HomeMy WebLinkAbout65D - 3RD AND BROADWAY AD HOCREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
FEBRUARY 21, 2017
TITLE:
THIRD AND BROADWAY PROPOSED
DEVELOPMENT UPDATE AND COUNCIL
AD HOC COMMITTEE RECOMMENDATION
fSTRATEGIC PLAN NO. 3, SA)
0 W(A �Tj F,11 kJ fft4
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
0220�
[] As Recommended
0 As Amended
El Ordinance on 1 " Reading
El Ordinance on 2nd Reading
El implementing Resolution
M Set Public Hearing For
ONTINUED TO
FILE NUMBER
1. Discuss the Council Ad Hoc Committee Recommendation to enter into an Exclusive
Negotiating and Reimbursement Agreement with Caribou Industries.
2. Direct staff to continue negotiations based upon the draft Disposition and Development
Agreement proposed on July 5, 2016.
3. Direct staff to continue negotiations of a draft Disposition and Development Agreement
based upon the Resolution proposed by Caribou Industries.
DISCUSSION
Background:
On August 5, 2013 the City Council authorized the Community Development Agency to release a
Request for Qualifications inviting development proposals for an innovative, high quality project at
the Third and Broadway parking structure site (Exhibit 1 -August 3, 2017 RFCA).
On September 16, 2014 the City Council authorized the Planning and Building Agency to release
a modified Request for Qualifications for the Third and Broadway parking structure site to include
the Council's expressed desire for a hotel component. (Exhibit 2 — September 16, 2014 RFCA).
On July 5, 2016 the City Council directed staff to pursue negotiations with Caribou Industries
based upon a draft Disposition and Development Agreement (DDA) included with the RIFCA
(Exhibit 3 -July 5, 2016 RFCA). Mayor Pulido appointed an ad hoc committee comprised of
himself and Council Member Benavides to work with staff on negotiating a final DDA and
developing a recommendation for the City Council's consideration. The Council Ad Hoc
committee conducted several meetings to discuss details of the DDA and Caribou's alternative
proposal. Caribou was not agreeable to the terms of the DDA and the Council ad hoc committee
has asked staff to further research Caribou's proposal as set forth in a draft Resolution prepared
by Caribou (Exhibit 4).
6513-1
Third and Broadway Proposed Development Update and Council Ad Hoc Committee
Recommendation
February 21, 2017
Page 2
As a first step in a major development project involving City -owned property, a city often enters
into an Exclusive Negotiating Agreement (ENA). An ENA proposes a process whereby a city and
a developer negotiate diligently and in good faith towards the goal of producing a mutually
acceptable Disposition and Development Agreement ("DIDA"). An ENA will include, among other
terms, at least all of the following:
• Schedule of Performance
• Development Concept
• Term
• Parameters for Negotiations
• Developer's Submission of Documents for City Review and Comment
Staff also recommended to the Council Ad Hoc Committee that the City ask Caribou for a
reimbursement agreement as the pursuit of complex development deals require significant staff
time, economic analysis, environmental analysis and legal expertise. The proposed ENA will
include a requirement that Caribou post a monetary deposit with the City and replenish the
deposit as funds are expended in pursuit of reaching a final DDA.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal #3 - Economic Development,
Objective #5 (Leverage private investment that results in tax base expansion and job creation
citywide), Strategy A (identify and market underutilized properties for new development that will
create new jobs and expand the City's tax base).
FISCAL IMPACT
There is no immediate fiscal impact to the City in entering into an Exclusive Negotiation and
Reimbursement Agreement. The reimbursement component of the proposed agreement will
require the developer to post a deposit with the City to cover legal, consultant and planning costs
associated with the continued research, negotiation and due diligence required to develop a
Disposition and Development Agreement.
Exhibits: 1. Request for Qualifications RFCA dated 8/5/13
2. Request for Qualifications RFCA dated 9/16/14
3. Request for Qualifications RFCA dated 7/15/16
4. Resolution draft
65D-2
REQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
AUGUST 5, 2013
TITLE:
REQUEST FOR QUALIFICATIONS FOR
DEVELOPMENT OF THE THIRD STREET AND
BROADWAY PARKING STRUCTURE -
201 W. THIRD STREET
CITY MANAGEK
RECOMMENDED ACTION
Exhibit 1
CLERK OF COUNCIL USE ONLY:
APPROVED
0 As Recommended
As Amended
Ordinance on 1 " Reading
El Ordinance on 2n' Reading
El Implementing Resolution
[I Set Public Hearing For_
CONTINUED TO
FILE NUMBER
Authorize the Community Development Agency to release a Request for Qualifications inviting
qualified developers to submit Statements of Qualifications to develop an innovative, high quality
project at the Third Street and Broadway parking structure site, designed to complement and
enhance the unique characteristics of Downtown Santa Ana.
DEVELOPMENT AND TRANSPORTATION COMMITTEE REVIEW
The Development and Transportation Committee reviewed this matter at its meeting on June 4,
2013. The Committee suggested that the City solicit a broad array of concepts for this property,
though it noted that certain uses, such as a hotel, could be desirable. The Committee has
reviewed the RFQ and recommends that the City Council authorize staff to circulate it to
interested parties.
DISCUSSION
The Third Street and Broadway parking structure is centrally located in Downtown Santa Ana,
which is situated in the heart of Orange County (Exhibit 1). Downtown is a unique and vibrant
area characterized by a mix of retail, restaurants, entertainment venues, artist lofts, and other
uses catering to a broad customer base. Given the site's development potential and that the
parking structure's design is now functionally obsolete, the property is being considered for
redevelopment. The subject Request for Qualifications (RFQ) envisions replacing the parking
structure with an innovative high quality project that reconnects Third and Fourth Streets,
activates the ground floor space, incorporates public areas and art, and replaces the existing 440
parking spaces along with providing adequate parking for the new development. Potential uses
for this site include: retail, restaurant, residential, hotel and/or office/commercial use. The RFQ is
65D-3
RFQ 3 Id and Broadway Parking Structure
August 5, 2013
Page 2
designed to encourage creativity by developers in proposing the optimum development scenario
best suited to the Downtown and reflective of the needs of the community.
The Third Street and Broadway parking structure was constructed in 1982 on a 62,243 square
foot lot. The building area is approximately 146,055 square feet and consists of three levels that
service both daily and monthly parking. The structure has reached a point of functional
obsolescence due to its lack of vehicle and pedestrian mobility between Third and Fourth Streets,
and lack of street level activity along its outer edges. Additionally, there are several items in need
of repair or resolution including structural shoring, poor circulation, drainage issues, and obsolete
parking equipment. Based on an initial evaluation conducted by City engineers, it is estimated
that it would cost the City approximately $8.6 million to perform the necessary electrical,
mechanical, drainage, and structural improvements along with parking control upgrades
installation of security upgrades and wayfinding just to bring the parking structure to a baseline
level of service.
At the City Council Development (Land Use) and Transportation Committee meeting, staff
presented the options of either making the estimated $8.6 million of repairs to the parking
structure necessary to bring it to the baseline standard, or demolishing the structure and
developing a project that includes replacement parking. The Committee members and staff
agreed that the long-term benefits associated with demolition and redevelopment is the preferred
option. The Committee members also concurred with staff that the development would need to
incorporate adequate parking to replace the existing 440 spaces as well as any additional
capacity necessary to support any new uses generated by the project. However, it was agreed
that shared (reduced) parking could be considered if justified by a parking study.
The recommended action authorizes the release of an RFQ for the development of the Third
Street and Broadway parking structure site (Exhibit 2). The process will involve two steps: this
issuance of the RFQ to identify qualified developers followed by the issuance of a Request for
Proposals (RFP) to a short list of the top RFQ respondents. This process is designed to limit the
initial costs and time burden on respondents in order to attract the interest and participation of the
highest number of qualified developers as possible. The shortlisted developers would then be
requested to submit full proposals to the City for an evaluation and selection process. This
approach will ensure that the City and development community can most efficiently deliver the
optimum development scenario for the site.
Based on the anticipated schedule, qualifications will be due September 9, 2013, with the review
process commencing immediately. Following the review of qualifications, recommendations will
be made by staff and the Committee to the City Council regarding top candidates to invite to
participate in submitting a full proposal. It is anticipated this list of top candidates will be brought
to the Council for its consideration at its November 4, 2013 meeting. Depending upon the
number of qualification packages received, the time frame may be adjusted. Attached is the RFQ
distribution list which includes entities who have expressed interest in development in the City
over the years, in addition to other organizations that can assist in outreach to their members
(Exhibit 3). The RFQ will also be posted on the City's website. It is anticipated that the RFQ will
be issued on August 6, 2013, subject to City Council approval.
65D-4
RFQ 3rd and Broadway Parking Structure
August 5, 2013
Page 3
FISCAL IMPACT
There is no fiscal impact associated with this action.
/'-/-A,/4 �') L14�,e�k
Sandra D. Gottlieb
Acting Executive Director
Community Development Agency
SDGIGPUkg
Exhibit: 1. Map
2. Request for Qualifications
3. Distribution List
65D-5
JoTrevino
Executive Director
Planning and Building Agency
r
L;RM
REQUEST FOR
COUNCIL ACTION
CITY OUNCIL MEETING DATE:
SEPTEMBER 16, 2014
TITLE:
REQUEST FOP, QUALIFICATIONS FOR
THE THIRD AND BROADWAY
DEVELOPMENT PROJECT
Z
CITY MAINAGERfj
RECQMMENDED A97`10N
Exhibit 2
CLERK OF COUNCIL USE ONLY:
ulatmhw
Q As Recommended
M As Amended
El Ordinance on 151 Reading
0 Ordinance on 2N Reading
[I Implementing Resolution
[I Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the Planning and Building Agency to release a Request for Qualifications for the Third and
Broadway Development Project.
Staff is requesting authorization to release a Request for Qualifications (Exhibit 1) to experienced
commercial and residential development firms regarding the opportunity to partner with the City to
develop the property which currently contains the City -owned parking structure located at 201 West
Third Street. The 1 43 acre site Is located at the corner of 3rd Street and Broadway and represents
the largest developable parcel In the downtown with the greatest opportunity for development, Staff
has received and incorporated feedback and recommendations on the content and form of the RFQ
from a number of sources including the Development and Transportation Committee, LILI Technical
Assistance Panel, Dr. Richard Willson from Cal Poly Pomona, Kosmont Companies and the Planning
Division's urban design consultant.
STRATEGIC PLAN &IGNMENT
Approval of this Item supports the City's efforts to meet Goal 43 Economic Development, Objective
#5 (Leverage private investment that results in tax base expansion and job creation citywide),
Strategy A (Identify and market underutilized properties (city and non -city owned) for new
development that will create new jobs and expand the City's tax base (e.g. YMCA, 3'd and Broadway
parking structure, Saddleback Inn site).
FISCALIMPACT
There is no fiscal impact associated with this action.
W_ �A��_
Karen Haluza
Interim Executive Directov
Planning and Building Agency
MF:rb MF/ReportsRrCNs — P and 13rcadway RPQ Raleam RFCA
Exhibit: 1. Request for Qualifications
6501-7
JULY 5, 2018
TITLE:
REOU98T FOR QUALIFICATIONS FOR
THE THIRD STREETAND BROADWAY
DEVELOPMENT PROJECT
(STRATEGIC PLAN NO. 3,6A)
Exhibit 3
CLERK OF COUNCIL USE ONLY:
1.7--ifTIMPR
As Recommended
As Amended
Ordinance on I't Reading
El Ordinance on 214 Reading
Implementing Resolution
Set Public Hearing For
CONTINUED TO
FILE NUMBER
Review and SelectLan option for the Third and Broadway Streets Development Project from the
options listed below.
Consider the attached draft Disposition and Development Agreement �Sample Draft
Disposition and Development Agreement) and provIdeL direction;
2. Direct stalf to prepare a sample Exclusive Negotiation Agreement for consideration to be
executed with a qualified developer; or
3, Direct the Planning and Building Agency to prepare a now Request for Qualifications,
followed by a detailed Request for Proposal process; or
4. Provide additional direction to staff on the development of the Third Street and Broadway
Project.
On Septenriber 16, 2014, the City, Council directed the Planning and Building Agency to release a
Request for Qualifications for the Third and Broadway Development Project, On September 18,
2014, the Planint.rig and Building Agency Issued a Request for Quallf1pat[ons outlining several
components dealred by the City Cqvndl, Among the components of the,new project, there was
an expressed desire to see a hotel/hospitailty component, Five proposals were received by staff,
only one of whloh, the proposal presented by Caribou Industries, included a hotel component,
Subsequently, staff presented the proposals. to the Development and Transportation Committee
of the City Council, recommending Oliver McMillan as the most qualified developer to develop the
site. However, at a later meeting, the Development and Transportation Committee directed staff
r
L;RWO
Third and Broadway Development Project
July 5, 2016
Page 2
to reach out to all of the development firms who had submitted proposals and give them a second
chance to submit new proposals that would include a hotel components, even as a second phase
of the project on the site or on a nearby property,
Four of the original development firms resubmitted proposals. Caribou Industries included a
hotel component. Of those four firms, the three other firms maintained their position that the
hospitality market In Downtown Santa Ana did not sufficiently support financing and construction
of a new hotel and did nQt:includo a hotel component In their new proposals,
Subsequently, staff Identified the qualifying criteria for Caribou Industries to be selected as the
developer for the Third and Broadway site, Part of the qualifying criteria were audited financial
statements, a common criterion that allows City staff to assess the developer's ability to complete
and doliver.the proposed projeot on time and on budget. After several requests, staff has not
received the audited financial Information required,
Proposed Draft Disposition and Development Agreement lDDA) Components:
If the City Council opts to enter into a ODA with a qualified developer as drafted In the proposed
sample DDA, the scope of the Third and Broadway Project will be as follows, but not limited to;
1 Developer Is to purchase the property at market value with the intention of
demolishing the existing parking garage and building a mixed use
residential/retall/office/hotel project,
2. The City shall Impose a lien on the property for the market value purchase of said
property, Said lien shall be maintained for no less than 26 years.
.3. The City shall release the lien after 25 years and upon the developer's
accomplishment of all performance. requirements and terms of the loan as outlined In
the DDA.
4. The developer shall be required to deposit a determined amount within five (5) days of
opening an escrow.
6, The transfer of the title of the property shall only take plaos after o9rtain City of Santa
conditions have been met by the developer.
0� The developer shall obtain all necessary, entitlements at their own expense prior to
transfer of property fltle$ from the City to the developer.
7. The developer shall prepare a complete environmental document consistent with
California Environmental Quallty.Act (CEQA) for the proposed project,
8� A minimum three (3) -star hotel component, consisting of no fewer than 00 room$ Is a
required component of the proposed project, The hotel may be built at the same time
as the rest of the project or In a subsequent phase, as described by the developer with
a justification for Its phasing and timing. Developer must submit documentation to
verify a commitment from ai major hotel, development proforma for the hotel, and
signed labor agreements as required but the City In order to most the hotel
component requirement for the project,
6501-9
Third and Broadway Development Project
July 5, 2016
Page 3
9� A hotel tax rebate incentive rnay be negotiated between the City and the hotel
operator consistent with the City's Hotel Incentive Program,
10, The developer shall build the project paying prevailing wages and the hotel
component shall employ unionized labor at prevailing wages for Its operations,
11, The developer will not be required to replace the existing publIc parking, Therefore,
no public funds shall be directed to the development project for the purpose of
creation of public parking.
12, The City and the developer will review and resolve all existing parking obligations
associated with the exAstIng municipal parking structure.
13. The City shall convey property Was immediately prior to a previously scheduled and
fully authorized demolition of the existing Improvement on the property.
114� The demolition of the existing Improvements and subsequent construction of the new
project shall take place consistent with agreed upon terms and timellnes; set forth In
the DDA�
15. Any unauthorized delays by the developer at any Agreed upon phase of construction
shall be subject to penalties set forth In the DDA.
16. The new development project shall be designed by a highly credible design team to
exemplify the City's commitment to excellent design and sustainabillity in Santa Ana.
17. The City shall be responsible for removing all City parking equipment prior to
commencement of demolition.
18, Prior to issuance of final certificates of occupancy, general, standard, and specific
conditions and obligations set forth for this project shall be met within the timallnes
outlined in the DDA.
19. Developer is required to provide Community Outreach with all stakeholders to hear
and address concerns over parking and construction during and after construction
20, The developer shall provide a Parking Management Agreement. Part of that
agreement will Include provisions for the City to maintain and operate the parking
structure until such time that the property must be prepared for demolition,
21, Developer shall reconstruct Sycamore Street between 3rd Street and 0 Street for all
modes of transportation At the developer's expense. The reconstruction of 8yoamors
Street shall be performed according to all zoning, open space, and public right-of4way
standards to the satisfaction of the Planning and Building and Public Works Agencies,
22. Existing street parking motor and parking activity must remain Intact,
23. Developer shall Improve the alleyadjacent to the property according to specifications
determined during the entitlement review process.
24� Developer shall remove the existing pedestrian bridges,
25. Developer shall provide ground floor, pedestrian-orlonlad commercial uses as will be
detailed during the entitlement process. The dovsloper shall meet specific
performance milestones set forth In the DD&
28. The developer shall provide a detailed construction schedule, stagIng, and
management plan to be reviewed and approved by the City to eliminate or mitigate
Impacts to the surrounding businesses and the public during construction,
6501-10
Third and Broadway Deveiopment Project
July 5, 2018
Page 4
27. Developer shall be fully responsible for securing and leasing staging locations at the
developer's expense to the satisfaction of the City, The construction staging location
and equipment shall not Impede day-to-day activities in surrounding areas,
2& The construction management and mitigation plan shall be disoussed and analyzed as
part of the environmental review process prior to final approvals.
The City Council has the following options:
1 � Consider the attached draft Disposition and Development Agreement Sample Draft
Disposition and Development Agreement) and provide direction;
2, Direct staff to prepare a sample Exclusive Negotiation Agreement for consideration to be
exeouted with a qualified developer, or
3, Direct the Planning.and Building Agency to prepare a now Request for Qualifications,
followed by a detailed RequeStfor Proposal prom. s; or
4. Provide additional dirsotion to. staff on the development of the Third Street and Broadway
Project.
Approval of this Item supports the City's efforts to meet Goal #3 - Economic Development,
Objective #5 (Leverage private investment that results In tax base expansion and job creation
altyw1da), Strategy A (identify and market underutillzed properties fbr now development that will
create now jobs and expand the City's tax basp),
FISCAL IMPACT
There Is no fiscal Impact associated with this action,
MAR
N
HH:rb
hMportOrd & Orqadway — June 18, 201a
Exhibit; 1 . Sample Disposition and Development Agreement
6501-11
NWIFIM
CITY OF SANTA ANA
DISPOSITION AND DEVELOPMENT AGREEMENT
Downtown Hotel and Mixed -Use: Residential and Retail/Commercial Project
At Third and Broadway
This DISPOSIT10N AND DEVELOPMENT AGREEMENT ("Agreement" or "DDA") is
entered into as of , 2016 (the "Effective Date"), by and between the CITY
OF SANTA ANA, a California municipal corporation ("City"), and _, a
("Developer").
RECITALS
A. City is the fee owner of certain real property collectively consisting of approximately
acres located at and approximately acres that constitutes a portion of the
parcel located at as more particularly described in Attachment No. 3, attached hereto and
incorporated herein by reference and depicted on the Map of the Project Site (collectively, the
"City Property").
B. In 20 , Developer contacted City to express an interest in purchasing the City
Property N;71t—hthe int—ent of redeveloping the City Property and the Developer Property with a
mixed use hotel and commercial/retail. project.
C. City and Developer have negotiated terms pursuant to which Developer will purchase the
City Property from the City for the development of an approximately _ room hotel and retail,
restaurant and. caf6 space as more particularly described in the Scope of Development, attached
hereto as Attachment No. 5 (the "Project"), which will be located on the City Property (the
"Project Site"). The proposed Project will result in the redevelopment of iandenitilized land and
aging structures, development of extended stay hotel rooms to accommodate a demand in
Downtown Santa Ana and nearby to the Orange County Courthouse facility, increased
employment opportunities within the City and additional property taxes, sales taxes and transient
occupancy taxes produced from the Project Site. Additionally, Developer has agreed to pay the
City the full fair market value for the purchase of the City Property, which will provide
additional general fund revenue for the City.
D. Based on the reasons identified in Recital C, above, together with the commitments and
obligations of the Developer to develop the Project Site as contained in this Agreement, the City
has determined that the sale of the Project Site to the Developer for development in accordance
with this Agreement is in the best interest of the City.
NOW THEREFORE, the Parties hereby agree as follows.
Article 1
PURPOSE, PARTIES, AND PROJECT SITE
1.1 Recitals. The Recitals axe hereby incorporated into this Agreement.
EXHIBIT 1
55394.00000'09008220.1 65D-1 2
1.2 Purpos . The purpose of this Agreement is to set forth the obligations of the Parties and
the terms and conditions precedent for the purchase and sale of the City Property from the City
to the Developer, and the design, development, construction and operation of the Project on the
Project Site,
The City has determined that the construction and operation of the Project by Developer
within the City will stimulate direct and indirect economic activity within the City, will enhance
the quality of life of residents and will provide substantial additional intangible benefits to the
City. Further, Developer has agreed to pay fair market value for the City Property subject to the
terms set forth in this Agreement. As such, the sale and development of the Project Site pursuant
to this Agreement and the fulfillment generally of this Agreement are in the vital and best
interests of the City, and the health, safety, morals and welfare of its residents arld in accord with
the public purposes and provisions of applicable federal, state and local laws and requirements.
1.3 Parties
1.3.1 The Cit The City is the City of Santa Ana, a municipal corporation of the State
of California. The principal office of the City is located at 20 Civic Center Plaza, Santa Ana,
California.
1.3.2 The Developer. The Developer is a The
principal address of the Developer is Whenever the term "Developer" is
used herein, such term shall include any perraitted nominee, assignee or successor in interest as
herein provided.
1.3.2,1 The parties anticipate that a partnership or other entity (the "Partnership")
may be formed by the Developer for the purposes of acquiring and developing the Site, or any
portion thereof. In the event such a Partnership is formed, and provided that an entity owned or
controlled by constitutes the sole general partner or managing member of the
Partnership, it is the understanding and agreement of the parties that this Agreement may be
assigned to and assumed by such Partnership; provided that such Partnership shall assume all the
obligations of the Developer hereunder, in form and content satisfactory to the City
1.3.2.2 The qualifications and identity of the Developer are of particular concern
to the City, and it is because of such qualifications and identity that the City has entered into this
Agreement with the Developer. Except as otherwise provided in this Subsection 1.3.2, no
voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers
under this Agreement, and the Developer shall not assign all or any part of this Agreement
without the prior written approval of the City, which approval will be in the City's sole discretion
exercised in good faith. This Agreement may be terminated by the City if there is any significant
change (voluntary or invol-amary) in the management or control of the Developer without Cit3�s
prior written approval, which approval will not be unreasonably withheld. Except as otherwise
provided in this Agreement, for an approved assigranent to be effective, the Developer and
assignee shall enter into an assignment and assumption agreement in a form reasonably approved
by the City,
5 5 3 94.00000\29008220.1
65D-1 3
1.3.2.3 Notwithstanding the foregoing, the following assignments or transfers of
this Agreement and the Project Site shalt be permitted:
1.3.2.3.1 the sale or lease of commercial, restaurant or caB6 space to tenants or end-
users, for occupancy upon completion;
1.3.2.3.2 an assignment as security for a construction and/or development loan from a
lender, subject to the approval by City pursuant to this Agreement, which
approval shall not be unreasonably withheld, conditioned, or delayed;
1.3.2,33 an assignment to a Partnership, as authorized above and in compliance with
this Section 1.3.2; or
1.3.2.3.4 any other assignment or transfer after the issuance of a certificate of
occupancy for the Project.
1.4 The Project Sit . The Proj cot Site is comprised of the City Property, as generally shown
on the Map of the Project Site attached hereto as Attachrrient No, 1.
Article 2
DEFINITIONS
2.1 Definitions. Each reference in this Agreement to any of the following terms shall have
the meaning set forth below for each such term.
2.1.1 "City" and "Developer" shall have the definitions set forth in the Preamble,
Recitals and Section 13.
2.1.2 "City Property" is defined in Recital A.
2.1.3 "Close of Escrow" is defined in Section 3.3.3.
2.1.4 "Damages" is defined in Section 3.12.3.
2.1.5 "Deposit" is defined in Section 3.2.
2.1.6 "Escrow Agent" is defined in Section 3.3.
2.1.7 "Feasibility Period" is defined in Section 3.2.
2.1.8 "Force Majoure" is defined in Section 6.3.
2.1.9 "Grant Deed" is defined in Section 3.3.
2.1.10 "Hazardous Materials" is defined in Section 3.12,5.
55394M000\29008220. 1 65D-14
2.1.11 "Improvements" means the private improvements to be developed on the Project
Site as part of the Project, as mare fully described in the Scope of Development.
2.1.12 "Indemnitees" is defined in Section 3.12.3.
2.1.13 "Outside Date" is defined in Section 3.3.3.
2.1.14 "Partnership" is defined in Section 1.3.2.1.
2,1.15 "Preliminary Title Report" is defined in Section 3.6.
2.1.16 "Purchase Price" is defined in Section 3.1.
2.1.17 "Project" is the mixed use hotel and commercial, restaurant and caS5
improvements to be developed on the Project Site, as more fully described in the Scope of
Development, attached hereto and incorporated into this Agreement as Attachment No. 5.
2.1.18 "Project Site" shall have the definition set forth in Recital C and Section 1.4,
2.1.19 Intentionally Blank
2.1.20 "Schedule of Performance" means the schedule attached hereto and incorporated
into this Agreement as Attachment No. 4.
2.1.21 "Title Company" is defined in Section 3.9.
Article 3
DISPOSITION OF THE PROJECT SITE
3.1 Purchase and Sale of the Proiect Site. The City agrees to sell to the Developer, and
Developer agrees to purchase from the City, the City Property, within the time set forth in the
Schedule of Performance. The purchase price for the City Property collectively shall be
DOLLARS ($_.00) (the "Purchase Price"). The
Purchase Price constitutes the full fair market value of the City Property as determined piorsuant
to that certain appraisal of the City Property dated _, 2016 conducted by
and dated
The City shall impose a lien on the property for the market value purchase of said
property, Said lien shall be maintained for no less than 25 years. The City shall release the lien
after 25 years and upon the developer's accomplishment of all perforniance requirements and
terms of the loan as outlined in the DDA.
The Developer and City both acknowledge and understand that the City is selling the City
Property to Developer at market value with the intention of demolishing the existing parking
5 5 394.00000\29008220. 1 65D . -15
garage and building a mixed use residential/retait/office/hotel project, and not for speculation in
undeveloped land.
3.2 Deposi . Within five (5) days of the opening of the Escrow as set forth in Section 3.3 of
this Agreement, Developer shall deposit Thousand Dollars ($ into an interest
bearing escrow account with the Escrow Agent (the "Deposit"). The Deposit shall be fully
refundable for 90 days following the Effective Date of this Agreement as set forth in the
introductory paragraph herein, during which period Developer shall have the opportunity to
determine the suitability of the Property for Developer's intended use in its sole and absolute
discretion (the "Feasibility Period"). In the event that Developer determines prior to the
expiration of the Feasibility Period that it does not desire to proceed with the Project, Developer
may terminate this Agreement pursuant to Section 5.6 of this Agreement and the Deposit and all
interest accrued shall be refunded to Developer in its entirety. If Developer does not terminate
this Agreement prior to the end of the Feasibility Period, except as expressly sot forth in Section
5.5, the Deposit shall become non-refundable in the event of termination of this Agreement by
Developer as provided in Section 5.6 or based on Developer's default as provided in Section 5,7,
the Deposit shall be retained by City as liquidated damages as more specifically described in
Section 5.7 of this Agreement. DEVELOPER WILL PAY ALL FEES AND COSTS.
3.3 Escrow. The City agrees to open an escrow account with Title Company, located
at , Santa Ana, CA. or any other escrow company approved by the City and the
Developer, as escrow agent ("Escrow Agent") within the time established in the Schedule of
Performance, attached hereto as Attachment No. 4.
3.3.1 This Agreement constitutes the joint escrow instructions of the City and
Developer, and a duplicate original of this Agreement shall be delivered to the Escrow Agency
upon the opening of escrow. The City and the Developer shall provide such additional escrow
instructions as shall be necessary and consistent with this Agreement. The Escrow Agency
hereby is empowered to act under this Agreement and, upon indicating its acceptance of the
provisions of this Section 3.3 in writing, delivered to the City and to the Developer within five
(5) days after the opening of the escrow, shall carry out its duties as Escrow Agency hereunder,
3.3.2 The City shall titnely and properly execute, acknowledge and deliver to the
Escrow Agent a gant deed (the "Grant Deed"), in the form attached hereto as Attachment No. 6,
conveying to the Developer fee title to the City Property, subject to certain conditions as set forth
therein, in accordance with the requirements of Section 3.5 of this Agreement.
3.3.3 [Intentionally Left Blank]
3.3.4 The Developer shall pay into escrow to the Escrow Agent the following fees,
charges, and costs promptly after the Escrow Agent has notified the Developer of the amount of
such fees, charges, and costs, but not later than five (5) business days after opening an escrow:
3.3.4.1 The escrow and recording fees;
55394MG00\29008220.1 65D-1 6
3.3.4.2 The premiums for title insurance attributable to a CLTA standard form
policy, to be paid by the City as set forth in Section 3,9 of this Agreement hereof;
3.3.4.3 Any increase in title insurance premiums attributable to an ALTA title
insurance policy, and for all special endorsements, if and as requested by the Developer as set
forth in Section 3.9, below.
3,3.4.4 Costs necessary to place the title to the City Property in the condition for
conveyance required by the provisions of this Agreement;
3.3.4.5 Recording fees;
3.3.4.6 Notary fees;
3.3.4.7 Any state, county, or city documentary transfer tax, and
3.3.4.9 Ad valorem taxes, if any, upon the City Property for any time prior to
conveyance of the City Property interest to Developer.
3.3.5 Upon receiving a written certification from both the City and the Developer that
the conditions for conveyance to the Developer of the City Property have either been satisfied or
waived and instructing the Escrow Agent to close escrow, and upon delivery of the Grant Deed
and funds pursuant to Section 3.7 of this Agreement, the Escrow Agent shall record the Grant
Deed in accordance with the terms and provisions of this Agreement (the "Close of Escrow").
The Close of Escrow shall occur not later than 20 (the "Outside Date"). The
Escrow Agent is further authorized to:
3.3.5.1 Pay and charge the Developer for any fees, charges, or costs payable
pursuant to this Agreement. Before such payments are made, the Escrow Agent shall notify the
City and the Developer of the fees, charges, and costs necessary to clear title and close the
escrow;
3.3.5.2 Disburse funds and deliver any documents to the parties entitled thereto
when the conditions of this escrow have been falfilled by the City and Developer; and
3.3.5.3 Record the Grant Deed and any other instruments delivered through
escrow, if necessary or proper, to vest fee title in the Developer in accordance with the terms and
provisions of this Agreement, and pay any transfer tax from the escrow funds required by law.
3.3.6 All funds deposited with the Escrow Agent shall be delivered by wire transfer or
other certified immediately available funds, and shall be deposited by the Escrow Agent with
other escrow funds of the Escrow Agent in a general escrow account or accounts with any state
or national bank doing business in the State of California. Such funds may be transferred to any
other general escrow account or accounts. All disbursements shall be made by check of the
Escrow Agent, or by wire transfer if authorized by the Parties.
55394.00000\29008220,1 65D-1 7
3.3.7 In addition to the rights of the parties set forth in Article 5, if the escrow is not in
condition to close before the outside date for conveyance as set forth in the Schedule of
Performance, then either party who then shall have fully perforined their respective obligations
set forth in this Agreement may, in writing, terminate this Agreement as set forth in Sections 5,5
or 5.6 hereof, as the case may be, and demand the return of its money, papers or documents.
Thereupon all obligations and liabilities of the Parties under this Agreement shall terminate in
the manner set forth in Section 5.5 or 5,6 hereof, as the case may be, except any provisions
which specifically provide for survival shall survive such termination and remain in full force
and effect, If neither party shall have fully performed the acts to be performed before the time
for conveyance set forth in the Schedule of Performance, no termination or demand for return
shall be recognized until ten (10) days after the Escrow Agent shall have mailed copies of such
demand to the other party or parties at the address of its or their principal place or places of
business. If any objections are raised within the ten (10) day period, the Escrow Agent is
authorized to hold all money, papers and documents with respect to the City Property until
instructed in writing by both the City and the Developer or upon failure thereof by a court of
competent jurisdiction. . if no such demands are made, the escrow shall be closed as soon as
possible. Nothing in this Section 3.3.5 shall be construed to impair or affect the rights or
obligations of the City or the Developer to specific performance.
3.3.8 Any amendment of these escrow instructions shall be in writing and signed by
both flic City and the Developer. At the time of any amendment, the Escrow Agent shall agree to
carry out its duties as Escrow Agent under such amendment.
3.4 Conveygnce of Title and Delivery of Possession, Provided that Developer is not in
default under this Agreement and all conditions precedent to such conveyance have occurred,
and subject to any mutually agreed upon extensions of time, conveyance to the Developer of fee
title to the City Property shall be completed on or prior to the date specified in the Schedule of
Performance, or any extension of such time as may be mutually agreed to by the parties.
Possession shall be delivered to the Developer concurrently with the conveyance of the City
Property. The Developer shall accept its fee title and possession on or before said date.
3.5 Conditions Precedent to Conveyance. Close of escrow and conveyance of the City
Property to the Developer shall be contingent upon satisfaction (or waiver by the party benefiting
from such condition) of the following conditions precedent;
3.5.1 For Benefit of Developer:
3.5.1.1 Before the Close of Escrow, City shall not be in default in any of its
obligations under the terms of this Agreement and all representations and warranties of City
contained herein shall be true and correct in all material respects.
3,5,1,2 Developer shall have reviewed and approved the condition of title of the
City Property, as provided in Section 3.6 hereof.
3.5.1.3 Developer shall have reviewed and approved the environmental condition
of the Site.
55394.00000\29008220.1 65D-1 8
3.5.1.4 City shall have executed and delivered the Grant Deed to the Escrow
Agent.
3.5.1.5 City shall have executed and delivered the Reciprocal Easement
Agreement to the Escrow Agent.
3.5.1.6 Developer has received all City approvals required for the development of
the Project, including all required discretionary entitlements, design review, and approval of
Developer's construction plans and drawings for the Project and all appeal periods for such
approvals have expired;
3.5.1.7 The Title Company shall be ready, willing, and able to issue the Title
Policy to Developer at the Close of Escrow, subject only to the permitted exceptions described in
Section 3.6.2; and
3.5.2 For Benefit of City:
3.5.2.1 Before the Close of Escrow, Developer shall not be in default in any of its
obligations under the touns of this Agreement and all representations and warranties of
Developer contained herein shall be true and correct in all material respects.
3.5.2.2 Developer shall have reviewed and approved the condition of title of the
City Property, as provided in Section 3.6 hereof.
3.5.2.3 Developer shall have reviewed and approved the environmental condition
of the Project Site, as provided in Section 3.12 hereof.
3.5.2.4 Developer shall have executed and delivered the Reciprocal Easement
Agreement to the Escrow Agent;
3.5.2.5 Developer shall have delivered the Purchase Price to the Escrow Agent;
3.5.2,6 Developer shall have paid into escrow all fees and costs associated with
the transaction;
3.5.2.7 Developer's final construction plans and drawings for the Project have
been approved by the City, pursuant to Section 4.4;
3.5.2.8 The Developer shall prepare a complete environmental documents
consistent with the California Environmental Quality Act (CEQA) for the proposed project. The
construction management and mitigation plan shall be discussed and analyzed as part of the
envirom-nental review process prior to final approvals.
5 5 3 94. 00000\29008220. 1 65D - -19
3.5.2.9 Developer has received all City approvals and necessary entitlements
required for the development of the Hotel Project, at its own expense, including all required
discretionary entitlements, design review, and all appeal periods for such approvals have expired;
3.5.2.10 Developer has provided evidence, satisfactory to City in its sole
and discretion exercised in good faith, that Developer has sufficient and binding financing
commitments to complete the Project;
3.5.2.11 Developer has an executed construction contract for the Project
with its general contractor;
3.5.2.12 Developer has delivered to the City proof of insurance, in
compliance with Section 4.6 hereof;
3.5.2.13 Developer shall have obtained the commitments and approvals
necessary to develop and operate the hotel component of the Project as a minimum three (3) star
on the Project Site.
3.6 Conditions of Title. Within 30 days following execution of this Agreement, the City will
submit to the Developer for review and approval a preliminary title report for the City Property,
together with a copy of all underlying dociaments referred to therein ("Preliminary Title
Report"), and will farther provide an updated preliminary report at such time that the City takes
fee title to the Successor Agency Parcels, and thereafter from time to time upon reasonable
request of the Developer. The Developer shall approve or disapprove the Preliminary Title
Report within the time established in the Schedule of Performance, Failure by the Developer to
approve within such time shall be deemed disapproval.
3.6.1 The Developer shall be responsible for any costs and expenses necessary to place
title to the City Property in the condition for conveyance of fee title to the City Property to the
Developer as required hereunder, Tf the Developer disapproves any title exception reflected in
the Preliminary Title Report (or my updated preliminary report), and the City, within ten (10)
days thereafter gives Developer written notice that the City elects not to remove such exception,
the Developer may elect, within ten (10) days of receipt of the City's notice, to accept fee title to
the Project Site subject to such exception or to terminate this Agreement by providing written
notice thereof to the City. Notwithstanding the foregoing, City shall, without the requirement of
Developer to object or City to refuse, remove all monetary liens (other than property taxes or
assessments for amounts not yet delinquent) from the title to the City Property delivered to
Developer at Close of Escrow, and shall remove from title or otherwise satisfy all exceptions it
otherwise agrees to remove, in a form that is reasonably satisfactory to Developer prior to the
Closing Date.
3.62 The City shall convey to the Developer fee interest in the City Property free and
clear of all recorded liens, encumbrances, assessments, leases and taxes, except easements of
record and encumbrances that are consistent with this Agreement or approved in writing by the
Developer.
553 94.00000\29008220. 1 65D-20
3.7 Time for and Place of Delivery of Grant Deed. Subject to any mutually agreed upon
extensions of time, the City shall deposit the Grant Deed for the City Property with the Escrow
Agent on or before the date established in the Schedule of Performance for the conveyance of fee
title to the City Property to Developer, Developer shall deposit the Purchase Price and all sums
required hereunder with the Escrow Agent prior to the date for conveyance thereof, provided that
the Escrow Agent shall have notified the Developer in writing that the Grant Deed, property
executed and acknowledged by the City, has been delivered to the Escrow Agent and that title is
in condition to be conveyed in conformity with the provisioris of Section 3.4 of this Agreement.
3.8 Recordation of Grant Deed and Recjpt�ocal Easement Agreem . Upon close of escrow,
the Escrow Agent shall record the Grant Deed, and subsequently record the Reciprocal Easement
Agreement, in the land records of the Office of the County Recorder of Orange County, and shall
deliver to the Developer, with a copy to the City, the title insurance policy insuring fee title to the
City Property, in conformity with this Agreetrient,
3.9 Title Insurance. Concirrrently with recordation of the Grant Deed, Title
Company or another title insurance company satisfactory to the City and the beveloper having
equal or greater financial responsibility ("Title Company"), shall provide and deliver to the
Developer a title insurance policy issued by the Title Company insuring that title to the City
Property is vested in the Developer in the condition required by this Agreement, and shall
provide the City with a copy of the title insurance policy. The face amount of the title policy
shall be shall be equal to the Purchase Price.
3.9.1 The Developer shall pay for the title insurance premium attributable to a CLTA
standard fonn policy of title insurance for the City Property. The Title Company shall, if
requested by the Developer, provide the Developer with an endorsement to insure the amount of
the Developer's estimated development costs of the improvements to be constructed upon the
Project Site. The Developer shall pay the entire premium for any increase in coverage and
special endorsements, including extended ALTA coverage, if any, that may be requested by it.
3.10 Delivery of Possession. The City Property shall be conveyed to Developer free of any
possession or right of possession by any person,
3.11 Payment of Taxe , All general and special real property taxes, bonds and assessments, if
any, on the City Property, and taxes upon this Agreement or any rights hereunder, levied,
assessed or imposed for any period commencing prior to the close of escrow for the sale of the
City Property to Developer shall be borne by the City. All general and special real property
taxes, bonds and assessments levied or imposed for any period commencing after close of
escrow for sale of the City Property to Developer shall be paid by the Developer.
3.12 Inspections and Conditions of the Project Site.
3.12.1 Inspectigns. Within the time established in the Schedule of Performance, the
Developer shall, at its sole cost, conduct any additional investigation of the City Property, its
physical condition, the soils and toxic conditions of the City Property and all other matters which
in the Developer's sole and absolute judgment affect or influence the Developer's proposed use
5 53 94.00000\29008220,1 65D-21
of the City Property and the Developer's willingness to develop the City Property pursuant to
this Agreement. The Developer's investigation may include, without limitation, the preparation
by a duly licensed soils engineer of a Phase One environmental assessment for the City Property,
Within the time set forth in the Schedule of Performance, the Developer shall provide written
notice to the City of the Developer's determinations concerning the suitability of the physical
condition of the City Property. If, in the Developer's reasonable judgment, the physical
condition of the City Property is iinsuitable for the use or uses to which the City Property will be
put, then the Developer in Developer's sole and absolute judgment shall have the option either:
(a) to take any action necessary to place the City Property in a condition suitable for
development, at no cost to the City; or (b) to terminate this Agreement by delivering written
notice thereof to the City. If the Developer has not notified the City of its determinations
concerning the suitability of the physical condition of the City Property within the time set forth
in the Schedule of Performance (or any extension of such time mutually agreed to by the parties),
the City shall have the right to terminate this Agreement pursuant to Section 5.6 hereof.
3.12.2 "As -Is". In addition to the environmental assessments referenced above, the City
shall deliver to the Developer all other information of which it has actual knowledge concerning
the physical condition of the City Property, including, without limitation, information about any
Hazardous Materials. The Developer acknowledges that the City Property is being acquired "as
is", in its current physical condition, with no warranties, express or implied, as to the physical
condition thereof, the presence or absence of any latent or patent condition thereon or therein,
including, without limitation, any Hazardous Materials thereon or therein, and other matters
affecting the City Property.
3.12.3 Indemnit . The Developer agrees, from and after the date of recording of the
Grant Deed conveying fee interest in the Project Site to the Developer under this Agreement, to
defend, indemnify, protect and hold harmless the City and its officers, beneficiaries, employees,
agents, attorneys, representatives, legal successors and assigns ("Indemnitees") from, regarding
and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands,
actions, claims, losses, dainages, fines, penalties, expenses, or costs of any kind of nature
whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and
experts' and consultants' fees) ("Damages") whenever arising, not caused in whole or in part by
the City resulting from or in connection with the actual or claimed generation, storage, handling,
transportation, use, presence, placement, migration, and/or release of Hazardous Materials (as
defined herein), at, on, in, beneath, or from the City Property, except if such Damages (a)
resulted from fraud, negligence, misrepresentation, or failure to disclose by the Indemnitees, or
(b) were caused in whole or in part by the Indemnitees. The Developer's defense,
indemnification, protection and hold harmless obligations herein shall include, without
limitation, the duty to respond to any governmental inquiry, investigation, claim or demand
regarding the any Hazardous Materials condition, at the Developer's sole cost.
3.12.4 Release and Waiver. The Developer hereby releases and waives all rights, causes
of action and claims the Developer has or may have in the future against the Indemnitees arising
out of or in connection with any Hazardous Materials (as defined herein), at, on, in, beneath or
from the City Property, except if such cause of action arises from the negligent or fraudulent
misrepresentation or failure to disclose by the City relating to a representation or warranty of
City which is false or misleading.
5 5 3 94,00000\29008220.1 65D-22
3,12.5 Hazardous Materials Defined. As used in this Agreement, the term "Hazardous
Materials" means any substance, material or waste that is (1) defined as a "hazardous waste,"
"hazardous matcricA" "hazardous substance," "extremely hazardous waste," or "restricted
hazardous waste" under any provision of California law; (2) petroleum; (3) asbestos; (4)
polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C.
Section 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317);
(7) defined as a "hazardous substance" pursuant to the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 or seq. (42 U.S.C. Section 6903) or its implementing regulations; (8)
defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section
9601 et seq. (42 U.S.C. Section 9601); or (9) determined by California, federal or local
governmental authority to be capable of posing a risk of injury to health, safety or property,
3.12.6 Materiality. The Developer acknowledges and agrees that the defense,
indemnification, protection and hold harmless obligations of the Developer for the benefit of the
City set forth in this Agreement are a material element of the consideration to the City for the
performance of its obligations under this Agreement, and that the City would not have entered
into this Agreement unless the Developer's obligations were as provided herein.
3.13 Preliminary Work and Right of Emr . Prior to the conveyance of fee interest in the City
Property to the Developer, representatives of the Developer shall have the right of access to the
City Property at all reasonable times for the purpose of obtaining data and making surveys and
tests necessary to carry out this Agreement. The City may require the Developer to execute a
commercially reasonable right of entry agreement satisfactory to the City prior to entry onto the
City Property for such purpose. The Developer's inspections, examination, testing, survey and
review of the City Property shall be at the Developer's sole cost and expense, The developer
shall obtain the City's consent in writing prior to any proposed physical testing of the City
Property, which consent shall not be unreasonably conditioned, withheld or delayed. The
Developer shall repair, restore and return the City Property to its original condition after such
physical testing, at Developer's sole cost and expense, provided that Developer shall have no
obligation to remediate Hazardous Materials discovered during such testing. The Developer
shall schedule any such inspections during normal business hours unless otherwise approved by
the City. During this inspection period, the Developer shall at all times keep the City Property
free and clear of any liens and encumbrances created by Developer.
3.14 City Property Data and Information, The City shall make all data and information
pertaining to the City Property available to the Developer. The City makes no warranty or
representations, however, as to the completeness, correctness, or validity of such data and
information. Copies of final data, surveys, and tests obtained or made by the Developer on the
City Property shall be filed with the City. Any preliminary work by the Developer shall be
undertaken only after securing any necessary permits for such preliminary work from the
appropriate governmental agencies.
55394,00000\29008220. 1 65D-23
3.15 Indemnity for E= on Ci1y Propert , Without limiting any other indemnity provisions
set forth in this Agreement, the Developer shall indemnify, defend (with counsel approved by the
City) and hold the City and its elected and appointed officers, officials, employees, contractors,
agents and representatives harmless from and against all injury, damages, liability, loss, cost,
claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, or other
expense resulting from or arising in connection with entry upon the City Property by the
Developer or Developer's representatives or agents pursuant to this Agreement, except to the
extent caused by pre-existing conditions (such as Hazardous Materials) or the negligence or
willful misconduct of City. The Developer's indemnification obligations set forth in this Section
3.15 shall survive the close of escrow and termination of this Agreement. Prior to Developer's
entry upon the City Property, the Developer shall provide the City with a certificate or other
proof of insurance meeting the requirements set forth in this Agreement.
3,16 Submission of Evidence of Eguity Capital and Mortgage Financin . If the Developer
finances the development of the Project and related activities, all such financing (construction
and permanent) shall be subject to the approval of the City, which approval will not be
unreasonably withhold, conditioned, or delayed. No later than the time specified in the Schedule
of Performance, the Developer shall submit to the City evidence satisfactory to the City that the
Developer has the equity capital and commitments for financing necessary for development of
the Project. The City shall approve or disapprove such evidence of financing commitments
within the time established in the Schedule of Performance.
Article 4
DEVELOPMENT OF THE PROJE CT SITE
4.1 Reparcelization of the Project Site. Prior to conveyance of the City Property, the
Developer shall, at the Developer's sole cost and expense, take all actions necessary to obtain
approval from the City of a parcel map, lot line adjustment or other actions, as required by the
City, to reparcelize the Project Site to create one or more legal parcels to enable development of
the Project, with the resulting parcel map, lot line adjustment or other instruinent used to
reparcelize the Site to be recorded concurrent with the conveyance of the City Property,
[MAY NOT BE NECESSARY]
4.2 Scope of Develqpment. The Developer shall develop the Project on the Project Site, as
provided in the Scope of Development, all in accordance with plans approved by the City,
including the following:
4.2.t A minimurn three (3) -star hotel component, consisting of no fewer than 60 rooms
is a required component of the proposed project. The hotel may be built at the same time as the
rest of the project or in a subsequent phase, as described by the developer with a justification for
its phasing and timing. Developer must submit documentation to verify a commitment fTom a
major hotel, development proforma for the hotel, and signed labor agreements as required but the
City in order to meet the hotel component requirement for the project.
4.2.2 Developer shall reconstruct Sycamore Street between 3rd Street and 4th Street for
all modes of transportation at the developer's expense. The reconstruction of Sycamore Street
5 53 94.00000\29008220.1 65D-24
shall be performed according to all zoning, open space, and public right-of-way standards to the
satisfaction of the Planning and Building and Public Works Agencies,
4.2.3 Developer shall improve the alley adjacent to the property according to
specifications deterinined during the entitlement review process.
4.2.4 Developer shall remove the existing pedestrian bridges.
4.3 Covenant to Operate Retail Uses on Ground Floor, The Developer hereby covenants that
the ground floor of the Project as described in the Scope of Development shall be used
exclusively for pedestrian oriented commercial uses, and no other use shall be perinitted without
the written consent of the City, This covenant shall be incorporated into the Grant Deed
conveying the City Property from the City to Developer.
4.4 Development Review. Within the times established in the Schedule of Performance, the
Developer shall submit to the City for review and approval all construction plans, drawings and
related documents for the construction and development work to be done on the City Property.
The now development project shall be designed by a highly credible design team to exemplify
the City's commitment to excellent design and sustainability in Santa Ana, including
earthquake/seismic standards. Final construction plans and drawings are defined as those in
sufficient detail to obtain a building permit.
4.4.1 The Developer shall obtain all approvals a -ad permits that may be required under
the City's normal plan check, development review and approval process for the construction and
development work to be completed on the City Property, or applicable portion thereof, and shall
pay all fees and costs associated with such review consistent with the City's normal entitlement
process. The Project, and all plans, drawings and related documents for the development of the
City Property, shall be consistent with the City's General Plan and Zoning Code. During the
preparation of any drawings and plans for the development and construction work to be
completed on the City Property, the Developer shall meet with City staff and communicate and
consult informally and as frequently as is necessary to ensure that the formal submittal of any
documents to the City pursuant to this Section 4.4 can receive prompt consideration.
4.4.2 The City shall approve or disapprove the plans, drawings and related documents
submitted pursuant to this Section 4.4 in accordance with City's normal plan check procedures.
Any disapproval shall state in writing the reasons for disapproval and the changes that the City
requests be made. Such reasons and such changes must be consistent with the Scope of
Development and any items previously approved hereunder by the City. The Developer, upon
receipt of a disapproval, shall revise such plans, drawings and related documents and resubmit
them to the City as soon as possible after receipt of the notice of disapproval, provided that in no
case shall the City be entitled to require changes inconsistent with the Scope of Development and
any previously approved items,
4.4.3 If the Developer desires to make any material change in the construction plans
after their approval by the City, the Developer shall submit the proposed change to the City for
its approval. If the construction plans, as modified by the proposed change, conform to the
5 5394,00000\29008220. 1
65D-25
requirements of this Section 4.4, and other approvals previously granted by the City under this
Agreement and the Scope of Development, the City shall approve the proposed change and
notify the Developer in writing within thirty (30) days after submission to the City.
4.4.4 Based on the development and preliminary plans provided by Developer for the
Project under this Agreement, City staff has made an initial determination that the development
of the Hotel Project may have significant environmental impacts requiring the preparation of an
Environmental Impact Report.
4.5 Schedule of Performance. The Developer shall provide a detailed construction schedule,
staging, and management plan to be reviewed and approved by the City to eliminate or mitigate
impacts to the surrounding businesses and the public during construction. The Developer agrees
to perform and advance development of the Project consistent with the Schedule of Performance
attached hereto as Attachment No. 4. The Schedule of Performance is subject to revision as
mutually agreed upon in writing between the Developer and the City pursuant to this Agreement.
The City Manager shall have the authority to approve in writing, on behalf of the City, any such
extensions of time he or she deems reasonable and appropriate, in accordance with the
requirements of this Agreement.
4.5.1 The City shall convey property titles immediately prior to a previously scheduled
and fully authorized demolition of the existing improvements on the property.
4.5.2 The demolition of the existing improvements and subsequent construction of the
new project shall take place consistent with agreed upon terms and timelines set forth in the
DDA.
4.6 Bodily Iniury and Property Damage Insuran , Prior to the commencement of any work
on the Project Site, including any preliminary work performed by the Developer pursuant to
Section 3.13, the Developer shall furnish, or cause to be furnished to the City duplicate originals
or appropriate certificates of insurance evidencing commercial general liability insurance on an
oceturence basis instiring against bodily injury and property damage in a combined single limit
of liability per occurrence in the amount of ONE MILLION DOLLARS ($1,000,000), general
aggregate limit of TWO MILLION DOLLARS ($2,000,000) and builder's all risk insurance in
ari amount not less than the Rill insurable value of the improvements on the Site on a
replacement cost basis, together with endorsements naming the City, and its elected and
appointed officers, officials, employees, contractors, agents and representatives, as additional
insureds. Developer shall f)urther provide evidence of automobile liability insurance on an
occurrence basis for bodily injury, including death, of one or more persons, property damage and
personal injury, with limits of not less than TWO MILLION DOLLARS ($2,000,000) per
occurrence, covering owned, non -owned and hired automobiles. Developer shall also provide
evidence of worker's compensation insurance in the statutory amount required by law.
Developer's contractor, and subcontractors if any, shall also submit evidence of liability
insurance in the same form and amount as required by Developer.
4.6.1 The certificates of insurance shall be accompanied by all appropriate
endorsements, and shall set forth the names of the insurance carriers, fie policy numbers, the
5 5 3 94,00000\29008220, 1 65D-26
coverage limits, any applicable deductible or retention, and the policy Uffective and expiration
dates. The certificates of insurance shall also evidence that: (a) Developer has procured and paid
for the foregoing insurance coverage from companies either (i) having an A.M. Best rating of "A
Vil?) or higher or (ii) otherwise acceptable to City in its sole discretion; (b) the person executing
the insurance certificates is authorized by the applicable insurance carriers to do so; and (c) all
insurance coverages required to be maintained by Developer pursuant to this Section 4.6 provide
coverage on an "occurrence" basis and not on a "claims made" basis. The insurance certificates
shall state that the insurer will provide Agency with thirty (30) days written notice in case of
cancellation or non -renewal.
4.6.2 The insurance policies required by this Section 4.6 shall be endorsed by
Developer's insarance carriers to reflect (a) that the coverages provided pursuant to the policies
required by this Section 4.6, including any excess or umbrella policies, are primary over any
other insurance coverage that may be available to City, and (b) that any other insurance coverage
that may be available to City shall be excess over the coverages provided by the policies required
by this Section 4.6, including any excess or umbrella policies, and (c) that the coverages
provided pursuant to the policies required by this Section 4,6, including any excess or umbrella
policies, shall not require contribution of any other insurance coverage that may be available to
City, regardless of how such other insurance coverage of City is structured to apply in other
insurance situations. Further, all policies, including excess or umbrella policies, shall provide
coverage for claims by one insured against another insured and the policies $ball not contain any
cross -suits exclusions, cross -liability exclusions, or insured versus insured exclusions.
4.6.3 In addition to the insurance requirement of this Section 4.6, the Developer agrees
to and shall indemnify, protect, defend and hold the City, its elected and appointed officers,
directors, employees, agents and representatives, harmless from and against all liability, loss,
damage, costs or expenses (including reasonable attomeys' fees and court costs) arising from or
as a result of the death of any person or any accident, injury, loss or damage whatsoever caused
to any person or to the property of any person which shall occur on or adjacent to the City
Property, or applicable portion thereof, and which is not caused by the act or negligence of the
City, or its officers, agents, servants, employees or contractors.
4.7 itv and Other Governmental Agency Permits. Prior to the commencement of any
construction and development (or any work related thereto) upon the City Property, the
Developer shall, at its own expense, secure, or cause to be secured, my and all approvals and
permits which may be required by the City or any other governmental agency affected by such
construction. All site work and construction activities shall be undertaken in accordance with the
requirements of the City, and other applicable local, regional, state and federal rules, regulations
and standards, including but not limited to: City building permit; grading permit; approved
development plans; design review, and conditions specified in City conditional use permit.
The Developer agrees to defend, indemnify, protect and hold harmless the City and its officers,
employees, and agents from, regarding and against any and all liabilities, obligations, orders,
claims, dainages, fines, penalties and expenses of any kind whatsoever, together with fees
(including, without limitation, reasonable attorneys' fees), whenever arising, resulting from or in
5 53 94,00000\2 9008220.1 65D-27
connection with the obligation to comply with all laws with respect to the construction of the
Project, including, without limitation, all applicable federal and state labor laws and standards,
4.8 Rigbia of Access during Construction. For the purposes of assuring compliance with this
Agreement, representatives of the City shall have the reasonable right of access to the City
Property without charges or fees, at normal construction hours during the period of construction
and development for the purposes of this Agreement, including, but not limited to, the inspection
of the work being performed in constructing and developing the improvements. Nothing
contained in this Section 4.8 shall be, or be deemed to be, a limitation of the rights of the City,
under its regulatory authority, to access the City Property and inspect the City Property or the
improvements being constructed thereon.
4.9 Anti -Discrimination. The Developer, for itself and its successors and assigns, agrees that
in the construction and development of improvements on the Project Site as provided for in this
Agreement, the Developer will not discriminate against any employee or applicant for
employment on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
4.10 Certificate of CoMpleti , Upon the completion of the construction and development of
any portion of the Project, the Developer shall send a written request to the City and the City
shall furnish the Developer with a Certificate of Completion for such work, in a form suitable for
recording in the Official Records of Orange County, California. A Certificate of Completion is
not a Certificate of Occupancy as may be issued by the City.
The Certificate of Completion shall be, and shall so state, conclusive determination of
satisfactory completion of the construction and development work to be completed on that
portion of City Property, as required by this Agreement. The City shall not unreasonably
withhold the Certificate of Completion. If the City refirses or fails to furnish a Certificate of
Completion for any portion of the City Property after written request from the Developer, the
City shall provide the Developer with a written statement of the reasons the City refused or failed
to furnish a Certificate of Completion, The statement shall also contain the City's opinion of the
action the Developer must take to obtain a Certificate of Completion. If the reason for such
refusal is confined to the immediate unavailability of specific items or materials for landscaping
or monuments not a pail of a structure, the City may issue its Certificate of Completion upon the
posting of a bond by the Developer in an amount representing a fair value of the work not yet
completed.
After recording of a Certificate of Completion, any party then owning or thereafter leasing,
subleasing, or otherwise acquiring any interest in that portion of the City Property covered by a
Certificate of Completion shall not (because of sucl-i lease, sublease or acquisition) incur any
obligation or liability under this Agreement.
A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of
any obligation by the Developer to any holder of a mortgage or any insurer of a mortgage
5 5394.00000\29008220.1 65D-28
securing money leaned to finance the improvements or any part thereof. A Certificate of
Completion is not notice of completion as referred to in California Civil Code Section 3093.
Prior to issuance of final certificates of occupancy, general, standard, and specific conditions and
obligations set forth for this project shall be met within the timelines outlined in the DDA.
4.11 Records. The Developer shall maintain in accordance with generally accepted
accounting principles, complete books and records relating to the construction, and development
of the Project. Upon request for examination by the City, the Developer during all normal
business hours, shall make available all of its records with respect to all matters covered by this
Agreement. Developer shall permit the City to audit, examine and make excerpts or transcripts
from these records.
4.12 Prevailing Wage . The parties contemplate that the construction of the Project pursuant
to this Agreement will be subject to the payment of prevailing wages under Labor Code Section
1720, et seq. Accordingly, the Developer shall indemnify, hold harmless and defend (with
counsel reasonably acceptable to the City) the City against any claim for damages,
compensation, fines, penalties or other arnounts arising out of the failure of Developer or its
contractors to pay prevailing wages if slid to the extent required by law or to comply with the
other applicable provisions of Labor Code Sections 1720 ot seq. and implementing regulations of
the Department of Industrial Relations in connection wft�-cou8tructiori of the Project, The
foregoing indemnity shall survive any termination of this Agreement. Additionally, the hotel
component shall employ unionized labor at prevailing wages for its operations.
4.13 Labor Agreement Requiremen.
4.14 Hotel Tax Rebate Incentive. A hotel tax rebate incentive may be negotiated between the
City and the hotel operator consistent with the City's Hotel Incentive Program.
4.15 Parking.
4.15.t The developer will not be required to replace the existing public parking.
Therefore, no public funds shall be directed to the development project for the purpose of
creation of public parking.
4.15.2 The City and the developer will review and resolve all existing parking
obligations associated with the existing municipal parking structure.
4,15.3 The City shall be responsible for removing all City parking equipment prior to
commencement of demolition.
4.15.4 The developer shall provide a Parking Management Agreement. Part of that
agreement will include provisions for the City to maintain and operate the parking structure until
such time that the property must be prepared for demolition.
4.15.5 Existing street parking meter and parking activity must remain intact.
55394.00000\29008220, t 65D-29
4.16 Community Outreach. Developer is required to provide Community Outreach with all
stakeholders to hear and address concerns over parking and construction during and after
construction.
4.17 Stap-ing Locations. Developer shall be fully responsible for securing and leasing staging
locations at the developer's expense to the satisfaction of the City. The construction staging
location and equipment shall not impede day-to-day activities in surrounding areas.
Article 5
DEFAULTS AND REMEDIES
5.1 Default. Subject to extensions of time set forth herein, or any other extension of time that
may be agreed to by the parties, and the specific remedies set forth in sections 5.5-5.7 below,
failure or delay by either party to perform any terin or provision of this Agreement constitutes a
default under this Agreement. The non -defaulting party shall notify the defaulting party that a
default exists and that the defaulting party must cure or commence to cure and diligently
prosecute to completion any such default within thirty (30) days of receipt of the notice of
default, The party who so fails or delays must immediately commence to cure, correct or remedy
such failure or delay, and shall complete such cure, correction or remedy with reasonable
diligence and during any period of curing shall not be in default. If the default is not commenced
to be cured within thirty (30) days after service of the notice of default and is not cured promptly
in a continuous and diligent manner within a reasonable period of time after commencement, the
defaulting party shall be liable to the non -defaulting party for damages caused by such default,
Except as otherwise expressly provided in this Agreement, any failure or delay by either party in
asserting any of its rights or remedies as to any default shall not operate as a waiver of any
default or of any such rights or remedies or deprive such party of its right to institute and
maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any
such rights or remedies.
5.2 Legal Action , In addition to any other rights or remedies, either party may institute legal
action to cure, correct or remedy any default, to recover damages for any default or to obtain any
other remedy (including specific performance) consistent with the purpose of this Agreement.
Such legal actions must be instituted in the Superior Court of the County of Yolo, State of
California, in any other appropriate court in that county, or in the Federal District Court in the
Eastern District of California.
Further, the non -defaulting party may file legal action to require the defaulting party to
specifically perforin the terms and conditions of this Agreement.
5.3 Applicable Law. The laws of the State of California, excepting those provisions dealing
with choice of law, shall govern the interpretation and enforcement of this Agreement.
This Agreement has been negotiated at arm's length and between persons sophisticated and
Imowledgeable in the matters dealt with herein. In addition, each party has been represented by
5 5394. 00000\29008220. 1 65D-30
experienced and knowledgeable legal counsel. Accordingly, any rule of law (including
California Civil Code Section 1654) or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not applicable and is waived.
The provisions of this Agreement shall be interpreted in a reasonable manner to effect the
purposes of the parties and this Agreement,
5.4 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party
of one or more of such rights or remedies shall not preclude the exercise by it, at the same time
or different times, of any other rights or remedies for the same default or any other default by the
other party,
5.5 Termination by the Developer Prior to Conveyance. In the event that prior to conveyance
of the City Property to the Developer:
S.5.1 If the Developer identifies any existing contamination on the City Property, and
the Developer elects not to remediate any such existing contamination, or for any other reason
the Developer determines that the condition of the City Property is not suitable for development
pursuant to this Agreement; or
5.5.2 If any of the Developer's conditions precedent to conveyance are not satisfied by
the time set foith in this Agreement despite City's good faith efforts to do so, and such failure is
not cured within thirty (30) days after written notice from Developer or, if such failure cannot be
reasonably cured within such 30 day period, the City is not diligently acting to cure such failure
in a thriely manner; or
5.5.3 Si�bject to Force Majeure, all conditions precedent to conveyance are satisfied or
waived by the party benefiting from such condition and the City, despite City's good faith
efforts, is unable to tender conveyance of fee interest in the City Property or possession thereof
in the manner and condition and by the date provided in this Agreement, and any such failure is
not cured within fifteen (15) days after written demand by the Developer or, if such failure
cannot be reasonably cured within such fifteen (15) day period, the City is not diligently acting
to cure such tenure In a timely manner; or
5.5.4 The Developer is unable, despite diligent efforts, to secure reasonable financing
necessary for development of the City Property, or otherwise determines that the development of
the City Property is not feasible due to the economic conditions then in existence, and the City
and Developer are unable to mutually agree upon an alternative approach, which may include
modifications or amendments to this Agreement; or
5.5.5 The City is in default under any other provision of this Agreement and such
default is not cured within the applicable time periods;
then this Agreement and any rights of the City or any assignee or transferee in this Agreement
pertaining thereto or arising therefrom with respect to the Developer may, at the option of the
Developer be terminated by written notice thereof to the City, as the Developer's sole and
5 5394, 00000\2.9009220.1 65D-31
exclusive remedies for the matters described in this subsection. Upon such termination, and
except for those provisions which are specifically intended to survive any termination of this
Agreement, the parties shall have no farther obligations to or rights against each other.
Notwithstanding the foregoing, in the event that Developer terminates the Agreement pursuant to
this Section 5.6 after the completion of the Feasibility Period, except for terminations based upon
any default by City, the City shall retain the Deposit as liquidated damages as provided in
Section 5.7 of this Agreement.
5.6 Termination by the City Prior to Qqaylyange. In the event that prior to conveyance of
fee interest in the City Property to the Developer:
5.6.1 The Developer transfers or assigns this Agreement or any rights herein in
violation of this Agreement; or
5.6.2 There is a change in the ownership or identity of the Developer or the parties in
control of the Developer in violation of the provisions of this Agreement; or
5.6.3 The Developer does not submit the evidence required under Section 3.16 that it
has the necessary commitment letters for financing for development of the City Property in the
manner and by the date provided in this Agreement and such failure is not cured within thirty
(3 0) days after written notice from City or, if such failure cannot be reasonably cured within such
thirty (30) day period, the Developer is not diligently acting to cure such failure in a timely
manner; or
5.6.4 The Developer does not submit the Deposit within the time provided herein; or
5.6.5 The Developer does not satisfy all its conditions precedent to Close of Escrow
pursuant to this Agreement prior to the date set forth for Close of Escrow herein and such failure
is not cured within fifteen (15) days after written demand by the City or, if such failure cannot be
reasonably cured within such fifteen (15) day period, the Developer is not diligently acting to
cure such failure in a timely manner, or
5.6.6 The Developer has failed to satisfy all of the conditions to Close of Escrow set
forth herein prior to the Outside Date,
5.6�7 The Developer is in breach or default with respect to any other material obligation
of the Developer under this Agreement prior to Close of Escrow; and if any default or failure
referred to above shall not be cured within thirty (30) days after the date of written demand by
the City or, if such default cannot be reasonably cured within such thirty (30) day period, the
Developer is not reasonably acting to cure such default in a timely manner; then this Agreement,
and any rights of the Developer or any assignee or transferee in this Agreement pertaining
thereto or arising therefrom with respect to the City, may, at the option of the City, be terminated
by the City by written notice thereof to the Developer, and provided such termination occurs
after the end of the Feasibility Period, the City shall retain the Deposit as liquidated damages,
and such liquidated darnages and termination of this Agreement shall constitute the City's sole
and exclusive remedies for the matters described in this subsection. Upon such termination, and
5 53 94.00000\29008220.1 65D-32
eNcept for those provisions which are specifically intended to survive any termination of this
Agreement, the parties shall have no farther obligations to or rights against each other.
5.7 Liquidated Damages
IF THIS AGREEMENT IS TERMINATED BY THE CITY FOR A DEFAULT OF THE
DEVELOPER PRIOR TO CLOSE OF ESCROW OR BY DEVELOPER AFTER THE END OF
THE FEASIBILITY PERIOD, THE DEPOSIT MAY BE RETAINED BY THE CITY AS
LIQUIDATED DAMAGES AND AS ITS PROPERTY WITHOUT ANY DEDUCTION,
OFFSET OR RECOUPMENT WHATSOEVER. IF THE DEVELOPER SHOULD DEFAULT
UPON ITS OBLIGATIONS, MAKING IT NECESSARY FOR THE CITY TO TERMINATE
THIS AGREEMENT AND TO PROCURE ANOTHER PARTY OR PARTIES TO
REDEVELOP THE SITE IN SUBSTANTIALLY THE MANNER AND WITHIN THE
PERIOD THAT SUCH SITE WOULD BE REDEVELOPED UNDER THE TERMS OF THIS
AGREEMENT, THEN THE DAMAGES SUFFERED BY THE CITY BY REASON
THEREOF WOULD BE UNCERTAIN. SUCH DAMAGES WOULD INVOLVE SUCH
VARIABLE FACTORS AS THE CONSIDERATION THAT SUCH PARTY WOULD PAY
FOR THE SITE; THE EXPENSES OF CONTINUING THE OWNERSHIP AND CONTROL
OF THE SITE; OF INTERESTED PARTIES AND NEGOTIATING WITH SUCH PARTIES;
POSTPONEMENT OF TAX REVENUES THEREFROM THE COMMUNITY; AND THE
FAILURE OF THE AGENCY TO EFFECT ITS PURPOSES AND OBJECTIVES WITHIN A
REASONABLE TIME, RESULTING IN ADDITIONAL IMMEASURABLE DAMAGE AND
LOSS TO THE CITY AND THE COMMUNITY. IT IS IMPRACTICABLE AND
EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH DAMAGES TO THE CITY,
BUT THE PARTIES ARE OF THE OPINION, UPON THE BASIS OF ALL INFORMATION
AVAILABLE TO THEM, THAT SUCH DAMAGES WOULD APPROXIMATELY EQUAL
THE AMOUNT OF THE DEPOSIT HELD BY THE CITY AT THE TIME OF THE DEFAULT
OF THE DEVELOPER, AND THE AMOUNT OF SUCH DEPOSIT SHALL BE PAID TO
THE CITY UPON ANY SUCH OCCURRENCE AS THE TOTAL OF ALL LIQUIDATED
DAMAGES FOR ANY AND ALL SUCH DEFAULTS AND NOT AS A PENALTY, IN THE
EVENT THAT THIS PARAGRAPH SHOULD BE HELD TO BE VOID FOR ANY REASON,
THE CITY SHALL BE ENTITLED TO THE FULL EXTENT OF DAMAGES OTHERWISE
PROVIDED BY LAW.
THE DEVELOPER AND THE CITY SPECIFICALLY ACKNOWLEDGE THIS
LIQUIDATED DAMAGES PROVISION BY THEIR SIGNATURES HERE:
0
0
5.8 Tertnination Followina Conveyance. Following conveyance of the City Property, in
addition to any other rights or remedies, either party may institute legal action to clare, correct or
remedy any default, or recover damages for any default, or to obtain any other remedy consistent
.5 53 94.00000\29008220,1 65D-33
with the purpose of this Agreement, including but not limited to specific performance under this
Agreement.
Article 6
GENERAL PROVISIONS
6.1 Conflicts of Interest. No member, official or employee of the City shall have any
personal interest, direct or indirect, in this Agreement, nor shall any such member, official or
employee participate in any decision relating to this Agreement which affects his or her personal
interests or the interests of any corporation, partnership or association in which he or she is
directly or indirectly interested. The Developer warrants that it has not paid or given, and will
not pay or give, any third party any money or other consideration for obtaining this Agreement.
6.2 Non -Liability of City Officials and EMployees. No member, official or employee of the
City shall be personally liable to the Developer, or any successor in interest, in the event of any
default or breach by the City, or for any amount which may become due to the Developer or its
successors, or on any obligations under the terms of this Agreement, except as may be caused by
intentional torts or criminal activities of any such City member, official or employee. Developer
hereby waives and releases any claim it may have against the members, officials or employees of
the City with respect to any default or breach by City or for any amount which may become due
to Developer or its successors, or on any obligations under the terms of this Agreement, except
as may be caused by intentional torts or criminal activities.
6.3 Force Majeur . Subject to the limitations set forth below, performance by any party
tinder this Agreement shall not be deemed to be in default, and all performance and other dates
specified in this Agreement shall be extended, where delays are due to: war; insurrection; strikes;
lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy;
epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority;
litigation; unusually severe weather; acts or omissions of the other party; or other circumstances
beyond the control of such party ("Force Majeure"). An extension of time for any such cause
shall be for the period of the force majeure delay and shalt commence to run from the time of the
commencement of the cause (but in any event shall not exceed a cumulative total of one hundred
eighty (180) days), if notice by the party claiming such extension is sent to the other party within
thirty (30) days of the commencenient of the cause. Times of performance under this Agreement
may also be extended in writing by the mutual agreement of City and Developer.
6.4 Inspection of Books and Records. The City has the right, upon not less than seventy-two
(72) hours' notice, at all reasonable times, to inspect the books and records of the Developer
pertaining to the Project Site as pertinent to the purposes of this Agreement
6.5 Time is of the Essence. Time is of the essence in the performance of this Agreement.
6.6 Waiver. A waiver by one party of the performance of any covenant, condition or promise
of the other party shall not invalidate this Agreement, nor shall it be considered to be a waiver by
such party of any other covenant, condition or promise contained herein. The waiver of either or
55394,00000\290082M I 65D-34
both parties of the time for performing any act shall not be construed as a waiver of any other act
required to be performed at a later date.
63 Notices, All notices that are given pursuant to this Agreement shall he in writing. Any
notice sent by registered or certified mail, return receipt requested, shall be deemed given on the
date of delivery shown on the receipt card. Notices delivered by the United States Express Mail,
Federal Express, Airborne Express or another overnight courier that provides next business day
delivery (the "Express Courier") shall be deemed given on the next business day after deposit of
the same with the Express Courier. If any notice is transmitted by facsimile (fax) transmission or
similar means, the same shall be deemed received or delivered upon the transmission thereof,
provided a copy is also given via personal delivery or deposited with the Express Courier by no
later than the next business day after such facsimile transmission, If notice is given or received
on a Saturday, Sunday or legal holiday, or on a business day after 5:00 P.M., it shall be deemed
given or received on the next business day, For purposes of notice, the addresses of the parties
are as follows, which may be changed by five (5) days prior written notice:
City: City of Santa Ana
Attn: City Manager
Telephone:
Facsimile:
With a copy to: City Attorney
Developer:
With a copy to:
Attn:
Telephone:
Facsimile:
Attn:
Telephone:
Facsimile:
6.8 Entire Agreement. This Agreement, including all attachments hereto, contains the entire
agreement between the parties with regard to the Project Site and supersedes all prior written
and/or oral representations and/or agreements, including, but not limited to, any letter of intent
between the parties.
5 53 94,00000\29008 2M 1 65D-35
6.9 Attorneys' Fees. If an action is filed by any of the parties hereto to enforce and/or
interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs,
6,10 Days. In computing any period of time by days as provided in this Agreement, the date
of the act, event or default from which the designated period of time begins to run will not be
included. If the date for performance or last day of any time period stated in this Agreement falls
on a day that is not a business day, then the due date or the duration of such time period will be
extended so that it ends on the next succeeding day that is a business day. A "business day" is a
day of the week that is not a Saturday, Sunday, or legal holiday recognized by the banks, United
States Postal Service or the Recorder of the County.
6.11 Relationship of the Parties. Nothing in this Agreement is intended to create a partnership
or joint venture between the parties or make one party the agent of the other,
6.12 Headings. Any headings or captions used herein are inserted only as a matter of
convenience and for reference only and in no way defines limit or describe the scope of this
Agreement nor the intent of any of the provisions hereof.
6.13 Context. The words or phrases that are not proper nouns that begin with capital letters
are defined terms that have the meanings that are assigned to them in this Agreement. The
singular form shall include the plural and vice versa; adverbs such as "herein ... .. hereto," and
"hereunder" shall refer to this Agreement in its entirety and not to my specific section or
paragraph; and the terms "include," "including," and similar terms shall be construed as though
followed immediately by the phrase "but not limited to". "Recorded" means to be recorded in
the Official Records of the County of Yolo. Unless specified to the contrary, any reference to a
section or paragraph shall be to a section or paragraph of this Agreement, All Attachments
referred to in this Agreement are attached to it mid incorporated herein and made a part of this
Agreement by this reference.
6.14 Counterparts. This Agreement may be signed by the parties in different counterparts, and
the signature pages combined shall create a document binding on all parties.
6.15 Ci1y App ovals and Actions. Whenever a reference is made herein to an action or
approval to be undertaken by City, the City Manager or his or her designee is authorized to act
on behalf of City, unless specifically provided otherwise or the context requires otherwise.
6,16 Modifications� Amendments. The Developer and City agree to mutually consider
reasonable requests for amendments to this Agreement that inay be made by any of the parties
hereto, subtenants of Developer, lending institutions or bond counsel or financial consultants to
Developer or the City, provided such requests are consistent with this Agreement and would not
materially after the basic business terms included herein. Any waiver, alteration, change,
modification or amendment of or to this Agreement, in order to become effective, shall be made
in writing and in each instance signed on behalf of each party. The City Manager shall be
authorized to approve any modification or amendment to the Schedule of Performance or other
minor modification or amendment hereto that does not atter the basic business terms included
5 5394.00000\2 9008220. 1 65D-36
herein. Any substantive or significant alteration, change, modification or amendment of Or to
this Agreement shall require approval by the City Council.
6.17 Entire Agreement, Waivers and Amendments. This Agreement is executed in four (4)
duplicate originals, each of which is deemed to be an original, This Agreement comprises pages
I through _, inclusive, and Attachments Nos, I through _ which, together with all
documents and agreements referenced herein, constitute the entire understanding and agreement
of the parties with respect to the Project Site.
This Agreement integrates all of the terms and conditions: mentioned herein or incidental hereto
and supersedes all negotiations or previous agreements between the parties with respect to all or
any part of the subject matter hereof.
6.18 Time for Accotance of Agreement by Ci . This Agreement, when executed by the
Developer and delivered to the City, must be authorized, executed and delivered by the City
within thirty (30) days after the date of signature by the Developer or this Agreement shall be
void, except to the extent that the Developer may consent in writing to further extensions of time
for the authorization, execution and delivery of this Agreement. The effective date of this
Agreement shall be the date when this Agreement has been signed by the City,
5 3 3 94.00000\29008220.1 65D-37
,2016 "CITY"
APPROVED AS TO FORM:
City Attorney
CITY OF SANTA ANA,
a California Charter City
By:
Mayor
ATTEST:
By:
City Clerk
2016 "DEVELOPER"
m-
55 3 94,00000\2,9008 220, 1 65D-38
ATTACHMENTS
Attachment No. I
Map of the Project Site
Attachment No. 2
[Intentionally Blank]
Attachment No. 3
Legal Description of the City Property
Attachment No. 4
Schedule of Performance
Attachment No. 5
Scope of Development
Attachment No. 6
Form of Grant Deed
5 53 94.00000\29008220. 1 65D-39
ATTACHMENT NO. I
Map of the Project Site
55394. 00000\29008220,1 65D-40
ATTACHMENT NO. 2
[Intentionally Left Blank]
55394,000OW9008220.1 65D-41
ATTACHMENT NO. 3
Legal Description of the City Property
55394. 00000\29008220.1 65D-42
ATTACHMENT NO. 4
SCHEDULE OF PERFORMANCE/MILESTONES
Action Date
Execution of Agreement by Cit The City shall Within days after execution and delivery by
authorize execution of this Agreement and deliver the Developer.
this Agreement to the Developer.
2. Submission of Preliminary Title Repor . The City
shall cause to be prepared and delivered to the
Developer a Preliminary Title Report for the City
3. AMroval of Preliminary Title Rgport. The
Developer shall approve the Preliminary Title
Report for the Site.
4. Feasibility Period. The Developer shall complete
its investigations and approve or disapprove of the
condition of the City Property, and decide whether
to move forward with the Hotel Prqj�ect.
5, Submission of Site and Construction Plans and
Construction a i. The
Developer shall prepare and submit to the City
final construction plans, drawings and related
documents.
6. Aonroval of Site and Construction Plans and
Construction and Operating Budge. The City
shall approve the Developer's final construction
plans.
7. Submission of Evidence of Financing. The
Developer shall submit evidence of adequate
financing to construct the Projea
8, Approval of Evidence of Financing. The City
shall review and approve Develop&s evidence
of adequate financing to construct the Project,
1 Within days following execution of
I Agreement by City.
Within — days after receipt of updated
Preliminary Title Report from City (following
acquisition of Successor Agency Parcels).
Within — days after execution of this
Agreement by the City,
. ..... ... ..... ...
Within _ days after execution of this
Agreement by the City.
In accordance with City's normal plan check and
design review process.
Concurrent with or immediately following
approval of final Construction and Operating
Budget, but in any event within days prior to
.close of escrow
Within — days after receipt thereof by the
Agency.
9. Satisfaction of All Conditions Precedent to Clos At or prior to the close of escrow.
of Escrow. Developer and City, as applicable,
shall complete all other conditions precedent to
close of escrow provided for in Section 3.5.
55394,00000\29008220.1 65D-43
Action
13. Deposit of Grant Deed and Purchase Price.
Developer and City, as applicable, shall deliver
into escrow the Grant Deed, Purchase Price, and
all required funds.
111 .. .. . . ...... . . . -- ------- - -- --- ----------
15, Merger of Project Sit . Developer shall record an
approved parcel map and/or lot line adjustment as
14. Close of Escrow, The City shall convey title to the
City Property to the Developer, and the Developer
16. Certificates of Insurance. The Developer shall
deliver to the City certificates of insurance.
17. Commencement of Construction. The Developer
shall commence construction of the improvements
on the Proioct Site,
18. Comi)letion of Construction. The Developer shall
complete construction of the improvements on the
Site,
19. Issuance of Certificate of Completio . The City
shall furnish die Developer with a Certification of
Completion for the Project,
Date
Not later than — days prior to the close of
escrow.
.. .. ... . .....
Immediately following or concurrent with Close
of Escrow
Prior to or concurrently with the close of
Developer's construction loan for the Project,
which shall occur no later than
Prior to commencement of any work on the City
Property.
Within — days after close of escrow.
Within months after commencement thereof.
Promptly after completion of all construction
required to be completed by the Developer on
the Site, and upon written request therefor by the
Developer.
55394.00000\29009220.1 65D-44
ATTACHMENT NO. 5
SCOPE OF DEVELOPMENT
The Project Site shall be developed by Developer in accordance with the provisions of
this Agreement and the plans, drawings and related documents as approved by the City pursuant
to entitlement and permit application processes.
Hotel of 80 rooms or keys
Residential Project of no more floors.
City will maintain management and operation of the garage until he is at point of
demolition, Developer will have obtained demolition permit.
Must have a hotel operator labor agreement.
The Developer shall construct, or cause to be constructed, on the Project Site an
extended stay hotel with a minimum three start rating, with approximately _square feet of
commercial space oil the first floor of the building for retail and restaurant space.
pool.
orily�
The hotel will include at least _ rooms, a inain lobby, meeting rooms and an indoor
The Project Site shall provide parking sufficient to serve the demands of the Project
The "Project" shall not be required to provide public parking.
Describe alley improvements
Describe trash and sanitation plan
Removal of foot bridges.
Describe roof top plans.
Architectural Design. The architectural design of Project shall be consistent with the
requirements of the City of Santa Ana and in accordance with the Basic Concept Drawings
attached hereto as Exhibit A and are incorporated herein by this reference.
Landscape design, signage, and screening for trash areas, fire related mechanical
devices, rooftop equipment and other building elements with required screening for the Hotel
Project, shall all be consistent with the standards of the City of Santa Ana.
Shall have submitted a Staging Plan for street closures, phasing for the facilities etc.
5 53 94.00000 \29008220A 65D-45
Prior to evidence dernonstrating that the existing parking agreements have been
extinguished.
5 5394. 00000\'29008220.1 65D-46
ATTACHMENT NO. 6
Form of Grant Deed
553 94, 00000\29008220.1 65D-47
ATTACHMENT NO. 7
Form of ReciprocaI Easement Agreement
55394.00000\29008220. ( 65D-48
,665D-49
Exhibit 4
Resolution No.
RE, SOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA DIRECTING THE CITY
ATTORNEYS' OFFICE TO NEGOTIATE A
DISPOSITION AND DEVELOPMENT AGREEMENT
WITH CARIBOU INDUSTRIES, INC. OR ITS
AFFILIATES CONCERNING A MIXED USE/HOTEL
DEVELOPMENT AT THIRD & BROADWAY
WHEREAS, the City believes that continued economic development in the Artists
Village is in the best interests of the City insofar as the Artists Village promotes tourism,
diversifies the City's economic base, and further solidifies the City's position as a regional and
State economic hub;
WHEREAS, to this end, the City has adopted numerous economic incentive policies to
further stimulate growth in and around the Artists Village including, but not limited to, a unique
tax incentive program to encourage the development of visitor serving hotel uses in and adjacent
to the Artists Village;
WHEREAS, for the past several years, the City has been actively pursuing a mixed use
development at Third & Broadway consisting of residential, retail, office and hotel;
WHEREAS, on May 3, 2013 and September 16, 2014, the City previously sought
responses from qualified developers to a request for proposals to enter into a disposition and
development agreement with the City to develop the Third & Broadway project;
WHEREAS, Caribous Industries, Inc. ("Developer") responded to the RFP and on July 5,
2016 was selected by the City as the Developer and the City directed City Staff to prepare a
disposition and development agreement with Developer;
WHEREAS, the City's Development and Transportation Committee have been working
with the Developer to negotiate such a disposition and development agreement to implement the
Project;
WHEREFORE, in light of the importance of the Third & Broadway project to the overall
economic development goals of the City, the City Council hereby directs the City Attorneys'
Office to negotiate a development and disposition agreement with Developer concerning a mixed
use development at Third & Broadway consisting of the following terms and to be brought back
to the City Cow-icil for further action at a City Council meeting to be held no later than
December 31, 2016:
Developer is to purchase the property at no cost to Developer (as an incentive to invest in
excess of $70,000,000) with the intention of demolishing the existing parking garage and
building a mixed use residential/retail/office/hotel project.
1032/028269-0006
10259001.1 a10/24/16 65D-50
2. The developer shall be required to deposit $50,000 within five (5) days of opening an
escrow,
3. The Agreement shall only become binding once California Environmental Quality Act
("CEQA") compliance has been achieved and Developer has obtained land use
entitlements. Transfer of the title of the property shall only take place after CEQA
compliance and land use entitlements have been obtained.
4. The developer shall obtain all necessary entitlements at its own expense.
5. A quality hotel component consisting of no fewer than 60 rooms is a required component
of the proposed project. The hotel may be built at the same time as the rest of the project
or in a subsequent phase, as described by the developer with a justification for its phasing
and timing. If the hotel is built at the same time, and within 6 months of the certificate of
occupancy the hotel is proven to be unsuccessful, the hotel rooms can be rented as studio
apartments.
6. A hotel tax abatement incentive may be negotiated between the City and the developer.
7. The developer shall build the project paying prevailing wages.
8. The developer will replace the existing public parking with between 253-300 parking
spaces. The City will leaseback the parking spaces from developer for 40 -years at $95 per
space per month. The City will fund between $8,053,243 and $9,549,300 (number of
spaces x $31,831 per space = cost) for the public parking portion of the above ground
parking structure.
9. The City and the developer will review and resolve all existing parking obligations
associated with the existing municipal parking structure.
10. The City shall convey property titles immediately prior to a previously scheduled and full
authorized demolition of the existing improvements on the property.
11. The demolition of the existing improvements and subsequent construction of the new
project shall take place consistent with agreed upon terms and timelines set forth in the
DDA.
12. Any uriatithorized delays by the developer, except reasonable delays for force majeure,
weather, economic downturn, etc., at any agreed upon phase of construction shall be
subject to penalties set forth in the DDA,
13. The new development project shall be designed by Studio One Eleven to exemplify the
City's commitment to excellent design and sustainability in Santa Ana.
14. Prior to issuance of final certificates of occupancy, general, standard, and specific
conditions and obligations set forth for this project shall be met within the timelines
outlined in the DDA subject to the reasonable carve -outs outlined in #12 above.
15. Developer is required to provide reasonable Community Outreach with all stakeholders
living within the immediately surrounding neighborhood and within 200 feet of the
project, to hear and address reasonable concerns during and after construction.
1032/028269-0006
10259001 1 a] 0/24/16 65D-51
16. The developer shall provide a Parking Management Agreement. Part of that agreement
will include provisions for the City to rnaintain and operate the parking structure until
such time that the property must be prepared for demolition.
17. The proposed development must reconnect Sycamore Street between 3rd Street and 4 Ih
Street for both vehicle and pedestrian access.
18. Existing street parking meter and parking activity must remain intact except for street
closures for construction.
19. Developer shall reasonably improve the alley adjacent to the property according to
specifications determined during the entitlement review process.
20. Developer shall remove the existing pedestrian bridges.
21. Developer shall provide ground floor, pedestrian oriented commercial uses as will be
detailed during the entitlement process,
22. The developer shall provide a reasonable construction schedule, staging and management
plan to be reviewed and approved by the City to eliminate or mitigate impacts to the
surrounding businesses and the public during construction.
23. The construction management and mitigation plan shall be discussed and reasonably
analyzed as part of the environmental review process prior to final approvals.
24. Developer shall be fully responsible for securing and leasing staging locations at own
expense as approved by City.
25. City shall be responsible for removing all City parking equipment prior to commencement
of demolition.
PASSED, APPROVED and ADOPTED this _ day of November 2016.
/s/ [Mayor]
tD32/028269-0006
10259001.1 at 0/24/16 65D-52