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HomeMy WebLinkAbout10/18/2017 - STAFF REPORTS - 4.A. p A L M S,6 iy � O V U „oun• cq��FORN�P CITY COUNCIL STAFF REPORT DATE: October 18, 2017 NEW BUSINESS SUBJECT: AMENDMENTS TO THE PURCHASE AND SALE AGREEMENT AND SERVICES AGREEMENT WITH SELENE PALM SPRINGS, LLC, FOR THE DREAM HOTEL PROJECT LOCATED AT THE NORTHEAST CORNER OF CALLE ALVARADO AND EAST AMADO ROAD FROM: David H. Ready, City Manager BY: Community & Economic Development Department SUMMARY Selene Palm Springs, LLC, a California limited liability company, (Developer), is prepared to initiate construction of the Dream Hotel Project, (the "Hotel'), located on a 7.8 acre property at the northeast corner of Calle Alvarado and Amado Road. The property was recently conveyed from the City to Developer pursuant to a Purchase and Sale Agreement (A6329) and associated Services Agreement (A6329), both of which have terms and conditions relating to issuance of building permits and commencement of construction. The actions to be considered by Council relate to amendments to the Purchase and Sale Agreement and Services Agreement to allow for issuance of phased building permits and sequential construction of the Hotel, providing for Developer's ability to quickly mobilize its resources on the property, close the existing public parking facility, and commence with construction of the Hotel. Selene Palm Springs, LLC, a California limited liability company, is managed by CDI Ventures, LLC, a California limited liability company, and Qaiser Capital, LLC, a California limited liability company, with a third member consisting of Calsprings Properties, LLC, a California limited liability company. The principle managing members are Lauri Kibby and Abdul Lalani. RECOMMENDATION: 1. Approve Amendment No. 8 to the Purchase and Sale Agreement (A6329) by and between the City of Palm Springs and Selene Palm Springs, LLC, a California limited liability company related to the Dream Hotel Project; ITEM NO.L— City Council Staff Report October 18, 2017-- Page 2 Dream Hotel Project 2. Approve Amendment No. 2 to the Services Agreement (A6329) by and between the City of Palm Springs and Selene Palm Springs, LLC, a California limited liability company related to the Dream Hotel Project; and, 3. Authorize the City Manager or designee to take all actions needed to execute these actions. STAFF ANALYSIS: On March 6, 2013, the City and Developer entered into the Purchase and Sale Agreement ("PSA") and a related Services Agreement ("SA") for the purpose of developing and maintaining the Dolce Hotel Project, (the "Hotel"), a First Class Superior Hotel (Four+ stars), on a 7.8 acre parcel owned by the City located at the northeast corner of Calle Alvarado and East Amado Road (the "Property"). The PSA identified the terms and conditions for the City's conveyance of the Property to Developer, including a performance schedule that identified deadlines for: (1) entitlements, (2) close of escrow, (3) start of construction, and (4) opening date of the Hotel. The PSA originally identified the following conditions: • Purchase Price: $2,000,000 (Purchase and Sale Agreement • Purchase Price: $2,675,000 (Services Agreement) • Entitlements: June 30, 2013 • Close of Escrow: December 31, 2013 • Start of Construction: December 31, 2013 • Opening Date: March 2016 Seven prior amendments to the PSA were approved by Council from March 2014 through May 2017, modifying the performance schedule to reflect the following: • Entitlements: July 31, 2017 • Close of Escrow: August 31, 2016 • Start of Construction: December 31, 2017 • Opening Date: December 31, 2018 The SA identified the terms and conditions for the City's cooperation with Developer for the purpose of providing for the assemblage and acquisition of certain property and to provide funding for replacement parking within a parking structure and/or parking facilities on the City's Convention Center Parking Lot in conjunction with developing and maintaining the Hotel. Amendment No. 1 to the SA was approved by Council on November 4, 2015, incorporating an obligation regarding replacement parking, generally stating: Developer shall pay City the amount of $2,675,000 for the unamortized parking improvements necessary or desirable for the construction of at least 350 public parking spaces to replace existing public parking spaces on the City Property that will be lost as a result of the sale of the City Property to the Developer and the construction of the .I !, 02 City Council Staff Report October 18, 2017-- Page 3 Dream Hotel Project Dolce Hotel Project'. Prior to or upon the issuance of a building permit, the Developer shall cause the full $2,675,000 to be deposited in an escrow account designated and approved by the City to be held by the City until such time as the funds are required to fund all or a portion of contributions necessary for funding for replacement of public parking. (The $2,675,000 payment is referred to herein as the "Parking Fee"). On August 3, 2016, the City Council approved the final escrow instructions for close of escrow and conveyance of the Property, incorporating provisions from the amended PSA and SA. On August 26, 2016, City and Developer completed the real property transaction consummated by the PSA, and City conveyed fee title interest in the Property to Developer pursuant to that certain Grant Deed recorded as Document No. 2016- 0367646 (the "Grant Deed"). In accordance with the final escrow instructions a deed restriction was imposed generally requiring the Developer to submit a parking plan of at least 350 parking spaces, for City Council consideration of a joint public/private parking facility to be constructed in conjunction with the Hotel; and, to the extent the City partnered with the Developer on such a parking facility, the Parking Fee would be paid into escrow, whereas, if the City opted not to partner with the Developer, the Parking Fee would be paid in a lump sum upon City's issuance of a building permit. On April 5, 2017, the City Council reviewed the Developer's plan for parking, and determined not to participate in a joint public/private parking facility as part of the Hotel. On June 7, 2017, the City Council adopted Resolution No. 24236, approving an amendment to Final Planned Development District 333 proposed by Developer, formally revising the original Dolce Hotel Project to a first class new hotel project consisting of 169 hotel rooms and 34 multi-family residential condominium units, to be operated as a "Dream Hotel" brand hotel by the Dream Hotel Group. As a matter of reference, the Dream Hotel will include 296 on-site parking spaces, two restaurants, a screening room, spa, green house, pocket park, four pools, and a rooftop terrace. The hotel and condominiums will be approximately 280,413 square feet, villas are 7,820 square feet, meeting space will be 10,035 square feet, and the garage will be 67,755 square feet. The Project will comprise a total of 360,023 square feet total. The Dream Hotel perspective views and site plans are shown on the next pages. The Dolce Hotel was the originally proposed hotel group; however, on June 15, 2016, the City Council approved Amendment No. 5 to the PSA approving the Dream Hotel Group brand as the hotel. •, 03 tI a 1ti t ' 'j a $ yt 1' r ,1 Vk AX rn r � y r t F N / m y � N U 00 O 0 L 2 T 0 N t () L 000 04 City Council Staff Report October 18, 2017-- Page 5 Dream Hotel Project e n w I Ms a v 1v a —. 7 c CA MOO- 5. �. -_ PERSPECTIVE O City Council Staff Report October 18, 2017-- Page 6 Dream Hotel Project "°mow i P 14 I� sx- =.r = t 4 PERSPECTIVE Q C7? City Council Staff Report October 18, 2017 -- Page 7 Dream Hotel Project t III! ELEVATION R-at, I Sig- ELEVATION■-•t. SITE ELEtiATIO O City Council Staff Report October 18, 2017-- Page 8 Dream Hotel Project .o a � 1 s sM. Wll skit- .> ELEVATION G-lop I •tt � z. a x .vim. LIM flu IMMUar NE. ELEVATION O•Ott H SITE ELEVATIO \ O 00 City Council Staff Report October 18, 2017 -- Page 9 Dream Hotel Project PALM ENTRY DRIVE 3 PORES COCHEFF CONDOMINUM AND HOTEL pFOE OIf i CONDOMINIUM ENTRY HOTEL S E. PEDESTRIAN E. NTRY FIRE ACCESS ❑ { GARAGE EMERY E. GARAGE RIVE r•�.r E. SERVICE RAMP 1 VALET TANDEM PARKING R_ VILLA EAAMP*LOADING DOCK 10 VILLA PASSING MAZE•FIRE GA IE. VILLA SUITE!ITGARD GARDENS Il F LAWN AND LEMON COURT P�wM. Q vwa�-.a IE FIRE IRE ACCESS If THE FARM NGE IE WATER COURT Il WATER WALL E RUNNEIf IafEENRN " P IE SPA VILLA GARDEN! M. fiA ~r ' Af El ❑ 10. POOLS •R� EI STADIUM SEATS AT POOL i _ l FAMILY POOL n POOL DININ TERRACE ♦rt, I 11 PEDE STFIAN ENTRY TO PARKING)VALET ' 1 IF DINING•LOUNGE TERRACE it WATER WAIL _ ll DEMONSTRATION KITCHEN TERRACE ..►U: 1L. CIACULATION SPINS O g7��0 11 PFRIMETEK XEDGE"1.8'1 c C 0;k T� J 6 ❑ IF 12 i "A 4 11 ` ° I'± o p , > Will 4.wEFweo■owe 0� 140' 180' 1 At this time, Developer wants to begin construction of the Hotel, and recognizes that its plan for doing so varies from certain terms in the PSA and SA. While the Developer is not asking for new or additional consideration from the City, an important definition as to the "commencement of construction" and related provisions as to benchmarks and the City's rights under the PSA and SA must be adjusted if Developer's plan for construction is to be implemented. Developer has requested approval to construct the Hotel in phases, with issuance of phased building permits and sequential phased construction of the Hotel, including mobilization of resources on the Property requiring closure of the existing surface parking facility to allow for commencement of demolition prior to issuance of final building permits for the underground parking garage, foundation, and "core and shell" of the Hotel. 09 City Council Staff Report October 18, 2017 -- Page 10 Dream Hotel Project The advantage of the Developer's approach is that it allows commencement of construction when the Developer would otherwise be waiting for all the required permits to be approved at one time. Moreover, the Developer has advised that holding back from commencing on any work on the Property until all the various building permits have been issued and related contracts executed is logistically challenging. However, the PSA as amended includes the following restriction on the commencement of construction by defining "commence construction" as: Developer has: (1) completed all pre-construction engineering and design, (2) has entered into binding and enforceable agreements with General Contractor and MEP and Structural contractors (consistent with industry practice), and (3) received permits, licenses, and entitlements from all government entities, including the City, as can reasonably be considered necessary so that physical construction of the Hotel Project may begin and proceed to completion without foreseeable interruption of material duration. Currently, the Developer is obligated to commence construction within 15 months of close of escrow (approximately December 1 , 2017). The Developer is completing construction drawings for the underground garage and foundation for the Hotel and anticipates submitting to the City for building plan check review by December 1, 2017. The Developer is also completing the construction drawings for the "core and shell" of the Hotel, and anticipates submitting to the City for building plan check review by April 1 , 2018. The Developer has submitted the rough grading and site demolition plans to the Engineering Services Department, with approval anticipated by November 1, 2017. Therefore, the Developer will be in a position to mobilize on the Property and commence with site clearing, demolition, and rough grading operations required to excavate for the underground parking garage which serves as the foundation for the Hotel. This work is anticipated to take 3-4 months, while concurrently the Developer is completing the building plan check review process and obtaining building permits for the underground parking garage/foundation, and ultimately the vertical "core and shell" of the hotel by April 1, 2018. Staff is in agreement with the Developer's proposal for phased building permits and sequential construction, noting that the Developer has made the following progress with regard to the Hotel: • Developer has acquired the property from the City subject to the terms of the recorded Grant Deed, and secured all entitlements necessary for the Hotel's development. • Developer has submitted its parking plan in compliance with the terms of the Grant Deed through which it received fee title interest to the Property. • Developer will complete construction drawings for the underground parking garage/foundation with an expected submittal to the City's Building Department by December 1, 2017. YU City Council Staff Report October 18, 2017-- Page 11 Dream Hotel Project • Developer will complete construction drawings for the vertical "core and shell" of the Hotel with an expected submittal to the City's Building Department by April 1, 2018. • Developer has refined its design and construction plans for implementation, and is prepared to start staging the Property for construction by November 15, 2017. • Developer has secured a written confirmation from its lender of a $20,000,000 credit facility, and drawn down $3,400,000 of that funding to date. • Developer has secured an extension from its lender of the date before which Developer must submit a full budget for the Hotel by December 31, 2017, so that the lender can evaluate and consider the additional funding that will be required to complete the Hotel. In addition to redefining the "commencement of construction" and making corresponding adjustments to the Project's established benchmark schedule, Developer has requested deferral of its payment of the Parking Fee in the amount of $2,675,000. Currently the Parking Fee must be paid in a lump sum basis upon the issuance of a building permit. At the time this provision was incorporated into the SA, it was the intent that the City would immediately replace the lost public parking spaces through the Parking Fee; however, circumstances have changed and although the City intends to utilize some, if not all, of the Parking Fee towards the construction of off-site public parking spaces, the immediate need for the Parking Fee is no longer present. Accordingly, Developer is requesting that payment of the Parking Fee be deferred until such time as the City requires the Parking Fee (or portions thereof) to pay for the City's replacement of the existing parking facilities as contemplated by the SA, likely in coordination with Developer's receipt of Statewide Community Infrastructure Program (SLIP) funding, discussed further below. However, a provision has been included in the amendment to the SA that obligates Developer to pay the Parking Fee by December 31, 2018. Staff has prepared Amendment No. 8 to the PSA, and Amendment No. 2 to the SA, to accommodate the Developer's request, while preserving protections for the City with regard to the Developer's timely progress with construction of the Hotel, including preserving the City's legal ability to repurchase the Property to the extent the Developer proceeds with construction, but later fails to complete the Hotel or otherwise abandons the project. The following outlines the recommended changes to the PSA and SA: A. Require Developer, prior to City's issuance of any permits for construction of the vertical "core and shell" of the Hotel, to submit evidence to the City of the availability of financing to complete the Hotel to the City's reasonable satisfaction; such evidence may consist of a letter from Developer's private lender confirming approval of a credit facility in an appropriate amount necessary to complete the Hotel, estimated at this time to be an additional $50,000,000 beyond the credit facility already approved; B. Modify the definition of the "commencement of construction" as stated in Amendment No. 8, and thereby allow the phasing of construction of the Hotel, planned to be complete not more than twenty-six (26) months after the issuance of City Council Staff Report October 18, 2017-- Page 12 Dream Hotel Project the building permits necessary to complete the Hotel, or not later than June 30, 2020; C. Require Developer to submit its completed construction drawings and apply for a building permit for construction of the underground parking garage/foundation on or before December 31, 2017; D. Require Developer to submit its completed construction drawings and apply for a building permit for construction of the vertical "core and shell" of the Hotel on or before April 1, 2018; E. In the event that Developer for any reason has not completed construction of the Hotel's underground parking garage/foundation by January 1, 2019, and therefore, has not timely commenced with construction of the vertical "core and shell" of the Hotel, require Developer to complete all required site civil work, landscaping, utility work, and associated improvements as reasonably deemed necessary by City to prepare the underground garage for public use by the City, but excluding air conditioning systems or elevator equipment; F. Explicitly require Developer pay prevailing wages, and to indemnify, hold harmless, and defend the City against any claims in that regard; G. Prohibit Developer from engaging in any demolition of the Property prior to Developer's submittal of its completed construction drawings and application for a building permit for construction of the underground parking garage/foundation; H. In the event that Developer for any reason has not commenced construction of the Hotel's underground parking garage/foundation by April 1, 2018, require Developer to restore the Property to its pre-existing condition, including reconstruction of the existing surface parking facility, and to grant City, at no cost to the City, the right to maintain, operate, and use the Property as a public parking lot until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel; I. Preserving "Repurchase Option A", in the event that Developer for any reason has not commenced construction of the Hotel's underground parking garage/foundation by April 1, 2018, after sixty (60) days' written notice and failure to cure, the City in its sole discretion has the right to acquire the Property from Developer for the Developer's Purchase Price of $2,000,000 or the current fair market appraised value, whichever is higher, less the amount the City must expend to restore the Property to its original condition as a public parking lot; J. Require the Developer to deliver a commitment letter from its lender that the lender acknowledges that the Parking Fee in the amount of $2,675,000 is a part of the Developer's approved funding, including annualized interest on the deferred payment (at a minimum rate in accordance with LAIF or 2% maximum), with the Parking Fee to be held and preserved in trust by the lender for the City, for use by the City, at the City's sole discretion, in whole or part, for replacement parking or any other public purpose. In the event Developer has not paid the full amount of the Parking Fee, and Developer has defaulted with regard to completion of the Hotel, and City elects to acquire the Property pursuant to either "Repurchase Option A" or "Repurchase Option B" in accordance with Section 19 of the PSA, then the purchase price shall be reduced by the amount of the Parking Fee owing to the City. • 2 City Council Staff Report October 18, 2017-- Page 13 Dream Hotel Project K. Allow City, at City's cost, to remove all electric vehicle charging equipment, light poles, and palm trees located on the Property; L. Require Developer to provide City with ten (10) days' notice before commencing demolition of the existing parking lot; M. Require that the Hotel be at least a Four Star Hotel operated by Dream Hotel Group; and Developer has submitted its request for a demolition permit and believes it can begin as early as November 2017. With plans and specifications for the garage and foundation projected for submittal this year, construction for this component of the Project may begin by January 2018, saving months that otherwise would have ensued prior to the vertical core and shell plans and specifications being completed for submittal. Developer has informed staff the anticipated opening date of the Hotel is early 2020. The proposed Amendment No. 8 does not affect, modify or delete the existing "Repurchase Option B" incorporated into the PSA via Amendment No. 4. This option allows for the City to declare the Developer in default for failure to complete construction of the Hotel by the revised performance date, which is now recommended in two phased time frames: (1) completion of underground parking garage/foundation and commencement of vertical "core and shell" by December 31, 2017; or (2), completion of the Hotel by June 30, 2020. As was stipulated in this term approved by Council on November 4, 2015, the purchase price payable by the City to Developer pursuant to "Repurchase Option B" includes the Purchase Price paid by Developer, plus any cash payments previously paid for development of the Property since October 1, 2013, financed costs associated with design and entitlements, amounts financed inclusive of all "hard" and "soft" costs related to the Property and the improvements constructed thereon. To the extent the Developer proceeds with construction of the underground parking garage/foundation and/or the vertical "core and shell" of the Hotel, the repurchase price will be significantly higher than under the "Repurchase Option A" scenario. Parking Fee— SCIP Financing The Developer intends to finance the Parking Fee pursuant to a SCIP Community Facilities District ("CFD") to be imposed on the Property. SCIP is a financial tool to provide financing for public improvements through bonds available through the California Statewide Community Development Authority, to finance public infrastructure projects. SCIP allows property owners in participating cities and counties to finance development impact fees and public capital improvements costs. Thus, to the extent the City utilizes some or all of the Parking Fee towards the cost of public improvements, the Developer may be reimbursed through the SCIP bond proceeds for its payment of the Parking Fee. Developer and other property owners within the project (i.e. individual owners of the condominium units) would be assessed a special tax for the SCIP CFD added to the property tax bill. The SCIP bond repayment tied to property tax payments allows for lower cost, and longer term financing, replacing the Developer's requirement I3 City Council Staff Report October 18, 2017 -- Page 14 Dream Hotel Project for upfront capital for payment of the Parking Fee that carries more expensive financing than the lower-cost, long-term SCIP bond financing debt. As outlined above, Developer requests that the SA be amended to allow for deferral of the Parking Fee payment to the City. In order to secure the City's payment, staff is recommending that the SA amendment include an obligation of the Developer to provide a Commitment Letter from its lender acknowledging the City's Parking Fee is a part of the Developer's approved funding, including annualized interest on the deferred payment (at a minimum rate in accordance with LAIF or 2% maximum), with the Parking Fee to be held and preserved in trust by the lender for the City, for use by the City, at the City's sole discretion, in whole or part, for either (1) replacement parking or other eligible SCIP financed public improvements, or (2) any other governmental purpose ineligible for SCIP financing. To the extent the Developer has not commenced with construction of the vertical "core and shell" of the Hotel by December 31, 2018, the Parking Fee will become due and payable to the City. This modification avoids any impact this payment would otherwise have on Developer's financing through its lender. Since the Developer's lender will hold the Parking Fee until the City requires it for replacement of public parking, the deferral delays the start of the three (3) year limitation within which public improvements financed through SCIP must be spent on the related public improvements, providing the City with greater flexibility in the timing of physical construction of the replacement parking and/or other public improvements the City chooses to construct with the payment. ENVIRONMENTAL DETERMINATION: On July 18, 2007, the City Council adopted Mitigated Negative Declaration (MND) No. 2006109032 for the Project; City Council adopted an Addendum to the MND on November 20, 2013. In accordance with California Environmental Quality Act (CEQA) Guidelines Section 15162, the City prepared a Subsequent Initial Study / Mitigated Negative Declaration (IS/MND) for the amended project to identify whether or not any significant environmental impacts may result from the proposed amended project. Specifically, the Subsequent IS/MND evaluated the following environmental factors: aesthetics, agricultural resources, air quality, biological resources, cultural resources, geology and soils, greenhouse gas emission, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, noise, population and housing, public services, recreation, transportation/traffic, tribal cultural resources, and utilities and service systems. The Subsequent IS/MND determined that the amended project would not result in any significant environmental impacts that could not be mitigated. Mitigation measures were incorporated to ensure that the amended project would have a less than significant impact on the environment. Pursuant to CEQA Guidelines, a Notice of Intent to adopt a Subsequent Mitigated Negative Declaration was prepared. The Notice of Intent (NOI) was circulated for public review and comments. The review and comments period 0 1 City Council Staff Report October 18, 2017-- Page 15 Dream Hotel Project commenced on April 20, 2017, and closed on May 9, 2017. Comments were received from reviewing agencies and other interested parties; responses to the comments were completed. On June 7, 2017, the City Council adopted Resolution No. 24236, adopting the Subsequent IS/MND for the amended project. No further environmental review pursuant to CEQA is required. FISCAL IMPACT: The proposed amendments to the PSA and SA do not affect the Purchase Price the Developer paid to the City for acquisition of the Property; however, the amendments do provide for deferral of the Developer's payment of the Parking Fee in the amount of $2,675,000 that would otherwise be paid upon issuance of the first building permit. In return for deferral of the Parking Fee payment, Developer has agreed to pay to City accrued interest (pursuant to LAIF or 2% maximum), until such time as the City has received full payment of the Parking Fee. Staff has approximated the net positive economic impact ranging from $500,000 to $700,000 annually accruing to the City as a result of development of the Hotel. A similar net positive economic impact will accrue to the other taxing entities (i.e. Palm Springs Unified School District, Coachella Valley Community College District, Riverside County, etc.). City Council Staff Report October 18, 2017 -- Page 16 Dream Hotel Project SUBMITTED: Marcus Fuller, MPA, P.E., P.L.S. Edward Kotkin, Assistant City Manager City Attorney 7 David;11. Ready, Esq., Ph. Jay Vi to City Manager Direct r, C munity & Economic Develo ent Attachments: 1. Amendment No. 8 to the Purchase and Sale Agreement 2. Amendment No. 2 to the Services Agreement 16 AMENDMENT NO. 8 TO PURCHASE AND SALE AGREEMENT (DREAM HOTEL) This Amendment No. 8 to the Purchase and Sale Agreement (the "Amendment'), is made and entered into this day of , 2017, by and between the City of Palm Springs, California, a California Charter City and municipal corporation, ("City"), and Selene Palm Springs, LLC, a California limited liability company, the successor in interest to Praetor Investments, LLC, a California limited liability company ("Developer"). RECITALS A. City and Developer entered into that certain Purchase and Sale Agreement dated March 6, 2013, identified as Agreement No. 6329, (the "Purchase and Sale Agreement'), for the purpose of developing and maintaining the Dolce Hotel Project, (the "Hotel'), a First Class Superior Hotel (Four+ stars), on a 7.8 acre parcel owned by the City located at the northeast corner of Calle Alvarado and East Amado Road (the "Property"). B. Delays in certain performance obligations have occurred as a result of changes in state law and outside of the control of the Parties, causing the Parties to agree to previous amendments to the Purchase and Sale Agreement to reflect changes to the Hotel by designating it as a Dream Hotel branded project, changes to the Benchmark Schedule, and changes to the Default Repurchase Conditions. C. On August 26, 2016, City and Developer completed the real property transaction consummated by the Purchase and Sale Agreement, and City conveyed fee title interest in the Property to Developer pursuant to that certain Grant Deed recorded as Document No. 2016-0367646 (the "Grant Deed"). D. In accordance with the final escrow instructions and Grant Deed, City and Developer coordinated on review of a plan for the construction of 350 to 500 parking spaces in public/private parking facilities, including the manner in which such public/private parking facilities would be financed and maintained. On April 5, 2017, the City Council determined not to participate in a joint public/private parking facility, allowing Developer to finalize the development plans for the Hotel to exclude additional public parking in excess of on-site parking otherwise required for the Hotel. E. On June 7, 2017, the City Council adopted Resolution No. 24236, approving an amendment to Final Planned Development District 333 proposed by Developer, formally revising the original Dolce Hotel Project to a first class new hotel project consisting of 169 hotel rooms and 34 multi-family residential condominium units, Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 1 17 to be operated as a "Dream Hotel" brand hotel by the Dream Hotel Group (the "Project"). F. In accordance with the City's approval of the Dream Hotel on June 7, 2017, Developer has prepared demolition, rough grading, and construction drawings for the underground parking facility and foundation of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before December 31, 2017, and will be prepared to commence with demolition of existing surface improvements and grading operations on the Property on or before December 31, 2017. Developer has also prepared construction drawings for the vertical "core and shell" of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before April 30, 201 B. G. This Amendment will modify the affected performance schedule in response to the City's recent approval of the Dream Hotel on June 7, 2017, and to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel, including mobilization of resources on the Property requiring closure of the existing surface parking facility to allow for commencement of demolition prior to issuance of final building permits for the core and shell of the Dream Hotel. H. This Amendment will modify the Default Repurchase Conditions to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel. NOW, THEREFORE, in consideration of the foregoing Recitals and promises and covenants contained in this Agreement, the City and Developer as follows: SECTION 1. The foregoing Recitals are true, correct, and incorporated by this reference herein as material terms relied upon by the Parties in agreeing to and executing this Amendment. SECTION 2. Section 15 of the Purchase and Sale Agreement is amended in its entirety to read: 15. Anticipated Opening Date of the Hotek The opening date shall occur not later than twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and foundation, but not later than June 30, 2020. Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 2 18 SECTION 3. Section 16 of the Purchase and Sale Agreement, last amended in Amendment No. 7, is amended in its entirety to read: 16. Benchmark Schedule: Entitlements: The Parties agree that Developer has complied with the previously agreed benchmark schedule for completion of the Final Planned Development Permit not later than nine (9) months from the close of escrow. Submittal for Permit: Developer shall make the following submittals to the City's Building Department: (1) no later than December 31, 2017, full construction drawings for a building permit, as part and parcel of a building permit application for construction of the underground parking facility and the foundation for the core and shell; and (2) no later than April 30, 2018, full construction drawings for a building permit, as part and parcel of a building permit application for the completed construction of the "core and shell" of the Hotel Project. In agreeing upon these dates and submittal requirements, the Parties agree that Developer may submit applications for sequential/phased building permits for the Hotel Project, generally consisting of an initial building permit for construction of the underground parking facility and core and shell foundation, followed by a second building permit for completed construction of the "core and shell" of the hotel buildings. These two (2) enumerated submittals may be followed by various other building permits required for completion of accessory structures, completion of interior building improvements, and construction of tenant improvements. Start of Construction (Site Mobilization): Upon ten (10) days' written notice to City, Developer may mobilize its resources on the Property and close the existing surface parking facility to allow for site mobilization and demolition prior to Developer undertaking to "Commence Construction" (as that term is defined in Section 19a herein). The Parties anticipate this mobilization as taking place not earlier than November 16, 2017. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to allow City to secure and remove from the Project site, at City's sole cost, any existing parking lot lighting improvements, existing electric vehicle charging stations, and existing palm trees. Start of Construction (Hotel Project): Developer shall proceed with construction of the Dream Hotel (beginning with the underground parking facility and core and shell foundation) not later than April 1, 2018. Developer shall complete construction of the underground parking facility and core and shell foundation not later than December 31, 2018. Continuous Construction: In the event Developer does not commence with construction of the vertical "core and shell" of the Hotel Project by December 31, 2018, and within sixty (60) days following written notice of the failure to do so by Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 3 19 City, Developer fails to commence with such construction, Developer shall be required, at its sole cost, to complete all required site civil work, landscaping, utility work, and associated improvements as reasonably deemed necessary by City to prepare the underground garage for public use by the City, but excluding air conditioning systems and elevator equipment, (the "Garage Improvements"). In the event of such default of "continuous construction" as specified herein, Developer shall complete the Garage Improvements within ninety (90) days following written notice thereof by City to complete the garage improvements. Developer hereby further agrees to grant to City, at no cost to the City, the right to maintain, operate, and use the Garage Improvements on the Property as a public parking facility until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. Opening Date: Twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and core and shell foundation, but not later than June 30, 2020. SECTION 4. Section 18e of the Purchase and Sale Agreement is amended in its entirety to read: e. Evidence of Financing — Post Closing. Developer and its financing partner shall submit sufficient evidence of having secured financing for the full cost of the construction of the Dream Hotel, acceptable to the City Attorney. Such evidence shall be provided as a condition precedent to the City's issuance of a building permit for construction of the vertical "core and shell" of the Dream Hotel. SECTION 5. Section 19a of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: a. Option to Repurchase Upon Failure to Commence Construction. City and Developer acknowledge and agree that as a material consideration inducing the City to enter into this Agreement and sell the City Property to Developer, Developer intends to Commence Construction, and has received various discretionary development entitlements for, a First Class Hotel on the City Property on or before the date for the Start of Construction identified in the Benchmark Schedule identified in Section 16 herein. For the purposes of this Section 19, the Parties acknowledge that the Hotel Project approved on June 7, 2017, as an amended Final Planned Development, if constructed as approved, will be a "First Class Hotel." For the purposes of this Section 19, the term "Commence Construction" shall mean Developer has: (1) secured City issuance of a rough grading permit providing for the site clearing, demolition, and removal of all existing surface improvements, (2) completed the construction drawings for the underground parking facility and core and shell foundation, (3) submitted said Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 4 20 construction drawings and a complete building permit application for the underground parking facility and foundation to the City's Building Department. The City and Developer hereby further acknowledge and agree that if Developer should Commence Construction upon City's issuance of a rough grading permit, thereby removing the existing surface parking facility, and subsequently fail to submit the required construction drawings and obtain the associated building permit for the underground parking facility and core and shell foundation of the Hotel Project at the City Property on or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fail to cure the same within sixty (60) days following written notice thereof by City, City shall have the option (as its sole and exclusive remedy) to repurchase the Property from Developer (the "Repurchase Option A"), subject to the terms and conditions set forth in this Section 19a. In the event of such default, Developer agrees to and shall be solely responsible for restoring the Property to its pre- existing condition, including reconstruction of the existing surface parking facility. Further, in the event of such default and City exercise of Repurchase Option A, Developer hereby grants to City, at no cost to the City, the right to maintain, operate, and use the Property as a public parking lot until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to restore the Property in the event of default and City exercise of Repurchase Option A as provided herein. Notwithstanding anything to the contrary contained herein, City's Repurchase Option A shall vest and come into existence only upon the occurrence of the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and only in the event Developer should fail to commence construction of the Hotel Project at the City Property on or before the Start of Construction Date, and fail to cure the same within sixty (60) days following written notice thereof by City. In the event Developer commences construction of the Hotel Project at the City Property pursuant to the City's issued building permits for the underground parking facility and foundation or"core and shell" on or before the Start of Construction Date (or, if applicable, within sixty (60) days following written notice by the City), the Repurchase Option A shall automatically terminate and be of no further force and effect. SECTION 6. Section 19b of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: b. In the event Developer fails to commence construction of the underground parking facility and foundation of the Hotel Project at the City Property on or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fails to cure the same within sixty (60) days following written notice thereof by City, City shall have the right to exercise the Repurchase Option A by written notice to the Developer (the "City's Repurchase Election Notice") delivered no later than six (6) months after the Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 5 21 Start of Construction Date. In the event City fails to timely and property exercise its Repurchase Option A, the Repurchase Option A shall automatically terminate and be of no further force and effect. In the event City timely and property exercises its Repurchase Option A, the purchase price payable by City to Developer with respect to the City Property shall be an amount equal to the Purchase Price by Developer to City hereunder for the City Property shall be an amount equal to the Purchase Price paid by Developer to City hereunder for the City Property or the fair market, as determined through an appraisal of the City Property, acceptable to both properties, whichever amount is higher. In the event Developer fails to satisfy its obligation to restore the property in the event of the City's exercise of its rights pursuant to the default provision specified in Section 19a herein, within (60) days following written notice thereof by City, the Purchase Price pursuant to Repurchase Option A shall be reduced by the amount required to restore the Property to its pre-existing condition, including reconstruction of the existing surface parking facility, pursuant to construction bids solicited by the City. In the event the City timely and property exercises its Repurchase Option A, then (i) the closing shall occur on the date specified in the Repurchase Election Notice, which shall be no earlier than sixty (60) days and no later than one hundred and eighty (180) days after the date of the City's service on Developer of the Repurchase Election Notice, (ii) Developer and City shall each pay one-half(1/2) of the escrow fees, (iii) Developer shall pay for (1) any documentary tax stamps and (2) an ALTA standard Owner's Policy of Title Insurance in the full amount of the Purchase Price showing fee title vested in the City; and (iv) the City shall pay the recording fee for any other instruments which are recorded through such escrow. SECTION 7. Section 21 of the Purchase and Sale Agreement is amended to read: Provided that Developer constructs the Project as designed and approved, Developer shall be eligible to participate in the City's Hotel Incentive Program (Palm Springs Municipal Code Chapter 5.26) as a "new first class hotel" in accordance with the Operations Covenant approved by the City on December 17, 2014, as Agreement No. 6642, or any amendment to the Operations Covenant otherwise approved by the Parties. SECTION 8. Section 23b of the Purchase and Sale Agreement is amended to read: b. Amended Final Planned Development District. The Site shall be developed as established in the amended Final Planned Development District 333 and related documents approved by the City on June 7, 2017, except as changes may be mutually agreed upon between the Developer and the City. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 3). Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 6 22 SECTION 9. Attachment 3 — Scope of Development is hereby revised as follows: Section 1 "Private Development", subsection B "Developer's Improvements" is amended to read: The Developer shall construct, or cause to be constructed, on the Site a "four star' Dream Hotel of one hundred sixty nine (169) rooms, and not more than 34 additional residential units which may be fractionals, private residences, for rent residences, or condominiums and on-site parking which meets the requirements of the City. A "four star" hotel means a full service hotel comparable to other Dream Hotel brand projects in operation as of the date of this Agreement. The hotel will contain at least ten thousand (10,000) square feet of"under roof' group meeting space. SECTION 10. The following provision is hereby added to Section 31 of the Purchase and Sale: If construction of certain improvements related to the Hotel Project are considered a public work for purposes of State law, Developer shall be required to: (i) pay and cause its contractor and subcontractors to pay, prevailing wages for construction of the improvements as those wages are determined pursuant to Labor Code Sections 1720 et seq.; (ii) implement regulations of the Department of Industrial Relations; and (iii) comply with the other applicable provisions of Labor Code Sections 1720 et seq. Developer agrees for itself, and its successors and assigns, to indemnify and defend and hold harmless the City, its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claims, damages, penalties, losses, costs, expenses, injuries and/or liabilities arising out of claims that Developers construction of the Hotel Project creates a public work for prevailing wage purposes thereby requiring the payment of prevailing wages and this obligation shall apply regardless of whether or not the claim, damage, penalty, loss, cost, expense, injury and/or liability complained of arises out of or relates in any way to any negligence on the part of City. SECTION 11. The first sentence of Section 44 of the Purchase and Sale Agreement is amended to read: The Developer shall cause the Hotel to be operated pursuant to an operating and/or management agreement ("Hotel Operating Agreement") with a Dream Hotel Group qualified operator ("Operator"). SECTION 12. Except as expressly provided above, all other terms and conditions of the Purchase and Sale Agreement, as amended, shall remain unchanged and in full force and effect. [SIGNATURES ON NEXT PAGE] Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 7 23 IN WITNESS WHEREOF, the Parties have executed this Amendment and acknowledge October 18, 2017, as the effective date of this Amendment. "City" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM ATTEST By: By: Edward Z. Kotkin Kathleen Hart City Attorney Interim City Clerk "Developer" Selene Palm Springs, LLC, a California limited liability company Date: By: Lauri Kibby for CDI Ventures, LLC Managing Member Date: By: Abdul Q. Lalani for Qaiser Capital, LLC Managing Member Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 8 24 AMENDMENT NO.2 TO SERVICES AGREEMENT(SELENE) This Amendment No. 2 to the Services Agreement (the "Amendment"), is made and entered into this day of , 2017, by and between the City of Palm Springs, California, a California Charter City and municipal corporation, ("City"), and Selene Palm Springs, LLC, a California limited liability company, the successor in interest to Praetor Investments, LLC, a California limited liability company, and CDI Ventures, LLC, a California limited liability company, ("Developer"). RECITALS A. City and Developer entered into that certain Services Agreement dated March 6, 2013, identified as Agreement No. 6329, (the "Services Agreement"), for the purpose of providing for the assemblage and acquisition of certain property and to provide funding for replacement parking within a parking structure and/or parking facilities on the City's Convention Center Parking Lot in conjunction with developing and maintaining the Dolce Hotel Project, (the "Hotel"), a First Class Superior Hotel (Four+ stars), on a 7.8 acre parcel owned by the City located at the northeast corner of Calle Alvarado and East Amado Road (the "City Property"). B. City and Developer also entered into that certain related Purchase and Sale Agreement dated March 6, 2013, also identified as Agreement No. 6329, (the "Purchase and Sale Agreement"), to accommodate the conveyance of the City Property to Developer for purposes of constructing the Hotel. C. Pursuant to Amendment No. 1 to the Service Agreement approved by City on November 4, 2015, Developer agreed to pay City the amount of $2,675,000 for the unamortized parking improvements necessary or desirable for the construction of at least 350 public parking spaces to replace existing public parking spaces on the City Property that will be lost as a result of the sale of the City Property to the Developer and the construction of the Hotel (the "Parking Fee"). D. Pursuant to Amendment No. 1 to the Service Agreement approved by City on November 4, 2015, City and Developer acknowledged a desire to replace the existing public parking spaces within a public/private parking structure and related parking facilities ("Parking Facilities") that Developer will construct and maintain in conjunction with the Hotel. E. Pursuant to Amendment No. 1 to the Service Agreement approved by City on November 4, 2015, City and Developer anticipated that the Parking Facilities would be funded through the Statewide Community Infrastructure Program ("SCIP"), and that prior to or upon the issuance of a building permit, Developer will deposited the Parking Fee in an escrow account designated and approved by the City to be held by the City until such time as the funds are required to fund all or a portion of contributions Amendment No. 2 Services Agreement Dream Hotel Pagel 25 necessary for the SCIP and the construction of the Parking Facilities, and to be used solely for funding replacement public parking. F. On August 26, 2016, City and Developer completed the real property transaction consummated by the Purchase and Sale Agreement, and City conveyed fee title interest in the City Property to Developer pursuant to that certain Grant Deed recorded as Document No. 2016-0367646 (the "Grant Deed"). G. In accordance with the final escrow instructions and the restriction noted on the Grant Deed, City and Developer coordinated on review of a plan for the Parking Facilities, including the manner in which such public/private Parking Facilities would be financed and maintained. Further, the final escrow instructions and the restriction noted on the Grant Deed modified the provisions of Section 3 of the Services Agreement amended by Amendment No. 1 thereto, and requires Developer's payment of the Parking Fee to the City in one lump sum to the City prior to the issuance of any building permit on the City Property, which the City may use for any city purpose. H. On April 5, 2017, the City Council determined not to participate in a joint public/private Parking Facility, thereby eliminating the need for the Parking Fee to be paid into an escrow account designated and approved by the City to be held by the City until such time as the funds are required to fund all or a portion of contributions necessary for the SCIP and the construction of the Parking Facilities. 1. This Amendment will modify Section 3 of the Service Agreement to reflect the City's decision not to participate in a joint public/private Parking Facility, and to allow for payment of the Parking Fee subsequent to the City's issuance of building permits. NOW, THEREFORE, in consideration of the foregoing Recitals and promises and covenants contained in this Amendment, the City and Developer as follows: SECTION 1. The foregoing Recitals are true and correct, and incorporated herein by this reference as a material inducement upon which the parties relied in their decision to agree upon and execute this Amendment. SECTION 2. Section 3 of the Service Agreement is amended in its entirety to read: 3. Existing Improvements and Entitlement Rights: a. Developer shall pay City the amount of $2,675,000.00 as the cost to replace the existing public parking spaces on the City Property that will be lost as a result of the sale of the City Property to the Developer and the construction of the Dream Hotel Project, or for City to use, in an exercise of City's sole and absolute discretion, in the design, construction, maintenance or repair of any public facility or improvement (the "Parking Fee"). The Parking Fee is otherwise due and payable upon issuance of a building permit to Developer for construction of the Dream Hotel Project, Amendment No. 2 Services Agreement Dream Hotel Page 2 26 which payment may be deferred pursuant to the conditions specified herein this Section 3. b. City reserves the right, but not the obligation, to utilize the Parking Fee towards the City's costs to replace the existing public parking spaces on the City Property, and may alternatively use the Parking Fee for any other governmental purpose in its sole discretion. To the extent City utilizes the Parking Fee towards the City's costs to replace the existing public parking spaces on the City Property, the Parties acknowledge that it is the Developer's intent to reimburse itself for payment of the Parking Fee through participation in the SCIP, with all such eligible costs in the City's use of the Parking Fee to be financed through the SCIP. C. As a condition precedent to City's issuance of a building permit to Developer, Developer shall deliver a commitment letter from its financial lender, in a form acceptable to the City Attorney, acknowledging that the Parking Fee is funded and otherwise set aside, and is available for payment to the City at any time requested by the City in its sole discretion. Following City's issuance of a building permit for the Dream Hotel Project, Developer hereby agrees to increase the Parking Fee by an annualized interest equivalent to the current rate of the Local Agency Investment Fund ("LAIF") or two percent (2%), whichever is lower, until the Parking Fee is paid in full to the City. Developer acknowledges and agrees that City shall have full discretion to call for payment of a portion of, or the full amount of, the Parking Fee, when it so requires. d. In accordance with the provisions of the Purchase and Sale Agreement, as amended and executed by the Parties, Developer is obligated to commence with construction of the Dream Hotel Project, and continue with continuous construction by dates certain. In the event Developer does not commence with construction of the "core and shell" of the Dream Hotel Project by December 31, 2018, as stipulated in the Purchase and Sale Agreement, payment of the Parking Fee shall be due and payable to City in the full amount otherwise owing, inclusive of applicable interest, less any prior payments of portions of the Parking Fee made to City. In the event Developer does not otherwise pay the Parking Fee to City within thirty (30) days written notice thereof, the amount owed to the City shall constitute a lien payable to the City, and City reserves its rights to recover the Parking Fee in accordance with applicable law. e. In accordance with the Sections 19 of the Purchase and Sale Agreement, as originally amended by Amendment No. 4 and approved by City on November 4, 2015, and subsequently amended in Amendment No. 8 approved concurrently herewith (the "PSA"), the City and Developer acknowledged and agreed to various scenarios pursuant to which the City has the right to repurchase the Property. In the event that the City exercises either Repurchase Option A or Repurchase Option B as defined in Section 19, and Developer has not fully paid the Parking Fee to City pursuant to this Section 3 of the Services Agreement, the Parties agree that the Purchase Price payable by City to Developer pursuant to either Repurchase Option A or Repurchase Option B Amendment No. 2 Services Agreement Dream Hotel Page 3 �7 shall be reduced by the amount of the Parking Fee otherwise owing to the City at that time. SECTION 3. Except as expressly provided above, all other terms and conditions of the Service Agreement, as amended, shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, the Parties have executed this Amendment and acknowledge October 18, 2017, as the effective date of this Amendment. "City" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM ATTEST By: By: Edward Z. Kotkin Kathleen Hart City Attorney Interim City Clerk "Developer" Selene Palm Springs, LLC, a California limited liability company Date: By: Lauri Kibby for CDI Ventures, LLC Managing Member Date: By: Abdul Q. Lalani for Qaiser Capital, LLC Managing Member i Amendment No. 2 Services Agreement Dream Hotel Page 4 28 (� AMENDMENT NO. 8 TO �! PURCHASE AND SALE AGREEMENT (DREAM HOTEL) This Amendment No. 8 to the Purchase and Sale Agreement (the "Amendment"), is made and entered into this day of , 2017, by and between the City of Palm Springs, California, a California Charter City and municipal corporation, ("City"), and Selene Palm Springs, LLC, a California limited liability company, the successor in interest to Praetor Investments, LLC, a California limited liability company ("Developer"). RECITALS A. City and Developer entered into that certain Purchase and Sale Agreement dated March 6, 2013, identified as Agreement No. 6329, (the "Purchase and Sale Agreement'), for the purpose of developing and maintaining the Dolce Hotel Project, (the "Hotel'), a First Class Superior Hotel (Four+ stars), on a 7.8 acre parcel owned by the City located at the northeast corner of Calle Alvarado and .East Amado Road (the "Property"). B. Delays in certain performance obligations have occurred as a result of changes in state law and outside of the control of the Parties, causing the Parties to agree to previous amendments to the Purchase and Sale Agreement to reflect changes to the Hotel by designating it as a Dream Hotel branded project, changes to the Benchmark Schedule, and changes to the Default Repurchase Conditions. C. On August 26, 2016, City and Developer completed the real property transaction consummated by the Purchase and Sale Agreement, and City conveyed fee title interest in the Property to Developer pursuant to that certain Grant Deed recorded as Document No. 2016-0367646 (the "Grant Deed"). D. In accordance with the final escrow instructions and Grant Deed, City and Developer coordinated on review of a plan for the construction of 350 to 500 parking spaces in public/private parking facilities, including the manner in which such public/private parking facilities would be financed and maintained. On April 5, 2017, the City Council determined not to participate in a joint public/private parking facility, allowing Developer to finalize the development plans for the Hotel to exclude additional public parking in excess of on-site parking otherwise required for the Hotel. E. On June 7, 2017, the City Council adopted Resolution No. 24236, approving an amendment to Final Planned Development District 333 proposed by Developer, formally revising the original Dolce Hotel Project to a first class new hotel project consisting of 169 hotel rooms and 34 multi-family residential condominium units, Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 1 to be operated as a "Dream Hotel" brand hotel by the Dream Hotel Group (the "Project"). F. In accordance with the City's approval of the Dream Hotel on June 7, 2017, Developer has prepared demolition, rough grading, and construction drawings for the underground parking facility and foundation of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before December 31, 2017, and will be prepared to commence with demolition of existing surface improvements and grading operations on the Property on or before December 31, 2017. Developer has also prepared construction drawings for the vertical "core and shell" of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before April 30, 2018. G. This Amendment will modify the affected performance schedule in response to the City's recent approval of the Dream Hotel on June 7, 2017, and to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel, including mobilization of resources on the Property requiring closure of the existing surface parking facility to allow for commencement of demolition prior to issuance of final building permits for the core and shell of the Dream Hotel. H. This Amendment will modify the Default Repurchase Conditions to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel. NOW, THEREFORE, in consideration of the foregoing Recitals and promises and covenants contained in this Agreement, the City and Developer as follows: SECTION 1. The foregoing Recitals are true, correct, and incorporated by this reference herein as material terms relied upon by the Parties in agreeing to and executing this Amendment. SECTION 2. Section 15 of the Purchase and Sale Agreement is amended in its entirety to read: 15. Anticipated Opening Date of the Hotel. The opening date shall occur not later than twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and foundation, but not later than June 30, 2020. Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 2 to be operated as a "Dream Hotel" brand hotel. by the Dream Hotel Group (the "Project"). F. In accordance with the City's approval of the Dream Hotel on June 7, 2017, Developer has prepared demolition, rough grading, and construction drawings for the underground parking facility and foundation of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before December 31, 2017, and will be prepared to commence with demolition of existing surface improvements and grading operations on the Property on or before December 31, 2017. Developer has also prepared construction drawings for the vertical "core and shell" of the Dream Hotel, and will submit these construction drawings to the City for review and approval for building permit on or before April 30, 2018. G. This Amendment will modify the affected performance schedule in response to the City's recent approval of the Dream Hotel on June 7, 2017, and to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel, including mobilization of resources on the Property requiring closure of the existing surface parking facility to allow for commencement of demolition prior to issuance of final building permits for the core and shell of the Dream Hotel. H. This Amendment will modify the Default Repurchase Conditions to allow for issuance of phased building permits and sequential phased construction of the Dream Hotel. NOW, THEREFORE, in consideration of the foregoing Recitals and promises and covenants contained in this Agreement, the City and Developer as follows: SECTION 1. The foregoing Recitals are true, correct, and incorporated by this reference herein as material terms relied upon by the Parties in agreeing to and executing this Amendment. SECTION 2. Section 15 of the Purchase and Sale Agreement is amended in its entirety to read: 15. Anticipated Opening Date of the Hotel. The opening date shall occur not later than twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and foundation, but not later than June 30, 2020. Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 2 SECTION 3. Section 16 of the Purchase and Sale Agreement, last amended in Amendment No. 7, is amended in its entirety to read: 16. Benchmark Schedule: Entitlements: The Parties agree that Developer has complied with the previously agreed benchmark schedule for completion of the Final Planned Development Permit not later than nine (9) months from the close of escrow. Submittal for Permit: Developer shall make the following submittals to the City's Building Department: (1) no later than December 31, 2017, full construction drawings for a building permit, as part and parcel of a building permit application for construction of the underground parking facility and the foundation for the vertical construction of the Hotel (the "Foundation") eli; and (2) no later than April 30, 2018, full construction drawings for a building permit, as part and parcel of a building permit application for the completed construction of the "core and shell" of the Hotel Project (the "Core and Shell"). In agreeing upon these dates and submittal requirements, the Parties agree that Developer may submit applications for sequential/phased building permits for the Hotel Project, generally consisting of an initial building permit for construction of the underground parking facility and raere- a„p he'll — undation, followed by a second building permit for completed construction of the eFe and shell" of the hetel bwildingscore and Shell. These two (2) enumerated submittals may be followed by various other building permits required for completion of accessory structures, completion of interior building improvements, and construction of tenant improvements. Start of Construction (Site Mobilization): Upon ten (10) days' written notice to City, Developer may mobilize its resources on the Property and close the existing surface parking facility to allow for site mobilization and demolition prior to Developer undertaking to "Commence Construction" (as that term is defined in Section 19a herein). The Parties anticipate this mobilization as taking place not earlier than November 16, 2017. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to allow City to secure and remove from the Project site, at City's sole cost, any existing parking lot lighting improvements, existing electric vehicle charging stations, and existing palm trees. Start of Construction (Hotel Project): Developer shall proceed with construction of the Dream Hotel (beginning with the underground parking facility and Gore aR 'd s Ffoundation) not later than April 1, 2018. Developer shall complete ork on the underground parking facility and sere-afld shell fGURd Foundation not later than December 31, 2018. Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 3 Continuous Construction: In the event Developer does not commence with construction of the "Core and Shell of the Hotel Project by December 31, 2018, and within sixty (60) days following written notice of the failure to do so by City, Developer fails to commence with such construction, Developer shall be required, at its sole cost, to complete all required site civil work, landscaping, utility work, and associated improvements as reasonably deemed necessary by City to prepare the underground garage for public use by the City, but excluding air conditioning systems and elevator equipment, (the "Garage Improvements"). In the event of such default of "continuous construction" as specified herein, Developer shall complete the Garage Improvements within ninety (90) days following written notice thereof by City to complete the garage improvements. Developer hereby further agrees to grant to City, at no cost to the City, the right to maintain, operate, and use the Garage Improvements on the Property as a public parking facility until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. Opening Date: Twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and ^^re and Ffoundation, but not later than June 30, 2020. SECTION 4. Section 18e-48 is added to of-the Purchase and Sale Agreement is amended iR its eRtiretyi to read: 48. e. Evidence of Financing re Construction of Dream Hotel - Post Closing. Developer and its financing partner shall submit sufficient evidence of having secured financing for the full cost of the construction of the Dream Hotel, acceptable to the City Attorney. Such evidence shall be provided as a condition precedent to the City's issuance of a building permit for construction of the "Core and Shell of the Dream Hotel. SECTION 5. Section 19a of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: a. Option to Repurchase Upon Failure to Commence Construction. City and Developer acknowledge and agree that as a material consideration inducing the City to enter into this Agreement and sell the City Property to Developer, Developer intends to Commence Construction, and has received various discretionary development entitlements for, a First Class Hotel on the City Property on or before the date for the Start of Construction identified in the Benchmark Schedule identified in Section 16 herein. For the purposes of this Section 19, the Parties acknowledge that the Hotel Project approved on June 7, 2017, as an amended Final Planned Development, if constructed as approved, will-would be a "First Class Hotel." For the purposes of this Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 4 SECTION 3. Section 16 of the Purchase and Sale Agreement, last amended in Amendment No. 7, is amended in its entirety to read: 16. Benchmark Schedule: Entitlements: The Parties agree that Developer has complied with the previously agreed benchmark schedule for completion of the Final Planned Development Permit not later than nine (9) months from the close of escrow. Submittal for Permit: Developer shall make the following submittals to the City's Building Department: (1) no later than December 31, 2017, full construction drawings for a building permit, as part and parcel of a building permit application for construction of the underground parking facility and the foundation for the vertical construction of the Hotel (the "Foundation GGFe and c:w-; and (2) no later than April 30, 2018, full construction drawings for a building permit, as part and parcel of a building permit application for the completed construction of the "core and shell" of the Hotel Project (the "Core and Shell"). In agreeing upon these dates and submittal requirements, the Parties agree that Developer may submit applications for sequential/phased building permits for the Hotel Project, generally consisting of an initial building permit for construction of the underground parking facility and nr—and ll—Ffoundation, followed by a second building permit for completed construction of the ^re and shell" of the eild+agsCore and Shell. These two (2) enumerated submittals may be followed by various other building permits required for completion of accessory structures, completion of interior building improvements, and construction of tenant improvements. Start of Construction (Site Mobilization): Upon ten (10) days' written notice to City, Developer may mobilize its resources on the Property and close the existing surface parking facility to allow for site mobilization and demolition prior to Developer undertaking to "Commence Construction" (as that term is defined in Section 19a herein). The Parties anticipate this mobilization as taking place not earlier than November 16, 2017. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to allow City to secure and remove from the Project site, at City's sole cost, any existing parking lot lighting improvements, existing electric vehicle charging stations, and existing palm trees. Start of Construction (Hotel Project): Developer shall proceed with construction of the Dream Hotel (beginning with the underground parking facility and Ffoundation) not later than April 1, 2018. Developer shall complete ork on the underground parking facility and sere-and E;hell found Foundation not later than December 31, 2018. Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 3 Section 19, the term "Commence Construction" shall mean Developer has: (1) secured City issuance of a rough grading permit providing for the site clearing, demolition, and removal of all existing surface improvements, (2) completed the construction drawings for the underground parking facility and GGFe and r Ffoundation, (3) submitted said construction drawings and a complete building permit application for the underground parking facility and Ffoundation to the City's Building Department. The City and Developer hereby further acknowledge and agree that if Developer should Commence Construction upon City's issuance of a rough grading permit, thereby removing the existing surface parking facility, and subsequently fails to submit the required construction drawings and obtain the associated building permit for the underground parking facility and GeFe and s Ffoundation of the Hotel Project at the City Property on or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fails to cure the same within sixty (60) days following written notice thereof by City, City shall have the option (as its sole and exclusive remedy) to repurchase the Property from Developer (the "Repurchase Option A"), subject to the terms and conditions set forth in this Section 19a and in Section 19b. In the event of such default, Developer agrees to and shall be solely responsible for restoring the Property to its pre-existing condition, including reconstruction of the existing surface parking facility. Further, in the event of such default and City exercise of Repurchase Option A, Developer hereby grants to City, at no cost to the City, the right to maintain, operate, and use the Property as a public parking lot until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to restore the Property in the event of default and City exercise of Repurchase Option A as provided herein. Notwithstanding anything to the contrary contained herein, City's Repurchase Option A shall vest and come into existence only upon the occurrence of the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and only in the event Developer should fail to Commmence Csonstruction of the Hotel Project at the City Property on or before the Start of Construction Date, and fail to cure the same within sixty (60) days following written notice thereof by City. In the event Developer Csommences Csonstruction of the Hotel Project at the City Property pursuant to the City's issued building permits for the underground parking facility and Ffoundation " on or before the Start of Construction Date (or, if applicable, within sixty (60) days following written notice by the City), the Repurchase Option A shall automatically terminate and be of no further force and effect. SECTION 6. Section 19b of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: b. In the event Developer fails to Commmence Csonstruction of the underground parking facility and Ffoundation Gf the HGtel PFGjeGt at the City Property on Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 5 or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fails to cure the same within sixty (60) days following written notice thereof by City, City shall have the right to exercise the Repurchase Option A by written notice to the Developer (the "City's Repurchase Election Notice") delivered no later than six (6) months after the Start of Construction Date, time being of the essence. In the event City fails to timely and properlty exercise its Repurchase Option A, the Repurchase Option A shall automatically terminate and be of no further force and effect. In the event City timely and properlty exercises its Repurchase Option A, the purchase price payable by City to Developer with respect to the City Property shall be an amount equal to the equat--to the Purchase Price paid by Developer to City hereunder for the City Property or the fair market, as determined through an appraisal of the City Property, acceptable to both properties, whichever amount is higher. In the event Developer fails to satisfy its obligation to restore the property, and in the event of the City's exercise of its rights pursuant to the default provision specified in Section 19a herein, within (60) days following written notice thereof by City, the Purchase Price pursuant to Repurchase Option A shall be reduced by the amount required to restore the Property to its pre- existing condition, including reconstruction of the existing surface parking facility, pursuant to construction bids solicited by the City. In the event the City timely and property exercises its Repurchase Option A, then (i) the closing shall occur on the date specified in the Repurchase Election Notice, which shall be no earlier than sixty (60) days and no later than one hundred and eighty (180) days after the date of the City's service on Developer of the Repurchase Election Notice, (ii) Developer and City shall each pay one-half (1/2) of the escrow fees, (iii) Developer shall pay for (1) any documentary tax stamps and (2) an ALTA standard Owner's Policy of Title Insurance in the full amount of the Purchase Price showing fee title vested in the City; and (iv) the City shall pay the recording fee for any other instruments which are recorded through such escrow. SECTION 7. Section 21 of the Purchase and Sale Agreement is amended in its entirety to read: Provided that Developer constructs the Project as designed and approved, Developer shall be eligible to participate in the City's Hotel Incentive Program (Palm Springs Municipal Code Chapter 5.26) as a "new first class hotel" in accordance with the Operations Covenant approved by the City on December 17, 2014, as Agreement No. 6642, or any amendment to the Operations Covenant otherwise approved by the Parties. SECTION 8. Section 23b of the Purchase and Sale Agreement is amended in its entirety to read: b. Amended Final Planned Development District. The Site shall be developed as established in the amended Final Planned Development District 333 and Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 6 Continuous Construction: In the event Developer does not commence with construction of the "Core and Shell of the Hotel Project by December 31, 2018, and within sixty (60) days following written notice of the failure to do so by City, Developer fails to commence with such construction, Developer shall be required, at its sole cost, to complete all required site civil work, landscaping, utility work, and associated improvements as reasonably deemed necessary by City to prepare the underground garage for public use by the City, but excluding air conditioning systems and elevator equipment, (the "Garage Improvements"). In the event of such default of "continuous construction" as specified herein, Developer shall complete the Garage Improvements within ninety (90) days following written notice thereof by City to complete the garage improvements. Developer hereby further agrees to grant to City, at no cost to the City, the right to maintain, operate, and use the Garage Improvements on the Property as a public parking facility until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. Opening Date: Twenty-six (26) months from issuance of the first building permit for construction of the underground parking facility and Ffoundation, but not later than June 30, 2020. SECTION 4. Section 18e-48 is added to of-the Purchase and Sale Agreement +s amended in 46 entirety to read: 48. a-.—Evidence of Financing re Construction of Dream Hotel - Post Closing. Developer and its financing partner shall submit sufficient evidence of having secured financing for the full cost of the construction of the Dream Hotel, acceptable to the City Attorney. Such evidence shall be provided as a condition precedent to the City's issuance of a building permit for construction of the VeFtiGal "^^re and E;he!Core and Shell of the Dream Hotel. SECTION 5. Section 19a of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: a. Option to Repurchase Upon Failure to Commence Construction. City and Developer acknowledge and agree that as a material consideration inducing the City to enter into this Agreement and sell the City Property to Developer, Developer intends to Commence Construction, and has received various discretionary development entitlements for, a First Class Hotel on the City Property on or before the date for the Start of Construction identified in the Benchmark Schedule identified in Section 16 herein. For the purposes of this Section 19, the Parties acknowledge that the Hotel Project approved on June 7, 2017, as an amended Final Planned Development, if constructed as approved, wifl--would be a "First Class Hotel." For the purposes of this Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 4 related documents approved by the City on June 7, 2017, except as changes may be mutually agreed upon between the Developer and the City. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 3). SECTION 9. Attachment 3 — Scope of Development is hereby revised as follows: Section 1 "Private Development", subsection B "Developer's Improvements" is amended in its entirety to read: The Developer shall construct, or cause to be constructed, on the Site a "four star" Dream Hotel of one hundred sixty nine (169) rooms, and not more than 34 additional residential units which may be fractionals, private residences, for rent residences, or condominiums and on-site parking which meets the requirements of the City. A "four star" hotel means a full service hotel comparable to other Dream Hotel brand projects in operation as of the date of this Agreement. The hotel will contain at least ten thousand (10,000) square feet of"under roof' group meeting space. SECTION 10. The following provision is hereby added to Section 31 of the Purchase and Sale: If construction, of certain improvements related to the Hotel Project are considered a public work for purposes of State law, Developer shall be required to: (i) pay and cause its contractor and subcontractors to pay, prevailing wages for construction of the improvements as those wages are determined pursuant to Labor Code Sections 1720 et seq.; (ii) implement regulations of the Department of Industrial Relations; and (iii) comply with the other applicable provisions of Labor Code Sections 1720 et seq. Developer agrees for itself, and its successors and assigns, to indemnify and defend and hold harmless the City, its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claims, damages, penalties, losses, costs, expenses, injuries and/or liabilities arising out of claims that Developer's construction of the Hotel Project creates a public work for prevailing wage purposes thereby requiring the payment of prevailing wages and this obligation shall apply regardless of whether or not the claim, damage, penalty, loss, cost, expense, injury and/or liability complained of arises out of or relates in any way to any negligence on the part of City. SECTION 11. The first sentence of Section 44 of the Purchase and Sale Agreement is amended to read: The Developer shall cause the Hotel to be operated pursuant to an operating and/or management agreement ("Hotel Operating Agreement") with a Dream Hotel Group qualified operator ("Operator"). Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 7 SECTION 12. A new Section 49 is hereby added to the Purchase and Sale Agreement reading as follows: 49. Force Majeure. Notwithstanding anything to the contrary contained in this Agreement, in the event that any obligation in this Agreement to be performed by Developer (including, without limitation, the Benchmark Schedule in Section 16) is not fulfilled within the time period required hereunder due to Force Majeure (as hereinafter defined), the date required for fulfillment of such obligation shall be automatically extended for the period equal to the time lost by reason of the delay. As used herein, the term "Force Maieure" means each of the following: (1) acts of God (including, without limitation, tornadoes, floods, hurricanes, earthquakes, (ii) embargoes, interruptions to financial markets or to domestic or international transportation to/from the United States of a duration of one month or longer, jiii) acts or campaigns of terrorism or sabotage, (iv1 federal, state, or county laws, rules, orders and regulations issued beyond the capacity of the City to control or limit, (v) war, or a pandemic, and(vi) any matter(s) not covered in clauses (i) through (v) that the developer and City agree prevents progress in the construction and development of the Project. SECTION 13. Except as expressly provided above, all other terms and conditions of the Purchase and Sale Agreement, as amended, shall remain unchanged and in full force and effect. [SIGNATURES ON NEXT PAGE] Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 8 has: 1 secured Construction shall mean Developer Section 19, the term "Commence ( ) City issuance of a rough grading permit providing for the site clearing, demolition, and removal of all existing surface improvements, (2) completed the construction drawings for the underground parking facility and ^^re and c Ffoundation, (3) submitted said construction drawings and a complete building permit application for the underground parking facility and Ffoundation to the City's Building Department. The City and Developer hereby further acknowledge and agree that if Developer should Commence Construction upon City's issuance of a rough grading permit, thereby removing the existing surface parking facility, and subsequently fails to submit the required construction drawings and obtain the associated building permit for the underground parking facility and Ffoundation of the Hotel Project at the City Property on or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fails to cure the same within sixty (60) days following written notice thereof by City, City shall have the option (as its sole and exclusive remedy) to repurchase the Property from Developer (the "Repurchase Option A"), subject to the terms and conditions set forth in this Section 19a and in Section 19b. In the event of such default, Developer agrees to and shall be solely responsible for restoring the Property to its pre-existing condition, including reconstruction of the existing surface parking facility. Further, in the event of such default and City exercise of Repurchase Option A, Developer hereby grants to City, at no cost to the City, the right to maintain, operate, and use the Property as a public parking lot until such time as Developer, or Developer's successor in interest, proceeds with construction of the Hotel Project. As a condition precedent to City's issuance of a rough grading permit allowing for removal of the existing surface parking facility, Developer agrees to restore the Property in the event of default and City exercise of Repurchase Option A as provided herein. Notwithstanding anything to the contrary contained herein, City's Repurchase Option A shall vest and come into existence only upon the occurrence of the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and only in the event Developer should fail to Csommence Csonstruction of the Hotel Project at the City Property on or before the Start of Construction Date, and fail to cure the same within sixty (60) days following written notice thereof by City. In the event Developer Csommences Csonstruction of the Hotel Project at the City Property pursuant to the City's issued building permits for the underground parking facility and Ffoundation " on or before the Start of Construction Date (or, if applicable, within sixty (60) days following written notice by the City), the Repurchase Option A shall automatically terminate and be of no further force and effect. SECTION 6. Section 19b of the Purchase and Sale Agreement, as added by Amendment No. 4 to the Purchase and Sale Agreement, is amended in its entirety to read: b. In the event Developer fails to Csommence Csonstruction of the underground parking facility and Ffoundation t the City Property on Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 5 IN WITNESS WHEREOF, the Parties have executed this Amendment and acknowledge October 18, 2017, as the effective date of this Amendment. "City" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM ATTEST By: By: Edward Z. Kotkin Kathleen Hart City Attorney Interim City Clerk "Developer" Selene Palm Springs, LLC, a California limited liability company Date: By: Lauri Kibby for CDI Ventures, LLC Managing Member Date: By: Abdul Q. Lalani for Qaiser Capital, LLC Managing Member Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 9 or before the Start of Construction Date, (April 1, 2018), specified in Section 16 herein, and fails to cure the same within sixty (60) days following written notice thereof by City, City shall have the right to exercise the Repurchase Option A by written notice to the Developer (the "City's Repurchase Election Notice") delivered no later than six (6) months after the Start of Construction Date, time being of the essence. In the event City fails to timely and properlty exercise its Repurchase Option A, the Repurchase Option A shall automatically terminate and be of no further force and effect. In the event City timely and properlty exercises its Repurchase Option A, the purchase price payable by City to Developer with respect to the City Property shall be an amount equal to the eq+at-to the Purchase Price paid by Developer to City hereunder for the City Property or the fair market, as determined through an appraisal-of the City Property, acceptable to both properties, whichever amount is higher. In the event Developer fails to satisfy its obligation to restore the property, and in the event of the City's exercise of its rights pursuant to the default provision specified in Section 19a herein, within (60) days following written notice thereof by City, the Purchase Price pursuant to Repurchase Option A shall be reduced by the amount required to restore the Property to its pre- existing condition, including reconstruction of the existing surface parking facility, pursuant to construction bids solicited by the City. In the event the City timely and property exercises its Repurchase Option A, then (i) the closing shall occur on the date specified in the Repurchase Election Notice, which shall be no earlier than sixty (60) days and no later than one hundred and eighty (180) days after the date of the City's service on Developer of the Repurchase Election Notice, (H) Developer and City shall each pay one-half (1/2) of the escrow fees, (iii) Developer shall pay for (1) any documentary tax stamps and (2) an ALTA standard Owner's Policy of Title Insurance in the full amount of the Purchase Price showing fee title vested in the City; and (iv) the City shall pay the recording fee for any other instruments which are recorded through such escrow. SECTION 7. Section 21 of the Purchase and Sale Agreement is amended in its entirety to read: Provided that Developer constructs the Project as designed and approved, Developer shall be eligible to participate in the City's Hotel Incentive Program (Palm Springs Municipal Code Chapter 5.26) as a "new first class hotel" in accordance with the Operations Covenant approved by the City on December 17, 2014, as Agreement No. 6642, or any amendment to the Operations Covenant otherwise approved by the Parties. SECTION 8. Section 23b of the Purchase and Sale Agreement is amended in its entirety to read: b. Amended Final Planned Development District. The Site shall be developed as established in the amended Final Planned Development District 333 and Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 6 related documents approved by the City on June 7, 2017, except as changes may be mutually agreed upon between the Developer and the City. Any such changes shall be within the limitations of the Scope of Development (Attachment No. 3). SECTION 9. Attachment 3 — Scope of Development is hereby revised as follows: Section 1 "Private Development", subsection B "Developer's Improvements" is amended in its entirety to read: The Developer shall construct, or cause to be constructed, on the Site a "four star" Dream Hotel of one hundred sixty nine (169) rooms, and not more than 34 additional residential units which may be fractionals, private residences, for rent residences, or condominiums and on-site parking which meets the requirements of the City. A "four star' hotel means a full service hotel comparable to other Dream Hotel brand projects in operation as of the date of this Agreement. The hotel will contain at least ten thousand_ (10,000) square feet of"under roof' group meeting space. SECTION 10. The following provision is hereby added to Section 31 of the Purchase and Sale: If construction, of certain improvements related to the Hotel Project are considered a public work for purposes of State law, Developer shall be required to: (i) pay and cause its contractor and subcontractors to pay, prevailing wages for construction of the improvements as those wages are determined pursuant to Labor Code Sections 1720 et seq.; (H) implement regulations of the Department of Industrial Relations; and (fii) comply with the other applicable provisions of Labor Code Sections 1720 et seq. Developer agrees for itself, and its successors and assigns, to indemnify and defend and hold harmless the City, its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claims, damages, penalties, losses, costs, expenses, injuries and/or liabilities arising out of claims that Developer's construction of the Hotel Project creates a public work for prevailing wage purposes thereby requiring the payment of prevailing wages and this obligation shall apply regardless of whether or not the claim, damage, penalty, loss, cost, expense, injury and/or liability complained of arises out of or relates in any way to any negligence on the part of City. SECTION 11. The first sentence of Section 44 of the Purchase and Sale Agreement is amended to read: The Developer shall cause the Hotel to be operated pursuant to an operating and/or management agreement ("Hotel Operating Agreement") with a Dream Hotel Group qualified operator ("Operator"). Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 7 SECTION 12. A new Section 49 is hereby added to the Purchase and Sale Agreement reading as follows: 49. Force Maieure. Notwithstanding anything to the contrary contained in this Agreement in the event that any obligation in this Agreement to be performed by Developer (including, without limitation, the Benchmark Schedule in Section 16) is not fulfilled within the time period required hereunder due to Force Maieure (as hereinafter defined) the date required for fulfillment of such obligation shall be automatically extended for the period equal to the time lost by reason of the delay. As used herein, the term "Force Maieure" means each of the following: (i) acts of God (including, without limitation tornadoes, floods, hurricanes, earthquakes, (ii) embargoes, interruptions to financial markets or to domestic or international transportation to/from the United States of a duration of one month or longer, (iii) acts or campaigns of terrorism or sabotage, (iv) federal state, or county laws, rules, orders and regulations issued beyond the capacity of the City to control or limit, (v) war, or a pandemic, and (vi) any matter(s) not covered in clauses (i) through () that the developer and City agree prevents progress in the construction and development of the Project. SECTION 13. Except as expressly provided above, all other terms and conditions of the Purchase and Sale Agreement, as amended, shall remain unchanged and in full force and effect. [SIGNATURES ON NEXT PAGE] Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 8 IN WITNESS WHEREOF, the Parties have executed this Amendment and acknowledge October 18, 2017, as the effective date of this Amendment. "City" City of Palm Springs Date: By: David H. Ready City Manager APPROVED AS TO FORM ATTEST By: By: Edward Z. Kotkin Kathleen Hart City Attorney Interim City Clerk "Developer" Selene Palm Springs, LLC, a California limited liability company Date: By: Lauri Kibby for CDI Ventures, LLC Managing Member Date: By: Abdul Q. Lalani for Qaiser Capital, LLC Managing Member Amendment No. 8 Purchase and Sale Agreement Dream Hotel Page 9