:
Name:
Its:
"CITY"
CITY OF TUSTIN
By:
Aldo E. Schindler, City Manager
31
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A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Orange
On , before me, , a Notary Public,
personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California
County of Orange
On , before me, , a Notary Public,
personally appeared who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
32
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
PARCEL 1, PER MAP FILED IN BOOK 52, PAGE 36 OF PARCEL MAPS, IN THE OFFICE OF
THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 2, OF PARCEL MAP, PER MAP FILED IN BOOK 52, PAGE 36 OF PARCEL MAPS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY
SITE ADDRESS:
13751 RED HILL AVENUE, TUSTIN, CA 92780
13841 RED HILL AVENUE, TUSTIN, CA 92780
ASSESSOR'S PARCEL NUMBERS:
APN 500-141-10
APN 500-141-09
A-1
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Aa91IN,
EXHIBIT B
SITE PLAN
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390691-00001
1279837.13 a03/06/25
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EXHIBIT C
ON STREET PARKING/OFF-SITE IMPROVEMENT CONCEPTUAL PLAN
Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
EXHIBIT D
PUBLIC AMENITY SPACE CONCEPTUAL PLAN
"NIT
I
PARK 3 (0.08 AC)
'
CONCEPTUAL PRIVATE PARK
PROGRAM
-
WATER EASEMENT
(D Secondary Gateway Monumentatlon
1B
Tubular Steel Fencing) Access Gate
1
7
-'Red Hill Distncf signage
- Controlled acres to neighborhood mclays
22
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-Demratire wall-potentialmoseicmeral
t1
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Screen Hedge
15
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-Illuminated sign
9
-Accent planting
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SWalk
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8
zO Orchard Heritage Basque
t3
6' Planted Parkway
®
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-Accent trees in raised planters
-Accent Tree Lighting
t4
9' Planted Parkway
UNIT
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4
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5
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6 -
O Decorative Plaza 'Pavement
to
Planting Area
-Enhancedpining, color and finish
- Material to Corm a natural barricade with deterrent
<
- Materials to mimic uop rows
properties
t
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Q Open Turf Community Gathering Space
Festoon Lighting
1 e
street Parlring
4 •
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-
Nil Tud
1 �
AC Units Behind Fence with Gravel Base
_
20
21
O5 Hertage Informational 5ignage
is
Unit Accent Tree
Historical inromation- orchadisignificance
to
Curb Ramp Comer
• •
• •
-vertical Displays
-Accent Lighting
20
Canopy Street Tree
Trash Receptacle (2)
2t
Bench (4)
O
20
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Q7 Bicycle Racks (2)
z2
- Intermediate armrest
Pet Waste Dispenser
18
Qe 6'x 6' Planter Pot on Concrete Pad
- -
- Bosque Heritage Trees
10' x 10' Planter (9)
12
-
-Accent Base Plantings
e
tg
NOTE' Privately owned, publicly accessible amenity space_
1a
RED HILLAVENUE
20
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EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
RECORDING REQUESTED BY
AND WHEN RECORDED, RETURN TO:
CITY OF TUSTIN
300 Centennial Way
Tustin, CA 92780
Attn: City Attorney
(Space Above This Line For
Recorder's Use)
[PARTIAL] ASSIGNMENT AND ASSUMPTION
OF DEVELOPMENT AGREEMENT
This [PARTIAL] ASSIGNMENT
AGREEMENT ("[Partial] Assignment") is entered
and between
("Assignee")
AND ASSUMPTION OF DEVELOPMENT
into as of , 20_ (the "Effective Date"), by
("Assignor"), and
RECITALS
A. Meritage Homes of California, Inc. (collectively "Original Developer" or
"Assignor"), and the City of Tustin, a municipal corporation ("City") entered into that certain
"Development Agreement", dated , and recorded on , as
Document No. of Official Records, Orange County (the "Development
Agreement" or the "DA"), pursuant to which Original Developer agreed to develop certain property
more particularly described in the Development Agreement subject to certain conditions and
obligations set forth in the Development Agreement.
B. Assignor is [the owner of or Original Developer's successor -in -interest to]
the property more particularly described on Exhibit A attached hereto (the "Assignor Land"), which
is [all or a portion] of the property subject to the Development Agreement].
C. Assignee is purchasing [all or a portion] of the Assignor Land, as more
particularly described on Exhibit B attached here to (the "Property"), from Assignor, in accordance
with the terms of that certain [Purchase and Sale Agreement Description] (the "Purchase
Agreement").
D. Pursuant to the terms of the Purchase Agreement, Assignor agreed to
assign to Assignee and Assignee agreed to assume certain rights, interests and obligations and
other terms and conditions under the Development Agreement, as such right, interests and
obligations relate to the Property.
E. The purpose of this [Partial] Assignment is to set forth the terms and
provisions agreed upon between Assignor and Assignee with respect to the assignment of certain
rights and interests and the delegation of certain duties and obligations of Assignor under the
Development Agreement, as such rights, interests, duties and obligations relate to the Property.
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AGREEMENT
NOW, THEREFORE, Assignor and Assignee agree as follows:
1. Assignment. Assignor hereby assigns, conveys and transfers to Assignee all
rights and interests of Assignor, as the "Developer", under the Development Agreement to the
extent such rights and interests relate to the Property, and Assignee hereby accepts such
assignment. [Notwithstanding the foregoing, Assignor shall retain (i) any and all rights under the
Development Agreement necessary to perform the Retained Obligations, defined below; and (ii)
those specific retained rights set forth on Exhibit C attached hereto (the "Retained Rights").]
2. Assumption of Obligations. [Except with respect to those specific retained burdens
and obligations of Assignor set forth on Exhibit C attached hereto (the "Retained Obligations"),]
Assignee hereby assumes all of Assignor's duties and obligations under the Development
Agreement accruing after the date hereof, to the extent such obligations relate to the Property,
regardless of whether the obligations originate in the Development Agreement itself or documents
executed in connection therewith as a means to effectuate the intent of those provisions,
including, without limitation: (a) any indemnity obligations, to the extent applicable to the Property
or to Assignee by reason of its ownership of the Property, (b) any obligation to follow and be
bound by all applicable rules, regulations and policies, (c) any obligation to pay any fees,
assessments or exactions as may be imposed by the Development Agreement, and (d) any
obligations arising under the Development Agreement by reason of a default of Assignee under
the Development Agreement (with respect to any obligations assumed by Assignee hereunder).
Assignee agrees to provide City commercially reasonable assurances of its performance of its
obligations under the Development Agreement. Notwithstanding anything to the contrary in this
[Partial] Assignment, Assignee acknowledges that the Development Agreement runs with the
land, therefore nothing in this [Partial] Assignment shall be construed to excuse Assignee from
general compliance with the Development Agreement's prohibitions, default and cure provisions,
and other standard provisions to the extent applicable to the Property.
3. Development Agreement Transfer Provision. Assignor and Assignee understand
and agree that this Agreement is required to comply with Section 10.5 of the Development
Agreement.
4. Indemnity. Assignee agrees to indemnify, defend and hold harmless Assignor, its
affiliated entities and persons, and their respective members, managers, partners, officers,
directors, shareholders, employees and agents from any claims, demands, losses, liability,
damages, causes of action, costs or expenses (including reasonable attorneys' fees) made
against or suffered by Assignor with regard to any failure by Assignee to perform any term or
condition of the Development Agreement, to the extent such term or condition relates to the
Property, from and after the date hereof.
5. Miscellaneous.
5.1. Interpretation; Governing Law. This [Partial] Assignment shall be
construed according to its fair meaning and as prepared by both parties hereto. This [Partial]
Assignment shall be construed in accordance with and governed by the internal laws of the State
of California, without regard to conflicts of law principles.
5.2. Attorneys' and Other Fees. In the event of any dispute between the parties
hereto or institution of any action or proceeding to interpret or enforce the provisions of this
Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
[Partial] Assignment, or arising out of the subject matter of this [Partial] Assignment or the
transaction contemplated hereby, the prevailing party shall be entitled to recover from the losing
party all of its costs and expenses incurred, including court costs and reasonable attorney's fees
and expert witness fees.
5.3. Authority. Each of the parties hereto represents and warrants to the other
that the person or persons executing this [Partial] Assignment on behalf of such party is or are
authorized to execute and deliver this [Partial] Assignment and that this [Partial] Assignment shall
be binding upon such party.
5.4. Further Assurances. Assignor and Assignee each agree to do such further
acts and things and to execute and deliver such additional agreements and instruments as the
other may reasonably request to consummate, evidence, confirm or more fully implement the
agreements of the parties as contained herein.
5.5. Execution in Counterparts. This [Partial] Assignment may be executed in
several counterparts, and all originals so executed shall constitute one agreement between the
parties hereto.
5.6. Conflict. Nothing in this [Partial] Assignment is intended to modify or
amend the respective obligations of Assignor and Assignee under the Purchase Agreement
between Assignor and Assignee which gave rise to this [Partial] Assignment and, in the event of
any conflict between this [Partial] Assignment and the Purchase Agreement, as between Assignor
and Assignee the provisions of the Purchase Agreement shall supersede and control over this
Partial Assignment.
5.7. Recordation. The parties hereby authorize this [Partial] Assignment to be
recorded in the records of Orange County upon the date hereof.
5.8. Successors and Assigns. This [Partial] Assignment shall be binding upon
and inure to the benefit of the respective successors, assigns, personal representatives, heirs
and legatees of Assignor and Assignee.
5.9. Notice. All notices to Assignee under the Development Agreement should
be addressed as follows:
Attn:
With a copy to:
Attn:
Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
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Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
IN WITNESS WHEREOF, the parties hereto have executed this [Partial] Assignment as of the
date set forth below its name below.
"ASSIGNOR"
a
By:
Date:
By:
Date:
"ASSIGNEE"
a
By:
Date:
By:
Date:
Docusign Envelope ID: AE055DBB-5F56-4850-Al56-16DE4C41 DA1 E
I-LIA011-7Yi-4
CONSTRUCTION PHASING PLAN
A
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