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HomeMy WebLinkAbout1901 E. 1ST STREET PARTNERS, LLC 1 - 2007 . . . . A-2007-082 " 4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder 111111111111111111111111111111111111111111 !IIII 1111I 11I11 11111 !IIII 1111 1111 NO FE E 2007000243870 03:44pm 04/16/07 11611 A12 25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Clerk of the Council City of Santa Ana 20 Civic Center Plaza M-30 P.O. Box 1988 Santa Ana, California 92702 FREE RECORDING GOVERNMENT CODE 9 6103 DEVELOPMENT AGREEMENT by and between THE CITY OF SANTA ANA and 1901 E. 1ST STREET PARTNERS, LLC, A DELA WARE LIMITED LIABILITY COMPANY Dated: March 19, 2007 I Pi / f\\~ (\/ DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SANTA ANA AND 1901 E.Ist STREET PARTNERS, LLC, A DELAWARE LIMITED LIABILITY COMPANY This DEVELOPMENT AGREEMENT ("Agreement") is entered into between THE CITY OF SANTA ANA, a charter city and municipal corporation duly authorized under the Constitution and laws ofthe State of California ("City") and 1901 E. 1ST STREET PARTNERS, LLC, a Delaware limited liability company ("Owner" or "Property Owner"). 1. RECITALS. The Agreement is entered into with reference to the following facts: 1.1 Purpose. (1) The purpose of this Agreement is to facilitate the development of the real property located at 1901 East First Street in the City of Santa Ana, a 5.19 acre parcel of land that is located at the northeast comer of First Street and Cabrillo Park Drive, more particularly described in section 2.5 of this Agreement. (2) The Owner proposes to develop on the Property (defined in section 2.5 of this Agreement) a mixed-use project consisting of two high-rise buildings, a 22-story tower on the north portion of the site and a 23-story tower on the south portion of the site, with extensive landscaping between. These two towers will contain a total of 374 condominium units. The North Tower will contain a maximum of 183 for-sale units, and the South Tower will contain a maximum of 191 for-sale units. In addition, a total of 8,800 square feet of commercial space will be provided for the project, with 4,400 square feet to be provided within each tower. The project will utilize the existing four-level, 669 space parking structure as well as an additional 105 surface parking stalls on the site. These parking areas combined will provide 774 parking stalls. 1.2 Code Authorization. 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. City enters into the Agreement pursuant to the provisions of the Government Code and applicable City policies. The parties acknowledge: (I) the time of development. This Agreement is intended to assure adequate public facilities at (2) This Agreement is intended to assure development in accordance with City's General Plan, applicable Specific Plans and the Metro East Mixed-Use Overlay Zone. - 1 - (3) This Agreement will permit achievement of goals and objectives as reflected in the City's General Plan, all applicable Specific Plans and the Metro East Mixed-Use Overlay Zone (4) Owner is required by existing City regulations to provide mitigation for certain identified impacts and pay certain regulatory fees as conditions of approvals through the regulatory process. (5) This Agreement will allow City to realize extraordinary and significant public infrastructure facilities and other supplemental benefits in addition to those available through the existing regulatory process. (6) Many of the extraordinary and significant benefits identified as consideration to City for entering into this Agreement are of regional significance, relate to existing deficiencies in public facilities, require Owner 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. 1.3 Owner. Owner represents and warrants that it has a legal or equitable interest in the real property located in City of Santa Ana, California, legally described on Exhibit A attached hereto and incorporated herein, and graphically described on Exhibit B attached hereto and incorporated herein (defined in section 2.5 as the "Property"). The Property is currently occupied by a two-story, 75,300 square foot building that was formerly home to the Sequoia Athletic Club and the Australian Swim School, that will be demolished to accommodate the proposed project. In addition, the four-story, 669 space parking structure that currently exists on the east side of the property will remain as part of the Project (as that word is defined in section 2.7 of this Agreement). 1.4 Interest of Owner. Owner hereby represents that it has an equitable and legal interest in the Property. Owner further hereby represents that it has approved this Agreement and is authorized to enter into this Agreement. 1.5 Planning Commission - Council Hearings. On February 26 and March 12, 2007, the Planning Commission of the City ("Planning Commission"), after giving notice pursuant to Government Code Sections 65090 and 65091, held a public hearing to consider the Owner's application for this Agreement. The Planning Commission recommended to the City Council of City that it execute this Agreement. On March 19, 2007, the City Council of the City of Santa Ana ("Council"), after providing notice as required by law, held a public hearing to consider the Owner's application for this Agreement. 1.6 Council Findings. The Council finds that this Agreement is consistent with the General Plan, applicable Specific Plan(s) as well as all other applicable ordinances, plans, policies and regulations of the City. 1.7 City Ordinance. On April 2, 2007, the Council adopted Ordinance No. NS-2741 approving this Agreement. The ordinance becomes effective thirty (30) days thereafter. - 2 - 2. DEFINITIONS. In the Agreement, unless the context otherwise requires: 2.1 "Applicable Rules" means all rules, regulations, ordinances and official plans and policies of the City in force as of the Effective Date as included within the Santa Ana Municipal Code ("SAMC"), the Metro East Mixed-Use Overlay Zone, this Agreement and the Entitlements, as defined below. 2.2 "Effective Date" means May 2, 2007, the date upon which the ordinance approving this Agreement becomes effective. 2.3 "Entitlements" means Environmental Review No. 2006-01, General Plan Amendment No. 2007-01, Amendment Application No. 2007-01, Tentative Tract Map No. 2007- 01 (County Map No. 17069), Zoning Ordinance Amendment No. 2007-01, the Metro East Overlay Zone Public Realm Improvement Plan and Site Plan Review No. 2007-01. 2.4 "Reserved Powers" means the rights and authority excepted from this Agreement's restrictions on the City's police powers and which are instead reserved to the City. The Reserved Powers include the power to enact and implement rules, regulations, ordinances and policies after the Effective Date that are not in conflict with the Applicable Rules or that may be in conflict with the Applicable Rules, but: (a) prevent or remedy conditions which the City has found to be injurious or detrimental to the public health and/or safety; (b) are Uniform Codes; (c) are required to comply with mandates under state and federal laws, rules and regulations (whether enacted previous or subsequent to the Effective Date) or to comply with a court order or judgment of a state or federal court; or (d) relate to increases in development impact fees occurring after the Effective Date. 2.5 "Property Owner" or "Owner" means 1901 E. 1st Street Partners, LLC, a Delaware Limited Liability Company, being the person, persons, or entity having a legal or equitable interest in the Property, and includes successors in interest. 2.6 "Property" is the real property described in Exhibit A and referred to in Exhibit B. 2.7 "Project" is the development of the Property, a one or two phase, for-sale 374 residential condominium development with 8,800 square feet of commercial development, as generally set forth in Environmental Review No. 2006-01, General Plan Amendment No. 2007-01, Amendment Application No. 2007-01, Tentative Tract Map No. 2007-01 (County Map No. 17069), Zoning Ordinance Amendment No. 2007-01, the Metro East Overlay Zone Public Realm Improvement Plan and Site Plan Review No. 2007-01. 2.8 "Uniform Codes" means those building, electrical, mechanical, fire and other similar regulations of a City-wide scope which are based on recommendations of a multi- state professional organization and become applicable throughout the City, such as, but not limited to, the California Building Code, the California Electrical Code, the California Mechanical Code, or the California Fire Code (including those amendments to the promulgated - 3 - Uniform Codes which reflect local modification to implement the published recommendations of the multi-state organization and which are applicable City-wide) 2.9 "Utility Release" means the formal approval of the City Building Department, following its inspection, that residential unit(s) may be released for initial connection to the electrical power system, water service system, gas service system, and sanitary sewer system. Utility Release(s) do not include temporary utility service provided to any structure during construction. 3. EXHIBITS. The following documents referred to in the Agreement are attached to this Agreement and are identified as follows: Exhibit Designation Description Referred to in Section A Property Legal Description 1.3 B Property Graphical Description (Site Plan) 1.3 C Additional Offsite Mitigation Measures 5.1.1 4. GENERAL PROVISIONS. 4.1 Duration of Agreement. The term of this Agreement shall for ten (10) years. 4.2 Assignment. Owner shall have the right to transfer or assign the Property, in whole or in part, to any person, entity (public or private), partnership, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, the rights of Owner under this Agreement may not be transferred or assigned unless the written consent of the Council is first obtained and any transfer or assignment of the rights under this Agreement shall include in writing the assumption of the duties, obligations, and liabilities arising from this Agreement if the City grants written consent to transfer the rights. Nor shall the rights of the Owner hereunder be subject to assignment by attachment, execution, or proceedings under any provision of the Bankruptcy Act, and any such assignment or transfer of the rights under this Agreement shall be wholly void and of no force and effect unless such written consent thereto be obtained from the Council. A transfer or assignment of the rights under this Agreement without the consent of the City shall not relieve Owner of any accrued duty, obligation or liability to City. No consent shall be required for sale of units to condominium unit buyers. During the term of this Agreement, any approved assignee or transferee of the rights under this Agreement shall observe and perform all of the duties and obligations of Owner contained in this Agreement as such duties and obligations pertain to the portion of the Property transferred or assigned. Any and all approved successors and assignees of Owner shall have all of the same rights, benefits, duties, obligations, and liabilities of Owner under this Agreement. If the Property is subdivided, any subdivided parcel may be sold, mortgaged, hypothecated, -4- assigned, or transferred to persons for development by them in accordance with the provisions of this Agreement. Upon assignment or transfer of the rights of Owner under this Agreement, the obligations of Owner and the transferee or assignee shall be joint and several. Individual condominium unit buyers shall not have any liability or obligation pursuant to that Agreement. 4.3 Amendment or Cancellation of Agreement. This Agreement may be amended from time to time or cancelled by the mutual consent of the parties, but only in the same manner as its adoption by an ordinance as set forth in Government Code Section 65868. The term "Agreement" or "Development Agreement" as used herein shall include any amendment properly approved and executed. 4.4 Enforcement. Notwithstanding Government Code Section 65865.4, this Agreement is enforceable by any party to the Agreement in any manner provided by law. The remedies provided in Section 7.4 of this Agreement shall not include, and City shall not be liable for, any action in damages or any costs or attorney's fees resulting from any dispute, controversy, action or inaction, or any legal proceeding arising out of this Agreement. 4.5 Hold Harmless. Owner agrees to and shall indemnify, defend (through its own counsel) and hold City, its officers, agents, employees, consultants, and representatives harmless from liability for damages, attorneys fees, restitution, judicial or (to the extent legally possible) equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from construction activities with respect to the Project by the Owner or their contractors, subcontractors, agents, employees, or other persons acting on their behalf. Owner further agrees to indemnify, defend (through its own counsel) and hold City, its officers, agents, employees, consultants, and representatives harmless from any Litigation, as hereinafter defined. For purposes of this paragraph, "Litigation" shall mean shall mean any lawsuit, action or cross-action, challenging the validity of this transaction, the Project as defined in Section 2.7, or any portion thereof or the rights of either party hereunder and/or the rights of either party to engage in the acts and transactions contemplated by this Agreement. Notwithstanding any other provision of this Agreement, this indemnity and duty to defend shall be limited as follows: (1) Owner shall have no responsibility to defend the City under this section for any aspect of Litigation challenging Amendment Application 2007-0 I, General Plan Amendment No. 2007-01, and/or Zoning Ordinance Amendment No. 2007-01 (the "Overlay"). (2) In the event the Litigation results in a judgment and/or award of damages and/or attorneys fees related to the Overlay but in no way related to the application of the Overlay to the Property, Owner shall have no responsibility to indemnify the City therefor. (3) In the event of any Litigation the parties hereby agree to affirmatively cooperate in defending said action. (4) Owner shall have approval of any settlement if, (i) it will affect Owner's project, or (ii) Owner will be required to pay (or reimburse) any amounts - 5 - (regardless of type) in connection with the settlement (including attorneys' fees and cost). (i) If City determines to settle over Owner's objections, then Owner may upon thirty (30) days written notice terminate defense of the action. (ii) If City rejects a settlement offer that Owner deems reasonable, then Owner may upon thirty (30) days written notice terminate defense of the action. (5) Owner shall be allowed to terminate its defense if it determines to abandon defense of its project application; provided, however, that in such circumstance Owner shall be solely liable for award, if any, of costs or attorneys' fees to plaintiff/petitioner incurred prior to the effective date of termination. 4.6 Binding Effect of Agreement. To the extent not otherwise provided in Section 4.2 of this Agreement, the burdens of the Agreement bind, and the benefits of the Agreement inure, to the parties' successors in interest. 4.7 Relationship of the Parties. The contractual relationship between City and Owner arising out of the Agreement is one of independent contractor and not agency. This Agreement does not create any third party beneficiary rights. 4.8 Notices. Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: If to City, to: City Manager City of Santa Ana 20 Civic Center Plaza M-3l P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647-6954 and, City Attorney City of Santa Ana 20 Civic Center Plaza M-29 P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647-6515 - 6 - If to Owner, to: 1901 E. 1st Street Partners, LLC c/o NDC Development 4100 MacArthur Boulevard, Suite 150 Newport Beach, California 92660 Attention: Chief Legal Officer telefacsimile (949) 622-9019 and, Hans Van Ligten Rutan & Tucker, LLP P.O. Box 1950 Costa Mesa, California 92626-1950 telefacsimile (714) 5436-9035 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail, any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by telefacsimile, any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting telefacsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County, or city holidays shall be excluded. 5. DEVELOPMENT OF THE PROPERTY. 5.1 City Obligations. In consideration for Owner entering into this Agreement and performing its obligations hereunder and in order to effectuate the purposes and intentions set forth in this Agreement and the Development Agreement Act, the City hereby agrees during the Term as follows: 5.1.1 Vested Rights to Develop. Owner is hereby granted the vested right to develop the Project subject to the terms and conditions of the Applicable Rules and the Reserved Powers. 5.1.2 Non-application of Changes in Applicable Rules. Any change in, or addition to, the Applicable Rules, including, without limitation, any change in the General Plan, zoning ordinance, subdivision ordinance, or building regulation adopted or becoming effective after the Effective Date, including, without limitation, any such change by means of ordinance, initiative, referendum, resolution, motion, policy, order or moratorium, initiated or instituted for any reason whatsoever, however denominated, and adopted by the City Council, Planning Commission or any City Agency, or by the electorate, as the case may be, which would, absent this Agreement, otherwise be applicable to the Project and which would conflict with the Applicable Rules, shall not be applied to the Project unless such changes represent an - 7 - exercise of the City's Reserved Powers or are othelWise expressly allowed by this Agreement. In the event that state or federal laws or regulations enacted after this Agreement has been entered into, prevent or preclude compliance with one or more 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. 5.1.3 Reserved. 5.1.4 Agreed Changes and Other Reserved Powers. This Agreement shall not preclude application to the Project of rules, regulations, ordinances and officially adopted plans and policies in conflict with the Applicable Rules where such additional rules, regulations, ordinances and officially adopted plans and policies (a) are mutually agreed to in writing by Owner and the City, or (b) result from the Reserved Powers. 5.1.5 Subsequent Development Approvals. The City shall require Owner to obtain only those Subsequent Development Approvals that are required by the Applicable Rules or the Reserved Powers. City hereby agrees that it shall condition any Subsequent Development Approvals based only on the Applicable Rules and/or Reserved Powers. 5.1.6 Moratoria. In the event an ordinance, resolution or other measure is enacted, whether by action of the City, by initiative, or othelWise, which relates to the rate, amount, timing, sequencing, or phasing of the development or construction of the Project on all or any part of the Property, City agrees that, unless required by applicable state law, such ordinance, resolution or other measure shall not apply to the Project, Property or this Agreement, unless such changes are adopted pursuant to the City's exercise of its Reserved Powers or other applicable provision of this Agreement. 5.1.7 Timing of Development. The parties acknowledge that Owner cannot at this time predict when or if the Property will be developed. Such decisions depend upon numerous factors which are not within the control of Owner such as market orientation and demand, interest rates, absorption, completion and other similar factors. Because the California Supreme Court held in Pardee Construction Co. v. City of Camarillo (1984) 37 Cal. 3d 465, that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over such parties' agreement, it is the parties' intent to cure that deficiency by acknowledging and providing that except as provided in and subject to Section 5.11, Owner shall have the right to develop the Property at such rate and at such time as Owner deems appropriate within the exercise of its subjective business judgment. 5.1.8 Additional Offsite Mitigation Measures. The offsite mitigation measures (i.e., which clarify mitigation measures set forth in the Project entitlements) which must be constructed by Owner are as set forth in Exhibit C to this Agreement. All funds or costs for offsite mitigation measures required pursuant to the approvals set forth in section 2.4 of this Agreement shall be paid or security provided therefor in conformance with the provisions of the Subdivision Map Act, no later than recordation of the final subdivision map for the Project, or issuance of the first building permit for the Project, whichever comes first. - 8 - 5.1.9 Irrevocable Offer to Dedicate Easements or Land To Implement Public Realm Improvement Plan. On the face of the final map for the Project, or contemporaneous with offering the final map for filing with the County if it is not placed on the final map, Owner shall execute an irrevocable offer to dedicate to the City such property interest (easement for the breezeway/lane along the north side and fee title along the south side of the Project) as is necessary to effectuate the Metro East Public Realm Improvement Plan adopted contemporaneously with the Project. Owner shall not be required to dedicate additional land pursuant to any amendments to said Plan which mayor may occur following its adoption. Owner shall be entitled to an offset against its obligations under section 5.7 of this Agreement for such property. 5.2 Exclusion from Existing Rules, Regulations and Policies. a. Pursuant to Government Code Section 65866, and Pardee Construction Co. v. City of Camarillo (1984) 37 Ca1.3d 465, 208 Ca1.Rptr. 228, 690 P.2d 701, City retains the right to enact police power regulations on matters not covered by section 5.1 of this Agreement, including without limitation: b. Municipal laws and regulations which do not interfere with Owner's vested rights to develop and use the Property in accordance with section 5.1 of this Agreement Owner and its successors and assigns and all persons and entities in occupation of any portion of the Property shall comply with such non-conflicting laws and regulations as may from time to time be enacted or amended hereafter. Specifically, but without limitation on the foregoing, such non-conflicting laws and regulations include the following: (1) Taxes, assessments, fees and charges, except as otherwise specifically provided in this Development Agreement; (2) Building, electrical, mechanical, fire and similar codes based upon uniform codes incorporated by reference into the Santa Ana Municipal Code; (3) Laws, including zoning code provisions, which regulate the manner in which business activities may be conducted or which prohibit any particular type of business activity on a city-wide basis; and (4) Procedural rules of general City-wide application. 5.3 Construction Standards and Specifications. The construction standards (e.g., the Uniform Codes) and specifications for all Project construction shall be subject to applicable construction standards and guidelines in effect at the time that any development approval shall be sought for the Project or any unit or structure contained within the Project. 5.4 FAA Approval. Owner shall obtain and maintain, during the term of the agreement, any and all necessary approvals from the FAA for the Project. Should such approvals lapse, and not be reinstated or reapproved prior to the issuance of the first building permit, the City shall have the right to terminate the agreement. - 9 - 5.5 Processing Fees. All fees and charges intended to cover City costs associated with processing development of the Property, including but not limited to fees and charges for applications, processing, inspections, plan review, plan processing, and/or environmental review, which are existing or may be revised or adopted during the term of this Agreement, shall apply to the development of the Property. 5.6 Amendments or Additions to Citywide Fee Programs. This Agreement shall not preclude the inclusion of and changes to fee programs, taxes whether special or general, or assessments (hereafter collectively referred to as "fees") adopted by the City after the effective date of this Agreement, which shall be applicable to the Project or the Property provided that they (1) are standard fees applicable to all development in the City (although actual fee rates may vary within the City where bona fide Citywide fee zones have been established), (2) are not applicable primarily or only to this Project, or (3) are not imposed to either (a) mitigate, offset or compensate for Project impacts which were analyzed in the environmental impact report prepared for the Project, or (b) duplicate any project design features conditions of approval, Agreements, or mitigation measures contained in this Agreement. 5.7 Community Facilities District or Other Financing Tool. Owner agrees to petition for, and fully support (including voting to establish, if required), the establishment of or annexation into a Community Facilities District or similar financing mechanism covering the Property, in order to fund the proposed project's fair share of eligible items, e.g., the costs of implementing the Metro East Public Realm Improvement Plan; provided, however that the total effective tax rate (including but not limited to regular property or ad valorem taxes, special taxes, benefit assessment or other imposition) shall not exceed an annual levy of one and six-tenths percent (1.6%) of the Property's valuation, as improved. Owner and City shall cooperate in good faith to designate those improvement and/or fees to be funded by the Community Facilities District or other mechanism. Owner shall have the right to review and approve any final list of said facilities and/or fees; provided, however that Owner's approval may not be unreasonably withheld. 5.7.1 Phasing of Project. The parties agree and acknowledge that the Project may be built in up to two (2) phases (with one tower in each phase), but that, except as otherwise expressly stated herein, all conditions and mitigation measures shall be implemented as part of the initial phase; provided, however that Owner may propose to delay to the second phase on-site conditions (e.g., sidewalks) that could be damaged by future construction. Prior to issuance of the first building permit for the project, Owner shall submit a proposed Phasing Plan to the City, for review and approval by the City's Planning Commission. The proposed Phasing Plan shall contain those items Owner deems necessary, but shall include the timing for first and second phase construction and interim site improvements (i.e., landscaping, internal circulation) between the phases. The approved Phasing Plan must be implemented within 6 months after completion of the first phase (i.e., issuance of first Utility Release). 5.7.2 Inelusionary Housing. Owner shall pay to the City the sum of Three Thousand Dollars ($3,000) for each Residential Unit contained in each phase ("Inclusionary Housing Fee"). The Inclusionary Housing Fee shall be paid with respect to each phase at such time as 95% of the residential units within such phase have received Utility Releases. The Inclusionary Housing Fee shall be used by the City for planning (including but - 10- not limited to preparation of one or more elements of its general plan or for zoning amendments), conceptual design, final design, bid preparation, award of bid, property appraisal, property acquisition, relocation, lost goodwill, and/or construction of new or substantially rehabilitated existing affordable housing in the City. 5.7.3 In-Lieu Park Development Fee. The Owner shall pay an in-lieu park development fee in the amount of One Million Four Hundred Fifty Thousand Dollars ($1,450,000) with respect to the Project ("In-Lieu Park Development Fee") payable pro rata, which pro rata fraction shall be determined based on a fraction the numerator of which is the total number of residential units in a phase and the denominator of which is the total number of residential units in the Project. The pro rata In-Lieu Park Development Fee shall be paid prior to issuance of the building permit for each phase. The City shall use said fees for new parkland, capital improvements at existing parks, and deferred maintenance at existing parks (up to a maximum of fifty percent of amount of the fee). If not used or appropriated this fee shall be returned to Developer, consistent with the provisions of (and subject to the exceptions contained within) the California Mitigation Fee Act, Government Code ~ 66000 et seq. Owner may propose in future an alternative in-lieu of the provisions of this section which fully satisfies this requirement, and if such proposal is consistent with City's park plans and standards, the City shall consider such proposal in good faith; provided, however, that if approved such proposal shall be the subject of an amendment to this Agreement entered into pursuant to Government Code section 65868. 5.7.4 Reserved 5.7.5 Covenants, Conditions, and Restrictions. Covenants, Conditions, and Restrictions (CC&R's) must be provided and approved by the Planning and Building Agency's Executive Director for the project prior to the issuance of the first building permit. Such CC&R's must contain at a minimum, the following: (1) No more than four residents per unit, except that for three-bedroom units, there shall be no more than five residents per unit. (2) All initial sales of residential units by Owner shall include a covenant that the buyer may not re-sell the unit for a period on one (1) year. (3) No home occupancy shall be permitted in a unit, except III accordance with section 41-192 et seq. of the Santa Ana Municipal Code. (4) Assignment of repair of perimeter walls and common areas, including landscaping, will be specified in the CC&R's in the event of damage. (5) Disclosure and release: CC&R's shall provide notice to prospective owners of the urban character of the City and this area, including but not limited to the permitted uses of the property and buildings in the immediate area of the development (e.g., Xerox Towers, State Compensation Insurance Fund, 1-5 and SR-55 freeways), and surrounding property zoned and/or devoted to commercial use, and shall provide a release of all claims against the City which may arise from or relate to the disclosed matters. -11- (6) Terms and Content: 1. CC&R's are to be in effect for an initial period of ninety- nine years and then automatically expanded for successive one hundred year periods unless terminated by the joint consent of the City and not less than seventy five percent ofthose entitled to vote. ii. Any proposed modifications to the CC&R's will require approval by the Agency's Executive Director. 111. CC&R's shall provide a significant financial penalty (i.e., the maximum permitted by law) that shall be imposed by the Home Owner's Association to any member who violates these provisions 5.8 Reserved. 5.9 Reserved. 5.10 Conditions of Discretionary Approva]s. The requirements imposed as conditions of any discretionary approval received through the City's existing regulatory process shall be governed by the terms of those approvals, and in no event shall such conditions be affected by the termination, cancellation, rescission, revocation, or default or expiration of this Agreement (although such conditions must comply with the Applicable Rules). 5.11 Compliance With Governmenta] Requirements. Owner shall carry out the design, construction, and operation of the Project in substantial conformity with all applicable laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the United States, the State of California, the County of Orange, the City, or any other political subdivision in which the Property is located, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the City, the Owner or the Property, including all applicable federal, state, and local occupation, safety and health laws, rules, regulations and standards, applicable state and labor standards, applicable prevailing wage requirements, the City zoning and development standards, City permits and approvals, building, plumbing, mechanical and electrical codes, as they apply to the Property and the Project, and all other provisions of the City and its Municipal Code (as they apply to the Property and the Project), and all applicable disabled and handicapped access requirements, including, without the limitation, the Americans With Disabi]ity Act, 42 U.S.C. ~ ]2]01 et seq., Government Code ~ 4450 et seq., and the Unruh Civil Rights Act, Civil Code ~ 5] et seq. ("Governmenta] Requirements"). 6. ANNUAL REVIEW. 6.] City and Owner Responsibilities. City shall, at least every twelve (12) months during the term of this Agreement, review the extent of good faith substantial compliance by Owner with the terms of this Agreement. Pursuant to Government Code Section 65865.1, as amended, Owner shall have the duty to demonstrate by substantia] evidence its good faith compliance with the terms of the Agreement at the periodic review. - 12- 6.2 Review Letter. If Owner is found to be in compliance with the Agreement after annual review, City shall, upon written request by Owner, issue a Review Letter to Owner (the "Letter") stating that based upon information known or made known to the City Council, the City Planning Commission and/or the City Planning Director, the Agreement remains in effect and Owner is not in default. Owner may record the Letter in the Official Records of the County of Orange. 6.3 Failure of Periodic Review. City's failure to review at least annually Owner's compliance with the terms and conditions of this Agreement shall not constitute or be asserted by any party as a breach of the Agreement by Owner or City. 7. DEFAULT. 7.1 Events of Default. Property Owner is in default under this Agreement upon the happening of one or more of the following events or conditions: (1) If a warranty, representation, or statement made or furnished by Property Owner to the City is false or proves to have been false in any material respect when it was made; (2) A finding and determination made by the City Council following a periodic review under the procedure provided for in Government Code Section 65865.1 that upon the basis of substantial evidence the Property Owner has not complied in good faith with one or more of the terms or conditions of this Agreement; (3) Failure to comply with Governmental Requirements; (4) Any other event, condition, act, or omission which materially interferes with the intent and objectives ofthis Agreement. 7.2 Procedure upon Default. (1) Upon the occurrence of default, City shall give Property Owner (the "defaulting party") thirty (30) days written notice specifying the nature of the alleged default and, when appropriate, the manner in which said default may be satisfactorily cured. After proper notice and expiration of said thirty (30) day cure period without cure, City may terminate or amend this Agreement in accordance with the procedure adopted by the City as to all defaults that may be cured within said thirty (30) day cure period. For defaults that cannot be cured within said thirty (30) day cure period, City may terminate or amend this Agreement in accordance with the procedure adopted by the City should at any time Owner fail to diligently proceed in curing the default. Failure or delay in giving notice of default shall not constitute a waiver of any default, nor shall it change the time of default. (2) City does not waive any claim of defect in performance by Property Owner, if on periodic review the City does not propose to modifY or terminate this Agreement. - 13 - (3) Non-performance shall not be excused because of a failure of a third person. (4) An express repudiation, refusal, or renunciation of the contract, if the same is in writing and signed by the Property Owner, shall be sufficient to terminate this Agreement and a hearing on the matter shall not be required. (5) Adoption of a law or other governmental activity making performance by the Owner unprofitable or more difficult or more expensive does not excuse the performance of the obligation by the Property Owner. (6) All other remedies at law or in equity which are not inconsistent with the provisions of this Agreement are available to the parties to pursue in the event there is a breach. 7.3 Damages upon Termination. In no event shall Property Owner be entitled to any damages against City upon termination of this Agreement. 7.4 Institution of Legal Action. In addition to any other rights or remedies, either party may institute legal action to cure, correct, or remedy any default or breach, to specifically enforce any covenants or Agreements set forth in the Agreement, or to enjoin any threatened or attempted violation of the Agreement; or to obtain any remedies consistent with the purpose of the Agreement. Legal actions shall be instituted in the Superior Court of the County of Orange, State of California, or in the Federal District Court in the Central District of California, Southern Division. 8. MORTGAGEE PROTECTIONS 8.1 Right to Owner/Notice/Multiple Mortgagees. Owner shall have the absolute right to encumber Owner's right, title and interest in, to and under this Agreement and the Property pursuant to one or more Mortgages. Because certain portions of the Project may be developed by one or more assignees, the Parties acknowledge and agree that different Mortgages may encumber the Property and that there may be a separate Mortgage in effect with respect to separate parcels within the Property. It is the intention of the Parties that the rights and protections granted in this Section 8 to each Mortgagee shall only apply to the parcels upon which such Mortgagee's Mortgage is a lien (each a "Mortgage Parcel"), and to the rights, privileges and obligations under this Agreement relating to such Mortgage Parcel. 8.2 Notice of Breach to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Owner as provided herein, whenever the City delivers any Notice or demand to Owner with respect to any Breach by Owner under this Agreement and if Owner fails to cure the Breach within the time set forth herein, the City shall deliver to each Mortgagee a copy of such notice or demand accompanied by a writing to the affect that Owner has failed to cure a Breach ("Mortgagee Notice"); provided that Owner or Mortgagee has provided City with addresses for such purpose. Each such Mortgagee shall (insofar as the rights granted by the City are concerned) have the right, at its option, within thirty (30) days after the receipt of the Mortgagee Notice, to cure or remedy or commence to cure or remedy and thereafter to - 14- pursue with due diligence the cure or remedy of any such Breach and to add the cost thereof to the mortgage debt and the lien of its mortgage; provided, however if the Mortgagee is legally prevented from curing such Breach because of a bankruptcy by the Owner then the thirty (30) day period shall be tolled until such bankruptcy is confirmed or rejected. Nothing contained in this Agreement shall be deemed to permit or authorize such Mortgagee to take advantage of Owner's rights hereunder, or any portion thereof, without first having expressly assumed Owner's obligations to the City by written agreement reasonably satisfactory to the City. It is understood that a Mortgagee shall be deemed to have satisfied the thirty (30) day time limit set forth above for commencing to cure or remedy a Owner default which requires title and/or possession of the Site (or portion thereof) if and to the extent any such Mortgagee has within such thirty (30) day period commenced proceedings to obtain title and/or possession and thereafter the Mortgagee diligently pursues such proceedings to completion and cures or remedies the Breach, provided that, in such event, all noncurable Defaults shall be waived. 8.3 Mortgagee Not Obligated Under the Agreement. Unless a Mortgagee expressly assumes Owner's Obligations to the City in accordance with 8.2 above, no Mortgagee shall in any way be obligated by the provisions of this Agreement, nor shall any covenant or any other provision in this Agreement be construed so to obligate such Mortgagee. Nothing in this Agreement shall be deemed to construe, permit or authorize any such Mortgagee to devote the Mortgage Parcel to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 8.4 No Liability. No Mortgagee shall have any personal liability beyond its interest in the Mortgage Parcel acquired by it through enforcement of its Mortgage for the performance or payment of any covenant, liability, warranty or obligation hereunder, and the City agrees that it shall look solely to the interests of such Mortgagee in such Mortgage Parcel for payment or discharge of any such covenant, liability, warranty or obligation. 8.5 No Amendment or Termination. This Agreement shall not, without the prior written consent of all Mortgagees holding Mortgages on each portion of the Property to be affected thereby, be amended so as to (a) terminate this Agreement prior to the expiration of the Term hereof (except as provided in Section 8.4 above with respect to such Property); or (b) change any provision of this Agreement which, by its terms is specifically for the benefit of Mortgagees or specifically confers rights on Mortgagees. No amendment to this Agreement affecting the Property or any part thereof, made without the consent of any Mortgagee holding a Mortgage on such Property, or any part thereof, shall be binding upon such Mortgagee or its successors in interest should it become a party hereto. 8.6 Condemnation or Insnrance Proceeds. Nothing in this Agreement shall impair the rights of any Mortgagee, pursuant to its Mortgage, to receive insurance and/or condemnation proceeds which are otherwise payable to Owner granting such Mortgage. 8.7 Title by Foreclosnre. Except as otherwise set forth herein, all of the provisions contained in this Agreement applicable to any of the Mortgage Parcel shall be binding on and for the benefit of any person who acquires title to the property, or any part thereof, by foreclosure under a Mortgage or transfer by deed in lieu. 8.8 Delegation to Mortgagee. Owner may delegate and/or assign irrevocably to any Mortgagee the non-exclusive authority to exercise any or all of Owner's obligations and/or rights - 15 - hereunder with respect to the Mortgage Parcel, but no such delegation shall be binding upon the City unless and until either Owner or such Mortgagee shall give to the City a true and correct copy of a written instrument effecting such delegation. Such delegation of authority may be effected by the terms of the Mortgage itself, in which case service upon the other Party of an executed counterpart or confonned copy of said Mortgage, together with written notice specifying the provisions therein which delegates such authority to said Mortgagee, shall be sufficient to give such other Party notice of such delegation. No such delegation or assignment shall relieve the Owner of that Mortgage Parcel of any of its obligations hereunder with respect to such Mortgage Parcel. 8.9 No Obligation to Cure. Nothing herein contained shall requIre any Mortgagee to cure any default of Owner referred to above. 8.10 Separate Agreement. The City shall, upon request, execute, acknowledge and deliver to each Mortgagee requesting same, an agreement prepared at the sole cost and expense of Owner, in form satisfactory to such Mortgagee and the City, between the City and the Mortgagees, agreeing to all of the provisions hereof, provided Owner pays for all legal and other consulting costs incurred by City in reviewing same. 8.11 Estoppel Certificate. Within thirty (30) days after written request therefore, the City shall execute and deliver to any proposed Mortgagee in connection with its new Mortgage and to such Mortgagee thereafter from time to time an estoppel certificate in form and substance satisfactory to Owner and such Mortgagee ("Estoppel Certificate"). The City hereby agrees to reasonably cooperate in including in any such Estoppel Certificate from time to time any provision which may reasonably be requested by any proposed Mortgagee for the purpose of implementing the Mortgagee protection provisions contained in this Section 8 and allowing such Mortgagee reasonable means to protect or preserve the lien and security interest of its Mortgage hereunder, clarifying the non-applicability of the provisions of this Agreement to such Mortgagee as it relates to parcels other than the Mortgage Parcel, and/or such other terms and provisions as are customarily required by Mortgagees (taking into account the customary requirements of their participants, syndication partners or ratings agencies) in connection with any such financing; provided, however, that no such Estoppel Certificate shall in any way materially adversely affect any rights of the City or increase any obligations of City under this Agreement. 8.12 Conflicts. If there is any conflict between this Section 8 and any other provision contained in this Agreement, this Section 8 shall control. 9. MISCELLANEOUS PROVISIONS. 9.1 Rules of Construction. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory; "may" is permissive. If there is more than one signer of this Agreement, their obligations are joint and several. 9.2 Entire Agreement, Waivers and Amendments. This Agreement constitutes the entire understanding and Agreement of the parties with respect to the matters set forth in this Agreement. This Agreement supersedes all negotiation or previous Agreements between the parties respecting this Agreement. All waivers of the provision of this Agreement must be in writing and signed by the appropriate authorities of City or of Owner. All amendments to this Agreement must be in writing signed by the appropriate authorities of City - 16- and Owner, in a form suitable for recording in the Official Records of Orange County, California. Upon the completion of performance of this Agreement or its revocation or termination, an appropriate Certificate of Completion acknowledging such occurrence signed by the appropriate agents of Owner and City shall be recorded in the Official Records of Orange County, California. 9.3 Project as a Private Undertaking. It is specifically understood by the parties that: (a) the Project is a private development for purposes of Government Code Section 65864 et seq.; (b) City has no interest in or responsibilities for or duty to third parties concerning any improvements to the Property or in connection with the Project; and (c) Owner shall have the full power and exclusive control of the Property subject to the obligations of Owner set forth in this Agreement. 9.4 Incorporation of Recitals. The Recitals set forth in Section I of this Agreement are part of this Agreement. 9.5 Captions. The captions of this Agreement are for convenience and reference only, and shall not define, explain, modify, construe, limit, amplify, or aid in the interpretation, construction, or meaning of any of the provisions of this Agreement. 9.6 Consent. Where the consent or approval of a party is required in or necessary under this Agreement, the consent or approval shall not be unreasonably withheld. 9.7 Covenant of Cooperation. The parties shall cooperate with, deal with each other in good faith, and assist each other in the performance of the provisions of this Agreement. 9.8 Time of Essence. Time is of the essence for each provision of this Agreement of which time is an element. 9.9 Conflicts of Law. In the event that state or federal laws or regulations enacted after this Agreement has been entered into or the action or inaction of any other affected governmental jurisdiction prevent or preclude compliance with one or more provisions of this Agreement or require changes in plans, maps, or permits approved by the City, the parties shall provide the other party with written notice of such state or federal restriction, provide a copy of such regulation or policy, and a statement of conflict with the provisions of this Agreement. The parties shall, within thirty (30) days, meet and confer in good faith in a reasonable attempt to modify this Agreement to comply with such federal or state law or regulation. Thereafter, regardless of whether the parties reach an Agreement on the effect of such federal or state law or regulation upon the Agreement, the matter shall be scheduled for hearing before the Council. Public notice of such hearing shall be given pursuant to Government Code Section 65854.5. The City Council, at such hearing, shall determine the exact modification or suspension which shall be necessitated by such federal or state law or regulation pursuant to Government Code Section 65869.5. At the hearing Owner shall have the right to offer oral and written testimony. - 17 - 9.10 Recording. The City Clerk shall cause a copy of this Agreement to be recorded with the Office of the County Recorder of Orange County, California, within ten (10) days following the effective date ofthis Agreement. IN WITNESS WHEREOF, this Agreement has been executed by the City of Santa Ana and by Property Owner. . ll1A Dated thiS ~ Clay of A~(( f J ,2007. THE CITY OF SANTA ANA ATTEST: ,. .~-J/ . ~~-._-, /.'7 -1tL ..cA_~~-<--Llc~-:'i PATRICIA E. HEALY . ) Clerk of the Council &Z/v/.c2~ DAVID N. REAM City Manager Approved as to Form: /J /A fOSrll w. FLE City ttorney , . (signatures continued on next page) - 18 - (signatures continued from prior page) 1901 E. 1ST STREET PARTNERS, LLC, a Delaware limited liability company By: CPH UI I, LLC, a Delaware limited liability company, Its Member By: Capital Pacific Holdings, Inc. , a Delaware c oration, Its Sole M r By: Name: Title: By: ~/ Name:/Matt ew C. Kern Title: Chief Financial Officer - 19 - STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) On. this ! ~.-tK day of j~2rv\ 1 200-1, before me, L~/l \:)(, {V'\;;ytl;;Z, a Notary Public in and for said state, personally appeared -tl~'" f\ N. "\:Qo.\'V\ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the City Manager of THE CITY OF SANTA ANA, the charter city that executed the within instrument, known to me to be the person who executed the within instrument on behalf of the municipal corporation therein named, and acknowledged to me that such municipal corporation executed the within instrument pursuant to its bylaws or a resolution of its City Council. WITNESS my hand and official seal. " '1 ., NLljl!'-. . Vv-~"'.J'~'r.-' NOTARY PUBLIC r@~~~l <:;' NotarY Public. California i :II ORANGE COUNTY !:! :c '. My COmmIs8Ion Explrao ~ t SE~~~~R 28, ~ . ~~ STATE OF CALIFORNIA ) ) ss. ) COUNTY OF ORANGE On this I q~ day of (Y\uxl (/') 200~, before me, ~i\f,lC C:ll ('Plio} 1-, a Notary Public in and for said state, personally appeared U[, (] .It\;' \ JL I f12>itlJ , personally knowp to me (U1 proved to-me on the-b1:rsrs of. Gah~faclery e'.,4E1eHee) to be theCil1ff l cqo..l C1h(;'\of ('PH LCI I, II c ., the l tL:\'\.t Vi that executed the within instrument, known to me to be the person who executed the within instrument on behalf of the municipal corporation therein named, and acknowledged to me that such municipal corporation executed the within instrument pursuant to its bylaws or a resolution of its Board. WITNESS my hand and official seal. J- - - - :~~~~-I I.' NoIary PublIc . CalIIomIa Orange Cowllv MvComm.__Jan 10.201 _ _ _ _ _ _ _ _ _ _ _ _of " 1 f\' I' rl.~.()1C L, 'v'-- NOTARYP LIC 7 - 20- STATE OF CALIFORNIA ) ) ss. COUNTY OF ORANGE ) ,'. ' On this \C,~ day of \\\Cl\/[ V\ 2001, before me, ~\\~t:~ ll\L(~L\ " a Notary Public in and for said state, personally appeared 1\ _C heLLA \ l" k_J'i n , personally known to me fer pf.lJued to m" on the basis. of satisfa~luIY ",iEleace) to be the C\l\tC fh\C[il( liLl C\~iIt'of CP\\ ell I I LlL "the LlL'.\; .~ that executed the within instrument, known to me to be the person who executed the within instrument on behalf of the municipal corporation therein named, and acknowledged to me that such municipal corporation executed the within instrument pursuant to its bylaws or a resolution of its Board. WITNESS my hand and official seal. lLIJ~LrU__ "'-lz.Zj l.- - - - :=~efu:3-1 - NcllaIV PublIC . CalIlOmIa \ ~CQ1m~~~101~ ------------ - 21 - . , EXHIBIT A Property Legal Description THAT PORTION OF LOT 15 OF THE MAYBURY TRACT, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 36, PAGE 65 OF MISCELLANEOUS MAPS, RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS: PARCEL NO, 1 AS SHOWN ON A MAP FILED IN BOOK 98, PAGE 30 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, AS AMENDED BY A CERTIFICATE OF CORRECTION RECORDED OCTOBER 20,1977 IN BOOK 12424, PAGE 543 OF OFFICIAL RECORDS, EXCEPTING THEREFROM THAT PORTION OF PARCEL 1 AS SHOWN ON A MAP FILED IN BOOK 98, PAGE 30 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA, SITUATED IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWESTERLY CORNER OF SAID PARCEL 1; THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL 1 NORTH 89031'52" EAST 34.14 FEET; THENCE NORTH 45019'14" WEST 38.26 FEET TO A LINE PARALLEL WITH AND 7.00 FEET EASTERLY FROM THE WESTERLY LINE OF SAID PARCEL 1; THENCE SOUTH 89049'39" WEST 7.00 FEET TO SAID WESTERLY LINE; THENCE ALONG SAID WESTERLY LINE SOUTH 0 010'21" EAST 27.18 FEET TO THE POINT OF BEGINNING, AS GRANTED TO THE CITY OF SANTA ANA, IN DEED RECORDED SEPTEMBER 18, 1990 AS INSTRUMENT NO. 90-493896, OF OFFICIAL RECORDS, Orange County Assessor's Parcel Number 400-081-08 - 22- ZAT ON EXHIBIT B Property Site Plan r<WUJi ;CW0R 'w "" 1t c:. '" F~ ~ c:. ."J ."J 1t '" t3 11 Ex/(n'N.11 SfRUC?JRC - 23 - II '. . EXHIBIT C Additional Offsite Mitigation Measures Improvement Location Pay fair share of all costs to acquire required right of way for and construct eastbound right turn lane Fourth Street at Southbound SR-55 on-ramp (Tustin Avenue to SR-55) In order to implement & satisfy mitigation measure MM 4.12 2, construct raised "pork- chop" island to Public Works Agency specifications First Street and Cabrillo along the project frontage Note: For off site public improvements constructed by Owner (i.e., "pork-chop" island), it shall pay all workers employed in connection with the work not less than the prevailing rates of wages, as provided in the statutes applicable to public works contracts, including without limitation SS 1770-1780 of the California Labor Code. - 24-