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HomeMy WebLinkAbout10/17/2001 - STAFF REPORTS (6) DATE: OCTOBER 17, 2001 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: REDEVELOPMENT DIRECTOR OWNER PARTICIPATION AGREEMENT WITH DESERT SHADOWS III LIMITED PARTNERSHIP FOR THE DEVELOPMENT OF SEVENTEEN(17)HOTEL CONDOMINIUMS AT THE NORTHEAST CORNER OF INDIAN CANYON DRIVE AND STEVENS ROAD, MERGED PROJECT AREA#1 (NORTH PALM CANYON) RECOMMENDATION: That the Community Redevelopment Agency of the City of Palm Springs("CRA")approve an Owner Participation Agreement with Desert Shadows III Limited Partnership (Participant) providing tax increment financing assistance for offsite improvement completion, in an amount not to exceed $200,000.00. BACKGROUND: On October 18, 1995, the Community Redevelopment Agency entered into an Owner Participation Agreement with Linsu Development Company, L.L.C., a California Limited Liability Company. The OPA was amended on December 4, 1996 to include reimbursement for certain offsite improvements on Vista Chino Road and Indian Canyon Drive. The project facilitated the expansion of the General Partner and Developer's hotel, Desert Shadows Inn, located adjacent to the Site. The Developer built 38 condominium units on what was previously vacant, blighted land, adjacent to and part of the Desert Shadows Inn; the project included a swimming pool, spa and a meeting room, all of which were contained in four two- story structures with a maximum height of 24 feet. Fifty-nine parking spaces (covered and uncovered)were provided on-site, including nine spaces located on the adjacent property to the south, specifically for this project. The project resulted in the renovation of a portion of our City and helped expand and diversify the City's economic base. In April, 1999 the Agency approved a second OPA with the same Developer (using a separate development company called Smart Alex LLC) to develop the parcel south of the hotel at the northeast corner of Chuckwalla Road and Indian Canyon Drive. The parcel was previously the site of a small 22-unit hotel, which had been razed, and was rebuilt as 21 condominiums with reciprocal access to Desert Shadows Inn and the previous 38 condominiums built in 1997 by Linsu Development Company LLC. One additional feature of that project was the vacation by the City of Chuckwalla Road between Chaparral Road and Indian Canyon Drive, to provide more land for parking, as well as improve the safety in the adjoining neighborhood by slowing through traffic to and from Indian Canyon Drive. The City, however, maintained pedestrian access through the easement for the convenience of the neighborhood to the east. As in the Linsu OPA, the Participant requested that the Agency reimburse it for the costs of constructing the off-site improvements on Indian Canyon Drive, Chuckwalla Road, and Chaparral Road; provided, however, that the Agency's obligation to reimburse the Participant shall not exceed $100,000.00. At the point the Developer is adding a third phase of expansion, Desert Shadows III. The significant differences between this phase and previous phases is that it is located across the CP-M F' - A Desert Shadows III LP October 17, 2001 street from the main property, necessitating an expensive access solution; and, the property has three separate street frontages: on North Indian Canyon Drive, on Stevens Road, and North Palm Canyon Drive. Two of the three streets are major thoroughfares with additional hardscape requirements. As in the previous two projects, the Developer has requested Agency assistance in the development of the public infrastructure. The nature of the project, known as One Stevens Place, is relatively similar to the previous two, though the condominiums are larger and more private than the previous two phases. Because the units are typically rented through the hotel's rental pool, larger units mean that the hotel will receive a higher room rate for the larger units than it does for the previous two phases or its regular hotel rooms, of which it has 34. This factor is significant because the hotel already has one of the highest average daily rates in the City because of its high percentage of condominium units and its niche market. The project description is as follows: One Stevens Place is bounded by Stevens Road on the south, Indian Canyon Drive on the east, Palm Canyon Drive on the west, and three contiguous commercial lots on the north, including an existing apartment complex. The project consists of 17 condominium units. Each unit has approximately 1,705 square feet of livable area, and are split level in configuration and are attached in the following configuration: 2 fourplex buildings, 1 duplex building and a 7-unit building. The parking is configured in such a way that there are covered spaces attached and detached from the units. The project will contain a pool and spa with an elegantly landscaped courtyard. A recreation building of approximately 3,000 square feet will be constructed for the use of the management company (the hotel) and homeowners. Reciprocal access between the site and Desert Shadows Inn across the street shall be granted. The Developer has requested Agency assistance with the following items, which are referenced to the approved landscape and construction plans: Civil engineering- Cost for offsite improvements. $20,500.00 Architect- Design development for offsite improvements, masonry wall design and hardscape—Christopher S. Mills Arch. $ 15,000.00 Landscape Architect— Ronald Gregory and Associates design $ 3,680.00 development documents and plans. Saw Cut- For street repair and removal on Stevens Place, Indian Canyon Drive and Palm Canyon per Mainiero, Smith and Assoc. plans not dated sheets 2 of 3 detail 4, 21 and 20. $ 2,500.00 Grading- Grading for street improvements on Palm Canyon Drive, Page -2- CI�r4 Desert Shadows III LP October 17, 2001 Indian Canyon Drive and Stevens road. Cut drainage swales on Palm Canyon, Stevens Road and Indian Canyon Drive, as noted on Mainiero, Smith and Assoc. sheet 2 of 3. $ 6,600.00 Decorative hardscape at entry- Install decorative colored concrete at entrance to property per Mainiero, Smith and Assoc, plan sheet 2 of 3 detail 14 $ 9,900.00 City sidewalk- Install city sidewalk per Mainiero, Smith and Assoc. plan sheet 2 of 3 per detail #2 on Indian Canyon Drive and Stevens Road. $ 8,260.00 Drive approach- Construct drive approaches per City of Palm Springs standards at all entrances to the property from Stevens Road, as noted but not detailed on Mainiero, Smith and Assoc. drawing sheet 2 of 3. $ 1,762.00 Underground Utilities- Removal of pole at the North West property corner and install underground conduit from Indian Canyon Drive to the project. $18,500.00 Water System- Connect into water main system per Desert Water Agency for domestic service to property. $ 8,400.00 Drainage System- Installation of plastic drain pipe and catch basin Boxes. Installation of 2 drywells as noted on Mainiero, Smith and Assoc. Details #23, 12, 135 sheet 2 of 3. $ 8,600.00 Perimeter Wall- Raise perimeter masonry wall 2 feet in height, this was a request of the Palm Springs Planning Department. $19,650.00 Offsite Landscape and Irrigation- Installation of irrigation system on Indian Ave, Palm Canyon Drive and Stevens Road, also includes paver stepping stones, all palm trees, boxed trees and shrubs, ground cover and annual color, per plans prepared by R.G.A. Landscape Arch, sheets IP 1,2 and L.P 1,2. $34,000.00 Landscape Lighting- Install landscape lights per R.G.A. Landscape Arch, Inc. Plan sheet PL-1. $ 6,500.00 Curb and Gutter- Install 8' pcc curb and gutter as noted on Mainiero, Smith and Assoc. plan sheet 2 of 3 note#9. $ 3,000.00 Barrier curb construct 8" barrier curb as noted on Mainiero, Smith and Assoc. plan sheet 2 of 3 note#17. $ 848.00 Cross gutters and spandrel- Construct cross gutter and spandrel as noted on plans prepared by Mainiero, Smith and Assoc. sheet 2 of 3 $ 2,707.00 Page -3- cot Desert Shadows III LP October 17, 2001 detail #21 and 22. $ 1,908.00 Handicap- Construct handicap ramps as referenced on Mainiero, Smith and Assoc. plan sheet 2 of 3 detail #1 and 24. $ 1,800.00 Asphalt removal- Remove asphalt paving as noted on sheet 2 of 3 of the plans prepared by Mainiero, Smith and Assoc. referenced detail 16. Indian Canyon Drive, Palm Canyon and Stevens Road. $ 5,635.00 Asphalt Replacement- Replace asphalt paving as noted on sheet 2 of 3 Mainero, Smith and Assoc. and reference detail #6 and 20. Indian Canyon Drive, Palm Canyon Drive and Stevens Road. $ 11,160.00 Supervision, Overhead and Fee- General Contractors appropriated fee for this schedule of values and scope of work. $28,637.00 TOTAL REQUEST $219,547.00 California Redevelopment Law requires that, before a Redevelopment Agency can use its authority to provide streets, sidewalks and utilities or other improvements which an owner of property must otherwise provide, the City Council must find that the provision of such improvements is necessary to effectuate the purposes of the Redevelopment Plan (Health and Safety Code Section 33421.1). One of the purposes of this Redevelopment Plan is to eliminate blight and increase tax increment revenue. The developers of this property are required to make certain street improvements, as outlined above, in keeping with City codes. Such offsite improvements are imperative to this project. This project will eliminate a blighted comer of Merged Project Area#1 (the North Palm Canyon Redevelopment Project Area)and will increase tax increment to the City. The Desert Shadows Inn expansion will give a much- needed face lift to the neighborhood, increase revenue, improve traffic circulation and safety at an important intersection and improve the overall well-being of this Project Area. In so doing, this project will effectuate the purposes of the Redevelopment Plan. In addition to the foregoing finding, California Redevelopment Law in Section 33445, also permits the City Council to pay all or part of the cost of installing any public improvement which will be publicly owned, if the City Council finds that, 1) the improvements are of benefit to the Project Area,2)no other reasonable means of financing the improvements are available to the City, 3) payment for the improvements will assist in eliminating blight. The basis of the City's findings are, in addition to the above, the proposed project is consistent with the Implementation Plan for this area, insofar as this project will increase tax increment and will expand an already-existing successful business. It will increase the City's tourist business by expanding a destination-type resort and creating a beautiful architecturally-inviting project on a previously underutilized piece of land on a very busy corner. Page -4- CRA Desert Shadows III, LLC October 17, 2001 The funds, necessary for the Agency to reimburse the developer for this work, will be loaned from the General Fund into the Project Area account and repaid out of net tax increment from this project, at six percent(6%)over a 7-year term, as funds are drawn down. In the event the Agency- and City-owned parcel across Palm Canyon Drive sells to the Developer who has made an offer on it,the Agency could choose to pay the City loan sooner,from sale proceeds rather than tax increment. The actual work shall be performed by Developer who will be reimbursed following completion of the work when evidence is given of the Developer's actual enense in the performance of the work. tl JdH�N�S. R M�OND t f oDirecor o deve -p t pAprove Executive Directo�� Attachment 1. Resolution 2. Loan Agreement 3. City Resolution per Section 33421.1 4. Owner Participation Agreement REVIEWED BY DEPT.OF FINANCE YK Page -5- 04 Jr- 45- OWNER PARTICIPATION AGREEMENT By and Between COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA and DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C. eM / -.- FS2\383\014084-0094\2157467.3 .10/09/1 TABLE OF CONTENTS 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.3 C1_tY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.4 Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.5 Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.6 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.7 Enforced Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.8 Participant Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.9 Proiect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.10 ProiectArea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.11 Redevelopment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.12 Redevelopment Plan Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.13 Schedule of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.14 Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. PURPOSE OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.1 Participant Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (a) Participant Ownership of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (b) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (c) No Possessory Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (d) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (e) No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (f) No Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (g) No Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (h) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (i) Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Q) No Extraneous Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.2 Agency Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (a) No Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (b) Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 (c) Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4. CONSTRUCTION OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.1 Development in Accordance with Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.2 Evolution of Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4.3 Other Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4.4 Approval by Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4.5 Agency Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.6 Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.7 Construction Schedule: Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.8 Plans and Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.9 Nondiscrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.10 Rights of Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.11 Anti-discrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4.12 Easements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 4.13 Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 PS2\383\014084-0094\2157467.3 .10/09/1 1 C R A Fo� h 7 4.14 Agency Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5. SALE OR TRANSFER OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5.1 Transfer Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5.2 Agency Approval of Transfer Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 5.3 Release: Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 5.4 Relocation Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6. INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6.1 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (a) Comprehensive General Liability Insurance . . . . . . . . . . . . . . . . . . . . . 10 (b) Worker's Compensation Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (c) Automotive Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (d) Builder's Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 6.3 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 7. RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE . . . . . . . . 14 7.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 7.2 Limitation on Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 7.3 Participant's Breach Not Defeat Mortgage Lien . . . . . . . . . . . . . . . . . . . . . . . . . 15 7.4 Holder Not Obligated to Construct or Complete Improvements . . . . . . . . . . . . . 15 7.5 Notice of Default to Mortgagee Deed of Trust or Other Security Interest Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . I . . . . . . . . . . . . . . . . . 15 7.6 Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 7.7 Agency's Rights upon Failure of Holder to Complete Improvements . . . . . . . . . 16 7.8 Right of Agency to Cure Mortgage Deed of Trust or Other Security Interest Default . . . . . . . . . . . 17 7.9 Right of the Agencv to Satisfy Other Liens on the Property After Conveyance of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 8. USE OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 8.1 Use of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 8.2 No Inconsistent Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 8.3 Obligation to Refrain from Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 8.4 Effect of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 8.5 Taxes and Assessments and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9. ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9.1 Defaults, Right to Cure and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 9.2 Agency Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.3 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 9.5 Agency's Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 10. Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 10.1 Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 10.2 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . 1 . 22 10.3 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 FS2\383\014084-0094\2157467.3 .10/08/1 11 C RA F • "(wj g 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 11.2 Applicable Law and Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 11.3 Acceptance of Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . 23 11.4 Conflicts of Interest . . . . . jals an . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 11.5 Nonliability of Agency Officials and Employees . . . . . . . . . . . . . . . . . . . . . . . . . 24 11.6 Enforced Delay: Extension of Times of Performance . . . . . . . . . . . . . . . . . . . 24 11.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 (a) Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 (b) Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 11.8 Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.9 Merger of Prior Agreements and Understandings . . . . . . . . . . . . . . . . . . . . . . . 25 11.10 Binding Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.11 Assurances to Act in Good Faith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.12 Severabilitv . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.13 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.14 Entire Agreement, Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.15 Time for Acceptance of Agreement by Agency . . . . . . . . . . . . . . . . . . . . . . . . . 26 11.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 11.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 11.18 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 F52\383\014064-0094\2157467.3 a10/08/1 111 C �� IV OWNER PARTICIPATION AGREEMENT THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into this_ day of 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 DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C., a California limited liability company ("Participant"). RECITALS A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000, et seq. B. Agency desires to implement the Redevelopment Plan for its North Palm Canyon Redevelopment Project Area ("Project Area") by providing for the rehabilitation of a portion of the Project Area designated herein as the "Site" and the development of the "Project" thereon (as those terms are defined herein). C. Participant proposed a 17 condominium project in the Project Area at the corner of Stevens Road and Indian Canyon Drive, with reciprocal access to the Desert Shadows Inn at 1533 Chaparral Road, and has requested financial assistance from the Agency payable from the tax increment. D. On October 17, 2001, the Agency found that the rehabilitation of the Site as proposed by Participant pursuant to this Agreement, and the fulfillment generally of this Agreement will effectuate the Redevelopment Plan and are in the vital and best interests of the City and the health, safety, morals and welfare of its residents and in accord with the public purposes and provisions of the applicable state and local laws and requirements under which the Project has been undertaken and is being assisted. E. The Agency further found that no other means of financing the Project are available, and that Agency financial assistance will assist in eliminating blight, and that financial assistance to the Project is consistent with the Agency's adopted Five Year Implementation Plan. F. In connection with the Agency's approval of this Agreement, a Mitigated Negative Declaration was prepared in compliance with the California Environmental Quality Act, Public Resources Code Section 21000 et seq. as amended ("CEQA"), the State CEQA Guidelines and the City's CEQA procedures. The Agency found that, in its independent judgment, the Mitigated Negative Declaration adequately discusses the potential significant environmental effects of the proposed Project, including 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. FS2\363W14064-0094\2157467.3 n10/08/1 NOW THEREFORE, in consideration of the promises and covenants contained herein, the above recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 7. DEFINITIONS. 7.1 Agreement. The term "Agreement' shall mean this entire Owner Participation 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. 7.2 Certificate of Completion. The term "Certificate of Completion" shall mean that certain Certificate of Completion attached hereto as Exhibit "D". 7.3 CCU. 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. 7.4 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. 7.5 Declaration. The term "Declaration" shall mean that certain Declaration of Covenants, Conditions and Restrictions in the form attached hereto as Exhibit"E". 7.6 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. 7.7 Enforced Delay. The term "Enforced Delay" shall have the meaning set forth in Section 8.4 below. 7.8 Participant Property. The term "Participant Property" shall mean that certain real property located adjacent to the Property at 1533 Chaparral Road, Palm Springs, California, which is improved with a condominium development. 7.9 Proiect. The term 'Project' shall mean all of the construction, improvements, modifications, and rehabilitation to be performed by Participant on the Site pursuant to this Agreement. The Project is more particularly described in the Scope of Development attached hereto as Exhibit "F". Upon completion, the Project will consist of a seventeen (17) unit expansion of the condominium development located on the Participant Property. 7.10 Proiect Area. The term "Project Area" shall mean the North Palm Canyon Redevelopment Project Area. 7.11 Redevelopment Plan. The term 'Redevelopment Plan" shall mean the Redevelopment Plan for the North Palm Canyon Redevelopment Project Area ('Project Area") which was adopted by Ordinance Number 1227 of the City Council of City on October 19, PS2\383\014084-0094\2157467.3 a10/08/1 2 wkh r_ of// 1984. 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. 7.12 Redevelopment Plan Termination Date. The term "Redevelopment Plan Termination Date" shall mean the date the Redevelopment Plan shall expire, which date is October 19, 2024. 7.13 Schedule of Performance. The term "Schedule of Performance" shall mean that certain Schedule attached hereto as Exhibit "B". 7.14 Site. The term "Site" shall mean that certain unimproved real property located within the Project Area and in the City of Palm Springs, County of Riverside, State of California, consisting of approximately thousand (_,000) gross square feet, more particularly described and shown on Exhibit "A" attached hereto. 8. 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 development of the Project on the Site. Participant has agreed to participate in the redevelopment of the Site by entering into this Agreement with Agency. The development of the Site 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 developed, operated, and used in conformity with this Agreement and the Redevelopment Plan (see Sections 33380, 33381, 33437-33439 and 33339). By its ownership of the Participant Property, Participant qualifies as an "Owner Participant" within the meaning of the Redevelopment Plan and the California Community Redevelopment Law (California Health and Safety Code Section 33000 et seq.). 9. REPRESENTATIONS AND WARRANTIES. 9.1 Participant Representations and Warranties. Participant 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 war- ranties: (a) Participant Ownership of the Site. As of the Effective Date, Participant is owner of fee title to the Participant Property. FS2\383\014084-0094\2157467.3 a10/08/1 3 (b) Litigation. There are no pending or threatened claims, actions, proceedings, or lawsuits of any kind, whether for personal injury, property damage, landlord- tenant disputes, property taxes, or otherwise, that could adversely affect title to or the operation or value of the Site or which questions the validity or enforceability of this transaction, nor is there any governmental investigation of any type or nature, pending or threatened, against or relating to the Site or the transactions contemplated hereby (other than those conducted by City and Agency. (c) No Possessory Interests. Participant has the right of possession of the Site on the scheduled date of commencement of construction of the Project set forth in the Schedule of Performance, free from any tenant leases, tenancies, licenses, or other similar occupancy agreements that could interfere with Participant's right to develop the Project. (d) 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, instrument or arrangement by which Participant 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 Participant. (e) 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, Participant or relating to the Participant Parcel. (f) No Bankruptcy. Neither Participant nor the entities constituting Participant, 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. (g) No Misrepresentation. No representation, warranty, or covenant of Participant 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. (h) Disclosure. Participant has disclosed all information concerning the Site of which Participant is aware which may materially affect the value of the Site and/or Participant's ability to develop and utilize the Site as provided in this Agreement. (i) Due Execution. This Agreement has been duly executed by Participant and constitutes a valid, binding, and enforceable obligation of Participant. Participant 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 Participant have been obtained. Q) No Extraneous Consideration. Participant 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 F52\383\014084-0094\2157467.3 a10/08/1 4 any money or other consideration for obtaining this Agreement, except as expressly provided herein. 9.2 Agency Representations and Warranties. Agency hereby represents and warrants for the benefit of Participant and Participant'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. (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 Participant 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. 10. CONSTRUCTION OF THE PROJECT. 10.1 Development in Accordance with Plans. Participant 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 3.3 and 3.4, including any changes thereto as may be subsequently approved in writing by both Participant 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. 10.2 Evolution of Development Plan. Prior to or concurrently with the approval of this Agreement, the Agency has approved the Participant's Basic Concept Drawings. On or before the date set forth in the Schedule of Performance, Participant 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 FS2\383\014084-0094\2157467.3 a10/08/1 5 Rd �� II /� 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 Participant. Plans, (concept, preliminary and construction) shall be progressively more detailed and will be approved if the Agency determines they are a logical evolution of plans, drawings or specifications previously approved. 10.3 Other Governmental Permits. Participant 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 Participant 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, Participant 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. Participant shall not be obligated to commence construction if any such permit is not issued despite good faith effort by Participant. Participant 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. 10.4 Approval by Agency. The Agency shall approve or disapprove any submittal made by the Participant pursuant to this Agreement within thirty (30) days after such submittal. All submittals made by Participant will note in bold type the thirty (30) day time 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 Participant 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. 10.5 Agency Assistance. Subject to Participant'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 Participant, at no cost to Agency, in the expeditious processing of Participant's submittals required under this Agreement in order that Participant 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. 10.6 Cost of Construction. Participant 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 the costs directly associated with those public improvements expressly set forth in the Scope of Development to be performed by Agency. rs2\383\014094-0094\21574e7.3 ,roiosn 6 10.7 Construction Schedule; Reports. Participant shall commence and complete construction of the Project within the times set forth in the Schedule of Performance. Once construction is commenced, Participant shall diligently pursue such construction to completion and Participant 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. Participant 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. 10.8 Plans and Specifications. Participant 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. 10.9 Nondiscrimination During Construction. Participant, for itself and its successors and assigns, agrees that during the rehabilitation of the Project, Participant 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. 10.10 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 Participant. 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 Participant, 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 Participant harmless from any injury or property damage caused or liability arising out of Agency's exercise of this right of access. 10.11 Anti-discrimination During Construction. Participant, for himself and his successors and assigns, agrees that in the construction of the improvements to be constructed by Participant, it shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, sex, marital status, ancestry or national origin. 10.12 Easements. Participant 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. 10.13 Certificate of Completion. Upon written request by Participant, and upon satisfactory completion of the Project, Agency shall issue to Participant a Certificate of Completion. The Certificate of Completion 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 Participant is entitled to issuance of the Certificate of Completion, 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 rs283\014094-0094\2157467.3 ,10i08n 7 OA P�_ w/o liability under this Agreement, except that such party shall be bound by the covenants that survive the issuance of the Certificate of Completion, as set forth in the Declaration. The Certificate of Completion is not a notice of completion as referred to in California Civil Code section 3093. If Agency refuses or fails to furnish a Certificate of Completion after written request from Participant, Agency shall, within ten (10) days of the written request, provide the Participant a written statement of the reasons Agency refused or failed to furnish a Certificate of Completion. The statement shall also contain the Agency's opinion of the action Participant must take to obtain a Certificate of Completion. If the Agency shall have failed to provide such written statement within said ten (10) day period, Participant shall be deemed entitled to the Certificate of Completion. If Agency refuses or fails to furnish the Certificate of Completion 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 Certificate of Completion upon the posting by Participant 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. 10.14 Agency Financial Assistance. In consideration of Participant's performance of its obligations hereunder and provided that Participant has not defaulted in any of the terms, conditions, covenants and obligations of Participant under this Agreement, the Agency hereby agrees to reimburse Participant for the costs of constructing the off-site improvements on Indian Canyon Drive, Chaparral Road, and Chuckwalla Road, more particularly described in the Scope of Development; provided, however, that the Agency's obligation to reimburse Participant shall not exceed the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000.00). The contract between Participant and the contractor performing such work shall contain unit prices for all the work which is subject to reimbursement. Agency will reimburse Participant for such costs upon the acceptance of said off-site improvements by the City and the approval by Agency of invoices substantiating the costs incurred by Participant for said off-site improvements. All of the off-site improvements required by the Scope of Development shall be constructed when required by the Scope of Development shall be constructed when required by the conditions to approval for the Project. 11. SALE OR TRANSFER OF THE PROJECT. The Participant covenants that during the term of this Agreement and prior to the recordation of the Certificate of Completion, Participant shall not assign this Agreement or transfer the Site or any of its interests therein except as provided in this Section. 11.1 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 Participant 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 Participant or its general partners or their respective shareholders. In the event any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the F52\383\014084-0094\2157467.3 a10/08/1 8 94 �/� issued and outstanding capital stock of such corporation, or of beneficial interests of such trust; in the event that any entity constituting Participant, its successor or the constituent partners of Participant or any successor of Participant 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 Participant, its successor or the constituent partners of Participant or any successor of Participant 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. 11.2 Agency Approval of Transfer Required. Participant shall not Transfer this Agreement or any of Participant'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 Participant, 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 Participant'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. 11.3 Release: Assumption. In the absence of specific written agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site shall be deemed to relieve Participant 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 Participant'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. 11.4 Relocation Assistance. Participant waives any claims that it or any entities owned or controlled by it, and its successors and assigns may have to receive relocation assistance or benefits arising out of the work to be performed pursuant to this Agreement.. 12. INSURANCE AND INDEMNIFICATION. 12.1 Insurance. Prior to the entry by Participant on the Site pursuant to Section 4.10(c) and prior to the commencement of any construction by Participant, Participant 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: (a) 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 FS2\383\014084-0094\2157467.3 a10/08/1 9 C RA 49� A rI 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 (b) 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 Participant, 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 Participant in the course of carrying out the work or services contemplated in this Agreement. (c) 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. (d) 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 Participant pursuant to this Agreement. 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 mail to Agency and City. In the event any of said policies of insurance are canceled, the Participant 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 Participant has provided Agency with Certificates of Insurance or appropriate insur- ance 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. Participant 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 Participant pursuant to this Section, unless waived by the Risk Manager of Agency. F52\383\014084-0094\2157467.3 a10/08/1 10 / 40A The Participant agrees that the provisions of this Section shall not be construed as limiting in any way the extent to which the Participant may be held responsible for the payment of damages to any persons or property resulting from the Participant's activities or the activities of any person or persons for which the Participant is otherwise responsible. 12.2 Indemnification. During the period of any construction of the improvements pursuant to this Agreement and until such time as is issued a Certificate of Completion for the Project, Participant 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 Participant or its agents, servants, employees, or contractors. Participant 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. 12.3 Hazardous Substances. Participant represents and warrants that, after due and diligent inquiry and investigation, there exists no "Hazardous Materials" (as such term is herein defined) in, on, under, or about the Site. Participant understands and agrees that in the event Participant incurs any loss or liability concerning Hazardous Materials whether attributable to events occurring prior to or following the Effective Date, then Participant may look to current or prior owners of the Site, but under no circumstances shall Participant look to Agency or City for any liability or indemnification regarding Hazardous Materials. Participant, and each of the entities constituting Participant, if any, from and after the Effective Date, hereby waives, releases, remises, acquits and forever discharges Agency, City, their directors, officers, shareholders, 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 Participant, its successors, assigns or any affiliated entity of Participant, 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 Release provision declared null and void and of no present or future force and effect as to the parties. In connection therewith, Participant and each of the entities constituting Participant, expressly agree to waive any and all rights which said party may have under Section 1542 of the California Civil Code which provides as follows: FS2\383\014084-0094\2157467.3 .10/08/1 t C , r - ARV "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." Participant and each of the entities constituting Participant, shall, from and after the Effective Date, defend, indemnify and hold harmless Agency, City and their officers, directors, 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. Participant further agrees that in the event Participant obtains, from former or present owners of the Site or any other persons or entities, releases from liability, indemnities, or other forms of hold harmless relating to the subject matter of this section, Participant shall use its diligent efforts to obtain for Agency and City the same releases, indemnities and other comparable provisions. For purposes of this Section 5.3, the following terms shall have the following meanings: (a) "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. (b) "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 Materials on or under all or any part of the Site, including the ground water thereunder, 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. (c) "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. (d) "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) FS2\383\014084-0090.\2157467.3 a10/09/1 12 �� �— 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. (e) "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 derivate 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 25501 Q) 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 Article 9 or defined as hazardous or extremely hazardous pursuant to Article 1 of Title 22 of the California Code of Regulations, Division 4, Chapter 30; (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 sec. (42 U.S.C. § 9601); (xiii) defined as "Hazardous Material" pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et sue.; 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, as now, or at any time hereafter, in effect. Notwithstanding any other provision of this Agreement, Participant's release and indemnification as set forth in the provisions of this Article, as well as all other provisions of this Article, shall survive the termination of this Agreement and shall continue in perpetuity. 13. RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE. 13.1 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. P82\383\014084-0094\2157467.3 a10/08/1 ]j 13.2 Limitation on Encumbrances. Notwithstanding anything to the contrary contained in this Agreement, Participant 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 Participant has acquired fee title to the entire Site. Subsequent to or concurrently with Participant'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 Certificate of Completion 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 Participant shall notify the Agency in advance of any mortgage, if the Participant or such entity proposes to enter into the same before issuance of the Certificate of Completion. The Participant 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 Participant shall promptly notify the Agency of any mortgage, encumbrance, or lien that has been created or attached thereto prior to issuance of a Certificate of Completion, whether by voluntary act of the Participant or otherwise. 13.3 Participant's Breach Not Defeat Mortgage Lien. Participant'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. 13.4 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. 13.5 Notice of Default to Mortgagee Deed of Trust or Other Security Interest Holders. Whenever Agency shall deliver any notice or demand to Participant with respect to any breach or default by Participant hereunder, Agency shall at the same 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. 13.6 Right to Cure. Each holder (insofar as the rights of Agency are con- cerned) shall have the right, at its option, within ninety (90) days after the receipt of the notice, to: PS1383\014084-0094\2157467.3 n10/08/1 14 (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 Participant 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 Participant 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 Participant'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 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 Certificate of Completion from Agency. 13.7 Agency's Rights upon Failure of Holder to Complete Improvements. In any case where one hundred eighty (180) days after default by Participant 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 con- struct afforded in this Section or if it has exercised such option and has not proceeded dili- gently 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 PS2\383\014084-0094\2157467.3 a10/08/1 15 e14 dro "Of' on (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 Participant, 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) hereinabove, and any balance remaining thereafter shall be applied as follows: (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 Participant, 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 accord- ance with this Section. (iv) Fourth, any balance remaining thereafter shall be paid to Participant. 13.8 Right of Agency to Cure Mortgage Deed of Trust or Other Security Inter- est Default. In the event of a default or breach by Participant (or entity permitted to acquire title under this Section) of a mortgage prior to the issuance by Agency of a Certificate of Completion 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 Participant 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 F52\383\014084-0094\2157407.3 a10/09/1 16 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. 13.9 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of Title. After the conveyance of title and prior to the recordation of a Certificate of Completion for construction and development, and after the Participant 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 Participant to pay or make provision for the payment of any tax, assessment, lien or charge so long as the Participant in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the right to reimbursement from Participant 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. 14. USE OF THE SITE. 14.1 Use of the Site. Participant covenants and agrees, for itself and its successors and assigns, that beginning on the Effective Date and ending on the Redevelopment Plan Termination Date, Participant and such successors shall use and maintain the Site, or any part thereof, pursuant to the terms of the Declaration, the Redevelopment Plan and this Agreement; provided that, in the event of any inconsistency, the provisions of the Redevelopment Plan shall prevail over all others, and the provisions of the Declaration shall prevail over this Agreement. Participant 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. 14.2 No Inconsistent Uses. Participant covenants and agrees, for itself and its successors and assigns, that beginning on the Effective Date and ending on the Redevelopment Plan Termination Date, Participant and such successors shall it shall not devote the Site, or any part thereof, to uses inconsistent with the Redevelopment Plan, the applicable zoning restrictions, this Agreement, or the Declaration. 14.3 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 Participant, or any person claiming under or through Participant, 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 Declaration shall remain in effect in perpetuity. 14.4 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 Declaration for and in its own right and for the purposes of PS2\383\014084-0094\2157467.3 a10/0811 17 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 Redevelopment Project Area, and shall be effective as both covenants and equitable 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 Declaration. 14.5 Taxes and Assessments and Liens. Participant shall pay, when due, all real estate taxes and assessments assessed or levied subsequent to conveyance of title. Participant 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 Participant from contesting the validity or amounts of any tax, assessment, encumbrance or lien, nor to limit the remedies available to Participant in respect thereto. 15. ENFORCEMENT. 15.1 Defaults. Right to Cure and Waivers. Subject to any Enforced Delay, the occurrence of any one or more of the following events shall constitute a Participant Default hereunder if, after receiving written notice from Agency as provided in Section 8.3 below identifying such event, Participant fails to cure said event within ten (10) days if such event is a monetary default or Participant fails to cure said default within thirty (30) days, if such event is a non-monetary default; provided that if such non-monetary default is not capable of being cured within thirty (30) days Participant commences to cure said event within ten (10) days and diligently and in good faith continues to cure the event of default: (a) Participant fails to observe or perform any term or provision of this Agreement within the time set forth herein; (b) Participant fails to timely obtain all required permits and approvals for the Project which shall be determined in the sole and absolute discretion of Agency; (c) Participant makes or delivers to Agency any statement, report, financial statement, or certificate that is not true or correct in any material respect; (d) Participant applies for the appointment of a receiver, trustee, or custodian for any of Participant's assets; (e) Participant files a petition under any section or chapter of the Bankruptcy Code or any similar law or regulation; (f) Participant makes a general assignment for the benefit of his creditors; F52\383\014084-0094\2157467.3 a10/08/1 Ito � � � 10 � �� (g) A petition under any section or chapter of the Bankruptcy Code or any similar law or regulation is filed against Participant, and such injunction, restraint, or petition is not dismissed within thirty (30) days after the entry or filing thereof; (h) Participant ceases to conduct its business substantially as now conducted; (i) Participant is enjoined, restrained, or in any way prevented by court order from conducting all or any material part of its business affairs; Q) Participant becomes insolvent or admits in writing its inability to pay its debts as they mature; or (k) A notice of lien, levy, or assessment is filed of record with respect to all or any of Participant's assets by the United States, or any department, agency or instrumentality thereof, or by any state, county, municipal, or other governmental agency, or if any taxes or debts owing at any time hereafter to any one of these becomes a lien or encumbrance upon any of Borrower's assets or the Site and the same is not released within thirty (30) days after the same becomes a lien or encumbrance; provided that Participant shall have the right to contest in good faith and by appropriate proceedings any such lien, levy or assessment if Participant provides Agency with a bond or indemnity satisfactory to Agency assuring the payment of such lien, levy, or assessment; 15.2 Agency Defaults. The occurrence of any one or more of the following events shall constitute an Agency Default hereunder: (a) Agency fails to observe or perform any term or provision of this Agreement within the time set forth herein, and such failure is not cured to Participant's reasonable satisfaction within thirty (30) days after Participant gives Agency written notice as provided in Section 9.3 below identifying such failure; provided that if said default cannot be cured within said thirty (30) day period, Agency shall not be in default of this Agreement if Agency commences to cure said default within ten (10) days of said notice and diligently and in good faith continues to cure the default; (b) Agency makes or delivers to Participant any statement, report, or certificate that is not true or correct in any material respect; or 15.3 Notice of Default. The non-defaulting party shall give written notice of any Default under this Article 9 to the defaulting Party, clearly specifying the Default. Copies of any Notice of Default given to the defaulting Party shall also be given to any permitted lender requesting such notice. Any failure or delay in giving such notice or in asserting any of either Party's rights and remedies as to any Default shall not constitute a waiver of any Default, nor shall it change the time of Default, nor shall it deprive either Party of its rights to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 15.4 Remedies. In addition to any other rights or remedies set forth in this Section 8.4, either party may institute legal action to cure, correct, or remedy any Default, to recover damages for any Default, or to obtain any other remedy consistent with the purposes FS2\383\014084-0094\2157467.3 x10/08/1 19 M r- 0 of this Agreement. Such legal actions must be instituted and maintained in the Superior Court of the County of Riverside, State of California, or in any other appropriate court in that county. Subject to any applicable cure periods and the general right to notice provided for in this Agreement, upon a Default or breach of this Agreement by one Party to this Agreement, the other Party may bring an action for damages proximately caused thereby or for specific performance of this Agreement or any term or provision hereof. Participant agrees that Agency shall be entitled to the judicial remedy of specific performance and Participant 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, Participant 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 Participant to speculate with land. 15.5 Agency's Right to Terminate. In the event that, prior to Participant's commencement of construction of the Project, Agency is not in Default under this Agreement, and: (i) Participant commits a Default hereunder and fails to cure such Default within the time provided in Sections 9.1 and 9.3; or (ii) Participant fails to obtain any of the required approvals for the Project referenced herein; then, in such event, Agency may deliver a thirty (30) day written notice of termination to Participant and, if the applicable Default or condition has not been satisfied (or waived by Agency) within said time period, this Agreement shall terminate and neither Party shall have any further rights against or liabilities to the other (except Agency reserves its rights under Section 9.4 if Participant is in Default). 16. Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Amended OPA, the rights and remedies of the parties hereto are cumulative, and the exercise by any 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 another Party. 16.1 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. 16.2 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, Participant 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 Participant to speculate with land. 16.3 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 Participant and Agency only, in such action or proceeding, in addition to PS2\383\014084-0094\2157467.3 .10108/1 20 C _ A r- A o f 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. 17. MISCELLANEOUS. 17.1 Notices. Formal notices, demands, and communications between Agency and Participant shall be sufficiently given if (i) personally delivered; (ii) dispatched by registered or certified mail, 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 City of Palm Springs, California P.O. Box 2743 Palm Springs, California 92263-2743 3200 Tahquitz Canyon Way Palm Springs, California 92262 Attn: Executive Director With a copy to: Burke Williams & Sorensen 18301 Von Karman Avenue Suite 1050 Irvine, California 92612-1009 Attn: David J. Aleshire, Esq. If to Participant: Desert Shadows III Development Company, L.L.C. 1533 Chaparral Road Palm Springs, California 92262 Attn: Stephen Payne With a copy to: Roemer& Harnik 45025 Manitu Dr. Indian Wells, CA 92210 Attn: Richard I. Roemer, Esq. 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. 17.2 Applicable Law and Forum. The laws of the State of California shall govern the interpretation and enforcement of this Agreement.F82\383\014084-0094\2157467.3 a10/08/1 21 call F0_ of 17.3 Acceptance of Service of Process. In the event that any legal action is commenced by Participant 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 Participant, service of process on Participant 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. 17.4 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. 17.5 Nonliability of Agency Officials and Employees. No member, official, employee, or consultant of Agency or City shall be personally liable to Participant, or any successor in interest of Participant, in the event of any default or breach by Agency or for any amount which may become due to Participant or to its successor, or on any obligations under the terms of this Agreement. 17.6 Enforced Delay: 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 unless the act or failure is caused by the acts or omissions of Participant); 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 Participant, and shall not entitle Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the Project, and (ii) Participant'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 Participant. 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. 17.7 Books and Records. (a) Maintenance of Books and Records. Participant shall prepare and maintain all books, records, and reports necessary to substantiate Participant's compliance with the terms of this Agreement or reasonably required by the Agency. FS2\383\014084-0094\2157467.3 a10/08/1 22 1A 61 (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 Participant pertinent to the purposes of this Agreement. Said right of inspection shall not extend to documents privileged under attorney-client or other such privileges. 17.8 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. 17.9 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. 17.10 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. 17.11 Assurances to Act in Good Faith. Agency and Participant agree to execute all documents and instruments and to take all action and shall use their best efforts to accomplish the purposes of this Agreement. Agency and Participant shall each diligently and in good faith pursue the satisfaction of any conditions or contingencies subject to their approval. 17.12 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 or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 17.13 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. 17.14 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 Participant, as applicable, and all amendments hereto must be in writing and signed by the appropriate authorities of Agency and Participant. FS2083\014084-0094\2157467.3 a10/08/1 23 /r O w �_ 44 `` 17.15 Time for Acceptance of Agreement by Agency. This Agreement, when executed by Participant 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 Participant shall consent in writing to further extensions of time for the authorization, execution, and delivery of this Agreement. After execution by Participant, 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. 17.16 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. 17.17 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. 17.18 Exhibits. Exhibits "A" through 7", inclusive, attached hereto, are incorporated herein as if set forth in full. F52\383\014084-0094\21574673 a10/08/1 24 IPA �- �� IN WITNESS WHEREOF the Agency and Participant have executed this Agreement as of the date first written above. ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body, corporate and politic By: By: Assistant Secretary Chairman "Agency" APPROVED AS TO FORM: BURKE WILLIAMS & SORENSEN, LLP Agency Counsel DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C., a California limited liability company By: Its: By: Its: "Participant" FS2\383\014084-0094\2157467.3 110/08/1 25 A9h , A EXHIBIT "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: THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS FOLLOWS: EXHIBIT "A" TO OWNER PARTICIPATION AGREEMENT FS2\383\014084-0094\2157467.3 a10/08/1 r� 1 '19 635� EXHIBIT "B" SCHEDULE OF PERFORMANCE ITEM OF PERFORMANCE TIME FOR PERFORMANCE REFERENCE 1. Participant executes and delivers October—, 2001 Agreement to Agency 2. Agency approves Participant's Concurrently with execution Basic Concept Drawings pursuant of Agreement to Section 3.2. 3. Agency considers Agreement October 17, 2001 4. Participant prepares and submits Approved by City, April 2001 to City working drawings, grading Ian and landscaping Ian 5. City and Agency to approve In accordance with Section drawings and plans 3.1 d 6. Planning Commission to hold Approved by City, April 2001 hearing on approval of Planned Development for the project 7. City Council to hold hearing on Approved by City, April 2001 approval of Planned Development District for the Project 8. Participant to submit proof of Simultaneously with insurance execution of the Agreement, 9. Participant to commence June 15, 2001. construction of the Project 10. Participant to complete work By September 30, 2002. on the project 11. Participant to record reciprocal Prior to the issuance of the easement agreement referenced Certificate of Completion. in Scope of Development against the site and Participating Property. 11. Agency to issue Certificate of In accordance with Section Completion. 5.8 EXHIBIT "B" TO OWNER PARTICIPATION AGREEMENT as2v83\014084-0094\21574e7 3 ,ioiosii PAGE 1 OF 3 PAGES It is understood that this Schedule of Performance is subject to all of the terms and conditions of the text of the Agreement. The summary of the items performance in this Schedule of Performance 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 Participant 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. EXHIBIT 'B" TO OWNER PARTICIPATION AGREEMENT Cs k� 3 ` 7 asz\3a3\oiaoea-oo9a\zis7aers "ioioen PAGE 2 OF 3 PAGES EXHIBIT "D" CERTIFICATE OF COMPLETION 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 (?nly) CERTIFICATE OF COMPLETION WHEREAS, by an Owner Participation 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 DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C., a California limited liability company ("Participant"), Participant 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 Participant upon the Site, and upon request by Participant, Agency shall furnish Participant with a Certificate of Completion 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 Certificate of Completion shall be conclusive evidence that Participant has complied with the terms of the Agreement pertaining to the redevelopment of the Site; and WHEREAS, Participant has requested that Agency furnish Participant with the Certificate of Completion; and WHEREAS, Agency has conclusively determined that the redevelopment of the Site has been satisfactorily completed as required by the Agreement; and EXHIBIT "D" TO OWNER PARTICIPATION AGREEMENT F52\383\014084-0094\2157467.3 110/08/1 PAGE I of 3 PAGES C kh f- J0 n WHEREAS, the Agreement provided for certain covenants to run with the land, which covenants were incorporated in the grant deed conveying the Site to Participant 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 Certificate of Completion shall not constitute evidence of Participant's compliance with the Owner Participation Agreement and Declaration, the provisions of which shall continue to run with the land. 3. This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Participant 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 , 2002. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,CALIFORNIA,a public body,corporate and politic By: Executive Director EXHIBIT "D" TO OWNER PARTICIPATION AGREEMENT r52\383\014084-0094\2157467s aioiosn PAGE 2 of 3 PAGES 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] EXHIBIT "D" TO OWNER PARTICIPATION AGREEMENT P52\383\014084-0094\2157467.3 ,ioiosn PAGE 3 of 3 PAGES (`V� ATTACHMENT NO. 1 DESCRIPTION OF SITE THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS FOLLOWS: ATTACHMENT OF NO. 1 A ,� w asz\sas\oiaosa-oo9a\uszaez3 ,ioioan TO CERTIFICATE OF COMPLETION /V•Iyr/�,1{ '�•I/ EXHIBIT "E" 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 (For Recorder's Use Only) DECLARATION OF COVENANTS CONDITIONS AND RESTRICTIONS THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS ("Declaration") is made this day of , 200 by and among ("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. Declarant is the fee owner of 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"). B. The Site is within the North Palm Canyon Redevelopment Project Area ("Project Area")specifically described in the Redevelopment Plan forthe ProjectArea which was approved and adopted by the City Council of the City of Palm Springs by Ordinance No. 1227 on October 19, 1984 and as subsequently amended by means of ordinances of the City Council. 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 EXHIBIT"E" TO OWNER PARTICIPATION AGREEMENT C m � 4V2, w V 2, FS2\363\014064-0094\21574G7.3 a10/08/I Page I Of 12 Pages 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, Declarant has entered into an Owner Participation Agreement with the Agency which Agreement places certain restrictions on the Site. Pursuant to the City's development requirements, the City has approved or will approve a site plan for the development of the Site ("Site Plan"), which plan places certain restrictions on the Site. Said Redevelopment Plan, Owner Participation Agreement 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 Owner Participation Agreement by the Agency and the approval of the Site Plan by City, that the Declarant, its successors and assigns 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 powerto enforce the covenants, conditions, restrictions, and reservations as provided herein. G. 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 forthe 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 Declarant,Agency and City declare, covenant and agree, by and forthemselves,their heirs, executors and assigns, and all persons claiming under or through them that 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 VIII COVENANTS, CONDITIONS AND RESTRICTIONS 8.1 General. The Site shall be developed and used only as permitted by the restrictions contained in the Site Plan, Redevelopment Plan and Owner Participation Agreement. 8.2 Maintenance Agreement. Declarant, for itself and its successors and assigns, hereby covenants and agrees to be responsible for the following: EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT FS2\383\014084-0094\2157467.3 .10/09/1 Page 2 of 12 Pages ^10 or. A (a) Maintenance and repair of the Site and all related on-site improvements, easements, rights-of-way 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. (b) Maintenance of 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. 8.3 Parking and Driveways. Declarant shall be responsible for assuring that the driveways and traffic aisles on the Property be kept clear and unobstructed at all times. No vehicles or other obstruction shall project into any of such driveways or traffic aisles. Vehicles associated with the operation of the Property, including delivery vehicles, vehicles of employees and vehicles of persons with business on the Property shall park solely on the Property and shall not park on streets or adjacent property. 8.4 Other Rights of 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 City may have to enforce the provisions hereof, the City shall have the right to withhold or revoke, after giving written notice of said violation, any building permits, occupancy permits, certificates of occupancy, business licenses and similar matters or approvals pertaining to the Property or any part thereof or interests therein as to the violating person or one threatening violation. 8.5 No City Liability. The granting of a right of enforcement to the City does not create a mandatory duty on the part of the City to enforce any provision of this Declaration. The failure of the City to enforce this Declaration shall not give rise to a cause of action on the part of any person. No officer or employee of the City shall be personally liable to the Declarant, its successors, transferees or assigns, for any default or breach by the City under this Declaration. 8.6 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. 8.7 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. EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT do �_i� rsz\sssmiaosa-oo9a\zis7aers ,ioioan Page 3 of 12 Pages 8.8 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: (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 priorto 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. 8.9 Public Agency Rights of Access. Participant 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, repairorservice 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. 8.10 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 shall be subject to the payment of transient occupancy tax as set forth in the Palm Springs Municipal Code. EXHIBIT /+� �• y _r TO OWNER PARTICIPATION AGREENT FS2\383\014084-0094\2157467.3 a10/08/1 Page 4 of 12 Pages ARTICLE IX ENFORCEMENT 9.1 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. 9.2 Injunction. 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. 9.3 Other Rights of Agency 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 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. 9.4 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 of ten 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 EXFIIBIT IO w �r w • '� TO OWNER PARTICIPATION AGREEMENT '�r//�. H (Tj as2\sesm 2 i4os4-oo94� 574e7 s .10/08n Page 5 of 12 Pages 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 orAgency 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. ARTICLE X ENCUMBRANCES, MORTGAGE PROTECTION AND TAXES 10.1 Participant's Breach Not to Default Mortgage Lien. Declarant's breach of any of the covenants or restrictions contained in this Declaration or the Owner Participation 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 Owner Participation Agreement; but, unless otherwise herein provided, the terms, conditions, covenants, restrictions and reservations of this Declaration and the Owner Participation 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. 10.2 Amendments or Modifications to Declaration. No purported rule, regulation, modification, amendment and/or termination of this Declaration or the Owner Participation 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. 10.3 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. 10.4 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. EXHIBIT TO OWNER PARTICIPATION AGREE MENT FS2\383\014084-0094\2157467.3 a10/09/1 Page 6 OP 12 Pages ARTICLE XI COVENANTS TO RUN WITH THE LAND 11.1 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 intentthatthe 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. 11.2 Agreement Among Declarant Agency and Citv. The Declarant, in exchange for entering the Owner Participation 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 XII TERM The covenants, conditions and restrictions contained in this Declaration shall remain in effect for the term of the Redevelopment Plan. ARTICLE XIII MISCELLANEOUS 13.1 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. EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT FS2\383\014084-0094\2157467.3 a10/08/1 Page 7 of 12 Pages 007 13.2 Amendments. Any amendment to any provision of this Article or to any other provisions of this Declaration enforceable by the City shall require the prior written consent of the City. 13.3 Governing Law. This Declaration shall be governed by and construed in accordance with the laws of the State of California. 13.4 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. 13.5 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 Suite 1050 Irvine, CA 92612-1009 Attn: David J. Aleshire, Esq. Declarant: Desert Shadows III Development Company, LLC 1533 Chaparral Road Palm Springs, CA 92262 Attn: Stephen Payne With Copy to: Roemer& Harnik 45-025 Manitu Dr. Indian Wells, CA 92210 Attn: Richard I. Roemer, Esq. 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. 13.6 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. EXHIBIT " TO OWNER PARTICIPATION AGREEMENT /,�� rs2\383\014084-0094\215746 s ,ioiosii Page 8 of 12 Pages (� IN WITNESS WHEREOF, the undersigned have executed this Agreement was executed as of the date first written above. By: Its: By: Its: "Declarant" ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF 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: BURKE WILLIAMS & SORENSEN Agency Counsel and City Attorney EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT F521383\014084-0094\2157467.3 "ioioan Page 9 of 12 Pages 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] EXHIBIT" TO OWNER PARTICIPATION AGREEMENT P52\383\0140ft4-0094\2157467.3 moioen Page 10 of 12 Pages 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] EXHIBIT "E" TO OWNER PARTICIPATION AGREEMENT rs2\sas\oiaosa-oo9a\2is7aers 110/08/1 Page 11 of 12 Pages 40 It oo � � EXHIBIT "I" LEGAL DESCRIPTION OF THE SITE THE LAND REFERRED TO IN THIS AGREEMENT IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS FOLLOWS: EXHIBIT "1" TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS r f� 53 FS2\383\014084-0094\2157467.3 a10/08/1 (� Kri/i r - n EXHIBIT "2" DEPICTION OF PUBLIC PARCEL PS2\383\014084-0094\2157467.3 "10/08/1 �i I'R s/ EXHIBIT "F" SCOPE OF DEVELOPMENT 1. SUMMARY DESCRIPTION OF PROJECT: The Project will consist of the demolition of the existing improvements on the Site and construction of seventeen (17) condominium units on the Site as an expansion of Participant's hotel and condominium development located adjacent to the Participant Property and shall be designed in accordance with the Basic Concept Drawings attached hereto as Exhibit 1 and incorporated herein by this reference,which are approved by Agency in accordance with Section 5.1(b)of the OPA. The 17 units will be contained in two (2)fourplex structures, a duplex structure, and a seven-unit structure, with a maximum height of twenty-four (24) feet. The Project was processed as a Planned Development District under the Zoning Ordinance of the City and Participant shall be responsible for performing all conditions to approval of the Project including any off-site improvements. Twenty three (23) parking spaces (covered and uncovered) will be provided on the Site. Twenty(20)of the parking spaces on the Site will be located within a fenced and gated limited-access area. A reciprocal easement agreement for ingress, egress and parking between the Site and the Participant Property will be required to adequately provide for total resident and visitor parking needs. The amenity package includes a swimming pool, spa and meeting room. Total building coverage will not exceed thirty-four percent (34%), parking and driveway coverage will not exceed ten percent(10%) and open space/ recreation area coverage will be fifty-six percent (56%). The Project will provide for the required right-of-way on Indian Canyon Drive and for enhanced street improvements on all adjacent streets. The Project also includes a architecturally-enhanced pedestrian bridge over Indian Canyon Drive connecting the project to the Participant Property. 2. ARCHITECTURAL AND DESIGN: The Project shall be designed and developed as an integrated development with the condominium development located on the Participant Property in which all the buildings will have architectural excellence. The improvements to be constructed on the Site shall be of high architectural quality, shall bewell 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 Participant'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. 3. DEVELOPER'S RESPONSIBILITIES: A. Private Improvements. The Participant agrees to develop and construct, or cause the development and construction of the Projectas setforth below, or such additional size, intensi- ty, and character of improvements as may be permitted and approved under applicable land use EXHIBIT V' TO OWNER PARTICIPATION AGREEMENT w /)APS2\383\014084-0094\2157467.3 a10/11/1 PAGE 1 OF 4 PAGES C•K 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 Participant 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 Participant. 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 Participant 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 Participant 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 Participant, and the Participant shall have no further responsibility therefor. H. Utilities. The Participant 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. J. Off-Site Improvements/Dedications. The Participant 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: Indian Canyon Drive 1. Remove 100' of curb; and install 160' linear feet of curb and gutter. 2. Remove 972 square feet of sidewalk; install 1260 square feet of sidewalk. 3. Install 330 square feet of 5" asphalt concrete pavement over 4" class 2 aggregate base. EXHIBIT ego �_ osz TO OWNER PARTICIPATION AGREEMENT PAGE 2 OF 4 PAGES O.Remove 2,650 square feet of asphalt concrete pavement; sawcut 183 linear feet of pavement. 5. Install 600 square feet of turf block. 6. Grade and prepare the site; relocate trees and landscape right-of-way. Stevens Road 1. Remove 160 linear feet of poured concrete curb; install 188 linear feet of curb and gutter. 2. Remove 6,700 square feet of asphalt concrete pavement; sawcut 72 linear feet of asphalt pavement. 3. Install 5,490 square feet of 3" asphalt concrete pavement over 4"class 2 aggregate base. 4. Install a driveway approach and 2 handicapped ramps. 5. Install 625 square feet of stamped concrete at the parking lot entrance. Palm Canyon Drive 1. Remove 235 linear feet of poured concrete curb; install 500 linear feet of curb and gutter. 2. Install 7,670 square feet of 3" asphalt concrete pavement over 4" class 2 aggregate base. 3. Remove 6,803 of asphalt concrete; sawcut 400 linear feet of asphalt concrete pavement. 4. Install a driveway approach and handicapped ramp. 5. Install a 700 square foot sidewalk. 6. Install 300 square feet of asphalt patch, and pave 504 square feet of concrete. 7. Relocate trees and landscape right-of-way. C�QA F- �9s7 FINANCING AGREEMENT & PROMISSORY NOTE October_, 2001 Palm Springs, California FOR VALUE RECEIVED, the undersigned ("Agency") hereby promises to pay the CITY OF PALM SPRINGS, a public body, corporate and politic ("City"), the sum of Two Hundred Thousand Dollars ($200,000), to be used by the Agency to reimburse Desert Shadows III, L.P. ("Participant"), for the costs of constructing certain public improvements in the City of Palm Springs on Stevens Road, between North Palm Canyon Drive and North Indian Canyon Drive, as well as improvements on Palm Canyon Drive and North Indian Canyon Drive, in the former North Palm Canyon Redevelopment Project Area pursuant to an Owner Participation Agreement between the Agency and Participant, in an amount not to exceed Two Hundred Thousand Dollars ($200,000.00). a. Repayment by Agency. Agency shall pay in full to the City the Loan Amount in lawful money of the United States, from tax increment accrued to the Agency by Participant's project. Interest shall accrue to the City at a rate of Six Percent (6%) per annum. Payments shall be made annually from the Agency's Debt Service Fund (Fund 841) to the City. b. Prepayment. This Agreement sum may be prepaid in whole or in part at any time without penalty, provided the payment is at least equal to the Loan Amount plus the City costs incurred to that date. C. Late Charge. Agency agrees that if it fails to make any payment provided for herein more than ten (10) days after the due date thereof, Agency hereby agrees to pay to City a late charge equal to five percent (5%) of any payment which is not made within ten (10) days after the due date thereof, not as a penalty, but for the purpose of defraying the expenses incident to handling such delinquent payment. Such late charge represents the reasonable estimate of a fair average compensation for the loss that may be sustained by City due to the failure of Agency to make timely payments. Such late charge shall be paid without prejudice to the right of City to collect any other amount provided to be paid or to declare a default under this Agreement. Such late charge shall be payable not later than thirty (30) days after the due date of the delinquent payment. d. Acceleration of Obligation. Upon the failure to make payment due under this Agreement as and when the same becomes due and payable (whether by extension, acceleration or otherwise), or any breach of any other promise or obligation in this Agreement or in any other instrument now or hereafter securing the indebtedness evidenced hereby, then, and in any of such events, City may, at its option, declare this Agreement and the entire indebtedness hereby evidenced, including, without limitation, all accrued interest, to be immediately due and payable and collectible then or thereafter as City may elect, regardless of the date of maturity, and notice of the exercise of said option is hereby expressly waived by Agency. e. Severability. The unenforceability or invalidity of any provision or provisions of this Agreement as to any persons or circumstances shall not render that provision or those provisions unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in all 6)w p .044 other respects, shall remain valid and enforceable. f. Modifications. Neither this Agreement nor any term hereof may be waived, amended, discharged, modified, changed or terminated orally; nor shall any waiver of any provision hereof be effective except by an instrument in writing signed by Agency and City. No delay or omission on the part of City in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Agreement. g. No Waiver by City. No waiver of any breach, default or failure of condition under the terms of this Agreement or the obligation secured thereby shall be implied from any failure of the City to take, or any delay be implied from any failure by the City in taking action with respect to such breach, default or failure from any prior waiver of any similar or unrelated breach, default or failure. h. Governing Law. This Agreement has been executed and delivered by Agency in the State of California and is to be governed and construed in accordance with the laws thereof. IN WITNESS WHEREOF, Agency has executed this Agreement as of the date and year first above written. "Agency" COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a California municipal corporation By: Chairman ATTEST: Assistant Secretary APPROVED AS TO FORM: Agency Counsel RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN OWNER PARTICIPATION AGREEMENT WITH DESERT SHADOWS III, L.L.C. TO PROVIDE FINANCIAL ASSISTANCE WITH PUBLIC IMPROVEMENTS TO EFFECTUATE THE CONSTRUCTION OF A HOTEUCONDOMINIUM RESORT AT STEVENS ROAD, PALM CANYON DRIVE AND INDIAN CANYON WAY IN MERGED PROJECT AREA #1 (THE NORTH PALM CANYON REDEVELOPMENT PROJECT AREA) --------------------- WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, California ("Agency") is constituted under the Community Redevelopment Law (California Health and Safety Code Section 33000 et. sec.) to carry out the purpose as the redevelopment in the City of Palm Springs ("the City"); and WHEREAS, Desert Shadows III, LLC, (Developer) proposed a 17-unit condominium project at the northwest corner of Stevens Road and Indian Canyon Drive, with reciprocal access to the Desert Shadows Inn at 1533 Chaparral Road; and WHEREAS, Developer proceeded with the Project, but during construction Developer requested that the Agency fund certain public improvement costs to be reimbursed from tax increment; and WHEREAS,the California Redevelopment Law requires certain findings before the Agency can enter into this Amendment, as follows: a) Section 33421.1 -that the City Council find that the provision of such improvements 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 October 17, 2001. 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 OPA, a Mitigated Negative Declaration was prepared in compliance with CEQA, the State CEQA Guidelines and the City's CEQA procedures. The Community Redevelopment Agency finds that there are no changes in the effects of the proposed project or the 0,g, jx� 0, ,E Resolution No. October 17, 2001 Page 2 circumstances in which it is being carried out, which require any modification of the Environmental Assessment/Mitigated Negative Declaration and finds that it adequately discusses 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 Environmental Assessment/Mitigated Negative Declaration reflects its independent judgment. SECTION 3. 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 streets, curb, gutter and sidewalks along Indian Canyon Drive, Palm Canyon Drive, and Stevens Road; undergrounding utilities; providing drainage around the project, including two dry wells; providing handicapped ramps at the project; and, installing landscaping and irrigation in the public right of way. This project improves a blighted corner of Merged Project Area #1 (the North Palm Canyon Redevelopment Project Area) and will increase tax increment to the Agency and the City. SECTION 4. Agency will reimburse Desert Shadows III, LLC for the costs of constructing the off-site improvements on Indian Canyon Drive, Stevens Road, and North Palm Canyon Drive, as follows, provided that: (a) Agency's obligation to reimburse Desert Shadows III shall not exceed Two Hundred Thousand Dollars ($200,000.00): (b) The improvements will include, at a minimum, the following as required by the City of Palm Springs: 1. Install 300 feet of 8" curb and gutter along Indian Canyon Drive, Stevens Road, and north Palm Canyon Drive; and, construct 106 linear feet of 8" barrier curb. 2. Install over 950 square feet of cross gutter and spandrel, as well as and 720 square feet of cross gutter at Stevens Road/Indian Canyon Drive and Stevens Road/Palm Canyon Drive. 3. Install a total of four(4) handicapped ramps at Stevens Road and Indian Canyon Drive and Stevens Road and Palm Canyon Drive. 4. Remove 210 square feet of asphalt on Palm Canyon Drive, Indian Canyon Drive, and Stevens Road. 5. Construct drainage improvements, including catch basin boxes and two drywells. 6" JF : B2 Resolution No. October 17, 2001 Page 3 6. Construct road pavement in accordance with City standards from the edge of proposed gutter to the clean sawcut edge of the existing road pavement along Palm Canyon Drive, Indian Canyon Drive, and Stevens Road. Sawcut approximately 600 linear feet of asphalt and concrete. Replace 4,135 square feet of asphalt on Palm Canyon Drive, Indian Canyon Drive, and Stevens Road. 7. Install landscaping, landscape lighting, and irrigation on Palm Canyon Drive, Indian Canyon Drive, and Stevens Road, including paver stepping stones, all palm trees, boxed trees and shrubs,ground cover and annual color, per plans prepared by R.G.A. Landscape Architects and included as an exhibit to the OPA. 8. Install 1,523 square feet of decorative concrete around the project's entrance on Stevens Road. Improve the drive approach on Stevens Road (665 square feet). 9. Install 3,671 of sidewalks according to City standard. 10. Underground the overhead utility lines along the project boundary. (c) Agency will reimburse Desert Shadows III for such costs upon acceptance of off-site improvements by the City and approval by Agency of invoices substantiating the costs incurred by Desert Shadows III for said off-site improvements. SECTION 6. The Agency does hereby find and determine as follows: (a) The property was originally developed in the 1940's as an apartment project and other commercial uses but declined in economic value,was demolished and has been vacant for the past two decades. The neighboring Desert Shadows Inn was rehabilitated in 1992 and expanded in 1994. In 1995, the owners of Desert Shadows in formed a limited liability corporation, Linsu Development Company LLC, which acquired the 2.5 acre property north of the Desert Shadows Inn with Redevelopment Agency assistance, and constructed 38 condominiums that were linked to the hotel grounds via reciprocal access agreements. The Agency provided assistance with the purchase of the Linsu property through its powers of eminent domain, as well as $79,000 in tax increment financing for offsite improvements. Smart Alex Development Company, LLC, another entity related to the hotel, purchased the Chandler Inn in 1998 and constructed 21 /° ,PA 4m A .> Resolution No. October 17, 2001 Page 4 condominiums also linked to the hotel via the reciprocal access agreements, using approximately$100,000 in Agency financial assistance for offsite improvements. (b) The OPA effectuates the purposes of the Community Redevelopment Law by reversing or alleviating any serious physical,social,and economic burden of the Communitywhich cannot reasonably be expected to be reversed or alleviated by private enterprise acting alone, in that the assistance will facilitate the redevelopment and operation of the hotel and retail buildings by causing the reconstruction and upgrade of the property, placing the property in the hands of a first class and experienced operator, in order to maintain existing sales tax revenue and attract additional commercial development within the City and increase the City's tax base. (c) The OPA 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 8. The proposed project is consistent with the Implementation Plan for this area, insofar as this project will increase tax increment and will expand an already-existing successful business. It will increase the City's tourist business by expanding a destination-type resort and creating an architecturally inviting project on a previously bighted property on a very busy corner and the City's main thoroughfare. SECTION 9. Based on foregoing reasons, this OPA is hereby approved and incorporated herein by this reference. SECTION 10. The Chairman of the Agency, and/or his designee, is authorized to execute all necessary documents, in a form approved by the Agency Counsel. ADOPTED this day of , 2001. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED &APPROVED dteo# y RESOLUTION NO, OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, ACCEPTING A LOAN FROM THE CITY OF PALM SPRINGS AND APPROVING THE "FINANCING AGREEMENT AND PROMISSORY NOTE" IN THE AMOUNT OF TWO HUNDRED THOUSAND DOLLARS ($200,000) FOR OFFSITE IMPROVEMENT COSTS BY DESERT SHADOWS III, L.P. WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, California ("Agency") is constituted under Community Redevelopment Law (California Health and Safety Code § 33000 et. seq.) to carry out the purpose as the redevelopment agency in the City of Palm Springs ("City"); and WHEREAS, on October 17, 2001, the Community Redevelopment Agency approved an Owner Participation Agreement with Desert Shadows III, LP ('Project'); and WHEREAS, pursuant to California Health and Safety Code §33132 and 33601, the Agency is authorized to borrow money from other public agencies to fulfill its obligations; and WHEREAS, the Agency has executed a "Financing Agreement and Promissory Note" in the amount of TWO HUNDRED THOUSAND DOLLARS ($200,000); and WHEREAS, the Agency has considered all the information, testimony and evidence provided during the regularly scheduled meeting of October 17, 2001. NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs that: SECTION 1. A loan forTWO HUNDRED THOUSAND DOLLARS ($200,000) from the City of Palm Springs to the Community Redevelopment Agency to reimburse Desert Shadows III, LP for off-site improvement costs pertaining to their site is hereby accepted in the form of an "Agreement and Promissory Note," as on file in the Office of the City Clerk, and shall accrue interest at the rate of 6% per annum and be repayable from net tax increment accrued from the project. SECTION 2. Any payments made to Desert Shadows III, LP shall be in accordance with the OPA, as amended. ADOPTED this day of 12001. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Executive Director REVIEWED &APPROVED C�,� �c RESOLUTION NO, OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 2001-02 FISCAL YEAR. WHEREAS Resolution 1101 approving the budget for the fiscal year 2001-02 was adopted on June 14, 2000; and WHEREAS the Executive Director has recommended, and the Agency desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution 1101, adopting the budget for the 2001-02 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS FUND Activity Account Amount 811 8191 65120 $200,000 Merged Area#1 Capital &Admin Desert Shadows Area#1 OPA Purpose: Loan to Agency to reimburse Desert Shadows III per OPA. SECTION 2. SOURCE FUND Activity Account Amount 001 12416 CRA Loans $200,000 General Fund Adopted this day of 12001 AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS By Assistant Secretary Chairman REVIEWED AND APPROVED AS TO FORM:A L-A17 ' � '