HomeMy WebLinkAbout7/18/2001 - STAFF REPORTS Il
DATE: JUNE 18, 2001
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: REDEVELOPMENT DIRECTOR
A PUBLIC HEARING TO APPROVE A DISPOSITION AND DEVELOPMENT
AGREEMENT WITH PALM SPRINGS NEW MILLENNIUM DEVELOPMENT, LLC TO
PROVIDE A LAND WRITE-DOWN TO FACILITATE THE DEVELOPMENT OF THE
STAR CANYON RESORT PROJECT, INCLUDING A 210-ROOM LUXURY HOTEL
AND 264 TIMESHARE UNITS, ON SOUTH PALM CANYON DRIVE BETWEEN
SUNNY DUNES DRIVE AND MESQUITE DRIVE
RECOMMENDATION:
It is recommended that the Agency approve a Disposition and Development
Agreement with Palm Springs New Millennium Development, LLC to provide a
land write-down to facilitate the development of the Star Canyon Resort on
South Palm Canyon Drive in Merged Project Area#1.
SUMMARY:
This resolution approves a Disposition and Development Agreement with Palm
Springs New Millennium Development, LLC, the developers of the Star Canyon
Resort on South Palm Canyon Drive. The resort, which received final land-use
approvals from City Council in May, 2000, features a 210-room hotel and 264
time share units (over 13,000 intervals) and will be the first major hotel built in
the City since the late 1980's. Based on the analysis of the developer's pro
forma, the project had a significant financing gap that could not be feasibly
closed with private sector financing. The factors contributing to the gap
included increased site development costs related to topography and off-site
improvements, competitive pressures on the hotel from other Valley hotels that
have received subsidies, the lack of a convenient golf amenity at the project
site, and the seasonality of the hotel industry in the desert. Through this DDA
the Agency would acquire the hotel site from the land seller for approximately
$3.4 million using the Developers' funds, convey the site to the Developer for
$1.00, and then repay the Developer for the site over a period of up to 15 years
from tax increment generate by both the hotel and time share components of
the project. Land write downs are one of the few ways an Agency can directly
assist private development.
BACKGROUND:
City Council approved the Star Canyon Resort project on May 17, 2000 by
adopting a Mitigated Negative Declaration and approving Case 5.0830,
Preliminary Planned Development District 260 and Tentative Parcel Map 29691.
The project consisted of the hotel and vacation ownership units, as well as the
subdivision of the 11.41 acre project site into 9 parcels, subject to conditions.
Once he began to try to firm up funding commitments, the Developer came to
the Agency for financing assistance on the project. The Developer's financial
consultant, Holliday Fenoglio Fowler, L.P., identified several factors in the
project financing that made the project difficult to finance:
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1. Star Canyon does not have its own golf course.
2. The average daily rates (ADRs) are lower in Palm Springs than in other
Coachella Valley cities such as Rancho Mirage, Indian Wells, and Palm
Desert.
3. The seasonality of Palm Springs and the entire Coachella Valley
substantially lowers occupancy levels and average daily rates.
4. The site location is not centralized to the Coachella Valley.
5. There are only one or two comparable hotels in Palm Springs.
6. Competition "down Valley" is a serious threat.
Based on the original development pro formas, the Developer asked for
assistance in excess of$10 million. Staff used Keyser Marston &Associates to
analyze the developer's request; they reported that, based on a gap of the size
and percentage shown in the Developer's own numbers, the project had a
bigger problem with just a financing gap. The Agency's informal guidelines for
recommending assistance are that the amount of gap financing should be
marginal when compared to the project cost—the original request, however,
was for a significant percentage of the overall project cost to be paid from public
funds generated by the project.
In the end, the Agency and the Developer negotiated a much more modest
assistance package, but one that was attractive enough to the debt and equity
lenders that the project was able to receive financing.
The Agency financial participation in the project is as follows:
1. The Developer would make a loan to the Agency of approximately $3.4
million, which would be repaid to the Developer through the net tax
increment generated by both the hotel and time share component of the
project over a period of up to 15 years.
2. The developer commits to keeping the project as originally proposed,
including the architectural upgrades, quality landscaping, and other
components.
3. The Agency would take title to the land from the seller.
4. The Agency agrees to contribute the land to the project when the project
is fully funded, all permits have been obtained, and the Developer is
prepared to commence construction. The Agency would retain reverter
rights if the Developer fails to proceed or complete the project.
5. The Developer constructs the resort in phases, and receives repayment
of the Agency note through the tax increment of the project, net of pass-
Star Canyon Resort DDA
July 18, 2001
Page 2
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throughs and housing setaside payments..
6. The Developer also agrees to place an additional fee on the time share
intervals, equal to $10 per full interval per year, payable through the
HOA payment. That fee would be paid to the City to offset a portion of
the TOT lost to the City by the rooms not being hotel rooms.
The project as proposed by the Developer is extremely attractive and would
provide an economic jump-start to the South Palm Canyon Drive area, which
has lagged behind the downtown and North Palm Canyon Drive areas in
revitalization. While this DDA commits all of the property tax increment from the
project to the loan repayment, it will spur additional development in the area that
would have not otherwise occurred, and developed a flow of TOT, sales taxes,
and in-lieu fees to the City with little "cannibalization" of existing Palm Springs
hoteliers by bringing in a brand new to Palm Springs as well as a product more
directly competitive with down Valley resorts than with Palm Springs hotels.
A Summary Report describing the purchase and sale of the property, as
required by California Health and Safety Code Section 33433 (a), is enclosed
with the resolution. I
JOHN S. FAYMONR
Redevel ment Director
APP VED - �Cto—r
Exec
ATTACHMENTS:
1. Resolution
2. Dispostion and Development Agreement
3. Summary Report
4. Public Hearing Notice
5. City Council Concurring Resolution
Star Canyon Resort DDA
July 18, 2001
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SUMMARY REPORT:
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
THE PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY
AND
PALM SPRINGS NEW MILLENNIUM DEVELOPMENT
JULY 2001
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INTRODUCTION
Before real property acquired by a Community Redevelopment Agency with tax increment
proceeds may be sold or leased, the transaction must be approved by the Agency Board in
accordance with California Health and Safety Code Section 33433. This Section requires a
"Summary Report", which describes and specifies certain information in regard to the proposed
transaction, be available for public inspection.
DESCRIPTION OF THE PROPOSED AGREEMENT
Site and Interests to be Conveyed
The Site consists of a single parcel of land of approximately 11.41 acres, subdivided as part of
the development into 9 parcels. The Site is located on South Palm Canyon Drive between Sunny
Dunes Drive and Mesquite Drive and backs up to Belardo Road. The Developers of the Property,
Palm Springs New Millenium Development, LLC, are seeking Agency financial assistance in
developing a proposed 210-room resort hotel and 264 vacation ownership units. Part of the
assistance will be that the Agency shall purchase the land from the current owner and convey it
back to the project when the project is ready to proceed to the construction phase. The Developer
will lend the Agency the funds to complete the transaction, which the Agency shall repay over a
period of 15 years to the Developer through the tax increment the project has produced, including
both the hotel and time share portions.
Proposed Development
The Developer is building 210 luxury hotel rooms and 264 vacation ownership units on the 11.41
acre site, in addition to underground parking, water features and other site amenities, and
restaurants. The hotel will be a major brand, equivalent to Radisson or better. The time share
units will be sold in intervals and will be able to be divided into smaller configurations and fractional
shares to increase the total number of intervals available for sale. The project contains significant
architectural and landscaping upgrades as well significant off-site improvements. The project is
in an area that has lagged behind other areas of Palm Canyon Drive in new investment and will
provide a major economic boost to the area.
Financing
The Developer has received commitments of debt- and equity financing sufficient to ensure the
project will be built. Within the project financing structure is an equity gap of approximately $3.4
million, which will be covered by the amount of the Agency financial participation. The Agency's
percentage share of the overall project cost is approximately 5%and counts as Developer's equity
in the financing structure.
Agency Responsibilities
The Agency agrees to repay the Developer for the$3,400,000 land acquisition loan, plus interest,
for a period of up to 15 years. The maximum amount paid over the period is $6.8 million. The
loan payment shall be made solely from the tax increment generated by the project; should a
portion of the project be undeveloped and the property tax increment not created, the Agency is
not obligated to pay non-project-based revenues to repay the note. All tax increment calculations
are net of pass-through obligations to other taxing entities, as well as the low/mod housing
setaside.
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Developer Responsibilities
The developer commits to keeping the project as originally proposed, including the architectural
upgrades, quality landscaping, and other components. The Agency's standard terms and
conditions, including non-discrimination and maintenance covenants, and other terms and
conditions remain as in Disposition and Development Agreement for Developer.
COST OF AGREEMENT TO THE AGENCY
The Agency will commit an amount of up to $6,800,000 to the project from project-created tax
increment over a period of up to 15 years to repay a loan made by the Developer to the Agency
to execute the land sale from the Current Owner to the Agency. The present value of the
assistance, based on Year 2001 dollars, is approximately $3,400,000.
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OWNER PARTICIPATION AGREEMENT
By and Between
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
and
P.S. NEW MILLENIUMDEVELOPMENT, L.L.C.
TABLE OF CONTENTS
Page No.
1. DEFINITIONS.................................................................................................... I
1.1 Agency Acquisition Costs ........................................................................ 1
1.2 Agency Financial Assistance..................................................................... 1
1.3 Agreement............................................................................................... 1
1.4 Notice of Release of Construction Covenants........................................... 1
1.5 City.......................................................................................................... 1
1.6 Closing..................................................................................................... 1
1.7 Days ........................................................................................................ 1
1.8 Declaration .............................................................................................. 2
1.9 Deed........................................................................................................ 2
1.10 Deposit Fund ........................................................................................... 2
1.11 Effective Date. ......................................................................................... 2
1.12 Enforced Delay........................................................................................ 2
1.13 Escrow..................................................................................................... 2
1.14 Note......................................................................................................... 2
1.15 Project..................................................................................................... 2
1.16 Project Area............................................................................................. 2
1.17 Redevelopment Plan................................................................................. 2
1.18 Schedule of Performance.......................................................................... 3
1.19 Site.......................................................................................................... 3
1.20 Title Company ......................................................................................... 3
2. PURPOSE OF AGREEMENT............................................................................ 3
3. REPRESENTATIONS AND WARRANTIES..................................................... 3
3.1 Developer Representations and Warranties............................................... 3
3.2 Agency Representations and Warranties................................................... 4
4. ASSEMBLY AND DISPOSITION OF THE SITE.............................................. 5
4.1 Developer Deposit of Acquisition Fund.................................................... 5
4.2 Agency Acquisition of the Site ................................................................. 5
4.3 Developer's Purchase Price for the Site; Conveyance of the Site to
Developer............................................................................................................ 6
4.4 Escrow..................................................................................................... 7
4.5 Conditions to Closing............................................................................... 7
4.6 Tax Reporting and Miscellaneous Matters................................................ 9
4.7 Conveyance of the Site............................................................................. 9
4.8 Title Matters............................................................................................ 9
4.9 Developer Financing............................................................................... 10
4.10 Condition of Site.................................................................................... 11
4.11 Indemnification ...................................................................................... 14
4.12 Costs of Escrow..................................................................................... 14
4.13 Termination of Escrow........................................................................... 15
4.14 Responsibilities of Escrow Agent ........................................................... 16
4.15 Brokerage Commissions......................................................................... 16
5.0 CONSTRUCTION OF THE PROJECT ............................................................ 17
5.1 Construction of the Project.................................................................... 17
5.2 Sale or Transfer of the Project................................................................ 19
5.3 Insurance and Indemnification................................................................ 20
5.4 Rights of Access .................................................................................... 22
5.5 Taxes and Assessments and Liens........................................................... 22
5.6 Antidiscrimination During Construction.................................................. 22
5.7 Easements.............................................................................................. 22
5.8 Notice of Release of Construction Covenants......................................... 22
5.9 Rights of Holders of Approved Security Interests in Site....................... 23
6.0 AGENCY FINANCIAL ASSISTANCE............................................................ 27
7.0 USE OF THE SITE........................................................................................... 27
7.1 Use of the Site ....................................................................................... 27
7.2 No Inconsistent Uses.............................................................................. 27
7.3 Obligation to Refrain from Discrimination....................................27
7.4 Effect of Covenants................................................................................ 27
8. ENFORCEMENT ............................................................................................. 28
8.1 Defaults, Right to Cure and Waivers ...................................................... 28
8.2 Legal Actions......................................................................................... 28
8.3 Rights and Remedies are Cumulative...................................................... 29
8.4 Specific Performance.............................................................................. 29
8.5 Attorney's Fees....................................................................................... 29
9. MISCELLANEOUS.......................................................................................... 29
9.1 Notices .................................................................................................. 29
9.2 Conflicts of Interest................................................................................ 30
9.3 Nonliability of Agencv Officials and Emplovees...................................... 30
9.4 Enforced Delav: Extension of Times of Performance............................ 30
9.5 Books and Records................................................................................ 31
9.6 Modifications......................................................................................... 31
9.7 MerQer of Prior Agreements and Understandings ................................... 31
9.8 Binding Effect of Agreement.................................................................. 31
9.9 Assurances to Act in Good Faith............................................................ 31
9.10 Severabilitv............................................................................................ 32
9.11 Interpretation......................................................................................... 32
9.12 Entire Agreement, Waivers and Amendments......................................... 32
9.13 Time for Acceptance of Agreement by Agency....................................... 33
9.14 Counterparts.......................................................................................... 33
9.15 Inte rag tion............................................................................................. 33
9.16 Exhibits.................................................................................................. 33
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement")is entered into
this_day of July,2001 (the"Effective Date")by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body,corporate and politic
("Agency"), and P.S.NEW MILLENIUM DEVELOPMENT,L.L.C., a California limited liability company
("Developer").
1. DEFINITIONS.
1.1 Agency Acquisition Costs. The term "Agency Acquisition Costs" shall
mean all of the costs as determined by Agency for the performance by Agency of the duties and
obligations of Agency under this Agreement, including, but not limited to, the reasonable and
necessary legal fees and costs incurred by Agency for the drafting, negotiation and implementation
of this Agreement and the transactions contemplated herein, the costs incurred by Agency to
acquire the Site (whether through condemnation or otherwise), appraisers' fees, any costs incurred
in defending the Project and similar reasonable and necessary fees and costs incurred by Agency in
order for it to complete its obligations hereunder.
1.2 Agency Financial Assistance. The term"Agency Financial Assistance shall
have the meaning ascribed at Section 6.0 herein, as further set forth in the Note in the form
attached hereto as Exhibit "C".
1.3 Agreement. The term "Agreement" shall mean this Disposition and
Development Agreement, including all exhibits, which exhibits are a part hereof and incorporated
herein in their entirety, and all other documents attached hereto which are incorporated herein by
reference as if set forth in full.
1.4 Notice of Release of Construction Covenants. The term "Notice of
Release of Construction Covenants" shall mean that certain Notice of Release of Construction
Covenants attached hereto as Exhibit "D".
1.5 City. The term "City" shall mean the CITY OF PALM SPRINGS, a
municipal corporation, having its offices at 3200 East Tahquitz Canyon Way, Palm Springs,
California 92262.
1.6 Closing. The term "Closing" or "Closing Date" shall mean the date on
which the Deed and Declaration are filed for record in the Office of the County Recorder of
Riverside County, California, which Closing shall occur on or before the date established therefor
in the Schedule of Performance.
1.7 Days. The term "days" shall mean calendar days and the statement of any
time period herein shall be calendar days, and not working days, unless otherwise specified.
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1.8 Declaration. The term 'Declaration" shall mean that certain Declaration of
Covenants, Conditions and Restrictions in the form attached hereto as Exhibit "E".
1.9 Deed. The term 'Deed" shall mean that certain Grant Deed in substantially
the form attached hereto as Exhibit "C" by which Agency as grantor will convey fee title to the
Site to Developer as grantee.
1.10 Deposit Fund. The term 'Deposit Fund" shall mean the monies to be
deposited by Developer with Agency to be held by Agency for the payment of costs hereinafter
provided, which monies shall be equal to the Agency Acquisition Costs.
1.11 Effective Date. The Effective Date of this Agreement shall occur after
public hearing and approval hereof by the Agency, and shall mean the date this Agreement is
executed on behalf of Agency.
1.12 Enforced Delay. The term "Enforced Delay" shall have the meaning set
forth in Section 8.4 below.
1.13 Escrow. The term "Escrow" shall mean the escrow opened with
Escrow(Escrow Agent") located at , Palm
Springs, CA , or such other escrow company satisfactory to Agency and Developer for
the conveyance of title to the Site from Agency to Developer.
1.14 Note. The term"Note" shall mean the promissory note executed by
Agency in favor of Developer, as described in Section 6.0, which shall be in the form set forth as
Exhibit "C".
1.15 Project. The term "Project" shall mean all of the construction,
improvements, modifications, and rehabilitation to be performed by Developer on the Site
pursuant to this Agreement. The Project is more particularly described in the Scope of
Development attached hereto as Exhibit "G". Upon completion, the Project will consist of a high
quality resort hotel with timeshare vacation units, consisting of 210 key rooms for hotel use plus
176 time share units, and located on the Developer Property.
1.16 Project Area. The term"Project Area" shall mean the redevelopment
project area known as South Palm Canyon Project Area which was adopted by Ordinance
Number 1203 of the City Council of City on November 30, 1983, as amended on December 21,
1994 by Ordinance No. 1494, on December 15, 1999 by Ordinance 1576, and on May 31, 2000
by Ordinance 1584, which merged the South Palm Canyon Project with the Central Business
District, Ramon-Bogie, Oasis, North Palm Canyon and Project Area No. 9 into Merged Project
Area No. 1.
1.17 Redevelopment Plan. The term "Redevelopment Plan" shall mean the
Redevelopment Plan for the Project Area. A copy of the Redevelopment Plan is on file in the
Office of the City Clerk of the City. The Redevelopment Plan is incorporated herein by this
reference as though fully set forth herein.
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1.18 Schedule of Performance. The term "Schedule of Performance" shall mean
that certain Schedule attached hereto as Exhibit "B".
1.19 Site. The term "Site" shall mean that certain unimproved real property
located within the Project Area in the City of Palm Springs, County of Riverside, State of
California, consisting of approximately 11.41 acres, more particularly described and shown on
Exhibit "A" attached hereto.
1.20 Title Company. The term "Title Company" shall mean
Title Company located at or such other title company
mutually agreeable to Agency and Developer.
2. PURPOSE OF AGREEMENT. This Agreement and the Exhibits attached hereto
are intended to effectuate the Redevelopment Plan for the Project Area by providing for the
disposition and rehabilitation of portions of the Site and development of the Project on the Site,
pursuant to the Scope of Development set forth at Exhibit "G" hereto. Developer has agreed to
participate in the redevelopment of the Site by entering into this Agreement with Agency. The
disposition and rehabilitation of the Site and development of the Project pursuant to this
Agreement, and the fulfillment generally of this Agreement, are in the best interests of the City
and the welfare of its residents, and are in accordance with the public purposes and provisions of
applicable federal, state, and local laws and requirements under which the Project has been
undertaken and is being assisted.
This Agreement is entered into by the Agency pursuant to its authority under the Community
Redevelopment Law of the State of California,Health and Safety Code Sections 33000 et seq. (all statutory
references herein are to the Health and Safety Code unless otherwise provided);which authorizes the Agency
to make agreements with owners,purchasers and lessees of property in the Redevelopment Project Area
providing for the development of property in conformity with the Redevelopment Plan, and providing that the
Agency retain controls and establish restrictions or covenants running with the land so that the property will
be rehabilitated,developed, operated, and used in conformity with this Agreement and the Redevelopment
Plan(see Sections 33390, 33381, 33437-33439 and 33339).
3. REPRESENTATIONS AND WARRANTIES.
3.1 Developer Representations and Warranties. Developer hereby makes the
following representations, covenants, and warranties for the benefit of Agency, and Agency's
successors and assigns, and acknowledges that the execution of this Agreement by Agency has
been made, in MATERIAL reliance by Agency on such representations and warranties:
(a) Developer Ownership of the Site. As of the Effective Date,
Developer is owner of fee title to the Developer Property.
(b) No Default. The execution and delivery of this Agreement will not
constitute or result in any default or event that with notice or the lapse of time, or both, would be
a default, breach, or violation of any lease, mortgage, deed of trust, or other agreement,
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instrument or arrangement by which Developer is bound or any event which would permit any
party to terminate an agreement or accelerate the maturity of any indebtedness or other obligation
affecting Developer.
(c) No Violation. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein will not violate any provision of, or
require any consent, authorization, or approval under any law or administrative regulation or any
other order, award,judgment, writ, injunction or decree applicable to, or any governmental permit
or license issued to, Developer or relating to Site.
(d) No Bankruptcv. Neither Developer nor the entities constituting
Developer, if any, have filed or been the persons or subject of any filing of a petition under the
Federal Bankruptcy Law or any insolvency laws, or any laws for the discharge of indebtedness or
for the reorganization of debtors.
(e) No Misrepresentation. No representation, warranty, or covenant of
Developer in this Agreement, or in any document or certificate furnished or to be furnished to
Agency pursuant to this Agreement, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.
(0 Disclosure. Developer has disclosed all information concerning the
Site of which Developer is aware which may materially affect the value of the Site and/or
Developer's ability to develop and utilize the Site as provided in this Agreement.
(g) Due Execution. This Agreement has been duly executed by
Developer and constitutes a valid, binding, and enforceable obligation of Developer. Developer is
qualified to do business in and is in good standing with the State of California, has full power and
authority to enter this Agreement and all authorizations required to make this Agreement binding
upon Developer have been obtained.
(h) No Extraneous Consideration. Developer has not paid or given to,
and will not pay or give to, the Agency or City or any official or agent of the Agency or City any
money or other consideration for obtaining this Agreement, except as expressly provided herein.
3.2 Agency Representations and Warranties. Agency hereby represents and
warrants for the benefit of Developer and Developer's successors and assigns, that the following
facts are true as of the execution of this Agreement:
(a) No Approvals. No approvals or consents not heretofore obtained
by Agency are necessary in connection with the execution of this Agreement by Agency or with
the performance by Agency of Agency's obligations hereunder.
(b) Due Execution. This Agreement has been duly executed by Agency
or its duly authorized officers or agents and constitutes a valid, binding, and enforceable
obligation of Agency.
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(c) Governmental Approvals. Notwithstanding anything contained
herein to the contrary, the Agency makes no representations or warranties with respect to the
approvals required by any other governmental entity or with respect to approvals hereinafter
required from the City or the Agency. The Agency reserves full police power authority over the
Project and Developer acknowledges that the City retains such full police power as well. Nothing
in this Agreement shall be deemed to be a prejudgment or commitment with respect to such items
nor to guaranty that such approvals or permits will be issued within any particular time or with or
without any particular conditions.
4. ASSEMBLY AND DISPOSITION OF THE SITE.
Developer hereby agrees to acquire the Site,upon the terms and conditions hereinafter set forth.
4.1 Developer Deposit of Acquisition Fund. Agency acknowledges that prior
to the execution of this Agreement, Developer deposited Ten Thousand Dollars ($10,000.00) into
the Acquisition Fund to pay for the Agency Acquisition Costs. Within thirty (30) days after the
Effective Date, Developer shall deposit an additional Fifteen Thousand Dollars ($15,000.00) into
the Acquisition Fund to pay for the Agency Acquisition Costs. Agency estimates that said
additional Fifteen Thousand Dollar ($15,000.00) deposit should be sufficient to pay for the costs
of preparing an offer letter with respect to the Site and preparing, processing and considering the
adoption of a Resolution of Necessity with respect to the Site. Should the Agency reach a
negotiated agreement with Existing Owners (as hereinafter defined) to acquire the Site, Developer
shall deposit with Agency the purchase price for the Site contained in the purchase agreement for
the Site upon the execution of such purchase agreement by the Agency. Should the Agency adopt
a Resolution of Necessity as provided below, prior to filing the complaint for condemnation,
Developer shall deposit into the Acquisition Fund the sum of Thirty Thousand Dollars
($30,000.00) plus the appraised value of the Site as determined by the appraiser retained by the
Agency in connection with the condemnation of the Site. In addition, Agency may request in
writing additional deposits into the Acquisition Fund to cover its actual and reasonable expenses
incurred hereunder, which Developer shall make within ten (10) days of such written request
therefor. After acquisition of the Site and payment of all Agency Acquisition Costs, any excess
funds in the Acquisition Fund shall be returned to Developer.
4.2 Agency Acquisition of the Site.
(a) Negotiated Purchase. From and after the date of this Agreement,
Agency shall attempt to acquire the Site from Existing Owner by negotiated purchase; provided,
however, that nothing in this Agreement shall obligate Agency to pay more than the amount
Agency has determined to be the fair market value of the Site as determined by an appraisal
obtained by the Agency nor to agree to any other non-standard terms or conditions except as may
be acceptable to Agency in its sole and absolute discretion and provided Developer indemnifies
Agency regarding same in a form satisfactory to Agency. The parties acknowledge that
Developer has obtained an appraisal valuing the Site at Three Million
Dollars ($3, .00).
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(b) Condemnation. If, after and despite its best efforts to do so,
Agency is unable to acquire the Site by negotiated purchase, Agency shall conduct the necessary
analysis in order to determine in its sole discretion whether to attempt to acquire the Site by
exercise of its power of eminent domain. Agency shall have the right to obtain a bona fide
appraisal from an appraiser satisfactory to Agency. The Agency has informed Developer that in
connection with condemnation proceedings, a hearing is held to adopt a Resolution of Necessity.
The Agency cannot legally commit itself to condemnation of property until after this hearing is
held and the testimony given at the hearing has been considered. Accordingly, the Developer
understands that the Agency is not obligated by this Agreement to actually acquire the
Site, and the members of the Agency Board are free to exercise their discretion in any
manner they see fit in the event the Agency considers condemnation. Nothing in this
Agreement shall be deemed a prejudgment or commitment with respect to condemnation,
or a guarantee that such condemnation will be undertaken. In the event Agency exercises its
power of eminent domain to acquire the Site, Agency shall, subject to delays outside Agency's
control, exercise reasonable diligence to complete the acquisition of the Site as soon as
practicable after commencement of eminent domain proceedings. In the event Agency elects not
to condemn a parcel, Agency shall not have any liability of any kind to Developer despite the
effect of such election on the Project.
4.3 Developer's Purchase Price for the Site; Conveyance of the Site to
Developer.
(a) Purchase Price. In the event Agency acquires the Site either
through negotiated purchase or through exercise of its power of eminent domain, Agency shall
convey the Site to Developer and Developer shall acquire the Site from Agency for an amount
equal to the Agency Acquisition Cost, including but not limited to, all closing costs, legal costs,
soils consultants, appraiser costs, and relocation consultant fees incurred by Agency. The Agency
Acquisition Cost shall include all costs and fees of escrow described in Section 4.12.
(b) Order of Prejudgment Possession. In the event that Agency
exercises its power of eminent domain to acquire the Site and provided Developer has approved
in writing title pursuant to Section 4.9 below, Agency shall, upon Developer's written request
(which written request shall specifically state that Developer is prepared to take possession of the
Site within sixty(60) days) and delivery of the sums referenced above, exercise its reasonable
diligence to obtain a judicial order or orders authorizing Agency to take possession of the Site
prior to the formal order of condemnation (hereinafter "Order of Prejudgment Possession").
(c) Close of Escrow. Notwithstanding any other provision of this
Agreement to the contrary, if at any time prior to Agency's acquisition of the Site, Agency(i)
deposits the Deed and a copy of the Order of Prejudgment Possession for the Site into Escrow;
(ii) Agency tenders possession of the Site to Developer; (iii) Agency is diligently proceeding with
the eminent domain action seeking the rendering of a final judgment authorizing the taking; and
(iv) the Title Company commits to issuing title insurance as provided herein; then, subject to the
satisfaction or waiver of all the conditions specified in Section 4.5(a), Developer shall accept such
right of possession and proceed with development of the Project at the Site. The date of such
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transfer of possession from Agency to Developer shall be treated as the "Close of Escrow" for all
purposes herein. In such event, Agency shall exercise reasonable diligence to conclude the
eminent domain proceedings and obtain a final order of condemnation terminating all interests in
the Site, and finalizing Agency's cost to acquire the Site, including all closing costs incurred by
Agency relating thereto as soon as possible after the Close of Escrow for the Site.
(d) Termination. If Agency elects not to exercise its power of eminent
domain to acquire all or any portion of the Site, Developer may elect either to (a)terminate this
Agreement pursuant to Section 4.13, or (b) amend the Site Plan and to proceed with the
development of the Site without such portion of the Site, if and only if Agency and City approve
such amended site plan. If such amended site plan is not approved by the Agency and City,
Developer shall not proceed with the development of the Site and this Agreement shall terminate.
4.4 Escrow. Escrow shall be opened as soon as possible after the execution of
this Agreement by Developer and Agency. This Agreement shall constitute the joint escrow
instructions of the Agency and the Developer, and a duplicate original of this Agreement shall be
delivered to the Escrow Agent upon the opening of Escrow. Escrow Agent is empowered to act
under these instructions. Agency and Developer shall promptly prepare, execute, and deliver to
the Escrow Agent such additional escrow instructions consistent with the terms herein as shall be
reasonably necessary. No provision of any additional escrow instructions shall modify this
document and in the event of any conflict between the provisions of this Agreement and such
additional escrow instructions, the provisions of this Agreement shall prevail.
4.5 Conditions to Closing.
(a) Developer's Conditions to Closing. Developer's obligation to close
the Escrow, in addition to any other conditions set forth herein in favor of Developer, shall be
conditional and contingent upon the satisfaction, or waiver by Developer, of each and all of the
following conditions (collectively the "Developer's Conditions") within the time provided in the
Schedule of Performance:
(i) Agency shall have deposited into Escrow a certificate
("FIR-PTA Certificate") in such form as may be required by the Internal Revenue Service pursuant
to Section 1445 of the Internal Revenue Code and a California Form 590-RE ("Residency
Certificate") pursuant to Section 18805 of the California Revenue and Taxation Code;
(ii) Title or possession pursuant to an Order of Prejudgment Possession
shall be conveyed subject to the conditions and exceptions recited in the Deed and the Declaration
and those exceptions specified in Section 4.8;
(iii) Agency shall have deposited into Escrow the executed Deed and/or
the Order of Prejudgment Possession, Declaration and all other funds and documents required
under this Agreement.
Any waiver of the foregoing conditions must be express and in writing. In the event that
the foregoing conditions have not been satisfied within the time provided therefor in the Schedule
IRV 911003 v1 _7_
of Performance or herein, either party may terminate this Agreement by delivering a written notice
in accordance with Section 4.13, subject to any cure rights provided therein.
(b) Agenev's Conditions to Closing. Agency's obligation to sell the Site to
Developer and to close Escrow shall, in addition to any other conditions set forth herein in favor
of Agency, shall be conditional and contingent upon the satisfaction, or waiver by Agency, of each
and all of the following conditions (collectively the "Agency's Conditions")within the time
provided in the Schedule of Performance:
(i) Developer shall have deposited the sum of One and 00/100 Dollar
($1.00) for the purchase price of the Site ("Purchase Price"), payable to Agency.
(ii) Developer shall have obtained such preliminary commitments as
necessary to finance the acquisition of the Site and development of the Project or otherwise
provided Agency with financial statements or loan commitments documenting Developer's
capability to acquire the Site and develop the Project;
(iii) Developer shall not have made or attempted to make a Transfer in
violation of Section 5.2;
(iv) Developer shall have timely paid the Agency Acquisition Costs into
the Acquisition Fund and deposited all honeys, documents, fees, charges, costs and items
required to be deposited therein by Developer and complied with all other requirements
hereunder;
(v) Developer shall have timely performed each and every obligation of
Developer hereunder;
(vi) Agency has approved the final building plans for the Project as
provided in Section 5.1(d) below;
(vii) Developer has obtained all governmental permits and approvals
necessary to commence construction of the Project as more particularly set forth in Section 5.1(c)
below;
(viii) Developer is not in default of this Agreement and this Agreement
has not been terminated for any reason; and
(ix) Agency shall have timely acquired the Site with title in the condition
required for conveyance to Developer hereunder.
Any waiver of the foregoing conditions must be express and in writing. In the event that Developer
fails to satisfy Agency's foregoing conditions,or defaults in the performance of its obligations hereunder,
Agency may terminate this Agreement by delivering a written notice in accordance with Section 4.13,subject
to any cure rights provided therein.
IRV k11003 v1
_8_
4.6 Tax Reporting and Miscellaneous Matters. Prior to the Closing Date,
Developer and Agency shall execute and deliver a certificate ("Taxpayer ID Certificate") in such
form as may be required by the IRS pursuant to Section 6045 of the Internal Revenue Code, or
the regulations issued pursuant thereto, certifying as to the description of the Site, date of
Closing, gross price, and taxpayer identification number for Developer and Agency. Prior to the
Closing, Developer and Agency shall cause to be delivered to the Escrow Agent such other items,
instruments and documents, and the parties shall take such further actions, as may be necessary or
desirable in order to complete the Close of Escrow.
4.7 Conveyance of the Site.
(a) Time for Conveyance. The Closing shall occur upon satisfaction of
all conditions to the Closing contained herein, but not later than the Closing Date, unless extended
by the mutual written agreement of the parties.
(b) Escrow Agent to Advise of Costs. On or before the date set forth
in the Schedule of Performance, the Escrow Agent shall advise the Agency and the Developer in
writing of the fees, charges, and costs necessary to close the Escrow, and of any documents which
have not been provided by said party and which must be deposited in Escrow to permit timely
Closing.
(c) Deposits By Agency Prior to Closing. On or before 1:00 p.m. on
the last business day preceding the Closing Date, Agency shall execute, acknowledge and deposit
into Escrow(i) the Deed and/or Order of Prejudgment Possession; (ii) the Declaration; (iii) the
FIRPTA Certificate; (iv) the Residency Certificate; and (v) payment to Escrow Agent of Agency's
share of costs as determined by the Escrow Agent pursuant to Section 4.12.
(d) Deposits By Developer Prior to Closing. On or before 1:00 p.m.
on the last business day preceding the Closing Date, Developer shall execute and acknowledge as
may be required and deposit into Escrow: (i) the Deed; (iii)the deed of trust or other security of a
lender approved by Agency pursuant to Section 4.6, if any; (iv) the Declaration; (v) payment to
Escrow Agent of Developer's share of costs as determined by the Escrow Agent pursuant to
Section 4.12; and the (vi) One Dollar ($1.00)Purchase Price payable to Agency.
(e) Recordation and Disbursement of Funds. Upon the completion by
the Agency and Developer of the deliveries and actions specified in these escrow instructions
precedent to Closing, the Escrow Agent shall be authorized to pay any documentary transfer taxes
and recording fees, if required by law, and thereafter cause to be recorded in the appropriate
records of Riverside County, California, the Deed and/or Order of Prejudgment Possession, the
Declaration and any other appropriate instruments delivered through this Escrow. Concurrent
with recordation, Escrow Agent shall deliver the Title Policy to Developer. Following
recordation, the Escrow Agent shall deliver copies of said instruments to Developer and Agency.
In addition, after deducting any sums specified in this Agreement, the Escrow Agent shall disburse
funds to the party entitled thereto.
4.8 Title Matters.
IRV#11003 v1 _C�_
(a) Condition of Title. Upon the Closing, Agency shall convey fee title
to the Site to Developer subject only to: (i) the Redevelopment Plan; (ii) this Agreement; (iii) the
covenants, conditions and restrictions set forth in the Deed; (iv) the Declaration; (v)
nondelinquent real property taxes and assessments; (vi) necessary public and quasi-public utility
easements; (vii) public street easements; and (viii) covenants, conditions, and restrictions,
easements, and other encumbrances and title exceptions approved by Developer under subsection
(b) or otherwise created or consented to by Developer(collectively, the "Permitted
Encumbrances").
(b) Approval of Title Exceptions. Prior to the execution of this
Agreement, Agency delivered to Developer a preliminary title report issued by Title Company.
Prior to the date set forth in the Schedule of Performance, Developer shall deliver to Agency
written notice specifying in detail any exception (other than those exceptions specifically listed in
subsection (a)) disapproved and the reason therefor. Prior to the date set forth in the Schedule of
Performance, Agency shall deliver written notice to Developer as to whether Agency will or will
not cause the disapproved exceptions to be removed or to be endorsed with endorsements
providing reasonable assurance with respect to the disapproved exceptions. If Agency elects not
to cure the disapproved exceptions, Developer may terminate this Agreement without any liability
of Agency to Developer by providing written notice of termination within five (5) days of
receiving Agency's notice. The failure of Developer to provide said notice within the time
specified shall be deemed Developer's irrevocable election to proceed with the acquisition of the
Site subject to said (natters. If Agency so elects to cure the disapproved exceptions, Agency shall
do so on or before the Closing Date.
(c) Title Policy. Upon the Closing, the Title Company shall furnish
Developer with a CLTA owner's policy of title insurance insuring Developer's fee interest in the
Site subject only to the Permitted Encumbrances (the "Title Policy"). Developer shall be
responsible for any title policy insuring the interest of any lender of funds for the Project.
4.9 Developer Financing. Within the time set forth in this Schedule of
Performance, Developer shall submit to Agency's Executive Director for approval evidence
reasonably satisfactory to the Executive Director that Developer has the financial capability
necessary for the acquisition of the Site and development of the Project thereon pursuant to this
Agreement. Such evidence of financial capability shall include all of the following:
(a) Costs. Reliable cost estimates for Developer's total cost of
acquiring the Site and developing the Project (including both "hard" and "soft" costs).
(b) Financials. A financial statement and/or other documentation
reasonably satisfactory to the Executive Director sufficient to demonstrate that Developer has
adequate funds available and committed to cover the difference between the total acquisition costs
of the Site and development costs of the Project (subparagraph (a) above).
(c) Construction Contract. A copy of the proposed contract between
Developer and his general contractor for all of the improvements required to be constructed by
IRV 911003 vI _I0_
Developer hereunder, certified by Developer to be a true and correct copy thereof. The
Executive Director shall also have the right to review and approve any revisions that are made to
the proposed contract after its approval by the Executive Director.
4.10 Condition of Site.
(a) Developer Approval of Site. Prior to the execution of this
Agreement, Developer has approved the physical condition of the Site, including its seismic, soil
and environmental condition, based upon Developer's inspection of the Site and public records.
Developer has determined, from its inspection and investigation of the Site, and its investigation
of all records and reports concerning the physical condition of the Site, that the soils,
environmental, geotechnical and other physical conditions of the Site are in accordance with the
standards contained in this Agreement and suitable for the development and construction of the
Project on the Site.
(b) Disclaimer of Warranties. Developer shall take the Site in its "AS-
IS" condition and shall be responsible for any defects in the Site, whether patent or latent,
including, without limitation, the physical, seismic, environmental and geotechnical condition of
the Site, and the existence of any contamination, Hazardous Materials, vaults, debris, pipelines,
abandoned wells or other structures located on, under or about the Site. Agency makes no
representation or warranty concerning the physical, environmental, geotechnical or other
condition of the Site, the suitability of the Site for the Project, or the present use of the Site, and
specifically disclaims all representations or warranties of any nature concerning the Site made by
it, the City and their employees, agents and representatives. The foregoing disclaimer includes,
without limitation, topography, climate air, water rights, utilities, present and future zoning, soil,
subsoil, existence of Hazardous Materials or similar substances, the purpose for which the Site is
suited, or drainage. The Agency shall not be responsible for grading the Site and makes no
representation nor warranty concerning the compaction of soil upon the Site, nor of the suitability
of the soil for construction.
(c) Release. Developer, from and after the Effective Date, hereby
waives, releases, premises, acquits and forever discharges Agency, City, their directors, officers,
employees, and agents, and their respective heirs, successors, personal representatives and
assigns, of and from any and all Environmental Claims, Environmental Cleanup Liability and
Environmental Compliance Costs, as those terms are defined below, and from any and all actions,
suits, legal or administrative orders or proceedings, demands, actual damages, punitive damages,
loss, costs, liabilities and expenses, which concern or in any way relate to the physical or
environmental conditions of the Site, the existence of any Hazardous Material thereon, or the
release or threatened release of Hazardous Materials therefrom, whether existing prior to, at or
after the Effective Date. It is the intention of the parties pursuant to this release that any and all
responsibilities and obligations of Agency and City, and any and all rights, claims, rights of action,
causes of action, demands or legal rights of any kind of Developer, its successors, assigns or any
affiliated entity of Developer, arising by virtue of the physical or environmental condition of the
Site, the existence of any Hazardous Materials thereon, or any release or threatened release of
Hazardous Material therefrom, whether existing prior to, at or after the Effective Date, are by this
IRV#11003 vl -11-
release provision declared null and void and of no present or future force and effect as to the
parties. In connection therewith, Developer expressly, knowingly, and voluntarily agrees to waive
any and all rights which Developer may have under Section 1542 of the California Civil Code
which provides as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release,which if known by him must have materially affected his
settlement with the debtor."
Developer's Initials:
(d) Hazardous Materials Indemnitv. Developer shall, from and after
the Effective Date, defend, indemnify and hold harmless Agency, City and their officers, officials,
employees, agents and representatives (collectively, the "Indemnified Parties") from and against
any and all Environmental Claims, Environmental Cleanup Liability, Environmental Compliance
Costs, and any other claims, actions, suits, legal or administrative orders or proceedings, demands
or other liabilities resulting at any time from the physical and/or environmental conditions of the
Site whether before or after the Effective Date or from the existence of any Hazardous Materials
or the release or threatened release of any Hazardous Materials of any kind whatsoever, in, on or
under the Site occurring at any time whether before or after the Effective Date, including but not
limited to, all foreseeable and unforeseeable damages, fees, costs, losses and expenses, including
any and all attorneys' fees and environmental consultant fees and investigation costs and expenses,
directly or indirectly arising therefrom, and including fines and penalties of any nature whatsoever,
assessed, levied or asserted against any Indemnified Parties to the extent that the fines and/or
penalties are the result of a violation or an alleged violation of any Environmental Law.
(e) Definitions. For purposes of this Section, the following terms shall
have the following meanings:
(i) "Environmental Claim" means any claim for personal injury,
death and/or property damage made, asserted or prosecuted by or on behalf of any third party,
including, without limitation, any governmental entity, relating to the Site or its operations and
arising or alleged to arise under any Environmental Law.
(ii) "Environmental Cleanup Liability" means any cost or
expense of any nature whatsoever incurred to contain, remove, remedy, clean up, or abate any
contamination or any Hazardous Material on or under all or any part of the Site, including the
ground water thereunder and asbestos thereon, including, without limitation, (i) any direct costs
or expenses for investigation, study, assessment, legal representation, cost recovery by
governmental agencies, or ongoing monitoring in connection therewith and (ii) any cost, expense,
loss or damage incurred with respect to the Site or its operation as a result of actions or measures
necessary to implement or effectuate any such containment, removal, remediation, treatment,
cleanup or abatement.
IRV#11003 v1 -12-
(iii) "Environmental Compliance Cost" means any cost or
expense of any nature whatsoever necessary to enable the Site to comply with all applicable
Environmental Laws in effect. "Environmental Compliance Cost" shall include all costs necessary
to demonstrate that the Site is capable of such compliance.
(iv) 'Environmental Law" means any federal, state or local
statute, ordinance, rule, regulation, order, consent decree,judgment or common-law doctrine, and
provisions and conditions of permits, licenses and other operating authorizations relating to (i)
pollution or protection of the environment, including natural resources, (ii) exposure of persons,
including employees, to Hazardous Materials or other products, raw materials, chemicals or other
substances, (iii) protection of the public health or welfare from the effects of by-products, wastes,
emissions, discharges or releases of chemical substances from industrial or commercial activities,
or (iv) regulation of the manufacture, use or introduction into commerce of chemical substances,
including, without limitation, their manufacture, formulation, labeling, distribution, transportation,
handling, storage and disposal.
(v) "Hazardous Material" is defined to include any hazardous or
toxic substance, material or waste which is or becomes regulated by any local governmental
authority, the State of California, or the United States Government. The term "Hazardous
Material' includes, without limitation, any material or substance which is: (i) petroleum or oil or
gas or any direct or derivative product or byproduct thereof; (ii) defined as a "hazardous waste,"
"extremely hazardous waste" or "restricted hazardous waste" under Sections 25115, 25117 or
25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code, Division
20, Chapter 6.5 (Hazardous Waste Control Law); (iii) defined as a "hazardous substance" under
Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-
Presley-Tanner Hazardous Substance Account Act); (iv) defined as a "hazardous material,"
"hazardous substance," or "hazardous waste" under Sections 255010) and (k) and 25501.1 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory); (v) defined as a "hazardous substance" under Section 25281 of
the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances); (vi) "used oil' as defined under Section 25250.1 of the California Health
and Safety Code; (vii) asbestos; (viii) listed under Chapter 11 of Division 4.5 of Title 22 of the
California Code of Regulations, or defined as hazardous or extremely hazardous pursuant to
Chapter 10 of Division 4.5 of Title 22 of the California Code of Regulations; (ix) defined as waste
or a hazardous substance pursuant to the Porter-Cologne Act, Section 13050 of the California
Water Code; (x) designated as a 'toxic pollutant" pursuant to the Federal Water Pollution Control
Act, 33 U.S.C. § 1317; (xi) defined as a "hazardous waste" pursuant to the Federal Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (xii) defined as a
"hazardous substance" pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601) (xiii) defined as "Hazardous
Material' pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; or
(xiv) defined as such or regulated by any "Superfund" or "Superlien" law, or any other federal,
state or local law, statute, ordinance, code, rule, regulation, order or decree regulating, relating
to, or imposing liability or standards of conduct concerning Hazardous Materials and/or oil wells
and/or underground storage tanks and/or pipelines, as now, or at any time hereafter, in effect.
IRV#11003 v1 -13-
(f) Survival. Notwithstanding any other provision of this Agreement,
Developer's release and indemnification as set forth in the provisions of this Section, as well as all
provisions of this Section shall survive the termination of this Agreement, shall not merge with the
Deed, and shall continue in perpetuity.
4.11 Indemnification.
(a) Title Indemnity. In the event Agency conveys possession to the
Site to Developer before transfer of actual legal title of the Site to Agency, Agency agrees to
execute an indemnification agreement in form satisfactory to the Title Company and reasonably
satisfactory to Agency by which Agency shall agree to indemnify the Title Company for any
losses, damages, and expenses incurred by the Title Company in the event of Agency's
abandonment of the eminent domain proceedings. Nothing herein shall be deemed to obligate
Agency to pay for any additional premium or other charge necessary for the issuance of the Title
Policy. In the event that the Title Company declines to issue a title insurance policy under such
circumstances and Developer does not agree in its sole and absolute discretion to satisfy whatever
other requirements the Title Company may impose as a condition to its issuance of the policy
prior to Agency's acquisition and conveyance of actual legal title to the Site, Developer's
obligations to take possession of the Site and to commence and complete construction of the
improvements on the Site shall not commence to run until legal title to the Site is conveyed to
Agency.
(b) Developer Indemnity. Developer shall defend, indemnify and hold
harmless the Agency, City and all of its agents, officers and employees from any claim, action or
proceeding against the Agency, City or any of its agents, officers and employees in any fashion
(including but not limited to attorney's fees) relating to the adoption or implementation of this
Agreement, either independently or in conjunction with the Redevelopment Plan for the Site,
including, but not limited to, proceedings to void, attack, annul, or set aside this Agreement, any
claims for money or damages against the City and/or Agency as a result of development
restrictions placed upon the Site such as those for inverse condemnation, substantive due process
violations, the taking of property, the failure or delay respecting the taking of property and the
like. The City and Agency will promptly notify the Developer of any such claim, action or
proceeding, and will cooperate fully in the defense of that action. The City and Agency shall,
however, have the sole discretion as to whether and in what manner to settle any such litigation.
4.12 Costs of Escrow.
(a) Allocation of Costs. Upon the Closing, the Escrow Agent is
authorized to allocate costs as follows: Agency shall pay the documentary transfer tax for the
Deed, the premium for a CLTA coverage Title Policy and one-half of the Escrow fee. Developer
shall pay the recording charges for the Deed, the Declaration and any financing documents, the
difference between CLTA coverage and ALTA coverage for the Title Policy, including the cost of
the ALTA survey, the costs of any endorsements to the Title Policy requested by Developer and
one-half of the Escrow fee.
IRV#11003 vl -14-
(b) Prorations and Adjustments. Ad valorem taxes and assessments on
the Site and insurance for the current year shall be prorated by the Escrow Agent as of the date of
Closing with the Agency responsible for those levied, assessed or imposed prior to Closing and
the Developer responsible for those after Closing. If the actual taxes are not known at the date of
Closing, the proration shall be based upon the most current tax figures. When the actual taxes for
the year of Closing become known, Developer and Agency shall, within thirty days thereafter,
prorate the taxes in cash between the parties.
4.13 Termination of Escrow.
(a) Termination. This Agreement and the Escrow may be terminated
by demand of either party who then shall have fully performed its obligations hereunder if (i) the
Developer's Conditions or Agency's Conditions, as the case may be, have not occurred or have
not been approved, disapproved, or waived as the case may be, by the approving party by the date
established herein for the occurrence of such condition, including any grace period pursuant to
this Section; (ii)Escrow is not in a position to close by the Closing Date, as the same may be
extended; or(iii) either party is in breach of the terms and conditions of this Agreement. In the
event of the foregoing, the terminating party may demand, in writing, return of its money, papers,
or documents from the Escrow Agent if Escrow has been opened, and shall deliver a copy of such
demand to the non-terminating party. No demand shall be recognized until fifteen (15) days after
such demand has been delivered to the non-terminating party, and no objections are raised in
writing to the terminating party and the Escrow Agent by the non-terminating party within the
fifteen (15) day period. In the event of such objections, the opportunity to cure shall be provided
as stated below in subsection (b) of this Section. In addition, the Escrow Agent is authorized to
hold all money, papers, and documents until instructed in writing by both Developer and Agency
or, upon failure thereof, by a court of competent jurisdiction. If no such demands are made, the
Closing shall occur as soon as possible and neither party shall have any further liability to the
other.
(b) Opportunity to Cure. In the event any of the Developer's
Conditions or Agency's Conditions are not satisfied, or waived by the party with the power to
approve said conditions (the "approving party"), then such party shall explain in writing to the
other party the reason for the disapproval or non-satisfaction. Thereafter, the party who has the
burden to satisfy such condition(s) shall have an additional thirty (30) days to satisfy any such
condition(s) and only if such condition(s) still cannot be satisfied may the approving party
terminate this Agreement or the Escrow. In the event the Escrow is not in a condition to close
because of a default by any party, and the performing party has made demand as stated in
subsection (a), then upon the non-performing party's delivering its objection to Escrow Agent and
the performing party within the above fifteen (15) day period, the non-performing party shall have
the right to cure the default in accordance with and in the time provided in Section 8.2.
(c) Agencv's Costs. Developer shall reimburse Agency for all costs
incurred by Agency respecting the acquisition of the Site whether or not Developer ultimately
acquires the Site. Said costs shall include but not be limited to attorneys fees, appraisers fees, soil
consultants, etc. In the event escrow is terminated for any reason, Escrow Holder shall not return
IRV 411003 v1 -15-
any funds it holds until Agency has given written notice to Escrow summarizing the amounts due
to Agency hereunder. Thereafter, Escrow Holder shall terminate the Escrow, and without further
instructions deliver the costs demanded by Agency to Agency from the Acquisition Fund and the
balance, if any, shall be returned to Developer. In the event this Agreement is terminated for any
reason, Agency may elect to terminate any condemnation proceeding and Agency shall retain such
costs as Agency determines is required to terminate the proceeding and to reimburse Agency for
its costs and shall be returned the balance, if any, of the Acquisition Fund to Developer and in the
event additional sums are needed to fully compensate the owner of the Site as well as to
reimburse Agency's costs, Developer shall deliver same to Agency within five (5) days of receipt
of written notice.
4.14 Responsibilities of Escrow Agent.
(a) Deposit of Funds. All funds received in Escrow shall be deposited
by the Escrow Agent in an escrow account with any state or national bank doing business in the
State of California.
(b) Notices. All communications from the Escrow Agent shall be
directed to the addresses and in the manner provided in Section 8.1 of this Agreement for
notices, demands and communications between Agency and Developer.
(c) Sufficiency of Documents. The Escrow Agent is not to be
concerned with the sufficiency, validity, correctness of form, or content of any document prepared
outside of Escrow and delivered to Escrow. The sole duty of the Escrow Agent is to accept such
documents and follow Developer's and Agency's instructions for their use.
(d) Exculpation of Escrow Agent. The Escrow Agent shall in no case
or event be liable for the failure of any of the conditions to Closing, or for forgeries or false
impersonation, unless such liability or damage is the result of negligence or willful misconduct by
the Escrow Agent.
(e) Responsibilities in the Event of Controversies. If any controversy
documented in writing arises between Developer and Agency or with any third party with respect
to the subject matter of the Escrow or its terms or conditions, the Escrow Agent shall not be
required to determine the same, to return any money, papers or documents, or take any action
regarding the Site prior to settlement of the controversy by a final decision of a court of
competent jurisdiction or written agreement of the parties to the controversy. The Escrow Agent
shall be responsible for timely notifying Developer and Agency of the controversy. In the event of
such a controversy, the Escrow Agent shall not be liable for interest or damage costs resulting
from failure to timely close the Escrow or take any other action unless such controversy has been
caused by the failure of the Escrow Agent to perform its responsibilities hereunder.
4.15 Brokerage Commissions. Each party agrees to indemnify and hold the
other harmless from and against all liabilities, costs, damages, and expenses, including, without
limitation, attorneys' fees, resulting from any claims or fees or commissions, based upon
agreements by it, if any, to pay a broker's commission and/or finder's fee.
IRV 911003 v1 -16-
5. CONSTRUCTION OF THE PROJECT.
5.16 Construction of the Project.
(a) Development in Accordance with Plans. Developer shall develop
the Project in accordance with this Agreement, the Scope of Development, the approved Basic
Concept Drawings approved by the Agency prior to or concurrently with the approval of this
Agreement, and the plans and permits approved by Agency and City pursuant to subsections (c)
and (d), including any changes thereto as may be subsequently approved in writing by both
Developer and Agency and, if necessary, City. As completed, the Project: (a) shall comply with
all applicable laws and ordinances of all governmental authorities, including, without limitation, all
laws and ordinances necessary to permit development of the Site as permitted by this Agreement;
(b) except as expressly provided herein, will be entirely on the Site and will not encroach upon the
land of others or overbound any easement or right-of-way; and (c) will be wholly in compliance
with any enforceable building restriction laws, however established, and will not violate any
enforceable use, easement, license, covenant, condition or other restriction affecting the Site.
(b) Evolution of Development Plan. Prior to or concurrently with the
approval of this Agreement, the Agency has approved the Developer's Basic Concept Drawings.
On or before the date set forth in the Schedule of Performance, Developer shall submit to the City
preliminary, and thereafter final drawings and specifications for development of the Site in
accordance with the Scope of Development, the Basic Concept Drawings, and in accordance with
the City's requirements. The term preliminary and final drawings shall be deemed to include site
plans, building plans and elevations, grading plans, if applicable, landscaping plans, parking plans,
material pallets, a description of structural, mechanical, and electrical systems, and all other plans,
drawings and specifications. Final drawings will be in sufficient detail to obtain a building permit.
Said plans, drawings and specifications shall be consistent with the Scope of Development and the
various development approvals referenced hereinabove, except as such items may be amended by
City (if applicable) and by mutual consent of Agency and Developer. Plans, (concept, preliminary
and construction) shall be progressively more detailed and will be approved if a logical evolution
of plans, drawings or specifications previously approved.
(c) Other Governmental Pen-nits. Developer shall, at its own expense
and before commencement of construction, rehabilitation, restoration, revitalization, or
development of any buildings, structures, or other work of improvement upon the Site, secure or
cause to be secured any and all permits and approvals which may be required by City or any other
governmental agency affected by such construction, development or work to be performed by
Developer pursuant to the Scope of Development, including but not limited to, necessary building
permits and all approvals required under the California Environmental Quality Act ("CEQA").
Not by way of limiting the foregoing, in developing and constructing the Project, Developer shall
comply with all applicable development standards in City's Municipal Code and shall comply with
all building code, landscaping, signage and parking requirements except as may be permitted
through approved variances and modifications. Developer shall not be obligated to commence
construction if any such permit is not issued despite good faith effort by Developer. Developer
IRV 911003 v1 -17-
shall pay all normal and customary fees and charges applicable to such permits and any fees and
charges hereafter imposed by City or Agency which are standard for and uniformly applied to
similar projects in the City.
(d) Approval by Agency. The Agency shall approve or disapprove any
submittal made by the Developer pursuant to this Agreement within thirty(30) days after such
submittal. All submittals made by Developer will note in bold type the thirty (30) daytime limit
and specifically reference this Agreement and this Section. Any disapproval shall state in writing
the reason for the disapproval and the changes which the Agency requests to be made. After
Developer resubmits the corrected submittal, Agency shall have an additional thirty (30) days for
the review of the resubmittal but if the Agency disapproves the resubmittal, then the cycle shall
repeat, until the Agency's approval has been obtained. Any approvals made by the City relating to
the design of the Project shall be deemed to also constitute approval by the Agency.
(e) Agency Assistance. Subject to Developer's compliance with(i)
applicable City and Agency development standards for the Site and (ii) all applicable laws and
regulations governing such matters as public hearings, site plan review and environmental review,
Agency agrees to provide reasonable assistance to Developer, at no cost to Agency, in the
expeditious processing of Developer's submittals required under this Agreement in order that
Developer may obtain a final City action on such matters on or before the date set forth in the
Schedule of Performance; provided that Agency does not warrant or represent that such approval
shall be obtained.
(f) Cost of Construction. Developer shall bear all costs of preparing
and developing the Project and constructing all improvements thereon, including, but not limited
to, any and all costs for demolition and clearance of existing surface and subsurface improvements
inconsistent with the Project, architectural and engineering plans, preparation of the Site, costs
associated with meeting applicable seismic standards, interim and permanent financing, broker's
and leasing commissions, and fees or charges for development and building, except for those
public improvements expressly set forth in the Scope of Development to be performed by Agency.
(g) Construction Schedule; Reports. Developer shall commence and
complete construction of the Project within the times set forth in the Schedule of Performance.
Once construction is commenced, Developer shall diligently pursue such construction to comple-
tion and Developer shall not abandon such construction for more than thirty (30) consecutive
days. The decision of the Executive Director shall be final and conclusive upon the parties to this
Agreement. Developer shall keep Agency informed of the progress of construction and submit to
Agency written reports of the progress of construction when and in the form requested by
Agency, but not less than monthly.
(h) Plans and Specifications. Developer shall construct the Project
upon the Site in accordance with the construction drawings, working specifications, and related
documents that shall be submitted to and approved by the Agency in advance and in writing.
IRV 411003 v1 _18_
(i) Nondiscrimination During Construction. Developer, for itself and
its successors and assigns, agrees that during the rehabilitation of the Project, Developer will not
discriminate against any employee or applicant for employment because of race, color, creed,
religion, sex, marital status, age, physical or mental disability, ancestry, or national origin.
5.17 Sale or Transfer of the Project. The Developer covenants that
during the term of this Agreement and prior to the recordation of the Notice of Release of
Construction Covenants, Developer shall not assign this Agreement or transfer the Site or any of
its interests therein except as provided in this Section.
(a) Transfer Defined. As used in this Section, the term "Transfer" shall
include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer to
any person or group of persons acting in concert of more than twenty-five percent (25%) (in the
aggregate) of the present ownership and/or control of any person or entity constituting Developer
or its general partners, taking all transfers into account on a cumulative basis, except transfers of
such ownership or control interest between members of the salve immediate family, or transfers to
a trust, testamentary or otherwise, in which the beneficiaries are limited to members of the
transferor's immediate family, or among the entities constituting Developer or its general partners
or their respective shareholders. In the event any entity constituting Developer, its successor or
the constituent partners of Developer or any successor of Developer, is a corporation or trust,
such transfer shall refer to the transfer of the issued and outstanding capital stock of such
corporation, or of beneficial interests of such trust; in the event that any entity constituting
Developer, its successor or the constituent partners of Developer or any successor of Developer is
a limited or general partnership, such transfer shall refer to the transfer of more than twenty-five
percent (25%) of such limited or general partnership interest; in the event that any entity
constituting Developer, its successor or the constituent partners of Developer or any successor of
Developer is ajoint venture, such transfer shall refer to the transfer of more than twenty-five
percent (25%) of the ownership and/or control of any such joint venture partner, taking all trans-
fers into account on a cumulative basis.
(b) Mency Approval of Transfer Required. Developer shall not
Transfer this Agreement or any of Developer's rights hereunder, or any interest in the Site or in
the improvements thereon, directly or indirectly, voluntarily or by operation of law, without the
prior written approval of Agency, which approval will not be unreasonably withheld, and any such
purported Transfer without such approval shall be null and void. In considering whether it will
grant approval to any Transfer by Developer, which Transfer requires Agency approval, Agency
shall consider factors such as (i) whether the completion of the Project is jeopardized; (ii) the
financial credit, strength and capability of the proposed transferee to perform Developer's
obligations hereunder; (iii) the proposed transferee's experience and expertise in the planning,
financing, rehabilitation, development, ownership, and operation of similar projects; and (iv)
whether the Transfer is for the purpose of financing the purchase or development of the Site. A
Transfer for financing purposes shall not be approved by the Agency if the loan documents do not
state that the loan proceeds must be used for the Project.
IRV##11003 v1 -19-
(c) Release; Assumption. In the absence of specific written agreement
by Agency, no Transfer by Developer of all or any portion of its interest in the Site shall be
deemed to relieve Developer or any successor party from the obligation to complete the Project
or any other obligations under this Agreement. In addition, no attempted Transfer of any of
Developer's obligations hereunder shall be effective unless and until the successor party executes
and delivers to Agency an assumption agreement in a form approved by the Agency assuming
such obligations.
5.18 Insurance and Indemnification.
(a) Insurance. Prior to the entry by Developer on the Site pursuant to
Section 4.10(c) and prior to the commencement of any construction by Developer, Developer
and/or any persons entering on the Site to conduct inspections or to install improvements on the
Site shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to
Agency, during the entire term of such entry or construction, the following policies of insurance:
(i) Comprehensive General Liability Insurance. A policy of
comprehensive general liability insurance written on a per occurrence basis in an amount not less
than either (i) a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) or(ii)
bodily injury limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person,
ONE MILLION DOLLARS ($1,000,000.00) per occurrence, ONE MILLION DOLLARS
($1,000,000.00) products and completed operations and property damage limits of FIVE
HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence and FIVE HUNDRED
THOUSAND DOLLARS ($500,000.00) in the aggregate.
(ii) Worker's Compensation Insurance. A policy of worker's
compensation insurance in such amount as will fully comply with the laws of the State of
California and which shall indemnify, insure and provide legal defense for both the Developer,
Agency, and the City against any loss, claim or damage arising from any injuries or occupational
diseases occurring to any worker employed by or any persons retained by the Developer in the
course of carrying out the work or services contemplated in this Agreement.
(iii) Automotive Insurance. A policy of comprehensive
automobile liability insurance written on a per occurrence basis in an amount not less than either
(i) bodily injury liability limits of TWO HUNDRED FIFTY THOUSAND DOLLARS
($250,000.00) per person and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00)per
occurrence and property damage liability limits of ONE HUNDRED THOUSAND DOLLARS
($100,000.00) per occurrence and ONE HUNDRED THOUSAND DOLLARS ($100,000.00) in
the aggregate or (ii) combined single limit liability of FIVE HUNDRED THOUSAND DOLLARS
($500,000.00). Said policy shall include coverage for owned, non-owned, leased and hired cars.
(iv) Builder's Risk Insurance. A policy of"builder's risk"
insurance covering the full replacement value of all of the improvements to be constructed by
Developer pursuant to this.Agreement.
IRV 411003 v1 _20-
All of the above policies of insurance, except the Builder's Risk Insurance, shall be
primary insurance and shall name Agency, City, and their officers, employees, and agents
as additional insureds. The insurer shall waive all rights of subrogation and contribution it
may have against Agency, City, and their officers, employees and agents and their
respective insurers. All of said policies of insurance shall provide that said insurance may
not be amended or canceled without providing thirty (30) days prior written notice by
registered snail to Agency and City. In the event any of said policies of insurance are
canceled, the Developer shall, prior to the cancellation date, submit new evidence of
insurance in conformance with this Section to the Executive Director. No work or
services under this Agreement shall commence until the Developer has provided Agency
with Certificates of Insurance or appropriate insurance binders evidencing the above
insurance coverages and said Certificates of Insurance or binders are approved by Agency.
The policies of insurance required by this Agreement shall be satisfactory only if
issued by companies qualified to do business in California, rated "A" or better in the most
recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and
only if they are of a financial category Class VII or better, unless such requirements are
waived by the Risk Manager of the City ("Risk Manager") due to unique circumstances.
Developer shall provide in all contracts with contractors, subcontractors,
architects, and engineers that said contractor, subcontractor, architect, or engineer shall
maintain the same policies of insurance required to be maintained by Developer pursuant
to this Section, unless waived by the Risk Manager of Agency.
The Developer agrees that the provisions of this Section shall not be construed as
limiting in any way the extent to which the Developer may be held responsible for the
payment of damages to any persons or property resulting from the Developer's activities
or the activities of any person or persons for which the Developer is otherwise
responsible.
(b) Indemnification. During the period of any construction of the
improvements pursuant to this Agreement and until such time as is issued a Notice of Release of
Construction Covenants for the Project, Developer agrees to and shall indemnify and hold the
Agency and the City harmless from and against all liability, loss, damage, cost, or expense
(including reasonable attorneys'fees and court costs) arising from or as a result of the death of
any person or any accident, injury, loss, or damage whatsoever caused to any person or to the
property of any person which shall occur on the Site and which shall be directly or indirectly
caused by the acts done thereon or any errors or omissions of the Developer or its agents,
servants, employees, or contractors. Developer shall not be responsible for (and such indemnity
shall not apply to) any acts, errors, or omissions of the Agency or the City or their respective
agents, servants, employees, or contractors. Agency and City shall not be responsible for any
acts, errors, or omissions of any person or entity except Agency and City and their respective
agents, servants, employees, or contractors, subject to any and all statutory and other immunities.
The provisions of this Section shall survive the termination of this Agreement.
IRV 911003 v1 -21-
5.19 Rights of Access. Representatives of the Agency shall have the reasonable
right of access to the Site without charges or fees, at any time during normal construction hours
during the period of construction, for the purpose of assuring compliance with this Agreement,
including but not limited to the inspection of the construction work being performed by or on
behalf of Developer. Such representatives of Agency shall be those who are so identified in
writing by the Executive Director of Agency. Each such representative of Agency shall identify
himself or herself at the job site office upon his or her entrance to the Site, and shall provide
Developer, or the construction superintendent or similar person in charge on the Site, a
reasonable opportunity to have a representative accompany him or her during the inspection.
Agency shall indemnify, defend, and hold Developer harmless from any injury or property damage
caused or liability arising out of Agency's exercise of this right of access.
5.20 Taxes and Assessments and Liens. Developer shall pay, when due, all real
estate taxes and assessments assessed or levied subsequent to conveyance of title. Developer
shall remove or have removed any levy or attachment made on the Site, or assure the satisfaction
thereof, within a reasonable time, but in any event prior to a sale thereunder. Nothing herein
contained shall be deemed to prohibit Developer from contesting the validity or amounts of any
tax, assessment, encumbrance or lien, nor to limit the remedies available to Developer in respect
thereto.
5.21 Antidiscrimination Durina Construction. Developer, for himself and his
successors and assigns, agrees that in the construction of the improvements to be constructed by
Developer, it shall not discriminate against any employee or applicant for employment because of
race, color, creed, religion, sex, marital status, ancestry or national origin.
5.22 Easements. Developer shall grant to Agency and City all necessary and
appropriate easements for development of public improvements consistent with the approved
Project plans, including but not limited to streets, rights of vehicular access, sidewalks, sewers,
storm drains, and water improvements.
5.23 Notice of Release of Construction Covenants. Upon written request by
Developer, and upon satisfactory completion of the Project, Agency shall issue to Developer a
Notice of Release of Construction Covenants. The Notice of Release of Construction Covenants
shall be, and shall so state, a conclusive determination of satisfactory completion of the Project
required by this Agreement, and a full compliance with the terms of this Agreement relating to
commencement and completion of the Project. After the date Developer is entitled to issuance of
the Notice of Release of Construction Covenants, and notwithstanding any other provision of this
Agreement to the contrary, any party then owning or thereafter purchasing, leasing or otherwise
acquiring any interest in the Site shall not (because of any such ownership, purchase, lease, or
acquisition) incur any obligation or liability under this Agreement, except that such party shall be
bound by the covenants that survive the issuance of the Notice of Release of Construction
Covenants, as set forth in the Declaration. The Notice of Release of Construction Covenants is
not a notice of completion as referred to in California Civil Code section 3093.
IRV#11003 v1 -22-
If Agency refuses or fails to furnish a Notice of Release of Construction Covenants after written
request from Developer,Agency shall,within ten(10)days of the written request,provide the Developer a
written statement of the reasons Agency refused or failed to furnish a Notice of Release of Construction
Covenants. The statement shall also contain the Agency's opinion of the action Developer must take to
obtain a Notice of Release of Construction Covenants. If the Agency shall have failed to provide such written
statement within said ten(10)day period,Developer shall be deemed entitled to the Notice of Release of
Construction Covenants. If Agency refuses or fails to furnish the Notice of Release of Construction
Covenants for the reason that specific items or materials are not available or landscaping is not complete and
the cost thereof is less than ten percent(10%)of the cost of total consideration,Agency shall issue the Notice
of Release of Construction Covenants upon the posting by Developer with Agency of a cash deposit,bond or
irrevocable letter of credit(in a form acceptable to Agency)in an amount representing one hundred fifty
percent(150%)of the fair value of the work not yet completed.
5.24 Rights of Holders of Approved Security Interests in Site.
(a) Definitions. As used in this Section, the term "mortgage" shall
include any mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security
interest, or sale and lease-back, or any other form of conveyance for financing. The term "holder"
shall include the holder of any such mortgage, deed of trust, or other security interest, or the
lessor under a lease-back, or the grantee under any other conveyance for financing.
(b) Limitation on Encumbrances. Notwithstanding anything to the
contrary contained in this Agreement, Developer shall not mortgage the Site or the Project or any
portion thereof or any interest therein, or enter into any other form of conveyance for financing
prior to the date that Developer has acquired fee title to the entire Site. Subsequent to or
concurrently with Developer's acquisition of fee title to the entire Site, mortgages required for any
reasonable method of financing of the construction of the improvements or acquisition of the Site
are permitted before issuance of a Notice of Release of Construction Covenants but only for the
purpose of securing loans of funds used or to be used for financing the acquisition of the Site, for
the construction of improvements thereon, and for any other expenditures necessary and
appropriate to develop the Site under this Agreement, or for restructuring or refinancing any of
same, so long as the refinancing does not exceed the then outstanding balance of the existing
financing, including any additional costs for completion of construction, whether direct or
indirect, based upon the estimates of architects and/or contractors. The Developer shall notify
the Agency in advance of any mortgage, if the Developer or such entity proposes to enter into the
salve before issuance of the Notice of Release of Construction Covenants. The Developer or
such entity shall not enter into any such conveyance for financing without the prior written
approval of the Agency as provided in Section 5.2. Any lender approved by the Agency pursuant
to Section 5.2 shall not be bound by any material amendment, implementation, or modification to
this Agreement subsequent to the recordation of its mortgage without such lender giving its prior
written consent thereto. In any event, the Developer shall promptly notify the Agency of any
mortgage, encumbrance, or lien that has been created or attached thereto prior to issuance of a
Notice of Release of Construction Covenants, whether by voluntary act of the Developer or
otherwise.
IRV 7V11003 v1 -23-
(c) Developer's Breach Not Defeat Mortgage Lien. Developer's breach
of any of the covenants or restrictions contained in this Agreement shall not defeat or render
invalid the lien of any mortgage permitted pursuant to subsection (b) above and made in good
faith and for value as to the Site, or any part thereof or interest therein, but unless otherwise
provided herein, the terms, conditions, covenants, restrictions, easements, and reservations of this
Agreement shall be binding and effective against the holder of any such mortgage of the Site
whose interest is acquired by foreclosure, trustee's sale or otherwise.
(d) Holder Not Obligated to Construct or Complete Improvements.
The holder of any mortgage shall in no way be obligated by the provisions of this Agreement to
construct or complete the improvements or to guarantee such construction or completion.
Nothing in this Agreement shall be deemed or construed to permit or authorize any such holder to
devote the Site or any portion thereof to any uses, or to construct any improvements thereon,
other than those uses or improvements provided for or authorized by this Agreement.
(e) Notice of Default to Mortgagee, Deed of Trust or Other Security
Interest Holders. Whenever Agency shall deliver any notice or demand to Developer with respect
to any breach or default by Developer hereunder, Agency shall at the salve time deliver a copy of
such notice or demand to each holder of record of any mortgage who has previously made a
written request to Agency therefor, or to the representative of such lender as may be identified in
such a written request by the lender. No notice of default shall be effective as to the holder unless
such notice is given.
(f) Right to Cure. Each holder(insofar as the rights of Agency are
concerned) shall have the right, at its option, within ninety (90) days after the receipt of the
notice, to:
(i) Obtain possession, if necessary, and to commence and
diligently pursue said cure until the same is completed, and
(ii) Add the cost of said cure to the security interest debt and
the lien or obligation on its security interest; provided that in the case of a default which cannot
with diligence be remedied or cured within such ninety (90) day period, such holder shall have
additional time as reasonably necessary to remedy or cure such default.
In the event there is more than one such holder, the right to cure or remedy a breach or
default of Developer under this Section shall be exercised by the holder first in priority or as the
holders may otherwise agree among themselves, but there shall be only one exercise of such right
to cure and remedy a breach or default of Developer under this Section.
No holder shall undertake or continue the construction or completion of the improvements
(beyond the extent necessary to preserve or protect the improvements or construction already
made) without first having expressly assumed Developer's obligations to Agency by written
agreement satisfactory to Agency with respect to the Site or any portion thereof in which the
holder has an interest. The holder must agree to complete, in the manner required by this
IRV#11003 vl -24-
Agreement, the improvements to which the lien or title of such holder relates, and submit
evidence satisfactory to the Agency that it has the qualifications and financial responsibility
necessary to perform such obligations. Any holder properly completing such improvements shall
be entitled, upon written request made to Agency, to a Notice of Release of Construction
Covenants from Agency.
(g) Agency's Rights upon Failure of Holder to Complete
Improvements. In any case where one hundred eighty(180) days after default by Developer in
completion of construction of improvements under this Agreement, the holder of any mortgage
creating a lien or encumbrance upon the Site or improvements thereon has not exercised the
option to construct afforded in this Section or if it has exercised such option and has not
proceeded diligently with construction, Agency may, after ninety (90) days' notice to such holder
and if such holder has not exercised such option to construct within said ninety (90) day period,
purchase the mortgage (or the fee interest if the holder has foreclosed), upon payment to the
holder of an amount equal to the sum of the following:
(i) The unpaid mortgage, debt plus any accrued and unpaid
interest (less all appropriate credits, including those resulting from collection and application of
rentals and other income received during foreclosure proceedings, if any);
(ii) All expenses, incurred by the holder with respect to
foreclosure, if any;
(iii) The net expenses (exclusive of general overhead), incurred
by the holder as a direct result of the ownership or management of the Site, such as insurance
premiums or real estate taxes, if any;
(iv) The costs of any improvements made by such holder, if any;
and
(v) An amount equivalent to the interest that would have
accrued on the aggregate of such amounts had all such amounts become part of the mortgage
debt and such debt had continued in existence to the date of payment by the Agency.
In the event that the holder does not exercise its option to construct afforded in this
Section, and Agency elects not to purchase the mortgage of holder, upon written request by the
holder to Agency, Agency agrees to use reasonable efforts to assist the holder selling the holder's
interest to a qualified and responsible party or parties (as determined by Agency), who shall
assume the obligations of making or completing the improvements required to be constructed by
Developer, or such other improvements in their stead as shall be satisfactory to Agency. The
proceeds of such a sale shall be applied first to the holder of those items specified in
subparagraphs (a) through (e) herein-above, and any balance remaining thereafter shall be applied
as follows:
IRV#11003 v1 -25-
(i) First, to reimburse Agency, on its own behalf and on behalf
of the City, for all costs and expenses actually and reasonably incurred by Agency, including but
not limited to payroll expenses, management expenses, legal expenses, and others.
(ii) Second, to reimburse Agency, on its own behalf and on
behalf of the City, for all payments made by Agency to discharge any other encumbrances or liens
on the Site or to discharge or prevent from attaching or being made any subsequent encumbrances
or liens due to obligations, defaults, or acts of Developer, its successors or transferees.
(iii) Third, to reimburse Agency, on its own behalf and on behalf
of the City, for all costs and expenses actually and reasonably incurred by Agency, in connection
with its efforts assisting the holder in selling the holder's interest in accordance with this Section.
(iv) Fourth, any balance remaining thereafter shall be paid to
Developer.
(h) Right of Agencv to Cure Mortgage, Deed of Trust or Other
Security Interest Default. In the event of a default or breach by Developer (or entity permitted to
acquire title under this Section) of a mortgage prior to the issuance by Agency of a Notice of
Release of Construction Covenants for the Site or portions thereof covered by said mortgage, and
the holder of any such mortgage has not exercised its option to complete the development,
Agency may cure the default prior to completion of any foreclosure. In such event, Agency shall
be entitled to reimbursement from Developer or other entity of all costs and expenses incurred by
Agency in curing the default, to the extent permitted by law, as if such holder initiated such claim
for reimbursement, including legal costs and attorneys' fees, which right of reimbursement shall be
secured by a lien upon the Site, with power of sale, to the extent of such costs and disbursements.
Any such lien shall be subject to:
(i) Any mortgage for financing permitted by this Agreement;
and
(ii) Any rights or interests provided in this Agreement for the
protection of the holders of such mortgages for financing; provided that nothing herein shall be
deemed to impose upon Agency any affirmative obligations (by the payment of money,
construction or otherwise)with respect to the Site in the event of its enforcement of its lien.
Agency may enforce its lien pursuant to the provisions of Section 2924 et seq. of the California
Civil Code.
(i) Right of the Agency to Satisfy Other Liens on the Propertv After
Conveyance of Title. After the conveyance of title and prior to the recordation of a Notice of
Release of Construction Covenants for construction and development, and after the Developer
has had a reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site or
any portion thereof, the Agency shall have the right to satisfy any such liens or encumbrances;
provided, however, that nothing in this Agreement shall require the Developer to pay or make
provision for the payment of any tax, assessment, lien or charge so long as the Developer in good
faith shall contest the validity or amount thereof, and so long as such delay in payment shall not
IRV 411003 v1 -26-
subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right to
reimbursement from Developer for any amount expended pursuant to this Section, which right of
reimbursement shall be secured by a lien on the Site, with power of sale, as provided in the
Declaration.
6. AGENCY FINANCIAL ASSISTANCE. In consideration of Developer's
performance of its obligations hereunder and provided that Developer has not defaulted in any of
the terms, conditions, covenants and obligations of Developer under this Agreement, the Deed,
the Declaration or any other document incorporated herein by reference, Agency agrees to pay to
Developer in annual installments the sum of the (i) Agency Acquisition Costs, and (iii) the
purchase price of the Site (whether paid pursuant to a negotiated purchase or through eminent
domain), less any funds paid by Agency for the acquisition or disposition of the Site which were
not reimbursed by Developer to Agency ("Agency Financial Assistance") pursuant to the terms
and conditions set forth in the Note at Exhibit hereto.
7. USE OF THE SITE.
7.25 Use of the Site. Developer hereby covenants and agrees, for itself and its
successors and assigns, to use and maintain the Site pursuant to the terms of the Deed, the
Declaration and the Redevelopment Plan. Developer shall have sole and exclusive responsibility
and financial liability for any and all construction or works of improvement on the Site as may be
necessary in order to use the Site for the Project.
7.26 No Inconsistent Uses. Developer covenants and agrees that it shall not
devote the Site to uses inconsistent with the Redevelopment Plan, the applicable zoning
restrictions, this Agreement, or the Declaration.
7.27 Obligation to Refrain from Discrimination. Except as specifically
provided in the Declaration with respect to renting the units within the Project to Senior Citizens,
as such term is defined therein, there shall be no discrimination against, or segregation of, any
persons, or group of persons, on account of race, color, creed, religion, sex, marital status, age,
physical or mental disability, ancestry, or national origin in the rental, sale, lease, sublease,
transfer, use, occupancy, or enjoyment of the Site, or any portion thereof, nor shall Developer, or
any person claiming under or through Developer, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use,
or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion
thereof. The nondiscrimination and nonsegregation covenants contained herein and in the Deed
shall remain in effect in perpetuity.
7.28 Effect of Covenants. Agency is deemed a beneficiary of the terms and
provisions of this Agreement and of the restrictions and covenants running with the land, whether
or not appearing in the Deed or the Declaration for and in its own right and for the purposes of
protecting the interests of the community in whose favor and for whose benefit the covenants
running with the land have been provided. The covenants in favor of the Agency shall run
without regard to whether Agency has been, remains or is an owner of any land or interest therein
in the Site, or in the Project Area, and shall be effective as both covenants and equitable
IRV#11003 vl -27-
servitudes against the Site. Agency shall have the right, if any of the covenants set forth in this
Agreement which are provided for its benefit are breached, to exercise all rights and remedies and
to maintain any actions or suits at law or in equity or other proper proceedings to enforce the
curing of such breaches to which it may be entitled. With the exception of the City, no other
person or entity shall have any right to enforce the terms of this Agreement under a theory of
third-party beneficiary or otherwise. The covenants running with the land and their duration are
set forth in the Deed and the Declaration.
8. ENFORCEMENT.
8.1 Defaults, Right to Cure and Waivers. Subject to any Enforced Delay,
failure or delay by either party to timely perform any covenant of this Agreement constitutes a
default under this Agreement, but only if the party who so fails or delays does not commence to
cure, correct or remedy such failure or delay within thirty (30) days after receipt of a written
notice specifying such failure or delay, and does not thereafter prosecute such cure, correction or
remedy with diligence to completion.
The injured party shall give written notice of default to the party in default, specifying the
default complained of by the injured party. Except as required to protect against further damages,
the injured party may not institute proceedings against the party in default until thirty(30) days
after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any
default, nor shall it change the time of default.
Except as otherwise provided in this Agreement, waiver by either party of the
performance of any covenant, condition, or promise, shall not invalidate this Agreement, nor shall
it be considered a waiver of any other covenant, condition, or promise. Waiver by either party of
the time for performing any act shall not constitute a waiver of time for performing any other act
or an identical act required to be performed at a later time. The delay or forbearance by either
party in exercising any remedy or right as to any default shall not operate as a waiver of any
default or of any rights or remedies or to deprive such party of its right to institute and maintain
any actions or proceedings which it may deem necessary to protect, assert, or enforce any such
rights or remedies.
8.2 Legal Actions.
(a) Institution of Legal Actions. In addition to any other rights or
remedies, and subject to the requirements of Section 7.1, either party may institute legal or
equitable action to cure, correct or remedy any default, to recover damages for any default, or to
obtain any other remedy consistent with the purpose of this Agreement. Actions must be
instituted and maintained in the Superior Court of the County of Riverside, State of California, in
any other appropriate court in that county, or in the Federal District Court in the Central District
of California.
(b) Applicable Law and Forum. The laws of the State of California
shall govern the interpretation and enforcement of this Agreement.
IRV#11003 v1 _28_
(c) Acceptance of Service of Process. In the event that any legal action
is commenced by Developer against Agency, service of process on Agency shall be made by
personal service upon the Executive Director or Secretary of Agency, or in such other manner as
may be provided by law. In the event that any legal action is commenced by Agency against
Developer, service of process on Developer shall be made in such manner as may be provided by
law and shall be valid whether made within or without the State of California.
8.3 Rights and Remedies are Cumulative. Except as otherwise expressly stated
in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either
party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party.
9.4 Specific Performance. In addition to any other remedies permitted by this
Agreement, if either party defaults hereunder by failing to perform any of its obligations herein,
each party agrees that the other shall be entitled to the judicial remedy of specific performance,
and each party agrees (subject to its reserved right to contest whether in fact a default does exist)
not to challenge or contest the appropriateness of such remedy. In this regard, Developer
specifically acknowledges that Agency is entering into this Agreement for the purpose of assisting
in the redevelopment of the Site and not for the purpose of enabling Developer to speculate with
land.
8.5 Attorney's Fees. If either party to this Agreement is required to initiate or
defend any action or proceeding in any way arising out of the parties' agreement to, or
performance of, this Agreement, or is made a party to any such action or proceeding by the
Escrow Agent or other third party, such that the parties hereto are adversarial, the prevailing
party, as between the Developer and Agency only, in such action or proceeding, in addition to any
other relief which may be granted, whether legal or equitable, shall be entitled to reasonable
attorney's fees from the other. As used herein, the "prevailing party" shall be the party determined
as such by a court of law, pursuant to the definition Code of Civil Procedure Section 1032(a)(4),
as it may be subsequently amended. Attorney's fees shall include attorney's fees on any appeal,
and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for
investigating such action, taking depositions and discovery and all other necessary costs the court
allows which are incurred in such litigation. All such fees shall be deemed to have accrued on
commencement of such action and shall be enforceable whether or not such action is prosecuted
to judgment.
9. MISCELLANEOUS.
9.1 Notices. Formal notices, demands, and communications between Agency
and Developer shall be sufficiently given if(i) personally delivered; (ii) dispatched by registered or
certified snail, postage prepaid, return receipt requested; or (iii) by Federal Express or another
reputable overnight delivery service, to the following addresses:
If to Agency: Community Redevelopment Agency of the
IRV#11003 A -29-
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attn: Executive Director
With a copy to: Burke, Williams & Sorensen
18301 Von Karman Avenue
Irvine, California 92612
Attn: David J. Aleshire, Esq.
If to Developer: P.S. NEW MILLENIUM DEVELOPMENT, L.L.C.
39-700 Bob Hope Drive, Suite 300
Rancho Mirage, California 92270
Attn: J.B. Gold
With a copy to:
All notices shall be deemed to be received as of the earlier of actual receipt by the
addressee thereof, the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section; or twenty-four(24) hours after delivery to
Federal Express or another overnight delivery service. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from time
to time designate by mail.
9.2 Conflicts of Interest. No member, official, or employee of Agency shall
have any personal interest, direct or indirect, in this Agreement nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interests of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
9.3 Nonliability of Agency Officials and Employees. No member, official,
employee, or consultant of Agency or City shall be personally liable to Developer, or any
successor in interest of Developer, in the event of any default or breach by Agency or for any
amount which may become due to Developer or to its successor, or on any obligations under the
terms of this Agreement.
9.4 Enforced Delav: Extension of Times of Performance. Time is of the
essence in the performance of this Agreement. Notwithstanding the foregoing, in addition to
specific provisions of this Agreement, performance by either party hereunder shall not be deemed
to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots;
floods; earthquakes; fires; casualties; supernatural causes; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority litigation; unusually severe weather; inability to secure necessary labor, materials or tools;
acts of the other party; acts or the failure to act of a public or governmental agency or entity
(except that acts or the failure to act of City or Agency shall not excuse performance by Agency
IRV#11003 vi -30-
unless the act or failure is caused by the acts or omissions of Developer); or any other causes
beyond the reasonable control or without the fault of the party claiming an extension of time to
perform. In the event of such a delay (herein "Enforced Delay"), the party delayed shall continue
to exercise reasonable diligence to minimize the period of the delay. An extension of time for any
such cause shall be limited to the period of the enforced delay, and shall commence to run from
the time of the commencement of the cause, provided notice by the party claiming such extension
is sent to the other party within ten (10) days of the commencement of the cause. The following
shall not be considered as events or causes beyond the control of Developer, and shall not entitle
Developer to an extension of time to perform: (i)Developer's failure to obtain financing for the
Project, and (ii)Developer's failure to negotiate agreements with prospective users for the Project
or the alleged absence of favorable market conditions for such uses. Times of performance under
this Agreement may also be extended by mutual written agreement by Agency and Developer.
The Executive Director of Agency shall have the authority on behalf of Agency to approve
extensions of time not to exceed a cumulative total of one hundred eighty (180) days with respect
to the development of the Site.
9.5 Books and Records.
(a) Maintenance of Books and Records. Developer shall prepare and
maintain all books, records, and reports necessary to substantiate Developer's compliance with the
terms of this Agreement or reasonably required by the Agency.
(b) Right to Inspect. The Agency shall have the right, upon not less
than seventy-two (72) hours notice, at all reasonable times, to inspect the books and records of
the Developer pertinent to the purposes of this Agreement. Said right of inspection shall not
extend to documents privileged under attorney-client or other such privileges.
9.6 Modifications. Any alteration, change or modification of or to this
Agreement, in order to become effective, shall be made by written instrument or endorsement
thereon and in each such instance executed on behalf of each party hereto.
9.7 Merger of Prior Agreements and Understandings. This Agreement and all
documents incorporated herein contain the entire understanding among the parties hereto relating
to the transactions contemplated herein and all prior or contemporaneous agreements,
understandings, representations, and statements, oral or written, are merged herein and shall be of
no further force or effect.
9.8 Binding Effect of Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their legal representatives, successors, and assigns.
This Agreement shall likewise be binding upon and obligate the Site and the successors in interest,
owner or owners thereof, and all of the tenants, lessees, sublessees, and occupants of such Site.
9.9 Assurances to Act in Good Faith. Agency and Developer agree to execute
all documents and instruments and to take all action and shall use their best efforts to accomplish
IRV 411003 v1 -31-
the purposes of this Agreement. Agency and Developer shall each diligently and in good faith
pursue the satisfaction of any conditions or contingencies subject to their approval.
9.10 Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition of invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
9,11 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
party by reason of the authorship of this Agreement or any other rule of construction which might
otherwise apply. The Section headings are for purposes of convenience only, and shall not be
construed to limit or extend the meaning of this Agreement. This Agreement includes all
attachments attached hereto, which are by this reference incorporated in this Agreement in their
entirety. This Agreement also includes the Redevelopment Plan and any other documents
incorporated herein by reference, as though fully set forth herein.
9.12 Entire Agreement, Waivers and Amendments. This Agreement integrates
all of the terms and conditions mentioned herein, or incidental hereto, and this Agreement
supersedes all negotiations and previous agreements between the parties with respect to all or any
part of the subject matter hereof. All waivers of the provisions of this Agreement, unless specified
otherwise herein, must be in writing and signed by the appropriate authorities of Agency or
Developer, as applicable, and all amendments hereto must be in writing and signed by the
appropriate authorities of Agency and Developer.
IRV#11003 v1 -32-
9.13 Time for Acceptance of Agreement by Agency. This Agreement, when
executed by Developer and delivered to Agency, must be authorized, executed and delivered by
Agency, not later than the time set forth in the Schedule of Performance or this instrument shall
be void, except to the extent that Developer shall consent in writing to further extensions of time
for the authorization, execution, and delivery of this Agreement. After execution by Developer,
this Agreement shall be considered an irrevocable offer until such time as such offer shall become
void due to the failure of the Agency to authorize, execute and deliver the Agreement in
accordance with this Section.
9.14 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, and such counterparts shall constitute one and the same
instrument.
9.15 Integration. This Agreement and other documents expressly incorporated
herein by reference contain the entire and exclusive understanding and agreement between the
parties relating to the matters contemplated hereby and all prior or contemporaneous negotiations,
agreements, understandings, representations and statements, oral or written, are merged herein
and shall be of no further force or effect.
9.16 Exhibits. Exhibits "A" through "G", inclusive, attached hereto, are
incorporated herein as if set forth in full.
IN WITNESS WHEREOF the Agency and Developer have executed this Agreement as of the date
first written above.
"Agency"
COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS,CALIFORNIA,a
public body,corporate and politic
ATTEST:
By: By:
Assistant Secretary Chairman
APPROVED AS TO FORM:
David J. Aleshire,Esq.
Agency Counsel
"Developer"
P.S.NEW MILLENIUM DEVELOPMENT,L.L.C., a California
limited liability company
By:
Its:
By:
Its:
EXMIT "A"
LEGAL DESCRIPTION OF THE SITE
That certain real property located in the City of Palm Springs, County of Riverside, State
of California described as follows:
STATE OF CALIFORNIA )
) ss.
COUNTY OF RIVERSIDE )
On 2001, before me, personally appeared
,personally known to me(or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and
that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT"D"
FREE RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
P.O. Box 2743
Palm Springs, California 2262
Attn: Assistant Secretary
(Space Above Line for Recorder's Use Only)
(Exempt from Recording Fee per Gov. Code § 6103)
GRANT DEED
FOR A VALUABLE CONSIDERATION,the receipt ofwhich is hereby acknowledged,the
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,
CALIFORNIA, a public body, corporate and politic ("Grantor") acting under the Community
Redevelopment Law of the State of California, hereby grants to P.S. NEW MILLENIUM
DEVELOPMENT, L.L.C., a California limited liability company ("Grantee") the real property,
hereinafter referred to as the "Site," in the City of Palm Springs, County of Riverside, State of
California, as more particularly described in Attachment No. 1 attached hereto and incorporated
herein by this reference.
As conditions of this conveyance,the Grantee covenants by and for itself and any successors-
in-interest for the benefit of Grantor and the City of Palm Springs, a municipal corporation, as
follows:
1. Governing Documents. The Site is being conveyed (i)pursuant to a Disposition and
Development Agreement (the "DDA") entered into by and among Grantor and Grantee and dated
July ,2001 and(ii) subject to the terms of the DDA,this Deed, and the Declaration of Covenants,
Conditions and Restrictions ("Declaration") by and between Grantor and Grantee, executed and
recorded concurrently herewith. The DDA and the Declaration are public records on file in the office
of the City Clerk of the City of Palm Springs, located at 3200 East Tahquitz Canyon Way, Palm
Springs, California 92263, and are incorporated herein by this reference. Any capitalized terms not
defined herein shall have the meanings ascribed to them in the DDA. Grantee covenants and agrees
for itself and its successors and assigns to develop the Site in accordance with the DDA and thereafter
to use, operate and maintain the Site in accordance with the Redevelopment Plan, the Declaration,
and this Deed. The Site is also conveyed subject to easements and rights-of-way of record and other
matters of record. In the event of any conflict between this Deed and the DDA,the provisions of the
DDA shall control.
2. Term of Restriction. Pursuant to the DDA and the Declaration, Grantee hereby
covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site
that Grantee, such successors and such assigns, shall not develop, operate, maintain or use the Site in
violation of the terms and conditions of this Deed and the Declaration (unless expressly waived in
writing by Grantor) for the term of the Redevelop Plan; provided that, however, the covenants
contained in Sections 6 and 7 shall remain in effect in perpetuity.
3. Right of Re-Entry Prior to Completion. The Grantee covenants by and for itself and
any successors in interest that the Grantor shall have the additional right, at its option,to reenter and
take possession of the Site hereby conveyed,with all improvements thereon,and revest in the Grantor
the estate conveyed to the Grantee, if after conveyance of title and prior to issuance of a Notice of
Release of Construction Covenants of construction of the Project upon the Site, the Grantee or
successor-in-interest shall:
(a) Fail to proceed with the construction of the Project as required by the DDA
within the time period for cure as provided in the DDA; or
(b) Abandon or substantially suspend construction of the Project as required by
the DDA, and fail to proceed within the time period for cure as provided in the DDA; or
(c) Transfer, or suffer any involuntary transfer of the Site, or any part thereof, in
violation of the DDA.
Such right to reenter, repossess and revest shall be subordinate and subject to and be limited
by and shall not defeat, render invalid or limit:
(d) Any mortgage, deed of trust or other security instrument for the benefit of any
lender approved by the Agency pursuant to the DDA and/or Section 6 below;
(e) Any rights or interests provided in the DDA for the protection of the holder of
such mortgages, deeds of trust or other security instruments.
Within five (5) days after Grantor gives Grantee written notice that Grantor intends to
exercise its right to reenter and take possession of the Site, Grantee shall deliver grant deed(s)
reconveying the Site to Grantor.
4. Reservation of Existing Streets. Grantor excepts and reserves any existing street,
proposed street, or portion of any street or proposed street lying outside the boundaries of the Site
which might otherwise pass with a conveyance of the Site.
5. Transfer Restrictions. The Grantee covenants prior to the recordation ofthe Notice of
Release of Construction Covenants against the Site, Grantee shall not Transfer (as hereinafter
defined) the DDA, the Site or any of its interests therein except as provided in this Section.
(a) Transfer Defined. As used in this Section, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon. A Transfer shall also include the transfer
to any person or group of persons acting in concert of more than twenty-five percent(25%)
(in the aggregate)of the present ownership and/or control of any person or entity constituting
Grantee or its general partners,taking all transfers into account on a cumulative basis, except
transfers of such ownership or control interest between members of the same immediate
family, or transfers to a trust,testamentary or otherwise,in which the beneficiaries are limited
to members of the transferor's immediate family, or among the entities constituting Grantee or
its general partners or their respective shareholders. In the event any entity constituting
Grantee,its successor or the constituent partners of Grantee or any successor of Grantee,is a
corporation or trust, such transfer shall refer to the transfer of the issued and outstanding
capital stock of such corporation, or of beneficial interests of such trust;in the event that any
entity constituting Grantee, its successor or the constituent partners of Grantee or any
successor of Grantee is a limited or general partnership, such transfer shall refer to the trans-
fer of more than twenty-five percent(25%) of such limited or general partnership interest;in
the event that any entity constituting Grantee, its successor or the constituent partners of
Grantee or any successor of Grantee is a joint venture, such transfer shall refer to the transfer
of more than twenty-five percent (25%) of the ownership and/or control of any such joint
venture partner, taking all transfers into account on a cumulative basis.
(b) Grantor Approval of Transfer Required. During the term of the Declaration,
Grantee shall not Transfer this Agreement or any of Grantee's rights hereunder,or any interest
in the Site or in the improvements thereon, directly or indirectly,voluntarily or by operation
of law without the prior written approval of Grantor, which approval may not be
unreasonably withheld, and any such purported Transfer without such approval shall be null
and void. In considering whether it will grant approval to any Transfer by Grantee, which
Transfer requires Grantor approval, Grantor shall consider factors such as (i) whether the
completion of the Project is jeopardized; (ii)the financial credit, strength and capability ofthe
proposed transferee to perform Grantee's obligations hereunder; (iii)the proposed transferee's
experience and expertise in the planning, financing, rehabilitation, development, ownership,
and operation of similar projects; and(iv)whether the Transfer is for the purpose offinancing
the purchase or rehabilitation of the Site. A Transfer for financing purposes shall not be
approved by the Grantor if the loan documents do not state that the loan proceeds must be
used for the Project.
(c) Release; Assumption. In the absence of specific written agreement by Grantor
no Transfer by Grantee of all or any portion of its interest in the Site shall be deemed to
relieve Grantee or any successor party from the obligation to complete the Project or any
other obligations under this Deed. In addition, no attempted Transfer of any of Grantee's
obligations hereunder shall be effective unless and until the successor party executes and
delivers to Grantor an assumption agreement in a form approved by the Grantor assuming
such obligations.
6. Non-Discrimination. Grantee covenants that there shall be no discrimination against,
or segregation of, any persons, or group of persons, on account of race, color, creed, religion, sex,
marital status, age, physical or mental disability, ancestry, or national origin in the rental, sale, lease,
sublease,transfer,use, occupancy, or enjoyment of the Site, or any portion thereof,nor shall Grantee,
or any person claiming under or through Grantee, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,use, or occupancy of
tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof. The
nondiscrimination and nonsegregation covenants contained herein shall remain in effect in perpetuity.
7. Form of Nondiscrimination Clauses in Agreements. Except as specifically provided in
the Declaration with respect to renting the units within the Project to Senior Citizens, as such term is
defined therein, Grantee shall refrain from restricting the rental, sale, or lease of any portion of the
Site on the basis of race, color, creed, religion, sex, marital status, age, physical or mental disability,
ancestry, or national origin of any person. All such deeds, leases, or contracts shall contain or be
subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) Deeds: In deeds the following language shall appear: "Except as specifically
provided in the Declaration with respect to renting the units within the Project to Senior
Citizens, as such term is defined therein, the grantee herein covenants by and for itself, its
heirs, executors, administrators, and assigns, and all persons claiming under or through them,
that there shall be no discrimination against or segregation of any person or group of persons
on account of race, color, creed, religion, sex, marital status, age, physical or mental
disability, ancestry, or national origin in the sale, lease, rental, sublease, transfer, use, occu-
pancy, tenure, or enjoyment of the land herein conveyed, nor shall the grantee itself, or any
persons claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use, or
occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land herein conveyed.
The foregoing covenants shall run with the land."
(b) Leases: In leases the following language shall appear: "The lessee herein
covenants by and for itself, its heirs, executors, administrators, successors,and assigns,and all
persons claiming under or through them, and this lease is made and accepted upon and subject
to the following conditions:
"Except as specifically provided in the Declaration with respect to renting the units
within the Project to Senior Citizens, as such term is defined therein, that there shall be no
discrimination against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, age, physical or mental disability, ancestry, or
national origin in the leasing, subleasing, renting, transferring, use, occupancy, tenure, or
enjoyment of the land herein leased nor shall the lessee itself, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use, or occupancy of tenants, lessees,
sublessees, subtenants, or vendees in the land herein leased."
(c) Contracts: In contracts the following language shall appear: "Except as
specifically provided in the Declaration with respect to renting the units within the Project to
Senior Citizens, as such term is defined therein, there shall be no discrimination against or
segregation of any person or group of persons on account of race, color, creed, religion, sex,
marital status, age,physical or mental disability, ancestry, or national origin in the sale,lease,
rental, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the
transferee itself, or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the selection,location,
number,use, or occupancy of tenants,lessees, subtenants, sublessees, or vendees ofthe land."
The foregoing covenants shall remain in effect in perpetuity.
8. Mortgage Protection. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations contained in this Deed shall defeat or render invalid or in any
way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument
permitted by and approved by Grantor pursuant to the DDA;provided,however,that any successor
of Grantee to the Site shall be bound by such remaining covenants, conditions,restrictions,limitations
and provisions,whether such successor's title was acquired by foreclosure, deed in lieu offoreclosure,
trustee's sale or otherwise.
9. Covenants to Run With the Land. The covenants contained in this Deed shall be
construed as covenants running with the land and not as conditions which might result in forfeiture of
title, and shall be binding upon Grantee, its heirs, successors and assigns to the Site, whether their
interest shall be fee, easement, leasehold, beneficial or otherwise.
10. Rights Upon Default.
(a) Rights of Holder of Mortgage to Cure. Whenever Grantor shall deliver any
notice or demand to the Grantee with respect to any breach or default by the Grantee under
the DDA or the Declaration, Grantor shall at the same time deliver to each holder ofrecord of
any mortgage, deed of trust or other security interest and the lessor under a lease-back or
grantee under any other conveyance for financing authorized by and approved by Grantor
pursuant to the DDA, a copy of such notice or demand. Each such holder (insofar as the
rights of the Grantor are concerned) has the right at its option within ninety (90) days after
the receipt of the notice, to cure or remedy, or to commence to cure or remedy, any such
default and to add the cost thereof to the security interest debt and the lien on its security
interest, or to the obligations of the lessee under any lease-back; or of the grantor under any
other conveyance for financing. If such default shall be a default which can only be remedied
or cured by such holder upon obtaining possession, such holder shall seek to obtain
possession with diligence or continuity through a receiver or otherwise, and shall remedy or
cure such default within ninety(90)days after obtaining possession; provided that in the case
of a default which cannot with diligence be remedied or cured, or the remedy or cure ofwhich
cannot be commenced,within such 90-day period, such holder shall have such additional time
as reasonably necessary to remedy or cure such default with diligence and continuity; and
provided further that such holder shall not be required to remedy or cure any noncurable
default of the Grantee. Nothing contained in the DDA or this Deed shall be deemed to permit
or authorize such holder or other entity to undertake or continue the construction or
completion of the improvements (beyond the extent necessary to conserve or protect the
improvements or construction already made) without first having expressly assumed the
Grantee's obligation (with respect to the Site or any portion thereof on which the holder or
other entity has an interest)to the Grantor by written agreement satisfactory to Grantor. The
holder or other entity in that event must agree to complete, in the manner provided in the
DDA, the improvements to which the lien or title of such holder relates, and submit evidence
satisfactory to Grantor that it has the qualifications and financial responsibility necessary to
perform such obligations. Any such holder or other entity properly completing such
improvements shall be entitled, upon written request made to the Grantor, to a Notice of
Release of Construction Covenants from the Grantor with respect to such improvements.
(b) Grantor's Right to Purchase Mortgage. In any case where,six(6)months after
default by the Grantee in completion of construction of improvements under the DDA, the
holder of any mortgage, deed of trust or other security interest creating a lien or encumbrance
upon the Site, or the lessor under a sale/lease-back, or grantee under any other conveyance
for financing of the Site or any portion thereof approved by Grantor pursuant to the DDA,
has not exercised the option to construct, or if it has exercised the option but has not
proceeded diligently with construction, Grantor may either: (1)purchase the mortgage,deed
of trust or other security interest, or the interest of any such lessor or grantee,by payment to
the holder of the amount of the unpaid debt, plus any accrued and unpaid interest, or, in the
case of such lessor or grantee,by payment to such lessor or grantee of the purchase price paid
for its interest in any of the Site (or any portion thereof) and the improvements to be
constructed thereon, and any unpaid rent or other charges payable to it under its applicable
agreements with its lessee or grantor; or (2) if the ownership of the Site (or any portion
thereof)has vested in the holder,purchase from the holder such interest,upon payment to the
holder of an amount equal to the sum indebtedness secured by such mortgage.
(c) Grantor's Right to Cure Default. In the event of a default or breach by the
Grantee (or entity permitted to acquire title under the DDA) of a mortgage, deed of trust or
other security instrument, of a lease-back, or of obligations of the Grantee under any other
conveyance for financing with respect to the Site, or any portion thereof prior to the
completion of development of improvements thereon, and the holder has not exercised its
option to complete the development,the Grantor may cure the default prior to completion of
any foreclosure, to termination of the lease, or to completion of proceedings by which such
other security interest is retained or granted back. In such event,the Grantor shall be entitled
to reimbursement from Grantee (or such other entity permitted to acquire title under the
DDA) of all costs and expenses incurred by the Grantor in curing the default, to the extent
permitted by law as if such holder initiated such claim for reimbursement. Grantor shall be
entitled to a lien upon the Site(or any portion thereof)encumbered by the security instrument
with respect to which Grantee(or such other entity permitted to acquire title under the DDA)
has defaulted to the extent of such costs and disbursements. Any such lien shall be subject to
mortgages, deeds of trust, or other security instruments and the interest of lessors under any
leases-back and grantees under other conveyances for financing executed for the sole purpose
of obtaining funds to purchase and/or develop the Site(or any portion thereof), to construct
the improvements thereon, and to finance such costs and to pay all costs reasonably related to
the Grantee's obtaining and performing this Agreement.
(d) Grantor's Right to Satisfv Liens. After the conveyance of title and prior to the
recordation of a Notice of Release of Construction Covenants for construction and
development, and after the Grantee had a reasonable time to challenge, cure or satisfy any
liens or encumbrances on the Site or any portion thereof, the Grantor shall have the right to
satisfy any such liens or encumbrances.
11. Counterparts. This Deed may be executed in any number of counterparts, each of
which shall be an original and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, Grantor and Grantee have caused this instrument to be executed
on their behalf by their respective officers or agents hereunto as of the date first above written.
"Grantor:"
ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS, CALIFORNIA, a
public body, corporate and politic
By: By:
Assistant Secretary Chairman
APPROVED AS TO FORM:
By:
David I Aleshire
Agency Counsel
By its acceptance of this Deed, Grantor hereby agrees as follows:
1. Grantee expressly understands and agrees that the terms of this Deed shall be deemed
to be covenants running with the land and shall apply to all of the Grantee's successors and assigns
(except as specifically set forth in the Deed).
2. The provisions of this Deed are hereby approved and accepted.
"Grantee":
P.S.NEW MILLENIUM DEVELOPMENT,L.L.C.,
a California limited liability company
By:
Its:
By:
Its:
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
ATTACHMENT NO. 1
DESCRIPTION OF SITE
That certain real property located in the City of Palm Springs, County of Riverside, State of
California described as follows:
EXEIIBIT `B"
SCHEDULE OF PERFORMANCE
ITEM OF PERFORMANCE TIME FOR REFERENCE
PERFORMANCE
1. Developer executes and delivers July 2001
Agreement to Agency
2. Agency holds public hearing on 2001
Agreement and Basic Concept
Drawings
3. Agency to snake offer to owner of Within 30 days of approval of 4.2(b).
Site to purchase Site Agreement
4. Agency to negotiate in good faith 30 days from making offer 4.2(b)
with owner of Site to acquire the Site
by negotiated purchase
5. If unable to reach a negotiated Within 30 days from the 4.2(c)
purchase, Agency to hold hearing for expiration of the good faith
adoption of Resolution of Necessity. negotiation period referenced
above
6. If Resolution of Necessity is adopted, Within 15 days from adoption 4.2(c)
Agency to file condemnation action of Resolution of Necessity & d
7. Agency and Developer to open Within 10 days of execution of 4.4
Escrow purchase agreement with the
owner of the Site or
commencing condemnation
action
8. Agency to seek Order of Prejudgment Within 15 days of Developer 4.3(b)
Possession depositing funds referenced in
Section 4.1 and providing the
notice referenced in Section
4.3 b
9. Agency to obtain Order of Within 30 days seeking Order 4.3(b)
Prejudgment Possession
10. Agency to obtain physical possession Within 30 days of obtaining 4.3(b)
of the Site Order, or such other time as
may be set by the court
11. Developer to disapprove title Within 20 days of Opening of 4.8
e9A A �a
exceptions. Escrow.
12. Agency to notify Developer of Within 10 days of receiving 4.8
election to cure disapproved Developer's notice.
exceptions.
13. Developer to submit evidence of Within 30 days of Opening of 4.9
financial capability to Executive Escrow.
Director.
14. Agency to notify Developer of Within 30 days of submission. 4.9
approval of evidence of financial
capability.
15. Escrow Agent to advise of fees, costs Within 5 business days of the 4.7
and required documents. Closing Date.
16. Delivery by Agency and Developer of On or before 1:00 p.m. on the 4.13
notice of failure of conditions to last business day preceding
Closing. Closing Date.
17. Agency and Developer to submit On or before 1:00 p.m. on the 4.7
closing documents and funds into last business day preceding
Escrow. Closing Date.
18. Agency and Developer may cure any Within 30 days of receipt of 4.13
condition to Closing disapproved or notice.
may cure default.
19. Closing Date. Within 60 days of the Opening 4.7
of Escrow, if by negotiated
purchase, or within 30 days of
obtaining possession under an
Order of Prejudgment
Possession.
20. Developer prepares and submits to Within 60 days of the approval 5.1
City working drawings, grading plan by Agency of this Agreement.
and landscaping plan and City and
Agency commence approval process.
21. City and Agency to approve drawings In accordance with Section 5.1
and plans 5.1 d
22. Planning Commission to hold hearing October 25, 1995 5.1
on approval of Planned Development
District for the Project
23. City Council to hold hearing on November 1, 1995 5.1
approval of Planned Development
District for the Project
Kruk 64it
24. Developer to submit proof of Prior to commencing any 4.10, 5.3
insurance. inspections and work on the
Project.
25. Developer to commence construction On or before the date that is 90 5.1
of Project. days after the Closing Date, but
not earlier than 180 days after
the approval of this Agreement
by A enc .
26. Developer to complete construction Within 18 months of 5.1
of the Project. commencement of construction.
27. Obtain judgment in condemnation Within 730 days of 4.2(c) and (d)
action. commencement of action.
28. Developer to record reciprocal Prior to the issuance of the Exhibit "F"
easement agreement referenced in Notice of Release of
Scope of Development against the Construction Covenants
Site and Developer Property
29. Agency to issue Notice of Release of In accordance with Section 5.8 5.8
Construction Covenants
It is understood that this Schedule ofPerformance is subject to all of the terms and conditions
of the text of the Agreement. The summary of the items performance in this Schedule ofPerformance
is not intended to supersede or modify the more complete description in the text; in the event of any
conflict or inconsistency between this Schedule of Performance and the text of the Agreement, the
text shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended only by
written agreement signed by both the Developer and the Agency. The Executive Director of Agency
shall have the authority to approve extensions of time without action of the Board of Directors of
Agency not to exceed a cumulative total of 180 days.
c RA AA
EXHIBIT "C"
PROMISSORY NOTE
July_, 2001 ("Note Date") Loan Amount: up to $
FOR VALUE RECEIVED, the undersigned, THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ("Agency")
promises to pay to P.S. NEW MILLENIUM DEVELOPMENT, L.L.C., a California limited
liability company("Developer") so much principal as may be outstanding in accordance with the
terms of this Note, the lesser of THREE MILLION FIFTY THOUSAND FIVE HUNDRED
FIFTY NINE DOLLARS AND NO CENTS ($3,050,559.00) or the sum of the price actually
paid by Agency for the purchase of the Site plus the Agency Acquisition Costs reimbursed to
Agency by Developer under the terms of the DDA("Agency Financial Assistance"), plus accrued
interest on the unpaid principal, plus such other costs, charges, and fees which may be owing from
time to time, all subject to the terms, conditions, and provisions hereinafter set forth.
Reference is made to:
A. The Disposition and Development Agreement by and between Agency and Developer,
dated on or about July_, 2001 ("DDA"), which provides, among other things, for the payment by
Agency to Developer pursuant to the terms of this Note in consideration for the Use Covenants upon
that certain real property consisting of approximately 11.41 acres owned by Developer and located in
the City of Palm Springs, California and in close proximity and benefiting the City's Merged Project
Area No. 1,which property is more particularly described in the legal description attached as Exhibit
"A" to the DDA("Site"). The Use Covenants are set forth in the Agreement Containing Covenants
Affecting Real Property ("Agreement Containing Covenants") by and between the Agency and
Developer recorded in the Official Records of Riverside County, California and dated July 2001.
The DDA is incorporated herein by reference as though fully set forth herein. All defined terms used
in this Note shall have the same meaning as set forth in the DDA unless otherwise stated.
B. The Redevelopment Plan for the Merged Project Area No. 1 ("Plan")is incorporated
herein by reference as though fully set forth.
I. Principal Amount: Disbursement Procedure.
a. Principal Amount. The principal amount payable by the Agency to
Developer in consideration for the Use Covenants pursuant to the Agreement Containing Covenants
is the Agency Financial Assistance, as defined above and as further set forth in the DDA. Agency
shall disburse the Agency Financial Assistance to Developer as set forth below. No interest shall
accrue on the outstanding principal balance but interest shall accrue as set forth in Paragraph
below in the event of an Agency default. The Agency Financial Assistance shall be reduced pursuant
to the terms set forth in Paragraph_below.
b. Disbursement Procedure. As of fulfillment of all of Agency's
Conditions to Disbursement as set forth in Section_below, Agency shall disburse one-fifteenth
(1/15)of the Agency Financial Assistance("Yearly Assistance Payment")each year between the years
t4A #4
2003 and 2014,from Net Property Tax Increment, as such term is defined below,received by Agency
from the Site during the calendar year then ended. Agency shall disburse the Yearly Assistance
Payment by July 31 of each year("Disbursement Dates")between and including the fiscal years 2003
through 2014, which fiscal year shall begin on July 1 and end June 30. Thus, the first Disbursement
Date shall occur on July 31, 2003, which shall be based on Net Property Tax Increment received by
the Agency between July 1, 2002 and June 30, 2003, ant the last Disbursement Date shall be on July
31, 2014.
C. Offset Against Payments. Agency shall offset against each Yearly
Assistance Payment a percentage of the Yearly Assistance Payment equal to the percentage shortfall
of Net Property Tax Increment revenue for each year of the term of this Note below the amount
described in the chart immediately below in this Section Lc under the column entitled"Combined Tax
Increment', representing the expected total Net Property Tax Increment for each year of payment of
the Agency Financial Assistance herein. Developer shall not be entitled to receive any Yearly
Assistance Payment exceeding the amount shown below in this Section 1.c under the column entitled
"Estimated Redevelopment Tax Increment" corresponding to the given year of the term of this Note.
In no event, however, shall the total Agency Assistance Payments exceed the price actually paid by
Agency for the purchase of the Site plus the Agency Acquisition Costs reimbursed to Agency by
Developer under the terms of the DDA.
Estimated
Net Property Combined
Year Tax Increment Tax Increment
1 $ 176,400 $ 176,400
2 $ 179,928 $ 224,028
3 $ 183,527 $ 272,609
4 $ 187,197 $ 322,161
5 $ 190,941 $ 372,704
6 $ 194,760 $ 424,258
7 $ 198,655 $ 476,843
8 $ 202,628 $ 532,244
9 $ 206,681 $ 542,889
10 $ 210,814 $ 553,747
11 $ 215,031 $ 564,822
12 $ 219,331 $ 576,118
13 $ 223,718 $ 587,640
14 $ 228,192 $ 599,393
15 $ 232,756 $ 611,381
$ 3,050,559 $ 6,837,237
The following examples are provided to illustrate the operation of the foregoing provisions:
Example No 1: Net Property Tax Increment received by City from the Project for the 2002-
03 year equals $201,625.20 (or 90% of the$224,028 Combined Tax
Increment for Year 2 of the term). Developer shall receive a Yearly
Assistance Payment by the Disbursement Date in 2003 of$161,935.20
(or 90% of the $ 179,928 Estimated Net Property Tax Increment.)
Example No. 2:Net Property Tax Increment received by City from the Project for the 2003-
04 year equals$299,869.90(or 110% of the$272,609 Combined Tax
Increment for Year 3 of the term). Developer shall receive a Yearly
Assistance Payment by the Disbursement Date in 2003 of$272,609.
Developer shall not be entitled to receive any amount above the
$272,609 Estimated Net Property Tax Increment, irrespective of the
amount of Yearly Assistance Payment paid for the prior year.
d. Net Property Tax Increment. The Agency Financial Assistance
shall not be a general obligation of the Agency and shall be payable solely from the "Net Property
Tax Increment" generated by the Site which is allocated and paid to Agency. As used herein, the
term "Net Property Tax Increment" shall mean the portion of the property taxes allocated to
Agency pursuant to California Health and Safety Code Section 33670(b) attributable to the Site
and actually paid to the Agency (provided, however, that the base year assessed value for which
the Net Property Tax Increment will be calculated shall be the assessed value of the Site as of the
date the Site is conveyed to Developer [as determined by the Riverside County Assessor based
upon the change in ownership of the Site from the current owner to Developer], rather than the
assessed value of the Site upon the adoption of the Redevelopment Plan), less the sum of(i)
twenty percent (20%) of the foregoing amount, which the Agency is required to set aside for
affordable housing purposes pursuant to California Health and Safety Code Section 33334.2 et
seq.; (ii) the percentage of Agency property tax increment revenues attributable to the Project
Area payable to other taxing entities under applicable "pass through" agreements; (iii) the
percentage of Agency property tax increment revenues attributable to the Project Area which the
Agency is required to set aside, pay or transfer to or for the benefit of any other taxing entity or
purpose pursuant to any existing or future requirement of law, including, but not limited to,
payments to the Educational Revenue Augmentation Fund, if payments were required to be made,
and to the County of Riverside for administrative fees or charges.
C. Payment Date. Payments of Net Property Tax Increment shall be
made annually on or before July 31 of each year after the recordation of the Notice of Release of
Construction Covenants.
f. Conditions to Disbursement. Disbursement of Net Property Tax
Increment to Developer shall be expressly conditioned upon the following:
(i) Developer shall not be in default of any term, condition,
covenant or obligation to be performed by Developer under this Agreement, the Grant
Deed, the Declaration or any other document incorporated herein or therein by reference
and no event shall have occurred which with the passage of time, the giving of notice or
both would constitute a default hereunder or thereunder;
(ii) Developer has provided evidence satisfactory to Agency
that Developer has timely paid the property taxes owing with respect to the Site for all
eie 4 A,cp
previous fiscal years, which evidence may include a copy of Developer's tax bill and
canceled check(s);
(iii) Developer has not appealed the assessed value of the Site
for the tax year in which the payment is to be made or any previous tax year;
(iv) The Notice of Release of Construction Covenants has
been recorded by Agency;
(v) An unpermitted Transfer has occurred under Section 5.2
of the DDA.
(vi) If the Agency financial assistance has not been fully paid
on or before the expiration date of the Redevelopment Plan for the Redevelopment Project Area(as
the same may be extended from time to time), any remaining balance of the Agency Financial
Assistance as of that date shall be deemed forgiven and discharged.
2. Term ofNote. The term of this Note shall be fifteen(15)years from the date of the
Effective Date, as that term is defined in the DDA.
3. Prepayment. Agency shall have the right to prepay all or any portion of this Note at
any time without penalty.
4. Default. Agency shall have the right to offset against any Yearly Assistance Payment
any amount resulting from Developer's default under the DDA or the Agreement Containing
Covenants. In the event of any breach or default of the Use Covenants under the Agreement
Containing Covenants, Agency shall be excused from making any and all payments under this Note,
Agency may deliver a notice of default to Developer, which notice of default shall effect a
cancellation and termination of this Note upon delivery of such notice of default to Developer. Upon
delivery of such notice of default, Agency shall have no further obligation to make any payment under
this Note, and Developer shall cancel this Note and return the original hereof to Agency within five
(5) days of its receipt of such notice of default. In the event that the Project ceases operation as a
result of a casualty which affects performance of the Use Covenants, all obligations of Agency to
make the Yearly Assistance Payment under this Note shall cease until operation of the Project on the
Site has resumed.
5. Additional Terms.
a. All payment shall be made in lawful money of the United States. Payments
shall be made to Developer at the address set forth in Paragraph 7 herein or at such other
address as Developer or the holder of this Note may direct pursuant to notice delivered to
Agency in accordance with Paragraph 7.
b. Should Agency breach or default under this Note or fail to make any payment
hereunder, Developer shall not be entitled to accelerate the balance due under this Note, but
shall be limited to an action to compel payment of any delinquent installment only.
LOAA 4 X
6. Nonassi ngnability and Nonassumabil�. This Note shall not be assignable or assumable
without the prior, express, written consent of Agency's Executive Director.
7. Notices. Any notices required by law or this Agreement shall be given either by (i)
personal service, (ii) delivery by reputable document delivery service such as Federal Express that
provides a receipt showing date and time of delivery, or (iii) mailing in the United States mail,
certified mail, postage prepaid, return receipt requested.
Notices to Agency shall be addressed to:
Community Redevelopment Agency of the
City of Palm Springs
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attn: Executive Director
With a copy to: Burke, Williams & Sorensen
18301 Von Karman Avenue
Irvine, California 92612
Attn: David J. Aleshire, Esq.
Notices to Developer shall be addressed to:
P.S. NEW MILLENIUM DEVELOPMENT, L.L.C.
39-700 Bob Hope Drive, Suite 300
Rancho Mirage, California 92270
Attn: J.B. Gold
Notices personally delivered or delivered by document delivery service shall be deemed
effective upon receipt.Notices mailed shall be deemed effective on the second business day following
deposit in the United States mail. Either party may designate that notices be sent to other or
additional addresses by complying with the requirements of this section.
8. Liti ag tion. This Note shall be governed by and construed under the laws of the State
of California. The parties agree that in any litigation between the parties arising out of this Note,the
Mwiicipal and Superior Courts of the State of California in and for the County of Riverside shall have
exclusive jurisdiction. The prevailing party in any litigation between the parties arising out of or
connected to this Note, in addition to whatever other relief to which the prevailing party is entitled,
shall also be entitled to reasonable attorney's fees,including fees and costs for discovery,and any fees
and costs for appeal. In the event of such legal action, service of process on Agency shall be made in
such manner as provided by law for service on a California public entity; service of process on
Developer shall be made in such manner as may be provided for by law, and shall be valid whether
made within or without the State of California.
9. Waiver. No waiver of any breach, default, or failure of condition under the terms of
this Note, or the obligations secured hereby, shall be implied from any failure of either party to take,
or any delay by such party in taking, action with respect to such breach, default, or failure from any
ei#4 it /t?
previous waiver or any similar or unrelated breach, default, or failure; and a waiver of any term ofthis
Note must be made in writing and shall be limited to the express written terms of such waiver.
10. Time of Essence. Time is of the essence in this Note.
11. Severability. In the event that any term or provision of this Note is held to be
unenforceable, the remainder of this Note shall remain in full force and effect to the fullest extent
without inclusion of the unenforceable term or provision.
12. Interpretation. In the event of any conflict between this Note and the DDA,this Note
shall apply. The terms of this Note shall be construed in accordance with the meaning ofthe language
used and shall not be construed for or against either party by reason of the authorship of this Note or
any other rule of construction which might otherwise apply. The paragraph headings are for purposes
of convenience only, and shall not be construed to limit or extend the meaning of this Note.
IN WITNESS WHEREOF, Agency has executed this Note as of the Note Date.
"Agency"
COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
SPRINGS, a public body, corporate and politic
By: .
Chairman
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN& TUCKER LLP
By:
Agency Counsel
04 /f
EXIIIBIT "E"
NOTICE OF RELEASE OF CONSTRUCTION COVENANTS
FREE RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
P.O. Box 2743
Palm Springs, California 92262
Attn: Assistant Secretary
(Space Above Line for Recorder's Use Only)
(Exempt from Recording Fee per Gov. Code § 6103)
RELEASE OF CONSTRUCTION COVENANTS
WHEREAS, by a Disposition and Development Agreement (hereinafter referred to as the
"Agreement") dated , 1995, by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body,corporate and politic
("Agency"), and P.S. NEW MILLENIUM DEVELOPMENT, L.L.C., a California limited liability
company("Developer"),Developer has redeveloped the real property(the "Site"), legally described
and depicted in Attachment No. 1 attached hereto and incorporated herein by reference, according to
the terms and conditions of said Agreement; and
WHEREAS, pursuant to Section of the Agreement, promptly after completion of all
construction work to be completed by Developer upon the Site, and upon request by Developer,
Agency shall furnish Developer with a Notice of Release of Construction Covenants in such form as
to permit it to be recorded in the Official Records of the County of Riverside; and
WHEREAS,the issuance by Agency of the Notice of Release of Construction Covenants shall
be conclusive evidence that Developer,has complied with the terms of the Agreement pertaining to
the redevelopment of the Site; and
WHEREAS, Developer has requested that Agency furnish Developer with the Notice of
Release of Construction Covenants; and
IRV 411003 v1 _1_
WHEREAS, Agency has conclusively determined that the redevelopment ofthe Site has been
satisfactorily completed as required by the Agreement; and
WHEREAS, the Agreement provided for certain covenants to run with the land, which
covenants were incorporated in the grant deed conveying the Site to Developer(the "Deed") and a
Declaration of Covenants, Conditions and Restrictions (the "Declaration");
NOW, THEREFORE:
1. As provided in the Agreement, Agency does hereby certify that redevelopment of the
Site has been fully and satisfactorily performed and completed, and that such redevelopment is in full
compliance with said Agreement.
2. This Notice of Release of Construction Covenants shall not constitute evidence of
Developer's compliance with the Deed and the Declaration,the provisions of which shall continue to
run with the land.
3. This Notice of Release of Construction Covenants shall not constitute evidence of
compliance with or satisfaction of any obligation of Developer to any holder of a mortgage, or any
insurer of a mortgage, securing money loaned to finance construction work on the Site, or any part
thereof. Nothing contained herein shall modify in any way any other provision of said Agreement.
4. This Certificate is not a Notice of Completion as referred to in California Civil Code
Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any way
any other provisions of the Agreement or any other provisions of the documents incorporated therein.
IN WITNESS WHEREOF, Agency has executed this Certificate as of this _ day of
199.
COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS, CALIFORNIA, a public body,
corporate and politic
By:
Executive Director
IRV#11003 v1
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
IRV 911003 yr
-3-
EXHIBIT "F"
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Community Redevelopment Agency
of the City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: Executive Director
(Space Above Line for Recorder's Use Only)
(Exempt from Recording Fee per Gov. Code § 6103)
DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
("Declaration") is made this day of July, 2001 by and among P.S. NEW MILLENIUM
DEVELOPMENT,L.L.C., a California limited liability company("Declarant"),THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public
body, corporate and politic ("Agency"), and THE CITY OF PALM SPRINGS, a municipal
corporation("City").
RECITALS:
A. Agency and Declarant are parties to that certain Disposition and Development
Agreement ("DDA") executed concurrently with this Agreement, whereby Agency has agreed to
convey fee title to Declarant that certain real property located in the City of Palm Springs, County of
Riverside, State of California more particularly described on Exhibit "1" attached hereto and
incorporated herein by reference ("Site") pursuant to the terms of the DDA and that certain Grant
Deed recorded concurrently herewith.
B. The Site is in close proximity to and benefits the redevelopment project area known as
South Palm Canyon Project Area which was adopted by Ordinance Number 1203 of the City Council
of City on November 30, 1983, as amended on December 21, 1994 by Ordinance No. 1494, on
December 15, 1999 by Ordinance 1576, and on May 31, 2000 by Ordinance 1584,which merged the
South Palm Canyon Project with the Central Business District, Ramon-Bogie, Oasis, North Palm
Canyon and Project Area No. 9 into Merged Project Area No. 1 ("Project Area").
C. The Agency and the City have fee or easement interests in various streets, sidewalks
and other property within the City and are responsible for the planning and development of land
within the City in such a manner so as to provide for the health, safety and welfare of the residents of
the City. That portion of the Agency's or City's interest in real property most directly affected by this
Agreement is depicted in Exhibit "2" attached hereto and incorporated herein by reference ("Public
Parcel").
D. The purpose of the Redevelopment Plan is to remedy and alleviate blighted conditions
associated with undeveloped and unproductive land, inadequate street and circulation systems,
unsuitable land mixes, inadequate or total lack of public street improvements, and the existence of
substandard and incompatible uses and structures. The redevelopment and restriction of the Site in
accordance with the Redevelopment Plan will promote the utility and value of the Site and of the
Project Area, for the benefit of its future owners and the entire city.
E. Pursuant to the Redevelopment Plan, the parties entered into the DDA which places
certain restrictions on the Site. Pursuant to Developer's development requirements, the City has
approved or will approve a site plan for the development of the Project, as that term is defined in the
DDA, on the Site ("Site Plan"), which places certain restrictions on the Site. Said Redevelopment
Plan,DDA and Site Plan(i) are on file and may be reviewed in the office of the executive director of
the Agency("Executive Director"), in the Palm Springs City Hall and(ii)are each incorporated herein
by this reference and made a part hereof as though fully set forth herein.
F. Declarant, the Agency and City intend, in exchange for the entering into the DDA by
the Agency and the approval of the Site Plan by City, that the Declarant hold, sell, and convey the
Site subject to the covenants, conditions, restrictions, and reservations set forth in this Declaration
and that the Agency and City shall have the right and power to enforce the covenants, conditions,
restrictions, and reservations as provided herein.
G. In further consideration for the Agency Financial Assistance and Agency Assistance
provided to Declarant by Agency under the terms of the DDA and Note, as those terms are defined in
the DDA, and development approvals provided to Declarant by City, Declarant agrees to impose
upon all timeshare units a$10.00 per interval per year fee in-lieu of the transfer occupancy tax lost by
City by virtue of Declarant developing such units as timeshares rather than hotel rooms upon which
City would otherwise collect transfer occupancy tax.
H. Declarant desires to establish and grant certain covenants, conditions and restrictions
upon the property for the benefit of the Agency and the City and their respective successors and
assigns for the purpose of enhancing and protecting the value, desirability and attractiveness of the
Site and effectuating the Redevelopment Plan. Such covenants, conditions and restrictions shall run
to the benefit of the Public Parcel and bind the Site, the Declarant and its successors and assigns.
NOW, THEREFORE, the Developer, Agency and City declare, covenant and agree, by and
for themselves, their heirs, executors and assigns, and all persons claiming under or through themthat
the Site shall be held,transferred, encumbered, used, sold, conveyed, leased and occupied subject to
the covenants and restrictions hereinafter set forth, which covenants are established expressly and
exclusively for the use and benefit of the Agency and City.
TERMS AND CONDITIONS
ARTICLE I
COVENANTS, CONDITIONS AND RESTRICTIONS
1.1 General. The Site shall be developed and used only as permitted by the restrictions
contained in the Site Plan, Redevelopment Plan and Disposition and Development Agreement.
1.2 Maintenance Agreement. Declarant, for itself and its successors and assigns,hereby
covenants and agrees to maintain and repair or cause to be maintained and repaired the Site and all
related on-site improvements and landscaping thereon at its sole cost and expense, including,without
limitation, buildings, parking areas, lighting, signs and walls, in a first class condition and repair, free
of rubbish, debris and other hazards to persons using the same, and in accordance with all applicable
laws, rules, ordinances and regulations of all federal, state, and local bodies and agencies having
jurisdiction over the Site. Such maintenance and repair shall include, but not be limited to, the
following: (i) sweeping and trash removal; (ii) the care and replacement of all shrubbery, plantings,
and other landscaping in a healthy condition;and(iii)the repair, replacement and restriping of asphalt
or concrete paving using the same type of material originally installed, to the end that such pavings at
all times be kept in a level and smooth condition. In addition,Declarant shall be required to maintain
the Site in such a manner as to avoid the reasonable determination of a duly authorized official of the
Agency or City that a public nuisance has been created by the absence of adequate maintenance such
as to be detrimental to the public health, safety or general welfare or that such a condition of
deterioration or disrepair causes appreciable harm or is materially detrimental to property or
improvements within one thousand (1,000) feet of such portion of the Site.
1.3 Parking. Declarant shall use its best efforts to insure that vehicles associated with the
operation of the Site,including delivery vehicles,vehicles of customers and employees and vehicles of
persons with business on the Site will park solely on the Site and not park on public streets or
adjacent property.
1.4 Compliance With Ordinances. Declarant shall comply with all ordinances,
regulations and standards of the City and Agency applicable to the Site. Declarant shall comply with
all rules and regulations of any assessment district of the City with jurisdiction over the Site.
1.5 Outside Storage. No storage of any kind shall be permitted outside the building(s)
located on the Site except for trash or other storage in any outside storage areas approved by the
Agency or as required by law. Adequate trash enclosures shall be provided and screened. Locations
of such areas and types of screening must be approved by the Executive Director. Gates for trash
storage area shall be kept closed at all times except when in actual use.
1.6 Buildings and Equipment. Any construction,repair,modification or alteration of any
buildings, equipment, structures or improvements on the Site shall be subject to the following
restrictions:
IRV#11003 v1 _3_
(a) All mechanical and electrical fixtures and equipment to be installed on the
roof or on the ground shall be adequately and decoratively screened. The screening must
blend with the architectural design of the building(s). Equipment on the roof must be at least
six(6)inches lower than the parapet line and adequately screened. All details and materials of
said screening shall be approved by the Executive Director prior to installation.
(b) The texture, materials and colors used on the buildings, as well as the design,
height, texture and color of fences and walls shall be subject to the approval of the Executive
Director.
(c) Signs on the Site shall conform to the standards and ordinances of the City
and to a uniform design theme approved by the City. Any signs installed on the Site shall
conform to said design scheme and shall be approved by the Executive Director prior to
installation.
(d) Lights installed on the building shall be a decorative design. No lights shall
be permitted which may create any glare or have a negative impact on the residential areas,if
any, existing around the Site. No light stand on any portion of the Site shall be higher than
fifteen(15) feet. The design and location of any lights shall be subject to the approval of the
Executive Director.
(e) No fences, signs, gas pumps, or any other similar facilities shall be
constructed or provided on the Site without the prior approval of the Executive Director.
(f) Manufacturing plant use may be permitted on the Site, subject to the
limitations provided in the Municipal Code of the City. Specifically, prior to such use,
suitable evidence must be provided to the Executive Director that no negative environmental
effect shall be caused by reason of odor, noise, glare, vibration, fumes, smoke, particulate
matter, refuse matter, and that no unsafe or dangerous conditions are to be created such as
the manufacture, use or storage of explosive, radioactive materials or other similarly
hazardous materials.
1.7 Public Agency Rights of Access. Developer hereby grants to the Agency, the City
and other public agencies the right, at their sole risk and expense,to enter the Site or any part thereof
at all reasonable times with as little interference as possible for the purpose of construction,
reconstruction, relocation, maintenance, repair or service of any public improvements or public
facilities located on the Site. Any damage or injury to the Site or to the improvements constructed
thereon resulting from such entry shall be promptly repaired at the sole expense of the public agency
responsible for the entry.
1.8 Transient Occupancy Tax. Declarant hereby covenants that all units located on the
Site or on properties adjacent to the Site which are owned or controlled by Declarant and part of the
Project shall be subject to the payment of transient occupancy tax as set forth in the Palm Springs
Municipal Code.
IRV 911003 v1
-4-
1.9 In-Lieu Transfer Occupancy Tax. Declarant hereby covenants that all units located on
the Site or on properties adjacent to the Site and are part of the Project shall be subject to the
payment of a TEN DOLLAR and 00/100 ($10.00) per interval per year fee, as such fee is adjusted
under Section 19.(a) below ("In-Lieu TOT") in-lieu of the transfer occupancy tax lost by City by
virtue of Declarant developing such units as timeshares rather than hotel rooms upon which City
would otherwise collect transfer occupancy tax. Declarant shall impose the In-Lieu TOT for each use
of each timeshare, subject to the In-Lieu TOT hereunder, regardless of the length of such use,
provided, however, that any use which exceeds one (1) year shall be subject to a separate In-Lieu
TOT. Declarant's obligations under this Section 1.9 shall be perpetual and run with the land pursuant
to Article below. The In-Lieu TOT shall be separate and in addition to any Transfer
Occupancy Tax collected for interim uses of the timeshares subject to the transient occupancy tax as
set forth in the Palm Springs Municipal Code.
(a) Adjustments to In-Lieu TOT. Beginning July 1, 2008 and each five(5)years
thereafter, the In-Lieu TOT set forth in this Section 1.9 shall be increased by percent
( °/u) of the In-Lieu TOT applied in five (5)year period immediately before such increase.
(b) Method of Payment of In-Lieu TOT. Declarant shall deliver all In-Lieu TOT
applied to the use of timeshare units for each month to City on or before the 5th calendar day
following the end of such month. Along with the total In-Lieu TOT collected for each month
Declarant shall deliver to City a statement showing the intervals of timeshare uses, name(s) of
person(s) using such timeshare during such month and amount of In-Lieu TOT collected for such
unit. Declarant agrees that all uses of timeshare units shall be subject to the In-Lieu TOT and
Declarant shall pay to City the In-Lieu TOT applicable to such timeshare use, irrespective ofwhether
Declarant collects such fee from the timeshare user.
ARTICLE II
ENFORCEMENT
2.1 Termination. No breach of this Declaration shall entitle any party to cancel, rescind
or otherwise terminate this Declaration, or excuse the performance of such party's obligations
hereunder; provided that, however, this limitation shall not affect in any manner any other rights or
remedies which the parties may have by reason of such breach.
2.2 Iniunction. Notwithstanding anything contained herein to the contrary, in the event
of any violation or threatened violation of any of the terms, covenants, restrictions and conditions
contained herein, in addition to the other remedies herein provided, the parties hereto shall have the
right to enjoin such violation or threatened violation in a court of competent jurisdiction.
2.3 Other Rights of Agencv and City. In the event of any violation or threatened
violation of any of the provisions of this Declaration, then in addition to, but not in lieu of, any of the
rights or remedies the Agency and City may have to enforce the provisions hereof, the Agency and
City shall have the right (i)to enforce the provisions hereof as a party hereto and as an owner of the
Public Parcel, and(ii)to withhold or revoke, after giving written notice of said violation, any building
IRV#11003 v1
-5-
permits, occupancy permits, certificates of occupancy, business licenses and similar matters or
approvals pertaining to the Site or any part thereof or interests therein as to the violating person or
one threatening violation.
2.4 Failure to Perform;Lien. If any owner of the Site defaults on the performance of any
of its obligations hereunder,the Agency or City,their employees, contractors and agents may,at their
sole option, and after making reasonable demand of the owner of the Site that it cure said default,
enter onto the Site for the purpose of curing the default. In making an entry,the Agency or City shall
give the owners of the Site or their representative, reasonable notice of the time and manner of said
entry and said entry shall only be at such times and in such manners as is reasonably necessary to
carry out this Agreement. In such event,the owner of the Site shall reimburse the Agency or City for
all costs and expenses related to the curing of said default. If the Agency or City is not reimbursed
for such costs by the owner of the Site within 30 days after giving notice thereof, the same shall be
deemed delinquent, and the amount thereof shall bear interest thereafter at a rate often percent(10%)
per annum until paid. Any and all delinquent amounts, together with said interest, costs and
reasonable attorneys fees shall be a personal obligation of the owner of the Site as well as a lien and
charge,with power of sale,upon the Site. The Agency may bring an action at law against the owner
of the Site to pay any such sums.
The lien provided for in this Section may be recorded by the Agency as a Notice of Lien
against the Site in the Office of the County Recorder, County of Riverside, signed and acknowledged,
which Notice of Lien shall contain a statement of the unpaid amount of costs and expenses. The
priority of such lien when so established against the Site shall date from the date such notice is filed of
record and shall be prior and superior to any right, title, interest, lien or claim which may be or has
been acquired or attached to such real property at the time of recording of such lien, but shall be
junior and subordinate to matters having a priority prior to the date such notice is recorded;provided
that, however, said lien shall be subordinate to any bona fide mortgage or deed of trust and any
purchaser at any foreclosure or trustee's sale under any such bona fide mortgage or deed of trust as
provided in Section 3.3 below. Such lien shall be for the use and benefit of the person filing the same,
and may be enforced and foreclosed in a suit or action brought in any court of competent jurisdiction.
Any such lien may be enforced by the Agency or City by taking either or both of the following
actions concurrently or separately(and by exercising either of the remedies set forth below shall not
prejudice or waive its rights to exercise the remedy): (i)bring an action at law against the defaulting
party personally obligated to pay such lien or(ii)foreclose such lien in accordance with the provisions
of Section 2924 of the California Civil Code applicable to the exercise of powers of sale or mortgages
and deeds of trust, or any other manner permitted by California law.
Upon the timely curing of any default for which such lien was recorded, the City or Agency
shall record an appropriate release of such lien, and sign any other documents reasonably necessary to
satisfy title insurance requirements, upon payment by the owner of the Site of a reasonable fee to
cover the costs of preparing and recording such release, together with the payment of such other
costs,including without limitation, reasonable attorneys fees, court costs, interest or other fees which
have been incurred.
IRV 411003 v1
-6-
ARTICLE III
ENCUMBRANCES, MORTGAGE PROTECTION AND TAXES
3.1 Developer's Breach Not to Default Mortgage Lien. Declarant's breach of any ofthe
covenants or restrictions contained in this Declaration or the Disposition and Development
Agreement shall not defeat or render invalid the lien of any mortgage or deed of trust made in good
faith and for value as to the Site or any part thereof or interest therein,whether or not said mortgage
or deed of trust is subordinated to this Declaration or the Disposition and Development Agreement;
but,unless otherwise herein provided,the terms, conditions, covenants,restrictions and reservations
of this Declaration and the Disposition and Development Agreement shall be binding and effective
against the holder of any such mortgage or deed of trust and any owner of any of the Site or any part
thereof whose title thereto is acquired by foreclosure, trustee's sale, or otherwise.
3.2 Amendments or Modifications to Declaration. No purported rule, regulation,
modification, amendment and/or termination of this Declaration or the Disposition and Development
Agreement shall be binding upon or affect the rights of any mortgagee holding a mortgage or deed of
trust upon the Site that is recorded in the Office of the Riverside County Recorder prior to the date
any such rule, regulation, modification, amendment or termination is recorded in such office,without
the prior written consent of such mortgagee.
3.3 Liens Subordinate. Any monetary lien provided for herein shall be subordinate to
any bona fide mortgage or deed of trust covering an ownership interest or leasehold or subleasehold
estate in and to the Site and any purchaser at any foreclosure or trustee' sale(as well as any by deed
or assignment in lieu of foreclosure or trustee's sale)under any such mortgage or deed of trust shall
take title free from any such monetary lien, but otherwise subject to the provisions hereof,provided
that, after the foreclosure of any such mortgage and/or deed of trust, all other assessments provided
for herein to the extent they relate to the expenses incurred subsequent to such foreclosure, assessed
hereunder to the purchaser at the foreclosure sale, as owner of the Site after the date of such
foreclosure sale, shall become a lien upon the Site and may be perfected and foreclosed as provided in
Section 2.4.
3.4 Payment of Taxes and Assessments. Declarant shall pay, when due, all real estate
taxes and assessments assessed or levied against the Site. Nothing herein contained shall be deemed
or prohibit Declarant from contesting the validity or amounts of any tax or assessments nor to limit
the remedies available to Declarant with respect thereto.
IRV 911003 vI
_7_
ARTICLE IV
COVENANTS TO RUN WITH THE LAND
4.1 Covenants Running With the Land. This Declaration is designed to create equitable
servitudes and covenants appurtenant to the Public Parcel and running with the Site. Declarant
hereby declares that all of the Site shall be held, sold, conveyed, encumbered, hypothecated, leased,
used, occupied and improved subject to the covenants, conditions, restrictions and equitable
servitudes, all of which are for the purposes of uniformly enhancing or protecting the value,
attractiveness and desirability of the Site and effectuating the Redevelopment Plan. The covenants,
conditions, restrictions, reservations, equitable servitudes, liens and charges set forth herein shall run
with the Site and shall be binding upon all persons having any right,title or interest in the Site, or any
part thereof, their heirs, successive owners and assigns; shall inure to the benefit of every portion of
the Public Parcel and any interest therein; shall inure to the benefit of the Agency, the City and their
successors and assigns and successors in interest; shall be binding upon Declarant, its successors and
assigns and successors in interest; and may be enforced by the Agency and City.
Agency and Declarant hereby declare their understanding and intent that the burden of the
covenants set forth herein touch and concern the land in that Declarant's legal interest in the Site is
rendered less valuable thereby. Agency and Declarant hereby further declare their understanding and
intent that the benefit of such covenants touch and concern the land by enhancing and increasing the
enjoyment and use of the Site by the citizens of the City and by furthering the public purposes for
which the Agency was formed.
4.2 Aureement Among Declarant, Agency and City. The Declarant, in exchange for
entering the Disposition and Development Agreement by the Agency and granting of the Site Plan by
City, hereby agrees to hold, sell, and convey the Site subject to the covenants, conditions,restrictions
and reservations of this Declaration. Declarant also grants to the Agency and City the right and
power to enforce the covenants, conditions, restrictions and reservations contained in this Declaration
against the Declarant and all persons having any right,title or interest in the Site, or any part thereof,
their heirs, successive owners and assigns.
ARTICLE V
TERM
The covenants, conditions and restrictions contained in this Declaration shall remain in effect
for the term of the Redevelopment Plan,
ARTICLE VI
MISCELLANEOUS
6.1 Modification, This Declaration may not be modified, terminated or rescinded, in
whole or in part, except by a written instrument duly executed and acknowledged by the parties
hereto,their successors or assigns and duly recorded in the Office of the County Recorder,County of
Riverside.
IRV#11003 v1 _8_
6.2 Governing Law. This Declaration shall be governed by and construed in accordance
with the laws of the State of California.
6.3 Severability. The invalidity or unenforceability of any provision of this Declaration
with respect to a particular party or set of circumstances shall not in any way affect the validity and
enforceability of any other provision hereof, or the same provision when implied to another party or
to a different set of circumstances.
6.4 Notices. Any notice to be given under this Declaration shall be given by personal
delivery or by depositing the same in the United States Mail, certified or registered, postage prepaid,
at the following address:
Agency: The Community Redevelopment
Agency of the City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: Executive Director
City: City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: City Manager
With Copy to: Burke, Williams & Sorensen
18301 Von Karman Avenue
Irvine, California 92612
Attn: David J. Aleshire, Esq.
Declarant: P.S. NEW MILLENIUM DEVELOPMENT, L.L.C.
39-700 Bob Hope Drive, Suite 300
Rancho Mirage, California 92270
Attn: J.B. Gold
With Copy to:
Any notice delivered personally shall be effective upon delivery. Any notice given by mail as
above provided shall be effective forty-eight (48) hours after deposit in the mails. Any party may
change address for notice by giving written notice of such change to the other party.
6.5 Counterparts. This Declaration may be executed in any number of counterparts each
of which shall be an original but all of which shall constitute one and the same document.
IRV#11003 vI _9_
IN WITNESS WHEREOF, the undersigned have executed this Agreement was executed as of
the date first written above.
P.S. NEW MILLENIUM DEVELOPMENT, L.L.C., a
California limited liability company
By:
Its:
By:
Its:
"Declarant"
ATTEST: COMMUNITY REDEVELOPMENT AGENCYOF THE
CITY OF PALM SPRINGS, CALIFORNIA, a
public body, corporate and politic
By: By:
Assistant Secretary Chairman
"Agency"
ATTEST: CITY OF PALM SPRINGS, a
municipal corporation
By: By:
City Clerk Mayor
"City"
APPROVED AS TO FORM:
David J. Aleshire,
Agency Counsel and
City Attorney
IRV#11003 v1 -1 0_
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
IRV#11003 v1 -I I-
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On before me, personally appeared
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s)is/are subscribed to the within instrument and acknowledged to me that he/she/they executed
the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
IRV#11003 v1 -12-
EXIIIBIT "G"
SCOPE OF DEVELOPMENT
1. SUMMARY DESCRIPTION OF PROJECT:
The Project shall be a uniquely designed full service four star hotel and vacation ownership
development. The Project is situated on 11.41 acres with over 575 feet of frontage on the Palm
Canyon Drive.
The Project is comprised of a 210 key hotel and 176 vacation ownership units. The European
architectural theme of arched rock walls, clock towers, lookout towers, clay tile roofs and
colorful bougainvillea lend an atmosphere of warm and friendly hospitality.
The Project shall include over half an acre of breathtaking pools, water features and spas,
waterslides, brick decking and trails that link the cool tranquil waters that form this spectacular
centerpiece of the Project. An 11,500 square foot ballroom and 1800 square feet of meeting
space will be available. Additionally, the Boulder Bar and Grill will be located in the pool area,
and the Starbar and Observatory Lounge will be located on the fifth floor of the hotel.
The hotel will house the vacation ownership sales center with theater and offices, totaling 8900
square feet. The second phase of the development will include a 6500 square foot fully inclusive
spa and health awareness center and recreation room. The Project also includes an 8,700 square
foot site for a stand-alone restaurant.
2. ARCHITECTURAL AND DESIGN:
The improvements to be constructed on the Site shall be of high architectural quality, shall be
well landscaped, and shall be effectively and aesthetically designed. The shape, scale of volume,
exterior design,, and exterior finish of each building, structure, and other improvement must be
consonant with, visually related to, physically related to, and an enhancement to each other and, to
the extent reasonably practicable, to adjacent improvements existing or planned within the Project
Area. The Developer's plans, drawings, and proposals submitted to the Agency for approval shall
describe in reasonable detail the architectural character intended for the Project. The open spaces
between buildings where they exist shall be designed,landscaped and developed with the same degree
of excellence. The total development shall be in conformity with the Redevelopment Plan for the
Project Area.
The architecture of the Project will include towers and fortified walls, which suggest a
magnificent European castle— a blend of the best of Italy, Southern Spain and France soaring
majestically from its mountainous base. Secreted within its impressive structure will be charming
vistas of tile-roofed luxury villas, interwoven with fragrant courtyards, sporting blossom-covered
wooden trellises, and made up of sun bleached plaster walls -their pale ochre and linen white
gently mellowed and time worn.
Upon first entering hotel's open-air lobby, the sight of the San Jacinto Mountains and Tahquitz
Canyon will be immediately visible to guests. A seventy-five foot high flowing waterfall will be
ekA Ait
situated in the lobby, where water will gush from rocky layers before overflowing into a series of
pools below.
3. DEVELOPER'S RESPONSIBILITIES:
A. Private Improvements. The Developer agrees to develop and construct,or cause
the development and construction of the Project as set forth below, or such additional size, intensity,
and character of improvements as may be permitted and approved under applicable land use
regulations of the City and Agency and in accordance with the previously approved Basic Concept
Drawings, as the same may be amended from time to time in accordance herewith.
B. Miscellaneous Site Improvements. The Developer shall provide all landscaping,
open areas, drive-ways, and other incidental on-site improvements required for the Project, in
accordance with the approved plans.
C. Setbacks. Minimum building and parking setbacks shall be in conformance with
the applicable provisions of the Palm Springs Municipal Code, including any permitted variances.
D. Building Construction. Buildings shall be constructed in conformance with the
applicable provisions of the Palm Springs Municipal Code and in accordance with the approved final
building plans.
E. Signs. All signs shall be installed by the Developer. A sign program shall be
submitted to the City for approval. Building and,where necessary, electrical permits shall be obtained
prior to the installation, painting or erection of signs. Signs shall be designed in a manner consistent
with the overall architectural theme of the Project.
F. Screening. All outdoor storage of materials or equipment shall be enclosed or
screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by
the City/Agency staff and the applicable provisions of the Palm Springs Ordinance Code.
G. Landscaping. The Developer shall provide all landscaping and irrigation required
on the Site, including the landscaping and irrigation within the public rights-of-ways on or adjacent to
the Site, in accordance with the approved landscape plans. The Developer shall maintain all
landscaping on the Site outside the public rights-of-way. After satisfactory installation of the
landscaping and irrigation systems within the public rights-of-way on the Site in connection with the
development of the Site, the Agency shall accept or cause the City to accept such improvements and
maintain or cause the City to maintain the same at no expense to the Developer, and the Developer
shall have no further responsibility therefor.
H. Utilities. The Developer agrees to extend all utilities required for the
development,use and maintenance of the improvements on the Site from the locations to which such
utilities will be brought the private improvements to be located on the Site. All utilities on the Site
shall be located underground.
I. Vehicular Access. The number and location of vehicular driveways and curb
breaks shall be in accordance with the approved plans.
UA A ou
I. Off-Site Improvements/Dedications. The Developer agrees to construct the
following off-site improvements and make the following dedications as part of the Project in
accordance with all applicable City standards, rules and regulations:
[insert improvements]
let*
EXIIIBIT "V
LEGAL DESCRIPTION OF TFIE SITE
That certain real property located in the City of Palm Springs, County of Riverside, State of
California described as follows:
IRV#11003 vI -13-
EXHIBIT "2"
DEPICTION OF PUBLIC PARCEL
F82\383\0140840094\21574673 .07/03/01 EXHIBIT "2"
TO DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS
PROOF OF PUBLICATION This 1s space for County Clerk's riling Stn1p
(2015.5.C.C.P)
STATE OF CALIFORNIA
County of Riverside
No.a6e2
CITY OF PALM SPRINGS
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the Community
Redevelopment Agency of the City of Palm
Springs and tpphe City of Palm Springqs will hold a
I am a citizen of the United States and a resident Of caublo t d at a8200n theTah City Council umberWay, Pal -
the County aforesaid; I am Over the e O a f eighteen Springs, California 92262, beginning at 7.00 P.m,
g g Wednesday,July 13,2001,to consider the follow-
years,and not a party to or interested in the ing:
above-entitled matter.I am the principal clerk of a A Dis osition and Development Agreement
printer of the,DESERT SUN PUBLISHING t�th P Deve opment New Millennium
COMPANY a newspaper of general for a proximately 11 acres on the west
circulation, side of South Palm Canyon Drive between
printed and published in the city of Palm Springs, pa Sunny Dunes Road and Mesqquite Road
County of Riverside,and Which newspaper has been lm Springs, California 9 2264The Community Redevelopment Agency of the
adjudged a newspaper of general circulation by the City of Palm Springs (Agency') proposes,a to
enter a Disposition and Development Agreement
.5'ttperlOr Court of the County Of RlVersld¢,State Of ("DDA")with Palm Springs New Millennium Devel-
California under the(late of March 24,1988.Case Community Redevelopment Ahercyy and the' the
Number 191236;that the notice,of which the of Palm Springs are required to make certain find-
inggs pursuant to Health and Safety Code Sections
annexed is a printed copy(set in type not smaller 33421.1, 33433 and 33445 and prior to making
those findings,a Public Hearing is held to receive
than non panel,has been published in each regular puhlic input on the matter.
and entire issue of said newspaper and not in any The nature of the Agreement is that the Agency
supplement thereof on the following dates,to wit: will purchase the approximately 11 acre site ap-
proved for the development of the Star Canyon
Resort, roughly bounded by South Palm Canyon
Jill 5 r Drive on the east and IRoad on the west,
y t.l 12t11 south of Tahqudz Creek and north of Magruder
Chevrolet. The Agency will write down the land
--------------------------------------------------------------- cost and convey the parcel to the Developer
through payment of a note made to the Develop-
er In exchange, the Developer agrees to con-
struct the resort on the she and all necessary
public improvements without a contribution from
the Agency
All in the year 2001 All interested persons are invited to attend the
Public Hearing and express opinions on the item
listed above If you challenge the nature of the
I CCrtif or decl proposed action in court, you may be limited to
y( are)under penalty of perjury that the raising only those issues you or someone else
foregoing is true and correct. raised at the Public Hearing described in this no-
tice,or in written correspondence delivered to the
12th City
Clerk,
at the
eaddress listed above, at or prior
Dated at Palm Springs,California this--------------day to Members Public
thea rig. may view this document
and all referenced documents in the Community
2001 Redevelopment Department;City Hall,and submit
of_____________________________________� written comments to the Community Redevelop-
, men[Agency at or poor to the Communty Bede-
,.,_ /'J') b a lit hearing
Agency Meetingthis
at or prior to the pub-
1 /`, .� vestment
hearing described in this torte
,e
-------------------------------------- ------- Further information, including a co y of the
Signature Amendment and Resolution, prepare in accor-
dance with Health and Safety Code Section
33433, is available In the Office of the City Clerk,
at the above address.
PATRICIA A. SANDERS
City Clerk
PUB July 5, 12, 2001 - '
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING
A DISPOSITION AND DEVELOPMENT AGREEMENT WITH
PALM SPRINGS NEW MILLENNIUM DEVELOPMENT, LLC
TO EFFECTUATE THE DEVELOPMENT OF A RESORT
HOTEL AND VACATION OWNERSHIP PROJECT ON
SOUTH PALM CANYON DRIVE BETWEEN MESQUITE
DRIVEAND SUNNY DUNES DRIVE, IN MERGED PROJECT
AREA # 1 (FORMERLY THE SOUTH PALM CANYON
PROJECT AREA)
WHEREAS,the Community Redevelopment Agency of the City of Palm Springs,California
("Agency")is constituted underthe Community Redevelopment Law(California Health and
Safety Code Section 33000 et. seq.) to carry out the purpose as the redevelopment in the
City of Palm Springs ("the City"); and
WHEREAS, Palm Springs New Millennium Development, LLC has requested Agency
financial assistance in their efforts to develop a resort on South Palm Canyon Drive, in
order to develop the first new hotel in Palm Springs in over twelve (12)years and make it
a profitable development for the hotel operator and the City, and increase the level of
employment; and
WHEREAS, development of the resort will create additional transient occupancy tax and
sales tax revenue for the City, as well as create additional jobs for low and moderate
income households, therefore improving the City's ability to provide services to all its
residents, as well as overall living conditions for low and moderate income households in
the City; and
WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency
may, "for purposes of redevelopment, sell, lease, for a period not to exceed 99 years,
exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or
otherwise, or otherwise dispose of any real or personal property or any interest in
property;" and
WHEREAS, a Notice of Public Hearing concerning the Disposition and Development
Agreement was published in accordance with applicable law; and
WHEREAS,the California Redevelopment Law requires certain findings beforetheAgency
can enter into this Amendment, as follows:
a) Section 33421.1 - that the City Council find that the provision of such
assistance will effectuate the Redevelopment Plan;
b) Section 33445-that the City Council find that the improvements benefit the
Project Area; that no other means of financing the improvements are
available;that payment of the funds will assist in eliminating blight, and that
assistance to the project is consistent with the Agency's adopted Five Year
Implementation Plan.
WHEREAS, the Agency has considered the staff report, and all the information, testimony
and evidence provided during the public hearing on July 18, 2001.
eio /i ��
NOW,THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the
City of Palm Springs as follows:
SECTION 1. The above recitals are true and correct and incorporated herein.
SECTION 2. Pursuant to the California Environmental Quality Act (CEQA), the
Community Redevelopment Agency finds as follows:
a) In connection with the approval of the DDA, the project
received approval of a Mitigated Negative Declaration on
May 17, 2000 based on the preparation of an Initial Study
and the recommendation of the Planning Commission.
Mitigation measures are included in the project design and
adopted as part of the Conditions of Approval for the
Project.
b) The Agency finds that the Planning Commission adequately
discussed the potential significant environmental effects of
the proposed project(land use,traffic/circulation,parking,air
quality, noise, aesthetics, geology/soils, water quality,
drainage, public utilities, public safety,
archaeological/historic resources and light and glare). The
Community Redevelopment Agency further finds that the
Mitigated Negative Declaration reflects its independent
judgment.
SECTION 3. The Developer proposes to construct a five-story hotel of at least
210 rooms; 264 vacation ownership units (time shares);
underground parking;water features and otheramenities; and other
landscaping and on-site improvements.
SECTION 4. The Developers are required to make certain street improvements
in keeping with City codes. Such offsite improvements are
imperative to this project, such as reconstructing curb, gutter and
sidewalks along Belardo Road and South Palm Canyon Drive. This
project improves a blighted parcel in Merged Redevelopment
Project Area#1 (formerly South Palm Canyon) and will increase tax
increment to the Agency and transient occupancy tax and sales tax
collections to the City.
SECTION 5. The Agency agrees, through this Disposition and Development
Agreement,to borrow approximately$3,400,000 from the Developer
to acquire the 11.41 acre site from the current owner, and to acquire
fee title to the site. The Agency agrees to contribute the land to the
project for $1.00 when the project is fully funded, all permits have
been obtained, and the Developer is prepared to commence
construction. The Agency would retain reverter rights if the
Developer fails to proceed or complete the project. The Agency
would then repay the loan from the net tax increment generated by
the project, including both the hotel and time share portions. Over
the 15 years the loan is to be repaid, the total tax increment paid to
the Developer will be close to $6.8 million. The present value of he
assistance, however, remains $3.4 million. In addition, the
U4 + a3
Developer agrees to place an "in-lieu of TOT"fee on the time share
units in the amount of$10 per interval peryear, payable through the
HOA fees.
SECTION 6. The Agency does hereby find and determine as follows:
(a) The property is currently vacant and lies between
Magruder Chevrolet on the south and the Rock
Garden Cafe to the north. The total site is
approximately 11.41 acres. Because of the
substantial amount of public improvements required
as part of the development, including the
undergrounding of utilities on Belardo Road, a
landscaped median island and traffic signal on South
Palm Canyon Drive, street widening on South Palm
Canyon Drive, and sidewalks, bikelanes, curbs and
gutters, it is only feasible for a major development
such as the Star Canyon Resort to develop the
property and carry the overhead cost of the public
improvements. In addition, there are topographic
challenges with grade changes and a significant
amount of boulder coverage on the site, which also
raises the cost of a new development.
(b) The DDA effectuates the purposes of the
Community Redevelopment Law by reversing or
alleviating any serious physical, social, and
economic burden of the Community which cannot
reasonably be expected to be reversed or alleviated
by private enterprise acting alone, in that the
assistance will facilitate the development and
operation of the resort hotel development causing
the upgrade of the property, placing the property in
the hands of a first class and experienced hotel
operator, in order to increase transient occupancy
tax and sales tax revenue and attract additional
commercial development within the City and
increase the City's tax base.
(c) The DDA effectuates the purposes of the
Community Redevelopment Law as it is intended to
eliminate blight and promote the health, safety and
general welfare of the people of Palm Springs.
SECTION 7. The proposed project is consistent with the Implementation
Plan for this area, insofar as this project will increase tax
increment and will create new commercial activities in the
project area. It will increase the City's commercial sector by
developing a major new destination property in the City, in
order to capture a portion of the significant resort and leisure
tourism leakage that occurs in Palm Springs.
UA #4 2
SECTION 8. Based on foregoing reasons, this DDA is hereby approved
and incorporated herein by this reference.
SECTION 9. The Chairman, or his designee, is hereby authorized to
execute on behalf of the Agency the Disposition and
Development Agreement and other documents necessary to
the Agreement, and make minor changes as may be
deemed necessary, in a form approved by Agency Counsel.
ADOPTED this day of 12001.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Chairman
REVIEWED &APPROVED AS TO FORM
e 4A- ,4�s
RESOLUTION NO.
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS, CALIFORNIA, CONCURRING WITH
THE COMMUNITY REDEVELOPMENT AGENCY
REGARDING THE APPROVAL OF A DISPOSTION
AND DEVELOPMENT AGREEMENT WITH PALM
SPRINGS NEW MILLENNIUM DEVELOPMENT,
LLC
NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs that it
concurs with the action of the Community Redevelopment Agency in the matter of approving a
Disposition and Development Agreement with Palm Springs New Millennium Development,
LLC.
ADOPTED this day of 2001.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
REVIEWED & APPROVED AS TO FORM