HomeMy WebLinkAbout12/19/2001 - STAFF REPORTS (2) DATE: DECEMBER 19, 2001
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: REDEVELOPMENT DIRECTOR
OWNER PARTICIPATION AGREEMENT WITH DESERT SHADOWS III LIMITED PARTNERSHIP
FOR THE DEVELOPMENT OF SEVENTEEN(17)HOTEL CONDOMINIUMS AT THE NORTHEAST
CORNER OF INDIAN CANYON DRIVE AND STEVENS ROAD, MERGED PROJECT AREA#1
(NORTH PALM CANYON)
RECOMMENDATION:
That the Community Redevelopment Agency of the City of Palm Springs("CRA")approve an
Owner Participation Agreement with Desert Shadows III Limited Partnership (Participant)
providing tax increment financing assistance for offsite improvement completion,in an amount
not to exceed $185,000.00.
BACKGROUND:
On October 18, 1995,the Community Redevelopment Agency entered into an Disposition and
Development Agreement with Linsu Development Company, L.L.C., a California Limited
Liability Company. The DDA was amended on December 4, 1996 to include reimbursement
for certain offsite improvements on Vista Chino Road and Indian Canyon Drive. The project
facilitated the expansion of the General Partner and Developer's hotel, Desert Shadows Inn,
located adjacent to the Site. The Developer built 38 condominium units on what was
previously vacant, blighted land, adjacent to and part of the Desert Shadows Inn; the project
included a swimming pool, spa and a meeting room, all of which were contained in four two-
story structures with a maximum height of 24 feet. Fifty-nine parking spaces (covered and
uncovered)were provided on-site, including nine spaces located on the adjacent property to
the south, specifically for this project. The project resulted in the renovation of a portion of our
City and helped expand and diversify the City's economic base.
In April, 1999 the Agency approved an Owner Participation Agreement with the same
Developer(using a separate development company called Smart Alex LLC) to develop the
parcel south of the hotel atthe northeast cornerof Chuckwalla Road and Indian Canyon Drive.
The parcel was previously the site of a small 22-unit hotel, which had been razed, and was
rebuilt as 21 condominiums with reciprocal access to Desert Shadows Inn and the previous 38
condominiums built in 1997 by Linsu Development Company LLC. One additional feature of
that project was the vacation by the City of Chuckwalla Road between Chaparral Road and
Indian Canyon Drive, to provide more land for parking, as well as improve the safety in the
adjoining neighborhood by slowing through traffic to and from Indian Canyon Drive. The City,
however, maintained pedestrian access through the easement for the convenience of the
neighborhood to the east.
As in the Linsu DDA, the Participant requested that the Agency reimburse it for the costs of
constructing the off-site improvements on Indian Canyon Drive, Chuckwalla Road, and
Chaparral Road; provided, however, that the Agency's obligation to reimburse the Participant
shall not exceed $100,000.00.
At the point the Developer is adding a third phase of expansion, Desert Shadows III. The
significant differences between this phase and previous phases is that it is located across the,
Desert Shadows III LP
December 19, 2001
street from the main property, necessitating an expensive access solution; and, the property
has three separate street frontages: on North Indian Canyon Drive, on Stevens Road, and
North Palm Canyon Drive. Two of the three streets are major thoroughfares with additional
hardscape requirements. As in the previous two projects, the Developer has requested
Agency assistance in the development of the public infrastructure.
The nature of the project, known as One Stevens Place, is relatively similar to the previous
two, though the condominiums are larger and more private than the previous two phases.
Because the units are often rented through the hotel's rental pool, larger units mean that the
hotel will receive a higher room rate for the larger units than it does for the previous two
phases or its regular hotel rooms, of which it has 34, This factor is significant because the
hotel already has one of the highest average daily rates in the City because of its high
percentage of condominium units and its niche market.
The project description is as follows:
One Stevens Place is bounded by Stevens Road on the south, Indian Canyon Drive
on the east, Palm Canyon Drive on the west, and three contiguous commercial lots on
the north, including an existing apartment complex.
The project consists of 17 condominium units. Each unit has approximately 1,705
square feet of livable area, and are split level in configuration and are attached in the
following configuration: 2 fourplex buildings, 1 duplex building and a 7-unit building.
The parking is configured in such a way that there are covered spaces attached and
detached from the units.
The project will contain a pool and spa with an elegantly landscaped courtyard. A
recreation building of approximately 3,000 square feet will be constructed for the use
of the management company (the hotel) and homeowners. Reciprocal access
between the site and Desert Shadows Inn across the street shall be granted by way of
a pedestrian bridge.
The Developer has requested Agency assistance with the following items, which are
referenced to the approved landscape and construction plans:
Civil engineering- Cost for offsite improvements. $20,500.00
Landscape Architect—Ronald Gregory and Associates design $ 3,680.00
development documents and plans.
Saw Cut- For street repair and removal on Stevens Place, Indian
Canyon Drive and Palm Canyon per Mainiero, Smith and Assoc.
plans not dated sheets 2 of 3 detail 4, 21 and 20. $ 2,500.00
Grading- Grading for street improvements on Palm Canyon Drive,
Indian Canyon Drive and Stevens road. Cut drainage swales on
Palm Canyon, Stevens Road and Indian Canyon Drive, as noted
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U10 k2a
Desert Shadows III LP
December 19, 2001
on Mainiero, Smith and Assoc. sheet 2 of 3. $ 6,600.00
Decorative hardscape at entry- Install decorative colored concrete
at entrance to property per Mainiero, Smith and Assoc. plan
sheet 2 of 3 detail 14 $ 9,900.00
City sidewalk- Install city sidewalk per Mainiero, Smith and Assoc.
plan sheet 2 of 3 per detail #2 on Indian Canyon Drive and
Stevens Road. $ 8,260.00
Drive approach- Construct drive approaches per City of Palm
Springs standards at all entrances to the property from Stevens
Road, as noted but not detailed on Mainiero, Smith and Assoc.
drawing sheet 2 of 3. $ 1,762.00
Underground Utilities- Removal of pole at the North West property
corner and install underground conduit from Indian Canyon Drive
to the project. $18,500.00
Water System- Connect into water main system per Desert Water
Agency for domestic service to property. $ 8,400.00
Drainage System- Installation of plastic drain pipe and catch basin
Boxes. Installation of 2 drywells as noted on Mainiero, Smith and
Assoc. Details#23, 12, 13,5 sheet 2 of 3. $ 8,600.00
Offsite Landscape and Irrigation- Installation of irrigation system on
Indian Ave, Palm Canyon Drive and Stevens Road, also includes
paver stepping stones, all palm trees, boxed trees and shrubs,
ground cover and annual color, per plans prepared by R.G.A.
Landscape Arch, sheets IP 1,2 and L.P 1,2. $34,000.00
Landscape Lighting- Install landscape lights per R.G.A. Landscape
Arch, Inc. Plan sheet PL-1. $ 6,500.00
Curb and Gutter- Install 8' pcc curb and gutter as noted on Mainiero,
Smith and Assoc. plan sheet 2 of 3 note#9. $ 3,000.00
Barrier curb construct 8" barrier curb as noted on Mainiero, Smith
and Assoc. plan sheet 2 of 3 note#17. $ 848.00
Cross gutters and spandrel- Construct cross gutter and spandrel
as noted on plans prepared by Mainiero, Smith and Assoc. sheet
2 of 3 $ 2,707.00
detail #21 and 22. $ 1,908.00
Handicap- Construct handicap ramps as referenced on Mainiero,
Smith and Assoc. plan sheet 2 of 3 detail #1 and 24. $ 1,800.00
Page -3-
CQ09 A -3
Desert Shadows III LP
December 19, 2001
Asphalt removal- Remove asphalt paving as noted on sheet 2 of 3
of the plans prepared by Mainiero, Smith and Assoc. referenced
detail 16. Indian Canyon Drive, Palm Canyon and Stevens Road. $ 5,635.00
Asphalt Replacement- Replace asphalt paving as noted on sheet
2 of 3 Mainero, Smith and Assoc. and reference detail#6 and 20.
Indian Canyon Drive, Palm Canyon Drive and Stevens Road. $ 11,160.00
Supervision, Overhead and Fee- General Contractors appropriated
fee for this schedule of values and scope of work. $28,637.00
TOTAL REQUEST $184,897.00
Staff's recommendation is to approve an agreement not to exceed the $185,000 figure, with
the understanding that the final Agency project cost could be slightly lowerbased on the actual
costs of the specified items.
California Redevelopment Law requires that, before a Redevelopment Agency can use its
authority to provide streets, sidewalks and utilities or other improvements which an owner of
property must otherwise provide, the City Council must find that the provision of such
improvements is necessary to effectuate the purposes of the Redevelopment Plan (Health
and Safety Code Section 33421.1). One of the purposes of this Redevelopment Plan is to
eliminate blight and increase tax increment revenue. The developers of this property are
required to make certain street improvements, as outlined above, in keeping with City codes.
Such offsite improvements are imperative to this project. This project will eliminate a blighted
corner of Merged Project Area#1 (the North Palm Canyon Redevelopment Project Area)and
will increase tax increment to the City. The Desert Shadows Inn expansion will give a much-
needed face lift to the neighborhood, increase revenue, improve traffic circulation and safety
at an important intersection and improve the overall well-being of this Project Area. In so
doing, this project will effectuate the purposes of the Redevelopment Plan.
The finding on the elimination of blight is based on the previous history of the subject parcels
and the condition at the time of the development. The project consists of three separate
parcels, at least one of which was demolished in 1981 and another demolished in 1987 as
part of an Abatement Agreement between the City of Palm Springs and the property owner.
Improper demolition and removal procedures (such as leaving most of a swimming pool on
site, under dirt) raises the project cost and increases the project schedule for the eventual
developer, as has happened here.
In addition to the foregoing finding, California Redevelopment Law in Section 33445, also
permits the City Council to pay all or part of the cost of installing any public improvement which
will be publicly owned, if the City Council finds that, 1) the improvements are of benefit to the
ProjectArea,2)no other reasonable means of financing the improvements are available to the
City, 3) payment for the improvements will assist in eliminating blight. The basis of the City's
findings are, in addition to the above, the proposed project is consistent with the
Implementation Plan for this area, insofar as this project will increase tax increment and will
expand an already-existing successful business. It will increase the City's tourist business by
expanding a destination-type resort and creating a beautiful architecturally-inviting project on
a previously underutilized piece of land on a very busy corner.
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Desert Shadows III LP
December 19, 2001
The previous analysis of the project's financing "gap"was made by determining the per-unit
shortfall between the debt and equity raised for each unit and the actual per-unit cost for the
unit, without land cost (since the land cost and note was assumed to be the same on either
side of the equation). Staff's determination in October, before the issue was raised in at the
October 17 meeting, was that a project shortfall of approximately$397,000 existed, of which
the Agency would cover half through its then-proposed $200,000 participation. However, a
revised analysis, based on the gross development costs (including all land and interest costs)
determined that the potential construction funding gap-priorto Agency assistance-could be
up to $530,000 without any revisions to the project to reduce cost. However, both the
developer and staff have assumed that an increase of$285,000 in equity (based on selling
out the remaining partnerships) will accrue to the project during the construction period,
reducing the pre-Agency gap to approximately$245,000, of which the Agency would reduce
by up to $185,000 through its participation. Pre-selling all of the units is an aggressive
assumption, however, as the bank's appraiser and the lender have made their calculations
based on a more conservative six-month absorption period for the condos. Nevertheless, the
developer's track record suggests that a pre-sale of all the units is possible. The Agency's
contribution does not leave the developer with a windfall profit,either, even after all of the units
are sold.
The funds, necessary for the Agency to reimburse the developer for this work, will be
appropriated from the project area's fund balance. One of the peculiarities of Redevelopment
Law is that an appropriation from the fund balance of the Debt Service Fund of the project
area must be passed through the City's General Fund into the Project Area account through
a series of loan repayments and new loans made. These are for accounting purposes as
required by law and do not affect the City's General Fund.
The actual work shall be performed by Developer who will be reimbursed following completion
of the work when evidence is given of the Developer's actual expense in the performance of
the work. J
JOHN S. RAYMgN
birecto of Redev' ment _
Approved y- . "`c"d
Executive D,irec or,-'
Attachment
1. Resolution
2. Budget Resolutions/Relending Agreements
3. City Resolution per Section 33421.1
4. Owner Participation Agreement
Page -5- wog �9-
OWNER PARTICIPATION AGREEMENT
By and Between
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
and
DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C.
FS2083\014084-0094\2157467.3 a12/11/1 C • )4 / 6
TABLE OF CONTENTS
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2 Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 CC� . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Enforced Delay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Participant Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Proiect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Proiect Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Redevelopment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 Redevelopment Plan Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Schedule of Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. PURPOSE OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Participant Representations and Warranties . 4
(a) Participant Ownership of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(b) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(c) No Possessory Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(d) No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(e) No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) No Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(g) No Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(h) Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(i) Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Q) No Extraneous Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Agency Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) No Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Due Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(c) Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. CONSTRUCTION OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Development in Accordance with Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Evolution of Development Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.3 Other Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Approval by Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5 Agency Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.6 Cost of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.7 Construction Schedule• Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.8 Plans and Specifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.9 Nondiscrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.10 Rights of Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.11 Anti-discrimination During Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.12 Easements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.13 Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
H2\383\014084-0094\21574673 ,12/11/1 j I / -
4.14 Agency Financial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5. SALE OR TRANSFER OF THE PROJECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Transfer Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Agency Approval of Transfer Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Release; Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Relocation Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(a) Comprehensive General Liability Insurance . . . . . . . . . . . . . . . . . . . . . 10
(b) Worker's Compensation Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Automotive Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
(d) Builder's Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE . . . . . . . . 14
7.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 Limitation on Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Participant's Breach Not Defeat Mortgage Lien . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Holder Not Obligated to Construct or Complete Improvements . . . . . . . . . . . . . 15
7.5 Notice of Default to Mortgagee Deed of Trust or Other Security Interest Holders
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.6 Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.7 Agency's Rights upon Failure of Holder to Complete Improvements . . . . . . . . . 16
7.8 Right of Agency to Cure Mortgage Deed of Trust or Other Security Interest Default
. . . . . . . . . . . . . . . 17
7.9 Right of the Agency to Satisfy Other Liens on the Property After Conveyance of Title
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8. USE OF THE SITE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Use of the Site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.2 No Inconsistent Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3 Obligation to Refrain from Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.4 Effect of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Taxes and Assessments and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9. ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1 Defaults. Right to Cure and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.2 Agency Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.3 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.5 Agency's Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
10. Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.1 Rights and Remedies are Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.2 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
10.3 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
..
PS2\383\014084-0094\2157467.3 a12/11/1 11 / ' R J�/ R 4
11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.2 Applicable Law and Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.3 Acceptance of Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.4 Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.5 Nonliability of Agency Officials and Employees . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.6 Enforced Delay: Extension of Times of Performance . . . . . . . . . . . . . . . . . . . 24
11.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(b) Right to Inspect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.8 Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.9 Merger of Prior Agreements and Understandings . . . . . . . . . . . . . . . . . . . . . . . 25
11.10 Binding Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.11 Assurances to Act in Good Faith . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.13 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . 25
11.14 Entire Agreement. Waivers and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.15 Time for Acceptance of Agreement by Agency . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.17 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.18 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
FS2\383\014084-0094\2157467.3 a12/11/1 111 C RI I h.
OWNER PARTICIPATION AGREEMENT
THIS OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into this_
day of 2001 (the "Effective Date") by and between the COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public
body, corporate and politic ("Agency"), and DESERT SHADOWS III DEVELOPMENT
COMPANY, L.L.C., a California limited liability company ("Participant").
RECITALS
A. Agency is a public body, corporate and politic, exercising governmental
functions and powers and organized and existing under the Community
Redevelopment Law of the State of California (Health and Safety Code Section
33000, et seq.
B. Agency desires to implement the Redevelopment Plan for its North Palm
Canyon Redevelopment Project Area ("Project Area") by providing for the
rehabilitation of a portion of the Project Area designated herein as the "Site" and
the development of the "Project" thereon (as those terms are defined herein).
C. Participant proposed a 17 condominium project in the Project Area at the corner
of Stevens Road and Indian Canyon Drive, with reciprocal access to the Desert
Shadows Inn at 1533 Chaparral Road, and has requested financial assistance
from the Agency payable from the tax increment.
D. On December 19, 2001, the Agency found that the rehabilitation of the Site as
proposed by Participant pursuant to this Agreement, and the fulfillment
generally of this Agreement will effectuate the Redevelopment Plan and are in
the vital and best interests of the City and the health, safety, morals and welfare
of its residents and in accord with the public purposes and provisions of the
applicable state and local laws and requirements under which the Project has
been undertaken and is being assisted.
E. The Agency further found that no other means of financing the Project are
available, and that Agency financial assistance will assist in eliminating blight,
and that financial assistance to the Project is consistent with the Agency's
adopted Five Year Implementation Plan.
F. In connection with the Agency's approval of this Agreement, a Mitigated
Negative Declaration was prepared in compliance with the California
Environmental Quality Act, Public Resources Code Section 21000 et seq.. as
amended ("CEQA"), the State CEQA Guidelines and the City's CEQA
procedures. The Agency found that, in its independent judgment, the Mitigated
Negative Declaration adequately discusses the potential significant
environmental effects of the proposed Project, including land use,
traffic/circulation, parking, air quality, noise, aesthetics, geology/soils, water
quality, drainage, public utilities, public safety, archaeological/historic resources
and light and glare.
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NOW THEREFORE, in consideration of the promises and covenants contained herein,
the above recitals, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
7. DEFINITIONS.
7.1 Agreement. The term "Agreement' shall mean this entire Owner
Participation Agreement, including all exhibits, which exhibits are a part hereof and
incorporated herein in their entirety, and all other documents attached hereto which are
incorporated herein by reference as if set forth in full.
7.2 Certificate of Completion. The term "Certificate of Completion" shall
mean that certain Certificate of Completion attached hereto as Exhibit "D".
7.3 Cam. The term "City" shall mean the CITY OF PALM SPRINGS, a
municipal corporation, having its offices at 3200 East Tahquitz Canyon Way, Palm Springs,
California 92262.
7.4 Days. The term "days" shall mean calendar days and the statement of
any time period herein shall be calendar days, and not working days, unless otherwise
specified.
7.5 Declaration. The term "Declaration" shall mean that certain Declaration
of Covenants, Conditions and Restrictions in the form attached hereto as Exhibit"E".
7.6 Effective Date. The Effective Date of this Agreement shall occur after
public hearing and approval hereof by the Agency, and shall mean the date this Agreement is
executed on behalf of Agency.
7.7 Enforced Delay. The term "Enforced Delay" shall have the meaning set
forth in Section 8.4 below.
7.8 Participant Property. The term 'Participant Property" shall mean that
certain real property located adjacent to the Property at 1533 Chaparral Road, Palm Springs,
California, which is improved with a condominium development.
7.9 Proiect. The term 'Project' shall mean all of the construction,
improvements, modifications, and rehabilitation to be performed by Participant on the Site
pursuant to this Agreement. The Project is more particularly described in the Scope of
Development attached hereto as Exhibit"F". Upon completion, the Project will consist of a
seventeen (17) unit expansion of the condominium development located on the Participant
Property,
7.10 Proiect Area. The term "Project Area" shall mean the North Palm
Canyon Redevelopment Project Area.
7.11 Redevelopment Plan. The term 'Redevelopment Plan" shall mean the
Redevelopment Plan for the North Palm Canyon Redevelopment Project Area ('Project Area")
which was adopted by Ordinance Number 1227 of the City Council of City on October 19,
FS2\383\014084-0094\2157467.3 a12/11/1 2 C AA R ' /�
1984. A copy of the Redevelopment Plan is on file in the Office of the City Clerk of the City.
The Redevelopment Plan is incorporated herein by this reference as though fully set forth
herein.
7.12 Redevelopment Plan Termination Date. The term "Redevelopment Plan
Termination Date" shall mean the date the Redevelopment Plan shall expire, which date is
October 19, 2024.
7.13 Schedule of Performance. The term "Schedule of Performance" shall
mean that certain Schedule attached hereto as Exhibit "B".
7.14 Site. The term "Site" shall mean that certain unimproved real property
located within the Project Area and in the City of Palm Springs, County of Riverside, State of
California, consisting of approximately_ thousand (_,000) gross square feet,
more particularly described and shown on Exhibit "A" attached hereto.
8. PURPOSE OF AGREEMENT.
This Agreement and the Exhibits attached hereto are intended to effectuate the
Redevelopment Plan for the Project Area by providing for the development of the Project on
the Site. Participant has agreed to participate in the redevelopment of the Site by entering into
this Agreement with Agency. The development of the Site pursuant to this Agreement, and the
fulfillment generally of this Agreement, are in the best interests of the City and the welfare of
its residents, and are in accordance with the public purposes and provisions of applicable
federal, state, and local laws and requirements under which the Project has been undertaken
and is being assisted.
This Agreement is entered into by the Agency pursuant to its authority under the
Community Redevelopment Law of the State of California, Health and Safety Code Sections
33000 et seq. (all statutory references herein are to the Health and Safety Code unless
otherwise provided); which authorizes the Agency to make agreements with owners,
purchasers and lessees of property in the Redevelopment Project Area providing for the
development of property in conformity with the Redevelopment Plan, and providing that the
Agency retain controls and establish restrictions or covenants running with the land so that the
property will be developed, operated, and used in conformity with this Agreement and the
Redevelopment Plan (see Sections 33380, 33381, 33437-33439 and 33339). By its ownership
of the Participant Property, Participant qualifies as an "Owner Participant"within the meaning
of the Redevelopment Plan and the California Community Redevelopment Law (California
Health and Safety Code Section 33000 et seq.).
9. REPRESENTATIONS AND WARRANTIES.
9.1 Participant Representations and Warranties. Participant hereby makes
the following representations, covenants, and warranties for the benefit of Agency, and
Agency's successors and assigns, and acknowledges that the execution of this Agreement by
Agency has been made, in MATERIAL reliance by Agency on such representations and war-
ranties:
(a) Participant Ownership of the Site. As of the Effective Date,
Participant is owner of fee title to the Participant Property.FS2\383\014084-0094\2157467.3 a12/11/1 3 /A
R4 44 r►/�
(b) Litigation. There are no pending or threatened claims, actions,
proceedings, or lawsuits of any kind, whether for personal injury, property damage, landlord-
tenant disputes, property taxes, or otherwise, that could adversely affect title to or the
operation or value of the Site or which questions the validity or enforceability of this
transaction, nor is there any governmental investigation of any type or nature, pending or
threatened, against or relating to the Site or the transactions contemplated hereby (other than
those conducted by City and Agency.
(c) No Possessory Interests. Participant has the right of possession
of the Site on the scheduled date of commencement of construction of the Project set forth in
the Schedule of Performance, free from any tenant leases, tenancies, licenses, or other similar
occupancy agreements that could interfere with Participant's right to develop the Project.
(d) No Default. The execution and delivery of this Agreement will not
constitute or result in any default or event that with notice or the lapse of time, or both, would
be a default, breach, or violation of any lease, mortgage, deed of trust, or other agreement,
instrument or arrangement by which Participant is bound or any event which would permit any
party to terminate an agreement or accelerate the maturity of any indebtedness or other
obligation affecting Participant.
(e) No Violation. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein will not violate any provision of, or
require any consent, authorization, or approval under any law or administrative regulation or
any other order, award, judgment, writ, injunction or decree applicable to, or any governmental
permit or license issued to, Participant or relating to the Participant Parcel.
(f) No Bankruptcy. Neither Participant nor the entities constituting
Participant, if any, have filed or been the persons or subject of any filing of a petition under the
Federal Bankruptcy Law or any insolvency laws, or any laws for the discharge of indebtedness
or for the reorganization of debtors.
(g) No Misrepresentation. No representation, warranty, or covenant
of Participant in this Agreement, or in any document or certificate furnished or to be furnished
to Agency pursuant to this Agreement, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
(h) Disclosure. Participant has disclosed all information concerning
the Site of which Participant is aware which may materially affect the value of the Site and/or
Participant's ability to develop and utilize the Site as provided in this Agreement.
(i) Due Execution. This Agreement has been duly executed by
Participant and constitutes a valid, binding, and enforceable obligation of Participant.
Participant is qualified to do business in and is in good standing with the State of California,
has full power and authority to enter this Agreement and all authorizations required to make
this Agreement binding upon Participant have been obtained.
0) No Extraneous Consideration. Participant has not paid or given
to, and will not pay or give to, the Agency or City or any official or agent of the Agency or City
FS2\383\014084-0094\2157467.3 .12/11/1 4 ( _� 64''
any money or other consideration for obtaining this Agreement, except as expressly provided
herein.
9.2 Agency Representations and Warranties. Agency hereby represents
and warrants for the benefit of Participant and Participant's successors and assigns, that the
following facts are true as of the execution of this Agreement:
(a) No Approvals. No approvals or consents not heretofore obtained
by Agency are necessary in connection with the execution of this Agreement by Agency or with
the performance by Agency of Agency's obligations hereunder.
(b) Due Execution. This Agreement has been duly executed by
Agency or its duly authorized officers or agents and constitutes a valid, binding, and
enforceable obligation of Agency.
(c) Governmental Approvals. Notwithstanding anything contained
herein to the contrary, the Agency makes no representations or warranties with respect to the
approvals required by any other governmental entity or with respect to approvals hereinafter
required from the City or the Agency. The Agency reserves full police power authority over the
Project and Participant acknowledges that the City retains such full police power as well.
Nothing in this Agreement shall be deemed to be a prejudgment or commitment with respect to
such items nor to guaranty that such approvals or permits will be issued within any particular
time or with or without any particular conditions.
10, CONSTRUCTION OF THE PROJECT.
10.1 Development in Accordance with Plans. Participant shall develop the
Project in accordance with this Agreement, the Scope of Development, the approved Basic
Concept Drawings approved by the Agency prior to or concurrently with the approval of this
Agreement, and the plans and permits approved by Agency and City pursuant to subsections
3.3 and 3.4, including any changes thereto as may be subsequently approved in writing by
both Participant and Agency and, if necessary, City. As completed, the Project: (a) shall
comply with all applicable laws and ordinances of all governmental authorities, including,
without limitation, all laws and ordinances necessary to permit development of the Site as
permitted by this Agreement; (b) except as expressly provided herein, will be entirely on the
Site and will not encroach upon the land of others or overbound any easement or right-of-way;
and (c) will be wholly in compliance with any enforceable building restriction laws, however
established, and will not violate any enforceable use, easement, license, covenant, condition
or other restriction affecting the Site.
10.2 Evolution of Development Plan. Prior to or concurrently with the
approval of this Agreement, the Agency has approved the Participant's Basic Concept
Drawings. On or before the date set forth in the Schedule of Performance, Participant shall
submit to the City preliminary, and thereafter final drawings and specifications for development
of the Site in accordance with the Scope of Development, the Basic Concept Drawings, and in
accordance with the City's requirements. The term preliminary and final drawings shall be
deemed to include site plans, building plans and elevations, grading plans, if applicable,
landscaping plans, parking plans, material pallets, a description of structural, mechanical, and
electrical systems, and all other plans, drawings and specifications. Final drawings will be in
sufficient detail to obtain a building permit. Said plans, drawings and specifications shall be ca
FS2\383\014084-0094\2157467.3 ,12/11/1 5 Oro
A I/�
consistent with the Scope of Development and the various development approvals referenced
hereinabove, except as such items may be amended by City (if applicable) and by mutual
consent of Agency and Participant. Plans, (concept, preliminary and construction) shall be
progressively more detailed and will be approved if the Agency determines they are a logical
evolution of plans, drawings or specifications previously approved.
10.3 Other Governmental Permits. Participant shall, at its own expense and
before commencement of construction, rehabilitation, restoration, revitalization, or
development of any buildings, structures, or other work of improvement upon the Site, secure
or cause to be secured any and all permits and approvals which may be required by City or
any other governmental agency affected by such construction, development or work to be
performed by Participant pursuant to the Scope of Development, including but not limited to,
necessary building permits and all approvals required under the California Environmental
Quality Act ("CEQA"). Not by way of limiting the foregoing, in developing and constructing the
Project, Participant shall comply with all applicable development standards in City's Municipal
Code and shall comply with all building code, landscaping, signage and parking requirements
except as may be permitted through approved variances and modifications. Participant shall
not be obligated to commence construction if any such permit is not issued despite good faith
effort by Participant. Participant shall pay all normal and customary fees and charges
applicable to such permits and any fees and charges hereafter imposed by City or Agency
which are standard for and uniformly applied to similar projects in the City.
10.4 Approval by Agency. The Agency shall approve or disapprove any
submittal made by the Participant pursuant to this Agreement within thirty (30) days after such
submittal. All submittals made by Participant will note in bold type the thirty (30) day time limit
and specifically reference this Agreement and this Section. Any disapproval shall state in
writing the reason for the disapproval and the changes which the Agency requests to be made.
After Participant resubmits the corrected submittal, Agency shall have an additional thirty (30)
days for the review of the resubmittal but if the Agency disapproves the resubmittal, then the
cycle shall repeat, until the Agency's approval has been obtained. Any approvals made by the
City relating to the design of the Project shall be deemed to also constitute approval by the
Agency.
10.5 Agency Assistance. Subject to Participant's compliance with (i)
applicable City and Agency development standards for the Site and (ii) all applicable laws and
regulations governing such matters as public hearings, site plan review and environmental
review, Agency agrees to provide reasonable assistance to Participant, at no cost to Agency,
in the expeditious processing of Participant's submittals required under this Agreement in order
that Participant may obtain a final City action on such matters on or before the date set forth in
the Schedule of Performance; provided that Agency does not warrant or represent that such
approval shall be obtained.
10.6 Cost of Construction. Participant shall bear all costs of preparing and
developing the Project and constructing all improvements thereon, including, but not limited to,
any and all costs for demolition and clearance of existing surface and subsurface
improvements inconsistent with the Project, architectural and engineering plans, preparation of
the Site, costs associated with meeting applicable seismic standards, interim and permanent
financing, broker's and leasing commissions, and fees or charges for development and
building, except for the costs directly associated with those public improvements expressly set
forth in the Scope of Development to be performed by Agency.
rS2\383\014084-0094\2157467.3 ,12/11/1 6 C�I ■ -/3
10.7 Construction Schedule; Reports. Participant shall commence and
complete construction of the Project within the times set forth in the Schedule of Performance.
Once construction is commenced, Participant shall diligently pursue such construction to
completion and Participant shall not abandon such construction for more than thirty (30)
consecutive days. The decision of the Executive Director shall be final and conclusive upon
the parties to this Agreement. Participant shall keep Agency informed of the progress of
construction and submit to Agency written reports of the progress of construction when and in
the form requested by Agency, but not less than monthly.
10.8 Plans and Specifications. Participant shall construct the Project upon
the Site in accordance with the construction drawings, working specifications, and related
documents that shall be submitted to and approved by the Agency in advance and in writing.
10.9 Nondiscrimination During Construction. Participant, for itself and its
successors and assigns, agrees that during the rehabilitation of the Project, Participant will not
discriminate against any employee or applicant for employment because of race, color, creed,
religion, sex, marital status, age, physical or mental disability, ancestry, or national origin.
10.10 Rights of Access. Representatives of the Agency shall have the
reasonable right of access to the Site without charges or fees, at any time during normal
construction hours during the period of construction, for the purpose of assuring compliance
with this Agreement, including but not limited to the inspection of the construction work being
performed by or on behalf of Participant. Such representatives of Agency shall be those who
are so identified in writing by the Executive Director of Agency. Each such representative of
Agency shall identify himself or herself at the job site office upon his or her entrance to the
Site, and shall provide Participant, or the construction superintendent or similar person in
charge on the Site, a reasonable opportunity to have a representative accompany him or her
during the inspection. Agency shall indemnify, defend, and hold Participant harmless from any
injury or property damage caused or liability arising out of Agency's exercise of this right of
access.
10.11 Anti-discrimination During Construction. Participant, for himself and his
successors and assigns, agrees that in the construction of the improvements to be constructed
by Participant, it shall not discriminate against any employee or applicant for employment
because of race, color, creed, religion, sex, marital status, ancestry or national origin.
10.12 Easements. Participant shall grant to Agency and City all necessary and
appropriate easemes for development of public improvements consistent with the approved
Proj nt
ect plans, including but not limited to streets, rights of vehicular access, sidewalks, sewers,
storm drains, and water improvements.
10.13 Certificate of Completion. Upon written request by Participant, and upon
satisfactory completion of the Project, Agency shall issue to Participant a Certificate of
Completion. The Certificate of Completion shall be, and shall so state, a conclusive
determination of satisfactory completion of the Project required by this Agreement, and a full
compliance with the terms of this Agreement relating to commencement and completion of the
Project. After the date Participant is entitled to issuance of the Certificate of Completion, and
notwithstanding any other provision of this Agreement to the contrary, any party then owning
or thereafter purchasing, leasing or otherwise acquiring any interest in the Site shall not
(because of any such ownership, purchase, lease, or acquisition) incur any obligation or
FS2\383\014084-0094\2157467.3 a12/11/1 7 44 I • //A
liability under this Agreement, except that such party shall be bound by the covenants that
survive the issuance of the Certificate of Completion, as set forth in the Declaration. The
Certificate of Completion is not a notice of completion as referred to in California Civil Code
section 3093.
If Agency refuses or fails to furnish a Certificate of Completion after written
request from Participant, Agency shall, within ten (10) days of the written request, provide the
Participant a written statement of the reasons Agency refused or failed to furnish a Certificate
of Completion. The statement shall also contain the Agency's opinion of the action Participant
must take to obtain a Certificate of Completion. If the Agency shall have failed to provide such
written statement within said ten (10) day period, Participant shall be deemed entitled to the
Certificate of Completion. If Agency refuses or fails to furnish the Certificate of Completion for
the reason that specific items or materials are not available or landscaping is not complete and
the cost thereof is less than ten percent (10%) of the cost of total consideration, Agency shall
issue the Certificate of Completion upon the posting by Participant with Agency of a cash
deposit, bond or irrevocable letter of credit (in a form acceptable to Agency) in an amount
representing one hundred fifty percent (150%) of the fair value of the work not yet completed.
10.14 Agency Financial Assistance. In consideration of Participant's
performance of its obligations hereunder and provided that Participant has not defaulted in any
of the terms, conditions, covenants and obligations of Participant under this Agreement, the
Agency hereby agrees to reimburse Participant for the costs of constructing the off-site
improvements on Indian Canyon Drive, Chaparral Road, and Chuckwalla Road, more
particularly described in the Scope of Development; provided, however, that the Agency's
obligation to reimburse Participant shall not exceed the sum of ONE HUNDRED EIGHTY FIVE
THOUSAND DOLLARS ($185,000.00). The contract between Participant and the contractor
performing such work shall contain unit prices for all the work which is subject to
reimbursement. Agency will reimburse Participant for such costs upon the acceptance of said
off-site improvements by the City and the approval by Agency of invoices substantiating the
costs incurred by Participant for said off-site improvements. All of the off-site improvements
required by the Scope of Development shall be constructed when required by the Scope of
Development shall be constructed when required by the conditions to approval for the Project.
11. SALE OR TRANSFER OF THE PROJECT. The Participant covenants that
during the term of this Agreement and prior to the recordation of the Certificate of Completion,
Participant shall not assign this Agreement or transfer the Site or any of its interests therein
except as provided in this Section.
11.1 Transfer Defined. As used in this Section, the term "Transfer" shall
include any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of
this Agreement, the Site, or the improvements thereon. A Transfer shall also include the
transfer to any person or group of persons acting in concert of more than twenty-five percent
(25%) (in the aggregate) of the present ownership and/or control of any person or entity
constituting Participant or its general partners, taking all transfers into account on a cumulative
basis, except transfers of such ownership or control interest between members of the same
immediate family, or transfers to a trust, testamentary or otherwise, in which the beneficiaries
are limited to members of the transferor's immediate family, or among the entities constituting
Participant or its general partners or their respective shareholders. In the event any entity
constituting Participant, its successor or the constituent partners of Participant or any
successor of Participant, is a corporation or trust, such transfer shall refer to the transfer of the
PS2\383\014084-0094\21574673 .12/11/1 8 CA4 A ��
issued and outstanding capital stock of such corporation, or of beneficial interests of such
trust; in the event that any entity constituting Participant, its successor or the constituent
partners of Participant or any successor of Participant is a limited or general partnership, such
transfer shall refer to the transfer of more than twenty-five percent (25%) of such limited or
general partnership interest; in the event that any entity constituting Participant, its successor
or the constituent partners of Participant or any successor of Participant is a joint venture, such
transfer shall refer to the transfer of more than twenty-five percent (25%) of the ownership
and/or control of any such joint venture partner, taking all transfers into account on a
cumulative basis.
11.2 Agency Approval of Transfer Required. Participant shall not Transfer
this Agreement or any of Participant's rights hereunder, or any interest in the Site or in the
improvements thereon, directly or indirectly, voluntarily or by operation of law, without the prior
written approval of Agency, which approval will not be unreasonably withheld, and any such
purported Transfer without such approval shall be null and void. In considering whether it will
grant approval to any Transfer by Participant, which Transfer requires Agency approval,
Agency shall consider factors such as (i) whether the completion of the Project is jeopardized;
(ii) the financial credit, strength and capability of the proposed transferee to perform
Participant's obligations hereunder; (iii) the proposed transferee's experience and expertise in
the planning, financing, rehabilitation, development, ownership, and operation of similar
projects; and (iv) whether the Transfer is for the purpose of financing the purchase or
development of the Site. A Transfer for financing purposes shall not be approved by the
Agency if the loan documents do not state that the loan proceeds must be used for the Project.
11.3 Release; Assumption. In the absence of specific written agreement by
Agency, no Transfer by Participant of all or any portion of its interest in the Site shall be
deemed to relieve Participant or any successor party from the obligation to complete the
Project or any other obligations under this Agreement. In addition, no attempted Transfer of
any of Participant's obligations hereunder shall be effective unless and until the successor
party executes and delivers to Agency an assumption agreement in a form approved by the
Agency assuming such obligations.
11.4 Relocation Assistance. Participant waives any claims that it or any
entities owned or controlled by it, and its successors and assigns may have to receive
relocation assistance or benefits arising out of the work to be performed pursuant to this
Agreement..
12. INSURANCE AND INDEMNIFICATION.
12.1 Insurance. Prior to the entry by Participant on the Site pursuant to
Section 4.10(c) and prior to the commencement of any construction by Participant, Participant
and/or any persons entering on the Site to conduct inspections or to install improvements on
the Site shall procure and maintain, at its sole cost and expense, in a form and content
satisfactory to Agency, during the entire term of such entry or construction, the following
policies of insurance:
(a) Comprehensive General Liability Insurance. A policy of
comprehensive general liability insurance written on a per occurrence basis in an amount not
less than either(i) a combined single limit of ONE MILLION DOLLARS ($1,000,000.00) or(ii)
bodily injury limits of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) per person, ONE
FS2\383\014084-0094\2157467.3 a12/11/1 9 moo
MILLION DOLLARS ($1,000,000.00) per occurrence, ONE MILLION DOLLARS
($1,000,000.00) products and completed operations and property damage limits of FIVE
HUNDRED THOUSAND DOLLARS ($500,000.00) per occurrence and FIVE HUNDRED
THOUSAND DOLLARS ($500,000.00) in the aggregate
(b) Worker's Compensation Insurance. A policy of worker's
compensation insurance in such amount as will fully comply with the laws of the State of
California and which shall indemnify, insure and provide legal defense for both the Participant,
Agency, and the City against any loss, claim or damage arising from any injuries or
occupational diseases occurring to any worker employed by or any persons retained by the
Participant in the course of carrying out the work or services contemplated in this Agreement.
(c) Automotive Insurance. A policy of comprehensive automobile
liability insurance written on a per occurrence basis in an amount not less than either (i) bodily
injury liability limits of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00) per
person and FIVE HUNDRED THOUSAND DOLLARS ($500,000.00)per occurrence and
property damage liability limits of ONE HUNDRED THOUSAND DOLLARS ($100,000.00) per
occurrence and ONE HUNDRED THOUSAND DOLLARS ($100,000.00) in the aggregate or(ii)
combined single limit liability of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00). Said
policy shall include coverage for owned, non-owned, leased and hired cars.
(d) Builder's Risk Insurance. A policy of "builder's risk" insurance
covering the full replacement value of all of the improvements to be constructed by Participant
pursuant to this Agreement.
All of the above policies of insurance, except the Builder's Risk Insurance, shall
be primary insurance and shall name Agency, City, and their officers, employees, and agents
as additional insureds. The insurer shall waive all rights of subrogation and contribution it may
have against Agency, City, and their officers, employees and agents and their respective
insurers. All of said policies of insurance shall provide that said insurance may not be
amended or canceled without providing thirty (30) days prior written notice by registered mail to
Agency and City. In the event any of said policies of insurance are canceled, the Participant
shall, prior to the cancellation date, submit new evidence of insurance in conformance with this
Section to the Executive Director. No work or services under this Agreement shall commence
until the Participant has provided Agency with Certificates of Insurance or appropriate insur-
ance binders evidencing the above insurance coverages and said Certificates of Insurance or
binders are approved by Agency.
The policies of insurance required by this Agreement shall be satisfactory only if
issued by companies qualified to do business in California, rated "A" or better in the most
recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only
if they are of a financial category Class VII or better, unless such requirements are waived by
the Risk Manager of the City ("Risk Manager") due to unique circumstances.
Participant shall provide in all contracts with contractors, subcontractors,
architects, and engineers that said contractor, subcontractor, architect, or engineer shall
maintain the same policies of insurance required to be maintained by Participant pursuant to
this Section, unless waived by the Risk Manager of Agency.
FS2\383\014084-0094\2157467.3 a12/11/1 10 4 R aw!?
The Participant agrees that the provisions of this Section shall not be construed
as limiting in any way the extent to which the Participant may be held responsible for the
payment of damages to any persons or property resulting from the Participant's activities or the
activities of any person or persons for which the Participant is otherwise responsible.
12.2 Indemnification. During the period of any construction of the
improvements pursuant to this Agreement and until such time as is issued a Certificate of
Completion for the Project, Participant agrees to and shall indemnify and hold the Agency and
the City harmless from and against all liability, loss, damage, cost, or expense (including
reasonable attorneys' fees and court costs) arising from or as a result of the death of any
person or any accident, injury, loss, or damage whatsoever caused to any person or to the
property of any person which shall occur on the Site and which shall be directly or indirectly
caused by the acts done thereon or any errors or omissions of the Participant or its agents,
servants, employees, or contractors. Participant shall not be responsible for(and such
indemnity shall not apply to) any acts, errors, or omissions of the Agency or the City or their
respective agents, servants, employees, or contractors. Agency and City shall not be
responsible for any acts, errors, or omissions of any person or entity except Agency and City
and their respective agents, servants, employees, or contractors, subject to any and all
statutory and other immunities. The provisions of this Section shall survive the termination of
this Agreement.
12.3 Hazardous Substances. Participant represents and warrants that, after
due and diligent inquiry and investigation, there exists no "Hazardous Materials" (as such term
is herein defined) in, on, under, or about the Site. Participant understands and agrees that in
the event Participant incurs any loss or liability concerning Hazardous Materials whether
attributable to events occurring prior to or following the Effective Date, then Participant may
look to current or prior owners of the Site, but under no circumstances shall Participant look to
Agency or City for any liability or indemnification regarding Hazardous Materials.
Participant, and each of the entities constituting Participant, if any, from and
after the Effective Date, hereby waives, releases, remises, acquits and forever discharges
Agency, City, their directors, officers, shareholders, employees, and agents, and their
respective heirs, successors, personal representatives and assigns, of and from any and all
Environmental Claims, Environmental Cleanup Liability and Environmental Compliance Costs,
as those terms are defined below, and from any and all actions, suits, legal or administrative
orders or proceedings, demands, actual damages, punitive damages, loss, costs, liabilities and
expenses, which concern or in any way relate to the physical or environmental conditions of
the Site, the existence of any Hazardous Material thereon, or the release or threatened release
of Hazardous Materials therefrom, whether existing prior to, at or after the Effective Date. It is
the intention of the parties pursuant to this release that any and all responsibilities and
obligations of Agency and City, and any and all rights, claims, rights of action, causes of
action, demands or legal rights of any kind of Participant, its successors, assigns or any
affiliated entity of Participant, arising by virtue of the physical or environmental condition of the
Site, the existence of any Hazardous Materials thereon, or any release or threatened release
of Hazardous Material therefrom, whether existing prior to, at or after the Effective Date, are by
this Release provision declared null and void and of no present or future force and effect as to
the parties. In connection therewith, Participant and each of the entities constituting
Participant, expressly agree to waive any and all rights which said party may have under
Section 1542 of the California Civil Code which provides as follows:
FS1383\014084-0094\4157467.3 a12/11/1 11 M## ofW;?,o
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor."
Participant and each of the entities constituting Participant, shall, from and after
the Effective Date, defend, indemnify and hold harmless Agency, City and their officers,
directors, employees, agents and representatives (collectively, the "Indemnified Parties") from
and against any and all Environmental Claims, Environmental Cleanup Liability, Environmental
Compliance Costs, and any other claims, actions, suits, legal or administrative orders or
proceedings, demands or other liabilities resulting at any time from the physical and/or
environmental conditions of the Site whether before or after the Effective Date or from the
existence of any Hazardous Materials or the release or threatened release of any Hazardous
Materials of any kind whatsoever, in, on or under the Site occurring at any time whether before
or after the Effective Date, including but not limited to, all foreseeable and unforeseeable
damages, fees, costs, losses and expenses, including any and all attorneys' fees and
environmental consultant fees and investigation costs and expenses, directly or indirectly
arising therefrom, and including fines and penalties of any nature whatsoever, assessed,
levied or asserted against any Indemnified Parties to the extent that the fines and/or penalties
are the result of a violation or an alleged violation of any Environmental Law. Participant
further agrees that in the event Participant obtains, from former or present owners of the Site
or any other persons or entities, releases from liability, indemnities, or other forms of hold
harmless relating to the subject matter of this section, Participant shall use its diligent efforts to
obtain for Agency and City the same releases, indemnities and other comparable provisions.
For purposes of this Section 5.3, the following terms shall have the following
meanings:
(a) "Environmental Claim" means any claim for personal injury, death
and/or property damage made, asserted or prosecuted by or on behalf of any third party,
including, without limitation, any governmental entity, relating to the Site or its operations and
arising or alleged to arise under any Environmental Law.
(b) "Environmental Cleanup Liability" means any cost or expense of any
nature whatsoever incurred to contain, remove, remedy, clean up, or abate any contamination
or any Hazardous Materials on or under all or any part of the Site, including the ground water
thereunder, including, without limitation, (i) any direct costs or expenses for investigation,
study, assessment, legal representation, cost recovery by governmental agencies, or ongoing
monitoring in connection therewith and (ii) any cost, expense, loss or damage incurred with
respect to the Site or its operation as a result of actions or measures necessary to implement
or effectuate any such containment, removal, remediation, treatment, cleanup or abatement.
(c) "Environmental Compliance Cost" means any cost or expense of any
nature whatsoever necessary to enable the Site to comply with all applicable Environmental
Laws in effect. "Environmental Compliance Cost" shall include all costs necessary to
demonstrate that the Site is capable of such compliance.
(d) "Environmental Law" means any federal, state or local statute,
ordinance, rule, regulation, order, consent decree, judgment or common-law doctrine, and
provisions and conditions of permits, licenses and other operating authorizations relating to (i)
FKM3\014084-0094\2157467.3 a12/11/1 12 C U A ov �,
pollution or protection of the environment, including natural resources, (ii) exposure of persons,
including employees, to Hazardous Materials or other products, raw materials, chemicals or
other substances, (iii) protection of the public health or welfare from the effects of by-products,
wastes, emissions, discharges or releases of chemical substances from industrial or
commercial activities, or (iv) regulation of the manufacture, use or introduction into commerce
of chemical substances, including, without limitation, their manufacture, formulation, labeling,
distribution, transportation, handling, storage and disposal.
(e) "Hazardous Material" is defined to include any hazardous or toxic
substance, material or waste which is or becomes regulated by any local governmental
authority, the State of California, or the United States Government. The term "Hazardous
Material" includes, without limitation, any material or substance which is: (i) petroleum or oil or
gas or any direct or derivate product or byproduct thereof; (ii) defined as a "hazardous waste,"
"extremely hazardous waste" or"restricted hazardous waste" under Sections 25115, 25117 or
25122.7, or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law); (iii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act); (iv) defined as a
"hazardous material," "hazardous substance," or"hazardous waste" under Sections 25501 Q)
and (k) and 25501.1 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory); (v) defined as a "hazardous
substance" under Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances); (vi) "used oil" as defined under
Section 25250.1 of the California Health and Safety Code; (vii) asbestos; (viii) listed under
Article 9 or defined as hazardous or extremely hazardous pursuant to Article 1 of Title 22 of
the California Code of Regulations, Division 4, Chapter 30; (ix) defined as waste or a
hazardous substance pursuant to the Porter-Cologne Act, Section 13050 of the California
Water Code; (x) designated as a "toxic pollutant" pursuant to the Federal Water Pollution
Control Act, 33 U.S.C. § 1317; (xi) defined as a "hazardous waste" pursuant to the Federal
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903); (xii)
defined as a "hazardous substance" pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (42 U.S.C. § 9601); (xiii) defined as
"Hazardous Material" pursuant to the Hazardous Materials Transportation Act, 49 U.S.C.
§ 1801 et seq.; or (xiv) defined as such or regulated by any "Superfund" or"Superlien" law, or
any other federal, state or local law, statute, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct concerning Hazardous
Materials, as now, or at any time hereafter, in effect.
Notwithstanding any other provision of this Agreement, Participant's release and
indemnification as set forth in the provisions of this Article, as well as all other provisions of this
Article, shall survive the termination of this Agreement and shall continue in perpetuity.
13. RIGHTS OF HOLDERS OF APPROVED SECURITY INTERESTS IN SITE,
13.1 Definitions. As used in this Section, the term "mortgage" shall include
any mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security
interest, or sale and lease-back, or any other form of conveyance for financing. The term
"holder" shall include the holder of any such mortgage, deed of trust, or other security interest,
or the lessor under a lease-back, or the grantee under any other conveyance for financing.
FS2\383\014084-0094\2157467.3 a12/11/1 13 664 #4 a,
13.2 Limitation on Encumbrances. Notwithstanding anything to the contrary
contained in this Agreement, Participant shall not mortgage the Site or the Project or any
portion thereof or any interest therein, or enter into any other form of conveyance for financing
prior to the date that Participant has acquired fee title to the entire Site. Subsequent to or
concurrently with Participant's acquisition of fee title to the entire Site, mortgages required for
any reasonable method of financing of the construction of the improvements or acquisition of
the Site are permitted before issuance of a Certificate of Completion but only for the purpose
of securing loans of funds used or to be used for financing the acquisition of the Site, for the
construction of improvements thereon, and for any other expenditures necessary and
appropriate to develop the Site under this Agreement, or for restructuring or refinancing any of
same, so long as the refinancing does not exceed the then outstanding balance of the existing
financing, including any additional costs for completion of construction, whether direct or
indirect, based upon the estimates of architects and/or contractors. The Participant shall
notify the Agency in advance of any mortgage, if the Participant or such entity proposes to
enter into the same before issuance of the Certificate of Completion. The Participant or such
entity shall not enter into any such conveyance for financing without the prior written approval
of the Agency as provided in Section 5.2. Any lender approved by the Agency pursuant to
Section 5.2 shall not be bound by any material amendment, implementation, or modification to
this Agreement subsequent to the recordation of its mortgage without such lender giving its
prior written consent thereto. In any event, the Participant shall promptly notify the Agency of
any mortgage, encumbrance, or lien that has been created or attached thereto prior to
issuance of a Certificate of Completion, whether by voluntary act of the Participant or
otherwise.
13.3 Participant's Breach Not Defeat Mortgage Lien. Participant's breach of
any of the covenants or restrictions contained in this Agreement shall not defeat or render
invalid the lien of any mortgage permitted pursuant to subsection (b) above and made in good
faith and for value as to the Site, or any part thereof or interest therein, but unless otherwise
provided herein, the terms, conditions, covenants, restrictions, easements, and reservations of
this Agreement shall be binding and effective against the holder of any such mortgage of the
Site whose interest is acquired by foreclosure, trustee's sale or otherwise.
13.4 Holder Not Obligated to Construct or Complete Improvements. The
holder of any mortgage shall in no way be obligated by the provisions of this Agreement to
construct or complete the improvements or to guarantee such construction or completion.
Nothing in this Agreement shall be deemed or construed to permit or authorize any such
holder to devote the Site or any portion thereof to any uses, or to construct any improvements
thereon, other than those uses or improvements provided for or authorized by this Agreement.
13.5 Notice of Default to Mortgagee Deed of Trust or Other Security Interest
Holders. Whenever Agency shall deliver any notice or demand to Participant with respect to
any breach or default by Participant hereunder, Agency shall at the same time deliver a copy
of such notice or demand to each holder of record of any mortgage who has previously made
a written request to Agency therefor, or to the representative of such lender as may be
identified in such a written request by the lender. No notice of default shall be effective as to
the holder unless such notice is given.
13.6 Right to Cure. Each holder (insofar as the rights of Agency are con-
cerned) shall have the right, at its option, within ninety (90) days after the receipt of the notice,
to: /w
MM3\014064-0094\2157467.3 a12/11/1 14 e R o �� 3
(i) Obtain possession, if necessary, and to commence and diligently
pursue said cure until the same is completed, and
(ii) Add the cost of said cure to the security interest debt and the lien
or obligation on its security interest; provided that in the case of a default which cannot
with diligence be remedied or cured within such ninety (90) day period, such holder
shall have additional time as reasonably necessary to remedy or cure such default.
In the event there is more than one such holder, the right to cure or remedy a
breach or default of Participant under this Section shall be exercised by the holder first in
priority or as the holders may otherwise agree among themselves, but there shall be only one
exercise of such right to cure and remedy a breach or default of Participant under this Section.
No holder shall undertake or continue the construction or completion of the
improvements (beyond the extent necessary to preserve or protect the improvements or
construction already made) without first having expressly assumed Participant's obligations to
Agency by written agreement satisfactory to Agency with respect to the Site or any portion
thereof in which the holder has an interest. The holder must agree to complete, in the manner
required by this Agreement, the improvements to which the lien or title of such holder relates,
and submit evidence satisfactory to the Agency that it has the qualifications and financial
responsibility necessary to perform such obligations. Any holder properly completing such
improvements shall be entitled, upon written request made to Agency, to a Certificate of
Completion from Agency.
13.7 Agency's Rights upon Failure of Holder to Complete Improvements. In
any case where one hundred eighty (180) days after default by Participant in completion of
construction of improvements under this Agreement, the holder of any mortgage creating a lien
or encumbrance upon the Site or improvements thereon has not exercised the option to con-
struct afforded in this Section or if it has exercised such option and has not proceeded dili-
gently with construction, Agency may, after ninety (90) days' notice to such holder and if such
holder has not exercised such option to construct within said ninety (90) day period, purchase
the mortgage (or the fee interest if the holder has foreclosed), upon payment to the holder of
an amount equal to the sum of the following:
(i) The unpaid mortgage, debt plus any accrued and unpaid interest
(less all appropriate credits, including those resulting from collection and application of
rentals and other income received during foreclosure proceedings, if any);
(ii) All expenses, incurred by the holder with respect to foreclosure, if
any;
(iii) The net expenses (exclusive of general overhead), incurred by
the holder as a direct result of the ownership or management of the Site, such as
insurance premiums or real estate taxes, if any;
(iv) The costs of any improvements made by such holder, if any; and
PS2\383\014084-0094\2157467.3 .12/11/1 15 / - A J aw24
(v) An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage
debt and such debt had continued in existence to the date of payment by the Agency.
In the event that the holder does not exercise its option to construct afforded in
this Section, and Agency elects not to purchase the mortgage of holder, upon written request
by the holder to Agency, Agency agrees to use reasonable efforts to assist the holder selling
the holder's interest to a qualified and responsible party or parties (as determined by Agency),
who shall assume the obligations of making or completing the improvements required to be
constructed by Participant, or such other improvements in their stead as shall be satisfactory to
Agency. The proceeds of such a sale shall be applied first to the holder of those items
specified in subparagraphs (a) through (e) hereinabove, and any balance remaining thereafter
shall be applied as follows:
(i) First, to reimburse Agency, on its own behalf and on behalf of the
City, for all costs and expenses actually and reasonably incurred by Agency, including
but not limited to payroll expenses, management expenses, legal expenses, and
others.
(ii) Second, to reimburse Agency, on its own behalf and on behalf of
the City, for all payments made by Agency to discharge any other encumbrances or
liens on the Site or to discharge or prevent from attaching or being made any
subsequent encumbrances or liens due to obligations, defaults, or acts of Participant,
its successors or transferees.
(iii) Third, to reimburse Agency, on its own behalf and on behalf of
the City, for all costs and expenses actually and reasonably incurred by Agency, in
connection with its efforts assisting the holder in selling the holder's interest in accord-
ance with this Section.
(iv) Fourth, any balance remaining thereafter shall be paid to
Participant.
13.8 Right of Agency to Cure Mortgage Deed of Trust or Other Security Inter-
est Default. In the event of a default or breach by Participant (or entity permitted to acquire
title under this Section) of a mortgage prior to the issuance by Agency of a Certificate of
Completion for the Site or portions thereof covered by said mortgage, and the holder of any
such mortgage has not exercised its option to complete the development, Agency may cure
the default prior to completion of any foreclosure. In such event, Agency shall be entitled to
reimbursement from Participant or other entity of all costs and expenses incurred by Agency in
curing the default, to the extent permitted by law, as if such holder initiated such claim for
reimbursement, including legal costs and attorneys' fees, which right of reimbursement shall be
secured by a lien upon the Site, with power of sale, to the extent of such costs and
disbursements. Any such lien shall be subject to:
0 Any mortgage for financing permitted by this Agreement; and
(ii) Any rights or interests provided in this Agreement for the
protection of the holders of such mortgages for financing; provided that nothing herein
shall be deemed to impose upon Agency any affirmative obligations (by the payment of
PS2\383\014084-0094\2157467.3 a12/11/1 16 LOQA1110 A 4vollr
money, construction or otherwise) with respect to the Site in the event of its
enforcement of its lien. Agency may enforce its lien pursuant to the provisions of
Section 2924 et seq. of the California Civil Code.
13.9 Right of the Agency to Satisfy Other Liens on the Property After
Conveyance of Title. After the conveyance of title and prior to the recordation of a Certificate
of Completion for construction and development, and after the Participant has had a
reasonable time to challenge, cure, or satisfy any liens or encumbrances on the Site or any
portion thereof, the Agency shall have the right to satisfy any such liens or encumbrances;
provided, however, that nothing in this Agreement shall require the Participant to pay or make
provision for the payment of any tax, assessment, lien or charge so long as the Participant in
good faith shall contest the validity or amount thereof, and so long as such delay in payment
shall not subject the Site or any portion thereof to forfeiture or sale. Agency shall have the
right to reimbursement from Participant for any amount expended pursuant to this Section,
which right of reimbursement shall be secured by a lien on the Site, with power of sale, as
provided in the Declaration.
14. USE OF THE SITE.
14A Use of the Site. Participant covenants and agrees, for itself and its
successors and assigns, that beginning on the Effective Date and ending on the
Redevelopment Plan Termination Date, Participant and such successors shall use and
maintain the Site, or any part thereof, pursuant to the terms of the Declaration, the
Redevelopment Plan and this Agreement; provided that, in the event of any inconsistency, the
provisions of the Redevelopment Plan shall prevail over all others, and the provisions of the
Declaration shall prevail over this Agreement. Participant shall have sole and exclusive
responsibility and financial liability for any and all construction or works of improvement on the
Site as may be necessary in order to use the Site for the Project.
14.2 No Inconsistent Uses. Participant covenants and agrees, for itself and
its successors and assigns, that beginning on the Effective Date and ending on the
Redevelopment Plan Termination Date, Participant and such successors shall it shall not
devote the Site, or any part thereof, to uses inconsistent with the Redevelopment Plan, the
applicable zoning restrictions, this Agreement, or the Declaration.
14.3 Obligation to Refrain from Discrimination. Except as specifically
provided in the Declaration with respect to renting the units within the Project to Senior
Citizens, as such term is defined therein, there shall be no discrimination against, or
segregation of, any persons, or group of persons, on account of race, color, creed, religion,
sex, marital status, age, physical or mental disability, ancestry, or national origin in the rental,
sale, lease, sublease, transfer, use, occupancy, or enjoyment of the Site, or any portion
thereof, nor shall Participant, or any person claiming under or through Participant, establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees, or
vendees of the Site or any portion thereof. The nondiscrimination and nonsegregation
covenants contained herein and in the Declaration shall remain in effect in perpetuity.
14.4 Effect of Covenants. Agency is deemed a beneficiary of the terms and
provisions of this Agreement and of the restrictions and covenants running with the land,
whether or not appearing in the Declaration for and in its own right and for the purposes of
F52\383\014084-0094\2157467.3 a12/11/1 17 A A *4 .x
protecting the interests of the community in whose favor and for whose benefit the covenants
running with the land have been provided. The covenants in favor of the Agency shall run
without regard to whether Agency has been, remains or is an owner of any land or interest
therein in the Site, or in the Redevelopment Project Area, and shall be effective as both
covenants and equitable servitudes against the Site. Agency shall have the right, if any of the
covenants set forth in this Agreement which are provided for its benefit are breached, to
exercise all rights and remedies and to maintain any actions or suits at law or in equity or other
proper proceedings to enforce the curing of such breaches to which it may be entitled. With
the exception of the City, no other person or entity shall have any right to enforce the terms of
this Agreement under a theory of third-party beneficiary or otherwise. The covenants running
with the land and their duration are set forth in the Declaration.
14.5 Taxes and Assessments and Liens. Participant shall pay, when due, all
real estate taxes and assessments assessed or levied subsequent to conveyance of title.
Participant shall remove or have removed any levy or attachment made on the Site, or assure
the satisfaction thereof, within a reasonable time, but in any event prior to a sale thereunder.
Nothing herein contained shall be deemed to prohibit Participant from contesting the validity or
amounts of any tax, assessment, encumbrance or lien, nor to limit the remedies available to
Participant in respect thereto.
15. ENFORCEMENT,
15.1 Defaults, Right to Cure and Waivers. Subject to any Enforced Delay, the
occurrence of any one or more of the following events shall constitute a Participant Default
hereunder if, after receiving written notice from Agency as provided in Section 8.3 below
identifying such event, Participant fails to cure said event within ten (10) days if such event is a
monetary default or Participant fails to cure said default within thirty (30) days, if such event is
a non-monetary default; provided that if such non-monetary default is not capable of being
cured within thirty (30) days Participant commences to cure said event within ten (10) days and
diligently and in good faith continues to cure the event of default:
(a) Participant fails to observe or perform any term or provision of
this Agreement within the time set forth herein;
(b) Participant fails to timely obtain all required permits and
approvals for the Project which shall be determined in the sole and absolute discretion of
Agency;
(c) Participant makes or delivers to Agency any statement, report,
financial statement, or certificate that is not true or correct in any material respect;
(d) Participant applies for the appointment of a receiver, trustee, or
custodian for any of Participant's assets;
(e) Participant files a petition under any section or chapter of the
Bankruptcy Code or any similar law or regulation;
(f) Participant makes a general assignment for the benefit of his
creditors;
M\363\014084-0094\2157467.3 a12/11/1 18 C`jam A :107
(g) A petition under any section or chapter of the Bankruptcy Code or
any similar law or regulation is filed against Participant, and such injunction, restraint, or
petition is not dismissed within thirty (30) days after the entry or filing thereof;
(h) Participant ceases to conduct its business substantially as now
conducted;
(i) Participant is enjoined, restrained, or in any way prevented by
court order from conducting all or any material part of its business affairs;
Q) Participant becomes insolvent or admits in writing its inability to
pay its debts as they mature; or
(k) A notice of lien, levy, or assessment is filed of record with respect
to all or any of Participant's assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal, or other governmental agency, or if
any taxes or debts owing at any time hereafter to any one of these becomes a lien or
encumbrance upon any of Borrower's assets or the Site and the same is not released within
thirty (30) days after the same becomes a lien or encumbrance; provided that Participant shall
have the right to contest in good faith and by appropriate proceedings any such lien, levy or
assessment if Participant provides Agency with a bond or indemnity satisfactory to Agency
assuring the payment of such lien, levy, or assessment;
15.2 Agency Defaults. The occurrence of any one or more of the following
events shall constitute an Agency Default hereunder:
(a) Agency fails to observe or perform any term or provision of this
Agreement within the time set forth herein, and such failure is not cured to Participant's
reasonable satisfaction within thirty (30) days after Participant gives Agency written notice as
provided in Section 9.3 below identifying such failure; provided that if said default cannot be
cured within said thirty (30) day period, Agency shall not be in default of this Agreement if
Agency commences to cure said default within ten (10) days of said notice and diligently and
in good faith continues to cure the default;
(b) Agency makes or delivers to Participant any statement, report, or
certificate that is not true or correct in any material respect; or
15.3 Notice of Default. The non-defaulting party shall give written notice of
any Default under this Article 9 to the defaulting Party, clearly specifying the Default. Copies
of any Notice of Default given to the defaulting Party shall also be given to any permitted
lender requesting such notice. Any failure or delay in giving such notice or in asserting any of
either Party's rights and remedies as to any Default shall not constitute a waiver of any Default,
nor shall it change the time of Default, nor shall it deprive either Party of its rights to institute
and maintain any actions or proceedings which it may deem necessary to protect, assert or
enforce any such rights or remedies.
15.4 Remedies. In addition to any other rights or remedies set forth in this
Section 8.4, either party may institute legal action to cure, correct, or remedy any Default, to
recover damages for any Default, or to obtain any other remedy consistent with the purposes
FS2\383\014084-0094\2157467.3 a12/11/1 19 C*4A A _Q9
of this Agreement. Such legal actions must be instituted and maintained in the Superior Court
of the County of Riverside, State of California, or in any other appropriate court in that county.
Subject to any applicable cure periods and the general right to notice provided
for in this Agreement, upon a Default or breach of this Agreement by one Party to this
Agreement, the other Party may bring an action for damages proximately caused thereby or for
specific performance of this Agreement or any term or provision hereof. Participant agrees
that Agency shall be entitled to the judicial remedy of specific performance and Participant
agrees (subject to its reserved right to contest whether in fact a default does exist) not to
challenge or contest the appropriateness of such remedy. In this regard, Participant
specifically acknowledges that Agency is entering into this Agreement for the purpose of
assisting in the redevelopment of the Site and not for the purpose of enabling Participant to
speculate with land.
15.5 Agency's Right to Terminate. In the event that, prior to Participant's
commencement of construction of the Project, Agency is not in Default under this Agreement,
and: (i) Participant commits a Default hereunder and fails to cure such Default within the time
provided in Sections 9.1 and 9.3; or (ii) Participant fails to obtain any of the required approvals
for the Project referenced herein; then, in such event, Agency may deliver a thirty (30) day
written notice of termination to Participant and, if the applicable Default or condition has not
been satisfied (or waived by Agency) within said time period, this Agreement shall terminate
and neither Party shall have any further rights against or liabilities to the other (except Agency
reserves its rights under Section 9.4 if Participant is in Default).
16. Rights and Remedies are Cumulative. Except as otherwise expressly stated in
this Amended OPA, the rights and remedies of the parties hereto are cumulative, and the
exercise by any Party of one or more of its rights or remedies shall not preclude the exercise
by it, at the same or different times, of any other rights or remedies for the same Default or any
other Default by another Party.
16.1 Rights and Remedies are Cumulative. Except as otherwise expressly
stated in this Agreement, the rights and remedies of the parties are cumulative, and the
exercise by either party of one or more of its rights or remedies shall not preclude the exercise
by it, at the same or different times, of any other rights or remedies for the same default or any
other default by the other party.
16.2 Specific Performance. In addition to any other remedies permitted by
this Agreement, if either party defaults hereunder by failing to perform any of its obligations
herein, each party agrees that the other shall be entitled to the judicial remedy of specific
performance, and each party agrees (subject to its reserved right to contest whether in fact a
default does exist) not to challenge or contest the appropriateness of such remedy. In this
regard, Participant specifically acknowledges that Agency is entering into this Agreement for
the purpose of assisting in the redevelopment of the Site and not for the purpose of enabling
Participant to speculate with land.
16.3 Attorney's Fees. If either party to this Agreement is required to initiate or
defend any action or proceeding in any way arising out of the parties' agreement to, or
performance of, this Agreement, or is made a party to any such action or proceeding by the
Escrow Agent or other third party, such that the parties hereto are adversarial, the prevailing
party, as between the Participant and Agency only, in such action or proceeding, in addition to
PS2\383\014084-0094\2157467.3 .12/11/1 20 C #204 A MV Z
any other relief which may be granted, whether legal or equitable, shall be entitled to
reasonable attorney's fees from the other. As used herein, the "prevailing party" shall be the
party determined as such by a court of law, pursuant to the definition Code of Civil Procedure
Section 1032(a)(4), as it may be subsequently amended. Attorney's fees shall include
attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be
entitled to all other reasonable costs for investigating such action, taking depositions and
discovery and all other necessary costs the court allows which are incurred in such litigation.
All such fees shall be deemed to have accrued on commencement of such action and shall be
enforceable whether or not such action is prosecuted to judgment.
17. MISCELLANEOUS,
17.1 Notices. Formal notices, demands, and communications between
Agency and Participant shall be sufficiently given if (i) personally delivered; (ii) dispatched by
registered or certified mail, postage prepaid, return receipt requested; or (iii) by Federal
Express or another reputable overnight delivery service, to the following addresses:
If to Agency: Community Redevelopment Agency of the
City of Palm Springs, California
P.O. Box 2743
Palm Springs, California 92263-2743
3200 Tahquitz Canyon Way
Palm Springs, California 92262
Attn: Executive Director
With a copy to: Burke Williams & Sorensen
18301 Von Karman Avenue
Suite 1050
Irvine, California 92612-1009
Attn: David J. Aleshire, Esq.
If to Participant: Desert Shadows III Development Company, L.L.C.
1533 Chaparral Road
Palm Springs, California 92262
Attn: Stephen Payne
With a copy to: Roemer& Harnik
45025 Manitu Dr.
Indian Wells, CA 92210
Attn: Richard I. Roemer, Esq.
All notices shall be deemed to be received as of the earlier of actual receipt by the
addressee thereof; the expiration of forty-eight (48) hours after depositing in the United States
Postal System in the manner described in this Section; or twenty-four (24) hours after delivery
to Federal Express or another overnight delivery service. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may
from time to time designate by mail.
17.2 Applicable Law and Forum. The laws of the State of California shall
govern the interpretation and enforcement of this Agreement. A `
FS283\014084-0094\2157467.3 .12/11/1 21 C. 49 LA.[ w �Q
17.3 Acceptance of Service of Process. In the event that any legal action is
commenced by Participant against Agency, service of process on Agency shall be made by
personal service upon the Executive Director or Secretary of Agency, or in such other manner
as may be provided by law. In the event that any legal action is commenced by Agency
against Participant, service of process on Participant shall be made in such manner as may be
provided by law and shall be valid whether made within or without the State of California.
17.4 Conflicts of Interest. No member, official, or employee of Agency shall
have any personal interest, direct or indirect, in this Agreement nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interests of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
17.5 Nonliability of Agency Officials and Employees. No member, official,
employee, or consultant of Agency or City shall be personally liable to Participant, or any
successor in interest of Participant, in the event of any default or breach by Agency or for any
amount which may become due to Participant or to its successor, or on any obligations under
the terms of this Agreement.
17.6 Enforced Delay: Extension of Times of Performance. Time is of the
essence in the performance of this Agreement. Notwithstanding the foregoing, in addition to
specific provisions of this Agreement, performance by either party hereunder shall not be
deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-
outs; riots; floods; earthquakes; fires; casualties; supernatural causes; acts of the public
enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation;
governmental restrictions or priority litigation; unusually severe weather; inability to secure
necessary labor, materials or tools; acts of the other party; acts or the failure to act of a public
or governmental agency or entity (except that acts or the failure to act of City or Agency shall
not excuse performance by Agency unless the act or failure is caused by the acts or omissions
of Participant); or any other causes beyond the reasonable control or without the fault of the
party claiming an extension of time to perform. In the event of such a delay (herein "Enforced
Delay"), the party delayed shall continue to exercise reasonable diligence to minimize the
period of the delay. An extension of time for any such cause shall be limited to the period of
the enforced delay, and shall commence to run from the time of the commencement of the
cause, provided notice by the party claiming such extension is sent to the other party within ten
(10) days of the commencement of the cause. The following shall not be considered as events
or causes beyond the control of Participant, and shall not entitle Participant to an extension of
time to perform: (i) Participant's failure to obtain financing for the Project, and (ii) Participant's
failure to negotiate agreements with prospective users for the Project or the alleged absence
of favorable market conditions for such uses. Times of performance under this Agreement
may also be extended by mutual written agreement by Agency and Participant. The Executive
Director of Agency shall have the authority on behalf of Agency to approve extensions of time
not to exceed a cumulative total of one hundred eighty (180) days with respect to the
development of the Site.
17.7 Books and Records.
(a) Maintenance of Books and Records. Participant shall prepare
and maintain all books, records, and reports necessary to substantiate Participant's
compliance with the terms of this Agreement or reasonably required by the Agency.FS2\363\014064-0094\2157467.3 a12/11/1 22 e.#44 A �B j
(b) Right to Inspect. The Agency shall have the right, upon not less
than seventy-two (72) hours notice, at all reasonable times, to inspect the books and records
of the Participant pertinent to the purposes of this Agreement. Said right of inspection shall
not extend to documents privileged under attorney-client or other such privileges.
17.8 Modifications. Any alteration, change or modification of or to this
Agreement, in order to become effective, shall be made by written instrument or endorsement
thereon and in each such instance executed on behalf of each party hereto.
17.9 Merger of Prior Agreements and Understandings. This Agreement and
all documents incorporated herein contain the entire understanding among the parties hereto
relating to the transactions contemplated herein and all prior or contemporaneous agreements,
understandings, representations, and statements, oral or written, are merged herein and shall
be of no further force or effect.
17.10 Binding Effect of Agreement. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their legal representatives, successors, and
assigns. This Agreement shall likewise be binding upon and obligate the Site and the
successors in interest, owner or owners thereof, and all of the tenants, lessees, sublessees,
and occupants of such Site.
17.11 Assurances to Act in Good Faith. Agency and Participant agree to
execute all documents and instruments and to take all action and shall use their best efforts to
accomplish the purposes of this Agreement. Agency and Participant shall each diligently and
in good faith pursue the satisfaction of any conditions or contingencies subject to their
approval.
17.12 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable law. If, however,
any provision of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.
17.13 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against
either party by reason of the authorship of this Agreement or any other rule of construction
which might otherwise apply. The Section headings are for purposes of convenience only, and
shall not be construed to limit or extend the meaning of this Agreement. This Agreement
includes all attachments attached hereto, which are by this reference incorporated in this
Agreement in their entirety. This Agreement also includes the Redevelopment Plan and any
other documents incorporated herein by reference, as though fully set forth herein.
17.14 Entire Agreement Waivers and Amendments. This Agreement
integrates all of the terms and conditions mentioned herein, or incidental hereto, and this
Agreement supersedes all negotiations and previous agreements between the parties with
respect to all or any part of the subject matter hereof. All waivers of the provisions of this
Agreement, unless specified otherwise herein, must be in writing and signed by the
appropriate authorities of Agency or Participant, as applicable, and all amendments hereto
must be in writing and signed by the appropriate authorities of Agency and Participant.
FS2\383\014094-0094\2157467.3 112/11/1 23 C A04 '04 f3 Z
17.15 Time for Acceptance of Agreement by Agency. This Agreement, when
executed by Participant and delivered to Agency, must be authorized, executed and delivered
by Agency, not later than the time set forth in the Schedule of Performance or this instrument
shall be void, except to the extent that Participant shall consent in writing to further extensions
of time for the authorization, execution, and delivery of this Agreement. After execution by
Participant, this Agreement shall be considered an irrevocable offer until such time as such
offer shall become void due to the failure of the Agency to authorize, execute and deliver the
Agreement in accordance with this Section.
17.16 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, and such counterparts shall constitute one and the
same instrument.
17.17 Integration. This Agreement and other documents expressly
incorporated herein by reference contain the entire and exclusive understanding and
agreement between the parties relating to the matters contemplated hereby and all prior or
contemporaneous negotiations, agreements, understandings, representations and statements,
oral or written, are merged herein and shall be of no further force or effect.
17.18 Exhibits. Exhibits "A" through "F, inclusive, attached hereto, are
incorporated herein as if set forth in full.
PS2\383\014094-0094\2157467.3 a12/11/1 24
IN WITNESS WHEREOF the Agency and Participant have executed this Agreement as
of the date first written above.
ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS, CALIFORNIA, a public body,
corporate and politic
By: By:
Assistant Secretary Chairman
"Agency"
APPROVED AS TO FORM:
BURKE WILLIAMS & SORENSEN, LLP
Agency Counsel
DESERT SHADOWS III DEVELOPMENT COMPANY,
L.L.C., a California limited liability company
By:
Its:
By:
Its:
"Participant"
FS2\383\014084-0094\2157467.3 a12111/1 25
494 A • 2�' V
EXHIBIT "A"
LEGAL DESCRIPTION OF THE SITE
That certain real property located in the City of Palm Springs, County of Riverside,
State of California described as follows:
THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS FOLLOWS:
EXHIBIT"A"
TO OWNER PARTICIPATION AGREEMENT
PS2\383\014084-0094\2157467.3 a12/11/1
eAA A - 3s
EXHIBIT "B"
SCHEDULE OF PERFORMANCE
ITEM OF PERFORMANCE TIME FOR PERFORMANCE REFERENCE
1. Participant executes and delivers December—, 2001
Agreement to Agency
2. Agency approves Participant's Concurrently with execution
Basic Concept Drawings pursuant of Agreement
to Section 3.2.
3. Agency considers Agreement December 19, 2001
4. Participant prepares and submits Approved by City, April 2001
to City working drawings, grading
Ian and landscaping Ian
5. City and Agency to approve In accordance with Section
drawings and plans 3.1 d
6. Planning Commission to hold Approved by City, April 2001
hearing on approval of Planned
Development for the project
7. City Council to hold hearing on Approved by City, April 2001
approval of Planned Development
District for the Project
8. Participant to submit proof of Simultaneously with
insurance execution of the Agreement.
9. Participant to commence June 15, 2001.
construction of the Project
10. Participant to complete work By September 30, 2002.
on the project
11. Participant to record reciprocal Prior to the issuance of the
easement agreement referenced Certificate of Completion.
in Scope of Development against
the site and Participating Property.
11. Agency to issue Certificate of In accordance with Section
Completion. 5.8
EXHIBIT"B"
TO OWNER PARTICIPATION AGREEMENT
as2\383\0140e4-0094\2157467.3 "12n1/1 PAGE 1 OF 3 PAGES
It is understood that this Schedule of Performance is subject to all of the terms and
conditions of the text of the Agreement. The summary of the items performance in this Schedule
of Performance is not intended to supersede or modify the more complete description in the text;
in the event of any conflict or inconsistency between this Schedule of Performance and the text
of the Agreement, the text shall govern.
The time periods set forth in this Schedule of Performance may be altered or amended
only by written agreement signed by both the Participant and the Agency. The Executive Director
of Agency shall have the authority to approve extensions of time without action of the Board of
Directors of Agency not to exceed a cumulative total of 180 days.
E=BIT'B"
TO OWNER PARTICIPATION AGREEMENT
F92\383\014084-0094\2157467.3 112/11n PAGE 2 OF 3 PAGES
Ckh A - ?s7
EXHIBIT "D"
CERTIFICATE OF COMPLETION
FREE RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
P.O. Box 2743
Palm Springs, California 92262
Attn: Assistant Secretary
(Space Above Line for Recorder's Use Only)
CERTIFICATE OF COMPLETION
WHEREAS, by an Owner Participation Agreement (hereinafter referred to as the
"Agreement") dated 1995, by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body, corporate and politic
("Agency"), and DESERT SHADOWS III DEVELOPMENT COMPANY, L.L.C., a California limited
liability company ("Participant"), Participant has redeveloped the real property(the "Site"), legally
described and depicted in Attachment No. 1 attached hereto and incorporated herein by
reference, according to the terms and conditions of said Agreement; and
WHEREAS, pursuant to Section of the Agreement, promptly after completion of all
construction work to be completed by Participant upon the Site, and upon request by Participant,
Agency shall furnish Participant with a Certificate of Completion in such form as to permit it to be
recorded in the Official Records of the County of Riverside; and
WHEREAS, the issuance by Agency of the Certificate of Completion shall be conclusive
evidence that Participant has complied with the terms of the Agreement pertaining to the
redevelopment of the Site; and
WHEREAS, Participant has requested that Agency furnish Participant with the Certificate
of Completion; and
WHEREAS, Agency has conclusively determined that the redevelopment of the Site has
been satisfactorily completed as required by the Agreement; and
EXHIBIT "D"
TO OWNER PARTICIPATION AGREEMENT
FS2\383\014084-0094\2157467.3 a12/11/1 PAGE 1 of 3 PAGES
CRr9 A-3s
WHEREAS, the Agreement provided for certain covenants to run with the land, which
covenants were incorporated in the grant deed conveying the Site to Participant and a Declaration
of Covenants, Conditions and Restrictions (the "Declaration");
NOW, THEREFORE:
1. As provided in the Agreement, Agency does hereby certify that redevelopment of
the Site has been fully and satisfactorily performed and completed, and that such redevelopment
is in full compliance with said Agreement.
2. This Certificate of Completion shall not constitute evidence of Participant's
compliance with the Owner Participation Agreement and Declaration, the provisions of which shall
continue to run with the land.
3. This Certificate of Completion shall not constitute evidence of compliance with or
satisfaction of any obligation of Participant to any holder of a mortgage, or any insurer of a
mortgage, securing money loaned to finance construction work on the Site, or any part thereof.
Nothing contained herein shall modify in any way any other provision of said Agreement.
4. This Certificate is not a Notice of Completion as referred to in California Civil Code
Section 3093.
5. Except as stated herein, nothing contained in this instrument shall modify in any
way any other provisions of the Agreement or any other provisions of the documents incorporated
therein.
IN WITNESS WHEREOF, Agency has executed this Certificate as of this day of
, 2002.
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY
OF PALM SPRINGS,CALIFORNIA,a public body,corporate
and politic
By:
Executive Director
EXHIBIT "D"
TO OWNER PARTICIPATION AGREEMENT
FS2\383\014084-0094\2157467.3 a12/11/1 PAGE 2 of 3 PAGES
CieA - 39
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally
appeared
-----------------------------------------------
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
[SEAL] Notary Public
EXHIBIT"M
TO OWNER PARTICIPATION AGREEMENT
FS2\383\014084-0094\2157467.3 .12/11/1 PAGE 3 Of 3 PAGES
CIpl4
ATTACHMENT NO. 1
DESCRIPTION OF SITE
THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS FOLLOWS:
ATTACHMENT NO. 1
FS2\383\014084-0094\2157467.3 .12/11/1 TO CERTIFICATE OF COMPLETION it" - fl[
EXHIBIT "E"
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Community Redevelopment Agency
of the City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: Executive Director
(For Recorder's Use Only)
DECLARATION OF COVENANTS CONDITIONS
AND RESTRICTIONS
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
("Declaration") is made this day of 200 by and among
("Declarant") THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, a public body,
corporate and politic ("Agency"), and THE CITY OF PALM SPRINGS, a municipal corporation
("City").
RECITALS:
A. Declarant is the fee owner of that certain real property located in the City of Palm
Springs, County of Riverside, State of California more particularly described on
Exhibit "1" attached hereto and incorporated herein by reference ("Site").
B. The Site is within the North Palm Canyon Redevelopment Project Area ("Project
Area")specifically described in the Redevelopment Plan for the ProjectArea which
was approved and adopted by the City Council of the City of Palm Springs by
Ordinance No. 1227 on October 19, 1984 and as subsequently amended by
means of ordinances of the City Council.
C. The Agency and the City have fee or easement interests in various streets,
sidewalks and other property within the City and are responsible for the planning
and development of land within the City in such a manner so as to provide for the
health, safety and welfare of the residents of the City. That portion of the Agency's
or City's interest in real property most directly affected by this Agreement is
depicted in Exhibit "2" attached hereto and incorporated herein by reference
("Public Parcel").
D. The purpose of the Redevelopment Plan is to remedy and alleviate blighted
conditions associated with undeveloped and unproductive land, inadequate street
and circulation systems, unsuitable land mixes, inadequate or total lack of public
EXHIBIT"E"
TO OWNER PARTICIPATION AGREEMENT
Fs2\383\014084-0094M574e7.3 112n1/1 Page 1 of 12 Pages
street improvements, and the existence of substandard and incompatible uses and
structures. The redevelopment and restriction of the Site in accordance with the
Redevelopment Plan will promote the utility and value of the Site and of the Project
Area, for the benefit of its future owners and the entire city.
E. Pursuant to the Redevelopment Plan, Declarant has entered into an Owner
Participation Agreement with the Agency which Agreement places certain
restrictions on the Site. Pursuant to the City's development requirements, the City
has approved or will approve a site plan for the development of the Site ("Site
Plan"), which plan places certain restrictions on the Site. Said Redevelopment
Plan, Owner Participation Agreement and Site Plan (i) are on file and may be
reviewed in the office of the executive director of the Agency("Executive Director"),
in the Palm Springs City Hall and(ii)are each incorporated herein by this reference
and made a part hereof as though fully set forth herein.
F. Declarant, the Agency and City intend, in exchange for the entering into the Owner
Participation Agreement by the Agency and the approval of the Site Plan by City,
that the Declarant, its successors and assigns hold, sell, and convey the Site
subject to the covenants, conditions, restrictions, and reservations set forth in this
Declaration and that the Agency and City shall have the right and power to enforce
the covenants, conditions, restrictions, and reservations as provided herein.
G. Declarant desires to establish and grant certain covenants, conditions and
restrictions upon the property for the benefit of the Agency and the City and their
respective successors and assigns forthe purpose of enhancing and protecting the
value, desirability and attractiveness of the Site and effectuating the
Redevelopment Plan. Such covenants, conditions and restrictions shall run to the
benefit of the Public Parcel and bind the Site, the Declarant and its successors and
assigns.
NOW,THEREFORE,the Declarant,Agency and City declare, covenant and agree, by and
forthemselves,their heirs, executors and assigns, and all persons claiming under orthrough them
that the Site shall be held, transferred, encumbered, used, sold, conveyed, leased and occupied
subject to the covenants and restrictions hereinafter set forth, which covenants are established
expressly and exclusively for the use and benefit of the Agency and City.
TERMS AND CONDITIONS
ARTICLE VIII
COVENANTS, CONDITIONS AND RESTRICTIONS
8.1 General. The Site shall be developed and used only as permitted by the
restrictions contained in the Site Plan, Redevelopment Plan and Owner Participation Agreement.
8.2 Maintenance Agreement. Declarant, for itself and its successors and assigns,
hereby covenants and agrees to be responsible for the following:
EXHIBIT"E"
TO OWNER PARTICIPATION AGREEMENT
FS2\383\014084-0094\2157467.3 a12/11/1 Page 2 of 12 Pages
CAA ## -Y3
1. Maintenance and repair of the Site and all related on-site improvements,
easements, rights-of-way and landscaping thereon at its sole cost and expense, including,without
limitation, buildings, parking areas, lighting, signs and walls, in a first class condition and repair,
free of rubbish, debris and other hazards to persons using the same, and in accordance with all
applicable laws, rules, ordinances and regulations of all federal, state, and local bodies and
agencies having jurisdiction over the Site. Such maintenance and repair shall include, but not be
limited to, the following: (i) sweeping and trash removal; (ii) the care and replacement of all
shrubbery, plantings, and other landscaping in a healthy condition;and(iii)the repair, replacement
and restriping of asphalt or concrete paving using the same type of material originally installed,
to the end that such pavings at all times be kept in a level and smooth condition.
2. Maintenance of the Site in such a manner as to avoid the reasonable
determination of a duly authorized official of the Agency or City that a public nuisance has been
created by the absence of adequate maintenance such as to be detrimental to the public health,
safety or general welfare or that such a condition of deterioration or disrepair causes appreciable
harm or is materially detrimental to property or improvements within one thousand (1,000)feet of
such portion of the Site.
8.3 Parking and Driveways. Declarant shall be responsible for assuring that the
driveways and traffic aisles on the Property be kept clear and unobstructed at all times. No
vehicles or other obstruction shall project into any of such driveways or traffic aisles. Vehicles
associated with the operation of the Property, including delivery vehicles, vehicles of employees
and vehicles of persons with business on the Property shall park solely on the Property and shall
not park on streets or adjacent property.
8.4 Other Rights of City. In the event of any violation or threatened violation of any
of the provisions of this Declaration, then in addition to, but not in lieu of, any of the rights or
remedies the City may have to enforce the provisions hereof, the City shall have the right to
withhold or revoke, after giving written notice of said violation, any building permits, occupancy
permits, certificates of occupancy, business licenses and similar matters or approvals pertaining
to the Property or any part thereof or interests therein as to the violating person or one threatening
violation.
8.5 No City Liability. The granting of a right of enforcement to the City does not create
a mandatory duty on the part of the City to enforce any provision of this Declaration. The failure
of the City to enforce this Declaration shall not give rise to a cause of action on the part of any
person. No officer or employee of the City shall be personally liable to the Declarant, its
successors, transferees or assigns, for any default or breach by the City under this Declaration.
8.6 Compliance With Ordinances. Declarant shall comply with all ordinances,
regulations and standards of the City and Agency applicable to the Site. Declarant shall comply
with all rules and regulations of any assessment district of the City with jurisdiction over the Site.
8.7 Outside Storage. No storage of any kind shall be permitted outside the building(s)
located on the Site except for trash or other storage in any outside storage areas approved by the
Agency or as required by law. Adequate trash enclosures shall be provided and screened.
Locations of such areas and types of screening must be approved by the Executive Director.
Gates for trash storage area shall be kept closed at all times except when in actual use.
EXHIBIT"E"
TO OWNER PARTICIPATION AGREEMENT
as2393\014034-00M2157467.3 ,ivwi Page 3 of 12 Pages
6QA oif-YV
8.8 Buildings and Equipment. Any construction, repair, modification or alteration of
any buildings, equipment, structures or improvements on the Site shall be subject to the following
restrictions:
1. All mechanical and electrical fixtures and equipment to be installed on the
roof or on the ground shall be adequately and decoratively screened. The screening must
blend with the architectural design of the building(s). Equipment on the roof must be at
least six (6) inches lower than the parapet line and adequately screened. All details and
materials of said screening shall be approved bythe Executive Directorpriorto installation.
2. The texture, materials and colors used on the buildings, as well as the
design, height, texture and color of fences and walls shall be subject to the approval of the
Executive Director.
3. Signs on the Site shall conform to the standards and ordinances of the
City and to a uniform design theme approved by the City. Any signs installed on the Site
shall conform to said design scheme and shall be approved by the Executive Director prior
to installation.
4. Lights installed on the building shall be a decorative design. No lights shall
be permitted which may create any glare or have a negative impact on the residential
areas, if any, existing around the Site. No light stand on any portion of the Site shall be
higher than fifteen (15) feet. The design and location of any lights shall be subject to the
approval of the Executive Director.
5. No fences, signs, gas pumps, or any other similar facilities shall be
constructed or provided on the Site without the prior approval of the Executive Director.
6. Manufacturing plant use may be permitted on the Site, subject to the
limitations provided in the Municipal Code of the City. Specifically, prior to such use,
suitable evidence must be provided to the Executive Director that no negative
environmental effect shall be caused by reason of odor, noise, glare, vibration, fumes,
smoke, particulate matter, refuse matter, and that no unsafe or dangerous conditions are
to be created such as the manufacture, use or storage of explosive, radioactive materials
or other similarly hazardous materials.
8.9 Public Agency Rights of Access. Participant hereby grants to the Agency,the City
and other public agencies the right, at their sole risk and expense, to enter the Site or any part
thereof at all reasonable times with as little interference as possible for the purpose of
construction, reconstruction, relocation,maintenance,repairorservice of any public improvements
or public facilities located on the Site. Any damage or injury to the Site or to the improvements
constructed thereon resulting from such entry shall be promptly repaired at the sole expense of
the public agency responsible for the entry.
8.10 Transient Occupancy Tax. Declarant hereby covenants that all units located on
the Site or on properties adjacent to the Site which are owned or controlled by Declarant shall be
subject to the payment of transient occupancy tax as set forth in the Palm Springs Municipal Code.
EXHIBIT "E"
TO OWNER PARTICrPATION AGREEMENT
PS2\383\014084-0094\2157467.3 a1211111 Page 4 of 12 Pages `fi's-
ARTICLE IX
ENFORCEMENT
9.1 Termination. No breach of this Declaration shall entitle any party to cancel,
rescind or otherwise terminate this Declaration, or excuse the performance of such party's
obligations hereunder; provided that, however, this limitation shall not affect in any manner any
other rights or remedies which the parties may have by reason of such breach.
9.2 Iniunction. Notwithstanding anything contained herein to the contrary,in the event
of any violation or threatened violation of any of the terms, covenants, restrictions and conditions
contained herein, in addition to the other remedies herein provided, the parties hereto shall have
the right to enjoin such violation or threatened violation in a court of competent jurisdiction.
9.3 Other Rights of Agency and City. In the event of any violation or threatened
violation of any of the provisions of this Declaration, then in addition to, but not in lieu of, any of
the rights or remedies the Agency and City may have to enforce the provisions hereof,the Agency
and City shall have the right(i)to enforce the provisions hereof as a party hereto and as an owner
of the Public Parcel, and (ii) to withhold or revoke, after giving written notice of said violation, any
building permits, occupancy permits, certificates of occupancy, business licenses and similar
matters or approvals pertaining to the Site or any part thereof or interests therein as to the
violating person or one threatening violation.
9.4 Failure to Perform; Lien. If any owner of the Site defaults on the performance of
any of its obligations hereunder,the Agency or City, their employees, contractors and agents may,
at their sole option, and after making reasonable demand of the owner of the Site that it cure said
default, enter onto the Site for the purpose of curing the default. In making an entry, the Agency
or City shall give the owners of the Site or their representative, reasonable notice of the time and
manner of said entry and said entry shall only be at such times and in such manners as is
reasonably necessary to carry out this Agreement. In such event, the owner of the Site shall
reimburse the Agency or City for all costs and expenses related to the curing of said default. If
the Agency or City is not reimbursed for such costs by the owner of the Site within 30 days after
giving notice thereof, the same shall be deemed delinquent, and the amount thereof shall bear
interest thereafter at a rate of ten percent (10%) per annum until paid. Any and all delinquent
amounts, together with said interest, costs and reasonable attorneys fees shall be a personal
obligation of the owner of the Site as well as a lien and charge, with power of sale, upon the Site.
The Agency may bring an action at law against the owner of the Site to pay any such sums.
The lien provided for in this Section may be recorded by the Agency as a Notice of Lien
against the Site in the Office of the County Recorder, County of Riverside, signed and
acknowledged, which Notice of Lien shall contain a statement of the unpaid amount of costs and
expenses. The priority of such lien when so established against the Site shall date from the date
such notice is filed of record and shall be prior and superior to any right, title, interest, lien or claim
which may be or has been acquired or attached to such real property at the time of recording of
such lien, but shall be junior and subordinate to matters having a priority prior to the date such
notice is recorded; provided that, however, said lien shall be subordinate to any bona fide
mortgage or deed of trust and any purchaser at any foreclosure or trustee's sale under any such
bona fide mortgage or deed of trust as provided in Section 3.3 below. Such lien shall be for the
use and benefit of the person filing the same, and may be enforced and foreclosed in a suit or
action brought in any court of competent jurisdiction. Any such lien may be enforced by the
Agency or City by taking either or both of the following actions concurrently or separately (and by
EXHIBIT "E"
TO OWNER PARTICIPATION AGREEMENT
FS21383\014084-0094\2157467.3 a12/11/1 Page 5 of 12 Pages
exercising either of the remedies set forth below shall not prejudice or waive its rights to exercise
the remedy): (1) bring an action at law against the defaulting party personally obligated to pay
such lien or (ii) foreclose such lien in accordance with the provisions of Section 2924 of the
California Civil Code applicable to the exercise of powers of sale or mortgages and deeds of trust,
or any other manner permitted by California law.
Upon the timely curing of any default for which such lien was recorded, the City or Agency
shall record an appropriate release of such lien, and sign any other documents reasonably
necessary to satisfy title insurance requirements, upon payment by the owner of the Site of a
reasonable fee to cover the costs of preparing and recording such release, together with the
payment of such other costs, including without limitation, reasonable attorneys fees, court costs,
interest or other fees which have been incurred.
ARTICLE X
ENCUMBRANCES, MORTGAGE PROTECTION AND TAXES
10.1 Participant's Breach Not to Default Mortgage Lien. Declarant's breach of any of
the covenants or restrictions contained in this Declaration or the Owner Participation Agreement
shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith and
for value as to the Site or any part thereof or interest therein, whether or not said mortgage or
deed of trust is subordinated to this Declaration or the Owner Participation Agreement; but, unless
otherwise herein provided, the terms, conditions, covenants, restrictions and reservations of this
Declaration and the Owner Participation Agreement shall be binding and effective against the
holder of any such mortgage or deed of trust and any owner of any of the Site or any part thereof
whose title thereto is acquired by foreclosure, trustee's sale, or otherwise.
10.2 Amendments or Modifications to Declaration. No purported rule, regulation,
modification, amendment and/or termination of this Declaration or the Owner Participation
Agreement shall be binding upon or affect the rights of any mortgagee holding a mortgage or deed
of trust upon the Site that is recorded in the Office of the Riverside County Recorder prior to the
date any such rule, regulation, modification, amendment or termination is recorded in such office,
without the prior written consent of such mortgagee.
10.3 Liens Subordinate. Any monetary lien provided for herein shall be subordinate
to any bona fide mortgage or deed of trust covering an ownership interest or leasehold or
subleasehold estate in and to the Site and any purchaser at any foreclosure or trustee' sale (as
well as any by deed or assignment in lieu of foreclosure or trustee's sale) under any such
mortgage or deed of trust shall take title free from any such monetary lien, but otherwise subject
to the provisions hereof; provided that, after the foreclosure of any such mortgage and/or deed
of trust, all other assessments provided for herein to the extent they relate to the expenses
incurred subsequent to such foreclosure, assessed hereunderto the purchaseratthe foreclosure
sale, as owner of the Site after the date of such foreclosure sale, shall become a lien upon the
Site and may be perfected and foreclosed as provided in Section 2.4.
10.4 Payment of Taxes and Assessments. Declarant shall pay, when due, all real
estate taxes and assessments assessed or levied against the Site. Nothing herein contained shall
be deemed or prohibit Declarantfrom contesting the validity or amounts of any tax or assessments
nor to limit the remedies available to Declarant with respect thereto.
EXHIBIT "E"
TO OWNER PARTICIPATION AGREEMENT
F82\383\014094-0094\2157467.3 ,12a1/1 Page 6 of 12 Pages ���
ARTICLE XI
COVENANTS TO RUN WITH THE LAND
11.1 Covenants Running With the Land. This Declaration is designed to create
equitable servitudes and covenants appurtenant to the Public Parcel and running with the Site.
Declarant hereby declares that all of the Site shall be held, sold, conveyed, encumbered,
hypothecated, leased, used, occupied and improved subject to the covenants, conditions,
restrictions and equitable servitudes, all of which are for the purposes of uniformly enhancing or
protecting the value, attractiveness and desirability of the Site and effectuating the
Redevelopment Plan. The covenants, conditions, restrictions, reservations, equitable servitudes,
liens and charges set forth herein shall run with the Site and shall be binding upon all persons
having any right, title or interest in the Site, or any part thereof, their heirs, successive owners and
assigns; shall inure to the benefit of every portion of the Public Parcel and any interest therein;
shall inure to the benefit of the Agency, the City and their successors and assigns and successors
in interest;shall be binding upon Declarant, its successors and assigns and successors in interest;
and may be enforced by the Agency and City.
Agency and Declarant hereby declare their understanding and intentthatthe burden of the
covenants set forth herein touch and concern the land in that Declarant's legal interest in the Site
is rendered less valuable thereby. Agency and Declarant hereby further declare their
understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Site by the citizens of the City and by
furthering the public purposes for which the Agency was formed.
11.2 Agreement Among Declarant Agency and City. The Declarant, in exchange for
entering the Owner Participation Agreement by the Agency and granting of the Site Plan by City,
hereby agrees to hold, sell, and convey the Site subject to the covenants, conditions, restrictions
and reservations of this Declaration. Declarant also grants to the Agency and City the right and
power to enforce the covenants, conditions, restrictions and reservations contained in this
Declaration against the Declarant and all persons having any right, title or interest in the Site, or
any part thereof, their heirs, successive owners and assigns.
ARTICLE XII
TERM
The covenants, conditions and restrictions contained in this Declaration shall remain in
effect for the term of the Redevelopment Plan.
ARTICLE XIII
MISCELLANEOUS
13.1 Modification. This Declaration may not be modified, terminated or rescinded, in
whole or in part, except by a written instrument duly executed and acknowledged by the parties
hereto, their successors or assigns and duly recorded in the Office of the County Recorder,
County of Riverside.
EXHIBIT "E"
TO OWNER PARTICIPATION AGREEMENT /�� A
PS2\383WI4064-0094\215746z3 "i2iun Page 7 of 12 Pages K 04 iA/6q
13.2 Amendments. Any amendment to any provision of this Article or to any other
provisions of this Declaration enforceable by the City shall require the prior written consent of the
City.
13.3 Governing Law. This Declaration shall be governed by and construed in
accordance with the laws of the State of California.
13.4 Severability. The invalidity or unenforceability of any provision of this Declaration
with respect to a particular party or set of circumstances shall not in any way affect the validity and
enforceability of any other provision hereof, or the same provision when implied to another party
or to a different set of circumstances.
13.5 Notices. Any notice to be given under this Declaration shall be given by personal
delivery or by depositing the same in the United States Mail, certified or registered, postage
prepaid, at the following address:
Agency: The Community Redevelopment
Agency of The
City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: Executive Director
City: City of Palm Springs
P.O. Box 2743
Palm Springs, CA 92263
Attn: City Manager
With Copy to: Burke Williams & Sorensen
18301 Von Karman Avenue
Suite 1050
Irvine, CA 92612-1009
Attn: David J. Aleshire, Esq.
Declarant: Desert Shadows III Development Company, LLC
1533 Chaparral Road
Palm Springs, CA 92262
Attn: Stephen Payne
With Copy to: Roemer& Harnik
45-025 Manitu Dr.
Indian Wells, CA 92210
Attn: Richard I. Roemer, Esq.
Any notice delivered personally shall be effective upon delivery. Any notice given by mail
as above provided shall be effective forty-eight (48) hours after deposit in the mails. Any party
may change address for notice by giving written notice of such change to the other party.
13.6 Counterparts. This Declaration may be executed in any number of counterparts
each of which shall be an original but all of which shall constitute one and the same document.
EXHIBIT "E"
TO OWNER PARTICIPATION AGREEMENT ��� � _ ��
as2\3es\m4o84-oo94\2is746za "i2iiin Page 8 of 12 Pages
IN WITNESS WHEREOF, the undersigned have executed this Agreement was executed as
of the date first written above.
By:
Its:
By:
Its:
"Declarant"
ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS, CALIFORNIA, a
public body, corporate and politic
By: By:
Assistant Secretary Chairman
"Agency"
ATTEST: CITY OF PALM SPRINGS, a
municipal corporation
By: By:
City Clerk Mayor
"City"
APPROVED AS TO FORM:
BURKE WILLIAMS & SORENSEN
Agency Counsel and
City Attorney
EXHIBIT"E"
TO OWNER PARTICIPATION AGREEMENT w
F52\383\014084-0094\Il57467.3 "iznvi Page 9 of 12 Pages /[7!
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally
appeared
-----------------------------------------------
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally
appeared
-----------------------------------------------
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
EXHIBIT"E"
TO OWNER PARTICIPATION AGREEMENT /�
Fs2\3s3\014084-009a\2inae7s ai2nin Page 10 of 12 Pages eA4 A...
STATE OF CALIFORNIA )
ss.
COUNTY OF )
On before me, personally
appeared
-----------------------------------------------
personally
known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed
the instrument.
Witness my hand and official seal.
Notary Public
(SEAL]
EXHIBIT"E"
TO OWNER PARTICIPATION Iof12 AGREEMENT UA 4_S' k
PS2\383\014084-0094\2157467.3 ,wive Page 11 of 12 Pages
EXHIBIT "F"
SCOPE OF DEVELOPMENT
1. SUMMARY DESCRIPTION OF PROJECT:
The Project will consist of the demolition of the existing improvements on the Site and
construction of seventeen (17) condominium units on the Site as an expansion of Participant's
hotel and condominium development located adjacent to the Participant Property and shall be
designed in accordance with the Basic Concept Drawings attached hereto as Exhibit 1 and
incorporated herein by this reference, which are approved by Agency in accordance with Section
5.1(b)of the OPA. The 17 units will be contained in two(2)fourplex structures, a duplex structure,
and a seven-unit structure, with a maximum height of twenty-four (24) feet. The Project was
processed as a Planned Development District under the Zoning Ordinance of the City and
Participant shall be responsible for performing all conditions to approval of the Project including
any off-site improvements. Twenty three (23) parking spaces (covered and uncovered) will be
provided on the Site. Twenty(20)of the parking spaces on the Site will be located within a fenced
and gated limited-access area. A reciprocal easement agreement for ingress, egress and parking
between the Site and the Participant Property will be required to adequately provide for total
resident and visitor parking needs. The amenity package includes a swimming pool, spa and
meeting room. Total building coverage will not exceed thirty-four percent (34%), parking and
driveway coverage will not exceed ten percent(10%) and open space/ recreation area coverage
will be fifty-six percent (56%). The Project will provide for the required right-of-way on Indian
Canyon Drive and for enhanced street improvements on all adjacent streets. The Project also
includes a architecturally-enhanced pedestrian bridge over Indian Canyon Drive connecting the
project to the Participant Property.
2. ARCHITECTURAL AND DESIGN:
The Project shall be designed and developed as an integrated development with the
condominium development located on the Participant Property in which all the buildings will have
architectural excellence. The improvements to be constructed on the Site shall be of high
architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed.
The shape, scale of volume, exterior design, and exterior finish of each building, structure, and
other improvement must be consonant with, visually related to, physically related to, and an
enhancement to each other and, to the extent reasonably practicable, to adjacent improvements
existing or planned within the Project Area. The Participant's plans, drawings, and proposals
submitted to the Agency forapproval shall describe in reasonable detail the architectural character
intended for the Project. The open spaces between buildings where they exist shall be designed,
landscaped and developed with the same degree of excellence. The total development shall be
in conformity with the Redevelopment Plan for the Project Area.
3. DEVELOPER'S RESPONSIBILITIES:
A. Private Improvements. The Participant agrees to develop and construct, or cause
the development and construction of the Project as set forth below, or such additional size, intensi-
ty, and character of improvements as may be permitted and approved under applicable land use
EXHIBIT "F"
TO OWNER PARTICIPATION AGREEMENT
PAGE 1 OF 4 PAGES A Re
FS2\383\014084-0094\21574G7.3 a12/11/1 ` JU I• No 5'3
regulations of the City and Agency and in accordance with the previously approved Basic Concept
Drawings, as the same may be amended from time to time in accordance herewith.
B. Miscellaneous Site Improvements. The Participant shall provide all landscaping,
open areas, drive-ways, and other incidental on-site improvements required for the Project, in
accordance with the approved plans.
C. Setbacks. Minimum building and parking setbacks shall be in conformance with the
applicable provisions of the Palm Springs Municipal Code, including any permitted variances.
D. Building Construction. Buildings shall be constructed in conformance with the
applicable provisions of the Palm Springs Municipal Code and in accordance with the approved
final building plans.
E. Signs. All signs shall be installed by the Participant. A sign program shall be
submitted to the City for approval. Building and, where necessary, electrical permits shall be
obtained prior to the installation, painting or erection of signs. Signs shall be designed in a
manner consistent with the overall architectural theme of the Project.
F. Screening. All outdoor storage of materials or equipment shall be enclosed or
screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required
by the City/Agency staff and the applicable provisions of the Palm Springs Ordinance Code.
G. Landscaping. The Participant shall provide all landscaping and irrigation required
on the Site, including the landscaping and irrigation within the public rights-of-ways on or adjacent
to the Site, in accordance with the approved landscape plans. The Participant shall maintain all
landscaping on the Site outside the public rights-of-way. After satisfactory installation of the
landscaping and irrigation systems within the public rights-of-way on the Site in connection with
the development of the Site, the Agency shall accept or cause the City to accept such
improvements and maintain or cause the City to maintain the same at no expense to the
Participant, and the Participant shall have no further responsibility therefor.
H. Utilities. The Participant agrees to extend all utilities required for the development,
use and maintenance of the improvements on the Site from the locations to which such utilities
will be brought the private improvements to be located on the Site. All utilities on the Site shall be
located underground.
I. Vehicular Access. The number and location of vehicular driveways and curb breaks
shall be in accordance with the approved plans.
J. Off-Site Improvements/Dedications. The Participant agrees to construct the
following off-site improvements and make the following dedications as part of the Project in
accordance with all applicable City standards, rules and regulations:
1. Install 300 feet of 8" curb and gutter along Indian Canyon Drive, Stevens
Road, and north Palm Canyon Drive; and, construct 106 linear feet of 8"
barrier curb.
EXHIBIT "F"
TO OWNER PARTICIPATION AGREEMENT
PAGE 2 OF 4 PAGES 10
P52\383\014084-0094\21574G7.3 n12/11/1 �
2. Install over 950 square feet of cross gutter and spandrel, as well as and
720 square feet of cross gutter at Stevens Road/Indian Canyon Drive and
Stevens Road/Palm Canyon Drive.
3. Install a total of four (4) handicapped ramps at Stevens Road and Indian
Canyon Drive and Stevens Road and Palm Canyon Drive.
4. Remove 210 square feet of asphalt on Palm Canyon Drive, Indian Canyon
Drive, and Stevens Road.
5. Construct drainage improvements, including catch basin boxes and two
drywells.
6. Construct road pavement in accordance with City standards from the edge
of proposed gutter to the clean sawcut edge of the existing road pavement
along Palm Canyon Drive, Indian Canyon Drive, and Stevens Road.
Sawcut approximately 600 linear feet of asphalt and concrete. Replace
4,135 square feet of asphalt on Palm Canyon Drive, Indian Canyon Drive,
and Stevens Road.
7. Install landscaping, landscape lighting, and irrigation on Palm Canyon
Drive, Indian Canyon Drive, and Stevens Road, including paver stepping
stones, all palm trees, boxed trees and shrubs, ground cover and annual
color, per plans prepared by R.G.A. Landscape Architects and included as
an exhibit to the OPA.
8. Install 1,523 square feet of decorative concrete around the project's
entrance on Stevens Road. Improve the drive approach on Stevens Road
(665 square feet).
9. Install 3,671 of sidewalks according to City standard.
10. Underground the overhead utility lines along the project boundary.
FS2\383\014084-0094\2157467.3 a12/11/1 C jet of cgs
EXHIBIT "1"
LEGAL DESCRIPTION OF THE SITE
THE LAND REFERRED TO IN THIS AGREEMENT IS SITUATED IN THE STATE OF
CALIFORNIA, COUNTY OF RIVERSIDE, CITY OF PALM SPRINGS AND IS DESCRIBED AS
FOLLOWS:
E=IT"1"
TO DECLARATION OF COVENANTS,
. -w -
F52\383\014084-0094\2157467.3 a12/11/1 CONDITIONS AND RESTRICTIONS /( ff •••
EXHIBIT "2"
DEPICTION OF PUBLIC PARCEL
FS2\383\014084-0094\2157467.3 a12/11/1 tf� �og
jp
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA,
APPROVING AN OWNER PARTICIPATION
AGREEMENT WITH DESERT SHADOWS III, L.L.C.
TO PROVIDE FINANCIAL ASSISTANCE WITH
PUBLIC IMPROVEMENTS TO EFFECTUATE THE
CONSTRUCTION OF A HOTEL/CONDOMINIUM
RESORT AT STEVENS ROAD, PALM CANYON
DRIVE AND INDIAN CANYON WAY IN MERGED
PROJECT AREA #1 (THE NORTH PALM CANYON
REDEVELOPMENT PROJECT AREA)
---------------------
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, California
("Agency") is constituted under the Community Redevelopment Law (California Health and Safety
Code Section 33000 et. seq.) to carry out the purpose as the redevelopment in the City of Palm
Springs ("the City"); and
WHEREAS, Desert Shadows III, LLC, (Developer) proposed a 17-unit condominium project at the
northwest corner of Stevens Road and Indian Canyon Drive, with reciprocal access to the Desert
Shadows Inn at 1533 Chaparral Road; and
WHEREAS, Developer proceeded with the Project, but during construction Developer requested that
the Agency fund certain public improvement costs to be reimbursed from tax increment; and
WHEREAS,the California Redevelopment Law requires certain findings before the Agency can enter
into this Amendment, as follows:
a) Section 33421.1 -that the City Council find that the provision of such improvements
will effectuate the Redevelopment Plan;
b) Section 33445 -that the City Council find that the improvements benefit the Project
Area; that no other means of financing the improvements are available;that payment
of the funds will assist in eliminating blight, and that assistance to the project is
consistent with the Agency's adopted Five Year Implementation Plan.
WHEREAS, the Agency has considered the staff report, and all the information, testimony and
evidence provided during the Agency public meeting on December 19, 2001.
NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of
Palm Springs as follows:
SECTION 1. The above recitals are true and correct and incorporated herein.
SECTION 2. Pursuant to the California Environmental Quality Act(CEQA), the Community
Redevelopment Agency finds as follows:
a) In connection with the approval of the OPA, a Mitigated
Negative Declaration was prepared in compliance with CEQA,
the State CEQA Guidelines and the City's CEQA procedures.
The Community Redevelopment Agency finds that there are
no changes in the effects of the proposed project or the
ea .4 - ,g
circumstances in which it is being carried out, which require
any modification of the Environmental Assessment/Mitigated
Negative Declaration and finds that it adequately discusses the
potential significant environmental effects of the proposed
project (land use, traffic/circulation, parking, air quality, noise,
aesthetics, geology/soils, water quality, drainage, public
utilities, public safety, archaeological/historic resources and
light and glare). The Community Redevelopment Agency
further finds that the Environmental Assessment/Mitigated
Negative Declaration reflects its independent judgment.
SECTION 3. The Developers are required to make certain street improvements in keeping
with City codes. Such offsite improvements are imperative to this project,such
as reconstructing streets, curb, gutter and sidewalks along Indian Canyon
Drive, Palm Canyon Drive, and Stevens Road; undergrounding utilities;
providing drainage around the project, including two dry wells; providing
handicapped ramps at the project; and, installing landscaping and irrigation in
the public right of way. This project improves a blighted corner of Merged
Project Area #1 (the North Palm Canyon Redevelopment Project Area) and
will increase tax increment to the Agency and the City.
SECTION 4. Agency will reimburse Desert Shadows III, LLC for the costs of constructing
the off-site improvements on Indian Canyon Drive, Stevens Road, and North
Palm Canyon Drive, as follows, provided that:
(a) Agency's obligation to reimburse Desert Shadows III shall not
exceed One Hundred Eighty Five Thousand Dollars
($185,000.00):
(b) The improvements will include, at a minimum, the following
as required by the City of Palm Springs:
1. Install 300 feet of 8" curb and gutter along Indian
Canyon Drive, Stevens Road, and north Palm
Canyon Drive; and, construct 106 linear feet of 8"
barrier curb.
2. Install over 950 square feet of cross gutter and
spandrel, as well as and 720 square feet of cross
gutter at Stevens Road/Indian Canyon Drive and
Stevens Road/Palm Canyon Drive.
3. Install a total of four(4) handicapped ramps at
Stevens Road and Indian Canyon Drive and Stevens
Road and Palm Canyon Drive.
4. Remove 210 square feet of asphalt on Palm Canyon
Drive, Indian Canyon Drive, and Stevens Road.
5. Construct drainage improvements, including catch
basin boxes and two drywells.
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6. Construct road pavement in accordance with City
standards from the edge of proposed gutter to the
clean sawcut edge of the existing road pavement
along Palm Canyon Drive, Indian Canyon Drive, and
Stevens Road. Sawcut approximately 600 linear feet
of asphalt and concrete. Replace 4,135 square feet
of asphalt on Palm Canyon Drive, Indian Canyon
Drive, and Stevens Road.
7. Install landscaping, landscape lighting, and irrigation
on Palm Canyon Drive, Indian Canyon Drive, and
Stevens Road, including paver stepping stones, all
palm trees, boxed trees and shrubs, ground cover and
annual color, per plans prepared by R.G.A.
Landscape Architects and included as an exhibitto the
OPA.
8. Install 1,523 square feet of decorative concrete around
the project's entrance on Stevens Road. Improve the
drive approach on Stevens Road (665 square feet).
9. Install 3,671 of sidewalks according to City standard.
10. Underground the overhead utility lines along the
project boundary.
(c) Agency will reimburse Desert Shadows III for such costs upon
acceptance of off-site improvements by the City and approval
by Agency of invoices substantiating the costs incurred by
Desert Shadows III for said off-site improvements.
SECTION 6. The Agency does hereby find and determine as follows:
(a) The property was originally developed in the 1940's as an
apartment project and other commercial uses but declined in
economic value, with a portion demolished in 1981 and
another demolished in 1987 through an Abatement
Agreement between the City and property owner. It has been
vacant for the past two decades. The neighboring Desert
Shadows Inn was rehabilitated in 1992 and expanded in 1994.
In 1995, the owners of Desert Shadows in formed a limited
liability corporation, Linsu Development Company LLC,which
acquired the 2.5 acre property north of the Desert Shadows
Inn with Redevelopment Agency assistance, and constructed
38 condominiums that were linked to the hotel grounds via
reciprocal access agreements. The Agency provided
assistance with the purchase of the Linsu property through its
powers of eminent domain, as well as $79,000 in tax
increment financing for offsite improvements. Smart Alex
Development Company, LLC, another entity related to the
hotel, purchased the Chandler Inn in 1998 and constructed 21
condominiums also linked to the hotel via the reciprocal
A" I . .A z
access agreements, using approximately$100,000 in Agency
financial assistance for offsite improvements.
(b) The OPA effectuates the purposes of the Community
Redevelopment Law by reversing or alleviating any serious
physical,social,and economic burden of the Communitywhich
cannot reasonably be expected to be reversed oralleviated by
private enterprise acting alone, in that the assistance will
facilitate the redevelopment and operation of the hotel and
retail buildings by causing the reconstruction and upgrade of
the property, placing the property in the hands of a first class
and experienced operator, in order to maintain existing sales
tax revenue and attract additional commercial development
within the City and increase the City's tax base.
(c) The OPA effectuates the purposes of the Community
Redevelopment Law as it is intended to eliminate blight and
promote the health, safety and general welfare of the people
of Palm Springs.
SECTION 8. The proposed project is consistent with the Implementation Plan for
this area, insofar as this project will increase tax increment and will
expand an already-existing successful business. It will increase the
City's tourist business by expanding a destination-type resort and
creating an architecturally inviting project on a previously bighted
property on a very busy corner and the City's main thoroughfare.
SECTION 9. Based on foregoing reasons, this OPA is hereby approved and
incorporated herein by this reference.
SECTION 10. The Chairman of the Agency, and/or his designee, is authorized to
execute all necessary documents, in a form approved by the Agency
Counsel.
ADOPTED this day of , 2001.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Chairman
REVIEWED &APPROVED
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