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HomeMy WebLinkAbout5/21/2008 - STAFF REPORTS - RA.3. E LiI a!, if�i a P NE, 1 I1 11 N II I'M I n `1_ � OIIIIIV� J I r uGG11��1 JI � r, IIII � Ld CITY CLELF.n LETTER OF TRANSMITTAL. ATTENTION: Mr. James Thompson City Clerk City of Palm Springs 3200 E Tahquitz Canyon Way Palm Springs, CA 92262 (760) 323-8204 - Ph. 8UU V, J0-=1U111JJ 1,UL1 (760) 322-8332 - Fax 011 „ Afl A'°°""A FROM: Stephen Roberts Vice President, Development Community Dynamics eio f Uffica. 2800 28t" Street, Suite 206 Santa Monica, CA 90405 (310) 399-9555 x204 - Ph. „�1 I I„V-r1 I rll (310) 399-9777 - Fax DATE: Friday, May 16, 2008 REFERENCE: Letter to Mayor and Members of the City Council Request for Inclusion in May 21, 2008 Council Packet REMARKS: Dear Mr. Thompson, Enclosed are five(5) copies of a letter from Community Dynamics to the members of the City Council. We respectfully request that you include this letter in the Council Packet for the May 21, 2008 meeting. Our letter pertains to item RA3 on the Agenda -- Approval of an Exclusive Agreement to Negotiate and a recoverable Grant Agreement with Community Dynamics. We are also sending this letter to the City Council members directly via e- mail; however, we understand they are away from the office and therefore may not be able to review the letter before they receive the Council Packet. Please feel free to contact me if you have any questions about this request. Thank you. �q-b1-n 012 A 1_ 11;z^3 C11 r' CF Fs',U4 S Pp.I!'' �; �i v� it i I'� IM 1 L u 20 ;gq 9 AH 8= 42 CITY CLERI, May 16, 2008 Hon. Steve Pougnet, Mayor and Members of the City Council City of Palm Springs 3200 East Tahquitz Canyon Way Palm Springs, CA 92262 Via E- and Overnight Mail Re: Affordable Housing at Indian Canyon and San Rafael 11 L„ Dear Mayor Pougnet and Members of the Council, 111,TA nn10', During the May 14 discussion of affordable housing options for the ,U Agency-owned 3.63 acre property at Indian Canyon and San Rafael, the Agency Board raised questions regarding the housing market, mortgage financing and the green building component of Community Dynamics' proposal for a new community of 52 moderate income townhomes- This letter is intended to address the questions raised on May 14. — Council Member Foat noted that many builders are having difficulty selling their new home inventory and asked whether the Agency should be delivering new for-sale housing at this time. While market challenges exist for builders selling homes at market rate prices, at this affordable housing community we propose to sell 100% of the homes at sales prices that are below market- Byway of example, the effective cost to the homeowner under our proposed financing program, after down payment assistance, will be approximately $160,000 - $190,000 for the 2 and 3 bedroom units, respectively. This is approximately $150k less than current sales pricing for comparable market rate product in Palm Springs. Based on our extensive experience with this product, potential buyers include teachers, government employees, as well as retail, hospitality and health care workers. These first-time homebuyers, when given the opportunity to realize the dream of owning a home, provide a deep pool of potential buyers. Page 1 of 4 Council noted that it has become increasingly difficult to qualify for mortgages as lenders have tightened underwriting standards. Community Dynamics specializes in affordable ownership housing and in the last year we successfully closed escrow on 93 moderate income homes at Falcon Crest in Palm Desert. Over the last nine months, during which time mortgage lending standards tightened considerably, we successfully closed escrow on 64 of those homes, including the project's final sale in April 2008. We're able to facilitate homebuyer financing, even in a tight mortgage market, because all buyers are underwritten by a California Housing Finance Agency (CaIHFA) approved first trust deed lender using FHA or Fannie Mae Conventional guidelines, which ensure that the mortgage can be insured and purchased. It is also important to note that our sales program will allow only 30- year fixed interest rate loans, which set buyers up for success by ensuring a stable monthly payment that each buyer can afford. Council expressed a desire to maximize the photovoltaics (PV), or solar power, in the new community. Community Dynamics is among the leading builders in the green technology field and we are experienced in delivering PV. Most recently we installed a total of 214kw of PV in Palm Desert. Our response to the Agency's RFQ included 3.8kw of PV to power the common area, as well as pre-wiring all of the homes for the optional addition of PV systems. Our RFQ response reflects the fact that the up-front cost to purchase and install PV systems, even after available rebates, is considerable and typically precludes the use of the technology in affordable housing. We are, however, in discussions with leading PV providers regarding new financing structures which may allow for the installation of PV systems at a lower up-front cost. We pledge our best efforts to identify new financing programs which will allow us to increase the use of PV in the new community_ In addition to photovoltaics, the Council expressed a desire for the project to be a true model of sustainable design and green building. Page 2 of 4 We enthusiastically support the Agency's desire to promote energy efficiency and sustainability and following is an overview of the aggressive green building program that was included in our response to the Agency's RFQ: Energy Savings: o All homes outperform California's 2005 Title-24 Energy Efficiency Standards by a minimum of 27.2%. This is achieved via a variety of measures including, but not limited to: R38 Ceiling Insulation with a Radiant barrier; RI Wall Insulation with HERS Verified Insulation Quality; Tankless Water Heater; 14.0 SEER minimum AC unit; and Vinyl windows with double glazing and low-e coatings. o Certify all homes with the ENERGY STAR program administered by the U.S. EPA and U.S. DOE. o Permanent overhangs, cantilevers and architectural recessing at windows and doors, which minimize heat gain thus decreasing air conditioning energy demands. o South-facing elevations receive the most direct sunlight, therefore we will locate trees to provide shading to the south facing elevations throughout the common areas. Water Conservation: o Xeriscape landscape design that features native plants which require minimal watering or maintenance, limits grass lawns to areas actually used as active public open spaces, and features inorganic materials such as permeable decomposed granite, cobble and boulders, which create beautiful spaces however do not require any water. o Programmable water-wise drip irrigation systems that can be adjusted for maximum water savings with seasonal changes and minimize water loss due to evaporation. Page 3 of 4 o Low-flow plumbing fixtures in all units, including toilets, faucet aerators and showerheads. Indoor Air Quality o Low odor and very low VOC paints, sealants and adhesives for the interior walls, ceilings and trim occupied buildings to deliver a very low odor and reduce chemical exposure_ Recycling: o Minimum diversion rate of 60% of construction waste from landfill dumping. o Utilize optimal value engineering and advanced framing techniques to minimize construction waste and optimize material use, particularly lumber. o Locate recycling receptacles in the project's public spaces to encourage residents and their guests to recycle. o Design kitchen cabinetry to provide dedicated spaces for both trash and recycling_ Throughout the design process we will continually look for additional opportunities to improve the sustainability of the community. We hope this information addresses the questions raised at the May 14 discussion, and we are committed to bringing the expertise and creativity that we have developed in this specialized field to Palm Springs in order to deliver a beautiful, sustainable and affordable development for the households that you intend to serve. Sincerely, aL Loren Bloch Stephen Roberts President Vice President, Development Page 4 of 4 Concept Elevation OffF I 01 rl.�11,I I f)0(,'I If, Indian Canyon µrCr Caoui'i64 Concept Site Plan .I C l li,I, In I. Indian Canyon l/ „�arc�cgauq r Pnlm£p6ngs Cclifemla ''l]]/VV�,111�I r`^� I a5 / Zt �Zovg y2A� 1 FpALM s� a� c U N ,r rw.n`°� °R 0 4z , pvl,p Community Redevelopment,Agency Staff Report DATE: May 21, 2008 CONSENT CALENDAR SUBJECT: APPROVING AN EXCLUSIVE AGREEMENT TO NEGOTIATE AND A RECOVERABLE GRANT AGREEMENT WITH COMMUNITY DYNAMICS OF SANTA MONICA, CALIFORNIA, FOR A PERIOD NOT TO EXCEED ONE YEAR FOR A 3.63 ACRE AGENCY-OWNED PROPERTY LOCATED AT 3130 NORTH INDIAN CANYON DRIVE, ADJACENT TO MERGED AREA#1 FROM: David H. Ready, Executive Director BY: Department of Community & Economic Development SUMMARY Staff is requesting that the Community Redevelopment Agency approve an Exclusive Agreement to Negotiate and Recoverable Grant Agreement with Community Dynamics of Santa Monica, California (the "Developer"), for a 3.63 acre Agency-owned properly located at 3130 North Indian Canyon Drive (APN 501-031-028) for the purpose of developing a 52 unit town house project for moderate income households. Community Dynamics is the recommended firm from six that responded to a solicitation begun by the Agency in March, 2007 at the Agency Board's direction. The Agency acquired the property in September, 2001 from the prior affordable housing developer. Redevelopment law requires that an Agency which acquires properly using Low- and Moderate-Income Housing Funds hold the property for no more than ten years. RECOMMENDATION: APPROVING AN EXCLUSIVE AGREEMENT TO NEGOTIATE AND A RECOVERABLE GRANT AGREEMENT WITH COMMUNITY DYNAMICS OF SANTA MONICA, CALIFORNIA, FOR A PERIOD NOT TO EXCEED ONE YEAR FOR A 3.63 ACRE AGENCY-OWNED PROPERTY LOCATED AT 3130 NORTH INDIAN CANYON DRIVE, ADJACENT TO MERGED AREA #1 Item No. RA3 . STAFF ANALYSIS: Based on direction from the Agency in 2006, Community Redevelopment Agency staff issued a "Request for Qualifications (RFQ) and Concept Proposals for For-Sale Multi- Family Housing for Moderate Income Families Using Green Building Technologies" on March 6, 2007, The RFQ process was exhaustive including a mailing to over fifty-one developers and architects, and with several addenda issued based on questions from prospective developers. Six firms submitted a response to the Agency's RFQ by the September 14, 2007 deadline and, following review of all proposals received and interviews with short-listed developers, staff selected Community Dynamics as the recommended proposer. The Exclusive Agreement to Negotiate ("EAN") between the Developer and the Agency would allow the Developer to commence the design and entitlement of the project. A conceptual plan was produced as part of the RFQ response; the plan will be finalized and submitted into the City's normal Planning process. The Developer has proposed to develop and build a new residential community on the Agency-owned 3.63-acre parcel at the southeast corner of North Indian Canyon Drive and East San Rafael Road. The new community will include 52 townhomes which will be sold to moderate income families that comprise a significant portion of the City's workforce. The proposed community responds to the existing neighborhood's architectural context and incorporates an aggressive green building program which addresses the Agency's desired energy savings, water conservation, indoor air quality and recycling objectives. The Developer has proposed a modern/contemporary townhouse design for the site, in keeping with the design vocabulary of its neighboring uses such as the Donald Wexler Steel Homes, The Towers, Palermo, Vista San Jacinto. Community Dynamics is currently completing a state-of-the-art $28 million homeownership community for low and moderate income families at Falcon Crest in Palm Desert. This community would exceed Title 24 standards, and would feature photovoltaics to power the common area improvements, as well as sustainable design utilizing plants native to the Coachella Valley, drip irrigation and inorganic materials like decomposed granite, cobble and boulders to reduce water usage_ Similar to the public-private partnership with the Palm Desert Redevelopment Agency, the Developer has proposed layered financing, including a grant from the State of California's BEGIN program and below-market 30 year fixed rate financing from CaIHFA in addition to Agency assistance to help make these homes affordable to moderate income families. Given the current market conditions for for-sale housing, staff and the Developer have refocused the proposed project to be 100% affordable to moderate income families. The prices for the 2-bedroom units would be $237,500 and the prices for the 3-bedroom units would be $267,500. The down payment assistance plus other State programs would 2 ODOM reduce the effective mortgage for buyers into the $160,000-$180,000 range, making them affordable to buyers under 120% of median income. The proposed total Agency assistance to the project would be $3,040,000. This amount includes the $500,000 expended in 2001 to purchase the property from the original tax- credit developer, a predevelopment and construction grant totaling $1,500,000, and Agency down payment assistance to the buyers in the amount of $1,040,000. The down payment assistance would average $25,000 per home but would be based on buyer need. The average subsidy per affordable unit — and all the units would be affordable --would be $58,462. The EAN sets forth the milestones for the entitlement of the project. In addition to providing for negotiations and Developer's due diligence, the ENA stipulates that Developer will prepare all design and engineering documents, submit all applications, and perform all related work necessary to obtain a tentative subdivision map and final environmental approvals for the construction of an affordable housing project as described in its response to the Agency's RFQ. Given the economics of affordable housing, however, the Developer has asked that the predevelopment expenditures in the amount of $530,555 be reimbursed during the entitlement process through a Recoverable Grant Agreement, which is attached to the EAN as Exhibit C. Developer has prepared a predevelopment budget (Exhibit C-1) itemizing all the expenses and fees Developer expects to incur and charge for during the Exclusive Negotiating Period. The Grant would be recoverable in the event Developer defaults with respect to its obligations under the ENA. The Agency submitted an application to CaIHFA's Residential Development Loan Program (RDLP) on May 2 in the amount of $530,555. This loan could effectively provide the funds for the Recoverable Grant, though much of the entitlement work would be completed prior to the receipt of the state funds. This action would grant the Executive Director the authority to execute the EAN and Recoeverable Grant Agreement on behalf of the Agency, and to take other actions necessary to facilitate the proposed development of a 52-unit residential community on the Agency's 3.63-acre parcel at the intersection of Indian Canyon Drive and San Rafael Road. The DDA would be prepared and presented for approval after the project has received its entitlements. FISCAL IMPACT: There is no fiscal impact to the General Fund. This Recoverable Grant Agreement would provide for a Recoverable Grant in the amount of $530,555, with a total project subsidy of $3,040,000 from the Low- and Moderate-Income Housing Fund, to be paid over the next several years as units come on the market. Part of the $3,040,000 was expended in 2001 and is carried on the books as an asset of the Agency- 3 00aa23 J OOHN . AY OND DALE E. COOK, JR. of m unity & Economic Development Community Development Administrator THOMAS +��ent DAVID H. REssistant Cager— Developm Services Executive Director cc: Exclusive Agreement to Negotiate 4 EXCLUSIVE AGREEMENT TO NEGOTIATE Com� Dyn, LLC THIS EXCLUSIVE AGREEMENT TO NEGOTIATE (this"Agreement")is made as of this 7r'day of May,2008, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ("Agency"), and COMDYN, LLC, a California limited liability company ("Developer"). Agency and Developer may sometimes hereinafter be referred to individually as a "Party" and collectively as the "Parties". RECITALS The Parties entered into this Agreement on the basis of the following facts, understandings and intentions: A. Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (California Health and Safety Code Sections 33000, etseq.). B. Agency desires to implement the Redevelopment Plan for the Highland- Gateway constituted area of the Merged Redevelopment Project Area No. 1 (the "Redevelopment Plan") and fulfill its objectives under the Housing Element of the City of Palm Spring's (the "City's") General Plan (the "General Plan") by providing for the development of a fifty-two (52)-unit moderate-income condominium project(the"Project") at the southeast corner of Indian Canyon Avenue and San Rafael, consisting of approximately three and sixty-three one hundredths (3.63) acres currently owned by Agency (the "Site"). The Site is described on Exhibit "Al" and depicted on Exhibit "A2", each of which is attached hereto and incorporated herein by this reference. The proposed Project is consistent with the land use designation forthe Site underthe General Plan and the City's zoning ordinance. The Site is located within an R-2 zone, which allows for the construction of up to fifty-three (53) residential units on the Site prior to the addition of a density bonus for affordable housing. C. In March, 2007, Agency issued that certain Request for Qualifications and Concept Proposals (as amended, the "RFQ")seeking a developer for the Site. Developer responded to the RFQ with a submittal dated September 14, 2007 (together with the presentation and answers to questions of Agency staff at an interview conducted on March 13, 2008, "Developer's Proposal"). The Agency Board selected Developer as the developer for the Site in reliance on Developer's Proposal. D. Developer desires to construct the Project at the Site. E. The Agency acknowledges that no project at the Site which includes affordable housing will likely be financially feasible without public assistance, which assistance may be in the form of direct grants, loans, subsidies and/or other public assistance programs. -1- 000H5 488886.8 0017?5.0005 4.141008-1:15 PM F. The Parties desire, for the period set forth herein,to negotiate diligently and in good faith the design, schedule, scope of development and other agreements described in this Agreement, in the RFQ and Developer's Proposal, including, without limitation, the terms and conditions of a disposition and development agreement("DDA")with respect to the Site. The DDA, if agreed upon and executed, will specify the rights, obligations and method of participation of the Parties with respect to the sale by Agency to Developer of the Site and development of the Site by Developer. NOW, THEREFORE, and in consideration of the mutual covenants hereinafter contained, it is mutually agreed upon by the Parties as follows: AGREEMENT SECTION 1 NATURE OF NEGOTIATIONS. A. Good Faith. The Parties agree that for the Period of Negotiation (as hereinafter defined)they will negotiate diligently and in good faith to prepare and enter into a DDA consistent with the provisions of this Agreement for the development of the Project upon the Site. Each Party acknowledges and agrees that the other Party shall be deemed to be acting in good faith so long as it makes reasonable efforts to attend scheduled meetings, directs its consultants to cooperate with the other Party, provides information necessary to the negotiations to the other Party and uses commercially reasonable efforts to review and return with comments all correspondence, reports,documents or agreements received from the other Party that require such comments. The development will be subject to all rules, regulations, standards and criteria set forth in the Redevelopment Plan, the General Plan, applicable specific plans and zoning regulations, as may be amended from time to time, and with this Agreement. This Agreement is solely an exclusive right to negotiate and is not a final agreement. The Parties do not intend this Agreement to be a purchase agreement, option or similar contract or to be bound in any way by this Agreement, other than to establish a period of exclusive negotiations during which time each Party shall negotiate with the other in good faith and Agency shall not market the Site to any other interested parties. B. Site. The Project shall be located upon the Site. C. Financial Provisions. The Parties agree that, except as otherwise provided herein, each Party shall be responsible for its own out-of-pocket expenses incurred in connection with the negotiation and preparation of this Agreement and the matters addressed herein, including, without limitation: (i) review of environmental issues, both technical and legal and (ii) preparation of the DDA. The identification and scope of public improvements for the Project shall be based upon the results of the California Environmental Quality Act("GEQX)analysis for the Project. The DDA shall address, inter alia, (i)the transfer of the Site, (ii)the design and development of the Site, (iii)the financing and construction of the improvements upon the Site, (iv) homebuyer financing, (v) community outreach, marketing and sales programming, (vi) new sale and resale restrictions for the moderate income homebuyers reflecting Agency's programming -2- 0000216 4aaaa6.a 0oiMmO5 4.?f.3u08-1:15PM priorities and the requirements of the applicable affordable housing provisions of California Redevelopment Law, (vii)the nature and extent of any and all public financial assistance from Agency and/or the City and (viii) the payment of fees of the City and any other government entity with review authority over the Project. D. Schedule of Performance. The Parties shall complete timely their respective obligations set forth on the Schedule of Performance, which is attached hereto as Exhibit "B"and incorporated herein by this reference. The DDA shall contain a separate schedule of performance apart from the Schedule of Performance. The Parties shall meet semi- monthly in order to review the Parties' progress under this Agreement and to allow the Parties to comment upon their respective efforts. The Parties agree to reasonably consider adjustments to the Schedule of Performance and the Period of Negotiation for delays caused by factors beyond the control of the Parties. E. CEQA. An initial study shall be undertaken for the purpose of determining the appropriate CEQA action. Once the appropriate CEQA action is determined, a more detailed environmental timeline shall be developed. F. Agreement to Negotiate. The Parties acknowledge that Developer's Proposal and this Agreement do not establish all of the essential terms for the transfer of the Site or the development of the Project and that although the Parties have set forth in this Agreement a framework for negotiation of such essential terms: (i)they have not set forth herein nor agreed upon all essential terms, including, e.g.,terms and timing of the transfer of the Site, (ii) they do not intend Developer's Proposal or this Agreement to be a statement of all of the essential terms and (iii) the essential terms of any transaction, if agreed to by the Parties, shall be set forth, if at all, in the DDA approved and executed by authorized representatives of each of the Parties. The DDA shall not exist and shall not be binding unless and until it is fully and duly executed by both Parties. Each Party assumes the risk that, notwithstanding this Agreement and good faith negotiations, the Parties may not enter into a DDA due to the Parties' failure to agree upon essential terms of a transaction. G. Developer's Representations, Warranties, and Covenants. 1. Developer represents that it has the necessary expertise, experience, and financial capability to undertake the Project contemplated in the RFQ and Developers Proposal; 2. Developer represents and agrees that its intended acquisition of the Site and its other intended undertakings pursuant to this Agreement shall be used only for the timely development of the Site and not for speculation in any manner; 3. With respect to the Site, Developer shall only negotiate with Agency's negotiating team as defined in writing by the Executive Director of Agency(the"Executive Director")and with no other persons unless expressly authorized to do so by the Executive Director. Nothing in this Agreement shall restrict Developer from responding to inquiries from the Agency Board or communicating with the Agency Board as requested by Agency. -3- 488826.2 001775.0005 4 19.1008.1 15 PM G G G C"' 7 During the Period of Negotiation, neither Developer nor Agency's negotiating team shall make any statements to the media about the proposed Project without the approval of the other Party, which approval shall not be unreasonably withheld or delayed. During the Period of Negotiation, the Parties shall coordinate community and neighborhood outreach efforts; 4. Developer acknowledges and agrees that the DDA shall include (i) certain restrictions (subject to certain exceptions) upon assignment, sale, encumbrance and use of the Site and/or any improvements thereon priorto issuance of the certificate of occupancyfor the Project without approval of Agency and (ii)certain restrictions on transfer of control of Developer prior to issuance of the certificate of occupancy for the Project in order to (a)assure that the use will be consistent with and promote the Project, (b) prevent speculation, (c)assure that any transferee has the resources, capability and experience to successfully develop the Project and (d)assure long-term maintenance of the Project in an attractive first-class condition; and 5. Developer agrees to make oral and/orwritten reports at least monthly (or at such other times as information is reasonably requested by the Executive Director) advising the Executive Director of all matters and studies being made. H. As-Is; License and Insurance. Developer acknowledges and agrees that the Site will be conveyed (if at all) on an "AS-IS, WHERE-IS AND WITH ALL FAULTS" basis, and, except as otherwise expressly provided in the DDA, Developer shall be obligated to release Agency with respect to Developer's acquisition and development of the Site and the condition of the Site, including any and all land use and environmental conditions of the Site. 1. Effective as of the date of execution of this Agreement by Agency, Agency hereby grants to Developer and its representatives and agents a revocable license during the Period of Negotiation to enter upon the Site for purposes of conducting Developer's due diligence inspections, provided, however, that prior to such access Developer shall: (i) deliver to the Executive Director written evidence that Developer has procured the insurance required under Section 1.H.2, (ii) give the Executive Director twenty-four (24) hours prior telephonic or written notice of any intended access which involves work on the Site or which may result in any impairment of the use of any portion of the Site, (iii) access the Site in a safe manner, (iv) conduct no invasive testing or boring without the written consent of the Executive Director, (v)allow no dangerous or hazardous condition created by Developer or Developer's agents, (vi)comply with all laws and obtain all permits required in connection with such access and (vii) conduct inspections and testing, subject to the rights of existing occupants and contractors, if any, and only after obtaining the Executive Director's consent, which shall not be unreasonably withheld or delayed. The limited license granted herein is revocable by Agency and may be revoked during the continuation of any breach of this Agreement by Developer and shall be automatically revoked and terminated, without further action of Agency, upon the termination of this Agreement. 4 Q00 8 486886 8 001775 0005 4 29 2006-1 15 PM 2. Developer shall obtain at Developer's sole cost and expense prior to commencement of any investigative activities on the Site, a policy of commercial general liability insurance covering any and all liability of Developer and its contractors and consultants arising out of any investigative activities on the Site and listing Agency as an additional insured thereunder. Such insurance shall be provided by insurer(s) authorized to do business in, and in good standing in, the State of California,with a Best's Key Rating of at least A VII and otherwise reasonably satisfactory to the Executive Director and Agency Counsel. Such policy of insurance shall be kept and maintained in force at all times during the term of this Agreement. 3. Developer hereby agrees to protect, indemnify, defend and hold Agency and the officials, employees, agents, representatives, consultants and contractors of Agency free and harmless from and against any and all claims, costs, expenses, losses, damages, liabilities,fees, fines and penalties resulting from Developer's access to the Site or its exercise of its rights under the above-referenced license, including any inspections, surveys, tests or studies performed by Developer or its employees, consultants or contractors, save and except where such claims result from the negligence or willful misconduct of Agency or its officials, employees, agents, representatives, consultants or contractors. Developer shall keep the Site free and clear of mechanics' liens and materialmen's liens related to Developer's inspection of the Site. The indemnification by Developer set forth in this Section 1.1-1.3 shall survive the termination of this Agreement,the execution of the DDA and the closing and transfer of the Site to Developer and shall not merge into any deed granted pursuant to the DDA. SECTION 2. PERIOD OF NEGOTIATIONS. A. The term of this Agreement (as it may be extended, the "Period of Negotiation")shall be a period of one (1)year from and after the date that this Agreement is executed by Agency, and it is the intent of the Parties to negotiate and prepare definitive documentation reflecting the transaction for execution and delivery within such Period of Negotiation. This Agreement shall automatically terminate at the end of the Period of Negotiation unless Developer and Executive Director have agreed upon a form of DDA acceptable to each as of said date, unless terminated earlier as provided in this Section 2, or unless extended as follows: 1. For sixty (60) days if a DDA has been prepared by Agency and executed by Developer, and has been submitted to Agency but has not yet been approved by the Agency Board; 2. By up to one hundred eighty(180)days(in increments of not less than thirty (30) days each) if the major business terms have been agreed to and the Executive Director determines that further negotiations are likely to result in a written agreement; 3. For ninety(90)days if the Project has been submitted to the Planning Commission but additional time is necessary to complete processing by the Planning Commission and/or the City Council for final approval of the entitlements for the Project; -5- [1 '0) 488886.8 001775.0005 419.2008-1.15 PM 4. For any additional period reasonably necessary (i) to prepare, circulate, review, revise, re-circulate or certify any documentation issued under CEQA in connection with the approval of the DDA and/or the Project (including any new or revised documents necessary as a result of any settlement orjudgment in a lawsuit challenging the environmental review for the DDA and/or the Project) and (ii) during the pendency of any action or lawsuit challenging any entitlements, actions or approvals (including, without limitation, environmental review) associated with the DDA and/or the Project; 5. For such time as a Party is unable to perform due to force majeure matters; and/or 6. By mutual agreement of the Parties (with the Executive Director having the authority to enter into such an agreement without seeking additional authorization from the Agency Board). B, Notwithstanding the Period of Negotiation, if(i) Developer is not negotiating diligently or in good faith or (ii) Developer has not complied with the deadlines of the Schedule of Performance,then, subject to the cure provisions of Section 5.D,Agency may thereafter terminate this Agreement upon five(5)days written notice to Developer following such uncured default. C. Notwithstanding the Period of Negotiation, Developer may terminate this Agreement by written notice to Agency if during the course of its investigations and evaluation of the Project, Developer determines in good faith that the Project is not feasible for any reason, including, without limitation, the geotechnical and/or environmental condition of the Site or the Project's inability to be reasonably financed. D. Upon Agency's negotiating team being prepared to recommend a DDA acceptable to Developer to the Agency Board for approval, Developer shall execute said DDA, and Agency's staff shall submit the proposed DDA to the Agency Board for approval. Developer acknowledges that any DDA shall require approval of the Agency Board and hereby agrees that, upon submittal by Developer to Agency of its fully-executed DDA, Developer shall not withdraw such offer for a period of one hundred twenty (120) days following such submittal (provided that there shall have been no material adverse changes to the Project, including, without limitation, applicable land use regulations, title matters and/or the geotechnical condition of the Site). During said one hundred twenty(120)-day period, Agency shall (i) determine whether it desires to enter into such DDA and (ii) if it does so desire, then take all actions necessary to authorize the execution of and execute the DDA. If Agency has not approved the DDA by the end of such one hundred twenty (120) -day period, then the offer to enter into the DDA shall be deemed withdrawn. E. If this Agreement is terminated as provided in this Section 2, then neither Party shall have any liability hereunder following such termination except as otherwise expressly set forth in this Agreement. This Section 2.E shall survive any termination of this Agreement. -6- 0000 1Q 4988SB.8 001775.0005 429200E•1:151'M F. The Executive Director shall review promptly and preliminarily approve Developer submittals identified in the Schedule of Performance prior to proceeding to each following milestone. SECTION 3. DEVELOPER'S RESPONSIBILITIES. A. During the Period of Negotiation, Developer shall: 1. Cause to be prepared (or update any such studies which have already been prepared) (!) an ALTA survey, (ii)a preliminary grading and hydrologic study, (iii)a preliminary soils and geologic investigation and (iv) a phase 1 environmental assessment of the Site; 2. Prepare additional studies, reports and analyses, if any,that Developer shall deem reasonably necessary to determine the feasibility of the Project; 3. In accordance with the Schedule of Performance, submit a tentative subdivision map application for the Project, and such other related documents typically required by the City in support of said application; 4. Cooperate with Agency in Agency's management of the environmental review of the Project; and 5. Cooperate with Agency in Agency's preparation of an application for funding to CaIHFA's Residential Development Loan Program. B. Developer acknowledges and agrees that, as Developer: 1. It shall design and construct the Project; and 2. It shall have a continuing obligation to demonstrate to Agency, after written request,the financial capacity of Developer and its principals, capital partners,joint venturers and members, the willingness of each to make adequate funding available and the capability of Developer to perform its obligations under this Agreement and the proposed DDA until the completion of the Project. C. Developer acknowledges that the selection of Developer as the developer of the Project is based in large part on the experience, qualifications and financial capacity of Developer and the constituent members of Developer's development team. Accordingly, the principals of Developer and the members of the development team, all as described in Developer's Proposal, shall remain substantially as set forth therein throughout the Period of Negotiation, except as modified with Agency's reasonable consent. Developer shall notify Agency in writing of any change in Developer's ownership or managers, and any change in the development team, including partners, joint venturers, negotiators and consultants. -7- 488886 0 001775.0005 4.29.2008-1:15 PM SECTION 4. AGENCY'S RESPONSIBILITIES. A. Negotiate Exclusively. Agency agrees that, during the Period of Negotiation and provided that Developer has not committed an uncured default of its obligations under this Agreement, Agency shall negotiate exclusively and in good faith with Developer with respect to the DDA and the development of the Site. During the Period of Negotiation, Agency shall not solicit, entertain or respond to offers or proposals from other parties concerning the Site. Developer acknowledges, however, that Agency may, from time to time, be contacted by other developers respecting the Site and that such contact is expressly permitted so long as Agency does not initiate such contact and Agency indicates to such other developers that Agency has executed this Agreement with Developer and that Agency is unable to discuss anything concerning these negotiations with Developer, disclose any information other than any Project-related information that is a disclosable public record, entertain or discuss any offer or proposal or negotiate with any other developer regarding the Site until the Period of Negotiation expires or this Agreement is terminated. B. Preparation of DDA. The Parties shall jointly prepare the proposed DDA, in connection with which each Party shall bear its own costs. C. Contract Authority- The Executive Director is authorized to enter into contracts on behalf of Agency for the purposes of planning, environmental review, appraisals and other such services for the Project without obtaining further authorization from the Agency Board- D. Confidentiality. Developer understands and agrees that Agency's negotiating team reserves the right at any time to reasonably request from Developer reasonable additional information to ascertain the depth of Developer's capability to develop the Project expeditiously. Agency's negotiating team shall provide a reasonable time in which Developer may obtain and submit to Agency such additional information, and Developer agrees to submit such additional information in a timely manner(which information may be redacted by Developer to omit trade secrets and confidential, proprietary and/or non- disclosable provisions). If Agency is required to defend an action under the California Public Records Act with regard to a request for disclosure of such a redacted document, then, if Developer requires Agency to oppose such disclosure request, Developer agrees to defend and indemnify Agency from all costs and expenses of such defense, including reasonable attorneys' fees of Agency or attorneys' fees awarded by a court arising out of such action. E. Site Information. Agency shall promptly provide to Developer all currently existing plans, studies and other written information regarding the Site and in the possession of Agency to the extent not previously delivered to Developer- F. Processing. Agency shall cooperate with Developer in Developer's efforts to expedite the processing of its tentative subdivision map application. 00002 2 468686.8 001775,0005 4 29,2008-1,15 PM G. Application to Residential Development Loan Program. Agency shall prepare and submit an application to CaIHFA's Residential Development Loan Program in accordance with the Schedule of Performance. H. Recoverable Grant Agreement. Concurrent with the Parties'execution of this Agreement, Agency shall authorize execution of a Recoverable Grant Agreement by and between Agency and Developer intended to cover Developer's costs of developing and entitling the Site in the amount of Five Hundred Thirty Thousand Five Hundred Fifty-Five Dollars ($530,555) in accordance with the terms provided in the Recoverable Grant Agreement attached hereto as Exhibit"C" and incorporated herein by this reference. The DDA shall provide that said recoverable grant amount shall be credited to Agency's project grant as described in Developer's Proposal. SECTION 5. MISCELLANEOUS. A Brokerage Commission. The Parties hereby represent and acknowledge that neither Party has engaged a broker or finder to represent such Parties in connection with this Agreement. The Parties hereby each indemnify and hold the other free and harmless from and against any and all costs and liabilities including, without limitation, attorneys' fees, for causes of action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party in connection with this Agreement. The foregoing representation and indemnity shall survive the termination of this Agreement. B. Successors and Assigns. This Agreement shall be binding upon and enforceable by the respective successors and assigns of the Parties. Without the prior written consent of Agency, Developer may not assign its rights or delegate its obligations hereunder; provided, however, that Developer shall have the right to assign its rights in and to this Agreement and/or the DDA to any entity in which Developer, or any Affiliate (as hereinafter defined)of Developer holds a direct or indirect interest and maintains an active role in the management of the affairs of such entity. Agency understands and agrees, however,that nothing in this Section 5.13 is intended to limit or impair Developer's ability to finance the Project, including, without limitation, admitting investors into Developer. "Affiliate" means any person or entity in control of, under the control of, or in common control with Developer. C. Notices. Any notice, consent, approval or disapproval to be given or other document to be delivered by any Party to the other or others hereunder may be delivered in person to an officer of any Party, or may be delivered by Federal Express, other private commercial delivery or courier service for next business day delivery, or may be deposited in the United States mail, duly certified or registered, return receipt requested,with postage prepaid, and addressed to the Party for whom intended, as follows: If to Developer: ComDyn, LLC 2800 281h St, Suite 206 Santa Monica, CA 90405 Attn: Mr. Loren Bloch -9 468866 9 001775,0005 4.29 2008-1:15 PM Phone No.: (310) 399-9555 Fax No.: (310) 399 9777 With a copy to: Brown Winfield Canzoneri Abram Inc. 300 S Grand Ave, 14t' Floor Los Angeles, CA 90071 Attention: Bill Pham, Esq, Phone No.: (213) 687-2136 Fax No.: (213) 687-1736 If to Agency: Community Redevelopment Agency of the City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA, 92263 Attn: Executive Director Phone No.: (760) 323-8350 Fax No.: (760) 323-8207 Notice may also be given by facsimile transmission ("Fax") to any Party at the respective Fax number given above and marked "RUSH - PLEASE DELIVER IMMEDIATELY'; provided, however, that receipt of such transmission shall be confirmed by follow-up notice within seventy-two (72) hours by another method authorized above. Any Party hereto may from time to time, by written notice to the other, designate a different address which shall be substituted for the one (1) above specified. Any notice shall be deemed served or delivered upon actual receipt or first attempted delivery (as shown by the records of the U.S. Postal Service or private delivery service) at the address listed above. D. Default. Neither Agency nor Developer shall be deemed to be in default of its respective obligations under this Agreement unless and until the non-defaulting Party shall deliver written notice of any alleged default which the defaulting Party fails to cure within thirty (30) days after delivery of such notice, and if such breach is capable of cure, but cannot reasonably be cured within such thirty (30) -day period, then within such longer period (notto exceed ninety(90)days from the delivery of the original notice), provided that the defaulting Party promptly undertakes to cure within the initial thirty(30)-day period and thereafter diligently prosecutes such cure to completion. E. Ownership of Documents. If the Period of Negotiation expires without execution of the DDA, then Developer shall, at the request of Agency and upon payment by Agency to Developer of the amount of the actual, out-of-pocket cost incurred by Developer therefor, transfer to Agency copies of any non-privileged and non-proprietary reports, studies, analyses, site plan layouts, development cost estimates and engineering studies regarding the proposed development and prepared during the Period of Negotiation, which copies shall become the property of Agency. Such transfer shall be made without any representation or warranty by Developer as to the accuracy or sufficiency of the contents of such documents and shall be made subject to the rights of -10- 488886 8 001775.0005 4.29.2008-1,15 PM the preparers of such documents including, without limitation, the copyright (if any) associated with such documents. F. Purpose of Contract. It is expressly understood and agreed by the Parties that this is an Agreement regarding the conduct of contract negotiations only and does not convey any interest in the Site whatsoever. It is further agreed and understood that this Agreement does not imply any obligation on the part of either Party to enter into any agreement that may result from negotiations contemplated herein. Nevertheless,Agency would not have entered into this Agreement if Developer's proposal did not fulfill Agency's objectives under the Redevelopment Plan and have merit, as represented. G. Amendment. This Agreement may only be amended by a document in writing executed by each of the Parties. K Authoritv. Each of the persons executing this Agreement on behalf of a Party warrants that (i) such Party is duly organized and existing, (ii) he or she is duly authorized to execute and deliver this Agreement on behalf of said Party, (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said Party is bound. I. Governing Law: Dispute Resolution. This Agreement shall be interpreted in accordance with California law, without giving effect to choice of law provisions. The Parties agree that in the event of litigation, exclusive venue shall be in Riverside County, California. In the event of any dispute, controversy or claim arising between the Parties in connection with or relating to this Agreement, the Parties shall make good faith efforts to resolve such dispute through negotiation and, if the Parties so elect, then non-binding mediation, priorto initiating anyjudicial proceeding to enforce the terms of this Agreement. The Parties shall bear their own costs, including attorneys' fees, in the dispute resolution process, including any judicial proceedings. J. Superseded by DDA. Following mutual execution by the Parties of a DDA, this Agreement shall be of no further force or effect, except as may be set forth in this Agreement. In the event of any conflict between the provisions of this Agreement and any DDA approved and executed by the Parties, the provisions of the DDA shall for all purposes prevail. K. No Duty. Notwithstanding any other provision of this Agreement, neither Party shall have any obligation or duty under this Agreement or any liability whatsoever in the event that the Parties fail to execute a DDA, except as may be set forth in this Agreement. L. Non liability of Representatives. No member, official, representative, director, staff member, attorney or employee of either Party shall be personally liable to the other Party or any successor in interest in the event of any default or breach by his or her respective Party or for any amount which may become due to the other Party or to its successor with respect to this Agreement, the Project or the Site. M886.8 001775.0005 4.29.2009-1 15 PM M. DDA Approval. If the negotiations hereunder culminate in a DDA, then such DDA shall be considered for approval by the Agency Board only after all required public hearings have been held and after compliance with all applicable laws and ordinances. The concurrence of Agency negotiators with the terms and provisions of a proposed DDA under any provisions of this Agreement shall not be construed or interpreted as the Agency Board approving or accepting such terns. Such concurrence shall be viewed as nothing more than the willingness of Agency negotiators to inform the Agency Board that Agency negotiators recommend approval of such terms. A DDA shall only become effective after it has been considered and approved by the Agency Board. N. Headings. The section headings in this Agreement are for convenience only and do not explain, modify or add to the meaning of this Agreement. O. Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any provision in this Agreement shall not affect the other provisions. P. Interpretation. This Agreement is the result of the combined efforts of the Parties. Should any provision be found to be ambiguous, then the ambiguity shall not be resolved by construing this Agreement in favor of or against any Party, but by construing the terms according to their generally accepted meanings. Q. Integration. This Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the Parties and no representations by either Partyto the other as an inducement to enter into this Agreement, except as expressly set forth herein. All prior negotiations between the Parties are superseded by this Agreement. R. Attorneys' Fees. If any Party should bring any legal action or proceeding relating to this Agreement (including, without limitation, any action or proceeding to interpret or enforce any provision hereof), then the Party in whose favor a judgment or decision is rendered shall be entitled to recover reasonable attorneys'fees and expenses from the other Party to the controversy. S. Counterparts, The Parties may execute this Agreement in counterparts, each of which when signed and delivered shall be deemed an original, and all of which when taken together shall constitute but one (1) and the same instrument. -12- 000016 488896 8 001775.0005 4.19.1008-1.15 PM IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day first above written. "AGENCY" COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic Chairperson ATTEST: Agency Secretary APPROVED AS TO FORM; Agency Counsel "DEVELOPER" COMDYN, LLC, a California limited liability company By: Name: Its: By: Name: Its: -13- 000017 488886.8 001775,0005 4,29,2009-1.15 PM Exhibit "Al" Legal Description of the Site That certain parcel located in the City of Palm Springs, County of Riverside, State of California, bearing APN 501-031-028. Exhibit "AT' Site Map [See attached page] r _ P A L M S P R I N G S, C•A L I F 0 R N I A 3.64 acres APNz +301-031-028 .SAIV fWAEL /fO,4D 4 I 4t IJ•d�47':s1" � rC•c`!7' PRDPeifTY /O`FC�347 PAR /N.STrC.�'29.'J�2Ga/4/Il/G� Q AREA = 54;4Ac11Cs 1 NZ d=9a/7CO- X` J I xr r�r.�ms�^ -11' r r l '•%�G��;�G;6.yi�"�: :,?���?....;, �...:,. n NbEf: (1 SV?YEY OATA PE.4 NO 411&0 ✓IGINI TY MAP N.T.S Goo a20 Exhibit "B" Schedule of Performance Agency enters into contract with consulting firm to undertake environmental assessment 5/31/08 Agency completes and submits an application to CalHFA's Residential Development Loan Program 5/31/08 Developer enters into contracts with consulting firm(s) for ALTA survey, preliminary soils and geologic investigation, preliminary grading and hydrologic analysis, and phase 1 environmental assessment 5/31108 Developer's studies and reports completed 7/15/08 Developer and Agency staff execute memorandum of understanding/term sheet for DDA 7/15/08 Developer completes physical due diligence and notifies Agency whether Developer approves physical condition of Site 7/31/08 Developer applies for entitlements 7/31/08 Developer and Agency staff complete execution-ready DDA 3/1/09 Environmental determination approved by City Council and/or Agency Board 411/09 Developer's tentative map and other entitlements approved by City Council and DDA approved by City Council and/or Agency Board 4/29/09 (�G0 2 "' Exhibit "C" Recoverable Grant Agreement [See attached page(s)] O irP71P EXHIBIT C GRANT AGREEMENT BETWEEN THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS AND COMDYN, LLC THIS GRANT AGREEMENT ("Agreement"), made and entered into this _ day of 2008, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ("Agency"), and COMDYN, LLC, a California limited liability company("Grantee"), WHEREAS, Agency desires to redevelop that certain property located at the southeast corner of Indian Canyon Avenue and San Rafael, consisting of approximately three and sixty- three one hundredths (3.63) acres currently owned by Agency (the "Property"), as more particularly described and depicted on EXHIBIT C-1 attached hereto and incorporated herein by this reference; WHEREAS, Agency has entered into an Exclusive Agreement to Negotiate ("ENA") with Grantee for the development of a fifty-two (52) unit moderate income condominium project on the Property(the "Project"); WHEREAS, Agency and Grantee acknowledged and agreed that no project at the Property which includes affordable housing will likely be financially feasible without public assistance, which assistance may be in the form of direct grants, loans, subsidies, or other public assistance programs. WHEREAS, as Grantee has requested for and the Agency agreed to provide to Grantee, as set forth in the ENA, a grant in the amount of Five Hundred Thirty Thousand Five Hundred Fifty-Five Dollars ($530,555) ("Grant Amount") for cost and expenses related to developing and entitling the Property, which costs and expenses are set forth in more detail on EXHIBIT C- 2 attached hereto; WHEREAS, Agency is prepared to hind the grant described in this Agreement, subject to the terms and conditions set forth below, and Grantee is prepared to accept such grant and perform its obligations under this Agreement. NOW THEREFORE, the Agency and Grantee agree as follows: 1. GRANT Agency hereby agrees to provide to Grantee the Grant Amount (the "Grant") for cost and expenses set forth on EXHIBIT C-2 and Grantee accepts the Grant subject to the terms and conditions set forth in this Agreement. 1 492995.2 001775,0005 4/29/2005.3.31 PM 2. DESCRIPTION OF USE OF GRANT (a) The Grant shall be used exclusively by Grantee for the payment for the work, services, materials and equipment described on EXHIBIT C-2 attached hereto all of which must be directly related to the Project. (b) Grantee shall be responsible for compliance with all applicable laws ' regarding the use of the Grant and the Project. 3. GRANT PAYMENT (a) Pa ent Schedule. Grantee shall submit monthly invoices not later than the 10th day of each month for expenses set forth on EXHIBIT B incurred in the previous month, including the "Developer Overhead" amount (which overhead is prorated over a ten (10) month period). Developer must document all third party expenses with third party invoices. All disbursements shall be made in arrears meaning after the work requested to be paid for in the disbursement request has been performed or delivered. It is intended that disbursements shall occur not more frequently than once each month. (b) Conditions to Disbursement. Grantee shall not be in default of any of its responsibilities as set forth in Section 3 of the ENA prior to the disbursement of any Grant fimds. The Agency may request additional information or clarifications with regard to the any disbursement and Grantee shall respond to such requests to the Agency's reasonable satisfaction before any such disbursement shall be made. (c) Term. The activity funded under the term of this Agreement shall occur between the date hereof and the termination of the ENA. 4. REPRESENTATION,WARRANTIES AND COVENANTS OF GRANTEE Grantee makes the following representations, warranties and covenants to Agency as of the date hereof and makes then continuously through out the term of this Agreement: (a) Location of Project: The Properly and the majority of the work performed regarding the Project will be performed and constructed within the boundaries of the City of Palm Springs. (b) Project Related Expenses. The funds requested are for reimbursement of funds expended by Grantee which are directly related to the Project and not for a different project. (c) Authority. Grantee is and the person signing this Agreement on behalf of Grantee is duly authorized and has the necessary power to enter into this Agreement as a binding obligation of Grantee. 5. RELATIONSHIP OF THE PARTIES 2 4919951 001775 0005 4/19/2008-3,31 PM a[1y 0 2 The relationship of the parties to this Agreement shall be that of principal/independent contractor and that in no event shall Grantee be considered an officer, agent, servant, employee, partner, or joint venturer of Agency. The Grantee shall be solely responsible for any workers compensation insurance, withholding taxes, unemployment insurance, and any other employer obligations associated with the described work. 6. TERMINATION BY AGENCY The Agency may terminate the Grant for "Cause" by providing a thirty (30) day written notice of default to Grantee ("Notice of Default"). In the event Grantee does not cure such default within thirty (30) days after its receipt of the Notice of Default, this Agreement shall be deemed terminated. In the event of such termination, Agency (i) may reject payment of any outstanding Grant funds to the extent that the Agency determines such expenditure to be in violation of the terms and conditions of this Agreement and (ii) may request that Grantee refunds, in full or in part, the Grant amounts previously disbursed to Grantee under this Agreement. "Cause" shall mean misapplication or misuse of Grant funds, failure to timely perform Grantee's obligations set forth in Section 3 of the ENA and/or any material breach of any of the terms or conditions of this Agreement. 7. ACCEPTANCE OF FINAL PAYMENT CONSTITUTES RELEASE The acceptance by Grantee of the final Grant payment and acceptance by the Agency of a final payment request prepared by Grantee made under this Agreement shall operate as and be a general release of the Agency from any and all claims and liabilities for compensation to for anything done, furnished, or relating to such Grantee's work or services. Approval or payment by the Agency shall not constitute, nor be deemed, to be an assumption of liability by the Agency for defect or error in the work prepared by Grantee, its volunteers, employees, subcontractors, or agents. 8. REVIEW OF RECORDS/COST RECOVERY Grantee shall keep and maintain regular books and records regarding the Grant and the Project including but not limited to, financial books and records of all expenses incurred with regard to the items set forth on EXHIBIT C-2; and causing all contractors and other vendors involved with the work set forth on EXHIBIT C-2 to prepare reasonably complete written contracts and invoices for all such, which shall be kept and maintained by Grantee; if applicable, obtain lien releases for all work which is paid for and which may be subject to the mechanics' lien or design professionals lien laws. At any time during normal business hours and as often as it may deem necessary, the Grantee shall make available to a representative of the Agency for examination of all its records with respect to all matters covered by this Agreement and will permit Agency to audit, examine and/or reproduce such records. Grantee will retain such financial records, invoices, and bills for at least one year after termination or final payment under this Agreement. If the Agency reasonably determines that any Grant funds have been expended improperly or otherwise in violation of the provisions of this Agreement, Grantee shall repay such amounts within 30 days after demand has been made therefore by the Agency. 9. WAIVER; REMEDIES CUMULATIVE 3 492995 2 001775,0005 4/292006-3 31 PM Failure by Agency to insist upon the strict performance of any of the provisions of this Agreement by Grantee, irrespective of the length of time for which such failure continues, shall not constitute a waiver of Agency's right to demand strict compliance by Grantee in the future, No waiver by Agency of a default or breach of the Grantee shall be effective or binding upon Agency unless made in writing by Agency, and no such waiver shall be implied from any omissions by Agency to take any action with respect to such default or breach. No express written waiver of a specified default or breach shall affect any other default or breach, or cover any other period of time, other than any default or breach and/or period of time specified. All of the remedies permitted or available to Agency under this Agreement, or at law or in equity, shall be cumulative and alternative, and invocation of any such right or remedy shall not constitute a waiver or election of remedies with respect to any other permitted or available right of remedy. 10. CONSTRUCTION OF LANGUAGE OF AGREEMENT The provisions of this Agreement shall be construed as a whole according to its common meaning of purpose of providing a public benefit and not strictly for or against any party. It shall be construed consistent with the provisions hereof, in order to achieve the objectives and purposes of the parties. Wherever required by the context, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine or neutral genders or vice versa. The captions or headings in this Agreement are for convenience only and in no other way define, limit or describe the scope or intent of any provision or section of the Agreement. 11. MITIGATION OF DAMAGES In all situations arising out of this Agreement, the parties shall attempt to avoid and minimize the damages resulting from the conduct of the other party. 12. NONDISCRIMINATION (a) The Grantee shall comply with the Federal Americans with Disability Act, Public Law 101-336, and observe the disability discrimination prohibitions of such laws in the performance of the work required tinder this Agreement- (b) There shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin or ancestry in connection with the Project, nor shall Grantee allow others who are engaged by Grantee to work on the Project to establish or permit any such practice or practices of discrimination or segregation with respect to the Project and work associated therewith. 13. ENTIRE AGREEMENT BETWEEN PARTIES Except For Grantee's proposals and submitted representations for obtaining this Agreement, this Agreement supersedes any other agreements, either oral or in writing, between the parties hereto with respect to the rendering of services, and contains all of the covenants and agreements between the parties with respect to said services. Any modifications of this Agreement will be effective only if it is in writing and signed by the party to be charged. 14. NOTICES 4 491995.1 001775 0005 429/2008-3.31 PM Ut1LM�Grs Any notice required to be given hereunder may be delivered in person to an officer of any party, or may be delivered by Federal Express, other private commercial delivery or courier service for next business day delivery, or may be deposited in the United States mail, duly certified or registered, return receipt requested, with postage prepaid, and addressed to the parry for whom intended, as follows: If to Grantee: ComDyn, LLC 2800 281h St, Suite 206 Santa Monica, CA 90405 Attn: Mr. Loren Bloch Phone No.: (310) 399-9555 Fax No.: (310) 399-9777 With a copy to: Brown Winfield Canzoned Abram Inc. 300 S Grand Ave, 14`h Floor Los Angeles, CA 90071 Attention: Bill Pham, Esq. Phone No.: (213) 687-2136 Fax No.: (213) 687-1736 If to Agency; Community Redevelopment Agency of the City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA, 92263 Attn: Executive Director Phone No.: (760) 323-8350 Fax No.: (760) 323-8207 15. GENERAIL PROVISIONS (a) Governing Law. This Agreement, and the rights and obligations of the parties, shall be governed and interpreted in accordance with the laws of the State of California. (b) Partial Invalidity. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way. (c) Conflict of Interests. No member, official or employee of Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. (d) Warranty Against Payment of Consideration for Agreement. Grantee warrants that it has not paid or given, and will not pay or give, any third parry any money or other consideration for obtaining this Agreement- 5 49'995.1 001775.0005 4/29/2009-3.31 PM (e) Non-liability of Agency Officials and Em to ees. No member, official or employee of Agency or of Grantee shall be personally liable to the other party or any successor in interest, in the event of any default or breach by Agency or Grantee for any amount which may become due to Grantee or Agency or its successor, or on any obligations under the terms of this Agreement. (f) Extension of Time of Performance. Agency will reasonably consider written requests by Grantee .for extension of time for performance of its obligations under this Agrmireent and the ENA. (g) Agency Approvals; No Partnership. Agency neither undertakes nor assumes nor will have any responsibility or duty to Grantee or to any third party to review, inspect, supervise, pass judgment upon or inform Grantee or any third party of any matter in connection with the Project, whether with respect to the quality, adequacy or suitability of the plans and specifications, any labor, service, equipment or material furnished to the Property, any person furnishing the same, or otherwise. Grantee and all third parties shall rely upon its or their own judgment with respect to such matters, and any review, inspection, supervision, exercise of judgment or information supplied to Grantee or to any third party by Agency in connection with such matters and neither Grantee (except for the purposes set forth in this Agreement) nor any third party is entitled to rely thereon. This Agreement is for the sole and exclusive use and benefit of Agency and Grantee and their respective permitted successors and assigns and may not be enforced, nor relied upon, by any person other than Agency and Grantee. All conditions of the obligations of Agency hereunder, including the obligation to authorize disbursements of the Grant, are imposed solely and exclusively for the benefit of Agency, its successors and assigns, and no other person shall have standing to require satisfaction of such conditions or be entitled to assume that Agency will refuse to authorize disbursements in the absence of strict compliance with any or all of such conditions, and no other person shall, under any circumstances, be deemed to be a beneficiary of such conditions, any and all of which may be freely waived in whole or in part by Agency at any time in Agency's sole discretion. (h) Time of Acceptance of Agreement by A enc . This Agreement, when executed by Grantee and delivered to Agency, must be authorized, executed and delivered by Agency within ten (10) days after the date of signature by Grantee, or this Agreement may be terminated by Grantee on written notice to Agency. This Agreement has been executed by the parties effective on the date and year first above written. COMMUNITY REDEVELOPMENT ATTEST: AGENCY OF THE CITY OF PALM SPRINGS Agency Clerk By: Title: APPROVED AS TO FORM: 6 492995.1 001775.0005 4/29/1006-3.31 PM Agency Attorney APPROVED AS TO ADMINISTRATION: Agency Manager GRANTEE: COMDYN, LLC By: Its: 7 492995.2 001775 0005 4/29/2009-3.31 PM EXHIBIT C-1 -Description of Pro'ect 8 49299$_ 001775.0005 4PW2008.3:31 PM 194J�'�F�U EXHIBIT "C-2" COMMUNITY DYNAMICS PALM SPRINGS PREDEVELOPMENT GRANT BUDGET May 7,2008 1500 PREDEVELOPMENT FEES Pre-Application 810 Mitigated Negative Declaration 6,355 PC & CC Notification Charges 845 City Attorney Review 3,500 Development Agreement 5,814 Architectural Approval 1,769 Tentative Tract Map 9,198 TOTAL PREDEVELOPMENT FEES 28,290 2500/5000 PREDEVELOPMENT Architect-Conceptual/Schematic Studies 40,000 Landscape Architect- Conceptual/Schematic Studies 15,000 Civil -Conceptual/Schematic Studies 50,000 Graphics Consultant 10,000 Color Consultant 15,000 Sustainability Consulting 7,000 Blueprints/Delivery 15,000 Legal 75,000 TOTAL PREDEVELOPMENT 227,000 S DEVELOPER OVERHEAD 250,000 CONTINGENCY 25,265 9 492995 2 001775 0005 4/29/2008-3 31 PM �0'C4u�"I TOTAL 530,555 10 492995.2 001775 0005 4/29/2008•3 31 PM 1 4 7 1 ix ♦ v t ` ` f . 1 GREEN BUILDING PROGRAM We applaud the Agency's leadership and aggressive stance on energy efficiency and green building standards, and are proud to present the following green design program. In addition to the items listed in this section, we will carefully and continually look for additional opportunities to improve the efficiency and sustainability of the project: Energy Savings The homes proposed herein will exceed the Agency's goal of a 25% reduction over the 2005 California Title-24 Energy Efficiency Standards. Together with Verde Concepts, our sustainable design consultant, and Haynal and Company, our Title-24 energy engineering consultant, we developed the following standard energy programming for all units which outperforms 2005 Title-24 by a minimum of 27.2%: R38 Ceiling Insulation with a Radiant barrier R15 Wall Insulation with HERS Verified Insulation Quality R19 Floor Insulation Y Tankless Water Heater 14.0 Seasonal Energy Efficiency Rating (SEER) minitnum AC unit 80%AFUE Furnace 12.5 Energy Efficient Ratio (EER) and Thermal Expansion Valve (TXV) R-6 Duct Insulation with Tight Duct Test Y Vinyl windows with double glazing and low-e coatings In preparation for this RFQ response, we completed a Title 24 Compliance Report specific to the proposed site design and floor plans in the same form that would be submitted to the Building Department for plan check approval (report provided as Exhibit D.1 at the end of this section). The Compliance Report takes into account the clustered arrangement and orientation of the units, and the energy programming described in this section to determine the percentage reduction over Title-24. Our buildings outperfonn Title-24 by 27.2% for the 2-unit cluster up to 29.1% for the 8-unit cluster. As part of our proposal we will certify all units with the ENERGY STAR program administered by the U.S. Environmental Protection Agency and the U.S. Department of Energy. ENERGY STAR certification provides verification and acknowledgement of the Agency's commitment to energy performance, and enhances marketability of the (tomes. If the Agency so desires, there is also an opportunity to design and build the project to be certified with the U.S. Green Building Council's I,EED program, and/or with other voluntary sustainable design programs such as California Green Builder and Build-It Green. We intend to work closely with Agency staff throughout the project design and development to understand and implement the Agency's goals in this regard. Green Systems & Materials We will endeavor to meet the Agency's goal of 50% in utility savings through standard energy programming, including tankless water heaters, 14.0 SEER AC systems and low-e windows, as noted under"Energy Savings" above, and through the following measures: ENERGY STAR Appliances: The homes will include ENERGY STAR qualified dishwashers standard, which use up to 50% less energy and water than standard models. We will also utilize ENERGY STAR thermostats, light fixtures and exhaust fans throughout the homes. Although homebuyers will provide their own clothes washers, driers and refrigerators; through our sales effort we will create and advertise an ENERGY STAR appliance package which will encourage buyers to purchase ENERGY STAR qualified appliances at a competitive cost as a buyer option. We will demonstrate to homeowners that the money saved on monthly utility bills can more than make up for the cost of a slightly more expensive but more efficient ENERGY STAR model. r Photovoltaic Program: Included in our proposal is a 3.8 kilowatt photovoltaic (PV) system located on a carport roof. This PV system will provide clean, renewable electricity to power the common area landscape and outdoor accent lighting. The PV system will offset the community's energy consumption by generating more than 5,400 kw hours of renewable power per year, and will lower the ongoing maintenance costs borne by the HOA, thus enhancing affordability. We acknowledge the Agency's goal of a 2-3kw PV system for each of the homes and Community Dynamics will pre-wire all homes for the addition of PV systems on the roofs. Although the project currently cannot bear the cost of PV systems on each home, we propose offering PV systems as an option for both the moderate and workforce buyers. Additionally, the Agency may elect to provide additional subsidy financing for the addition of PV systems on the affordable units (and possibly also the workforce units if the subsidy can be structured in a nxamier that does not trigger prevailing wage). For the Agency's consideration, below are estimates of the additional cost of adding either 1.9kw or 2.5kw systems for all of the homes: 1.9 kw: Base cost of approximately $12,000 per systetn installed (net of State rebates) for a total cost of approximately $624,000 for all 52 homes. A south facing 1.9 kw system would generate approximately 43% of an average home's energy consumption based on SC Edison estimates. 2.5 kw: Base cost of approximately $15,000 per system installed (net of State rebates) for a total cost of approximately $780,000 for all 52 homes. A south facing 2.5 kw system would generate approximately 57% of an average home's energy consumption based on SC Edison estimates. Community Dynamics is experienced with PV, and committed to the technology as an increasingly important tool in residential homebuilding. In 1999, we became the first builder in the western U.S. to install architecturally integrated PV in a residential subdivision, and in Palm Desert we are currently installing more than 100 architecturally integrated PV systems with a combined capacity of 214 kw. Provided in the "Letters of Reference" tab is a letter from SunPower Corp., our PV partner in Palm Desert, a6C �34 commenting on Community Dynamics' ability to successfully integrate PV into the product we deliver. ➢ Shade Structures and Recessed Windows & Doors: Our architectural design includes permanent overhangs, cantilevers and architectural recessing at windows and doors, which will provide shade and minimize heat gain in the homes thus decreasing air conditioning energy demands. At the same time the architectural design provides indirect sunlight throughout the bonzes which will minimize the need for electric light during daylight hours- Landscape Shadin : Soutb-facing elevations receive the most direct sunlight, and RGA Landscape Architects has located trees to provide shading to the south facing elevations throughout the common areas. Landscape shading will minimize heat gain in the homes thus reducing energy use, and will provide additional privacy and shading for homeowners' private outdoor areas. In addition, where possible, trees have been strategically located to provide shading of site hardscape areas to help mitigate the heat island affect from solar radiation. ➢ Recycled Content Materials & Waste Management: We will utilize pre-and post- consumer recycled content materials for construction and utilize waste saving advanced construction techniques in order to maximize the use of recycled construction materials and to minimize construction waste sent to landfills. — The carport structures will be built using steel. According to the Steel Recycling Institute, steel is the world's, as well as North America's, most recycled material as new steel includes more than 80% recycled content_ We note that we will utilize wood framing for the homes, rather than steel, because steel is an electricity conductor and would result in increased air conditioning energy use. — We will contract with a rough framing subcontractor with the capability to panelize flaming operations in its factory. Panelized framing is considered an advanced framing technique by the Department of Housing and Urban Development's Partnership for Advancing Technology in Housing (PATH) program, because it uses less lumber in framing a house. — We will utilize engineered floor joists made of recycled wood content OSB (oriented strand board). I-joists consist of 50% less lumber material than sawn lumber of a comparable strength and depth. — We will utilize pre-manufactured structural headers and beams constructed from scrap during the milling. Headers and beams sizes used will be based on actual sizes specified in the structural calculations and not oversized for convenience. Water Conservation We will meet the Agency's goal of a 75% reduction in water use by incorporating water conserving features throughout the yards and common areas, through water efficient landscaping, and in the homes, through the use of water efficient plumbing fixtures. Landscanino: According to the Desert Water Agency, residents of the Coachella Valley use as nnuch as 80 percent of their water for landscaping. RGA Landscape Architects specializes in designing landscaping for desert microclimates and is expert at creating attractively landscaped environments with minimal water use. We will work with RGA to develop a xeriscape landscape design that features native plants, which grow naturally in the desert climate and require minimal watering or maintenance. We will limit turf grass lawns to areas actually used as active public open spaces and design using hydrozoning (a landscape practice that groups plants with similar water requirements together in order to conserve water). We will also install programmable water-wise drip irrigation systems that can be adjusted for maximum water savings with seasonal changes and minimize water loss due to evaporation. The landscape design program will feature inorganic materials such as permeable decomposed granite, cobble and boulders, which create beautifully designed spaces however do not require any water. Low-Flow Plumbing Fixtures: We will utilize low-flow plumbing fixtures in all units, including toilets, faucet aerators and showerheads, to minimize the community's ongoing water use. Indoor Air Quality To meet the Agency's goal of an 80% reduction in VOC's / Formaldehyde and to keep our minimize moisture and mold, pests, combustion gases, and other airborne pollutants from our homes, Community Dynamics will institute the following air quality program: Low VOC Paints. Sealants and Adhesives: We will utilize low odor and very low VOC paints, sealants and adhesives for the interior walls, ceilings and trim occupied buildings to deliver a very low odor and reduce chemical exposure. ➢ Room Ventilation: Windows are arranged to permit cross ventilation to the greatest extent possible. y HVAC Filters: Filters with a minimum MFRV 6 rating will be installed for improved filtration of the indoor air. Duct System: All HVAC ducts and registers will be scaled off during construction prior to occupancy. y Garage Pollutant Protection: The site design, which locates parking in detached carports, will reduce exposure to indoor pollutants that typically originate from attached garages. Car emissions and other various items stored in the typical garage can leak from the garage into the home, adversely impacting occupant health. The proposed detached carport design eliminates such concepts. Y Transportation: The community design encourages residents and visitors to leave their cars parked, and to take advantage of alternate transportation options. — Walkablility: By separating parking spaces from the homes the site design encourages homeowners to make use of the landscaped walkways and public open spaces on their way to and from their homes. — Public Transportation: We are connnitted to working with the SunLine Transit Agency to ensure our homeowners have access to a covered shelter for SunBus Lines 23 and 24, which travel past the project site southbound on Indian Canyon Drive. In addition, the site plan provides multiple access points for tenants to gain access to public transit points. — Bikes: The site design encourages cycling as an alternate means of transportation by providing two (2) conveniently located bike shelters. r , ^ � 9e IvtZ Recycling Program Community Dynamics will endeavor to meet the Agency's recycling goal of a 90% reduction in solid waste by working together with City of Palm Springs Recycling Division and Palm Springs Disposal Services to: Achieve a minuxxum diversion rate of 60% of construction waste such as roofing, concrete, drywall and lumber from landfill dutnping. Utilize optimal value engineering and advanced lkaming techniques to minimize construction waste and optimize material use, particularly lumber. ➢ Include full size recyclable material enclosures in the trash enclosure structures to encourage recycling by residents. ➢ Locate smaller recycling receptacles in the project's public spaces to encourage residents and their guests to recycle when using outdoor amenities. ➢ Design kitchen cabinetry to provide dedicated spaces for both trash and recycling. ➢ Require that the homeowners association's gardening and landscape maintenance contractor recycle green waste (grass clippings, tree trimmings, shrubs, etc_). ➢ Work with the HOA to coordinate a "Recycling 101" event to educate homebuyers about the City's recycling guidelines, what materials they can and cannot recycle, etc_ Work with the HOA to coordinate a hazardous waste recycling/disposal event to encourage homeowners recycle and/or properly dispose of tires, antifreeze, batteries, motor oil, e-waste (computers, cell phones, TVs) and all other forms of household hazardous waste, and to educate them how to recycle such items. ® GPI 'G 'S7