HomeMy WebLinkAboutNS-2967 - Approving Development Agreement No. 2018-02 Between City of Santa Ana and Mainplace ShoppingTown, LLC for Mainplace Mall Transformation ProjectLS 6.4.19
ORDINANCE NO. NS-2967
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY
OF SANTA ANA APPROVING DEVELOPMENT
AGREEMENT NO. 2018-02 BETWEEN THE CITY OF
SANTA ANA AND MAINPLACE SHOPPINGTOWN, LLC
FOR THE MAINPLACE MALL TRANSFORMATION
PROJECT AT 2800 NORTH MAIN STREET, PURSUANT
TO CALIFORNIA GOVERNMENT CODE SECTION 65864,
ET SEQ.
WHEREAS, the City of Santa Ana ("City") is authorized pursuant to Government
Code Sections 65864 through 65869.5 to enter into development agreements with
persons having legal or equitable interests in real property for the purpose of
establishing certainty for both City and owner in the development process; and
WHEREAS, the City has found that development agreements strengthen the
public planning process, encourage private participation in comprehensive planning by
providing a greater degree of certainty in that process, reduce the economic costs of
development, allow for the orderly planning of public improvements and services,
allocate costs to achieve maximum utilization of public and private resources in the
development process, and ensure that appropriate measures to enhance and protect
the environment are achieved; and
WHEREAS, the City enters into this Development Agreement pursuant to the
provisions of the Government Code and applicable City policies; and
WHEREAS, applicant MainPlace Shoppingtown, LLC ("Developer") proposes the
MainPlace Mall Transformation Project ("MainPlace Project") at 2800 N. Main Street
('Property') in the City, more particularly described in Exhibit A, attached hereto and
incorporated herein by this reference; and
WHEREAS, the Property is an approximately 49-acre property and the current
site of the existing MainPlace Mall, an enclosed 2- to 3-story shopping center with
approximately 1,130,000 square feet of commercial uses; and
WHEREAS, the MainPlace Project seeks to revitalize the existing MainPlace Mall
to adapt to changing market conditions, facilitate private investment, and provide a long-
term development plan for the Property; and
WHEREAS, the MainPlace Project proposes a full buildout at the Property of
1,400,000 square feet of commercial, 750,000 square feet of office, 400 hotel rooms,
and 1,900 residential units; and
WHEREAS, the entitlements sought for the MainPlace Project include adoption
of a Specific Plan (Specific Plan No. 4) approval of a Tentative Parcel Map (Tentative
Ordinance No. NS-2967
Page 1 of 9
Parcel Map. 2018-01), and approval of a Development Agreement (Development
Agreement No. 2018-02); and
WHEREAS, the Development Agreement, attached hereto as Exhibit B, came
before the Planning Commission for a duly noticed public hearing on May 13, 2019. At
that hearing, the Planning Commission recommended that the City Council approve
said Development Agreement; and
WHEREAS, the Development Agreement, attached hereto as Exhibit B, came
before the City Council for a duly noticed public hearing on June 4, 2019.
WHEREAS, entering into this Development Agreement would provide the City
with extraordinary and significant benefits that are of regional significance, relate to
existing deficiencies in public facilities, require the Developer to contribute a greater
percentage of benefits than would otherwise be required, and represent benefits which
would not otherwise be required as part of the development process; and
WHEREAS, the Project and the use that the Developer proposes in connection
with the Property have been extensively reviewed and considered by the City, and such
proposed development and use have been found to accommodate the City's
recommendations and suggestions in order to protect the public's interest to enhance
the desirability of such proposed development and use. The terms and conditions of this
Development Agreement have been found to be fair, just and reasonable, and the City
has concluded that the pursuit of the MainPlace Project will serve the interests of the
City; and
WHEREAS, the City Council has determined that by entering into the
Development Agreement, the City will promote orderly growth and quality development
on the Property in accordance with the goals and policies set forth in the General Plan;
and
WHEREAS, the physical effects, if any, of the MainPlace Project and this
Development Agreement have been analyzed pursuant to California Environmental
Quality Act ("CEQK) (Pub. Resources Code section 21000 et seq.) in the certified Final
Environmental Impact for the Fashion Square Commercial Center Project ("1983 EIR"),
Addendum ER 96-033 to that 1983 EIR ("1996 Addendum), and the MainPlace Mall
Transformation Project EIR Addendum ("2019 Addendum), and together these
documents contain a complete and accurate reporting of all of the potential
environmental impacts associated with the MainPlace Project; and
WHEREAS, the City and Developer have reached mutual agreement and desire
to voluntarily enter into the Development Agreement to facilitate development of the
Project subject to the conditions and requirements set forth therein; and
WHEREAS, the terms and conditions of the Development Agreement have
undergone review by the City Council at a publicly noticed hearing and have been found
to be fair, just, and reasonable, and consistent with the General Plan; and
Ordinance No. NS-2967
Page 2 of 9
WHEREAS, the proposed Project is consistent with the MainPlace Specific Plan.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA ANA
DOES ORDAIN AS FOLLOWS:
SECTION 1. CEQA. The City Council of the City of Santa Ana hereby finds,
determines, declares and ordain as follows:
Based on the substantial evidence set forth in the record, including but not
limited to the 1983 EIR, the 1996 Addendum, and the 2019 Addendum, the City
Council finds that an addendum is the appropriate document for disclosing the
changes to the MainPlace Mall Property, and that none of the conditions
identified in Public Resources Code section 21166 and State CEQA Guidelines
section 15162 requiring subsequent environmental review have occurred,
because:
A. The MainPlace Project does not constitute a substantial change
that would require major revisions of the 1983 EIR due to the
involvement of new significant environmental effects or a
substantial increase in the severity of previously identified
significant effects.
B. There is not a substantial change with respect to the circumstances
under which the MainPlace Project will be developed that would
require major revisions of the 1983 EIR due to the involvement of
new significant environmental effects or a substantial increase in
the severity of the previously identified significant effects.
C. New information of substantial importance has not been presented
that was not known and could not have been known with the
exercise of reasonable diligence at the time the 1983 EIR was
certified or adopted, showing any of the following: (i) that the
modifications would have one or more significant effects not
discussed in the earlier environmental documentation; (ii) that
significant effects previously examined would be substantially more
severe than shown in the earlier environmental documentation; (iii)
that mitigation measures or alternatives previously found not to be
feasible would in fact be feasible and would substantially reduce
one or more significant effects, but the applicant declined to adopt
such measures; or (iv) that mitigation measures or alternatives
considerably different from those analyzed previously would
substantially reduce one or more significant effects on the
environment, but which the applicant declined to adopt.
SECTION 2. GENERAL PLAN CONSISTENCY. Pursuant to California
Government Code section 65867.5(b) and based on the entire record before the City
Council, including all written and oral evidence presented to the City Council, the City
Council hereby finds that the Development Agreement is compatible with the objectives,
Ordinance No. NS-2967
Page 3 of 9
policies, and general plan land use programs specified in the General Plan for the City
of Santa Ana in that:
A. The City of Santa Ana has officially adopted a General Plan.
B. The Development Agreement is compatible with the objectives, policies,
general land uses, and programs specified in the General Plan, for the
following reasons:
1. The existing General Plan land use designation for the Property is
District Center —intended to serve as an anchor to the City's
commercial corridors, and to accommodate major development
activity. District Centers are to be developed with an urban
character that includes a mixture of high-rise office, commercial,
and residential uses which provide shopping, business, cultural,
education, recreation, entertainment, and housing opportunities.
2. The proposed project will support several goals and policies of the
General Plan, including:
a. Housing Element (HE) Goal 2: Create diversity of quality
housing, affordability levels, and living experiences that
accommodate Santa Ana's residents and workforce of all
household types, income levels, and age groups to foster an
inclusive community.
b. HE Policy 2.2: Create high intensity, mixed -use urban
villages and pedestrian -oriented experiences that support
the mid- to high-rise office centers, commercial activity, and
cultural activities in the varied District Centers.
c. HE Policy 4.4: Provide adequate rental and ownership
housing opportunities and supportive services.
d. Land Use (LU) Element Goal 1: Promote a balance of land
uses to address basic community needs.
e. LU Policy 1.2: Maintain and foster a variety of residential
land uses in the City.
f. LU Policy 4.3: Support land uses which provide community
and regional economic and service benefits.
g. LU Policy 4.4: Encourage the development of projects which
promote the City's image as a regional activity center.
h. LU Policy 5.5: Encourage development which is compatible
with, and supportive of surrounding land uses.
Ordinance No. NS-2967
Page 4 of 9
LU Policy 5.7: Anticipate that the intensity of new
development will not exceed available infrastructure
capacity.
Land Use (LU) Element Goal 6: Reduce residential
overcrowding to promote public health and safety.
k. Urban Design (UD) Element Goal 1: Improve the physical
appearance of the City through development of districts that
project a sense of place, positive community image, and
quality environment.
UD Policy 1.1: New development and redevelopment must
have the highest quality design, materials, finishes and
construction.
C. The proposed Development Agreement will not adversely affect the public
health, safety, and welfare in that the Development Agreement will not
result in incompatible land uses on adjacent properties, inconsistencies
with any General Plan goals or policies, or adverse impacts to the
environment.
SECTION 3. EFFECTIVENESS. The Development Agreement shall not be
effective unless and until the following are adopted and become effective: Resolution
No. 2019-040 (2019 Addendum) and Ordinance No. NS-2966 (MainPlace Specific
Plan). If these approvals and Development Agreement are for any reason held to be
invalid or unconstitutional by the decision of any court of competent jurisdiction, or
otherwise does not go into effect for any reason, then the Development Agreement shall
be null and void and have no further force and effect.
SECTION 4. INDEMNIFICATION. The Developer shall indemnify, protect,
defend and hold the City and/or any of its officials, officers, employees, agents,
departments, agencies, authorized volunteers, and instrumentalities thereof, harmless
from any and all claims, demands, lawsuits, writs of mandamus, and other and
proceedings (whether legal, equitable, declaratory, administrative or adjudicatory in
nature), and alternative dispute resolution procedures (including, but not limited to
arbitrations, mediations, and such other procedures), judgments, orders, and decisions
(collectively "Actions"), brought against the City and/or any of its officials, officers,
employees, agents, departments, agencies, and instrumentalities thereof, that
challenge, attack, or seek to modify, set aside, void, or annul, any action of, or any
permit or approval issued by the City and/or any of its officials, officers, employees,
agents, departments, agencies, and instrumentalities thereof (including actions
approved by the voters of the City) for or concerning the Project, whether such Actions
are brought under the Ralph M. Brown Act, California Environmental Quality Act, the
Planning and Zoning Law, the Subdivision Map Act, Code of Civil Procedure sections
1085 or 1094.5, or any other federal, state or local constitution, statute, law, ordinance,
charter, rule, regulation, or any decision of a court of competent jurisdiction. It is
expressly agreed that the City shall have the right to approve, which approval will not be
unreasonably withheld, the legal counsel providing the City's defense, and that
Ordinance No. NS-2967
Page 5 of 9
Developer shall reimburse the City for any costs and expenses directly and necessarily
incurred by the City in the course of the defense. City shall promptly notify the
Developer of any Action brought and City shall cooperate with Developer in the defense
of the Action.
SECTION 5. CITY COUNCIL ACTION. The City Council approves
Development Agreement No. 2018-02, attached hereto and incorporated herein as
Exhibit B, and which shall not take effect unless and until the 2019 Addendum and the
MainPlace Specific Plan are approved by the City Council.
SECTION 6. PUBLICATION. The Clerk of the Council shall certify to the
adoption of this ordinance and cause the same to be published in the manner
prescribed by law.
ADOPTED this 18th day of June, 2019.
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
By: 6 C1 L
Lisa Storck
Assistant City Attorney
AYES: Councilmembers
NOES:
ABSTAIN:
NOT PRESENT:
Ordinance No. NS-2967
Page 6 of 9
Councilmembers
Councilmembers
Councilmembers
Iglesias, Penaloza, Pulido, Sarmiento, Solorio,
Villegas (6)
None (0)
None (0)
None (0)
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, NORMA MITRE, Acting Clerk of the Council, do hereby attest to and certify that the
attached Ordinance No. NS-2967 to be the original ordinance adopted by the City
Council of the City of Santa Ana on June 18, 2019 and that said ordinance was
published in accordance with the Charter of the City of Santa Ana.
Wate: ON, 0-1M
i
Acting Clerk of the Council
City of Santa Ana
Ordinance No. NS-2967
Page 7 of 9
EXHIBIT A
PROJECT SITE
Ordinance No. NS-2967
Page 8 of 9
Refer to LaserFiche for
EXHIBIT B: DEVELOPMENT AGREEMENT
Ordinance No. NS-2967
Page 9 of 9
DEVELOPMENT AGREEMENT NO. 2019- NN
This Development Agreement (hereinafter "Agreement") is entered into as of this _ day of
2019 by and between the City of Santa Ana, California (hereinafter "City"), and MAIN
PLACE SHOPPINGTOWN, LLC, a DELAWARE limited liability company (hereinafter "Owner'):
RECITALS
A. City is authorized to enter into binding development agreements with persons having legal or
equitable interests in real property for the development of such property, pursuant to Section
65864, et sec. of the Government Code.
B. This Agreement constitutes a current exercise of City's police powers to provide predictability to
Owner in the development approval process by vesting the permitted uses, density, intensity of
use, and timing and phasing of development consistent with the Development Plan in exchange
for Owner's commitment to provide significant public benefits to City as set forth in Section 4
below.
C. Owner has requested City to enter into a development agreement and proceedings have been
taken in accordance with the rules and regulations of City.
D. The best interests of the citizens of the City of Santa Ana and the public health, safety and
welfare will be served by entering into this Agreement.
E. The City Council hereby finds and determines that this Agreement is of major significance
because it will provide significant economic benefit to the City through additional jobs created
by the construction and operation of the Project, increased transient -occupancy and sales tax
revenue to the City, and general economic benefit.
F. The provision by Owner of the public benefits allows the City to realize significant economic,
recreational, open space, educational, social and public facilities benefits. The public benefits
will advance the interests and meet the needs of Santa Ana residents and visitors to a
significantly greater extent than would development of the Property without this Agreement.
G. The physical effects, if any, of the Project and this Agreement have been analyzed pursuant to
California Environmental Quality Act as amended to date and as documented in the Final
Environmental Impact Report entitled "Fashion Square Cotmmercial Center Subsequent Final
Environmental Impact Report" (State Clearinghouse House No. .oat and City of Santa Ana DP
No. '','RU, ("FEIR"), the 1996 Addendum to the FEIR (State Clearinghouse House No. IM and
City of Santa Ana DP No. 1996-25), and the 2019 Addendum to the FEIR (State Clearinghouse
House No. EM and City of Santa Ana DP No. 2018-17) ("2019 Addendum").
H. This Agreement and the Project are consistent with the Santa Ana General Plan and any specific
plan applicable thereto.
I. All actions taken and approvals given by City have been duly taken or approved in accordance
with all applicable legal requirements for notice, public hearings, findings, votes, and other
procedural matters.
Development of the Property in accordance with this Agreement will provide substantial benefits
to City and will further important politics and goals of City.
K. This Agreement will eliminate uncertainty in planning and provide for the orderly development of
the Property, ensure progressive installation of necessary improvements, provide for public
services appropriate to the development of the Project, and generally serve the purposes for
which development agreements under Section 65864, et scc . of the Government Code are
intended;
COVENANTS
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants
hereinafter contained and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
DEFINITIONS AND EXHIBITS.
1.1. Definitions. The following terms when used in this Agreement (including in the recitals
above) shall be defined as follows:
1.1.1. "Agreement' means this Development Agreement.
1.1.2. "City" means the City of Santa Ana, a charter city and California municipal
corporation.
1.1.3. "City Council' means the duly elected city council of the City of Santa Ana.
1.1.4. (INTENTIONALLY OMITTED]
1.1.5. "Development' means the improvement of the Property for the purposes of
completing the structures, improvements and facilities comprising the Project including, but not
limited to: grading; the construction of infrastructure and public facilities related to the Project
whether located within or outside the Property; the construction of buildings and structures; and
the installation of landscaping. "Development' does not include the maintenance, repair,
reconstruction or redevelopment of any building, structure, improvement or facility after the
construction and completion thereof.
1.1.6. "Development Exaction" means any requirement of City in connection with or
pursuant to any Land Use Regulation or development approval for the dedication of land, the
construction of improvements or public facilities, or the payment of fees in order to lessen,
offset, mitigate or compensate for the impacts of development on the environment or other public
interests.
1.1.7. "Development Impact Fee" means a monetary exaction other than a tax or
special assessment, whether established for a broad class of projects by legislation of general
applicability or imposed on a specific project on an ad hoc basis, that is charged by a local
agency to the applicant in connection with approval of a development project for the purpose of
defraying all or a portion of the cost of public facilities related to the development project, but
does not include park "in lied' fees specified in Government Code Section 66477, fees for
processing applications for governmental regulatory actions or approvals, or fees colleeted under
-2-
development agreements adopted pursuant to Article 2.5 of the Govermnent Code (commencing
with Section 65864) of Chapter 4.
1.1.8. "Development Plan" means the plan for development of the Property as set forth
in Exhibit "C."
1.1.9. "Development Project Review Approvals" refers to the administrative review of
all projects meeting the requirements of Division 3 of Article V of the Santa Ana Municipal
Code.
1.1.10. "Discretionary Action" or "Discretionary Approval" means an action that
requires the exercise of judgment, deliberation, or discretion on the part of the City, including
any board, agency, commission, or department and any officer or employee thereof, in the
process of approving or disapproving Development of the Project, as distinguished from an
activity that is defined herein as a Ministerial Permit or Ministerial Approval.
1.1.1 I. "Effective Date" means the date the ordinance approving and authorizing this
Agreement becomes effective.
1.1.12. "Existing Land Use Regulations" means the Land Use Regulations that are in
effect on the Effective Date, pursuant to California Government Code Section 65866.
I.1.13. "Existing Project Approvals" means all Project Approvals approved or issued on
or before the Effective Date.
1.1.14. "Future Project Approvals" means Project Approvals for the Project that are
adopted, approved, or issued after the Effective Date.
1.1.15. "Land Use Regulations" means all ordinances, laws, resolutions, codes, rules,
regulations, policies, requirements, guidelines, or other actions of City, including but not limited
to the provisions set forth in the City's General Plan, Municipal Code, that affect, govern, or
apply to the Development of the Project and use of the Property in a manner consistent with this
Agreement, including, without limitation, the permitted use of land, the density or intensity of
use, subdivision requirements, the maximum height and size of proposed buildings, the
provisions for reservation or dedication of land for public purposes, and the design, improvement
and construction standards and specifications applicable to the Development of the Property,
subject to the terms of this Agreement, whether adopted by the City Council or the voters in an
initiative. "Land Use Regulations" does not include any City ordinance, resolution, code, rule,
regulation or official policy, governing:
(a) the conduct of businesses, professions, and occupations;
(b) taxes (special or general) and assessments;
(c) the control and abatement of nuisances;
(d) the granting of encroachment permits and the conveyance of rights and
interests that provide for the use of or the entry upon public property;
(c) the exercise of the power of eminent domain.
-3-
1.1.16. "Owner' means the persons and entities listed as Owner on page 1 of this
Agreement and their successors in interest to all or any part of the Property.
1.1.17. "Ministerial Approval," or "Ministerial Act" means the nondiserctionary permits,
plans, inspections, certificates, documents and licenses required to be taken, issued, or approved
by the City in order for Owner to develop the Project, including, without limitation, building
permits, grading permits, Development Project Review Approvals, and other similar permits and
approvals. Any approval or act that is not a Discretionary Approval is a Ministerial Approval.
1.1.18. `Mortgagee" means a mortgagee of a mortgage, a beneficiary under a deed of
trust or any other security -device lender, and their successors and assigns.
1.1.19. "Net New" square footage means square footage constructed in excess of the
redevelopment of the central box (i.e., the space previously occupied by Nordstrom), the
construction of the Central Plaza, and the construction of a large -format entertainment use and
associated parking and site improvement.
1.1.20. "Project" means the development of the Property in the City that is known as the
MainPlace Mall and that is more specifically described in Exhibits "A" and `B," as
contemplated by the Development Plan as such Development Plan may be further defined,
enhanced, or modified pursuant to the provisions of this Agreement.
L 1.21. "Project Approvals" means all site -specific (meaning specifically applicable to
the Project only and not generally applicable to some or all other properties within the City)
plans, maps, permits, and entitlements to use of every kind and nature that are sought or agreed
to in writing by Owner in its sole and absolute discretion for Development of the Project and
that are approved by the City. Project Approvals include, but are not limited to, general plan
amendments, specific plan approvals or amendments, site plans, development project review
approvals, tentative and final subdivision maps, design guidelines, variances, zoning
designations, conditional use permits, grading, building, and other similar permits, the site -
specific provisions of general plans, environmental assessments, including environmental impact
reports and negative declarations.
1.1.22. "Property" means the real property described on Exhibit "A" and shown on
Exhibit "B" to this Agreement.
1.1.23. "Public Benefit" refers to those benefits provided to the City and the community
by Owner pursuant to Section 4 below.
1.1.24. "Reservation of Rights" means the rights and authority excepted from the
assurances and rights provided to Owner under this Agreement and reserved to City under
Section 3.3 of this Agreement.
1.1.25. "Term" has the meaning ascribed thereto in Section 2.4.1 below.
1.2. Exhibits. The following documents are attached to, and by this reference made a part of,
this Aereement
Exhibit "A" — Legal Description of the Property
Exhibit "B" — Map showing Propertv and its location
-4-
Exhibit "C" — Development Plan
Exhibit "D" — Development Impact Fees
Exhibit "E" — Assignment and Assumption Agreement
Exhibit "F" — 2018 Base Tax Year Values
2. GENERAL PROVISIONS.
2.1. Binding Effect of Agreement. The Property is hereby made subject to this Agreement.
Development of the Property is hereby authorized and shall be carried out in accordance with the
terms of the Development Plan and this Agreement.
2.2. Ownership of Property. Owner represents and covenants that it is the Owner of the fee
simple title to, or has an equitable interest in, the Property or a portion thereof.
2.3. City Council Findings. The City Council finds that:
2.3.1. This Agreement is consistent with the City's General Plan
2.3.2. This Agreement ensures a desirable and functional community environment,
provides effective and efficient development of public facilities, infrastructure, and services
appropriate for the development of the Project, enhances effective utilization of resources within
the City.
2.3.3. This Agreement provides public benefits beyond those that are necessary to
mitigate the development of the Project.
2.3.4. This Agreement strengthens the public planning process, encourages private
participation in comprehensive planning and reduces costs of development and government.
2.3.5. The best interests of the citizens of the City and the public health, safety, and
welfare will be served by entering into this Agreement.
2.4. Term.
2.4.1. The initial term of this Agreement shall commence on the Effective Date, and
shall continue for a period of ten (10) years thereafter (the "Initial Term"), unless this term is
modified or extended pursuant to the provisions of this Agreement. Together, the Initial Term
and any extension under this Agreement constitute the "Term."
2.4.2. The Initial Term of this Agreement is automatically extended by five additional
years for an Initial Term of 15 years if the Owner achieves the following milestones:
(a) Within the first seven (7) years of the Initial Term, the redevelopment of the
central box (i.e., the space previously occupied by Nordstrom), the construction of the Central
Plaza, and the construction of a large -format (i.e.. minimum 75,000 net, new square feet)
-5-
entertainment use and associated parking and site improvement, with certificates of occupancy
having issued for at least 90 percent of floor area of such developments; and
(b) Within the first eight (8) years of the Initial Term, commencement of (1) one or
more hotel developments that are included in the Development Plan. For purposes of this section,
"commencement" shall include the Owner having paid all required Development Impact Fees,
been issued a building permit, and performed construction activity on the site of the hotel
development.
2.4.3. The City hereby conditionally grants to Owner two five -year -extension options
(each an "Extension Option'), in addition to the Initial Tenn as it may be extended under
Section 2.4.2. The Extension Options are subject to the following conditions:
(a) To exercise the first Extension Option, by the end of the tenth year of
the Initial Term, Owner must demonstrate that during any year of the first ten years the total
gross annual general fund revenues generated by the Project have increased by at least a factor
of 2.0 over 2018 revenues generated by the Project , as set forth in Exhibit F.
(b) To exercise the second Extension Option (if the Term has been extended
to 15 years under either Section 2.4.2 or subsection 2.4.3(a) above), Owner must demonstrate
that the total gross annual general fund revenues generated by the Project have increased by at
least a factor of 2.5 over 2018 revenues generated by the Project, as set forth in Exhibit F,
during any one of the years I I through 15.
(c) if Owner does not satisfy the prerequisites to exercising an Extension
Option under subsection 2.4.3(a) or (b) above, the City may, at its sole discretion, allow Owner
to exercise that Extension Option anyway if Owner does both of the following:
(i) Provides City with a plan that includes a timeline and specific
milestones for moving the non-residential portion of the Project forward on a priority basis,
demonstrating to the City's satisfaction that the Project will meet or exceed expectations of fiscal
benefit to the City by the end of the five-year Extension Option period; and
(ii) Pays to the City a fee of $250,000.00.
2.4.4. When the Term, including any authorized extension thereof, ends, Owner shall
have no vested right under this Agreement, regardless of whether or not Owner has paid any
Development Impact Fee.
2.4.5. If any party other than Owner initiates litigation that challenges the Project, this
Agreement (and/or the ordinance approving this Agreement), or any of the Existing Project
Approvals, the Owner will have the right to toll commencement of the Term and any obligations
of Owner under this Agreement during the period of such litigation. The tolling shall commence
upon receipt by the City of written notice from Owner invoking this right to tolling. The tolling
shall terminate when the action, including any appeal, is finally resolved, whether by entry of a
final, non -appealable judgment that upholds the Project and the Existing Project Approvals or
voluntary or involuntary dismissal of the entire action (and the passage of time required to
appeal an involuntary dismissal). Owner shall similarly have the right to toll commencement of
the Term and any obligations of Owner under the Agreement in the event a referendum petition
challenging the Project, the ordinance approving this Agreement, or any of the Project Approvals
is submitted to the Citv Clerk. The tolling shall terminate if and when: (1) the Citv Clerk
determines the referendum petition did not receive sufficient signatures to qualify for the ballot;
(2) the City Council rescinds the challenged action; or (3) the election results of the referendum
are certified by the City Council.
2.5. Assignment.
2.5.1. Right to Assign. Owner shall have the right to sell, transfer or assign the
Property in whole or in part (provided that no such partial transfer shall violate the Subdivision
Map Act, Government Code Section 66410, et sec.) to any person, partnership, joint venture,
firm, limited liability company, or corporation at any time during the term of this Agreement;
provided, however, that any such sale, transfer or assignment shall include the assignment and
assumption of the rights, duties and obligations arising under or from this Agreement and be
made in strict compliance with the following conditions precedent:
(a) No sale, transfer or assignment of any right or interest under this
Agreement shall be made unless made together with the sale, transfer or assignment of all or a
part of the Property to which such rights or interests apply.
(b) Before with any such sale, transfer or assignment:
(i) Owner shall notify City, in writing, of such sale, transfer or
assignment and shall provide City with an executed agreement ("Assignment and Assumption
Agreement"), in substantially the form attached hereto as Exhibit E, by the purchaser, transferee
or assignee and providing therein that the purchaser, transferee or assignee expressly and
unconditionally assumes all the duties, obligations, agreements, covenants, waivers of Owner
under this Agreement, including, without limitation, the covenants not to sue and waivers
contained in Sections 6.2 and 7.4 hereof.
(ii) Owner shall also provide City with such information reasonably
requested by City that demonstrates to City's reasonable satisfaction such transferee or assignee
has sufficient development experience and financial capability to complete the Project and
perform all obligations assumed.
(c) Any sale, transfer or assignment not made in strict compliance with the
foregoing conditions shall constitute a default by Owner under this Agreement. Notwithstanding
the failure of any purchaser, transferee or assignee to execute the agreement required by this
subsection 2.5.1(c)(i), the burdens of this Agreement shall be binding upon such purchaser,
transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser,
transferee or assignee until and unless such agreement is executed.
(d) The Executive Director for the Planning and Building Agency shall have
the administrative authority to determine that Owner has complied with the above conditions.
Such determination shall not be unreasonably withheld, conditioned, or delayed.
2.5.2. Release of Transferring Owner. Notwithstanding any sale, transfer or
assignment, a transferring Owner shall continue to be obligated under this Agreement with
respect to the transferred Property or any transferred portion thereof, unless such transferring
Owner is given a release in writing by City, which release shall be provided by City upon the
full satisfaction by such transferring Owner of the following conditions:
-7-
(a) Owner is not then in default under this Agreement.
(b) Owner has complied with Section 2.5.1 above.
(c) The purchaser, transferee or assignee provides City with security
equivalent to any security previously provided by Owner to secure performance of its obligations
hereunder.
2.5.3, Subsequent Assignment. Any subsequent sale, transfer or assignment after an
initial sale, transfer or assignment shall be made only in accordance with and subject to the
terms and conditions of this Section 2.5.
2.6. Utilities. The Project shall be connected to all utilities necessary to provide adequate
water, sewer, gas, electric, and other utility service to the Project, prior to the issuance of final
approval for occupancy or the certificate of occupancy for any portion of the Project.
2.7. Sale to Public and Completion of Constntction. The provisions of Section 2.5.1 shall not
apply to the sale or lease (for a period longer than one year) of any residential lot or unit that
has been finally subdivided and is individually (and not in "bulb') sold or leased to a member of
the public. This Agreement shall terminate with respect to any residential lot or unit and such lot
shall be released and no longer be subject to this Agreement without the execution or recordation
of any further document upon satisfaction of both of the following conditions:
2.7.L The residential lot or unit has been finally subdivided and individually (and not
in "bulk") sold or leased (for a period longer than one year) to a member of the public; and
2.7.2. City final approval for occupancy or the certificate of occupancy has been
issued for a building on the lot, and the fees for such lot set forth in this Agreement have been
paid.
2.8. Administrative Changes and Modifications.
2.8.1. Owner and City acknowledge that further planning and development of the
Project may demonstrate that refinements and changes are appropriate with respect to the details
and performance of the parties under this Agreement. The Parties desire to retain a certain
degree of flexibility with respect to the details of the Project development and with respect to
those items covered in general terms under this Agreement, the Existing Project Approvals, the
Existing Land Use Regulations, and, once issued, any Future Project Approvals.
2.8.2. If and when the parties find that "Substantially Conforming Changes," as herein
defined, are necessary, desirable or appropriate, they may, unless otherwise required by law,
effectuate such changes or adjustments through an administrative operating memorandum that is
executed by the Owner and the Executive Director of the City's Planning and Building Agency
or the Director's designee. As used herein, a "Substantially Conforming Change' is a minor
change, modification, or adjustment that is deemed to be in substantial conformance under the
Development Plan. A Substantially Conforming Change is not considered an amendment to this
Agreement or to Development Plan, and so does not require prior notice or hearing by the
Planning Commission or City Council.
2.9. Amendment or Cancellation of Agreement. Except for Substantially Conforming
Changes as defined by Section 2.8.2 above, this Agreement may be amended or modified from
-8-
time to time only with the written consent of Owner and the City or their successors and assigns,
and only upon approval of an amendment by the City Council after a public hearing in
accordance with Government Code Section 65868. This provision shall not limit any remedy of
City or Owner as provided by this Agreement.
2.10. Termination. This Agreement shall be deemed terminated and of no further effect upon
the occurrence of any of the following events:
2.10.1. Expiration of the stated Term of this Agreement as set forth in Section 2.4.
2.10.2. Entry of a final judgment setting aside, voiding or annulling the adoption of the
ordinance approving this Agreement.
2.10.3. The adoption of a referendum measure overriding or repealing the ordinance
approving this Agreement. In the event a referendum petition challenging the ordinance
approving this Agreement is submitted to the City Clerk, Owner shall deposit with the City Ten
Thousand Dollars ($10,000) ("Petition Deposit") to cover the actual cost incurred by the City
examining the petition and verifying signatures. Should the referendum qualify for the ballot,
Owner may request, at or prior to the Council meeting at which the Council will take up the
referendum issue, that the City Council repeal the ordinance, rather than submitting it to the
voters. If Owner does not request that the City Council repeal the ordinance, and the City
Council submits the ordinance to the voters, Owner shall deposit Fifty Thousand Dollars
($50,000) ("Referendum Deposit") with the City. City may use the funds to pay any and all
costs associated with the said referendum measure. Any funds remaining in the Petition Deposit
may be put toward the Referendum Deposit at the Owner's request. If at any time the
Referendum Deposit account has Five Thousand Dollars ($5000) or less remaining, Owner shall,
within three (3) days of receiving notice from the City, deposit with the City additional funds as
requested by the City to cover all costs and expenses associated with the referendum and holding
the related election. Following certification of the election results, any funds remaining in the
Petition Deposit or the Referendum Deposit account shall be returned to the Owner. In the event
Owner requests that the City Council repeal the ordinance and the City Council nonetheless
determines to submit the ordinance to the voters, Owner shall have no responsibility for the costs
associated with holding the election.
2.10.4. Completion of the Project in accordance with the terms of this Agreement
including issuance of all required occupancy permits, final approval for occupancy by the City,
and acceptance by City or applicable public agency of all required dedications.
2.10.5. Termination of the Agreement as provided in Sections 6.3 or 6.4 herein.
Termination of this Agreement shall not constitute termination of any other land use entitlements
approved for the Property. Upon the termination of this Agreement, no party shall have any
further right or obligation hereunder except with respect to any obligation to have been
performed prior to such termination or with respect to any default in the performance of the
provisions of this Agreement that has occurred prior to such termination or with respect to any
obligations that are specifically set forth as surviving this Agreement. Upon such termination,
any Development Impact Fees paid by Owner to City for residential units on which construction
has not yet begun shall be refunded to Owner by City.
2.11. Notices.
S2
2.11.1. As used in this Agreement, "notice" includes, but is not limited to, the
communication of notice, request, demand, approval, statement, report, acceptance, consent,
waiver, appointment or other communication required or permitted hereunder.
2.11.2. All notices shall be in writing and shall be considered given either: (i) when
delivered in person to the recipient named below; or (ii) on the date of delivery shown on the
return receipt, after deposit in the United States mail in a scaled envelope as either registered or
certified mail with return receipt requested, and postage and postal charges prepaid, and
addressed to the recipient named below. All notices shall be addressed as follows:
If to City:
City Clerk
20 Civic Center Plaza, 8'h Floor
PO Box 1988 M-30
Santa Ana. Ca 82702
Copy to:
City Manager
City Attorney
Executive Director of Planning and Building Agency
If to Owner:
[Owner ENTITY]
[ADDRESS]
[ADDRESS]
Attn: Manager
Telephone: [ 1
Facsimile: [ 1
Copy to:
Peter J. Howell
Rutan & Tucker
611 Anton Blvd.
Costa Mesa, CA 92626
2.11.3. Either party may, by notice given at any time, require subsequent notices to be
given to another person or entity, whether a party or an officer or representative of a party, or to
a different address, or both. Notices given before actual receipt of notice of change shall not be
invalidated by the change.
3. DEVELOPMENT OF THE PROPERTY.
3.1. Rights to Develop. Subject to the teens of this Agreement including the Reservation of
Rights in Section 3.3 below, Owner shall have a vested right to develop the Property in
accordance with, and to the extent of, this Agreement and the Project Approvals.
3.1.1. Except as expressly provided otherwise herein, the Project shall remain subject
to all Existing Land Use Regulations and Project Approvals. Except as otherwise provided in
this Agreement, and notwithstanding the authority of the City to further revise the Land Use
Regulations pursuant to Government Code section 65866, the permitted uses of the Property, the
density and intensity of use, the maximum height and size of proposed buildings, and provisions
for reservation and dedication of land for public purposes shall be those set forth in the Existing
Land Use Regulations and Project Approvals.
3.1.2. In accordance with Government Code Section 66452.6(a), any tentative map
approved which relates to all or a portion of the Property shall be extended for the greater of (i)
the Tenn of this Agreement or (ii) expiration of the tentative map pursuant to Section 66452.6.
3.1.3. Owner shall comply with all mitigation measures required to be undertaken
pursuant to any document prepared in compliance with the California Environmental Quality Act
with respect to the Project.
3.1.4. Notwithstanding Section 3.1.1 above, Owner acknowledges and agrees that the
Project requires additional Project Approvals (the Future Project Approvals identified in Section
1.1.13). These Future Project Approvals shall be consistent with the Existing Project Approvals
and this Agreement as to the permitted uses of the Property, the density and intensity of use, the
maximum height and size of proposed buildings, and provisions for reservation and dedication of
land for public purposes; however the Future Project Approvals may include additional
conditions that are lawful and appropriate to the type of Project Approval.
3.2. Effect of Agreement on Land Use Regulations. Except as otherwise provided under the
terms of this Agreement including the Reservation of Rights in Section 3.3 below, the rules,
regulations and official policies governing permitted uses of the Property, the density and
intensity of use of the Property, the maximum height and size of proposed buildings, and the
design, improvement and construction standards and specifications applicable to development of
the Property shall be the Existing Land Use Regulations and Project Approvals. In connection
with any subsequently adopted Project Approvals and except as specifically provided otherwise
herein, City may exercise its discretion in accordance with the Land Use Regulations then in
effect, as provided by this Agreement, including, but not limited to, the Reservation of Rights.
City shall accept for processing, review, and take action on all applications for subsequent
Project Approvals, and such applications shall be processed in the same manner and the City
shall exercise its discretion, when required or authorized to do so, to the same extent it would
otherwise be entitled in the absence of this Agreement.
3.2.1. City shall reasonably strive to complete:
(a) its initial review of individual development projects within 30 days after
the application is deemed complete,
(b) any second plan review within 15 days after submission, and
(c) any third plan review within 10 days after submission.
3.2.2. Notwithstanding the foregoing, the City does not guarantee that the timelines
above will be met, and failure to meet these timelines does not constitute a default.
3.2.3. To help ensure expedited review of its development approvals, Owner may elect
to pay for City to use a contract planner. City agrees to retain a contract planner to expedite
review, if Owner so elects.
3.3. Reservation of Rights.
3.3.1. Limitations. Reservations and Exceptions. Notwithstanding any other provision
of this Agreement, the following are not Existing Land Use Regulations, but shall apply to the
development of the Property as they are established at the time of application, provided such
regulations and/or fees (as applicable) are not designed in a manner such that they are
applicable only to the Project and/or Property:
(a) Processing fees and charges of every kind and nature imposed by City to
cover the actual costs to City of processing applications for Project Approvals or for monitoring
compliance with any Project Approvals granted or issued.
(b) Procedural regulations relating to hearing bodies, petitions, applications,
notices, findings, records, hearings, reports, recommendations, appeals and any other matter of
procedure.
(c) Regulations, policies and rules governing engineering and construction
standards and specifications applicable to public and private improvements, including, without
limitation, all uniform codes adopted by the City and any local amendments to those codes
adapted by the City, including, without limitation, the City's Building Code, Plumbing Code,
Mechanical Code, Electrical Code, and Grading Ordinance.
(d) Regulations that are in material conflict with this Agreement but that are
reasonably necessary to protect the residents of the Project or the immediate community from a
condition perilous to their health or safety. To the extent possible, any such regulations shall be
applied and construed so as to provide Owner with the rights and assurances provided under this
Agreement.
(e) Regulations that are not in material conflict with this Agreement or the
Development Plan. Any regulation, whether adopted by initiative or otherwise, limiting the rate
or timing of development of the Property shall be deemed to materially conflict with the
Development Plan and shall therefore not be applicable to the development of the Property.
(0 Regulations that are in material conflict with the Development Plan;
provided Owner has given written consent to the application of such regulations to development
of the Property.
(g) Regulations that impose, levy, alter or amend fees, or charges relating to
consumers or end users, including, without limitation, trash can placement, service charges and
limitations on vehicle parking.
(h) Regulations of other public agencies, including Development Impact
Fees adopted or imposed by such other public agencies, although collected by City.
HIPA
3.3.2. Subsequent Project Approvals. This Agreement shall not prevent City, in acting
on subsequent Project Approvals and to the same extent it would otherwise be authorized to do
so absent this Agreement, from applying subsequently adopted or amended Land Use
Regulations that do not materially conflict with this Agreement.
3.3.3. Modification or Suspension by State or Federal Law. In the event that State,
County or Federal laws or regulations, enacted after the Effective Date of this Agreement,
prevent or preclude compliance with one or more of the provisions of this Agreement, such
provisions of this Agreement shall be modified or suspended as may be necessary to comply with
such State or Federal laws or regulations; provided, however, that this Agreement shall remain in
full force and effect to the extent it is not inconsistent with such laws or regulations and to the
extent such laws or regulations do not render such remaining provisions impractical to enforce.
3.3.4. Intent. The parties acknowledge and agree that City is restricted in its authority
to limit certain aspects of its police power by contract and that the foregoing limitations,
reservations and exceptions are intended to reserve to City all of its police power that cannot be
or are not expressly so limited. This Agreement shall be construed, contrary to its stated terms if
necessary, to reserve to City all such power and authority that cannot be or is not by this
Agreement's express terms so restricted.
3.4. Regulation by Other Public Agencies. It is acknowledged by the parties that other public
agencies not within the control of City may possess authority to regulate aspects of the
development of the Property separately from or jointly with City and this Agreement does not
limit the authority of such other public agencies.
3.5. Timing of Development. Because the California Supreme Court held in Pardee
Consavction Co, v. City of Camarillo, 37 Cal. 3d 465 (1984), that the failure of the parties in
that case to provide for the timing of development resulted in a later -adopted initiative restricting
the timing of development to prevail over the parties' agreement, it is the specific intent of the
Parties to provide for the timing of the Project in this Agreement. To do so, the Parties
acknowledge and provide that Owner shall have the right, but not the obligation, to complete the
Project in such order, at such rate, at such times, and in as many development phases and sub -
phases as Owner deems appropriate in its sole subjective business judgment, except for the
following:
3.5.1. The building permit for residential units 401 up to 820 may not be issued until
Owner commences construction activities for all development components on the Property
described in Section 2A.2(a). For purposes of this section, "commences" shall include the
Owner having paid all required Development Impact Fees, been issued a building permit, and
performed construction activity on the site. However, in the event Owner determines to proceed
with a mixed -use development that includes residential, as well as a commercial component of
not less than 20,000 square feet, the limitation set forth in the preceding sentence shall not
apply.
3.5.2. The building pcnmit for the 821th residential unit may not be issued until at least
200,000 square feet of net new non-residential development, excluding office space, on the
Property has commenced construction.
l3-
3.5.3. The building permit for the 1350th residential unit may not be issued until at
least 400,000 square feet of net new non-residential development, excluding office space, on the
Property has commenced construction
3.6. Property Maintenance Agreement.
3.6. L Owner shall, as required by the Conditions of Approval, enter into a Property
Maintenance Agreement which shall include:
(a) A Parking Management Plan; and
(b) A Property Maintenance Plan.
3.7. Moratoria. Except as specifically set forth in this section, City agrees that to the extent
permitted by law, no moratorium or other similar limitation (whether relating to the rate, timing,
or sequencing of the development of the Project or any part thereof and whether or not enacted
by local initiative or otherwise) affecting subdivision maps, grading or building permits,
occupancy certificates, or other entitlements approved, issued, or granted within the City, after
the Effective Date of this Agreement, shall apply to the Project. Owner acknowledges and agrees
that the provisions hereof shall not preclude the application to the Project of a moratorium or
other similar limitation (of the type described in the preceding sentence) enacted in order to
protect an imminent threat to the public health or safety.
3.8. Development Agreemcnt/Proiect Approvals. In the event of any inconsistency between
any Existing Land Use Regulation and a Project Approval, the provisions of the Project
Approval shall control. In the event of any inconsistency between any Existing Land Use
Regulation or Project Approval and this Agreement, the provisions of this Agreement shall
control.
4. PUBLIC BENEFITS.
4.1. Public Benefits. The Project is expected to bring significant fiscal benefits to the City.
The Project will also serve to implement the City's General Plan vision for the Property, which
has long been designated as a District Center, where relatively intense mixed -use development is
encouraged. In addition, Owner has committed by this Agreement to contribute to the
acquisition, construction and maintenance of certain "Public Benefits" as provided below.
4.1.1. City Facilities. Owner shall provide the following benefits towards the
acquisition, construction and maintenance of the City Facilities, as follows:
(a) Public Art. Owner shall create, install, and maintain a public art project
with a value equivalent to one-half of one percent (0.5%) of the total construction cost of the
Project. Total construction cost shall mean all construction costs, but shall not include design
and engineering costs. Owner shall prepare and submit to the City, no later than one hundred
eighty (180) days before final approval for occupancy or the issuance of a certificate of
occupancy, a public art plan that is consistent with Chapter 15 of the Citywide Design
Guidelines, Public Art Guidelines. Although Owner anticipates satisfying all or most of the
entire Public Art requirement early in the implementation of the Project, this requirement shall be
satisfied as long as art with a value equivalent to one-half of one percent (0.5%) of the
completed portion of the Project has been installed prior to final approval for occupancv or the
M
issuance of a Certificate of Occupancy for that portion of the Project.
4.1.2. Public -Accessible Benefits.
(a) Owner shall provide each of the public benefits described in the
Development Plan, including the Specific Plan.
(b) Owner shall provide the City, or mutually acceptable designee of City,
with use of the Central Plaza, Entry Plaza, or other mutually acceptable space at least 12 days
each calendar year (no more than two of which shall be consecutive and no more than three of
which shall be on a Saturday or Sunday) for events that are reasonably compatible with Project
programming.
(c) Owner shall provide at least 10 free events each year for the general
public.
(d) Owner shall provide publicly accessible open -space areas, to be owned
and maintained by Owner, as identified in the Development Plan.
(e) Owner shall install bike lanes and sidewalk along Main Place Drive
between Main Street and Bedford Avenue, as specified in the Project Approvals..
(f) Owner shall provide and maintain secure bike lockers or bike storage
rooms in at least four locations on the Property, including at least two within or in close
proximity to the residential development. At least half of the lockers shall be trade available for
free to Project residents and employees.
(g) In connection with development of any office building, Owner shall
provide a secure, private shower facility for employees of tenants located in the office building to
use to shower and change after riding to the Project site, which shall be made available free of
charge to said employees (though commercial tenants may be charged as part of their share of
common -area expenses).
(h) As part of its obligation to provide Public Art, Owner shall provide at
least two water features in public areas of the Project (which include public areas of the
enclosed mall), one of which may be a splash pad, if Owner determines the installation and
maintenance of a splash pad to be feasible and desirable.
(i) Owner shall include at least one high -end food court (i.e., "food hall')
area of the Project and shall endeavor to ensure that at least ten percent (10%) of the leasable
square footage is occupied by new, local food vendors, to the extent reasonably feasible.
Q) Owner shall submit to the City within 90 days of the Effective Date, a
plan for ongoing engagement and support of local philanthropic activities within the City
focusing on, but not limited to, the following activities:
(i) Education
(ii) Culture
15-
(iii) Arts
(k) Tenant Character and Quality. Notwithstanding any provision herein to
the contrary, Owner covenants that, for the Term of this Agreement, Owner will endeavor to
ensure that the tenant mix remains consistent with a high quality regional shopping center,
equivalent to or surpassing the current tenant mix in terns of quality. The hotels will be
operated under an internationally recognized hotel flag or by a boutique hotel operator with a
demonstrated track record of success operating similar hotels and classified as a 3 star or above
in a 5-star rating system as widely recognized and commonly used in the hospitality industry.
4.1.3. Graffiti Removal. Owner shall also install and maintain graffiti protection on
new surfaces and shall, within 48 hours of discovery of graffiti, cause it to be removed and
associated restorations completed throughout the Project.
4.2. Local Live -Work Preference. Prior to issuance of any building permits, Owner shall
develop and submit to the City Manager or the City Manager's designee, a local live -work plan
for the Project targeting, to the extent feasible and consistent with state and federal fair housing
laws, a preference or priority for persons who currently either live or work in the City of Santa
Ana for the rental or sale of residential units at the Project.
4.3. Local Sourcing Plan. Owner agrees to make a good -faith effort to encourage contractors
and suppliers to hire and procure locally, to the extent that it is cost effective and does not delay
the overall project development schedule.
5. REVIEW FOR COMPLIANCE.
5.1. Periodic Review.
5.1.1. The City shall review this Agreement annually, on or before the anniversary of
the Effective Date, in order to ascertain the compliance by Owner with the terms of this
Agreement ("Annual Review'). Owner shall submit an Annual Monitoring Report, in a form
acceptable to the City Manager, within thirty (30) days after written notice from the City
Manager. The failure of the City to conduct the Annual Review shall not constitute a default by
Owner. The Annual Monitoring Report shall be accompanied by an "Annual Review and
Administration Fee" sufficient to defray the estimated costs of review and administration of the
Agreement during the succeeding year. The amount of the Annual Review and Administration
Fee" shall be set annually by resolution of the City Council.
5.1.2. The Annual Review shall include a progress report on the status of the
implementation of the Project and the new tax revenue generated by the Project, including, but
not limited to, the following:
components:
(a) Development and construction progress of the following uses and Project
(i) Site development
(ii) Public infrastructure,
(iii) Project design features,
M
(iv)
Cotnnumity benefits,
(v)
Plaza,
(vi)
Hotel,
(vii)
Residential,
(viii)
Commercial,
(ix)
Office
(x)
Parking
(xi) Philanthropic activities (education, culture, arts)
(b) Reporting for items listed in subsection 5.1.2(a) shall be include a table
substantially similar to the followinti:
An example of a compliance report fa- sire dcvelopnnent and can be applied to other above criter/a and
meh-ics.
Reporting Period: 2022 — 2"^ Report
Year 3 of 10 of Agreement
Use
Approved
Total
Cumulative
Remaining to
Status & Look Ahead
SF/Units/Rooms
Completed In
Total
Be
Period
Completed
Completed
Residential
1.900
100
200
1.700
On target with 300 to be
completed in the next period
Hotel
400
150
150
250
Negotiating with Hilton to
construction a new full service
hotel for the next period
Commercial
300,000 (vac)
100,000
200,000
100,000
150k ten-year lease with Tenant
Existing
A since 2019.
1,100,000
50K 20 Year lease with Tenant
(ex)
B.
Working with Tenant C for
remaining 100k with a 15 year
lease.
Commercial
250,000
150,000
150,000
100,000
150k completed for Kidzania.
New
20-Yearlease.
Negotiating with Tenant X for a
15 year lease.
New Office
750,000
0
150,000
600.000
150k completed in 2020. Tenant
X with 20-year lease.
Market is soft. No new activity in
reporting period.
Anticipate XX for next period.
_17_
(c) Progress relative to economic projections of.
(i) Increases in property tax,
(ii) Property Tax In -Lieu of VLF received by the City,
(iii) Sales tax received from the Project,
(iv) Business tax received from the Project,
(v) Hotel Visitors Tax (HVT)
(vi) Utility User Tax received from the Project,
(d) Reporting for items listed in subsection 5.1.2(c) shall be include a table,
orcoared by the Owner with City's cooperation, substantially similar to the following:
Reporting Period: 2022 — 211d Report
Year 3 of 10 of Agreement
Revenue
Total for Period
Cumulative to
Percentage
Status & Look Ahead
date
increase over
2018 Base
Year
Property Tax
Property
Tax In -
Lieu of
VLF
Sales Tax
I
TOT (HVT)
Business
Tax
Franchise
Tax
UUT
5.2. Special Revicw. The City Council may order a special review of compliance with this
Agreement at any time, but not more than once during any 12 month period. The City Manager,
or his or her designee, shall conduct such special reviews.
5.3. Review Procedure.
-18-
5.3.1. During either a periodic review or a special review, Owner shall be required to
demonstrate good -faith compliance with the terms of this Agreement. The burden of proof on
this issue shall be on Owner.
5.3.2. Upon completion of a periodic review or a special review, the City Manager, or
the City Manager's designee, shall submit a report to the Planning Commission setting forth the
evidence concerning good -faith compliance by Owner with the terms of this Agreement and his
or her recommended finding on that issue.
5.3.3. If the Planning Cotrunission finds and determines on the basis of substantial
evidence that Owner has complied in good faith with the terms and conditions of this Agreement,
the review shall be concluded.
5.3.4. If the Planning Commission finds and determines on the basis of substantial
evidence that Owner has not complied in good faith with the terms and conditions of this
Agreement:
(a) The Planning Commission shall provide written notice to Owner of such
findings setting forth the nature of the problem and the actions, if any, required of Owner to cure
such problem.
(b) If the problem can be cured and Owner fails to take such actions and
cure such problem within sixty (60) days after the effective date of the Planning Commission's
notice or, in the event that such problem cannot be cured within such sixty (60) day period but
can be cured within a longer time, has failed to commence the actions necessary to cure such
problem within such sixty (60) day period and to diligently proceed to complete such actions and
cure such problem, then the Commission may recommend to the City Council modification or
termination of this Agreement.
(c) Owner may appeal a Planning Commission determination pursuant to
this Section 5.3.4 pursuant to City's rules for consideration of appeals in zoning matters then in
effect. Notice of default as provided under Section 6.3 of this Agreement shall be given to
Owner prior to or concurrent with proceedhtgs under Section 5.4 and Section 5.5.
5.4. Proceedings Upon Modification or Termination. If, upon a finding under Section 5.3,
City determines to proceed with modification or termination of this Agreement, City shall give
written notice to Owner of its intention so to do. The notice shall be given at least ten (10)
calendar days prior to the scheduled hearing and shall contain:
5.4.1. The time and place of the hearing;
5.4.2. A statement as to whether or not City proposes to terminate or to modify this
Agreement; and,
5.4.3. Such other inforniation that the City considers necessary to inform Owner of the
nature of the proceeding.
5.5. Hearing on Modification or Termination. At the time and place set for the hearing on
modification or termination, Owner shall be given an opportunity to be heard. Owner shall be
required to demonstrate good -faith compliance with the terms and conditions of this Agreement.
The burden of proof on this issue shall be on Owner. If the City Council finds, based upon
_19_
substantial evidence, that Owner has not complied in good faith with the terms or conditions of
this Agreement, the City Council may terminate this Agreement or, in lieu of termination and
with the consent of Owner, modify this Agreement and impose such conditions as are reasonably
necessary to protect the interests of the City. The decision of the City Council shall be final.
5.6. Certificate of Agreement Compliance.
5.6.1. If, at the conclusion of a Periodic or Special Review, Owner is found to be in
compliance with this Agreement, City shall, upon request by Owner, issue a Certificate of
Agreement Compliance ("Certificate) to Owner stating that after the most recent Periodic or
Special Review and based upon the information known or made known to the City Manager and
City Council that: (1) this Agreement remains in effect; and (2) Owner is not in default. The
Certificate shall be in recordable form, shall contain information necessary to communicate
constructive record notice of the finding of compliance, shall state whether the Certificate is
issued after a Periodic or Special Review and shall state the anticipated date of commencement
of the next Periodic Review. Owner may record the Certificate with the County Recorder.
5.6.2. Whether or not the Certificate is relied upon by assignees or other transferees or
Owner, City shall not be bound by a Certificate if a default existed at the time of the Periodic or
Special Review, but was concealed from or otherwise not known to the City Manager or City
Council.
5.7. Conditions of Discretionary Approvals. The requirements imposed as conditions of any
discretionary approval received through the City's existing regulatory process shall be
governed by the terns of those approvals, and in no event shall such conditions be affected
by the termination, cancellation, rescission, revocation, or default or expiration of this
Development Agreement (although such conditions must comply with the Applicable Rules).
6. DEFAULT AND REMEDIES
6.1. Remedies in General. It is acknowledged by the parties that City would not have entered
into this Agreement if it were to be liable in damages under this Agreement, or with respect to
this Agreement or the application thereof. In general, each of the parties hereto may pursue any
remedy at law or equity available for the breach of any provision of this Agreement, except that
City shall not be liable in damages to Owner, or to any successor in interest of Owner, or to any
other person, and Owner covenants not to sue for damages or claim any damages:
6.1.1. For any breach of this Agreement or for any cause of action that arises out of
this Agreement; or
6.1.2. For the taking, impairment or restriction of any right or interest conveyed or
provided under or pursuant to this Agreement; or
6.1.3. Arising out of or connected with any dispute, controversy or issue regarding the
application or interpretation or effect of the provisions of this Agreement.
6.2. Release.
6.2.1. Except for non -monetary remedies, Owner, for itself, its successors and
assignees, hereby releases City, its officers, agents and employees from any and all claims.
-20-
demands, actions, or suits of any kind or nature arising out of any liability, known or unknown,
present or future, including, but not limited to, any claim or liability, based or asserted, pursuant
to Article 1, Section 19 of the California Constitution, the Fifth and Fourteenth Amendments to
the United States Constitution, or any other law or ordinance which seeks to impose any other
liability or damage, whatsoever, upon City because it entered into this Agreement or because of
the terms of this Agreement. Owner hereby acknowledges that it has read and is familiar with
the provisions of California Civil Code Section 1542. which is set forth below:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR."
6.2.2. By initialing below, Owner hereby waives the provisions of Section 1542 in
connection with the matters that are the subject of the foregoing waivers and releases.
Owner's Initials
6.3. Termination or Modification of Agreement for Default of Owner. City may terminate or
modify this Agreement for any failure of Owner to perform any material duty or obligation of
Owner under this Agreement, or to comply in good faith with the terms of this Agreement
(hereinafter referred to as "default"); provided, however, City may terminate or modify this
Agreement pursuant to this Section 6.3 only after providing written notice to Owner of default
setting forth the nature of the default and the actions, if any, required by Owner to cure such
default and, where the default can be cured Owner has failed to take such actions and cure such
default within sixty (60) days after the effective date of such notice or, in the event that such
default cannot be cured within such sixty (60) day period but can be cured within a longer time,
has failed to continence the actions necessary to cure such default within such sixty (60) day
period and to diligently proceed to complete such actions and cure such default. City's sole
remedy for any default or breach of this Agreement by Owner shall be City's right to terminate
this Agreement.
6.4. Voluntary Termination of Agreement by Owner. In the event Owner determines, in its
sole discretion, that it no longer wishes to proceed with the Project pursuant to the terms of this
Agreement, Owner may terminate this Agreement by providing the City with 30 days written
notice. Notwithstanding this or other provisions herein, Owner's indemnity and defense
obligations shall survive such termination.
LITIGATION.
7.1. Third -Party Litigation Concerning Agreement. Owner shall defend, at its expense,
including attorneys' fees, indemnify, and hold harmless City, its agents, officers and employees
from any claim, action or proceeding against City, its agents, officers, or employees to attack,
set aside, void, or annul the approval of this Agreement, or the approval of any permit or
entitlement granted pursuant to this Agreement or for the Project. City shall promptly notifv
ylE
Owner of any claim, action, proceeding or determination included within this Section 7.1, and
City shall cooperate in the defense. If City fails to promptly notify Owner of any such claim,
action, proceeding or determination, or if City fails to cooperate in the defense, Owner shall not
thereafter be responsible to defend, indemnify, or hold harmless City as to that claim, action,
proceeding, or determination. City may in its discretion participate in the defense.
7.2. Environmental Assurances. Owner shall indemnify and hold City, its officers, agents,
and employees free and harmless from any liability, based or asserted, upon any act or omission
of Owner, its officers, agents, employees, subcontractors, predecessors in interest, successors,
assigns and independent contractors for any violation of any federal, state or local law, ordinance
or regulation relating to industrial hygiene or to environmental conditions on, under or about the
Property, including, but not limited to, soil and groundwater conditions, and Owner shall defend,
at its expense, including attorneys' fees, City, its officers, agents and employees in any action
based or asserted upon any such alleged act or omission. City may in its discretion participate in
the defense.
7.3. Reservation of Rights. With respect to Section 7.1 and Section 7.2 herein, City reserves,
the right to either (1) approve the attorney(s) that the indemnifying party selects, hires or
otherwise engages to defend the indemnified party hereunder, which approval shall not be
unreasonably withheld, conditioned, or delayed, or (2) conduct its own defense; provided,
however, that the indemnifying party shall reimburse the indemnified party forthwith for any and
all reasonable expenses incurred for such defense, including attorneys' fees, upon billing and
accounting therefor.
7.4. Challenge to Existing Land Use Approvals. By accepting the benefits of this Agreement,
Owner, on behalf of itself and its successors in interest, hereby expressly agrees and covenants
not to sue or otherwise challenge any land use approval affecting the Property and in effect as of
the Effective Data Such agreement and covenant includes, without limitation, the covenant
against any direct suit by Owner or its successor in interest, or any participation, encouragement
or involvement whatsoever that is adverse to City by Owner or its successor in interest, other
than as part of required response to lawful orders of a court or other body of competent
jurisdiction. Owner hereby expressly waives, on behalf of itself and its successors in interest, any
claim or challenge to any land use approval affecting the Property and in effect as of the
Effective Date.
7.5. Waiver.
7.5.1. Owner hereby acknowledges that it has read and is familiar with the provisions
of California Civil Code Section 1542, which is set forth below:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR."
_22_
7.5.2. By initialing below, Owner hereby waives the provisions of Section 1542 in
connection with the matters that arc the subject of the foregoing waivers and releases.
Owner's Initials
7.6. Survival. The provisions of Sections 7.1 through 7.4, inclusive, shall survive the
termination of this Agreement.
8. MORTGAGEE PROTECTION.
The Parties hereto agree that this Agreement shall not prevent or limit Owner, in any manner, at
Owner's sole discretion, from encumbering the Property or any portion thereof or any improvement
thereon by any mortgage, deed of trust or other security device securing financing with respect to the
Property. City acknowledges that the lenders providing such financing may require certain Agreement
interpretations and modifications and agrees upon request, from time to time, to meet with Owner and
representatives of such lenders to negotiate in good faith any such request for interpretation or
modification. City will not unreasonably withhold its consent to any such requested interpretation or
modification provided such interpretation or modification is consistent with the intent and purposes of
this Agreement. Anv Mortgagee of the Property shall be entitled to the following rights and privileges:
8.1. Neither entering into this Agreement nor a breach of this Agreement shall defeat, render
invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for
value, unless otherwise required by law.
8.2. The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part
thereof, which Mortgagee, has submitted a request in writing to the City in the manner specified
herein for giving notices, shall be entitled to receive written notification from City of any default
by Owner in the performance of Owner's obligations under this Agreement.
8.3. If City timely receives a request from a Mortgagee requesting a copy of any notice of
default given to Owner under the terms of this Agreement, City shall provide a copy of that
notice to the Mortgagee within ten (10) days of sending the notice of default to Owner. The
Mortgagee shall have the right, but not the obligation, to cure the default during the remaining
cure period allowed such party under this Agreement.
8.4. Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant
to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the
Property, or part thereof, subject to the terms of this Agreement. Notwithstanding any other
provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under
this Agreement to perform any of Owner's obligations or other affirmative covenants of Owner
hereunder, or to guarantee such performance; provided, however, that to the extent that any
covenant to be performed by Owner is a condition precedent to the performance of a covenant
by City, the performance thereof shall continue to be a condition precedent to City's
performance hereunder, and further provided that any sale, transfer or assignment by any
Mortgagee in possession shall be subieet to the provisions of Section 2.5 of this Agreement.
9. MISCELLANEOUS PROVISIONS.
-23-
9.1. Recordation of Agreement. This Agreement and any amendment or cancellation thereof
shall be recorded with the Orange County Recorder by the Clerk of the City Council within ten
(10) days after the City enters into this Agreement, in accordance with Section 65868.5 of the
Government Code. If the Parties to this Agreement or their successors in interest amend or
cancel this Agreement, or if the City terminates or modifies this Agreement as provided herein
for failure of the Owner to comply in good faith with the terms and conditions of this
Agreement, the City Clerk shall cause notice of such action recorded with the Orange County
Recorder.
9.2. Entire Agreement. This Agreement sets forth and contains the entire understanding and
agreement of the parties, and there are no oral or written representations, understandings or
ancillary covenants, undertakings or agreements that arc not contained or expressly referred to
herein. No testimony or evidence of any such representations, understandings or covenants shall
be admissible in any proceeding of any kind or nature to interpret or determine the terms or
conditions of this Agreement.
9.3. Severability. If any term, provision, covenant or condition of this Agreement shall be
determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected
thereby to the extent such remaining provisions arc not rendered impractical to perform taking
into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision
of the Public Benefits set forth in Section 4 of this Agreement, including the payment of the
Development Impact Fees set forth therein, arc essential elements of this Agreement and City
would not have entered into this Agreement but for such provisions, and therefore in the event
such provisions arc determined to be invalid, void or unenforceable, this entire Agreement shall
be null and void and of no force and effect whatsoever.
9.4. Interpretation and Goveming Law. This Agreement and any dispute arising hereunder
shall be governed and interpreted in accordance with the laws of the State of California, with
venue in Orange County. This Agreement shall be construed as a whole according to its fair
language and common meaning to achieve the objectives and purposes of the parties hereto, and
the rule of construction to the effect that ambiguities are to be resolved against the drafting party
shall not be employed in interpreting this Agreement, all parties having been represented by
counsel in the negotiation and preparation hereof.
9.5. Section Headings. All section headings and subheadings are inserted for convenience
only and shall not affect any construction or interpretation of this Agreement.
9.6. Singular and Plural. As used herein, the singular of any word includes the plural.
9.7. Joint and Several Obligations. If at any time during the Term of this Agreement the
Property is owned, in whole or in part, by more than one owner, all obligations Of such owners
under this Agreement shall be joint and several, and the default of any such owner shall be the
default of all such owners. Notwithstanding the foregoing, no owner of a single lot that has been
finally subdivided and sold to such owner as a member of the general public shall have any
obligation under this Agreement except as expressly provided for herein.
9.8. Time of Essence. Time is of the essence in the performance of the provisions of this
Agreement as to which time is an element.
9.9. Waiver. Failure by a party to insist upon the strict performance of any of the provisions
of this Agreement by the other party, or the failure by a party to exercise its rights upon the
-24-
default of the other party, shall not constitute a waiver of such party's right to insist and demand
strict compliance by the other party with the terms of this Agreement thereafter.
9.10. No Third -Party Beneficiaries. This Agreement is made and entered into for the sole
protection and benefit of the parties and their successors and assigns. No other person shall have
any right of action based upon any provision of this Agreement.
9.11. Force Maicure. Neither party shall be deemed to be in default where failure or delay in
performance of any of its obligations under this Agreement is caused by: (1) strikes, lockouts or
labor disputes; (2) inability to obtain labor or materials or reasonable substitutes therefor;
(3) inclement weather which delays or precludes construction; (4) acts of God, including but not
limited to earthquakes, or the public enemy or civil commotion; (5) condemnation, (6) fire or
other casualty; (7) shortage of fuel, electricity or natural gas; (8) action or nonaction of public
utilities or of local, state or federal governments, affecting the work, including, but not limited
to, any delays in the permitting process as a result of the action or inaction or such governmental
authorities; (9) criminal acts or acts of terrorism; or (10) other conditions similar to those
enumerated above which are beyond the reasonable anticipation or control of such Party, or
other causes beyond the Party's reasonable control. if any such events shall occur, the term of
this Agreement and the time for performance shall be extended for the duration of each such
event , provided that the Term of this Agreement shall not be extended pursuant to this section
for more than five (5) years.
9.12. Mutual Covenants. The covenants contained herein are mutual covenants and also
constitute conditions to the concurrent or subsequent performance by the party benefited thereby
of the covenants to be performed hereunder by such benefited party.
9.13. Successors in Interest. The burdens of this Agreement shall be binding upon, and the
benefits of this Agreement shall inure to, all successors in interest to the Parties to this
Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and
constitute covenants running with the land. Each covenant to do or refrain from doing some act
hereunder with regard to development of the Property: (a) is for the benefit of and is a burden
upon every portion of the Property; (b) runs with the Property and each portion thereof; and (c)
is binding upon each party and each successor in interest during ownership of the Property or
any portion thereof.
9.14. Counterparts. This Agreement may be executed by the parties in counterparts, which
counterparts shall be construed together and have the same effect as if all of the parties had
executed the same instrument.
9.15. Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or
brought by a party hereto for the purpose of enforcing, construing or determining the validity of
any provision of this Agreement shall be filed and tried in the Superior Court of the County of
Orange, State of California, and the parties hereto waive all provisions of law providing for the
filing, removal or change of venue to any other court.
9.16. Project as a Private Undertaking. It is specifically understood and agreed by and
between the parties hereto that the development of the Project is a private development, that
neither party is acting as the agent of the other in any respect hereunder, and that each party is
an independent contracting entity with respect to the terms, covenants and conditions contained
in this Agreement. No partnership, joint venture or other association of any kind is formed by
-25-
this Agreement. The only relationship between City and Owner is that of a government entity
regulating the development of private property and the owner of such property.
9.17. Further Actions and Instruments. Each of the Parties shall cooperate with and provide
reasonable assistance to the other to the extent contemplated hereunder in the performance of all
obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon
the request of either party at any time, the other party shall promptly execute and file or record
such required instruments and writings and take any actions as may be reasonably necessary
under the terms of this Agreement to carry out the intent and to fulfill the provisions of this
Agreement or to evidence or consummate the transactions contemplated by this Agreement.
9.18. Eminent Domain. No provision of this Agreement shall be construed to limit or restrict
the exercise by City of its power of eminent domain.
9.19. Agent for Service of Process. In the event Owner is not a resident of the State of
California or it is an association, partnership or joint venture without a member, partner or joint
venturer resident of the State of California, or it is a foreign corporation, then in any such event,
Owner shall file with the City Manager, upon its execution of this Agreement, a designation of a
natural person residing in the State of California, giving his or her name, residence and business
addresses, as its agent for the purpose of service of process in any court action arising out of or
based upon this Agreement, and the delivery to such agent of a copy of any process in any such
action shall constitute valid service upon Owner. If for any reason service of such process upon
such agent is not feasible, then in such event Owner may be personally served with such process
and such service shall constitute valid service upon Owner. Owner is amenable to the process so
served, submits to the jurisdiction of the Court so obtained and waives any and all objections
and protests thereto.
9.20. Certificate of Compliance. At any time during the term of this Agreement, any lender or
either Party may request either Party to this Agreement to confirm that (1) this Agreement is
unmodified and in full force and effect (or if there have been modifications hereto, that this
Agreement is in full force and effect as modified and stating the date and nature of such
modifications); (2) to the best of such Party's knowledge, no defaults exist under this Agreement
or if defaults do exist, to describe the nature of such defaults; and (3) any other information
reasonably requested. Each Party hereby agrees to provide a Certificate to such lender or other
Party within thirty (30) days of receipt of the written request therefor.
9.21. Authority to Execute. The person or persons executing this Agreement on behalf of
Owner warrants and represents that he or she/they have the authority to execute this Agreement
on behalf of his or her/their corporation, partnership or business entity and warrants and
represents that he or she/thcy has/have the authority to bind Owner to the performance of its
obligations hereunder.
[Signatures on following Pagesl
-26-
IN WITNESS WHEREOF, the parties hereto have executed this Development Agreement on the
last day and year set forth below.
Owner
[Owner ENTITY], a ]PLACE OF
INCORPORATION] limited liability
company
By: [FULL LEGAL NAME OF
ENTITY]
Its: Manager
Dated:
City
City OF SANTA ANA, a California municipal
corporation
M
Mayor
Dated:
ATTEST:
By:
City Clerk
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
City Attorney
IYAFA