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A6144 - PALM SPRINGS PROMENADE LLC
FOURTH AMENDMENT TO PFA This FOURTH AMENDMENT TO PFA ("Fourth Amendment"), made effective as of the date fully executed, is by and between the City of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a California limited liability company ("Developer"), with reference to the following: RECITALS A. PFA. On or about September 29, 2011, the City and Developer entered into a Project Financing Agreement ("PFA"), which related to financing, development, redevelopment, creation, and refurbishment of Public and Private Improvements in the DFP Area of downtown Palm Springs. (The PFA, and all documents attached to and/or executed pursuant to the PFA, are incorporated herein by reference as though set forth in full, and defined terms therein shall, unless otherwise indicated, have the same meanings herein.) B. First, Second and Third Amendments. Prior to the effective date hereof, City and Developer entered into a First Amendment to PFA ("First Amendment'), a Second Amendment to PFA ("Second Amendment'), and a Third Amendment to PFA ("Third Amendment'). (Said First, Second and Third Amendments are incorporated herein by reference as though set forth in full, and defined terms therein shall, unless otherwise indicated, have the same meanings herein.) C. Fourth Amendment. The parties now desire to enter into this Fourth Amendment, NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Site Plan and TPM. As of the effective date of this Fourth Amendment, the Site Plan for the DFP Area is as indicated on Exhibit A attached hereto, and the tentative parcel map ("TPM") for the DFP Area is as indicated on Exhibit B attached hereto. The parties agree that, upon request by Developer made at any time before recordation of a final map pursuant to the TPM, the DFP Property may be legally divided and functionally organized, in a manner generally consistent with divisions, functions and conditions of approval applicable to the TPM, by way of lot line adjustments, easement grants and reservations, and certificates of compliance, rather than by way of recordation of a final map for the TPM. 2. Force Majeure Occurrences. With respect to the Project, the parties acknowledge that (a) three lawsuits have becn commenced, (b) two of said lawsuits have been dismissed, and (c) one lawsuit, i.e., a Petition for Writ of Mandamus filed by Advocates for Better Community Development ("ABCD"), Riverside Superior Court Case No. RIC 1302004, received a Court issued Denial of Petition on April 4, 2014. The last day ABCD could appeal the Denial of Petition was July 8, 2014 and such appeal was not filed. The parties acknowledge and agree that such lawsuits constituted force majeure Mppfaf'ourlhamenddch 10.30.2014 occurrences and suspended and tolled times for performance by Developer from February 19, 2013 to July 8, 2014. The parties further acknowledge and agree that on or about January 29, 2014, the City entered into a Settlement Agreement with ABCD pursuant to which, among other things, ABCD filed a dismissal with prejudice in the Superior Court Action of any and all claims relating to Block C and the hotel (i.e., the Kimpton Hotel previously approved by the City on Block C-1). The Parties acknowledge that multiple discretionary entitlements have been approved by the City and additional discretionary entitlements will be submitted to the City for review and approval. The Parties agree that any litigation filed against any portion of the Project for which all discretionary entitlements have not been approved shall not constitute force majeure occurrences and suspend and toll times for performance by Developer for any Block within the Project for which all discretionary permits have been approved or has been otherwise approved and vested. For the purposes of this Section 2, the term "discretionary entitlement" does not include ministerial permits 3. Block E. The parties agree that Block E, as shown on the attached Site Plan, shall be conveyed by Developer and acquired by City in fee and without condition or limitation except as expressly provided in this Section 3 of this Amendment No. 4. Block E shall be improved, used, operated, and maintained in accordance with the following: A. Escrow. Within 10 days after execution of this Fourth Amendment, an escrow ("Escrow") shall be opened with a local escrow office of First American Title Insurance Company ("Escrow Holder"), and Escrow instructions, consistent with this Fourth Amendment and as reasonably requested by Escrow Holder, shall be promptly executed and delivered by the parties. The close of Escrow shall occur within 30 days after opening, and Block E will then be conveyed by Developer to City in accordance with the terms hereof. B. Value. Prior to execution of this Fourth Amendment, City requested and received a Valuation Report dated January 17, 2014, which valued Block E at the sum of $5,300,000. Notwithstanding such Valuation Report, City will pay $4,500,000 for Block E and such sum will be delivered at close of Escrow. Said funds shall be used to create additional parking to the extent provided in Section 3.B(l) below. (1) Additional Parking. Developer agrees that all funds received per Section 3.13 above, will be deposited directly into the Private Improvement account and be released, upon authorizations from the IFC Agent and will be used to construct approximately 188+/- new underground parking spaces below surface areas of Blocks B and B-i, Market Street, and Andreas Street. Such new spaces are depicted on Exhibit C attached hereto and will be constructed approximately concurrently with streets to be constructed in the DFP Area. Deposit of the funds per Section 3.13 above into the Private Escrow Improvement account and use of such funds as provided in this paragraph will satisfy the Developer's obligation to deposit $2,000,000,00 into the Private Escrow Account as required under Section 2.8(6) of the PFA. Dfppfafourthamenddch 10.30.2014 2 (2) Use of Parking. Such new parking spaces will be designated for use by occupants of development constructed within Blocks A, B, B-1, C, C-1, D, F, and G, and the guests and invitees of the occupants of such development. C. Title. Prior to execution of this Fourth Amendment, City received a current Preliminary Title Report ("PTR") issued by First American Title Insurance Company ("Title Company") covering Block E, and copies of all recorded exceptions to title shown by the PTR. City has approved the PTR and all such exceptions, and will take title subject to such exceptions and standard title insurance policy exclusions and exceptions. At close of Escrow, City will receive a CLTA title insurance policy issued by the Title Company in the face amount of $4,500,000. D. Propen . Block E is currently in process of demolition and removal of existing surface improvements. Subsequent thereto, Developer shall, at no cost to the City, do the following; (i) complete public streets to be located adjacent to Block E, i.e., Belardo Road and Main Street, with all appropriate utilities, including without limitation, water, sewer, gas, telecommunications including cable television, and electric utility services installed in said streets; (ii) install connections for such utility services, stubbed five (5) feet into the Block E site at locations designated by the City Manager; (iii) convey good and marketable title to Block E to City, consistent with the provisions of Section LA(1)(b) of the Project Financing Agreement and this Amendment No. 4; and (iv) deliver physical possession of Block E to City in the form of a clean dirt site. Following such delivery, City shall, at its cost, install and maintain the following within the Block E property; public restrooms, appropriate hardscape, landscape, perimeter and ancillary lighting, security systems, irrigation systems, access improvements, and electrical, sewer and audio-visual infrastructure. Such installation work by City will be coordinated so as to be completed approximately concurrently with completion of Private Improvements on Blocks C and/or C-1. E. Use of Block E. Subsequent to installation of the Block E improvements pursuant to Subsection D above„ City shall, at its cost, own, operate and maintain, in a neat, clean, attractive, safe, functional and first class condition, the Block E property as public open space, and as an active and vibrant area for staging community and public events such as concerts, movies, farmers markets, public gatherings, or community events of any kind or nature on or adjacent to (per Section 3.F below) Block E until at least January 1, 2044 or the date on which the O'Donnell Golf Club ceases operations at the O'Donnell Golf Course, whichever event occurs first. At any time after such date, the City may sell or lease Block E for any use or purpose as the City may determine. Before City may sell or lease Block E to a third party or entity, or any portion thereof as provided herein, the City shall first offer Block E or the portion thereof, to Developer on the same terms and conditions as are offered by the third party. Developer shall have 30 days during which to accept said offer. If Developer does not accept said offer within said period, City shall be free to accept the third -party offer. If City does not enter into an agreement with the third party on said terms and conditions and close the transaction within 120 days, City's right to sell or lease Block E or any portion thereof to the third party shall expire and the procedure described in this Section shall again be applicable. Nothing herein shall Wppfafourthamenddch 10,30.2014 3 prohibit or limit the right or the ability of the City to contract with one or more third parties to perform any of the City's obligations pursuant to the terms of this Section E, regardless of whether such agreement is characterized as a contract for services, a lease, or any other label or description. F. Noise Easement. Developer, as the owner of Blocks C-1 and F, shall convey to City, and agents, employees, contractors, and designees, a noise easement over the Project, including without limitation, for the staging, conducting, or allowing of events as described above and the residual effects of such events, which may include loud music, loudspeakers, fireworks, vibrations, debris, and other noise or activities, and closure of all or parts of New Main Street between the westerly alignment of Belardo Road and Museum Drive so long as such closure does not interfere with access to Parcel 5, which may disturb or disrupt any owner, tenant, or guest within the Project, between the hours of 8:00 am and 10:30 pm. In the event the City ceases to use Block E for event uses, the City shall terminate the noise easement provided in this Section. City, as the owner of Block E, shall convey to Developer, as the owner of Blocks C-I and F, a similar noise easement. G. Escrow Costs. Escrow costs and the premium for the title insurance policy shall be paid for by City. Property taxes and assessments shall be prorated between the parties at close of Escrow. H. Prior Provisions. The provisions of Section 3 of the Second Amendment relating to Block E are superseded and replaced by the provisions of Section 3 of this Fourth Amendment. 4, Blocks A and A-1. As leasing discussions have occurred, it became clear that because of concerns about the height of proposed retail facilities, commercial tenants were opposed to locating in the Block A building that was originally scheduled to remain in place. As a result, and after examination of various alternatives, it has been determined that such building should be replaced with two new buildings, one on Block A and one on Block A-1, as depicted on the attached Site Plan. Updated concepts for Block A call for a 3 story structure, well within Specific Plan height parameters, which will contain retail and restaurant uses at ground level, with office and other uses on the second and third floors. Developer intends to submit revised plans for Block A at or prior to execution of this Fourth Amendment. Block A-1 will be designed and developed as part of future phase 2. When Block A-1 is developed, a 30 foot wide pedestrian paseo will be created, and it will be aligned to match on the south with proposed Market Street and on the north with an existing entry into the adjacent Hyatt Hotel. 5. Blocks B and B-1. The Site Plan attached to the original PFA contemplated layout configurations, land uses, improvements, etc., that have evolved and changed over time as pursuit of the Project, and negotiations and discussions with potential tenants, end users, design consultants and the City have occurred. Block E, originally planned for 65,000-70,000 square feet of commercial space plus 165 upper level residential units, is now planned for 50,530 square feet of public open space. Increasing open space (and completely eliminating Private Improvements) in Block E logically justifies decreasing Dfppfafourthamenddeh 10.30.2014 4 open space (and increasing Private improvements) in nearby Blocks B and B-1. Updated concepts for Block B call for a two story structure which will contain retail and restaurant uses. Developer intends to submit revised plans for Block B at or prior to execution of this Fourth Amendment, Block B-I will be designed and developed as part of future phase 2. 6. Block C Public Restrooms. Developer agrees, within a building in Block C, to design and construct at its cost, at a location within such building reasonably acceptable to City, public restroom facilities for women consisting of at least four (4) stalls and related wash basins and facilities, and public restroom facilities for men consisting of at least two stalls, two urinals, and related wash basins and facilities, fully compliant with all applicable laws, including without limitation physical disability access requirements, and connect same to requisite utilities (water, power, sewer). Developer shall convey easement or leasehold title to the restrooms space and improvements to the City in a form acceptable to the City Manager, and thereafter and at all times the City shall operate and maintain such facilities in a neat, clean, attractive, safe, functional, and first class condition. 7. Maintenance of Streets Sidewalks and Other Common Areas. Within the Project and DFP Area, once constructed and accepted (a) City shall, at its sole cost and expense, operate and maintain all street and sidewalk areas and all landscaping and other improvements, e.g., utilities normally maintained by City, located therein, and (b) Developer shall, at its sole cost and expense, operate and maintain all other common areas and improvements and landscaping therein, all as shown on Exhibit "A." 8. Performance Trust Deed. As part of the PFA, Developer provided City with a Performance Trust Deed to secure obligations of Developer under the PFA to complete Private Improvements. The parties acknowledge that plans for development of the Project have evolved and changed over time, and that such changes, while significantly improving the overall Project, greatly increase Developer costs. Such increased costs can only be funded by substantial construction loans, and such loans can only be obtained if the City releases the Performance Trust Deed. The City is strongly in support of such changes and has agreed, and hereby does agree, to incrementally reconvey the Performance Trust Deed on a parcel by parcel basis concurrently with the recordation of any loan to fund all Private Improvements on each such parcel to be constructed within the DFP Area, so long as 100% of the costs to complete such improvements are fully funded by the construction loan and/or Developer funds as determined by the lender and reviewed by the City Manager or the City Manager's designee at a location in the Coachella Valley identified by the lender In turn, Developer has agreed, and hereby does agree, that expenditures from any such loan will require prior approval of the IFC Agent, as contemplated by original requirements of the PFA. 9. Development Agreement. At any time, upon request by Developer, City and Developer shall exert and use commercially reasonable best efforts to prepare, finalize, execute and implement a Development Agreement, as statutorily authorized by Section 65864, et se . of the California Government Code, pursuant to which, among other things, Developer will obtain vested rights to construct and operate, in whole or in part, Mppfafourthamenddch 10.30.2014 5 improvements contemplated for construction and development within areas covered by the Project and the Specific Plan. In connection with any such efforts and Development Agreement, City agrees to cooperate and proceed without charge, e.g., without imposition of fees, costs or exactions, upon or against Developer or the Project. 10. Amendment of Grant Deed for Parkin. The Parties agree to amend the Grant Deed conveying the Parking Facilities as provided in the PFA to allow the City Council with the discretion to prohibit parking in the underground parking area in Block A between the hours of 3:00 am and 6:00 am as the City Council may designate by resolution. IL Effect of Fourth Amendment. To the extent provided and/or contemplated herein, the terms, provisions, covenants, and conditions of the PFA (and all documents attached to and/or executed pursuant thereto) and the First, Second and Third Amendments, are deemed amended and superseded. Except to the extent provided and/or contemplated herein, the terms, provisions, covenants and conditions of the PFA (and all documents attached to and/or executed pursuant thereto) and the First, Second and Third Amendments, shall remain in effect as originally written. 12. Incorporation of Recitals and Exhibits. Each of the recitals set forth herein and each of the exhibits and documents attached hereto are incorporated herein by reference and made a part hereof as though set forth in full. IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment and made it effective as and when specified above. DEVELOPER: PALM SPRINGS PROMENADE, LLC XCX�mia lin i ed liability, company CITY: CITY OF PALM/SPRINGS unicipal coim@!66-n-DU charter city By:i Title: Dated: �o / ATTEST: Clerk APPR AS TO LEGAL FORM: APPROVED BY CITY COUN9U 0R10I Z°t`+•F City Attey 4 Eo I44- Dfppfafourthamenddch 10-30,2014 6 Exhibit A Site Plan for the DFP Area (On following page) Mppfafourthammddch 10.30.2014 USES f/1aW ROORESIAYW.: /Re1nL. :ROU040Di •H'KM\'�EIAI GiCW Y00RItIK IIS�NPM,! xo NayD40Oi 1FIAt/aKE ua AMY oOERitF�.l.4 'x ��'� �,1. ���•,'� Ey��'!� � ^"r"'�"'�S �, � • o}t uEl v.Loro uat rver�usu+ a�.t�u�Cr<ril'�reD�x:wr µyycl EUZn!'ECAC RAX/J+�t"0 er MMkE RAZA9'EGik Ru.MRa•8�6` m�LL,ks YL MC rM011tlt Ige/i101hUUOE3 A•'P!O'.�M9W ! %' a�carca aczzooR an cove liEczzceR wsgi elr)A lRF6CM A4 rrlK%4,1, oncsi«a:c.i aooR �aaL.,-INAEEi rACRN-NM![i fiPoIraR M6*rl efS[AIAW,! 301OP Oai ETi1L.@YIlWAN14 rOCltCI Ma�.lEifAAAM1Ii EIH�.OFgL. — —�-.,_�� "P AAl MlaIV RSE IW.A•a Nlr O',l ML'1•l101v&IDBItIAL rlO I+•+'OI,ER 161S A..ONFC IeM NRIO+EDbLffVA $5r1LON:DVR 4R3L45�MS�M if3EVPTL. t=ECR3C5GY.rlE NO OtFE1r IfS l:aM�JOEi NM01ED E_ I. 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EOM+,CrCAll�.v.BP.EM: rOMA • w Rorr•vxRaRw zo, .�IEIRLeRs_ a!u Exhibit B Tentative Parcel Map ("TPM") for the D P Area (On following page) Mppfafourthamenddch 10.30.2014 JV M MY Or PALM SPAM= COUMT OP )OWWS STAIN OF WAIOMMML VIOMWA"MOCOMAW OMEROEVELOPM TENTATIVE PARCEL MAP NO. 36446 SEM A SUDIMMS OF PAWV-f P m & IOP Alm I Aa A. x "r'LrffNOTFIC4TVW; scwa cm7mcr&AMft" WN v p 0 iU FBOROWMAE pr ARE4#JRWW"W Lary r PAAM A PA#=, M PAW& I I -AM I h LWAL LAAMMEMOXMM"M almmu'wom me F AMM=l SAkDORAI AXE C 7FMr4 YYW PARM MP AV. 36"6 T1.0 Exhibit C Parking Space Plan for DFP Area (On Following Page) Dfppfafuur[hamenddch 10.30.2014 Hill ---------------- TIT ------------ masnNG EXISTING BELOW GRADE UPPER LEVEL PARIQNG GARAGE PARIQNG GARAGE PROPOSED PRIVATE BELOW GRADE PARIQNG GARAGE VO THE PUBLIC) TC) RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, CA 92262 Exempt from Filing Fee per Government Code Section 27383 No Documentary Transfer Tax per Revenue and Tax Code Section 11822 EASEMENT AGREEMENT (Elevator and Parking for Block A) This EASEMENT AGREEMENT ("Agreement') is made effective as of the date of recordation with the Official Records of Riverside County, California, by and between the City of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a California limited liability company ("Developer"). RECITALS A. Prior to recordation of this Agreement and pursuant to a Project Financing Agreement ("PFA") between Developer and City, Developer (i) was the owner of fee title to the real property described on Exhibit "A " attached hereto ("Entire Property"), (ii) conveyed to City by recorded grant deed ("Grant Deed") fee title to the real property described on Exhibit "B" attached hereto ("Granted Property"), and (iii) retained fee title to the real property described on Exhibit "C" attached hereto ("Retained Property"). The Entire Property consists of identifiable lots including the real property described on Exhibit "A " (Block A). (The PFA and recorded Grant Deed are incorporated herein by reference as though set forth in full and all defined terms therein shall, unless otherwise indicated, have the same meanings herein.) The conveyance by Developer to City pursuant to the recorded Grant Deed was specifically made subject to certain terms, covenants, conditions, restrictions, reservations, easements, exceptions and agreements as set forth therein. B. Developer is prepared to convey to a major tenant ("Lessee") by recorded lease ("Lease Agreement") a portion of Block A ("Leased Property"). Developer desires an easement over a portion of the Granted Property, such portion is generally located under the Leased Property and described on Exhibit "F-1 "and "F-2" attached hereto ("Easement Property") for the purpose of providing underground elevator/service and related parking to Lessee. C. The purpose of this Agreement is to set forth certain terms, covenants, conditions, restrictions, reservations, easements, exceptions and agreements as provided herein. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Grant of Easement. The City grants Developer an Easement over the Easement Property for the construction, maintenance, and use of an elevator from and through the Easement Property to the Leased Property, storage area, and vehicle parking spaces. The Easement shall run with Block A, and shall apply to the Developer, the City, and their I OW2014Easement i successors in interests. Developer shall operate and maintain the Easement Property in a neat, clean, attractive, safe, functional, and first class condition. 2. Developer Obligation. Developer shall promptly, and in no event later than commencement of any improvements on the Easement Property, remove a stairwell located immediately west of the of the Easement Property, pave and construct parking spaces at such location to match adjacent parking spaces to the reasonable satisfaction of the City. 3. Miscellaneous General Provisions. A. Entire Agreement. Subject to the terms of the Grant Deed and the PFA and Revitalization Plan, this Agreement contains the entire agreement of the parties with respect to matters covered herein, and there are no other agreements or representations, written or oral, other than as contained herein. B. Cooperation. Each party agrees to and shall do and perform such other and further acts and properly execute and deliver such other and further documents as may be reasonably necessary, expedient or convenient to implement the intents and purposes hereof. C. Reasonable Approvals. Whenever this Agreement requires or calls for the approval or consent of any party hereto, such approval shall not be unreasonably withheld, delayed or conditioned. D. Binding Arbitration. In the event of any dispute or controversy arising out of or relating to this Agreement, or the breach or performance of it, the parties shall reasonably attempt to resolve such dispute or controversy without resort to third party review or resolution. The parties shall first meet and confer on any such dispute or controversy. Such meeting(s) shall include any principal of the Developer and, at the discretion of the City, may include the City Manager and/or the City Council, either as a whole or through an ad hoc subcommittee designated by the City Council. Upon a determination by the parties that they are or will be unable to resolve the dispute or controversy on their own, then the parties shall submit the dispute, controversy or any remaining unresolved matter to binding arbitration, to be held in the Coachella Valley, and be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. E. Legal Fees. In the event of any dispute, arbitration or litigation arising out of or relating to this Agreement, or the breach or performance of it, the prevailing party shall be entitled to recover, in addition to any other appropriate relief, reasonable legal fees and costs incurred in connection therewith. F. Binding on Successors. This Agreement shall be binding on the parties hereto, their heirs, successors and assigns. The terms, provisions and covenants herein shall be enforceable at law as legal easements and/or covenants running with the land, and in equity as equitable servitudes. G. Independent Legal Representation. Each party hereto has, at all times during the negotiation and execution of this Agreement, been represented by independent legal counsel. 10lb OMEmement 2 H. Incorporation of Recitals and Exhibits. All recitals herein and all Exhibits attached hereto are incorporated into and made a part of this Agreement. 1. Captions and Headings. Any captions or headings in this Agreement are for convenience only, and shall not be used to determine or construe meanings of substantive language herein. J. Applicable Law. This Agreement is entered into in California, and relates to California real property, and shall be determined in accordance with the laws of the State of California. K. Venue. In the event of any arbitration or litigation arising out of or relating to this Agreement, or the breach or performance of it, any such arbitration shall be conducted in the Coachella Valley, and any such litigation shall be filed in the Indio Branch of the Riverside County Superior Court. L. Severability. In the event any provisions of this Agreement is deemed or construed by arbitration or a court of competent jurisdiction to be unenforceable, the remaining provisions shall nevertheless remain binding and enforceable to the maximum extent possible. M. Interpretation. This Agreement and language herein has been prepared and agreed to by both parties, and any rules of contract interpretation calling for construction against one party or the other based on drafting, shall be inapplicable. N. Notices. As used in this Agreement, "notice" includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) on the date of delivery shown in the records of the telegraph company after transmission by telegraph to the recipient named below. All notices shall be addressed as follows: If to City: City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Attn: City Manager Telephone: (760) 322-8350 Facsimile: (760) 323-8207 1O 2014Casement If to Developer: Palm Springs Promenade, LLC 555 South Sunrise Way, Suite 200 Palm Springs, California 92264 Attn: John Wessman Telephone: (760) 325-3050 Facsimile: (760) 325-5848 Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change Q. Authority. Each party represents and warrants to the other that such party has full right, power and authority to sign, execute and enter into this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement and made it effective as of the day and year set forth above. DEVELOPER: CITY: PALM UJUNGS PROMENADE, LLC C a jiT ability company CITY OF P. By: Title: Dated: SPRINGS charter city ATT ,,r �G'P -- ROVED AS TO FORM:-, City Clerk City PROEM BY Cim,' COUNCIL o911-1 1 zo 4 + & A (o 44- 10/6/2014F.mement 4 EXHIBIT "F-'I" AIRSPACE LEAST: ALL THAT PORTION OF PARCEL_ 3 AND PARCEL 4 OF PARCEL MAP NO.20326 AS FILED IN PARCEL MAP BOOT{ 133 AT PAGES 81 T14ROUGII 85 INCLUSIVE, RIVERSIDE COUNTY RECORDS. DL:SCRII31 1) AS FOLLOWS. COMNICNCING AT THE CENTERLINE INTERSECTION OF NORTH PALM CANYON DRIVE AND TAHQUIT7 CANYON WAY AS SHOWN ON SAID PARCEL MAP, THENCE NORTH 00°-OS'-00- WEST ALONG THE CENTERLM- OF SAID NORTH PALM CANYON DRIVE, A DISTANCE OF 646.50 FEET. '1'FILN'CE SOUTH 89°52'-00" WEST, A DISTANCE OF 40.00 FEET TO THE WEST LINE OF NORTH PALM CANYON DRIVE AND THE WEST L[NE OF SAID PARCEI, j; THENCE NORTH 000-08'-00" WEST ALONG SAID WEST LINE OF PALM CANYON DRIVE AND EAST LINE OF SAID PARCEL 3, A DISTANCE OF 59.47 FEET; THENCE SOUTH 890-52'-00" WEST A DISTANCE OF 11A9 FEC]'.. THENCE NORTH 0D"-08'-00" WEST, A DISTANCE OF 1.5-33 FEET THENC.I NORTH 890-52'-00" EAST, A DISTANCE OF 10.00 FEET; T11ENCE NORTH 000-08'-00" WEST, A DISTANCE OF 195.06 FEET; THENCE SOUTH 890-i2'-00" WEST, A DISTANCE OF 21.38 FEET; THENCE SOUTI l 440-527-00" WFS'1', A DISTANCE OF 2.77 FEET; THENCE SOUTH 890-54'-] 3" WEST, A DISTANCE OF 19.72 FEET" 1'O THE TRUE POINT OF TI IENCE SOUTH 89°-54'-13" WEST, A DISTANCE OF 38.00 FEET; THENCE SOUTH 000-08--00" E=AST, A DISTANCE OF 69A0 FEET; THENCE NORTH 890 32'-00" FAST, A DISTANCE OF 38-00 FEET; THENCE NORTH 000-08'-00" Wi:ST, A DISTANCE OF 69.10 FEF:T'1'O THE TRUEPOINT OF BEGINNING. LOWER BOUNDARY LIMITS 451.00 FEET. UPPER BOUNDARY LIMITS 461.00 FEET SEC .EXHIBIT "F-2" FOR DEPICTION ATTACHED HERETO AND NIADE A PART HEREIN_ PREPARED BY SAN RN AIF, 1N v( 0 IN L. SA BORN PLS 4146 I(d1:► WO, 13-110 .y L.S. 4146 M .; EX". 0/30/111 �O�' C A I-A-- EXHIBI T "F-2" L7 N89°54'13"E POa L6 218.22' L9 L8 O N -� - AIRSPA CE LEASE L11 LOWER BOUNDARY= 45100 0 UPPER BOUNDARY= 46100 u; Q' r- L5 I k � 0 co 0 ° p z LINE TABLE BEARING LENGTH N89052'00'E 40.0' N00008'00'W 59.47' N89°52'00'E 11.49' Nao008'00'W 15.33' N89°52'00'E lo.00' N09052'00'E 24.38' N44052'00'E 2.77 N8905413'E 19.72' N89°549 3'E 38.00' N00008'00'W 69.10' N89°52'00'E 38-00' N00008'00'W 69.16' PARCEL PM 20326 FMB 133/81-85 573- 60-002 3CGALL 7.' MU GRAPHIC SCALE N PARCEt 032 A PM PM 10326 P51� 1 PMB 133/81-85 ' 513-560-004 0 Ln --- ` ---------------:�:___ � d PA -+vL � O QM 30376 po8 a PM$ 3-�� o C} Z z q TAHQUIT2 CANYON WAY P0C CENTERLNE NET@RSECTioN PER P.M. 20326 uF vAty ,� p CITY OF PALM SPRINGS AYYKUVtL: PUBLIC WORKS & ENGINEERING 28931 DEPARTMENT AASSE SST. �n kR OF PUBLIC WORKS/ PE. LEASE AIRSPACE DESIGN BY.- SCALE.FkE NO.: LEGAL DESCRIPAON: AMS I' = 100' - SEE EXHIBIT "F-1 " CHECKED BY.' WO. jr SHEET NO.: 13-110 2 OF 2 ACKNOWLEDGMENT OF INSTRUMENT (Cal. Civil Code Section 1181) State of California } County of Riverside ) SS. City of Palm Springs ) On October 30, 2014, before me, JAMES THOMPSON, CITY CLERK, CITY OF PALM SPRINGS CALIFORNIA, personally appeared DAVID H. READY, who I personally know is the CITY MANAGER of the CITY OF PALM SPRINGS whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his official and authorized capacity on behalf of the City of Palm Springs, a California Charter City. 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 the official seal of the City of Palm Springs, California, this 3& day of October, 2014. � QpALMSA� .y a V N a Signature: qtiFOAN` ES THOMPSON, CITY CLERK ity of Palm Springs, California Title or Type of Document: Easement Agreement [Elevator and Parking for Block A] Palm Springs Promenade, LLc TIE M AMENDMENT TO PFA This THIRD AMENDMENT TO PFA ("Third Amendment"), made effective as of the date fully executed, is by and between the City of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a California limited liability company ("Developer"), with reference to the following: RECITALS A. PFA. On or about September 29, 2011, the City and Developer entered into a Project Financing Agreement ("PFA"), which related to financing, development, redevelopment, creation, and refurbishment of Public and Private Improvements in the DFP Area of downtown Palm Springs. The PFA, and all documents attached to and/or executed pursuant to the PFA, are incorporated herein by reference as though set forth in full, and all defined terms therein shall, unless otherwise indicated, have the same meanings herein. B. First and Second Amendment. Prior to the effective date hereof, City and Developer entered into a First Amendment to PFA ("First Amendment') and a Second Amendment to the PFA ("Second Amendment"). The First Amendment and Second Amendment are incorporated herein by reference as though set forth in full, and all defined terms therein shall, unless otherwise indicated, have the same meanings herein. C. Third Amendment. The parties now desire to enter into this Third Amendment. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Further Updated Site Plan. The original Project Site Plan (attached to the PFA as Exhibit A) was replaced and superseded by the Updated Site Plan attached to the Second Amendment as Exhibit "I". Said Updated Site Plan is hereby superseded and replaced by the Further Updated Site Plan attached hereto as Exhibit "X". 2. Effect of Third Amendment. To the extent provided and/or contemplated herein, the PFA (and all documents attached to and/or executed pursuant to the PFA), the First Amendment and Second Amendment are deemed amended and superseded. Except to the extent provided and/or contemplated herein, the PFA (and all documents attached to and/or executed pursuant to the PFA), the First Amendment and Second Amendment shall remain in effect as originally written. 3. Incorporation of Recitals and Exhibits. Each of the recitals set forth herein and each of the Exhibits attached hereto are incorporated by reference and made a part hereof as though set forth in full. APPfadllrdamendl1102013 IN WPTNESS WHEREOF, the parties hereto have executed this Agreement and made it effective as and when specified above. DEVELOPER: PALM SPRIN PR46m ADE, LLC al' ii ted lia.W ity company Title: CITY: CITY OF PALM SPRINGS California giunicip ra n and charter city By: Title: c„ Dated: i /o ATTEST: APPROVED AS TO LEGAL FORM: ITEM NO..�..�..... APPROVED BY MY COUNCIL dit&thirdMCAdl/10/2013 2 L iwreaums DOWNTOWN PALM SPRINGS MASTERPLAN I SRE PLAN EXFQSff I SCALL 1:60 MUMS .__..........:,..._...... _..._.._...._.__....__.__...____._....._._._... SECOND AMENDMENT TO PFA This SECOND AMENDMENT TO PFA ("Amendment"), made effective as of the date fully executed, is by and between the City of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a California limited liability company ("Developer"), with reference to the following: RECITALS A. PFA. On or about September 29, 2011, the City and Developer entered into a Project Financing Agreement ("PFA"), which related to financing, development, redevelopment, creation, and refurbishment of Public and Private improvements in the DFP Area of downtown Palm Springs. The PFA, and all documents attached to and/or executed pursuant to the PFA, are incorporated herein by reference as though set forth in full, and all defined terms therein shall, unless otherwise indicated, have the same meanings herein. B. Progress to Date. Subsequent to entry into the PFA, substantial progress has been made toward applicable goals and objectives set forth therein. Among other things, the Acquisition Escrow has closed and the City has acquired title to the Public .Assets, the Bank of America building has been demolished, and Developer has nearly finalized information and documentation sufficient to submit a tentative tract map and major architectural application to the City. C. Proposed Wdifications. Experience gained in connection with progress to date has lead the parties to recognize that plans for development and redevelopment of the DFP Area will evolve and change over time as negotiations and discussions with potential tenants, end users and design consultants occur and take place. By this Amendment, the parties desire to approve proposed modifications to date, and acknowledge and agree that pursuit of the Project requires flexibility and future adjustments, changes and/or refinements will occur and be incorporated as the process continues. NOW, THEREFORE, IT IS AGREED AS FOLLOWS: 1. Updated Site Plan. The original Project Site Plan (attached to the PFA as Exhibit A) is hereby replaced and superseded by the Updated Site Plan attached hereto as Exhibit "I". In the Updated Site Plan, certain Blocks have been re -designated, as follows: (a) former Block A-1 has been re -designated as Block A; (b) former Block A-2 has been re -designated as Block B and divided into b and b-1; (c) former Block C has been divided into blocks c and c-1; (d) former Block E has been re -designated as Block F; and (e) former Block F has been re -designated as Block E. As of the effective date of this Amendment, Block designations and references in the PFA, and in any and all documents attached to and/or executed pursuant to the PFA, shall be deemed changed as indicated in 1�Page the Updated Site Plan, and herein. In addition, the parties approve proposed additional and/or alternative development and/or land uses as indicated on the Updated Site Plan. 2. Updates to Project Description. The original Project Description (attached to the PFA as Exhibit B) is amended and superseded to the extent provided in the Updates to Project Description attached hereto as Exhibit "B". 3. Event Area on Block E. The parties approve development and use of Block E as an Event Area for a period of ten years from the effective date of this Amendment_ (For the purpose of this Section 3 of this Second Amendment, the term "effective date of this Amendment" shall mean the date on which the reconstruction of BIocks H-1 and H-2 as provided in Section 5 of this Second Amendment has been completed and vehicular and pedestrian access has been provided to the Event Area from Belardo and Museum Drive, all of which shall be completed no later than the completion date of the Project as provided in the Project Financing Agreement.) Developer will retain ownership of the Event Area, but City shall have an irrevocable right and license, for and during said ten year period, to use the Event Area for scheduling, holding, staging, allowing and/or conducting special events (and ancillary, related, and incidental purposes). Developer will have similar rights, provided they do not conflict with events and/or activities previously scheduled by City. City and Developer will cooperate with each other and use reasonable and good faith to avoid conflicts. Developer shall have full possession and control of the site, except when City is using it for event purposes. City shall provide reasonable (not less than 48 hours) advance notice to Developer as to when and for what purposes -City will, from time to time, desire use of the site. Developer shall pay all costs to get the site in a condition to receive event equipment as designated by City, and City shall pay all costs of acquiring and installing such equipment (For the purpose of this Amendment, the phrase "to get the site in a condition to receive event equipment" includes but is not limited to installation of all hardscape, landscape, perimeter and ancillary lighting, security systems, irrigation systems, access improvements and electrical, sewer, and audio-visual infiasiructure.) During the ten year term, Developer shall maintain the site (but not the equipment) and advance and pay all costs reasonably incurred in connection therewith and the City will pay an costs to maintain the event equipment in a fast class condition. The Parties will meet and confer in good faith as provided herein on a plan for the use of the Event Area and the equitable sharing of the maintenance costs required pursuant to this Agreement Each party will be responsible for obtaining insurance or self insurance coverage sufficient to protect its own interests. During said ten year period, Block E will be used only as an Event Area.. Thereafter, Developer may, subject to receipt of normal City approvals, develop and use Block E for any purposes authorized by the Museum Market Plaza Specific Plan ("Specific Plan). 4. Proposed Hotel in Block c,1. Consistent with the provisions of the Specific Plan, Developer may pursue development and operation of a 170+/- room first class new hotel in Block c-1. The Parties recognize that such a first class new hotel is eligible for assistance pursuant to Chapter 5.26 (as amended) of the Palm Springs Municipal Code ("Ordinance"). Accordingly, Developer intends to pursue development 2 1 P a g e .... ........ ..... .... ..._...... r Es of the Palomar (or equivalent), a Kimpton Hotel, a high -end first class new hotel pursuant to the Ordinance (as referenced in Section 526.040 as amended), and City agrees to fully cooperate in that effort. City acknowledges that City Staff has done a preliminary review of basic plans for the hotel and concluded that, if timely commenced, constructed and operated as proposed, it will qualify with the provisions of the Ordinance relating to fast class new hotels. The parties further acknowledge that obtaining financing will require execution of a formal written agreement that sets forth terms and conditions relative to hotel development and operation, and implementation of the Ordinance in connection therewith. The parties agree that it despite commercially reasonable efforts by Developer, Developer is unable to meet the requirements of the Ordinance, Developer shall have an additional 6 months, beyond any existing completion deadline, to secure entitlements, including building permits, for an alternative development plan for Block c-land an additional 12 months after issuance of building permits to complete such development in a manner authorized by the PFA. 5. Plocks H-1 and H-2 Reconstruction. With respect to the portions of Block H-1 and Block H-2 which do not include subsurface parking facilities, the parties agree that upon receipt of appropriate permits from City, Developer shall, at an additional cost to the City but without any profit or mark-up to Developer, do or cause to be done the following: (i) demolish and remove all existing improvements, i.e., concrete surface areas, walls, pavers, landscaping, etc-, (ii) replace such improvements and level the site with compacted fill dirt, (iii) install new landscaping (grass, shrubs, trees, irrigation) and appropriate hardscape, (iv) install (on immediately adjacent areas for the benefit of subsurface parking) a new stairwell and mechanical exhaust ventilation system, as may be required by Code, and (v) install any other improvements as reasonably necessary for the completion of the Project_ 6. Confirmation of Status. Each of the parties acknowledges, agrees and confirms that the PFA, and each of the documents attached to and/or executed pursuant to the PFA and approved by the City Council, are in good standing, and that neither party is in any way in default with respect to same. 7. Cg_o_RgMtion. Each party agrees to do and perform such other and further acts, and execute and deliver such other and further documents, as may be necessary, expedient or appropriate to effectuate the intents and/or purposes hereof. 8. Effect of Amendment. To the extent provided and/or contemplated herein, the PFA, and all documents attached to and/or executed pursuant to the PFA, are deemed amended and superseded. Except to the extent provided and/or contemplated herein, the PFA, and all documents attached to and/or executed pursuant to the PFA, shall remain in effect as originally written. 9. Incorporation of Recitals and Exhibits. Each of the recitals set forth herein and each of the Exhibits attached hereto are incorporated by reference and made a part hereof as though set forth in full. 31Pa�()e _- _ .._....... �....... _........ IN WITNESS WHEREOF, the parties hereto have executed this Agreement and made it effective as and when specified above. DEVELOPER: PALM SPRINGS PROMENADE, LLC AB lia iy company Title• D ©l Z CITY: CITY OF PALM SPRINGS ornia mpnicipal co o d charter city Dated:�— ATTEST: APPROVED AS TO LEGAL FORM: 41Page C' Clerk Ci,kuofg7y APPROVED BY CITY COUNCIL ro/r7►JZo,Z A.1614 DOWNTOWN PALM SPRINGS WESSMAN DEVELOPMENT a USES P,�DA. .rDLt.r.,.., �s•a._, Pngneauuwwry ortiawowrc Pure aeAwDN>..crw�. Peetwawte Ncm:AAswa CSIwPUM jw N; Y C ISP fCOCPt Plt.C. MOhL01s,Cf a6iCNA. w1DxFLNRRM MgpIEp M{wEW Evllct Cfe,RwO.Nr DTCA l3E] Pf]TNMAMSPMwfYDDO, W! vuaxrPw.c1¢attc A,wwNaovcoev wioDtnursA utAc�xo uuaw uiwmuroaw+mc•.Iownn Nom wnweoMAuvtw,Dws DIQAMAART ItBW WPQI ILW (iffYCMNMMO.£DfFfM flPll[L RGt itlM IutnNo uews w wrrcc mecr wt�aouts vsAoouP atPncNrv.. upon+ INP4 bQbIWtWB.PGn • DIDCASMDC vc5T46Wcf PCWlr,ni¢ mPY NDPEI.POCwi P•tlURLP•MroK tf, •tPALdI MStYM11N R, utt9 Il ._ _ 1 � • W wtllEwt�we�iUluIET�ET .. _ .I J� .S�tf vOKP uuaTr r • ALYDNPf6bJrWlLb.f tt4 "� cgypVwP MI41tiCDIP4 •1WN8tailsPwwCMAON • NLttrtETt BEIAADO �� ' , � . �tCKCINYCwIIDI• W♦A MDD q� � •wwuc+n��:PPNNnNtrY MASTERPLAN /SITE PLAN "14 EXHIBIT SALE IM M12 1: 16 EXHIBIT 11 TO SECOND AMENDMENT TO PFA UPDATES TO PROJECT DESCRIPTION As of the effective date of the Second Amendment to PFA ("Amendment) to which this Exhibit "II" is attached, the original Project Description, as set forth on Exhibit "B" attached to the PFA, is amended and superseded as and to the extent provided below. 1. Undated Site Plan Any reference to Site Plan shall be deemed to refer to the Updated Site Plan (Exhibit "I" attached to the Amendment), and future development and uses within Block areas shall be consistent with designations set forth on the Updated Site Plan. 2. Changed Block Designations. Block designations and references in the Project Description shall be deemed changed as indicated on the Updated Site Plan. 3. Block F. Any reference to a movie theater in Block E shall be deemed deleted, it being understood that pursuant to Section 2 of the Amendment, Block E will be designated for use as an Event Area for a period of ten years, and thereafter may, subject to receipt of normal City approvals, be developed for any purposes authorized by the Specific Plan or PFA. 4. Block c-1. Subject to receipt of normal City approvals, Block o-1 may be developed into a high end boutique hotel of approximately 170+/- rooms, and related and incidental uses, in general accordance with preliminary height and massing plans submitted to the City. 5. Bollards . Any reference to "electronically operated bollards" shall be deemed changed to refer to "removable bollards". AMENDMENT NO. 1 TO PROJECT FINANCING AGREEMENT (AGREEMENT NO. A6144) THIS AMENDMENT NO. 1 TO PROJECT FINANCING AGREEMENT ("Amendment") is made and entered into this 18th day of April, 2012 by and between the City of Palm Springs, a California charter city ("City") and Palm Springs Promenade, LLC, a California limited liability company ("Developer"). RECITALS A. City and Developer entered into a Project Financing Agreement ("PFA") for the purpose of implementing the Downtown Revitalization Project on September 29, 2011. B. The City desires to fund its obligations under the PFA by the sale of lease revenue bonds secured in part by property and improvements the City will acquire from Developer pursuant to the PFA. It is the desire of the Parties that the sale of the lease revenue bonds and the sate of the property to the City will occur simultaneously. This Amendment expressly provides for the concurrent or simultaneous closing of the sale of the lease revenue bonds and the Acquisition Escrow as described in the Agreement. AGREEMENT The foregoing Recitals are true and correct. 2. Exhibit D, Schedule of Performance, Item 14 is amended in part to read: 14 Deposit of Purchase Price Concurrent or And Other Required Sums. Simultaneous with The City shall deposit the Purchase Closing Price of the Parking Structure and Other public assets, funds for the Public improvements and other Required sums in escrow Page 1 of 2 678705 3. Except as expressly provided above, all other terms and conditions of the original PFA shall remain unchanged and in full force and effect. City of Palm Springs "City" Date: `% By: David Ready, City Manager APPROVED TO FORM: By: City A orney APPROVED BY CITY COUNCIL WIZo, Z +A Ato,4+ Date: ATTEST: City Cleric DS��o/zo�z PALM SPRINGS PROMENADE, LLC "Developer" 10 f-N Gv F`s!�:M 6N Title: M /fN fi`� 9 Page 2 of 2 678705.2 PROJECT FINANCING AGREEMENT THIS PROJECT FINANCING AGREEMENT ("Agreement"), dated thisAlay of September, 2011, is entered into by and between the City of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a California limited liability company ("Developer"), with reference to the following: RECITALS A. Specific Plan and DFP Area. On December 2, 2009, the City adopted, by unanimous vote of the City Council, Ordinance 1764, which approved the Museum Market Plaza Specific Plan ("Specific Plan"). The Specific Plan covered two existing downtown commercial areas, i.e., the area commonly known as Desert Fashion Plaza ("DFP Area"), and the area commonly known as the Town and Country Center (`The Center"). This Agreement relates only to the DFP Area, which is (or within fifteen (15) days of full execution of this Agreement) owned by PSP LLC, and does not include The Center, including without limitation Parcels K-1 and K-2 as identified in the Specific Plan. B. Redevelopment. The Parties have long recognized that redevelopment of the DFP Area is critical to restoring economic vitality to downtown Palm Springs, and that successful redevelopment will, as is almost always the case with downtown areas, require public -private participation and funding. C. Revitalization Plan. In early 2011, the Mayor and City Council commenced a series of "visioning" sessions with community leaders and concerned citizens. As a result of that effort, concepts evolved and subsequent to the "visioning" sessions have been refined and finalized into a plan for the DFP Area ("Revitalization Plan"), which is depicted on the "Project Site Plan" attached hereto as Exhibit "A" and described in the "Project Description" attached hereto as Exhibit "B" (the "Project"). D. Public Participation. In order to evaluate economic feasibility of the Revitalization Plan, and determine the extent of required public participation, the City engaged Keyser Marston Associates, Inc. ("KMA"), a qualified and reputable public financial consultant that has worked with City on many prior occasions. At the request of City, KMA proceeded to analyze projected redevelopment costs and post redevelopment rental revenues in order to determine the extent to which public participation would be required for the Project. KMA projected that the total redevelopment project costs would be at least $100 million dollars. Using conservative but reasonable assumptions with respect to construction costs and rental revenues, KMA determined that $40 to $45 million dollars in public participation would be necessary to fund the Project. E. Public Assets and Improvements and Private Improvements. Based on the foregoing, but subject to the City identifying sources of funding as provided in Section 1.A.(1)(a) below, the parties have agreed to proceed with the Revitalization Plan. City will provide: 1) $32 million dollars ("City Payment") for the City to acquire certain property and interests ("Public Assets") as referenced in this Agreement, and fund project incentives for the completion of the Project; and 2) $11 million dollars ("Public improvement Payment") to create and refurbish (with respect to the Public Assets) public improvements as depicted on the Project Site Plan and described in the Project Description ("Public Improvements"). The Developer will create and refurbish private improvements as depicted on the Project Site Plan and described in the Project Description ("Private Improvements"). As used herein, with respect to Public Improvements, "creation" means demolition and construction work sufficient to install and complete the new public streets referenced in the Project Description, and "refurbishment" means rehabilitation of the Parking Facilities (defined in Section F.2 below) to be acquired by the City to a top quality, clean, safe, and operable condition; and, with respect to Private Improvements, "creation" means demolition and construction work sufficient to install and complete top quality new buildings in Blocks A-2, C, and F, and finished pads for future vertical development in Blocks D, E, and G, as referenced in the Project Description, and "refurbishment" means upgrading the existing building in Block A-1 with top quality new facades, as referenced in the Project Description. In view of the fact that private vertical development of Blocks D, E, and G will be deferred for future "phases", completion of Private Improvements as and to the extent referenced in Section 2 of the Project Description could be, and sometimes is, referred to as "Phase 1" of the Revitalization Plan. Nothing in this Agreement obligates the City to fund or contribute to any future "phases" of Private Improvements, or obligates Developer to construct any future "phases" of Private Improvements. F. City Acquisition of Public Assets. The Revitalization Plan calls for the City to acquire Public Assets as follows: 1. Land. Land to be acquired by the City ("Land") includes (a) land located under proposed new public streets as depicted on the Project Site Plan and described in the Project Description; (b) land located below the three level parking structure at the northwest comer of the DFP Area; (c) land located below the two level parking structure at the southwest corner of the DFP Area; (d) land located below the underground parking.garage that connects said three level parking structure and said two level parking structure; (e) land shown as Blocks H-1 and H-2 on the Project Site Plan; and (f) easements for sidewalks and pedestrian rights -of -way and restroom facilities. Legal descriptions covering the Land, and each portion thereof, shall be separately verified and signed by both of the Parties prior to or concurrently with final execution. The Parties acknowledge that the California Subdivision Map Act allows conveyances to public agencies such as the City without the necessity of subdivision or parcel map recordation and, therefore, the parties agree that conveyances to the City per this Agreement may be made without such map recordation. 2. Parkin- Facilities. Existing parking facilities to be acquired and refurbished by the City and then used for free public parking ("Parking Facilities") include: the three level parking structure located at the northwest corner of the DFP Area; the two level parking structure located at the southwest corner of the DFP Area; the underground parking garage that connects said three level parking structure and said two level parking structure; parking below developed portions of the DFP Area, and all associated ramps, driveways, connection tunnel, approaches, elevators and escalators. Legal descriptions covering the Parking Facilities, and each portion thereof, shall be separately verified and signed by both of the Parties prior to or concurrently with final execution. Such legal descriptions may include three dimensional airspaces to be acquired by the City. AGREEMENT 1. Acquisition of Public Assets and Funding of Public Improvements. Upon and subject to the terms and provisions of this Agreement, City shall acquire the Public Assets and provide funding for the Public Improvements. A. Acquisition Escrow. At least ten (10) days prior to the Effective Date of this Agreement, an escrow ("Acquisition Escrow") shall be opened by the Parties with a mutually agreeable and reputable escrow holder ("Escrow Holder"), and City and Developer shall each execute and deliver escrow instructions consistent with this Agreement and as reasonably requested or required by the Escrow Holder. The parties agree that escrow fees and costs of the Acquisition Escrow (and the Private Improvement Escrow referenced in Section 2.A. below, and the Public Improvement Escrow referenced in Section 2.A.(b)(7) below) shall be shared equally by the parties. Prior to the close of escrow and subject to the terms of this Agreement, City shall deposit the City Payment and the Public Improvement Payment into the Acquisition Escrow. (1) Contingencies to Close of Acquisition Escrow. Close of the Acquisition Escrow is subject to satisfaction of each of the following contingencies: (a) City Funding. A first contingency to close of the Acquisition Escrow shall be the City identifying funding sources for its obligations under this Agreement. City is currently exploring potential sources of funding for this and other desired public projects. In any event, if, by December 21, 2011, City has not (i) identified funds sufficient to cover its obligations under this Agreement, or (ii) been placed in a position of being reasonably certain that such funds will promptly (within 180 days) be identified and/or reserved, then, in that event, City shall have the right, by delivery of written notice to Developer by no later than December 22, 2011 (the "Effective Date"), to terminate this Agreement and cancel the Acquisition Escrow, without penalty or any damages for breach of any term of this Agreement. 3 (b) Condition of Title. A second contingency to close of the Acquisition Escrow shall be the conveyance by Developer to City of good and marketable title to the Public Assets, without encumbrances (except as approved by City), as evidenced by a CLTA title insurance policy with coverage in the sum of $32,000,000 (with such title endorsements as City may reasonably request or require) issued by a mutually agreeable and reputable title insurance company ("Title Company"). In this regard, the parties acknowledge that prior to the Effective Date, City will receive and review a preliminary title report ("Preliminary Report") covering the entire DFP Area, which shall set forth all liens, encumbrances, easements, restrictions, conditions, pending litigation, judgments, administrative proceedings relating to the entire DFP Area. Concurrently therewith, City shall receive (i) copies of all recorded documents listed as exceptions to title on the Preliminary Report, and (ii) an easement plat prepared by the Title Company which shows the locations of all recorded easements affecting the entire DFP Area. By reviewing the foregoing documents, the City will be able to determine which exceptions to title affect the Land (or portions thereof) and/or the Parking Facilities (or portions thereof), which are being acquired by City. It is understood that legal descriptions for each portion of the Land (and Parking Facilities thereon) will be called out by two dimensional area references, and that legal descriptions for portions of the Parking Facilities not located over the Land will be called out by three dimensional airspace references. City shall, with respect to Land and Parking Facilities to be acquired by City, approve or disapprove each exception shown on the Preliminary Report and each encroachment, overlap, or boundary line dispute, or any other matter that materially and adversely affects title or that violates any law, rule, or regulation (each an "Exception") within twenty (20) days after City receives the Preliminary Report, whichever is later. City's failure to object within the twenty (20) day period shall be deemed to be approval of the Exceptions. If any Exception is disapproved (each a "Disapproved Exception"), Developer shall, within thirty (30) days following expiration of the twenty (20) day period provided under this Section, use its best efforts to cause each Disapproved Exception to be discharged, satisfied, released, or terminated, as the case may be, of record, and in a form that is reasonably satisfactory to City and Escrow Agent, all at Developer's sole cost and expense. Developer authorizes Escrow Agent to disburse from proceeds otherwise disbursable to Developer upon Closing a sum sufficient to discharge any Disapproved Exception that may be discharged only by the payment of money. If Developer is unable to obtain a discharge, satisfaction, release, or termination within the period specified above, City shall have the right to waive the Disapproved Exception and proceed with Closing, accepting title to the Property subject to the Disapproved Exception, or to terminate this Agreement and cancel the Acquisition Escrow, without penalty or any damages for breach of any term of this Agreement. (c) Physical Condition. A third contingency to close of the Acquisition Escrow shall be the conveyance to City of the Public Assets, in substantially the same physical condition that exists as of the Effective Date of this 4 6( to 0 Agreement. In this regard, the Developer, prior to September 22, 2011, shall provide the City with full disclosure of the physical condition of the Public Assets, including without limitation all maintenance records and all studies and reports prepared on its behalf or otherwise in its possession. The parties acknowledge that prior to October 31, 2011, City and its independent consultants will perform thorough examinations of such Public Assets, and approve the existing physical condition thereof, with the understanding that such assets shall be conveyed "as is" and "with all faults" so long as the City reasonably determines that such physical condition is materially consistent with estimates of costs of creating and refurbishing Public Improvements as identified in a report by Developer's consultant, PENTA, submitted to the City prior to execution of this Agreement ("Developer's Disclosure"). As of the date of execution of this Agreement, Developer's Disclosure shows total costs of creating and refurbishing Public Improvements (as described in Section E above and Section 2 below) at $11,000,000. In the event the City reasonably determines that the physical condition of the Public Assets, or any portion thereof, is materially inconsistent with the Developer's Disclosure, City shall have the right, by delivery of written notice to Developer by no later than October 31, 2011, to terminate this Agreement and cancel the Acquisition Escrow, without penalty or any damages for breach of any term of this Agreement. The foregoing notwithstanding, the parties agree as follows: Using the funds in the Public Improvement Escrow (as referenced in Sections 1.A.(2)(b) and 2.B.(7) below), Developer shall be responsible for paying all costs and expenses incurred in connection with obtaining entitlements for and constructing (creating and refurbishing) Public Improvements. In the event such creation and refurbishment work exceeds the sum of $11,000,000, Developer shall promptly pay any and all costs in excess of $11,000,000; in the event such creation and refurbishment work is accomplished for less than $11,000,000, any savings (in the form of amounts remaining in the Public Improvement Escrow after completion of the Public Improvements and City issuance of a written certificate or acknowledgment of completion as provided in Section 2 below) shall be transferred from the Public Improvement Escrow into the Private Improvement Escrow (as referenced in Sections 1.A.(2)(b) and 2.A below), and be used to help complete the Private Improvements. Based on Developer's agreement to pay any costs of creation and refurbishment of Public Improvements in excess of $11,000,000, City shall waive its rights to terminate the Agreement and cancel the Acquisition Escrow under the provisions of this Section. (2) Close of Acquisition Escrow. Promptly upon satisfaction of each and all of the above contingencies or upon the Effective Date, whichever event occurs last, the Acquisition Escrow shall be closed and conveyances and transfers shall occur as follows: (a) Public Assets to City. Upon close of the Acquisition Escrow, good and marketable title without encumbrance (except as approved by City) to the Public Assets shall be conveyed to City, and City shall receive title insurance as (40 171 referenced above. The form of the Grant Deed shall be as reasonably requested or required by Title Company to issue title insurance consistent with the provisions of this Section A.1(2)(a), and certificates of compliance shall be issuedthe City as necessary`s and/or appropriate for the parcels and the airspace to be conveyed to the City and the parcels to be retained by the Developer. (b) City Payment. Upon close of the Acquisition Escrow, the City Payment shall be transferred by Escrow Holder directly into the Private Improvement Escrow referenced in Section 2.A. below, from which releases will occur in increments based on periodic written authorizations from the IFC Agent referenced in Section 2.6.(2) below, solely for the creation and refurbishment of the Private Improvements. Upon close of the Acquisition Escrow, the Public Improvement Payment shall be transferred by Escrow Holder directly into the Public Improvement Escrow referenced in Section 2.B.(7) below, from which releases will similarly occur in increments based on periodic written authorizations from the IFC Agent, solely for the creation and refurbishment of the Public Improvements. 2. Creation and Refurbishment of Public and Private Improvements. Once the Acquisition Escrow has been closed, the parties shall continue with implementation of the Revitalization Plan, and creation and refurbishment of Public Improvements and Private Improvements, in accordance with the provisions of this Agreement. As indicated in Section 1.A.(1)(c) above, Developer shall be responsible for creation and refurbishment of Public Improvements, and, as indicated in several sections in this Agreement, Developer shall be responsible for creation and refurbishment of the Private Improvements. The parties agree to work cooperatively together and exert commercially reasonable efforts to cause the Public Improvements and Private Improvements to be constructed and completed concurrently. Upon completion of the Public Improvements, City shall execute and deliver to Developer a written certificate or acknowledgment of completion, in form and substance reasonably satisfactory to Developer, and, upon completion of the Private Improvements, City shall execute and deliver to Developer a written certificate or acknowledgment of completion, in form and substance reasonably satisfactory to Developer. In connection with Public Improvements, any and all development mitigation fees of the City shall be waived by City. In connection with Private Improvements, City agrees that Developer shall be entitled to credits against (or waivers of) any and all development mitigation fees of the City to the extent of (and that would otherwise have been covered by) existing and prior improvements and facilities (approximately 358,000 square feet of space) previously developed within the DFP Area. Further, with respect to development mitigation fees that would normally be collected by City for remission to another public agency or entity, City will cooperate with Developer in efforts to mitigate and reduce such fees to the extent reasonable and legally feasible. For the purpose of this Agreement, the term "development mitigation fees" means fees or payments in lieu of dedication of land and/or construction of improvements as provided under law, including without limitation, public art, parks (or Quimby Act requirements), MSHCP, and TUMF. 0 to � A. Open Private Improvement Escrow. Concurrently with close of the Acquisition Escrow, a separate escrow ("Private Improvement Escrow") shall be opened with Escrow Holder and the City Payment shall be transferred by Escrow Holder directly into the Private Improvement Escrow, and then be released, in increments, based on periodic written authorizations from the IFC Agent referenced in Section 2.B.(2) below, solely for the creation and refurbishment of the Private Improvements. The Private Improvement Escrow shall be administered pursuant to the terms of the "Private Improvement Escrow Agreement" attached hereto as Exhibit "Cl". B. Schedule of Performance. With respect to the creation and refurbishment of Private Improvements and Public Improvements, Developer and City have approved and agreed to the "Schedule of Performance" attached hereto as Exhibit "D". As provided above, Developer shall be responsible for both Private Improvements and Public Improvements. In this regard, the parties contemplate and have agreed to actions and procedures as follows: (1) Demolition of Bank_ of America Building. Once the City funding contingency, as referenced in Section 1.A.(1)(a) above, has been satisfied, then Developer shall, at Developer's sole cost and expense, within sixty days thereafter, commence and complete demolition of the existing Bank of America building in the DFP Area. Developer shall clear the site, remove construction fencing installed in conjunction with its demolition and clearing operations, install landscaping and related fixtures, and allow public access thereon on this site pending vertical construction and/or demolition of other structures or improvements within the DFP Area. During such period of allowed public access, City shall be solely responsible for operation, maintenance and repair, and shall indemnify Developer from and against all claims and/or costs incurred in connection therewith. (2) Selection of IFC Agent. Once the City has advised Developer that the City funding contingency has been satisfied, City and Developer shall promptly select and enter into a written contract, under terms acceptable to Developer and City, with a mutually acceptable and reputable independent fund control agent ("IFC Agent"), with general construction experience, that shall be responsible for authorizing periodic releases, in increments, of funds from the Private Improvement Escrow to go solely towards creation and refurbishment of the Private Improvements, and from the Public Improvement Escrow to go solely towards creation and refurbishment of the Public Improvements. (3) Consultant Agreements for Private and Public Improvements. Once the IFC Agent has been engaged, Developer shall select and enter into contracts ("Consultant Agreements") with planners, architects and/or engineers ("Project Consultants") as necessary to prepare plans and designs necessary to obtain architectural and engineering approvals for the Private Improvements and Public Improvements from appropriate City departments. All costs and expenses in this regard shall be paid, upon release authorizations by the IFC Agent, from funds in the Private Improvement Escrow for Private Improvements and from funds in the Public Improvement Escrow for Public Improvements. (4) Building Permits for Private Improvements. Once architectural and engineering approvals for Private Improvements and Public Improvements have been received, Developer shall select and enter into Consultant Agreements with Project Consultants as necessary to prepare final plans and working drawings necessary obtain permits from appropriate City departments to construct the Private Improvements and Public Improvements. All costs and expenses in this regard shall be paid, upon release authorizations by the IFC Agent, from funds in the Private Improvement Escrow for the Private Improvements and from funds in the Public Improvement Escrow for the Public Improvements. (5) Commencement of Private and Public Improvements. Once permits have been issued, Developer shall select and enter into contracts ("Construction Contracts") with construction contractors and material suppliers ("Construction Contractors") as necessary to commence creation and refurbishment of the Private Improvements and Public Improvements. All costs and expenses in this regard shall be paid, upon release authorizations by the IFC Agent, from funds in the Private Improvement Escrow for the Private Improvements and from funds in the Public Improvement Escrow for the Public Improvements. (6) Completion of Private Improvements. Developer shall be responsible for completion of the Private Improvements, and shall commence depositing additional private funds into the Private Improvement Escrow, from time to time as and when needed, to be used to complete creation and refurbishment of the Private Improvements. Prior to drawing building permits for construction of any vertical improvements, Developer shall make an initial deposit of at least $2,000,000 into the Private Improvement Escrow. All costs and expenses for the completion of the Private Improvements, including fees and taxes, shall be paid, upon release authorizations by the IFC Agent, from funds in the Private Improvement Escrow. Developer shall be solely responsible for depositing additional private funds into the Private Improvement Escrow as necessary to complete the Private Improvements. (7) Public Improvements. As noted in Section 1.A.(2)(b) above, upon close of the Acquisition Escrow, the Public Improvement Payment shall be transferred by Escrow Holder directly into a separate escrow ("Public Improvement Escrow") to be opened with Escrow Holder. The Public Improvement Escrow shall be administered pursuant to the terms of the "Public Improvement Escrow Agreement" attached hereto as Exhibit "C2", and releases will occur in increments based on periodic written authorizations from the IFC Agent for the creation and refurbishment of the Public Improvements. As indicated in Section 1.A.(1)(c) above, Developer shall be 8 to 0 responsible for completion of the Public Improvements, and shall commence depositing additional private funds into the Public Improvement escrow, from time to time as and when needed, to be used to complete creation and refurbishment of Public Improvements. In this regard, Developer shall (1) submit all plans and designs of the Public Improvements to the City for review and approval, (2) submit all proposed change orders, if any, to the City for review and approval, and. (2) construct and install the Public Improvements in strict conformance with the plans and designs as approved by the City. All costs and expenses for the completion of the Public Improvements, including fees and taxes, if any, shall be paid upon release authorizations by the IFC Agent, from funds in the Public Improvement Escrow. Developer shall be solely responsible for depositing additional private funds into the Public Improvement Escrow as necessary to complete the Public Improvements. (8) Blocks D, E, and G. As part of completion of the Private Improvements, Developer shall (a) within Block D leave the surface area as existing parking, (b) within Block E install temporary grass landscaping, and (c) within Block G leave the surface area as existing parking and/or install temporarily grass landscaping thereon. Thereafter, with respect to the surface area of each such Block, and until construction of vertical improvements is ready to commence thereon, City shall be solely responsible for operation, maintenance and repair of same, and shall indemnify Developer from and against all claims and/or costs incurred in connection therewith. In this regard, Developer will provide City with a temporary license or easement, in form and substance reasonably acceptable to City and Developer, as necessary for City to operate, maintain, and repair each such Block, and allow public access thereon. (9) Blocks H-1 and H-2. With respect to Block H-1 (northerly parcel east of Art Museum), the following shall apply: (i) Developer shall, at its cost and as part of its creation and refurbishment work, fill in and grade same to a reasonably level condition (and City shall provide to Developer a temporary license to go upon Block H-1 to do so); (ii) the Parties acknowledge that the easterly property line of Block H-1 should be adjacent to the westerly side of the multi-plex theater and the Developer shall apply for and secure a lot line adjustment to adjust easterly the eastern property line of Block H-1 to affect and implement this intent of the Parties, in the event the multi-plex theater is not built at the current property line between Block H-1 and the multi-plex theater site. With respect to Block H-2 (southerly parcel east of Art Museum), the parties agree that it shall remain in its current condition pending future development desired by the City. (10) Performance Trust Deed. To secure performance of Developer's obligations under this Agreement to complete the Private Improvements and the Public Improvements, Developer shall provide to City a deed of trust ("Performance Trust Deed") in the form of Exhibit "E" attached hereto. The Performance Trust Deed shall encumber the DFP Area, and be recorded by Escrow Holder concurrently with close of the Acquisition Escrow, as referenced in Section 6 r 16 1.A.(2) above. The Performance Trust Deed shall be in the initial amount of $28,000,000 ("Security Amount"); however, the Security Amount (and the balance thereof) shall not bear interest and shall be reduced, from time to time, as, when, and to the extent Developer makes deposits (including the $2,000,000 deposit referenced above) into the Private Improvement Escrow to complete the Private Improvements or the Public Improvement Escrow to complete the Public Improvements. The parties acknowledge and agree that the Security Amount is likely to be in excess of the amount of additional private funds that Developer may be required to deposit into the Private Improvement Escrow to complete the Private Improvements and the Public Improvement Escrow to complete the Public Improvements. Therefore, and based upon the understanding and agreement of the parties that the purpose of said Performance Trust Deed is to secure completion of the Private Improvements and the Public Improvements, once the Private Improvements and the public Improvements have been substantially completed, the Performance Trust Deed shall be released and reconveyed in full, regardless of the amount of additional private funds actually deposited by Developer, or the amount of the outstanding balance then shown as due and/or owing under the Performance Trust Deed. In the event of any inconsistency between the terms of this Agreement and the terms of the Performance Trust Deed, the terms of this Agreement shall prevail. There shall be no other monetary encumbrance or security interest of any kind on the DFP Area as of the Effective Date (other than real property taxes and assessments which are a lien not yet due and payable and Developer shall promptly pay such property taxes and.assessments when made due and payable), nor shall any monetary encumbrance or security interest of any kind (other than mechanics lien claims as authorized by California law during the construction process, and Developer shall promptly resolve or defend such liens) be placed on the DFP Area after the Effective Date and prior to the City's issuance of a written certificate or acknowledgment of completion of the Private Improvements as provided in Section 2 above. As used in this Agreement, "Private Improvements" do not include tenant improvements, except with respect to the multi- plex theater which will have tenant improvements and be ready to receive the theater operator's furniture, fixtures and equipment (projectors, sound equipment, seating, screens, etc.) and thus become fully operable as part of the Revitalization Plan. As noted above, at such time as the Private Improvements and the Public Improvements have been substantially completed by Developer, the Performance Trust Deed shall be released and reconveyed in full, regardless of the amount of the outstanding balance then shown as due and/or owing thereunder. C. Close Private Improvement Escrow. Upon substantial completion of all Private Improvements, the Private Improvement Escrow shall be closed and Developer shall be released, except for "punchlist" items, from any and all further obligations, under this Agreement or otherwise, to create and/or refurbish Private Improvements, or any other improvements. D. Close Public Improvement_ Escrow. Upon substantial completion of all Public Improvements, the Public Improvement Escrow shall, subject to Section 1.A.(1)(c) above, be closed and Developer shall be released, except for "punchlist" items, from any and all further obligations, under this Agreement or otherwise, to create and/or refurbish Public Improvements, or any other improvements. E. Local Contractors. The Developer will endeavor to give consideration to using businesses and contractors whose work force resides in the Coachella Valley, however, in no case or event will the Developer have any legal obligation to do so. F. Commencement of Development Obligations. Anything herein to the contrary notwithstanding, with respect to the Schedule of Performance, it is understood and agreed that the development obligations of Developer shall not commence until the Acquisition Escrow has closed and funds have been transferred into the Private Improvement Escrow and Public Improvement Escrow as provided herein except that Developer shall complete the demolition of the Bank of America Building as provided under Section 2.8.1 of this Agreement. 3. Developer Default. Anything in this Agreement to the contrary notwithstanding, the following shall apply: A. Default by Developer — Opportunity to Cure. From the close of the Acquisition Escrow (and opening of the Private Improvement Escrow and Public Improvement Escrow) until substantial completion of the Private Improvements and the Public Improvements, if Developer fails to diligently do and perform all things reasonably necessary on the part of Developer to pursue creation and refurbishment of the Private Improvements and the Public Improvements, including failure to timely achieve "major milestones" described in the Schedule of Performance, then, in that event, City shall be entitled to deliver to Developer written notice of default, specifying, in detail, all facts alleged by City to constitute such default. For a period of 120 consecutive days after receipt of such notice of default, Developer shall have the right to commence and complete cure of the alleged default; provided, however, if the default is of such a nature as to reasonably require more than 120 days to cure, as reasonably determined by the City, Developer shall have such additional time as is reasonably necessary to complete such cure. B. Developer Failure to Cure — City Rights and Remedies. If, at the expiration of the applicable cure period, Developer has not reasonably completed such cure, then, in that event, City shall have the right to exercise any and all rights and remedies provided for in (i) the Performance Trust Deed referenced in Section 2.B.(6) above, and (ii) the Assignments referenced in Section IC below. At any foreclosure sale under the Performance Trust Deed, City shall have the right to issue a credit (non -cash) bid in an amount equal to the then balance (reduced to the extent of Developer deposits into the Private Improvement Escrow and the Public Improvement Escrow as referenced in Section 2.B.(6) above) of the Performance Trust Deed. In the event of any i:1 /� r inconsistency between the terms of this Agreement and the terms of the Performance Trust Deed, the terms of this Agreement shall prevail. At such time as the Private Improvements and Public Improvements have been substantially completed by Developer, the Performance Trust Deed shall be released and reconveyed in full, regardless of the amount of the outstanding balance then shown as due and/or owing thereunder. C. Assignment of Consultant and Contractor Agreements. With respect to each Consultant Agreement and each Contractor Agreement, as referenced in Sections 2.6.(3) and 2.B.(5) above, Developer shall, in accordance with the Schedule of Performance, execute and deliver to the City an assignment ("Assignment"), from Developer to City, in substantially the form and substance of Exhibit "F" attached. Each such Assignment shall include, without limitation, assignment of all of Developer's rights under the applicable Consultant Agreement or Contractor Agreement. In the event of any inconsistency between the terms of this Agreement and the terms of any such Assignment, the terms of this Agreement shall prevail. The Developer shall also assign to the City the Developer's rights to all plans and specifications prepared pursuant to this Agreement and all permits and entitlements relating to the Project. At such time as the Private Improvements and the Public Improvements have been substantially completed by Developer, each such Assignment shall be fully released. 4. Miscellaneous Specific Provisions. The parties further agree to miscellaneous additional provisions as set forth below. A. Local Requirements Applicable to Agreement. This Agreement is subject to the City's General Plan, the Museum Market Plaza Specific Plan, the Palm Springs City Charter, the Palm Springs Municipal Code and ordinances, and the Redevelopment Plan for Merged Area No. 1, with respect to the Project ("Governmental Regulations"). B. City Fast Track Process. The City shall use good faith efforts, within applicable legal constraints and consistent with applicable City policies, to take such actions as may be necessary or appropriate to effectuate and carry out this Agreement in a timely and commercially reasonable manner and to reasonably "fast track" the processing of all applications submitted by Developer to pursue the Revitalization Plan and/or create and refurbish the Private Improvements and Public Improvements. C. Subdivision Issues. The parties acknowledge and agree that the California Subdivision Map Act allows, without the necessity of recording a subdivision or parcel map, conveyances to and from public agencies such as the City, and leasing and financings of portions of parcels of property designated for commercial use. Nevertheless, in connection with pursuit and implementation of the Revitalization Plan, Developer may desire to record one or more subdivision or parcel maps against the DFP 12 Area (or portions thereof). In this regard, the parties agree to cooperate with each other, and the City agrees to reasonably "fast track" the processing of any subdivision or parcel map desired by Developer (including any vesting tentative map), and to promptly provide and issue certificates of compliance as and to the extent reasonably necessary or expedient as determined by the City. The parties acknowledge that the Title Company may require certificates of compliance to issue title insurance and, if so, the City shall promptly process and issue same. D. Easement Agreement. Concurrently with close of the Acquisition Escrow, and as a part thereof, City and Developer shall execute and cause to be recorded with the Official Records of Riverside County, California, an Easement Agreement in the form of Exhibit "G " attached hereto. To the extent that, pursuant to the Easement Agreement, easements run to the benefit of Developer or City, each such benefitted Party shall receive (and pay for) reasonable title insurance covering such easements. E. Escrow Matters. In the event of any inconsistency between the terms of this Agreement and the terms of any escrow instructions executed pursuant to this Agreement, the terms of this Agreement shall control unless a contrary intent is clearly expressed in the inconsistent escrow instructions. All escrow fees, charges, and title insurance costs for any escrow or title insurance called for herein shall be shared equally by the parties. Unless otherwise provided herein, Escrow Holder shall process and handle all escrow matters contemplated herein in the manner that is customary in the Coachella Valley area of Riverside County. F. Eminent Domain. Prior to entering into this Agreement, City expressed a desire to acquire all property covered by the Specific Plan by use of powers of eminent domain, and Developer expressed an intent to oppose any such effort. In that regard, this Agreement represents a negotiated compromise between City and Developer and, as a part hereof, City agrees as follows: In the event this Agreement is terminated by City as the result of the inability of City to identify and reserve City funding, as referenced in Section 1.A.(1)(a) above, or for any other reason not the fault of Developer, City shall not, for a period of three (3) years following such termination, directly or indirectly or in any way, attempt to take or acquire all or portions of any properties or improvements covered by the Specific Plan via use or exercise of eminent domain, or any similar or related public power or powers of the City. The covenants and agreements of City pursuant to this Section 4.E shall survive and remain in effect for a period of three (3) years from and after any such termination by City. G. Release. This Agreement is a voluntary agreement and Developer, on behalf of Developer and Developer's successors and assigns, fully releases City, the City's Redevelopment Agency, its officials, officers, attorneys, employees, and agents (the "Released Entities") from all claims and causes of action by reason of any damage that has been sustained, or may be sustained, as a result of City's or Agency's efforts, 13 prior to execution of this Agreement, to acquire the Property or any preliminary steps thereto. Developer further releases and agrees to hold the Released Entities from any and all claims and causes of action by or on behalf of any leasehold interest in the DFP Area. H. City's Sole Liability. The City's sole liabilities to Developer or any third party are those obligations expressly and specifically provided in this Agreement. I. Developer Right of First Refusal for Blocks H-1 and H-2. In the event that at any time in the future, City elects to sell Blocks H-1 and/or H-2, as shown on the Project Site Plan, or portions thereof, for solely private purposes, i.e., for purposes exclusive of public or non-profit purposes, Developer shall have a right of first refusal to match any offer received by City, and to purchase such Blocks H-1 and/or H-2, in accordance with the following: City shall promptly notify Seller that City has received an offer that it desires to accept and, concurrently therewith, provide Developer with an exact copy of such offer, and Developer shall have, for a period of sixty (60) days after receipt, the right to notify that Developer desires to match the terms of such offer and purchase the property. In such event, an escrow shall be promptly opened and closed with a reputable escrow company and City shall sell (and convey good and marketable title to) the property to Developer. Legal descriptions covering Blocks H-1 and H-2 shall be separately verified, signed and attached to this Agreement prior to or concurrently with final execution. J. Developer Right of First Refusal for Museum Drive. In the event that at any time in the future, City decides to abandon portions of Museum drive located adjacent to O'Donnell Golf Course, as shown on the Specific Plan, and sell same, or portions thereof, for solely private purposes, i.e., for purposes exclusive of public or non-profit purposes, Developer shall have a right of first refusal to match any offer received by City, and to purchase such property in. the same manner as contemplated for purchase of Blocks H-1 and/or H-2, as provided in Section 4.F above. Legal descriptions covering such property shall be separately verified, signed and attached to this Agreement prior to or concurrently with final execution. K. Not a Development Agreement. This Agreement is not a development agreement as provided in Government Code Section 65864 and is not a grant of any entitlement, permit, land use approval, or vested right in favor of the Developer or the Project. L. License to Enter. Developer grants to City and City's authorized agents, contractors, consultants, engineers, assigns, and other representatives an irrevocable license to enter upon the Public Assets for the purpose of making inspections and other examinations of the Public Assets, including without limitation the right to perform soil, geological, structural, engineering, and environmental tests of the 14 Public Assets. City will give Developer ten (10) hours notice before going on the Public Assets. M. Specific Performance. The Parties acknowledge and agree that this Agreement may be enforced through an action for specific performance subject to the provisions of Section 5.13 of this Agreement. S. Miscellaneous General Provisions. A. Entire Agreement. This Agreement (together with a Reimbursement Agreement and a Confidentiality Agreement previously entered into between City and Developer, and other agreements to be entered into between City and Developer as provided herein) contains the entire agreement of the parties with respect to matters covered herein, and there are no other agreements or representations, written or oral, other than as contained herein. B. Cooperation. Each party agrees to and shall do and perform such other and further acts and properly execute and deliver such other and further documents as may be reasonably necessary, expedient or convenient to implement the intents and purposes hereof. C. Reasonable Approvals. Whenever this Agreement requires or calls for the approval or consent of any party hereto, such approval shall not be unreasonably withheld, delayed, or conditioned. D. Binding Arbitration. In the event of any dispute or controversy arising out of or relating to this Agreement, or the breach or performance of it, the Parties shall reasonably attempt to resolve each such dispute or controversy without resort to third party review or resolution. The Parties shall first meet and confer on any such dispute or controversy. Such meetings shall include any principal of the Developer and at the discretion of the City may include the City Manager and/or the City Council either as a whole or through an ad hoc subcommittee designated by the City Council. Upon the Parties determination that the Parties are unable to resolve the dispute or controversy on their own, the Parties shall submit the dispute, controversy, or any remaining disputed matter to binding arbitration, to be held in the Coachella Valley, and be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association. E. Legal Fees. In the event of any dispute, arbitration, or litigation arising out of or relating to this Agreement, or the breach or performance of it, the prevailing party shall be entitled to recover, in addition to any other appropriate relief, reasonable attorneys' fees and legal costs incurred in connection therewith. 15 �� F. Force Maieure. Neither party shall be deemed to be in default where failure or delay in performance of any of such party's obligations under this Agreement is caused by any event described below, where any such event is beyond the control of the claiming party and such party's contractors and consultants and is not due to an act or omission of the claiming party or such parry's contractors or consultants, and such event directly, materially and adversely affects (a) the ability of the claiming party to meet its non -monetary obligations under this Agreement, including deadlines imposed by the Schedule of Performance, or (b) the ability of the claiming party to complete improvements (Private Improvements in the case of Developer and Public Improvements in the case of City), and which event (or the effect thereof) could not have been avoided by due diligence and use of reasonable efforts by the claiming party: (1) Unusually Severe Weather: weather conditions not reasonably anticipatable for that portion of the City of Palm Springs where the downtown area is located, based upon U.S. Weather Bureau climatological reports for the months included and a report indicating average precipitation, temperature, etc., for the previous ten (10) year period from the nearest weather reporting station; (2) Civil Unrest: an epidemic, blockage, quarantine, rebellion, war, insurrection, act of terrorism, strike or lock -out, riot, act of sabotage, civil commotion, act of a public enemy, or freight embargo; (3) Unforeseeable Conditions: reasonably unforeseeable physical conditions of the existing DFP Area or improvements thereon, including the presence of hazardous materials, as defined by applicable state and federal laws and regulations; (4) Casualty: fire, earthquake, flood or other casualty, in each case only if causing material physical destruction or damage to improvements (Private Improvements in the case of Developer and Public Improvements in the case of City); (5) litigation: any lawsuit seeking to restrain, enjoin, challenge or delay the issuance of any entitlement, or restraining, enjoining, challenging or delaying construction of improvements ( including the Private Improvements and/or the Public Improvements ), or restraining, enjoining, challenging, or delaying any funding mechanism the City elects to use to fund its obligations under this Agreement, or the authority of the City to use or establish such funding mechanism, or in any way challenges the authority of the City to enter into this Agreement or perform any obligation thereunder, which is vigorously defended by the claiming party and which is finally determined in a manner which restricts the ability of such party to perform its material obligations hereunder, or which results in a injunction against such party restricting its ability to so perform during the pendency of such injunction and which directly impairs the ability of the claiming party to perform despite commercially reasonable efforts to do so; ul - 16 (b) Change of Law: the passage of a referendum or initiative that results in the inability of the claiming parry to perform its material obligations hereunder; and/or (7) Conduct by Other Partv: conduct (action or inaction) by the other party which delays the ability of the claiming party to perform its material obligations under this Agreement, but only during periods in which such conduct (action or inaction) actually delays such performance. G. No Partnership. Notwithstanding language in this Agreement referring to "public -private participation", or words or similar import, it is acknowledged that the relationship of the City to the Developer is neither that of a partnership nor that of a joint venture and that neither the City nor the Developer shall be deemed or construed for any purpose to be the agent of the other Party, and neither Party shall have the power or the authority to speak on behalf of the other Party or to bind the other Party to any contractual or other obligations. The Developer shall not at any time hold itself out to the City or to any other third party as an agent of the City, as applicable, and shall not, by any act or omission, mislead any third party into believing, or allow any third party to continue in the mistaken belief, that the Developer is an agent of the City or has the power or authority to bind the City to any contractual or other obligation. H. Binding on Successors. This Agreement shall be binding on the parties hereto, their heirs, successors and assigns. I. Independent Legal Representation. Each party hereto has, at all times during the negotiation and execution of this Agreement, been represented by independent legal counsel. J. Incorporation of Recitals and Exhibits. All recitals herein and all Exhibits attached hereto are incorporated into and made a part of this Agreement. Said Exhibits are identified as follows: Exhibit Exhibit Identification A Project Site Plan B Project Description C1 Private Improvement Escrow Agreement C2 Public Improvement Escrow Agreement D Schedule of Performance E Performance Trust Deed F Assignment 17 (? r 0 G Easement Agreement K. Captions and Headings. Any captions or headings in this Agreement are for convenience only, and shall not be used to determine or construe meanings of substantive language herein. L. Applicable Law. This Agreement is entered into in California, and relates to California real property, and shall be determined in accordance with the laws of the State of California. M. Venue. In the event of any arbitration or litigation arising out of or relating to this Agreement, or the breach or performance of it, any such arbitration shall be conducted in the Coachella Valley, and any such litigation shall be filed in the Indio Branch of the Riverside County Superior Court. N. Severability. In the event any provisions of this Agreement is deemed or construed by arbitration or a court of competent jurisdiction to be unenforceable, the remaining provisions shall nevertheless remain binding and enforceable to the maximum extent possible. 0. Interpretation. This Agreement and JWnguage herein has been prepared and agreed to by both parties, and any rules ` tact interpretation calling for construction against one party or the other based on draft4' , shall be inapplicable. V sit P. Notices. As used in this Agreement, "notice" includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) on the date of delivery shown in the records of the telegraph company after transmission by telegraph to the recipient named below. All notices shall be addressed as follows: If to City: City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Attn: City Manager Telephone: (760) 322-8350 Facsimile: (760) 323-8207 18 Copy to: City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, California 92262 Attn: City Attorney Telephone: (760) 323-8211 Facsimile: (760) 323-8207 If to Developer: Palm Springs Promenade, LLC 555 South Sunrise Way, Suite 200 Palm Springs, California 92264 Attn: John Wessman Telephone: (760) 325-3050 Facsimile: (760) 325-5848 Copy to: Ealy, Hemphill & Blasdel, LLP 71780 San Jacinto Drive, Suite 1-3 Rancho Mirage, California 92270-5518 Attn: W. Curt Ealy Telephone: (760) 340-0666 Facsimile: (760) 340-4666 Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change Q. Authority. Each party represents and warrants to the other that such party has full right, power and authority to sign, execute and enter into this Agreement. SIGNATURES ON FOLLOWING PAGE 19 IN WITNESS WHEREOF, the parties hereto have executed this Agreement and made it effective as of the day and year set forth above. DEVELOPER: 144"A ATTEST: APPROVED AS TO LEGAL FORM CITY OF PALM SPRINGS A California municipal corporation and charter city By. Title: c'� • Dated: 'Jify Cler City Attor ey 20 1PPRM BY CITY COUNCIL A to 144 ICa30f d oa /07/z01 Q