HomeMy WebLinkAbout00200C - STANWILL PROPERTIES PALM COURT (NEVER EXECUTED) PAL,N
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City of Palm Springs
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RECEIVED
Department of Economic Development APR 0 2 19QQ
(619) 323-8197 * (619) 323-8259
FAX (619) 323-3314 CITY CLERK
April 4, 1990
Mr. Rocky Hafdahl
47 Rocky Knoll
Irvine, CA 92715
Re: Palm Court
Dear Rocky:
Per our recent telephone conversation, I am writing to confirm that the
owner participation agreement with Stanwill Properties for Palm Court will
be rescinded. We will retain this document as the basis for a future agree-
ment with your new development group. The approval process for a new
agreement should be relatively simple given the work that went into the
preparation of the Stanwill documents.
Thank you for your consideration on this matter. I look forward to working
with you and your development group to make Palm Court a reality.
Sinc9eliopment
Johnerell
Rede Coordinator
JCT/ft
cc: Kenneth Feenstra
Judith Sumich
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Post Office Box 1786, Palm Springs, California 92263-1786
MEMORANDUM
DATE : August 7 , 1989
TO : Judy Sumich, City Clerk
FROM . John Terell, Redevelopment Coordinator
RECEtt/fB--
SUB T .
: Agt. # 200 AUG 8 i9
CITY CLERK
Please be advised that the completion of exhibits for the
above-referenced agreement have been delayed by Stanwill Companies .
Their efforts have been diverted issues raised by a third party
over the clear title to the development site . Due to this "glitch"
in the process , I do not expect to hear back from them soon
on the attachments. Should there be some sort of "sunset"
provision regarding the finalization of the agreement, please
let me know so that I may use it as leverage .
Thank you for your cosnsideration on this matter.
CITY OF PALM SPRINGS
PARTICIPATION AGREEMENT
By and Between
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
and
SUN CAL INC . , dba SUN CAL PROPERTIES
and
STANWILL PROPERTIES , INC .
(PALM COURT PROJECT)
Central Business District Redevelopment Plan
and
North Palm Canyon Redevelopment Plan
Palm Springs , California
TABLE OF CONTENTS
PARTICIPATION AGREEMENT
Article ; Section; Subsection Title Page..
1 . SUBJECT OF AGREEMENT . . . . . . . . . . . . . . . . 3
1 . 1 The Redevelopment Project Areas . . . . . . . 3
1 . 2 The Site . . . . . . . . 3
1 . 3 Parties to this Agreement . . . . . . . . . . 5
1 . 3 . 1 Agency . . . . . . . . . . . . . 5
1 . 3 . 2 Participant and Developer . . . . . . . 5
2 . ACQUISITION AND ANNEXATION OF PROJECT
SITE BY PARTICIPANT . . . . . . . . . . . . . . . . 7
2 . 1 Acquisition of Sales Parcels #2 and #3 . . . . 7
2 . 1 . 1 Negotiated Purchase of Sales
Parcel #2 7
2 . 1 . 2 Negotiated Purchase of Sales
Parcel #3 8
2 . 1 . 3 Negotiated Purchase of Sales
Parcel. #4 . . . . . . . . . . . 8
2 . 1 . 4 Agency Acquisition . . . . . . . . . . 8
2 . 1 . 5 Sale . . . . . . . . 10
2 . 1 . 6 Advance of Funds . . . . . . . . . 12
2 . 2 Transfer of Sales Parcel #1 12
2 . 3 Conveyance of Title of Right-of-WaX
Parcel #1 . . . . . . . . . . . . . . . . . . 12
2 .4 Escrow . . . 13
2 . 5 Conveyance of Titie and Delivery of
Possession . . . . . . . . . . . . . . . . . . 16
2 . 6 Form of Deed 17
2 . 7 Condition of Title 17
2 . 8 Time for and Place of Delivery
of Grant Deeds . . . . . . . 18
2 . 9 Close of Escrow and Recordation of Deeds . . . 18
2 . 10 Title Insurance . . . . . . . . . . . . . . . 18
2 . 11 Taxes and Assessments . . . . . . . . . 19
2 . 12 Conveyance Free of Possession . . . . . 20
2 . 13 Consistency with General Plan Zoning
Ordinances and Redevelopment Plans . . . . . . 20
2 . 14 Compliance with California
Environmental Quality Act . . . . . . . . . . 21
2 . 15 Condition of Sales Parcels . . . . . . . . . . 21
2 . 16 Preliminary Work by Participant . . . . . . . 23
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3 . CONSIDERATION FOR AGENCY' S OBLIGATIONS . . . . . . . 24
3 . 1 Note and Deed of Trust . . . . . . . . . . . . 24
3 . 2 Additional Consideration . . . . . . . . . . . 25
3 . 3 Relocation Cost . . . . . . . . . . . . . . . . 26
4 . TAX INCREMENT AND RETAIL SALES TAX REVENUES . . 26
4. 1 Tax-Increment Revenues . . . . . . . . . . . . 26
4. 2 Retail Sales Taxes . . . . . . . . . . . . . . 27
4 . 3 Lifetime Cap . . . . . . . . . . . . . . . . . 27
5 . SUBMISSION OF EVIDENCE OF FINANCING . . . . . . . . 28
6 . DEVELOPMENT OF THE SITE . . . . . . . . . . . . . . 29
6 . 1 Scope of Development . . . . . . . . . . 29 -
6 . 1 . 1 Basic Concept Drawings . . . . 29
6 . 1 . 2 Construction Plans . Drawings and
Related Documents . . . . . . . . . . 30
6 . 1 . 3 Cost of Construction . . . . . . . . . 32
6 . 1 . 4 Construction Schedule . . 32
6 . 1 . 5 Bodily Injury Property Damage and
Worker ' s Compensation Insurance . . . 33
6 . 1 . 6 City and Other Governmental
Agency Permits . . . . . . . . . . . 33
6 . 1 . 7 Rights of Access . . . . . . . . . . . 34
6 . 1 . 8 Compliance With Laws . . . . . . . 34
6 . 1 . 9 Anti-Discrimination During
Construction . . . . . . . 34
6 . 1 . 10 Agency' s Responsibilities . . . . . . 35
6 . 1 . 11 Taxes , Assessments . Encumbrances
and Liens . .
6 . 1 . 12 Prohibition Against Transfer of
the Project . . . . . 36
nc 6 . 1 . 13 Security Finaing: Right
of Holders . . . . . . . . 36
6 . 1 . 13(a) No Encumbrances Except
Mortgages . Deeds of
Trust . Sales and
Leases-Back or Other
Financing for
Development 36
6 . 1 . 13(b) Notice of Default to
Secured Parties :
Right to Cure . . 38
6 . 1 . 13(c) Failure of Secured
Party to Complete
Improvements' . . . . . 39
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6 . 1 . 13(d) Right of Agency to
Cure Mortgage . Deed of
Trust or Other
Security Interest
Default . . . . . . . . 41
6 . 1 . 13(e) Right of the Agency tg
Satisfy Other Liens on
the Project After
Title Passes . . . . . 42
6 . 1 . 13(f) Certificate of
Completion . . . . . . 43
7 . FURTHER CONDITIONS OF AGREEMENT . . . . . . . . . . 45
7 . 1 Preleasing 45
7 . 2 Optional New Site Plan 46
7 . 3 Golf Course Privilege . . . . . . . . . . . . 46-
8 . USE OF THE SITE . . . . . . . . . . . . . . . . . . 46
8 . 1 Uses 46
8 . 2 Operation of Retail Portion of Project 47
8 .2 . 1 Operational Hours . . . . . . . . . . 47
8 . 2 . 2 Advertising Budget . . . . . . . . . . 48
8 . 2 . 3 Main Street Group 48
8 . 3 Obligation to Refrain from Discrimination 48
8 . 3 . 1 Form of Non-Discrimination and
Non-Segregation Clause in Deeds . . . 49
8 . 3 . 2 Form of Non-Discrimination and
Non-Segregation Clause in Leases . . . 50
8 . 3 . 3 Form of Non-Discrimination and
Non-Segregation Clause in Contracts 50
8 . 4 Effect and Duration of Covenants . . . . . . . 51
9 . DEFAULTS , REMEDIES AND TERMINATION . . . . . . . . . 52
9 . 1 Defaults -- General . . . . . . . . . . . . . 52
9 . 2 Legal Actions . . . 53
9 . 2 . 1 Institution of Legal Actions 53
9 . 2 . 2 Applicable Law 54
9 . 2 . 3 Acceptance of Service of Process 54
9 . 3 Rights and Remedies are Cumulative 54
9 . 4 Remedies and Rights of Termination Prior to
Conveyance of the Sales Parcels to
Participant . . . . . . 55
9 . 4 . 1 Termination by Participant . . . . . . 55
9 . 4 . 2 Termination by Agency 56
9 . 5 Option to Repurchase . Reenter and Repossess 58
9 . 6 Right of Reverter . . . . . . . . . . . . . . 61
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10 . GENERAL PROVISIONS . . . . . . . . . . . . . . . . . 67
10 . 1 Notices Demands and Communications Between
The Parties . . . . . . . . . . . . . . . . . 67
10 . 2 Conflicts of Interest . . . . . . . 67
10 . 3 Non-Liability of Agency Officials and
Employees . . . 67
10 . 4 Enforced Dew Extension of Times for
Performance . . . . . . . . . . . 68
10 . 5 Inspection of Books and Records . . . . . . . 68
10 . 6 Plans and Data . . . . . . . . . . . . . . . . 69
11 . SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . 69
11 . 1 Condemnation Actions . . . . . . . . . . . . . 69
11 . 2 Order of Immediate Possession . . . . . . . . 70
11 . 3 Preference for Retail and Commercial
Businesses Located in the Project Areas . . . 72
11 . 4 Submission of Documents for Approval . . . . . 72
11 . 5 Amendment of Redevelopment Plans . . . . . . . 73
11 . 6 Amendments to this Agreement . . . . . . . . . 73
12 . ENTIRE AGREEMENT WAIVERS AND AMENDMENTS . . . . . . 74
12 . 1 Counterparts . . . . . . . . . . . . . . . . . 74
12 . 2 Entire Agreement . . . . . . . . . . . . . 74
12 . 3 Waivers and Modifications . . . . . . . . . . 74
ATTACHMENTS
1 Map of the Site
2 Legal Description of the Site
3 Legal Description of Site Component
Parcels
4 Schedule of Performance
5 Forms of Grant Deeds
6 Approved Title Exceptions
7 Scope of Development
8 Form of Note and Deed of Trust
9 List of Prior Approved Plans and
Materials
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PARTICIPATION AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of
the _ day of , 198_, by and between the '
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
("Agency") and SUN CAL, INC . , a California corporation dba SUN
CAL PROPERTIES ("Participant") and STANWILL PROPERTIES , INC . , a
California corporation ("Developer") , with reference to the
following facts :
A. The City Council ("City Council") of the City of
Palm Springs ("City") approved and adopted the Central Business
District Redevelopment Plan on July 11 , 1973 , by Ordinance
No. 952 , and the North Palm Canyon Redevelopment Plan on
October 19 , 1984, by Ordinance No . 1227 (collectively, the
"Redevelopment Plans") . The Redevelopment Plans , as they now
exist and as they may be subsequently amended subject to the
terms of this Agreement , are incorporated herein by reference
and made a part hereof as though fully set forth herein.
B . The Redevelopment Plans , shared purpose is to
effectuate economic revitalization of the real property located
within the boundaries of the areas covered by the Redevelopment
Plans (the "Redevelopment Project Areas") by encouraging and
assisting commercial redevelopment of the Redevelopment Project
Areas .
C . Participant owns certain real property located
within the Redevelopment Project Areas ("Owner ' s Parcel #1 , " as
hereinafter defined) . STANWILL PROPERTIES , INC . ("Developer")
has developed a plan concept for development of the "Palm Court
Project , " a mediterranean style , multi-tenant , multi-use
commercial/ retail/office/hotel complex, on certain property
(the "Site") located within the Redevelopment Project Areas ,
which Site includes "Owner ' s Parcel #1" and certain other
parcels to be acquired for development by Agency and
Participant pursuant to the terms of this Agreement , and which
are more particularly described below. The Site , together with
the improvements to be known as the Palm Court Project , are
herein collectively referred to as the "Project . " Developer or
its assignee (as permitted by the terms of this Agreement) will
be the developer of the Project .
D. City and Agency have reviewed the plan concept
presented by Participant and Developer and have determined that
development of the Project is in the vital and best interests
of the City, will promote the public health, safety and morals ,
and will serve the purposes and provisions of applicable
federal , state and local laws and requirements . Implementation
of this Agreement will further the goals and objectives of the
Redevelopment Plans to strengthen commercial functions in the
City' s downtown areas , and will provide greater public access
to commercial facilities .
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NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged ,
and in consideration of the mutual provisions , covenants ,
conditions and agreements contained herein, the parties hereto
agree as follows :
1 . SUBJECT OF AGREEMENT
1 . 1 The Redevelopment Project Areas . The exact boundaries
of the Redevelopment Project Areas are specifically described
in the Redevelopment Plans .
1 . 2 The Site . The Site is that portion of the
Redevelopment Project Areas shown on the "Map of the Site , "
attached hereto as Attachment No . 1 and incorporated herein by
reference , and is more particularly described in the "Legal
Description of the Site , " attached hereto as "Attachment No. 2"
and incorporated herein by reference . The Site is comprised of
Owners Parcel #1 , which is owned by Participant and which is
more particularly described in the "Legal Description of Site
Component Parcels" attached hereto as "Attachment No. 3" and
incorporated herein by reference , real property located at the
southwest corner of the Site which is presently owned by Agency
and is to be transferred to Participant (hereinafter "Sales
Parcel #1 , " which is more particularly described in the Legal
Description of Site Component Parcels) , real property located
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at the southeast corner of the Site which is presently owned by
and/or known as the Palm Springs Hotel and which is to be
acquired by Participant or , under certain circumstances , by
Agency for disposition to Participant (hereinafter "Sales
Parcel #2 , " more particularly described in the Legal
Description of Site Component Parcels ) , real property located
at the northeast corner of the Site which is presently owned by
and/or known as the Stoddard Nursery School and which is to be
acquired by Participant or , under certain circumstances , by
Agency for disposition to Participant (hereinafter "Sales
Parcel #3 , " more particularly described in the Legal
Description of Site Component Parcels) , real property located
directly north of Owner ' s Parcel #1 between Palm Canyon Drive
and Belardo Drive which is presently owned by and/or known as
the Fairmont Hotel site and which is to be acquired by
Participant or , under certain circumstances , Agency for
disposition to Participant (hereinafter "Sales Parcel #4, "more
particularly described in the legal Description of Site
Component Parcels) and certain public rights-of-way to Chino
Drive , which are to be vacated by City and transferred to
Participant (hereinafter "Right-of-Way Parcel #1 , " more
particularly described in the Legal Description of Site
Component Parcels) . Sales Parcel #1 , Sales Parcel #2 , Sales
Parcel #3 , Sales Parcel #4 and Right-of-Way Parcel #1 are
herein collectively referred to as the "Sales Parcels" .
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1 . 3 Parties to this Agreement .
1 . 3 . 1 Agency. As used in this Agreement , "Agency"
includes the Community Redevelopment Agency of the City 6f Palm"
Springs and any assignee of or successor to its rights , powers
and responsibilities . 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 sections 33000;
et seq . , the "Community Redevelopment Law") . Agency' s office
and address for notices and service of process is : City Hall ,
3200 Tahquitz-McCallum Way, Palm Springs , California 92262 .
1 . 3 . 2 . Participant and Developer . Participant is
SUN CAL, INC . , a California corporation, dba SUN CAL
Properties . As the owner of Owner ' s Parcel #1 which is located
within the Redevelopment Project Areas , Participant qualifies
as an "owner participant , " as that term is used in the
Redevelopment Plans and the Community Redevelopment Law.
Developer is Stanwill Properties , Inc . , a California
corporation. Participant ' s and Developer ' s principal office
and address for notices and service of process is : Stanwill
Properties , Inc . , Centroplex, 5757 West Century Blvd . , Suite
520 , Los Angeles , California 90045 .
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The qualifications and identity of Participant and
Developer are of particular concern to City and Agency, and it
is in reliance upon such qualifications and identity that
Agency has entered into this Agreement with Participant and
Developer . No voluntary or involuntary successor in interest
of Participant or Developer shall acquire any rights or powers
under this Agreement except as expressly set forth herein.
Except as otherwise expressly set forth herein, Participant and
Developer shall not assign all or any part of this Agreement
without the prior written approval of Agency. Agency shall not
unreasonably withhold its approval of any assignment by
Participant and Developer so long as the proposed assignee
executes an assumption agreement in form and content
satisfactory to Agency assuming Participant ' s obligations
hereunder consistent with its interest . Provided , however ,
that Developer shall have the absolute right to assume the
obligations and benefits of Participant hereunder without
obtaining Agency' s approval ; and provided , further that
Developer shall have the absolute right to assign this
Agreement to a parent , subsidiary or affiliate or other entity
with at least Fifty One Percent (51"/) identity of ownership
with Developer without obtaining Agency' s prior written
consent . Participant and/or Developer shall promptly notify
Agency of any changes in the identity of the controlling
shareholder(s) of Participant and/or Developer . Wherever the
term "Participant" is used in this Agreement , such term shall
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include Developer and/or any permitted nominee , assignee or
successor in interest as provided in this Subsection 1 . 3 . 2 .
Notwithstanding any other provisions of this
Agreement , Participant reserves the right , at its discretion,
to join and associate with other individuals or entities in
joint ventures , partnerships or otherwise for the purpose of
acquiring the Site and developing the Project and portions
thereof , provided , however , that any such associate , joint
venturer or partner shall execute an assumption agreement in
form and content satisfactory to Agency assuming Participant ' s
obligations under this Agreement consistent with its interest ,
and provided that Participant shall remain responsible to
Agency as provided in this Agreement with respect to all
obligations pertaining to acquisition of the Site and
development of the Project .
2 . ACQUISITION AND ANNEXATION OF PROJECT SITE
BY PARTICIPANT
2 . 1 Acquisition of Sales Parcels #2 and #3 .
2 . 1 . 1 Negotiated Purchase of Sales Parcel #2 .
Participant shall use reasonable good faith efforts to
negotiate a purchase of Sales Parcel #2 from the current owner
at a price not to exceed One Million Five Hundred Thousand
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Dollars ($1 ,500 , 000) and upon terms and conditions acceptable
to Participant and Agency.
2 . 1 . 2 Negotiated Purchase of Sales Parcel #3 .
Participant shall use reasonable good faith efforts to
negotiate a purchase of Sales Parcel #3 for a purchase price
not to exceed the fair market value of Sales Parcel #3 , as
determined by Participant ' s appraisal , and upon terms and
conditions acceptable to Participant and Agency.
2 . 1 . 3 Negotiated Purchase of Sales Parcel #4.
Participant shall use reasonable good faith efforts to
negotiate a purchase of Sales Parcel #4 for a purchase price
not to exceed the fair market value of Sales Parcel #4, as
determined by Participant ' s appraisal , and upon terms and
conditions acceptable to Participant and Agency.
2 . 1 . 4 Agency Acquisition. In the event that
Participant is unable to negotiate a purchase of Sales Parcel
#2 upon terms and conditions acceptable to Participant and
Agency within sixty (60) days after the date of execution of
this Agreement (the "Execution Date") , and/or in the event
Participant is unable to acquire Sales Parcel #3 upon terms and
conditions acceptable to Agency and Participant within sixty
(60) days after the Execution Date , and/or in the event
Participant is unable to acquire Sales Parcel #4 upon terms and
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conditions acceptable to Agency and Participant within sixty
(60) days after the Execution Date , then upon written notice of
Participant ' s election to cause Agency to acquire Sales Parcel
#2 and/or Sales Parcel #3 and/or Sales Parcel #4, which
election shall be made not later than ninety (90) days
following the Execution Date , Agency shall , in accordance with
and subject to all the terms , covenants and conditions of this
Agreement and the requirements of California law with respect
to the acquisition of real property, acquire through negotiated
purchase or , if necessary, through the exercise of Agency' s
eminent domain powers , "Insurable Title" (as defined below) to
Sales Parcel #2 and/or Sales Parcel #3 and/or Sales Parcel #4,
as appropriate . For purposes of this Agreement , the
acquisition of "Insurable Title" to a parcel of land shall mean
the acquisition of a fee simple interest in such parcel , or an
insurable possessory interest in such parcel , followed by
acquisition of fee simple title within twenty-four (24) months
thereof . Agency represents and warrants to Participant that
acquisition of Insurable Title shall be sufficient to permit
Participant to commence construction of the Project , and Agency
shall indemnify Participant for any losses incurred by
Participant as a result of Agency' s failure to deliver fee
simple title to Sales Parcel #2 and/or Sales Parcel #3 and/or
Sales Parcel #4 to Developer within twenty-four (24) months of
its delivery of Insurable Title . Agency shall commence the
required acquisition activities and/or proceedings within
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sixty (60) days following written notice from Participant as
provided above, provided a negotiated sale was unsuccessful .
Notwithstanding anything to the contrary contained or implied
herein, the parties hereby acknowledge and agree that Agency' s
obligation to acquire Sales Parcel #2 and/or Sales Parcel #3
and/or Sales Parcel #4 through the exercise of eminent domain,
as set forth herein, shall be subject to all statutory and case
law requirements with respect to the adoption of a resolution
of necessity by Agency for the acquisition of such Parcels , and
this Agreement shall not be construed as nor constitute a
contractual limitation on Agency' s unfettered discretion in
determining whether or not to adopt such resolution of
necessity. In the event Participant fails to provide written
notice of its election to cause Agency to adopt such resolution
of necessity as provided above , or Agency declines to adopt
such resolution of necessity, this Agreement shall be deemed
null and void , and the parties hereto shall bear their own
costs and expenses and losses without recourse against each
other .
2 . 1 . 5 . Sale . In accordance with and subject to all
the terms , covenants and conditions of this Agreement , Agency
will , on or before six (6) months from the date it commences
acquisition, obtain and offer to sell and convey Insurable
Title to Sales Parcel #2 and/or Sales Parcel #3 and/or Sales
Parcel #4 to Participant . Participant will purchase and accept
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Sales Parcel #2 and/or Sales Parcel #3 and/or Sales Parcel #4
from Agency in accordance with and on the terms and conditions
set forth in this Agreement within twenty-four (24) months from
the date that Agency notifies Participant that Agency hag
obtained Insurable Title to Sales Parcel #2 and/or Sales Parcel
#3 and/or Sales Parcel #4 . With respect to any Sales Parcel ,
Participant shall enter such Sales Parcel within ninety (90)
days after acquisition of title thereto by either Agency or
Participant and commence demolition and clearance procedures . -
For purposes of this Agreement , purchase costs to be paid by
Participant shall include any amounts paid by Agency to the
owners of Sales Parcel #2 and/or Sales Parcel #3 and/or Sales
Parcel #4 or deposited with the court for the acquisition of
the land and the improvements thereon, and such other costs and
expenses incurred by Agency in connection with or related to
the acquisition of such property, including escrow fees , binder
fees , transfer taxes , and the like ; provided , however , such
costs shall not include Agency' s administrative or overhead
expenses and costs , but shall include reasonable attorneys '
fees or court costs incurred by Agency in connection with the
acquisition of Sales Parcel #2 and/or Sales Parcel #3 and/or
Sales Parcel #4 , and any compensation for fixtures and
equipment , improvements pertaining to realty, and "loss of
business goodwill" damages that Agency may pay in connection
with the acquisition of such property.
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2 . 1 . 6 . Advance of Funds . Participant agrees that
it will deposit into the "Escrow" (defined and established
pursuant to Section 2 . 4, below) to be opened by Agency for the
acquisition of Sales Parcel #2 , Sales Parcel #3 and Sales
Parcel #4, or deposit into the Superior Court, as applicable ,
any amounts required to be paid by Agency to acquire Insurable
Title to Sales Parcel #2 , Sales Parcel #3 and Sales Parcel #4
as provided in this Agreement . Any such payment or deposit
shall be made following the written request of Agency and at or
prior to the time such payment or deposit is required to be
made . _Such amounts will be credited against purchase costs
required to be paid by Participant pursuant to paragraph 2 . 1 . 4
above .
2 . 2 Transfer of Sales Parcel #1 . Within five (5) business
days after acquisition of fee simple title or Insurable Title
to Sales. Parcel #2 and/or Sales Parcel #3 and/or Sales Parcel
#4 by Participant or Agency, Agency shall convey to Participant
good and marketable title to Sales Parcel #1 free and clear of
any liens , encumbrances , or other claims of right to Sales
Parcel #1 .
2 . 3 Conveyance of Title to Right-of-Way Parcel #1 .
Immediately following execution of this Agreement, Agency shall
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request that City vacate Right-of-Way Parcel #1 and convey
title to Right-of-Way Parcel #1 to Agency. City shall
diligently pursue all steps necessary to convey title to
Right-of-Way Parcel #1 to Agency, and shall convey title to
Right-of-Way Parcel #1 to Agency as soon as possible after
receipt of Agency' s request . Simultaneously with Agency' s
conveyance of title to Sales Parcel #1 to Participant , Agency
shall convey good and marketable title to Right-of-Way Parcel
#1 to Participant , free and clear of any liens , encumbrances or
other claims of right against Right-of-Way Parcel #1 whatsoever .
2 . 4 Escrow. Agency will open an escrow (the "Escrow") for
the conveyance of the Sales Parcels with The Escrow Connection,
111 East Tahquitz Way, Palm Springs , California, 92262 ("Escrow
Agent") , or such other escrow company mutually agreed upon by
Agency and Participant , in Palm Springs , California, within the
time established in the "Schedule of Performance" attached
hereto as "Attachment 4. " This Agreement constitutes the joint
escrow instructions of Agency and Participant with respect to
the Escrow, and Agency shall deliver a duplicate original of
this Agreement to Escrow Agent upon the opening of the Escrow.
Agency and Participant shall provide such additional escrow
instructions as shall be necessary and consistent with this
Agreement . Escrow Agent is hereby empowered to act under this
Agreement , and upon indicating its acceptance of the provisions
of this Section 2 . 4 in writing and delivering the same to
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Agency and to Participant within three (3) days after the
opening of Escrow, shall carry out its duties as Escrow Agent
hereunder .
Prior to the scheduled date for the close of the
Escrow, Agency and Participant shall each respectively pay into
the Escrow such fees , charges and costs necessary to close the
Escrow as are customarily paid by the Seller and Buyer
respectively in commercial purchase and sale agreements for
real property situated in southern California .
Agency shall timely and properly execute , acknowledge
and deliver to Escrow Agent grant deeds conveying to
Participant title to the Sales Parcels in accordance with the
requirements of Section 2 . 6 hereof . Escrow Agent shall record
the deeds to the Sales Parcels as soon as title to the Sales
Parcels can be vested in Participant in accordance with the
terms of this Agreement . Escrow Agent shall buy, affix and
cancel any transfer stamps required by law, and pay any
transfer tax required by law.
Escrow Agent is authorized to :
1 . Pay and charge Agency and Participant ,
respectively, for any fees , charges and costs payable under
this Section 2 . 4. Before such payments are made , Escrow Agent
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shall notify Agency and Participant of the fees , charges and
costs necessary to clear title and close the Escrow;
2 . Disburse funds and deliver the deeds and
other documents to the parties entitled thereto when the
conditions of the Escrow have been fulfilled by Agency and
Participant ; and
3 . Record any instruments delivered through the
Escrow, if necessary or proper , to vest title in Participant in
accordance with the terms and provisions of this Agreement .
If the Escrow is not in condition to close before the
time for conveyance established in Section 2 . 5 of this
Agreement , either party who then shall have fully performed the
acts to be performed before the conveyance of title may, in
writing ,, terminate this Agreement in the manner set forth in
Subsections 9 . 4. 1 and 9 . 4. 2 of Article 9 of this Agreement , as
the case may be , and demand the return of its money, papers or
documents . Upon such termination, all obligations and
liabilities of the parties under this Agreement shall cease and
terminate in the manner set forth in Subsections 9 . 4. 1 and
9 . 4. 2 of Article 9 of this Agreement , as the case may be . If
neither Agency nor Participant shall have fully performed the
acts to be performed before the time for conveyance established
in Section 2 . 5 of this Agreement , no termination or demand for
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return shall be recognized until ten (10) days after Escrow
Agent shall have mailed copies of such demand to the other
party or parties at the address of its or their principal place
or places of business . If any objections are raised within the "
10-day period , Escrow Agent is authorized to hold all money,
papers and documents with respect to the Sales Parcels until
instructed in writing by both Agency and Participant or upon
failure thereof by a court of competent jurisdiction. If no
such demands are made , the Escrow shall be closed as soon as is
reasonably possible .
All communications from Escrow Agent to Agency or
Participant shall be directed to the addresses and in the
manner established in Section 10 . 1 of Article 10 of this
Agreement for notices , demands and communications between
Agency and Participant .
Escrow Agent ' s liability under this Agreement is
limited to performance of the obligations imposed upon it under
Sections 2 . 4 . 1 through 2 . 10 of this Agreement .
2 . 5 Conveyance of Title and Delivery of Possession.
Subject to any mutually agreed upon extensions of time and
subject to the provisions of Section 11 . 2 of Article 11 of this
Agreement , conveyance to Participant of title to the Sales
Parcels (in accordance with the provisions of Section 2 . 7 of
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this Agreement) shall be completed on or prior to the date
specified in the Schedule of Performance . Agency and
Participant agree to perform all acts necessary for conveyance
of title in sufficient time for title to be conveyed in '
accordance with the foregoing provisions .
Possession of the Sales Parcels shall be delivered to
Participant concurrently with the conveyance of title , except
that (1) limited access may be permitted before conveyance of
title as permitted in Sections 2 . 15 and 2 . 16 of this Article 2 ,
and (2) possession may be transferred to Participant prior to
the conveyance of title as provided in Section 10 . 2 of Article
10 of this Agreement . Participant shall accept title and
possession on or before the date established therefor in this
Section 2 . 5 .
2 . 6 Form of Deed . Agency shall convey to Participant title
to the Sales Parcels in the condition provided in Section 2 . 7
of this Agreement by Grant Deeds substantially in the forms
attached hereto as "Attachment No . 5" and incorporated herein
by reference (the "Grant Deeds") .
2 . 7 Condition of Title . Except as otherwise provided
herein, agency shall convey to Participant fee simple
merchantable title to the Sales Parcels free and clear of all
recorded liens , encumbrances , covenants , -assessments ,
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easements , leases and taxes , except as are set forth in the
"Approved Title Exceptions , " attached hereto as "Attachment No .
6" and incorporated herein by reference .
2 . 8 Time for and Place of Delivery of Grant Deeds .
Subject to any mutually agreed upon extension of time , Agency
shall deposit the Grant Deeds for the Sales Parcels with Escrow
Agent on or before the date established for the conveyance of
the Sales Parcels in the Schedule of Performance .
2 . 9 Close of Escrow and Recordation of Grant Deeds .
Escrow Agent shall notify Participant in writing that the Grant
Deeds , properly executed and acknowledged by Agency, have been
delivered to Escrow Agent and that title is in the condition to
be conveyed in conformity with the provisions of Section 2 . 7 of
this Agreement . Upon the close of the Escrow, Escrow Agent
shall file the Grant Deeds for recordation among the land
records in the Office of the County Recorder for Riverside
County and shall deliver to Participant a title insurance
policy insuring title in conformity with Section 2 . 10 of this
Agreement .
2 . 10 Title Insurance . Concurrently with recordation of the
Grant Deeds , Chicago Title Insurance Company, or some other
title insurance company reasonably satisfactory to Agency and
Participant (the "Title Company") , shall provide and deliver to
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Participant a title insurance policy or policies issued by
Title Company insuring that title to the Sales Parcels is
vested in Participant in the condition required in Section 2 . 7
of this Agreement . Title Company shall provide Agency with a
copy or copies of the title insurance policy or policies , and
the title insurance policy or policies shall be in an amount
equal to the greater of actual purchase prices of the Sales
Parcels , or Agency' s highest acquisition appraisals of the fair
value of the land constituting the Sales Parcels
(rights-of-ways constituting the Sales Parcels shall bear the
average square foot land value of such appraisals ) .
Concurrently with the recording of the Grant Deeds
conveying title to the Sales Parcel , Title Company shall , if
requested by Participant , provide Participant with an
endorsement to insure the amount of Participant ' s estimated
development costs of the improvements to be constructed upon
the Sales Parcels .
Participant shall pay for all premiums for title
insurance coverage or special endorsements .
2 . 11 Taxes and Assessments . Ad valorem taxes and
assessments , if any, on the Sales Parcels , and taxes upon this
Agreement or any rights hereunder , levied , assessed or imposed
for any period commencing prior to conveyance of title, or the
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earlier transfer of possession pursuant to Section 11 . 2 of
Article 11 of this Agreement , shall be borne by Agency. All ad
valorem taxes and assessments levied or imposed for any period
commencing after the close of the Escrow, or the earlier
transfer of possession pursuant to Section 11 . 2 of Article 11
of this Agreement , shall be paid by Participant .
2 . 12 Conveyance Free of Possession. Except as may be
otherwise provided in the "Scope of Development , " attached
hereto as "Attachment No . 7" and incorporated herein by
reference , the Sales Parcels shall be conveyed free of any
possession or right of possession by any person except that of
Participant and the easements of record as shown on the
Approved Title Exceptions .
2 . 13 Consistency with General Plan, Zoning Ordinances and
Redevelopment Plans . Agency represents and warrants that the
City General Plan, Zoning Ordinances and Redevelopment Plans
permit the development , construction, use , operation and
maintenance of the Project on the Site in accordance with the
provisions of this Agreement . Agency and City shall refrain
from taking any actions to effect a change in the General Plan,
Zoning Ordinances or Redevelopment Plans which would prevent
development of the Project on the Site .
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2 . 14 Compliance with California Environmental Quality Act .
Agency and City represent and warrant that they shall take all
actions necessary to ensure that development of the Project
complies with the requirements of the California Environmental
Quality Act (Public Resources Code Sections 21000 et . seq. )
2 . 15 Condition of the Sales Parcels . Except as may be
otherwise specifically provided in the Scope of Development ,
the Sales Parcels shall be conveyed from Agency to Participant '
in an "as is" condition, with no warranty, express or implied ,
by Agency as to the condition of the soil contained in Sales
Parcel #2 and/or Sales Parcel #3 , their geology, or the
presence of known or unknown faults ; subject , however , to
Agency' s obligation to assign to Participant any
representations or warranties obtained through negotiated
purchase or otherwise . It shall be the responsibility of
Participant , at its expense, to investigate and determine the
soil conditions of the Site for the development of the
Project . If Agency acquires title to Sales Parcel #2 and/or
Sales Parcel #3 through negotiated purchase as provided in
Section 2 . 1 hereof , Agency shall obtain appropriate
representations and warranties that Sales Parcel #2 and/or
Sales Parcel #3 are free of environmental contamination,
hazardous substances and hazardous waste , and Agency shall
obtain from the present owners of Sales Parcel #2 and/or Sales
Parcel #3 indemnities for subsequently discovered
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contamination. Such representations and warranties and
indemnities shall be for the benefit of Agency, and of
Participant as a third party beneficiary and/or successor in
interest , and shall be in form and content acceptable to
Participant , or Participant shall have the right to reject
Agency ' s conveyance of Sales Parcel #2 and/or Sales Parcel #3
and to terminate this Agreement . In addition, concurrent with
its transfer to Participant of Sales Parcel #1 and Right-of-Way
Parcel #1 , Agency shall execute representations and warranties -
regarding the environmental condition of such parcels , in form
and content satisfactory to Participant , and Agency shall agree
to indemnify and hold harmless Participant from and against
subsequently discovered environmental contamination, hazardous
substances and hazardous waste existing on or at Sales
Parcel #1 and/or Right-of-Way Parcel #1 . If Agency does not
agree to execute representations and warranties and an
indemnity satisfactory to Participant , Participant may
terminate this transaction.
If the Sales Parcels ' soil conditions are not in all
respects entirely suitable for the Project , then it shall be
the responsibility and obligation of Participant to take such
action as may be necessary to place the Sales Parcels ' soils in
a condition entirely suitable for its development , subject to
any representations , warranties , or indemnifications which
benefit Participant . To the extent it is legally able to do
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so, Agency will grant Participant entry to the Sales Parcels or
portions thereof for the purpose of conducting soils tests
thereon, provided that Participant shall hold Agency harmless
from such entry in the same manner as provided in Section 2 . 16
hereof . Agency shall not be responsible for any items of site
work except those which are listed in the Scope of Development
as Agency' s responsibilities .
2 . 16 Preliminary Work by Participant . After Agency' s
acquisition of the Sales Parcels and prior to the conveyance of
title , or the earlier transfer of possession to Participant
pursuant to Section 11 . 2 of Article 11 of this Agreement ,
representatives of Participant shall have the right of access
to the Sales Parcels at all reasonable times for the purpose of
obtaining data and making surveys and tests necessary to carry
out this Agreement . Participant shall hold Agency harmless for
any injury or damages arising out of any activity pursuant to
this Section 2 . 16 . Participant shall have access to all data
and information on the Sales Parcels available to Agency, but
without warranty or representation by Agency as to the
completeness , correctness or validity of such data and
information.
Any preliminary work undertaken on the Sales Parcels
by Participant prior to conveyance of title thereto, or the
earlier transfer of possession pursuant to Section 11 . 2 of
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Article 11 of this Agreement , shall be done only after written
consent of Agency and at the sole expense of Participant .
Participant shall save and protect Agency against any claims
resulting from such preliminary work access or use of the Sales -
Parcels . Copies of data, surveys and tests made or obtained by
Participant on the Sales Parcels shall be filed with Agency.
Any preliminary work by Participant shall be undertaken only
after securing any necessary permits from the appropriate
governmental agencies .
3 . CONSIDERATION FOR AGENCY' S OBLIGATIONS .
3 . 1 Note and Deed of Trust . Upon Agency' s grant of title
to Sales Parcel #1 to Participant pursuant to Section 2 . 2 of
Article 2 hereof , Participant shall execute and deliver to
Agency a revolving principal sum promissory note (the "Note")
in the initial principal sum of Seven Hundred Fifty Thousand
Dollars ($750 , 000) plus the "Price Differential" (as defined in
Section 3 . 2 below) , if any, as provided in Section 3 . 2 of this
Article 3 . The principal amount of the Note shall be increased
quarterly by an amount equal to the "Sales Tax Share" (defined
below) paid by City and/or Agency to Participant for the
immediately preceding quarter , as provided for in Section 4. 2
of Article 4 hereof . The Note shall provide for interest at
the rate of Seven Percent (7%) per annum, compounded annually,
principal and interest due and payable upon the earlier to
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occur of the sale or one hundred percent (100%) refinancing of
the Project , or Twelve (12) years from the date of Agency' s
grant of title to Sales Parcel #1 to Participant . The Note
shall be secured by a trust deed recorded against Sales Parcel
#1 , in the full amount of the principal and accrued interest on
the Note as the same shall be adjusted from time to time, and
naming Agency as beneficiary. The Trust Deed shall be
subordinate only to the purchase money (including any purchase
money mortgage in favor of the Seller ' s of the Sales Parcels) , -
construction loan, and permanent loan/take-out financing for
the Project . Upon Participant ' s payment of the Note , Agency
shall cancel the same and reconvey the Trust Deed to
Participant . The Note and Trust Deed shall be substantially in
the form attached hereto as "Attachment No. 8 . "
3 . 2 Additional Consideration. In the event that Agency
purchases Sales Parcel #2 through a proceeding in eminent
domain and the purchase price exceeds One Million Five Hundred
Thousand Dollars ($1 , 500 , 000) , Agency may elect to pay the
excess of the purchase price for Sales Parcel #2 over One
Million Five Hundred Thousand ($1,500, 000) (the "Price
Differential") , or Agency may elect to cause Participant to pay
the Price Differential , but in no event shall Participant be
required to pay a Price Differential of more than Two Hundred
Fifty Thousand Dollars ($250 , 000) . Agency shall be required to
pay the amount of any Price Differential which exceeds Two
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Hundred Fifty Thousand Dollars ($250 , 000) . If Agency elects to
cause Participant to pay the Price Differential , then the
principal amount of the Note provided for in Section 3 . 1 hereof
shall be reduced by the amount of the Price Differential .
3 . 3 Relocation Costs . In the event any of the Sales
Parcels are acquired through proceedings in Eminent Domain,
Participant shall pay to Agency one-half (1/2) of any tenant
relocation costs Agency is required to pay under California
law, provided that in no event shall Participant be required to
pay more than One Hundred Thousand Dollars ($100 , 000) for
tenant relocation costs .
4 . TAX INCREMENT AND RETAIL SALES TAX REVENUES
As and for additional consideration in return for
Participant ' s performance of its obligations hereunder , Agency
will pay to Participant the following share of tax increment
and retail sales tax revenues resulting from the Project :
4. 1 Tax-Increment Revenues . For a period of twelve (12)
years from the "Completion Date" (as hereinafter defined) ,
Participant shall receive ninety percent (90%) of all of the
tax-increment revenues attributable to the Project (the
"Tax-Increment Revenues") . Tax-Increment Revenues are the
increase in the real property taxes received by Agency that are
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directly attributable to the increased assessed value in the
Site due to the Project ' s development . The Tax-Increment
Revenues shall be paid to Participant semi-annually, in
arrears , within thirty (30) days following allocation of
Tax-Increment Revenues to Agency.
4. 2 Retail Sales Taxes . For a twelve (12) year period
beginning on the Completion Date , Participant shall receive a
portion of the retail sales taxes equal to fifty percent (50%)
of all revenues and proceeds generated by the Project subject
to the retail sales tax levied and/or collected by City and/or
Agency from time to time (the "Sales Tax Share") . The Sales
Tax Share shall be paid to Participant quarterly, in arrears ,
within thirty (30) days following the collection of retail
sales taxes by City and/or Agency. The Sales Tax Share shall
be repaid by Participant to Agency as provided in Section 3 . 1
of Article 3 of this Agreement .
4. 3 Lifetime Can . Notwithstanding the foregoing, the
total sum of Tax-Increment Revenues and Retail Sales Tax
Revenues that Agency shall be required to pay shall be limited
to a "Lifetime Cap" of Two Million Seven Hundred Twenty-Five
Thousand Dollars ($2 , 725 , 000 . 00) or eighteen percent (18%) of
"Total Project Development Costs", whichever is greater .
"Total Project Development Costs" shall include, but not be
limited to Participant ' s costs for acquisition of land , debt
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financing ( including loan brokerage fees , points , commissions
and other financing fees) , carry charges , attorneys ' fees ,
brokers and agents commissions and fees , clearing the Project
site and relocating tenants , compensation to tenants for '
loss-of-business goodwill , construction of improvements
(including architect ' s fees , cost of materials and labor ,
governmental approvals and permits , administrative and legal
fees) , advertising and marketing expenses , security, utilities ,
and any other costs incurred by Participant in connection with
financing , developing , constructing and leasing the Project .
5 . SUBMISSION OF EVIDENCE OF FINANCING
Within the time established therefor in the Schedule
of Performance , Participant shall demonstrate to Agency that
Participant has the ability to finance and pay for development
of the Project , to the extent payment therefor is not
undertaken by others . The documents evidencing Project
financing obtained by Participant from third party lenders who
are given a mortgage , deed of trust or other security interest
in the Project pursuant to Subparagraph 6 . 1 . 13(a) hereof
("Secured Party" or "Secured Parties") shall set forth such
Secured Party' s acknowledgement and agreement with the
limitation of such Secured Party' s rights pursuant to Section
6 . 1 . 13 of Article 6 hereof . Prior to Agency' s adoption of a
Resolution of Necessity, if eminent domain proceedings are
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required for acquisition of any of the Sales Parcels ,
Participant shall deliver to Agency satisfactory evidence that
Participant ' s financing obtained from Secured Parties is not in
an amount which exceeds the expected value of the Project.
However , nothing herein shall be deemed to require
Participant ' s to commence construction prior to three (3) years
after the Transfer Date .
6 . DEVELOPMENT OF THE SITE
6 . 1 Scope of Development . The Site shall be developed by
Participant as provided in the Scope of Development .
6 . 1 . 1 Basic Concept Drawings . Within the time
provided in the Schedule of Performance , Participant shall
prepare , and submit to City and Agency for review, and for
written approval by Agency, basic concept drawings and related
documents describing Participant ' s overall plan for development
of the Project (collectively, the "Basic Concept Drawings") .
The Basic Concept Drawings shall provide for development
conforming to the terms of this Agreement , including the Scope
of Development and any presentation materials or site plans
which have been approved by the Agency as of the Execution
Date , as listed in the "List of Prior Approved Plans and
Materials" set forth in "Attachment 10" hereto. Agency shall
approve or disapprove the Basic Concept Drawings within the
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time established in the Schedule of Performance . Agency may
not require change of Participant ' s theme for the Project ,
which is a mediterranean style , multi-tenant , multi-use
commercial/retail/office hotel complex.
Agency ' s failure to approve or disapprove the Basic
Concept Drawings within the designated time period shall be
deemed an approval . Any disapproval shall state in writing the
reasons for such disapproval . Upon receipt of Agency' s
disapproval , Participant shall revise the disapproved Basic
Concept Drawings and resubmit them to Agency and City as soon
as possible , provided that in no case may Agency require
changes inconsistent with the Scope of Development and any
previously approved items .
6 . 1 . 2 Construction Plans , Drawings , and Related
Documents . Participant shall prepare and submit construction
plans , drawings and related documents to City for architectural
and site planning review and written approval in accordance
with the Schedule of Performance . The construction plans ,
drawings and related documents shall be submitted in two
stages : (1) preliminary drawings , and (2) final working
drawings . Participant may make separate submissions of plans ,
drawings and related documents for distinct phases or portions
of the Project . "Final Drawings and Plans" are those in
sufficient detail to obtain a building permit .
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Not less frequent than biweekly, City and Agency
staff. , and Participant shall hold regular progress meetings to
coordinate the preparation of , submission to, and review of
construction plans and related documents by City and Agency.
City shall approve or disapprove the plans , drawings
and related documents within the times established in the
Schedule of Performance . City' s failure to either approve or J
disapprove within the times established in the Schedule of
Performance shall be deemed an approval . Upon receipt of
City' s disapproval , Participant shall revise such plans ,
drawings and related documents and resubmit them to City as
soon as possible, provided that in no case shall City be
entitled to require changes inconsistent with the Scope of
Development and any previously approved items .
If Participant desires to make any substantial change
in the construction plans after their approval by City,
Participant shall submit the proposed change to City for its
approval . If the construction plans , as modified by the
proposed change , conform to the requirements of the Scope of
Development and the approvals previously granted by City
hereunder , City shall approve the proposed change and notify
Participant . Such change in the construction plans shall , in
any event , be deemed approved by Agency unless rejected by
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written notice thereof setting forth in detail the reasons
therefor .
If any revisions or corrections to the Final Drawings
and Plans approved by City shall be required by any government
official , agency, department or bureau having jurisdiction, or
any lending institution involved in financing the Project ,
Participant and City shall cooperate in efforts to obtain a
waiver of such requirements or to develop mutually acceptable
alternative plans .
6 . 1 . 3 Cost of Construction. The cost of
developing the Project and constructing all improvements
thereon shall be borne by Participant , except for work
expressly set forth in this Agreement to be performed or paid
for by Agency or others . Agency and Participant shall each pay
the costs necessary to administer and carry out their
respective responsibilities and obligations under this
Agreement .
6 . 1 . 4 Construction Schedule . Participant shall
begin and complete all construction and development of the
Project , or any distinct phase or portion thereof , within the
times specified in the Schedule of Performance , or within such
reasonable extension of said dates as may be granted by Agency
or as provided in Article 10 of this Agreement . The Schedule
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of Performance is subject to revision from time-to-time upon
mutual written agreement between Participant and Agency.
6 . 1 . 5 Bodily Injury, Property Damage and Worker ' s
Compensation Insurance . Prior to the commencement of
construction of the Project , Participant shall furnish or cause
to be furnished to Agency duplicate originals or otherwise
appropriate certificates of insurance evidencing public
liability insurance coverage for the Project , with minimum
limits of at least One Million Dollars ($1 , 000 , 000 . 00) bodily
injury or property damage , combined single limits per
occurrence , subject to a Two Million Dollars ($2 , 000 , 000 . 00)
general aggregate limit together with an excess liability
policy having a limit of not less than Five Million Dollars
($5 , 000, 000 . 00) . Agency and City shall be named as additional
insureds or coinsureds on the policy. Participant shall also
furnish or cause to be furnished to Agency evidence
satisfactory to Agency that any contractor with whom
Participant has contracted for the performance of work on the
Project carries worker ' s compensation insurance as required by
law. The obligations set forth in this Section shall remain in
effect only until a final Certificate of Completion has been
issued by Agency pursuant to Subsection 6 . 1 . 13(f) hereof .
6 . 1 . 6 City and Other Governmental Agency Permits .
Before commencement of construction or development of any
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buildings , structures or other work of improvement upon the
Site , Participant shall , at its own expense , secure or cause to
be secured any and all permits which may be required by City or
any other governmental agency affected by such construction,
development or work. Agency shall provide all necessary and
proper assistance to Participant in securing these permits .
6 . 1 . 7 Rights of Access . For the purpose of
assuring compliance with this Agreement , representatives of
Agency and City shall have the reasonable right of access to
the Site without charges or fees , at normal construction hours
during-the period of construction for the purposes of this
Agreement , including , but not limited to, the inspection of the
work being performed in constructing the improvements . Such
representatives of Agency or City shall be those who are so
identified in writing by the Executive Director of Agency.
Agency and City shall indemnify Participant and hold it
harmless from any damage caused or liability arising out of
this right of access .
6 . 1 . 8 Compliance With Laws . Participant shall
carry out construction of the Project in conformity with all
applicable laws .
6 . 1 . 9 Anti-discrimination During Construction.
Participant , for itself and its successors and assigns , agrees
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that in constructing the Project , Participant will not
discriminate against any employee or applicant for employment
because of race , color , creed , religion, sex, marital status ,
ancestry or national origin.
6 . 1 . 10 Agency' s Responsibilities . Agency will
perform all work specified as Agency' s obligations in the Scope
of Development within the times specified in the Schedule of
Performance .
6 . 1 . 11 Taxes Assessments Encumbrances and Liens .
Participant will pay when due all real estate taxes and
assessments assessed and levied on the Sales Parcels subsequent
to conveyance of title thereto , or the earlier transfer of
possession pursuant to Article 2 of this Agreement .
Prior to Agency' s issuance of the Certificate of
Completion, Participant will not place or allow to be placed on
the Project any mortgage , trust deed , encumbrance or lien not
authorized by this Agreement . Participant shall remove or have
removed any levy or attachment made on the Project , or assure
the satisfaction thereof , within a reasonable time , but in any
event prior to a sale thereof .
Nothing herein contained shall be deemed to prohibit
Participant from contesting the validity or amounts of any tax,
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assessment , encumbrance or lien, nor to limit the remedies
available to Participant in respect thereto .
6 . 1 . 12 Prohibition Against Transfer of the
Project . Prior to Agency' s issuance of a Certificate of
Completion as hereinafter provided , except as provided by this
Section, Article 1 and Subsection 6 . 1 . 13(a) of this Agreement ,
Participant shall not transfer , convey, assign or lease the
whole or any part of the Project without Agency' s prior written
approval . This prohibition shall not apply to the Project
subsequent to Agency' s issuance of a Certificate of Completion
with respect to the completed Project improvements , nor to a
sale of the Project (or any portion thereof) at foreclosure (or
to a conveyance thereof in lieu of a foreclosure) pursuant to a
foreclosure thereof by a Secured Party. This prohibition shall
not be deemed to prevent the granting of easements or permits
to facilitate the development of the Project nor to prohibit or
restrict the prior leasing of any part or parts of a building
or structure pending completion of the Project .
6 . 1 . 13 Security Financing: Right of Holders .
6 . 1 . 13(a) No Encumbrances Except Mortgages . Deeds
of Trust . Sales and Leases-Back or Other Financing for
Development . Notwithstanding Sections 6 . 1 . 11 and 6 . 1 . 12 ,
above , mortgages , deeds of trust , sales and leases-back or any
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other form of conveyance required for any reasonable method of
financing are permitted before issuance of a Certificate of
Completion, but only for the purposes of securing loans of
funds to be used for financing construction of the Project and
any other expenditures necessary and appropriate to development
of the Project in accordance with this Agreement . Participant
shall notify Agency in advance of any mortgage , deed of trust ,
sale and lease-back or other conveyance for financing if
Participant proposes to enter into the same before issuance of
a Certificate of Completion.
Participant shall not enter into any such
conveyance for financing without Agency' s prior written
approval , which approval Agency agrees to give if any such
conveyance for financing is given to a responsible financial or
lending institution or other acceptable person or entity who
will finance development of the Project or a portion thereof in
a manner consistent with the terms of this Agreement , and ,
which will not restrict or impair Participant ' s ability to
carry out its obligations hereunder . Such lender shall be
deemed approved unless rejected in writing by Agency within ten
(10) days after notice thereof is given to Agency. In any
event , Participant shall promptly notify Agency of any
mortgage , deed of trust , sale and lease-back or other financing
conveyance , encumbrance or lien that has been created or
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attached thereto prior to issuance of a Certificate of
Completion of the Project or any portion thereof .
6 . 1 . 13(b) Notice of Default to Secured Parties •
Right to Cure . Whenever Agency shall deliver any notice or
demand to Participant with respect to any breach or default by
Participant in completion of construction of the Project ,
Agency shall at the same time deliver a copy of such notice or
demand to each Secured Party of record and the lessor under any
lease-back or the grantee under any other conveyance for
financing previously authorized by Agency. Each such Secured
Party shall (insofar as the rights of Agency are concerned)
have the right , at its option, within ninety (90) days after
the receipt of the notice , to cure or remedy or commence to
cure or remedy any such default and to add the cost thereof to
the security interest debt and the lien of its security
interest or the obligation of the lessee under any lease-back,
or of the grantor under any other conveyance for financing . In
the event there is more than one such Secured Party, 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.
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Nothing contained in this Agreement shall be
deemed to permit or authorize a Secured Party to undertake or
continue the construction or completion of the Project (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. The Secured Party, in the
event of such an assumption, must agree to complete , in the
manner provided in this Agreement , the improvements to which
the lien or title of such holder relates . Any such Secured
Party properly completing such improvements shall be entitled ,
by submitting a written request to Agency, to a Certificate of
Completion from Agency.
6 . 1 . 13(c) Failure of Secured Party to Complete
Improvements . In any case where six (6) months after default
by Participant in completion of construction of the Project ,
the Secured Party has not exercised the option to construct , or
if it has exercised the option and has not proceeded diligently
with construction, Agency may purchase the mortgage , deed of
trust or other security interest by payment to the holder of
the unpaid debt , plus any accrued and unpaid interest . If the
ownership of the Project or such portion thereof has vested in
a Secured Party, the Agency, if it so desires , shall be
entitled to a conveyance from the holder to the Agency of the
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Project or such portion thereof upon payment to the holder of
an amount equal to the sum of the following :
(a) The unpaid mortgage , deed of trust or other
security interest debt at the time title
became vested in the Secured Party (less all
appropriate credits , including those
resulting from collection and application of
rentals and other income received during
foreclosure proceedings) ;
(b) All expenses with respect to foreclosure ;
(c) The net expenses , if any (exclusive of
general overhead) , incurred by the Secured
Party as a direct result of its subsequent
management of the Project or any part
thereof ;
(d) The costs of any improvements made by such
holder ; and
(e) 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 or deed of trust debt and had
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such debt continued in existence to the date
of payment by Agency.
6 . 1 . 13(d) Right of Agency to Cure Mortgage . Deed
of Trust or other Security Interest Default . In the event of a
default or breach by Participant of a mortgage , deed of trust
or other security interest prior to the Agency' s issuance of a
Certificate of Completion for the Project or any portion
thereof , and the Secured Party has not exercised its option to -
complete the Project , Agency may cure the default prior to
completion of any foreclosure . In such event , Agency shall be
entitled to reimbursement from Participant of all costs and
expenses reasonably incurred by Agency in curing the default .
Agency shall also be entitled to a lien upon the Project or
such portion thereof to the extent of such costs and
disbursements . Any such lien shall be subject to :
(a) Any mortgage , deed of trust , other security
instrument , sale and lease-back or other
conveyance for financing permitted by this
Agreement ; or
(b) Any rights or interests provided in this
Agreement for the protection of the Secured
Parties , the lessor under any sale and
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lease-back or the grantee under any such
other conveyance for financing; or
(c) Any rights or interests of a lessee of the
Project or any portion thereof , provided
there is no default hereunder with respect
to such lease ;
provided that nothing herein shall be deemed to impose upon
Agency any affirmative obligations (by Agency' s payment of
money, construction or otherwise) with respect to the Project
or any,portion thereof in the event of the Agency' s enforcement
of its lien.
6 . 1 . 13(e) Right of the Agency to Satisfy Other
Liens on the Project After Title Passes . After the conveyance
of title to the Sales Parcels and prior to Agency' s issuance of
a Certificate of Completion, and after Participant has had a
reasonable time to challenge , cure or satisfy any liens or
encumbrances on the Site or against the Project or any portion
thereof , Agency, upon ten (10) days prior written notice to
Participant , shall have the right to satisfy any such liens or
encumbrances ; provided , however , that nothing in this Agreement
shall require Participant to pay or make provision for the
payment of any tax, assessment , lien or charge so long as
Participant in good faith contests the validity or amount
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thereof , and so long as such delay in payment shall not subject
the Project to forfeiture or sale .
6 . 1 . 13(f) Certificate of Completion. Promptly
after completion of all Project construction and development to
be completed by Participant , or any distinct phase or portion
thereof , Agency shall furnish Participant with a Certification
of Completion upon Participant ' s written request therefore .
Such Certificate of Completion shall be in such form as to
permit it to be recorded in the Office of the Recorder of
Riverside County.
A Certificate of Completion shall be , and shall
so state that it is , a conclusive determination of satisfactory
completion of the Project pursuant to this Agreement . After
issuance of such Certificate of Completion, any party then
owning or thereafter purchasing, leasing or otherwise acquiring
any interest in the Project covered by such Certificate of
Completion shall not (because of such ownership, purchase ,
lease or acquisition) incur any obligation or liability under
this Agreement with respect to the commencement and completion
of construction for which such Certificate of Completion is
issued , except that such party shall be bound by the covenants
contained in Article 8 of this Agreement . Except as otherwise
provided herein, after the issuance of a Certificate of
Completion for the Project , or any distinct phase or portion
-43-
thereof , neither Agency, City nor any other person shall have
any rights , remedies or controls with respect to the Project or
such distinct phase or portion thereof that it would otherwise
have or be entitled to exercise under this Agreement as a
result of a default in or breach of any provision of this
Agreement relating to the commencement or completion of Project
construction or any distinct phase or portion thereof , and the
respective rights and obligations of the parties with reference
to the Project or such distinct phase or portion thereof shall
be as set forth in Article 8 of this Agreement .
Agency shall not unreasonably withhold any
Certificate of Completion. If Agency refuses or fails to
furnish a Certificate of Completion after written request by
Participant , Agency shall , within ten (10) days of the next
regularly scheduled Agency meeting after Participant ' s written
request , provide Participant with a written statement of the
reasons Agency refuses or fails to furnish a Certificate of
Completion. The statement shall also contain Agency' s proposal
of the action Participant should take to obtain a Certificate
of Completion. If the reason for Agency' s refusal is confined
to the immediate availability of specific items or materials
for landscaping or the completion of typical "punch list"
items , Agency will issue its Certificate of Completion upon
Participant ' s posting of a bond with Agency in an amount
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representing Participant ' s fair estimate of the cost of
completing the items identified by Agency.
The Certificate of Completion shall not
constitute evidence of Participant ' s compliance with or
satisfaction of any obligation to any Secured Party. The
Certificate of Completion is not notice of completion as
referred to in California Civil Code Section 3093 .
7 . FURTHER CONDITIONS OF AGREEMENT
7 . 1 Preleasing. Participant ' s obligation to commence
construction of the Project is contingent upon Participant ' s
obtaining tenants ' written subscription for fifty percent (50%)
of the Project ' s retail and commercial space in the aggregate
in advance of the "Construction Commencement Date" (as
hereinafter defined) . If Participant has not subscribed at
least fifty percent (50%) of the Project on or before the third
(3rd) anniversary of the Transfer Date, then, unless
Participant has elected to proceed with construction despite
the failure to subscribe at least fifty percent (50"/) of the
Project , Agency and Participant shall sell the Project , and the
proceeds of such sale shall be the property of Participant ,
except for that portion of the proceeds , if any, necessary to
pay the Note , if any, which shall be the property of Agency.
—45—
7 . 2 Optional New Site Plan. Notwithstanding the
provisions of Section 6 . 1 above , if , on or before the third
(3rd) anniversary of the Transfer Date , the Project is not at
least fifty percent (50%) subscribed , including a major anchor
tenant acceptable to Participant or Participant has not
obtained a commitment from a major hotel operator , then
Participant may submit a new site plan and/or proposal for
development of the Project to Agency as an alternative to sale
of the Project , and if Agency approves such new plan or
proposal , after good faith consideration of the same , then
Agency and Participant may agree to extend the required
Construction Commencement Date .
7 . 3 Golf Course Privilege. Participant ' s obligation to
develop the Project is contingent upon City' s adoption of a
resolution officially designating the Project ' s hotel as
eligible for priority golf privileges , including at least
tee times during peak hours , and tee times during off-peak
hours , at the Fairchild Country Club, and Agency will use its
best effort to secure tee times at the Mesquite County Club .
8 . USE OF THE SITE
8 . 1 Uses . Participant covenants and agrees for itself ,
its successors and assigns , that during construction and
thereafter , Participant , its successors and assigns shall
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devote the Project to the uses specified in the Redevelopment
Plans .
8 . 2 Operation of Retail Portion of Project .
8 . 2 . 1 Operational Hours . Retail tenants of the
Project shall be required to maintain the following minimum
hours of operation:
Monday through Thursday
and Saturday 10 : 00 A.M. - 6 : 00 P.M.
Friday 10 : 00 A.M. - 9 : 00 P.M.
Sunday 10 : 00 A.M. - 5 : 00 P .M.
Participant will use its best efforts to require that
tenants remain open during the hours indicated above; provided ,
however , that if , notwithstanding the best efforts of
Participant and retail tenants of the Project , the foregoing
hours of operation shall , in Participant ' s determination, prove
to be economically unreasonable , Participant may reduce such
minimum hours of operation as Participant , in its reasonable
determination, deems suitable . Nothing herein shall preclude
tenants from remaining open longer than the hours above
indicated .
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Notwithstanding the foregoing, retail tenants of the
Project may be authorized to close during certain afternoon
hours in the "low season" , which occurs annually between
Independence Day and Labor Day, and other holidays .
8 . 2 . 2 Advertising Budget . Participant shall
maintain or cause to be maintained a substantial advertising
budget in a reasonable amount to be determined by Participant .
This obligation may be assigned by Participant to a merchants
association to be formed upon occupancy of the Project .
8 . 2 . 3 Main Street Group . Participant will join
the Main Street Group and upon completion of the Project will
maintain its membership for at least three (3) years after the
Completion Date . Participant will encourage tenants to
participate in the Main Street Group .
8 . 3 Obligation to Refrain from Discrimination.
Participant covenants and agrees for itself , its successors and
assigns , that there shall be no discrimination against or
segregation of any person or group of persons on account of
race , color , creed , religion, sex, marital status , ancestry or
national origin in the sale , lease, sublease , transfer , use ,
occupancy, tenure or enjoyment of the Project , nor shall
Participant , or any person claiming under or through it ,
establish or permit any such practice or practices of
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discrimination or segregation with reference to the selection,
location, number , use or occupancy of tenants , lessees ,
subtenants , sublessees or vendees of the Project . The
foregoing covenants shall run with the land and shall remain in
effect in perpetuity.
8 . 3 . 1 Form of Non-Discrimination and Non-
Segregation Clause in Deeds . In order to accomplish the
purposes of Section 8 . 3 above , any deeds concerning the Project
or any part thereof shall contain substantially the following
non-discrimination or non-segregation clause :
"The grantee herein covenants by and for himself , his
heirs , executors , administrators , and assigns , and all persons
claiming under or through them, that there shall be no
discrimination against or segregation of any person or group of
persons on account of race , color , creed , religion, sex,
marital status , ancestry or national origin in the sale, lease ,
sublease , transfer , use , occupancy, tenure or enjoyment of the
land herein conveyed , nor shall the grantee himself , or any
persons claiming under or through him, 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
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vendees in the land herein conveyed . The foregoing covenants
shall run with the land . "
8 . 3 . 2 Form of Non-Discrimination and Non-
Segregation Clause in Leases . Any lease of the Project or any
part thereof shall contain substantially the following
non-discrimination or non-segregation clause :
"The lessee herein covenants by and for himself , his
heirs , executors , administrators and assigns , and all persons
claiming under or through him, and this lease is made and
accepted upon and subject to the following conditions :
There shall be no discrimination against or
segregation of any person or group of persons on account of
race , color , creed , religion, sex, marital status , ancestry or
national origin in the leasing , subleasing, transferring, use ,
occupancy, tenure or enjoyment of the land herein leased nor
shall the lessee himself , or any person claiming under or
through him, establish or permit such practice or practices of
discrimination or segregation with reference to the selection,
location, number , use or occupancy of tenants , lessees ,
sublessees , subtenants or vendees in the land herein leased . "
8 . 3 . 3 Form of Non-Discrimination and Non-
Segregation Clause In Contracts . Any contracts concerning the
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Project or any part thereof shall contain substantially the
following non-discrimination or non-segregation clause :
"There shall be no discrimination against or
segregation of any persons or groups of persons on account of
race , color , creed , religion, sex, marital status , ancestry or
national origin in the sale , lease, transfer , use, occupancy,
tenure or enjoyment of the land , nor shall the transferee
himself , or any person claiming under or through him, establish
or permit any such practice or practices of discrimination of
segregation with reference to the selection, location, number ,
use or- occupancy of tenants , lessees , subtenants , sublessees or
vendees of the land . "
8 . 4 Effect and Duration of Covenants . Except as may be
otherwise provided , the covenants contained in this Agreement
shall remain in effect until October 19 , 2014 (the termination
date of the Redevelopment Plans) . The covenants against
discrimination shall remain in effect in perpetuity. The
covenants established in this Agreement and the Grant Deed
shall , without regard to technical classification and
designation, be binding for the benefit and in favor of the
Agency, its successors and assigns , the City and any successor
in interest to the Site or any part thereof .
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Agency is deemed the beneficiary of the terms and
provisions of this Agreement and of the covenants running with
the land for and in its own rights and for the purposes of
protecting the interests of the community and other parties ,
public or private , in whose favor and for whose benefit this
Agreement and the covenants running with the land have been
provided . This Agreement and the covenants shall run in favor
of Agency without regard to whether Agency has been, remains or
is an owner of any land or interest in the Project or the
Redevelopment Plan Areas . Agency shall have the right , if the
Agreement or covenants 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 or any other beneficiaries of this
Agreement may be entitled .
9 . DEFAULTS . REMEDIES AND TERMINATION.
9 . 1 Defaults -- General . Subject to the extensions of
time set forth in Section 10 . 4 of Article 10 hereof , failure or
delay by either party to perform any term or provision of this
Agreement shall constitute a default under this Agreement . The
party who so fails or delays must immediately commence to cure ,
correct or remedy such failure or delay, and shall complete
such cure , correction or remedy with reasonable diligence .
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The injured party shall give written notice of default
to the party in default , specifying the default complained of
by the injured party. Except as required to protect against
further damages , the injured party may not institute
proceedings against the party in default until thirty (30) days
after giving such notice . Failure or delay in giving such
notice shall not constitute a waiver of any default , nor shall
it change the time of default .
Except as otherwise expressly provided in this
Agreement , any failure or delay by either party in asserting
any of- its rights or remedies as to any default shall not
operate as a waiver of any default or of any such rights or
remedies or deprive such party of its right to institute and
maintain any actions or proceedings which it may deem necessary
to protect , assert or enforce any such rights or remedies .
9 . 2 • Legal Actions .
9 . 2 . 1 Institution of Legal Actions . In addition
to any other rights or remedies provided herein or by law,
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 purpose of this
Agreement . Such legal actions must be instituted in the
Superior Court of the County of Riverside, State of California,
—53—
in any other appropriate court in that county, or in the
Federal District Court in the Central District of California .
The prevailing party in any such legal action may recover its
reasonable attorney' s fees .
9 . 2 . 2 Annlicable Law. The laws of the State of
California shall govern the interpretation and enforcement of
this Agreement .
9 . 2 . 3 Acceptance of Service of Process . In the
event Participant commences any legal action against Agency,
service of process on Agency shall be made by personal service
upon the Executive Director or the Secretary of the Agency, or
in such other manner as may be provided by law.
In the event Agency commences any legal action against
Participant , service of process on Participant shall be made by
personal service upon any officer or agent of Participant
(authorized to accept service on behalf of Participant) or in
such other manner as may be provided by law and shall be valid
whether made within or without the State of California.
9 . 3 Rights and Remedies are Cumulative . Except as
otherwise expressly stated in this Agreement , the parties '
rights and remedies are cumulative , and either party' s exercise
of one or more of such rights or remedies shall not preclude
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its exercise , at the same or different times , of any other
rights or remedies for the same default or any other default by
the other party.
9 . 4 Remedies and Rights of Termination Prior to Conveyance
of the Sales Parcels to Participant .
9 . 4. 1 Termination by Participant . In the event
that at any time prior to conveyance of title or possession
(whichever first occurs) to the Sales Parcels to Participant :
(a) City does not take action to vacate and
abandon the portions of Right-of-Way Parcel
#1 necessary for conveyance and development
of the Project in the manner and within the
time set forth in the Schedule of
Performance ; or
(b) City does not approve final Planned
Development District Drawings and related
documents for development of the Project
within the time set forth in the Schedule of
Performance ; or
(c) Participant , despite diligent and good faith
efforts , is unable to obtain financing for
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the Project within the time set forth in the
Schedule of Performance ; or
(d) Agency does not tender conveyance of title
or possession to the Sales Parcels in the
manner and condition and within the times
set forth in the Schedule of Performance ; and
any such failure referred to in Subsections (a) , (b) , (c) or
(d) above is not cured prior to the time set forth in the
Schedule of Performance for the transfer of title or possession
to the- Sales Parcels , then this Agreement may, at Participant ' s
option, be terminated by written notice thereof to Agency.
Neither Agency nor Participant shall have any further rights
against or liability to the other under this Agreement with
respect to the Project .
• 9 . 4. 2 Termination by Agency. In the event that at
any time prior to conveyance of title or possession (whichever
first occurs) to the Sales Parcels to Participant :
(a) Participant (or any successor in interest)
transfers or assigns or attempts to transfer
or assign this Agreement or any rights
herein or in the Site or the Project in
—56—
violation of Subsection 1 . 3 . 2 of Article 1
hereof ; or
(b) Participant does not submit to Agency the
plans , drawings and related documents as
required by Subsections 6 . 1 . 1 and 6 . 1 . 2 of
Article 6 hereof within the times set forth
in the Schedule of Performance ; or
(c) Participant does not take title to , or
possession of , the Sales Parcels under
tender of conveyance by Agency in the manner
provided in this Agreement within the time
set forth in the Schedule of Performance for
the close of escrow; or
(d) Agency is unable to acquire title or
possession to the Sales Parcels in the
manner provided in this Agreement , despite
its best efforts to do so, within the time
set forth in the Schedule of Performance for
the close of escrow; or
(e) The City does not take action to vacate and
abandon Right-of-Way Parcel #1 in the manner
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and within the time set forth in the
Schedule of Performance ; and
any default or failure referred to in Subsections (a) , (b) ,
(c) , (d) , or (e) of this Section is not cured prior to the time
set forth in the Schedule of Performance for the transfer of
title or possession to the Sales Parcels ; provided , however
that any default or failure referred to in Subsections (d) and
(e) may be cured within sixty (60) days from the occurrence
thereof , provided Participant extends the date for close of
escrow as set forth in the Schedule of Performance for transfer
of title and possession of the Sales Parcels by not less than
sixty (60) additional days , then this Agreement , and any rights
of Participant or any assignee or transferee in this Agreement ,
or arising therefrom with respect to Agency or the Project ,
may, at the option of Agency, be terminated by Agency. Neither
Agency nor Participant shall have any further rights against or
liability to the other under this Agreement with respect to the
Project .
9 . 5 Option to Repurchase . Reenter and Repossess . Agency
shall have the additional right at its option (provided Agency
is not in default of its obligations hereunder) to repurchase ,
reenter and take possession of the Sales Parcels or any portion
thereof with all improvements thereon, if after conveyance of
title to the Sales Parcels and prior to Agency' s issuance of
—58—
the Certificate of Completion for the Project , Participant
shall :
1 . Fail to proceed with the construction of the
improvements as required by this Agreement
(subject to the provisions of Section 10 . 4 of
Article 10 hereof) for a period of ninety (90)
days after written notice thereof from Agency; or
2 . Abandon or suspend construction of the
improvements (subject to the provisions of
Section 10 . 4 of Article 10 hereof) for a period
of ninety (90) days after written notice of such
abandonment or suspension from the Agency; or
3 . Transfer or suffer any involuntary transfer of
the Project or any part thereof in violation of
this Agreement , and such violation is not cured
within ninety (90) days after written demand from
Agency.
Such right to repurchase , reenter and repossess , to
the extent provided in this Agreement , shall be subordinate and
subject to and be limited by and shall not defeat , render
invalid or limit :
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1 . Any mortgage , deed of trust or other security
instrument or sale and lease-back or other
conveyance for financing permitted by this
Agreement ; or
2 . Any rights or interests provided in this
Agreement for the protection of the holders of
such mortgages , deeds of trust or other security
instruments , the lessor under a sale and
lease-back or the grantee under such other
conveyance for financing; or
3 . Any rights or interests of a space tenant of the
Project expressly approved in writing by Agency
and granted non-disturbance by Agency;
provided that nothing herein shall be deemed to impose upon
Agency any affirmative obligations (by the payment of money,
construction or otherwise) with respect to the Sales Parcels in
the event of the Agency' s exercise of its rights under this
Section 9 . 5 .
To exercise its right to repurchase , reenter and take
possession of the Sales Parcels , Agency shall pay to
Participant in cash an amount equal to:
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1 . The costs incurred by Participant for on-site
labor and materials for the construction of the
improvements existing on the Sales Parcels , or
such part thereof , at the time of the repurchase ,
reentry and repossession; less
2 . Any gains or income withdrawn by Participant from
the Sales Parcels , or such part thereof , or the
improvements thereon; and less
3 . The amount of the total obligations secured by
the liens on the Sales Parcels as provided in
Subsection 6 . 1 . 13(a) of Article 6 of this
Agreement ; provided that the Agency shall
reimburse Participant to the extent that such
obligations are assumed by any subsequent
transferee of the Sales Parcels from Agency.
9 . 6 Right of Reverter . Agency shall have the additional
right , at its option (provided Agency is not in default of its
obligations hereunder) , to reenter and take possession of the
Sales Parcels or such portion thereof with all improvements
thereon and revest in Agency the estate theretofore conveyed to
Participant if , after conveyance of title to the Sales Parcels
and prior to Agency' s issuance of the Certificate of Completion
for the Project , Participant shall :
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1 . Fail to commence or proceed with construction of
the improvements as required by this Agreement
(subject to the provisions of Section 10 . 4 of
Article 10 of this Agreement) for a period of
ninety (90) days after written notice thereof
from Agency; or
2 . Abandon or substantially suspend construction of
the improvements (subject to the provisions of
Section 10 . 4 of Article 10 of this Agreement) for
a period of ninety (90) days after written notice
of such abandonment or suspension from Agency; or
3 . Transfer or suffer any involuntary transfer of
the Project or any part thereof in violation of
this Agreement , and such violation is not cured
within ninety (90) days after written demand from
Agency.
Such right to reenter , repossess and revest shall be
subject to and be limited by and shall not defeat , render
invalid or limit :
1 . Any mortgage , deed or trust or other security,
instrument of sale and lease-back or other
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conveyance for financing permitted by this
Agreement ; or
2 . Any rights or interests provided in this
Agreement for the protection of the holders of
such mortgages , deeds of trust or other security
instruments , the lessor under a sale and
lease-back or the grantee under such other
conveyance for financing ; or
3 . Any rights or interests of a tenant of the
Project that was expressly approved in writing by
Agency and granted non- disturbance by Agency;
provided that nothing herein shall be deemed to impose upon
Agency any affirmative obligations (for the payment of money,
construction or otherwise) with respect to the Sales Parcels in
the event of Agency' s exercise of its rights under this Section.
The Grant Deeds for the Sales Parcels shall contain
appropriate references and provisions to give effect to the
Agency' s rights , as set forth in this Section, under specified
circumstances prior to issuance by the Agency of the
Certificate of Completion, to reenter and take possession of
the Sales Parcels or any portions thereof with all improvements
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hereon, and to terminate and revest in Agency the estate
conveyed to Participant .
Upon the revesting in Agency of title to the Sales
Parcels or any part thereof as provided in this Section, Agency
shall , pursuant to its responsibilities under state law, use
its best efforts to resell the Sales Parcels or any portions
thereof as soon and in such manner as Agency shall find
feasible and consistent with the objectives of state law and of
the Redevelopment Plan to a qualified and responsible party or
parties (as reasonably determined by Agency) , who will assume
the obligation of making or completing the improvements , or
such other improvements in their stead , as shall be
satisfactory to Agency and in accordance with the uses
specified for the Sales Parcels , or any portion thereof , in the
Redevelopment Plans . Upon such resale of the Sales Parcels , or
any portion thereof , the proceeds thereof shall be applied :
1 . First , to reimburse Agency on its own behalf or
on behalf of the City, for all costs and expenses
incurred by Agency, including but not limited to
salaries paid to personnel in connection with the
recapture , management and resale of the Sales
Parcels or any portion thereof in connection with
such management , all taxes , assessments , and
water and sewer charges with respect to the Sales
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Parcels or any such portion thereof (or , in the
event the Sales Parcels or any such portion
thereof are exempt from taxation or assessment or
such charges during the period of ownership , then
such taxes , assessments , or charges [as
determined by the county assessing official] as
would have been payable if the Sales Parcels or
any such portion thereof were not so exempt) , any
payments made or required to be made to discharge
or prevent from attaching or being made any
subsequent encumbrances or liens due to
obligation, defaults or acts of Participant , its
successors or transferees , any expenditures made
or obligations incurred with respect to the
making or completion of the improvements or any
part thereof on the Sales Parcels or any such
portion thereof , and any amounts otherwise owing
to Agency from Participant ;
2 . Second , to reimburse Agency up to the total
amount of the obligations secured by the liens on
the Sales Parcels as provided in Sections 6 . 1 . 13
of Article 6 of this Agreement , provided that
Agency shall reimburse Participant to the extent
that such obligations are assumed by any
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subsequent transferee of the Sales Parcels from
Agency; and
3 . Third , to reimburse Participant up to an amount
equal to the sum of : (1) the Capital
Expenditures incurred for the development of the
Sales Parcels or any such portion thereof and for
the improvements existing on the Sales Parcels or
any such portion thereof at the time of reentry
and repossession; less (2) any gains or income
withdrawn or made by Participant from the Sales
Parcels or any such portion thereof or the
improvements thereon.
Any balance remaining after such reimbursements shall
be retained by Agency as its property.
• To the extent that the rights established in this
Section involve a forfeiture , it must be strictly interpreted
against Agency, the party for whose benefit it is created . The
rights established in this Section are to be interpreted in
light of the fact that Agency will convey the Sales Parcels to
Participant for development and not for speculation in
undeveloped land .
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10 . GENERAL PROVISIONS
10 . 1 Notices Demands and Communications Between the
Parties . Formal notices , demands and communications between
Agency and Participant shall be sufficiently given if
dispatched by registered or certified mail , postage prepaid ,
return receipt requested , to the principal offices of Agency
and Participant as set forth in Article 1 hereof . Such written
notices , demands and communications may be sent in the same
manner to such other addresses as either party may from time to
time designate by written notice to the other party pursuant to
this Section 10 . 1 .
10 . 2 Conflicts of Interest . No member , official or
employee of Agency shall have any personal interest , direct or
indirect , in this Agreement or the Project nor shall any such
member , official or employee participate in any decision
relating• to this Agreement or the Project which affects his
personal interest or the interests of any corporation,
partnership or association in which he is directly interested .
10 . 3 Non-Liability of Agency Officials and Employees .
Except as is otherwise provided or allowed by law, no member ,
official or employee of Agency shall be personally liable to
Participant in the event of any default or breach by Agency or
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for any amount which may become due to Participant or on any
obligations under the terms of this Agreement .
10 . 4 Enforced Delay: Extension of Times for Performance .
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 acts or the
failure to act of the City or any other public or governmental
agency or entity (except that acts or the failure to act of
Agency shall not excuse performance by Agency) or any other
causes beyond the control or without the fault of the party
claiming an extension of time to perform. An extension of time
for any such cause shall commence to run from the time of the
commencement of the cause , if notice by the party claiming such
extension is sent to the other party within thirty (30) days of
the commencement of the cause .
' Times for performance under this Agreement may also be
extended by mutual written agreement of Agency and Participant .
10 . 5 Inspection of Books and Records . Agency has the
right , upon not less than seventy two (72) hours notice (not
including weekends and holidays ) , at all reasonable times to
inspect the books and records of Participant pertaining to the
Project as pertinent to the purposes of this Agreement .
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Participant also has the right , upon not less than
seventy-two (72) hours notice (not including weekends and
holidays) , at all reasonable times to inspect the books and
records of Agency pertaining to the Project as pertinent to the
purposes of this Agreement .
10 . 6 Plans and Data . If this Agreement is terminated by
Agency pursuant to Subsection 9 . 4. 2 of Article 9 of this
Agreement for any failure or default of Participant specified
therein, Participant shall deliver to Agency all soils tests
and grading plans (whether or not formally submitted to the
City or Agency) and all plans and data concerning the Sales
Parcels formerly submitted to the City or Agency, and Agency or
any other person or entity designated by the Agency is free to
use such plans and data with respect to any future development
of the Sales Parcels without payment or financial obligation to
Participant or any other person for the use thereof , however ,
Participant does not and shall not be deemed to make any
representations regarding the accuracy of any such plans and
data.
11 . SPECIAL PROVISIONS .
11 . 1 Condemnation Actions . Nothing in this Agreement shall
be construed as obligating Agency to use its power of eminent
domain to acquire properties , but if it elects to do so, Agency
shall consider the adoption of a Resolution of Necessity within
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the time set forth in the Schedule of Performance for the
acquisition by eminent domain of those real properties
comprising the Sales Parcels for which Agency anticipates it
will be unable to acquire through negotiation in a timely
manner consistent with the requirements of this Agreement .
Except as otherwise provided in this Agreement , Agency shall
obtain title or possession to all land within the Sales Parcels
on or before the time established therefor in the Schedule of
Performance .
11 . 2 Order of Immediate Possession. If , prior to the time
provided in the Schedule of Performance for conveyance of the
Sales Parcels , Agency has not obtained title to all of the
Sales Parcels but has obtained judicial orders (herein "orders
of immediate possession") authorizing Agency to take possession
of such portions of the Sales Parcels , Agency may deposit a
copy of the orders of immediate possession in escrow if
necessary to do so in order to meet the requirements of the
Schedule of Performance . Notwithstanding the provisions of
this Agreement requiring Agency to acquire title to the Sales
Parcels prior to the time set for conveyance in the Schedule of
Performance, and to deposit the grant deeds for such Sales
Parcels in escrow prior to such time , if Agency has so
deposited such orders of immediate possession and :
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1 . Agency delivers possession of the Sales Parcels
to Participant on or prior to the time set for
conveyance thereof ; and
2 . The right of possession which Participant
acquires from Agency is such that the title
company will issue an endorsement insuring that :
(a) Participant has the right to exclusive use
and possession of the Sales Parcels ; and (b)
Agency is obligated to convey fee title to the
Sales Parcels to Participant ; and
3 . Agency is diligently proceeding with the eminent
domain actions seeking the rendering of a final
judgment , which judgment would authorize the
taking , and Agency agrees to forthwith deposit
the Grant Deeds to the Sales Parcels in the
Escrow as provided in Section 2 . 4 of Article 2 of
this Agreement when Agency obtains title ;
then Participant shall not terminate this Agreement under the
provision of Subsection 9 . 4. 1 of Article 9 , but shall accept
such right of possession and shall proceed with the development
of the Project . Agency shall use its best efforts to
diligently acquire title and conclude eminent domain
proceedings , and the Escrow provided in Article 2 with respect
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to the Sales Parcels shall remain open until the Grant Deeds to
such Sales Parcels can be deposited therein in accordance with
this Section.
11 . 3 Preference for Retail and Commercial Businesses
Located in the Project Areas . Participant agrees to provide
reasonable preferences for retail and commercial businesses
presently located in the Project Areas to become lessees in the
retail commercial shops to be developed at the Project (to the
extent such businesses are appropriate and compatible with the
types of tenants Participant has or proposes to locate at the
Project , and further provided that such businesses possess the
financial capacity to qualify for leases at rental rates and
upon other lease terms consistent with the rental rates and
other lease terms to be offered to similar lessees of such
development) .
Nothing in this Section or this Agreement creates any
rights as a third party beneficiary or otherwise , in any
existing tenant , property owner or other person or entity not a
party to this Agreement .
11 . 4 Submission of Documents for Approval . Whenever this
Agreement requires either party to submit plans , drawings or
other documents to the other party for approval , which shall be
deemed approved if not acted on by the other party within a
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specified time , said plans , drawings or other documents shall
be accompanied by a letter stating that they are being
submitted and will be deemed approved unless rejected by the
other party within the stated time . If there is no time .
specified herein for such action, the submitting party may
submit a letter requiring approval or rejection by the other
party of documents within thirty (30) days after submission to
the other party or such documents shall be deemed approved .
Except where such approval is expressly reserved to the sole
discretion of the approving party, all approvals required
hereunder by either party shall be reasonable and not
unreasonably withheld .
11 . 5 Amendment of Redevelopment Plans . Pursuant to
provisions of the Redevelopment Plans for modification or
amendment thereof , Agency agrees that no amendment which
changes the uses or development permitted on the Site , or
changes the restrictions or controls that apply to the Site , or
otherwise affects the Site , shall be made or become effective
without the prior written consent of Participant . Amendments
to the Redevelopment Plans applying to other property in the
Project Areas shall not require the consent of the Participant .
11 . 6 Amendments to this Agreement . Participant and Agency
agree to mutually consider reasonable requests for amendments
to this Agreement which may be made by either of the parties
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hereto, as well as lending institutions , or bond counsel or
financial consultants to Agency, provided said requests are
consistent with this Agreement and would not substantially
alter the basic business terms included herein.
12 . ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS .
12 . 1 Counterparts . This Agreement is executed in five (5)
duplicate originals each of which is deemed to be an original .
This Agreement comprises pages 1 through , inclusive , and
Attachment Nos . 1 through 9 , attached hereto and incorporated
herein- by reference , which constitute the entire understanding
and agreement of the parties with respect to the subject matter
of this Agreement .
12 . 2 Entire Agreement . This Agreement integrates all of
the terms and conditions mentioned herein or incidental hereto,
and supeYsedes all negotiations or previous agreements between
the parties with respect to all or any part of the subject
matter hereof .
12 . 3 Waivers and Modifications . All waivers or
modifications of any provisions of this Agreement must be in
writing and signed by the appropriate representations of Agency
and Participant .
—74—
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
1988 COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS -
By
Chairman
By
Secretary
"AGENCY"
1988 SUN CAL INC . , dba SUN CAL
PROPERTIES , a California
corporation
By
Its
1988 STANWILL PROPERTIES , INC . ,
a California corporation
By
Its
"DEVELOPER"
-75-
City has reviewed the foregoing Agreement and
hereby indicates its acceptance and approval of the same .
1988 CITY OF PALM SPRINGS
By
Its
w e + / 5 s e r . a y
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
1988 COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS .
f9y By
Chairman
APPROVED AS /TO FORABy
//�J
YI1C:ity 4ttom6y Secretary
c ]I,
']ate 1-4 "AGENCY"
nnr
i�`'✓AR 1988 SUN CAL INC . , dba SUN CAL
PROPERTIES , a California
corporation
By 6,�Z,
Itss�
V�
1988 STANWILL PROPERTIES , INC . ,
a Calif QFnia corporation
By
i
Its
"DEVELOPER"
-75-
City has reviewed the foregoing Agreement and
hereby indicates its acceptance and approval of the same .
1988 CITY OF PALM SPRINGS
By
Its
w e + / s e e x . a y
w s�.i•;':. " u:�}v �I__:� Si:h"j l'aj'�,j� {� -d:C;�yO DATE `� r
-76-