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HomeMy WebLinkAbout9/19/2007 - STAFF REPORTS - 5.D. 4 ?ALM SA c V N F • Cg4iFp0 R't,P' , City Council Staff Report SEPTEMBER 19, 2007 NEW BUSINESS Subject: REQUEST FOR TIME EXTENSION FOR SUBDIVISION IMPROVEMENT AGREEMENT FOR TRACT MAP 31263 From: David H. Ready, City Manager Initiated by: Public Works and Engineering Department SUMMARY A final map and Subdivision Improvement Agreement for Tract Map 31263 was approved on May 18, 2005. The project, located at 2850 N. Indian Canyon Dr., includes the construction of three condominium buildings consisting of 10 condominium units each (30 total). The developer has constructed two of the three condominium buildings, and due to real estate market conditions, has requested a significant extension of time to complete the project. RECOMMENDATION: 1) Authorize the Director of Public Works/City Engineer to approve a 12 month extension of time for the completion of improvements associated with Agreement No. A5100, a Subdivision Improvement Agreement for Tract Map 31263, with Krizman Desert Investments, LLC, a California Limited Liability Company. STAFF ANALYSIS: On May 18, 2005, City Council approved the Final Map for Tract No. 31263. In accordance with Section 2.1 of the Subdivision Improvement Agreement, the expiration date for the agreement (and completion of all improvements) was June 27, 2007. The project includes three condominium buildings consisting of 10 condominium units each (30 total). The first building permit for the project was issued on June 3, 2005, and construction commenced and was completed on the first two condominium buildings. As a result of the current real estate market, earlier this year the developer, Krizman Desert Investments, LLC, initially requested a three month time extension to defer construction of the third condominium building and on-site public improvements associated with it. In accordance with Section 2.1, the Director of Public Works/City ITEM NO. r City Council Staff Report September 19, 2007 - Page 2 Final Map 31263, Subdivision Agreement Extension of Time Engineer granted a 3 month extension of time, extending the time for completion until September 27, 2007. The real estate market has continued to slow, and the developer has further postponed construction of the third and final condominium building. On August 27, 2007, developer submitted a formal request for an additional 18 month time extension for the Subdivision Improvement Agreement, extending the time for completion until March 27, 2009. The improvements left to be completed associated with the final condominium building include a final lift of asphalt concrete paving, sewer laterals, and minor storm drainage improvements. Staff has estimated the total value of the improvements to be completed at $41,050. The developer is currently in the process of phasing the project into two phases with the Department of Real Estate, to allow for the separate sale of the first two constructed condominium buildings (Phase 1) to another developer, and postponement of construction of the third condominium building (Phase 2) until Phase 1 is sold. The developer intends to sell Phase 1 to another developer for individual sale of the condominium units to the public. However, to assure any potential developer purchasing Phase 1, the original developer requests formal City approval of an 18 month extension of time for completion of the improvements for the final building. Staff is concerned that the City Council be aware of the factors associated with this request, as this is the first request received by the Engineering Department for a significant extension of time related to a Subdivision Improvement Agreement. The request shows clear evidence of the impact the current real estate market has had on residential projects previously approved and under construction. Given the low value of the final improvements that remain incomplete, it would be prohibitively expensive to require the completion by ordering the completion through legal avenues (i.e. the surety bond). Further, as the public improvements yet to be completed do not affect oft-site public streets, a delay in completing the on-site public improvements will have no impact on the general public. Although the developer has requested an 18-month time extension, staff recommends that the extension of time be limited to 12 months. FISCAL IMPACT: None r yzc David J. Barakian Thomas J. Wils n Director of Public Works/City Engineer Assistant City Manager David H. Ready, . ity Mager ATTACHMENTS: 1. Subdivision Improvement Agreement 000002 ATTACHMENT 1 SUBDIVISION IMPROVEMENT AGREEMENT ��aQU� Krizman Desert Investments Subdivision Improvement Agr. AGREEMENT#5100 _Res 21270,5-1118_Q6 __ DOC = 2005-0BlE5033E3 07/13/2005 08:00R Fee:NC Page 1 of 31 RECORDING REQUESTED BY: Recorded in Official Records CITY OF PALM SPRINGS County of Riverside Larry W. Ward II Rslses501r,, Counl+tly1 Clerk Ia Recorder AND WHEN RECORDED MAIL TO: Illlll IIIIIII IIIII III IIIII IIIIII II III III IIIII IIII IIII City of Palm Springs P. O. Box 2743 M $ U PAGE GEE DA PCOR I HOCOO w MISC Palm Springs, CA 92263 Attn: City Clerk q n L COPY IANO REFNNO NCHC AJ Filing fee EXEMPT per Government Cade 6103 A5100 Subdivision Improvement Agreement Krizman Desert Investments LLC Tide of Document n • p � THIS AREA FOR {N, RECORDERS' p S^cr• 4 � USE ONLY n THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) N:IUSERsIc{ix�RerAR�eR1REcoao.PHR ax 000004 SUBDIVISION IMPROVEMENT AGREEMENT by and between CITY OF PALM SPRINGS and KRIZMAN DESERT INVESTMENTS, LLC A CALIFORNIA LIMITED LIABILITY COMPANY IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII eaas� 97/1 3 p o'f 1 B6R TABLE OF CONTENTS 1.Construction Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Works of Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 Other Obligations Referenced in Conditions of Tentative Map Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.3 Intent of Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.4 Survey Monuments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.5 Performance of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.6 Changes in the Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.7 Defective Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.8 No Warranty by City . • • . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . 2 1A Authority of the City Engineer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.10 Documents Available at the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.11 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . 3 1A2 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.13 Suspension of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.14 Final Acceptance of Works of Improvement . . . . . . . . . . . 3 2. Time for performance . . . . 3 2.1 Commencement and Completion Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Phasing Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.3 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.4 Continuous Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5 Reversion to Acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2.6 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3. Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.1 Labor Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 3.2 Nondiscrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 3.3 Licensed Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 34 Workers' Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1 Required Security . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Form of Security Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.3 Subdivider's Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4.4 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4.5 Release of Security Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 5. Cost of Construction and provision of Inspection 5.1 Subdivider Responsible for All Related Costs of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 5.2 Payment to City for Cost of Related Inspection and Engineering Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 Acceptance of Offers of Dedication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 �IIIIIIIIIIIIIHEIII11111IIII111111IIIIIIIli11111IIII T" Warranty of Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8.1 Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8.2 City Right to Perform Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8.3 Attorney's Fees and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9. Indemnity . . . . . . . . . . . . . . . . . . . - - - - - - . . . . . . . . . . . . ... . . . . . . . . . . . . . 8 110 General Provisions . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . 1 - 9 10-1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10-2 No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 10.3 Entire Agreement; Waivers and Amendments . , . . . . . . . . . . . . . . . . . . . . . . . . . 9 11. Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 000007 SUBDIVISION IMPROVEMENT AGREEMENT M SUBDIVISI N IMPROVEMENT AGREEMENT(this"Agreement") is entered into this day of 2005, by and between the CITY OF PALM SPRINGS, am icipal corporation of the Stgtb of California("CITY"),and KRIZMAN DESERT INVESTMENTS, LLC, a California Limited Liability Company ("Subdivider"). RECITALS A. Subdivider is the owner of, and has obtained approval of a subdivision map for Tract Map No. 31263, located in the City of Palm Springs, County of Riverside, State of California (the "Property"), as described on Exhibit "A". The map contains conditions of approval for the development of the Property(the "Conditions") as described an Exhibit"B". B. Pursuant to the Conditions, Subdivider,by the Map,has offered dedication to the City of Palm Springs an easement for public utility purposes with the right of ingress and egress for service as shown on the map as "5' PUE"; and City desires to accept said dedication and certain other improvements as described in this Agreement C. Subdivider has delivered to City and City has approved plans and specifications and related documents for certain "Works of Improvement" (as hereinafter defined)which are required to be constructed and installed in order to accommodate the development of the Property. D, Subdivider's agreement to construct and install the Works of Improvement pursuant to this Agreement and its public dedications and other improvements, as described in this Agreement, are a material consideration to City in approving the parcel map for the Property and permitting development of the Property to proceed. COVENANTS Based upon the foregoing Recitals which are incorporated herein by reference and in consideration Of City's approving the Map for the Property and permitting development of the Property to proceed, Subdivider agrees to timely perform all of its obligations as set forth herein. 1. Construction Obligations, 1.1 Works of Improvement. Subdivider agrees, at its sale cost and expense, to construct or install or cause to be constructed or installed the street, drainage, domestic water, sanitary sewer and other improvements(herein sometimes collectively referred to as the"Works of Improvement'), as the same may be supplemented and revised from time to time as set forth herein (said plans and specifications, together with all related documents, are referred to herein as the "Plans"). The estimated construction cost for the Works of Improvement is $350.G00.00. 1.2 Other Obligations Referenced in Conditions of Tentative Map Approval. In addition to the foregoing, Subdivider shall satisfy all of the conditions of approval on the Tentative Map for the Property. The conditions of approval associated with the Tentative Map are included as Exhibit"B" attached hereto. 1.3 Intent of Plans. The intent of the Plans referenced in Section 1.1 is to prescribe a complefeworkof improvement which Subdivider shall perform orcauseto be performed in a manner acceptable to the City Engineer(or his/her designee) and in full compliance with all codes and the terms of this Agreement. Subdivider shall complete a functional or operable improvement or facility, even though the Plans may not specifically call out all items of work required for the contractor to complete its tasks, incidental appurtenances, materials, and the like. If any omissions are made or ` tii QQQQQSu' ����II I'�I�II�II�I Il��I��I I�'���lII�II�I�III�I III I��� .,�2AA5-A56P336To information necessary to carry out the full intent and meaning of the Plans, Subdivider or its contractor shall immediately notify its design engineer who will seek approval of the City Engineer for furnishing of detailed instructions. In the event of any doubt or question arising regarding the true meaning of any of the Plans, reference shall be made to the City Engineer whose decision thereon shall be final. Subdivider recognizes that the Plans consist of general drawings. All authorized alterations affecting the requirements and information given on the Plans shall be in writing and approved by the City Engineer_The Plans shall be supplemented by such working or shop drawings as are necessary to adequately control the work.Without the City Engineer's prior written approval,no change shall be made by Subdivider or Subdivider's contractor to any plan,specification,or working or shop drawing after it has been stamped as approved. 1.4 Survey Monuments. Before final approval of street improvements,Subdividerwill place survey monument(s) as shown on the Map in accordance with the provisions of the State Subdivision Map Act and the Subdivision Ordinance of the City of Palm Springs. Subdivider shall provide security for such obligation as provided in Section 4.1(a)(iii) and, after setting the monument(s), Subdivider shall furnish the City Engineer of the City of Palm Springs written notice of the setting of said monument(s) and written proof of having paid the engineer or surveyor for the setting of said monument(s). 1.5 Performance of Work. Subdivider shall furnish or cause to be furnished all materials, labor, tools, equipment, utilities, transportation, and incidentals required to perform Subdivider's obligations under this Agreement. 1.6 Changes in the Work. The City Engineer, without invalidating this Agreement and without notification to any of the sureties or financial institutions referenced in Paragraph 4, may order extra work or may make changes by altering or deleting any portion of the Works of Improvement as specified herein or as deemed necessary or desirable by the City Engineer as determined necessary to accomplish the purposes of this Agreement and to protect the public health, safety, or welfare. The City Engineer shall notify Subdivider or Subdivider's contractor in writing (by Correction Notice) at the time a determination has been made to require changes in the work. No field changes performed or proposed by Subdivider or its contractor shall be binding on City unless approved in writing by the City Engineer. 1.7 Defective Work. Subdivider shall Cause its contractor to repair, reconstruct,replace, or otherwise make acceptable any work found by the City Engineer to be defective. 1.8 No Warranty by City. The Plans for the Works of Improvement have been prepared by or on behalf of Subdivider or its consultants or contractors, and City makes no representation or warranty, express or implied, to Subdivider or to any other person regarding the adequacy of the Plans or related documents. 1.9 Authority of the Ctiv Enaineer. In addition to the authority granted to the City Engineer elsewhere in this Agreement,the City Engineer shall have the authority to decide all questions which may arise as to the quality and acceptability of materials furnished and work performed, and all questions as to the satisfactory and acceptable futrillment of the terms of this Agreement by Subdivider and Subdivider's contractor. 1.10 Documents Available at the Site. Subdivider shall cause its contractor to keep a copy of all approved Plans at the job site and shall give access thereto to the City's inspectors and engineers at all times. z 000009, I Ir r! (lll�l I��IIII lull ill�I�II III�II III1II III1r 1III1 llll I1'I 07 130 2 05 96 0BR 1.11 Inspection. Subdivider shall have an authorized representative an the jab site at all times during which work is being done who has full authority to act for Subdivider, or its design engineer, and Subdivider's contractor(s) regarding the Works of Improvement. Subdivider shall cause its contractor to furnish the City with every reasonable facility for ascertaining whether or not the Works of Improvement as performed are in accordance with the requirements and intent of this Agreement, including the plans. If the City inspector requests it, the contractor at any time before acceptance of the Works of Improvement shall remove or uncover such portions of the finished work as may be directed which have not previously been inspected.After examination,the contractor shall restore said portions of the work to the standards required hereunder. Inspection or supervision by the City shall not be considered as direct control of the individual workmen on the job site. City's inspector shall have the authority to stop any and all work not in accordance with the requirements contained or referenced in this Agreement. The inspection of the work by City shall not relieve Subdivider or the contractor of any obligations to fulfill this Agreement as herein provided, and unsuitable materials or work may be rejected notwithstanding that such materials or work may have been previously overlooked or accepted. 1.12 Compliance With Law. In addition to the express provisions of this Agreement and the Plans, Subdivider shall cause construction of the Works of Improvement to be completed in accordance with all other applicable federal, state, and local laws, ordinances,rules and regulations. 1.13 Suspension of Work. City Engineer shall have authority to order suspension of the work for failure of the contractor to comply with law pursuant to Section 1.11. In case of suspension of work for any cause whatever, Subdivider and its contractor shall be responsible for all materials and shall store them properly if necessary and shall provide suitable drainage and erect temporary structures where necessary. 1.14 Final Acceptance of Works of Improvement. After Subdivider's contractor has completed all of the Works of Improvement, Subdivider shall then request a final inspection of the work. If items are found by the inspector to be incomplete or not in compliance with this Agreement or any of the requirements contained or referenced herein, City will inform the contractor of such items. After the contractor has completed these items, the procedure shall then be the same as specified above for the contractor's initial request for final inspection. If items are found by City's inspector to be incomplete or not in compliance after two(2)"final"inspections, City may require the contractor, as a condition to performing further field inspections, to submit in writing a detailed statement of the work performed subsequent to the date of the previous inspection which was found to be incomplete or not in compliance at that time. No inspection or acceptance pertaining to specific parts of the Works of Improvement shall be construed as final acceptance of any part until the overall final acceptance by City is made. Final acceptance shall not constitute a waiver by City of defective work subsequently discovered. The date on which the Works of Improvement will be considered as complete shall be the date of the Notice of Acceptance. 2. Time for Performance. 2.1 Commencement and Completion hates. Subject to Section 2.2 and 2.3 below, Subdivider shall (i)commence with construction and installation of the Works of Improvement thirty 30 da s following City's approval of the Plans("Commencement Date");and (ii)complete or cause to be completed all of the Works of Improvement two (2) years after the Commencement Date. Extensions of time for completion of the Works of Improvement may be granted upon approval by the City Engineer or his designee. Extension of time may be granted upon mutual agreement of the IIIIII IIIIIII IIIII III 11111111111111111 III 11111 IN 1111 a7�i00reoey6es3eaR City Engineer and Subdivider, either verbally or in writing, as required by the City Engineer or his designee. 2.2 Phasing Requirements. Notwithstanding the provisions of Section 2.1, City reserves the right to control and regulate the phasing of completion of specific Works of Improvement as required to comply with applicable City ordinances, regulations, and rules relating to the timely provision of public services and facilities. In addition to whatever other remedies City may have for Subdivider's failure to satisfy such phasing requirements,as the same now exist or may be amended from time to time, Subdivider acknowledges City's right to withhold the issuance of further building permits on the Property until such phasing requirements are satisfied. Prior to issuance of building permits, Subdivider shall provide satisfactory evidence that all applicable requirements that are a condition to issuance of building permits have been satisfied. Such requirements may include the payment of fees,construction of improvements,or both. Final inspections or issuance of Certificates of Occupancy may be withheld from the Subdivider by the City, if, upon a determination by the City Engineer or his designee, completion of specific Works of Improvements or other requirements associated with the development of the Property have not been completed to his satisfaction. 2.3 Force Majeure. Notwithstanding the provisions of Section 2.1, Subdividers time for commencement and completion of the Works of Improvement shall be extended for the period of any enforced delay caused due to circumstances beyond the control and without-the fault of Subdivider, including to the extent applicable adverse weather conditions, flood, earthquakes, strikers, lockouts, acts or failures to act of a public agency (including City), required changes to the scope of work required by City, and similar causes; provided, however, that the period of any enforced delay hereunder shall not include any period longer than five(5)days prior to City's receipt of a written notice from Subdivider or its Contractor detailing the grounds for Subdivider's claim to a right to extend its time for performance hereunder. City Engineer shall evaluate all claims to Force Majeure and his decision shall be final. 2.4 Continuous Work. After commencement of construction of the Works of Improvement (or separate portion thereof), Subdivider shall cause such work to be diligently pursued to completion, and shall not abandon the work for a consecutive period or more than thirty(30)days, events of Force Majeure excepted. 2.5 Reversion to Acreage. In addition to whatever other rights City may have due to Subdivider's failure to timely perform its obligations hereunder, Subdivider recognizes that City reserves the right to revert the Property to acreage subject to the limitations and requirements set forth in California Government Code Sections 66499.11-66499.20-314. In this regard, Subdivider agrees that if the Works of Improvement have not been completed on or before the later of two (2) years from the date of this Agreement or within the time allowed herein, whichever is the later, and if City thereafter initiates proceedings to revert the Property to acreage, pursuant to Govemment Code Section 66499.16 Subdivider hereby consents to reversion and agrees that any improvements made by or on behalf of Subdivider shall not be considered in determining City's authority to revert the Property to acreage. 2.6 Time of the Essence. Time is of the essence of Subdivider's performance of all of its obligations under this Agreement, 3, Labor. 3.1 Labor Standards. Subdivider shall be responsible for causing all contractors and subcontractors performing any of the Works of Improvement to comply with all applicable federal and state labor standards, including to the extent applicable the prevailing wage requirements promulgated by the Director of Industrial Relations of the State of California Department of Labor. 4 0000 � IIIIII IIIIIII IIIII III IIIII IIIIII 1111111111111111111111 07 2R0 2 0593,d9q 3.2 Nondiscrimination. Subdivider agrees that no contractor or subcontractor performing any of the Works of Improvement shall discriminate against any employee or prospective employee with respect to such work in hiring, promotion, seniority, or any other terms and conditions of employment on the grounds of race, creed, color, national origin, ancestry, religion, sex, or marital status. 3.3 Licensed Contractors. Subdivider shall cause all of the Works of Improvement to be constructed by contractors and subcontractors with valid California Contractors'licenses forthe type of work being performed. 3A Worker's Compensation. Subdivider shall cause every contractor and subcontractor performing any of the Works of Improvementto carry Workers'Compensation insurance as required by the Labor Code of the State of California and shall cause each such contractor and subcontractor to submit to City a Certificate of Insurance verifying such coverage prior to such contractor or subcontractor entering onto the job site. 4. Security. 4.1 Reauired Security. (a) At the time Subdivider executes this Agreement, Subdivider shall furnish to City the following bonds, letters of credit, instruments of credit (assignment of deposit account) or other security acceptable to City in its sole and absolute discretion and satisfying the requirements of the applicable provisions of this Section 4 below(hereinafter"Security Instruments"): (1) A Security Instrument securing Subdivider's faithful performance of all of the Works of Improvement("Faithful Performance Security Instrument"), in the amount of$350,000.00 equal to 100% of the estimated construction cost referenced in Section 1.1. (ii) A Security Instrument guaranteeing the payment to contractors, subcontractors, and other persons furnishing labor, materials, and/or equipment ("Labor and Materials Security Instrument")with respect to the Works Hof Improvement in an amount equal to$175 000.00 equal to 50% of the estimated construction cost referenced in Section 1.1. (iii) A Security Instrument guaranteeing the payment of the cost of setting monuments as required in Section 1.4 in the amount of$3.000.00 equal to 100% of the cost thereof. This Agreement shall not be effective for any purpose until such Security Instruments are supplied to and approved by City in accordance herewith. (b) Required Security Instrument for Maintenance and Warranty. Prior to the City Council's acceptance of the Works of Improvement and recordation of a Notice of Completion, Subdivider shall deliver a Security Instrument warranting the work accepted fora period of one(1)yearfoliowing said acceptance ("Maintenance and Warranty Security Instrument"), in the amount of$52 500.00, equal to 15% of the estimated construction cost set forth in Section 1.1 or a suitable amount determined by the City Engineer. 4.2 Form of Security Instruments, All Security Instruments shall be in the amounts required under Section 4.1 (a) or 4.1(b), as applicable, shall meet the following minimum requirements and otherwise shall be in a form provided by City or otherwise approved by the City Attorney: (a) Bonds. For Security Instruments provided in the form of bonds, any such bond must be issued and executed by an insurance company or bank authorized to transact surety business in the I 1 5 000012 �IN�II IIIIIII`IIII III(IIII IIIIII IIIIII 111 IIIII IIII IIII P7�00 PN�SsRR3ANF State of California.Any insurance company acting as surety shall have a minimum rating ofA-IX,as rated by the current edition of Bests Key Rating Guide published by A.M. Best's Company, Oldwick, New Jersey, 08858. Any bank acting as surety shall have a minimum rating of AA, as rated by Moody's or Standard &Poor s. (b) Letters of Credit. For Security Instruments which are letters of credit,any letter of credit shall be an original separate unconditional, irrevocable, negotiable and transferable commercial letter of credit issued by a financial institution with offices in the State of California acceptable to City. Any such letter of credit shall specifically permit City to draw on same by unilateral certification of the City Engineer of the City that Subdivider is in default under its payment or performance obligations hereunder or in the event Subdivider fails to deliver a replacement letter of credit not less than thirty (30)days prior to the date of expiration of any such letter of credit and shall further be subject to the provisions of Section 4.4. (c) Instrument of Credit. For Security Instruments which are Instruments of Credit, any Instrument of Credit shall be an assignment of deposit account assigning as security to City all of Subdivider's interest in funds on deposit in one or more bank accounts with financial institutions acceptable to City. (d) General Requirements for all Security Instruments. (i) Payments under any Security Instruments shall be required to be made (and, with respect to bonds, litigation shall be required to be Instituted and maintained) in the City of Palm Springs, State of California (and the Security Instrument shall se provide). (ii) Each Security Instrument shall have a minimum term of one (1) year after the deadline for Subdivider's completing the Works of Improvement, in accordance with Section 2.1 (other than Instruments of Credit, which shall have no defined term or expiration date)_ (iii) Each Security Instrument shall provide that changes may be made in the Works of Improvement pursuant to the terms of this Agreement without notice to any issuer or surety and without affecting the obligations under such Security Instrument. 4.3 Subdividers Liability. While no action of Subdivider shall be required in order for City to realize on its security under any Security Instrument, Subdivider agrees to cooperate with City to facilitate City's realization under any Security Instrument, and to take no action to prevent City from such realization of any Security Instrument.Notwithstanding the giving of any Security Instrument or the subsequent expiration of any Security Instrument or any failure by any surety or financial institution to perform its obligations with respect thereto, Subdivider shall be personally liable for performance under this Agreement and for payment of the cost of the labor and materials for the improvements required to be constructed or installed hereby and shall, within ten (10) days after written demand therefor, deliver to City such substitute security as City shall require satisfying the requirements in this Section 4. 4.4 Letters of Credit. (a) In the event a letter of credit is given pursuant to Section 4.2(b), City shall be entitled to draw on any such letter of credit if a replacement letter of credit (expiring in not less than one (1) year, unless City agrees to a lesser term in City's sole and absolute discretion) is not delivered not less than thirty(30)days prior to the expiration of the original letter of credit, such substitute letter of credit being in the same amount and having the terms and conditions as the initial letter of credit delivered hereunder, issued by a financial institution acceptable to City as of the date of delivery of the replacement letter of credit. j J6I{ I I��III����III IIII III IIIII IIIIII lIIIII III IIIIII III IIII 07290 ae s5ee3eee (b) In the event of draw by the City on a letter of credit, the City may elect, in its sole and absolute discretion, to apply any such funds drawn to the obligations secured by such letter of credit or to hold such funds in an account under the control of the City,with no interest accruing thereon for the benefit of the Subdivider, If the City elects to hold the funds in an account pursuant to the foregoing, City may thereafter at any time elect instead to apply such funds as provided in the foregoing. Subdivider agrees and hereby grants City a security interest in such account to the extent required for City to realize on its interests therein and agrees to execute and deliver to City any other documents requested by City in order to evidence the creation and perfection of City's security interest in such account. 4.5 Release of Security Instruments. (a) City shall release the Faithful Performance Security Instrument and labor and Materials Security Instrument when all of the following have occurred: (i) Subdivider has made written request for release and provided evidence of satisfaction of all other requirements in this Section 4.5; (ir) the Works of Improvement have been accepted; (iii) Subdivider has delivered the Maintenance and Warranty Security Instrument; and (iv) subject to the following sentences after passage of the time within which lien claims are required to be made pursuant to Article 3 (commencing with Section 3114) of Chapter 2 of Title 15 of Part IV of division 3 of the California Civil Code. If lien claims have been timely Fled, City shall hold the Labor and Materials Security Instrument until such claims have been resolved, Subdivider has provided a statutory bond, or otherwise as required by applicable law. (b) City shall release the Maintenance and Warranty Security Instrument upon Subdivider's written request upon the expiration of the warranty period, provided no claims are outstanding at that time regarding defective work. 5. Cost of Construction and Provision of Inspection Service. 5.1 Subdivider Resoonsible for All Costs of Construction. Subdivider shall be responsible for payment of all costs incurred for construction and installation of the Works of Improvement.In the event Subdivider is entitled to reimbursement from City for any of the Works of Improvement, such reimbursement shall be subject to a separate Reimbursement Agreement to be entered into between Subdivider and City prior to construction of the works. 5.2 Payment to City for Cost of Related Inspection and EngineeringServices, Subdivider shall compensate City for all of City's costs reasonably incurred in having its authorized representative make the usual and customary inspections of the Works of Improvement.In addition, Subdivider shall compensate City for all design,plan check,evaluating any proposed or agreed-upon changes in the work. The procedures for deposit and payment of such fees shall be as established by the City Council. In no event shall Subdivider be entitled to additional inspections or a final inspection and acceptance of any of the Works of Improvement until all City fees and charges have been fully paid, including without limitation, charges for applicable penalties and additional required inspections. 6. Acceptance of Offers of Dedication. The City Council shall pass as appropriate resolution or resolutions accepting all offers of dedication shown on the Map for the Property, with acceptance to become effective upon completion and acceptance by City of the Works of 7 I llllllllllllllllllllllIII 111111111111111 HIM 1111l a7n�@�e95�08300R Improvement.Such resolution(s)shall authorizethe City Clerk to execute the Certificate made apart of the Map regarding said acceptance of the offer of dedication. 7. Warranty of Work, Subdivider shall guarantee all Works of Improvement against defective materials and workmanship for a period of one(1)year from the date of final acceptance. If any of the Works of Improvement should fail or prove defective within said one(1)year period due to any reason other than improper maintenance, or if any settlement of Fill or backfill occurs, or should any portion of the Works of Improvement fail to fulfill any requirements of the Plans, Subdivider,within fifteen(15)days afterwritten notice of such defects, or within such shorter time as may reasonably be determined by the City in the event of emergency, shall commence to repair or replace the same together with any other work which may be damaged or displaced in so doing. Should Subdivider fail to remedy defective material and/or workmanship or make replacements or repairs within the period of time set forth above, City may make such repairs and replacements and the actual cost of the required labor and materials shall be chargeable to and payable by Subdivider. The warranty provided herein shall not be in lieu of, but shall be in addition to, any warranties or other obligations otherwise imposed by law. 8. Default. 8.1 Remedies Not Exclusive. In any case where this Agreement provides a specific remedy to City for a default by Subdivider hereunder, such remedy shall be in addition to, and not exclusive of, City's right to pursue any other administrative, legal, or equitable remedy to which it may by entitled. 8.2 City Right to Perform Work. In addition to whatever other rights or remedies it may have for Subdivider's default hereunder, in the event Subdivider shall fail to timely perform any work required to be performed under this Agreement and such failure shall continue for a period of twenty (20) days after receipt of written notice of default from City, or thereafter Subdivider shall fail to diligently and continuously pursue the cure of any such default to completion, City shall have the right to enter into the Property and perform any of the uncompleted work by force account or contract or both and thereupon recover from Subdivider or any Security Instrument, or both,the full cost and expense thereby incurred by City_ 8.3 Aftomey's Fees and Costs. In the event that Subdivider fails to perform any obligation under this Agreement, Subdivider agrees to pay all costs and expenses incurred by City in securing performance of such obligations, Including costs of suit and reasonable attorney's fees. In the event of any dispute arising out of Subdivider's performance of its obligations under this Agreement or under any of the Security Instruments referenced herein, the prevailing party in such action, in addition to any other relief which may be granted, shall be entitled to recover its reasonable attorney's fees and costs.Such attorney's fees and cost shall include fees and costs on any appeal, and in addition a party entitled to attorney's fees and costs shall be entitled to all other reasonable costs incurred in investigating such action, taking depositions and discovery, retaining expert witnesses, and all other necessary and related costs with respect to the litigation.All such fees and costs shall be deemed to have accrued on commencement of the action and shall be enforceable whether or not the action is prosecuted to judgment, 9. Indemnity. Subdivider agrees to indemnify, defend, and hold harmless City and City's officers, employees, and agents from and against any and all claims, liabilities, losses, damages, causes of action, and obligations arising out of Subdivider's failure to perform the construction and installation of the Works of improvement in accordance with the requirements contained or referenced in this Agreement. Said indemnity obligation shall apply to personal injury, death, property damage, economic loss, and any other monetary damage or penalty to which City may be subjected, including without limitation, attorney's fees and costs and the costs of realizing on any s aas aFsaa�"s 0 0 0 0 15 IIIIIII HE 111111111111111111111111111111111 IIII a7 raraes506:00R Security Instrument provided by Subdivider pursuant to the terms hereof.Such indemnity obligation shall not extend to any loss resulting from City's sole negligence or willful misconduct. 10. General Provisions. 10.1 Successors and Assigns. This Agreement shall be binding upon all successors and assigns to Subdivider's right, title, and interest in and to the Property and any portion thereof. 10.2 No Third Party Beneficiaries_ This Agreement is intended to benefit only the parties hereto and their respective successors and assigns. Neither City nor Subdivider intend to create any third party beneficiary rights in this Agreement in any contractor, subcontractor, member of the general public, or other person or entity. 10.3 Entire Agreement:Waivers and Amendments. This Agreement integrates all of the terms and conditions mentioned herein, or incidental hereto, and supersedes all negotiations and previous agreements between the parties with respect to all or part of the subject matter hereof, except as may be expressly provided herein.All waivers of the provisions of this Agreement must be in writing and signed by an authorized representative of the party to be charged, and all amendments hereto must be in writing and signed by the appropriate representatives of both parties_ 11. CorporateAuthority. The persons executing this Agreement on behalf of the parties hereto warrant the (1) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii)by so executing this Agreement,such party is formally bound to the provisions of this Agreement, and (iv) the entering into of this Agreement does not violate any provisions of any other Agreement to which said party is bound_ (Signatures on Next Page) 9��11�1111111111111111111111 ��20F�eBSs ae esR IN WITNESS WHEREOF, the parties hereto have executed this Subdivision Improvement Agreement as of the date first above written. ATTEST. CITY OF PALM SPRINGS, CALIFORNIA .lames Thompson, Gity C erk l7avid H. Ready, Ci y ger ECOMMENDED BY: APAROVSTI) FOR , David Barakian, City Engineer 13$UBDIVIDER: Til S KRIZMAN DESERT INVESTMENT" LLC, a California Limited Liability Company (Check One: individual,_partnership, aerporatieq) /t-C,( "� By: & , APPROVED BY CITY COUNCIL Signature 1 � sy: AmJ r)K1'ZM/n.! Name and Title Mailing Address: pp -4tT /A("-7 o- OA I` I tIlo 0000 L __ I II'lll'llllll I��II II�II��I Iillll Ill�fl fll�IIII�III IIII 07?3�l2005 0 a300fl Q�4©O CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California I I ss County pp of �siS � T ,�1 1� yy OJA(1(14 Q5 � 005 beforeme, 7V tty, P\, �AlC.Y'U 1 O�ttr I � Nano no rur,o101Gur in o.'Jnne Don Mpndldl personally appeared C(\1 H. Rtadv av_d jctme_5 ��7fJi7�7S7Y , w,mma of alrannrin L�orsonally known to me _ .. Fr.,, _.,_........ ....wry G'n W licrr to be the parson whose names) Is& subscribed to the within instrument and JIiIXiN A NICHOLS acknowledged to me that / lihe executed COMMI%don#1431823 the same in -fail thoi authorized _w Notary Publla'Collfomlo capacdy 1a and that by -hisltte the Riverside County signaturon the Instrument the person,or NtyCorom.&#esNRry21,2008� the entity upon behalf of which the persorA acted, executed Ilse instrument WITNESS my hand and official sea]. D l l SI nmua or Min,Puhr OPTIONAL 7nough the rnlomaflon bolowis not repuirod bylaw,it mey provo valuable to porsons ralyrng on the document and could preveof haudulent removal and reattachment of this lDnn for another dormment Ll cription of Attached Document Title or I of Oacument: Document Date, Number of Pages: Signer(s)Other Than Name ove: Capacity(ies) Claimed by Signe Signer's Name: ❑❑ Corporate Officer—Individual lap onnulny hors Title(s) ❑ Partner-0 Limited 0 General ❑ Attorney-in-Fact ❑ Trustee 0 Guardian or Conservator ❑ other-, Signor is Representing: m I9W N11Nnn No�ryraxo0On'0950 Do^uobpve PD ery,fA02•QIuL'wotlli,CA 8191&2A02•vnwrnali�g0 A010ryo,q Prod No 4007 Fo,c.r=1 W-FW 14WLM927 _. I IIIIII I�I�III���I�III IA AI I�IAII IIII�I II!�II I� I IIII ea 200 z15 oof 31 0 0 0 0-L t� ALL-I'T11tFOSE ACKNOWLEDGMENT Statuof California CAPACITY CLAIIM)BYSIGNER Couatyaf C)rInaP ❑ IKDIVE)UAL(S) ❑ CORPORATL On—M-my 3, 2005 before me, }'Caron P CTD-- is OFFICERS) - - Date Name,Tide of Officer T1TL.1:(S) personally appeared An'. u�i Moan - 0 PARTNER(S) NANIE(S) OF SIGNLR(S) ❑ ATTORNEY-IN-FACT M TRUSTEE(S) personally known to me-OR- ❑ SUBSCRIBING WITNESS ❑ GUARDIAN/CONSERVATOR Cl provud to me on the basis of satisfactory evidancv to he the persons(s) whuse name(s) is/arc XQ OTHER subscribed to ilia within instrument and ackaDwledgcd to me that helshe/dicy excculed d1e same in his/huhheir authorized capacity(ies), and that by his/herldiah sigoamre(s)on ilia instrument the person(s)or the entity upon behalf of which 910 persons(s)acted,executed the instmment. SIGNER IS RE'PRESFNTWG: s m hand I is al.�.. U R ID 14 Krizman Desist �"r_(� -•NOTARYPI)0UC-CWJf-0MAW Signature of tary r7kANGE COUNTY (} Tn pctmt�n -G COMM,EYP.AUG,27,2pt17- ATI%NTION NOTARY: Although die information requested below is OPTIONAL, it could prevent fraudulent attachment of this ceiiificate Ru unaudiormcd document. THIS CERTIFICATE Tide or Type of Document MUST BE ATTACEMD TO TEE DOCUMENT Number of Pages DATE of DOC(7NIENT DFSCRIBED AT RIGHT: Signer(&)Other Than Named Above IIIIII III I IIIII I I�IIII III{il IIIII III IIII I�lI I�I 2@65-95fiB336 a?/13/2605 WW O 0 o CI fw 16 of 31 41 7