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HomeMy WebLinkAbout2005 07-19 CC CDC JT AGENDA PKTCity of National City Joint Meeting Agenda Regular Meeting of the City Council Special Meeting of the Parking Authority Adjourned Regular Meeting of the Community Development Commission City Council Chambers Civic Center 1243 National City Boulevard National City, California Tuesday — July 19, 2005 - 6:00 P.M. Open To The Public Please complete a request to speak form prior to the commencement of the meeting and submit it to the City Clerk. It is the intention of your City Council to be receptive to your concerns in this community. Your participation in local government will assure a responsible and efficient City of National City. We invite you to bring to the attention of the City Manager any matter that you desire the City Council to consider. We thank you for your presence and wish you to know that we appreciate your involvement. Pledge of Allegiance to the Flag by Mayor Nick Inzunza Public Oral Communications (Three -Minute Time Limit) NOTE: Pursuant to state law, items requiring Council action must be brought back on a subsequent Council Agenda unless they are of a demonstrated emergency or urgent nature. Upon request, this agenda can be made available in appropriate alternative formats to persons with a disability in compliance with the Americans with Disabilities Act. Please contact the City Clerk's Office at 336-4228 to request a disability -related modification or accommodation. Notification 24 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. Spanish audio interpretation is provided during Council Meetings. Audio headphones are available in the lobby at the beginning of the meetings. Audio interpretacion en espanol se proporciona durante sesiones del Consejo Municipal. Los audiofonos estan disponibles en el pasillo al principio de la junta. Ili Council Requests That All Cell Phones And Pagers Be Turned Off During City Council Meetings COPIES OF THE CITY COUNCIL MEETING AGENDAS AND MINUTES MAY BE OBTAINED THROUGH OUR WEBSITE AT www.ci.national-city.ca.us Council, CDC, Parking Authority AGENDA 7/19/05 PAGE 2 JOINT PUBLIC HEARING 1. Joint Public Hearing of the City Council, the Community Development Commission and the Parking Authority on the proposed Disposition and Development Agreement by and between the Community Development Commission, the Parking Authority and ARE Holdings, LLC for the Development of the Cove at San Diego Bay Project — the block bounded by National City Boulevard, Roosevelt Avenue, 11th Street and 12th Street NON -CONSENT RESOLUTIONS Community Development Commission 2. Resolution of the Community Development Commission of the City of National City approving the Health and Safety Code Section 33433 Report; approving the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority, and ARE Holdings, LLC, for development of the Cove at San Diego Bay Project; approving the Project Concept Plan; making certain findings in connection herewith; and authorizing the transmittal of said Report to the City Council City Council 3. Resolution of the City Council of the City of National City approving the Health and Safety Code Section 33433 Report; approving the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority, and ARE Holdings, LLC, for development of the Cove at San Diego Bay Project; approving the Project Concept Plan; and making certain findings in connection herewith Parking Authority APPROVAL OF MINUTES Adjourned Regular Meeting of February 22, 2005 4. Resolution of the Parking Authority of National City approving the Health and Safety Code Section 33433 Report; approving the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority, and ARE Holdings, LLC, for development of the Cove at San Diego Bay Project; approving the Project Concept Plan; and making certain findings in connection herewith Council, CDC, Parking Authority AGENDA 7/19/05 PAGE 3 STAFF: MAYOR/CHAIRMAN: COUNCILMEMBERS/COMMISSIONERS: ADJOURNMENT: Next Regular City Council Meeting — Tuesday — August 2, 2005 - 4:00 p.m. — Council Chambers, Civic Center Next Regular CDC Meeting — Tuesday - July 26, 2005 - 6:00 p.m. — Martin Luther King Jr. Community Center Next Regular Parking Authority Meeting — Tuesday - July 18, 2006 - 6:00 p.m. - Council Chambers, Civic Center TAPE RECORDINGS OF EACH CITY COUNCIL MEETING ARE AVAILABLE FOR SALE IN THE CITY CLERK'S OFFICE CITY COUNCIL, COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY OF THE CITY OF NATIONAL CITY July 19, 2005 AGENDA ITEM NO. 1 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: JOINT PUBLIC HEARING: ON THE PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT Recommendation: Community Development Commission staff recommends that the joint. City Council, Parking Authority and the Community Development Commission of the City of National City: CONDUCT the Joint Public Hearing. Fiscal Impact: The Disposition and Development Agreement provides for an expenditure for public infrastructure of $365,000 for enhanced streetscape on National City Boulevard within the public right-of-way. The Disposition and Development Agreement also provides for an optional subsidy formula, as further described herein, of up to $1,875,000. These funds would be covered by tax increment revenues and/or tax allocation bond proceeds. The Project is expected to generate approximately $455,000 in net tax increment, $90,000 in net low -moderate income housing set -aside, and $50,000 in net sales tax on an annual basis beginning in fiscal year 2007-2008, equating to annual revenues to the Community Development Commission and the City of National City in the amount of $595,000. In addition, approximately $250,000 in up -front impact fees will be assessed to cover basic city services. City Council, Community Development Commission, Parking Authority Agenda Item No. 1 July 19, 2005 Page 1 of 4 Environmental: A Program Environmental Impact Report has been adopted for the Downtown Specific Plan, in accordance with CEQA Guidelines. The project has been determined to be consistent with the Downtown Specific Plan. Pursuant to Section 15182(a) of the California Environmental Quality Act, the project is deemed exempt from further CEQA review. Background: The Commission, at their meeting of October 7, 2003, selected ARE Holdings, LLC to redevelop the block bounded by. National City Boulevard, Roosevelt Avenue, 11th Street and 12th Street. The selection followed an owner participation process, as required by California redevelopment law and the Redevelopment Agency's Owner Participation Rules. ARE Holdings, LLC has proposed the mixed -use Cove at San Diego Bay project, which consists of approximately 219 residential condominiums, 7,500 square feet of commercial retail space, and 360 parking spaces. The project includes a tower element of 16 stories, a mixed -use 7 story building on National City Boulevard, and two four story buildings, one on 12th Street and one on Roosevelt Avenue. Each of these building elements surround a central core of subterranean and podium parking, which remains screened from public view (Exhibit 4). The project is designed to create a village environment that complements other projects in the "Morgan Square" area between the Police Headquarters building on the south and the Education Village project on the north. The development represents a total developer investment of approximately $70,000,000 and is envisioned as a major catalyst to the revitalized downtown district. As a catalyst project, Community Development Commission staff is not recommending the inclusion of subsidized very -low or low-income housing units in this particular development proposal. The Disposition and Development Agreement provides for Redevelopment Agency and/or Parking Authority property acquisition if ARE Holdings, LLC is unsuccessful in assembling all necessary parcels. Any costs associated with Agency acquisition will be covered by ARE Holdings, LLC. In addition, Polanco Act indemnification is provided to ARE Holdings, LLC for any environmental contamination that may be found during the due diligence period. National City Boulevard Streetscape improvements will be implemented, including upgraded sidewalk and landscape elements, as part of the Project development. The Community Development Commission will commit up to $365,000 for public City Council, Community Development Commission, Parking Authority Agenda Item No. 1 July 19, 2005 Page 2 of 4 j improvements for this purpose. In addition, ARE Holdings, LLC will have the option of electing a Redevelopment Agency subsidy of up to $1,875,000, based on the following formula: Subsidy Formula: Within sixty (60) days of completion of acquisition and relocation activities funded by the developer, the developer may elect to either: a. Proceed with a subsidy from the Community Development Commission based on acquisition and relocation costs that exceed $80/square foot, capped at $1,875,000. The Community Development Commission will be reimbursed for these costs through a one percent surcharge collected upon the resale of residential units (after the initial sale and in effect for 30 years), through the same formula applied to initial and subsequent sale of retail units, and through an additional "upside participation" formula, as further described in the Agreement. However, if the subsidy disbursed is $1,300,000 or less, the additional "upside participation" formula will not apply; b. Proceed without a subsidy from the Community Development Commission, in which case the Project is not expected to be constructed utilizing the State Prevailing Wage formula, except as this applies to the construction of National City Boulevard streetscape enhancements; c. Discontinue development and sell back to the Community Development Commission any properties acquired, at the cost of acquisition, and terminate the Disposition and Development Agreement. Timing of Development: The acquisition and relocation process is scheduled to take place as soon as possible and conclude by early Spring 2006. Depending on the outcome of that process, construction plans could be submitted for building permits by early 2006. Building permits are expected to be issued by Summer 2006 with construction planned to commence shortly thereafter. Building completion and occupancy is slated for Spring 2008. Community Development Commission staff will actively work to expedite all phases of the project. A more detailed listing of projected dates is included in the Schedule of Performance (Attachment No. 3 to the Disposition and Development Agreement). With this, Community Development Commission staff recommends that the City Council, the Community Development Commission Board and the Parking Authority Board approve the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority and ARE Holdings, LLC, for development of the Cove at San Diego Bay Project; approve the Health and Safety City Council, Community Development Commission, Parking Authority Agenda Item No. 1 July 19, 2005 Page 3 of 4 July 19, 2005 Code Section 33433 Report; approve the Project Concept Plan; and make certain findings in connection herewith. ATTACHMENTS: EXHIBIT 1 EXHIBIT 2 EXHIBIT 3 EXHIBIT 4 Staff member: Estes — Draft Disposition and Development Agreement — Health and Safety Code Section 33433 Report — Site Map — Notice of Joint Public Hearing City Council, Community Development Commission, Parking Authority Agenda Item No. 1 Page 4 of 4 DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the COMMUNITY DEVELOPMENT COMMISSION AND PARKING AUTHORITY OF THE CITY OF NATIONAL CITY and ARE HOLDINGS, LLC EXHIBIT 1 Table of Contents 100. DEFINITIONS 2 200. SITE ACQUISITION ASSISTANCE 7 201. Developer Request for Site Acquisition Assistance 7 202. Undertaking Site Acquisition Assistance and Transfer of the Remaining Parcels to the Developer 7 203. The CDC's/Parking Authority's Negotiated Acquisition of the Remaining Parcels 7 204. Acquisition by Eminent Domain 8 205. Relocation of Occupants of Remaining Parcels 8 206. Costs and Fees of the Site Acquisition Program and Purchase Price of the Remaining Parcels Acquired by the CDC 8 207. Developer's Election Regarding CDC Financial Assistance 9 208. CDC Financial Assistance 9 209. Disbursement of Financial Assistance Funds 10 210. Reimbursement to CDC 10 211. Developer Reimbursement for Off -Site Improvements 11 300. CONVEYANCE OF THE REMAINING PARCELS 11 301. Disposition of Remaining Parcels 11 302. Escrow 11 302.1. Costs of Escrow 11 302.2. Escrow Instructions 11 302.3. Authority of Escrow Agent 12 302.4. Closing 12 302.5. Termination 12 302.6. Closing Procedure 13 303. Title and Survey Review 13 304. Title Insurance 14 305. Conditions of Closing 14 305.1. CDC's/Parking Authority's Conditions of Closing 14 305.2. Developer's Conditions of Closing 15 306. Representations and Warranties. 16 306.1. CDC and Parking Authority Representations 16 306.2. Developer's Representations 17 307. Studies and Reports 18 308. Condition of the Site 18 308.1. Disclosure 18 308.2. Investigation of Site 19 308.3. CDC's Performance of Remedial Work 19 308.4. Financial Responsibility for Remedial Work 19 308.5. CDC Responsibilities for Hazardous Materials and Remedial Work 19 308.6. Warranties and Indemnities As To Site 20 308.7. Mutual Representations 20 400. DEVELOPMENT OF THE SITE 20 401. Scope of Development. 20 -i- 401.1. Developer's Obligation to Construct Improvements 20 401.2. CDC's Obligation to Construct Infrastructure 21 402. Design Review. 21 402.1. Basic Concept Drawings 21 402.2. Site Plan Drawings 21 402.3. CDC Review and Approval 21 402.4. Standards for Disapproval 21 402.5. Consultation and Coordination 22 402.6. Revisions 22 402.7. Defects in Plans 22 403. Land Use Approvals 23 404. Schedule of Performance 23 405. Cost of Construction 23 406. Insurance Requirements 23 407. Rights of Access 24. 408. Compliance with Laws 24 408.1. Nondiscrimination in Employment 24 408.2. Prevailing Wages 25 408.3. Taxes and Assessments 25 409. Release of Construction Covenants 25 410. Financing of the Improvements 27 410.1. Approval of Financing 27 410.2. No Encumbrances Except Mortgages and Deeds of Trust 27 410.3. Holder Not Obligated to Construct Improvements 27 410.4. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 27 500. COVENANTS AND RESTRICTIONS 28 501. Use in Accordance with Redevelopment Plan 28 502. Use Covenants 28 503. Maintenance Covenants and CC&Rs 28 504. Nondiscrimination Covenants 29 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction 30 600. DEFAULTS AND REMEDIES 30 601. Default Remedies 30 602. Institution of Legal Actions 30 603. Termination by the Developer Prior to the Conveyance 30 604. Termination by the CDC Prior to the Conveyance 31 605. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction. 31 606. Acceptance of Service of Process 33 607. Rights and Remedies Are Cumulative 33 608. Inaction Not a Waiver of Default 33 609. Applicable Law 33 610. Non -Liability of Officials and Employees of the CDC 33 611. Attorneys' Fees 33 700. GENERAL PROVISIONS 33 701. Notices, Demands and Communications Between the Parties 33 702. Extended Delay; Extension of Times of Performance 34 703. Transfers of Interest in Site or Agreement 35 703.1. Permitted Transfers 35 703.2. CDC Consideration of Requested Transfer 35 703.3. Successors and Assigns 36 703.4. Assignment by CDC 36 704. Relationship Between CDC and Developer 36 705. CDC Approvals and Actions 36 706. Counterparts 37 707. Integration 37 708. Real Estate Brokerage Commission 37 709. Titles and Captions 37 710. Interpretation 37 711. No Waiver 37 712. Modifications 37 713. Severability 37 714. Computation of Time 37 715. Legal Advice 38 716. Time of Essence 38 717. Cooperation 38 718. Conflicts of Interest 38 719. Time for Acceptance of Agreement by CDC 38 Attachment No. 1 Site Map A-1 Attachment No. 2 Site Legal Description A-2 Attachment No. 3 Grant Deed A-3 Attachment No. 4 Schedule of Performance A-4 Attachment No. 5 Scope of Development A-5 Attachment No. 6 Release of Construction Covenants A-6 Attachment No. 7 CDC Environmental Reports A-7 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of July 19, 2005, by and between the COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), the PARKING AUTHORITY OF NATIONAL CITY, a public body, corporate and politic (the "Parking Authority") and ARE HOLDINGS, LLC, a Delaware limited liability company (the "Developer"). RECITALS The following recitals are a substantive part of this Agreement: 1. In furtherance of the objectives of the California Community Redevelopment Law, the CDC desires the redevelopment of certain real property within the Project Area, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th (the "Site") for a residential and retail mixed -use project consistent with the terms of this Agreement. 2. As of the date of this Agreement, the Developer owns in fee certain of the parcels which comprise the Site (the "Developer Parcels"). The parties contemplate the possibility that the Developer may need the assistance of the CDC and/or the Parking Authority to acquire the remaining parcels which form the Site (the "Remaining Parcels"). The Parking Authority may acquire property under California law through eminent domain and otherwise for the purpose of constructing and maintaining parking facilities for the use and convenience of the public when it is deemed necessary or convenient to provide such facilities. The Parking Authority and the CDC find it necessary and convenient to require that the Project provide public parking for the Project's retail use, as more particularly described herein, and that the Parking Authority may use its power of eminent domain to acquire property for the purpose of providing such public parking. In the event the Developer needs such assistance to acquire the Remaining Parcels, the CDC and/or the Parking Authority shall provide such assistance in accordance with the terms hereof and to the extent permitted by law. 3. The CDC and the Developer desire by this Agreement for the Developer to purchase the Remaining Parcels from the CDC and/or the Parking Authority if the CDC and/or the Parking Authority acquire the Remaining Parcels pursuant to this Agreement, and for the Developer to construct on the Site of at least approximately 209 and up to 300 condominium residential units (the "Residential Units"), commercial and retail facilities, as well as associated parking therefor (the "Project"). Parking for the Project shall consist of approximately 320 parking spaces of which 40 spaces shall be reserved for public use to access the Project's retail use. Additional development on the Site may occur pursuant to the terms of this Agreement. 4. On February 1, 2005 The City of National City (the "City") adopted the City's Downtown Specific Plan, an amendment to its General Plan and an amendment to its Zoning Code, and certified an Environmental Impact Report (the "EIR") in connection with these actions, which entitle the owner of the Site to construct and operate on the Site multi -family residential units up to a floor area ratio of 6:1, commercial retail space of up to fifteen thousand (15,000) square feet and associated onsite parking. 5. The City Council for the City (the "City Council") and the CDC have duly adopted the Downtown Redevelopment Plan (the "Redevelopment Plan") which permits and encourages each LA-FS 1 \V illaF\311599v05\72826.010100 of the proposed uses and the construction of the Improvements (as hereinafter defined) which, the Developer will undertake under this Agreement. 6. The Developer's acquisition of the Remaining Parcels and its development of the Site as a mixed -use, condominium and retail center in accordance with this Agreement will promote the City's goals of revitalizing its downtown core, expanding housing opportunities for its residents, providing much -needed retail services and public parking, and catalyzing investment in and the redevelopment of this area, all as set forth in the Downtown Redevelopment Plan and the Downtown Specific Plan. 7. The parties have determined that Hazardous Materials, defined below, are present at the Site. 8. As of the Date of this Agreement, the CDC intends to submit a Property Mitigation Plan ("PMP") for. the Site to the regulatory agencies asserting jurisdiction over the Site in connection with mitigating and/or eliminating the environmental contamination identified in the CDC Environmental Reports (as defined below). The PMP is intended to assure the suitability of the Site for the development, occupancy and operation of the Project. The CDC shall perform the Remedial Work in accordance with applicable Governmental Requirements and Environmental Laws and in a manner that is intended to qualify for the immunity under the Polanco Act (set forth at California Health and Safety Code §33459 et seq.) subject to the parties' respective obligations concerning the costs of the Remedial Work as set forth herein. 9. The parties believe that neither the CDC nor the Developer caused the environmental contamination on the Site. However, completion of the Remedial Work is in the best interests of the CDC, the City and the health, safety and welfare of the residents and taxpayers of the Redevelopment Project and the City, and is in accord with the public purposes and provisions of applicable state and local laws. The CDC desires to see the Remedial Work completed under the Polanco Act to effectuate reuse of the Site in accordance with the Redevelopment Plan as well as to provide the CDC, Developer and any subsequent purchasers of all or a portion of the Site with immunity pursuant to Health and Safety Code §33459.3. 10. The CDC's and/or the Parking Authority's acquisition of the Remaining Parcels and disposition thereof to the Developer, and the Developer's acquisition of the Remaining Parcels and construction and completion of the Improvements pursuant to the terms of this Agreement, are in the vital and best interest of the Cityandthe health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the redevelopment of the Redevelopment Project Area has been undertaken and public parking may be afforded. NOW, THEREFORE, the CDC and the Developer hereby agree as follows: 100. DEFINITIONS "Actual Knowledge" means the actual knowledge of the CDC and Developer and their respective officers, managers, employees and agents. "Agreement" means this Disposition and Development Agreement between the CDC and the Developer. -2- "Association" means the property owner's association for the Residential Units, as set forth in Section 403 hereof. "Association CC&Rs" means the Declaration of Covenants, Conditions and Restrictions for the Residential Units, as set forth in Section 403 hereof. "Basic Concept Drawings" means the plans and drawings to be submitted by the Developer and approved by the CDC, as set forth in Section 302.1 hereof. "CDC" means the Community Development Commission of The City of National City, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, Health and Safety Code, Section 33000, et seq., and any assignee of or successor to its rights, powers and responsibilities. "CDC's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the CDC, as set forth in Section 305.1 hereof. "City" means the City of City of National City, a California municipal corporation. "Closing" means the close of Escrow for the Conveyance of any Remaining Parcels from the CDC and/or the Parking Authority to the Developer, as set forth in Section 302.4 hereof. "Closing Date" means the date of the Closing, as set forth in Section 302.4 hereof. "Completion Letter" means the issuance by the DEH or other applicable governmental agency of a letter, certificate or other official writing in a form reasonably acceptable to Developer which provides that the PMP has been completed and that no further investigation, remediation, response or removal with respect to Hazardous Materials is necessary considering the development, occupancy and operation of the Project and confirming, without limitation, that the immunity available under Health and Safety Code Section 33459.3 applies. "Condition of Title" is defined in Section 203 hereof. "Construction Drawings" means the detailed construction drawings and plans to be prepared and used with respect to constructing the hnprovements, which are stamped by a licensed and/or registered engineer as set forth hereafter. "Conveyance" means the conveyance of any of the Remaining Parcels by the CDC and/or the Parking Authority to the Developer on the Closing Date. "Date of Agreement" means the date set forth in the first paragraph hereof. "Default" means the failure of a party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure, as set forth in Section 501 hereof. "DEH" means the County of San Diego, Department of Environmental Health. - 3 - "Developer" means ARE Holdings, LLC, a Delaware limited liability company, and its successors and assigns. "Developer Parcels" are defined in Recital 2 hereof. "Developer's Conditions Precedent" means the conditions precedent to the Closing to the benefit of the Developer, as set forth in Section 205.2. "Developer's Environmental Consultant" means the environmental consultant that may be employed by the Developer pursuant to Section 208.2 hereof. "Developer's Environmental Report" means the environmental investigation of the Site, which may be conducted for the Developer by Developer's Environmental Consultant, as set forth in Section 308.2 hereof. "Eligible Persons" means any individual, partnership, corporation or association which qualifies as a "displaced person" pursuant to the definition provided in Government Code Section 7260(c) of the California Relocation Assistance Act of 1970, as amended, and any other applicable federal, state, or local regulations or laws. "Environmental Insurance" is defined in Section 308.5 hereof. "Environmental Laws" shall mean any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations, or any other requirements of governmental authorities presently relating to the release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous Materials, or the protection of the environment or human, plant or animal health. "Environmental Laws" include, without limitation, (i) the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9601 et seq.), (ii) the Hazardous Materials Transportation Act (94 U.S.C. § 1801 et seq.), (iii) the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.), (iv) the Federal Water Pollution Control Act (33 U.S.C. § 1251 et seq.), (v) the Clean Air Act (42 U.S.C. § 7401 et seq.), (vi) the Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), (vii) the Oil Pollution Act (33 U.S.C. § 2701 et seq.), (viii) the Emergency Planning and Community Right -To -Know Act (U.S.C. § 11001 et seq.), (ix) the Porter -Cologne Water Quality Control Act (Cal. Water Code § 13020 et seq.), (x) the Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code § 25300 et seq.), (xi) the Hazardous Waste Control Act (Cal. Health & Safety Code § 25100 et seq.), (xii) the Carpenter -Presley -Tanner Hazardous Substance Account Act (Cal. Health and Safety Code § 25316 et seq.), (xiii) the Hazardous Materials Release Response Plans and Inventory (Cal. Health & Safety Code § 25501 et seq.), (xiv) Cal. Health and Safety Code § 25281 (Underground Storage of Hazardous Substances), (xv) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, and other applicable provisions of the California Health and Safety Code, Water Code, and Government Code as amended or supplemented and any analogous present federal, state or local statutes, ordinances or laws, and any regulations promulgated pursuant to any of the foregoing. "Environmental Reports" means the collective environmental investigations of the Site as reported in the Developer's Environmental Report and any investigations conducted by or for the CDC or the Developer performed pursuant to Section 308 hereof. kime -4- "Escrow" is defined in Section 302 hereof. "Escrow Agent" is defined in Section 302 hereof. "Escrow Costs" are defined in Section 302.1 hereof. "Exceptions" is defined in Section 303 hereof. "Extended Delay" is defined in Section 702 hereof. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, CDC or instrumentality exercising jurisdiction over the CDC, the Developer or the Site. "Grant Deed" means any grant deed for the conveyance of any of the Remaining Parcels from the CDC and/or the Parking Authority to the Developer, in the form of Attachment No. 3 hereto which is incorporated herein. "Hazardous Materials" means any substance, material, or waste which is or becomes,'• regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous substance," "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Environmental Laws, (ii) petroleum, (iii) friable asbestos, (iv) polychlorinated byphenyls, (v) methyl tertiary butyl ether, or (vi) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Govemmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal, or is defined as "hazardous" or harmful to human health or the environment. "HRA"_shall mean the Health Risk Assessment for the Site prepared by Developer's Environmental Consultant. "Lender" is defined in Section 410 hereof. "Improvements" means the new improvements to be constructed by the Developer upon the Site, all more particularly described in Section 401.1 hereof and in the Scope of Development. hereof. "Mortgage" is described in Section 410.1 hereof. "Notice" shall mean a notice in the form prescribed by Section 701 hereof. "Outside Date" shall mean the last date the Closing shall occur, as set forth in Section 302.4 "Phase 1 Report" is defined in Section 308.2 hereof. "Property Mitigation Plan" or "PMP" referenced in Recital 8 hereof, is a plan designed to combine the investigation and mitigation of environmental conditions at the Site to the extent necessary to use the Site for its intended use after redevelopment. -5- "Polanco Act" shall be defined as California Health and Safety Code §33459, et seq. "Purchase Price" means the price to be paid by the Developer to the CDC and/or the Parking Authority in consideration for the Conveyance of fee title to the Remaining Parcels, as set forth in Section 301 hereof. "Redevelopment Plan" means the Redevelopment Plan for the Redevelopment Project, adopted by Ordinance No. 95 - 2095 of the City Council of the City of National City, and incorporated herein by reference. "Redevelopment Project" means the National City Redevelopment Project, adopted by the City pursuant to the Redevelopment Plan. "Release of Construction Covenants" means the document, which evidences the Developer's satisfactory completion of the Improvements, as set forth in Section 310 hereof, in the form of Attachment No. 6 hereto which is incorporated herein. "Remaining Parcels" are defined in Recital 2 hereof. "Remedial Work" means all actions necessary to investigate the Site for environmental conditions, engage and obtain the approval of appropriate regulatory agency or agencies for a PMP, and implement the PMP to the satisfaction of the environmental oversight agency. Remedial Work also includes the legal and consulting costs incurred by the CDC while seeking cost recovery for Polanco related expenditures. "Report" means the preliminary title report, as described in Section 303 hereof. "Residential Units" means the condominium residential units to be constructed on the Site. "Schedule of Performance" means the Schedule of Performance attached hereto as Attachment No. 4 and incorporated herein, setting out the dates and/or time periods by which certain obligations set forth in this Agreement must be accomplished. The Schedule of Performance is subject to revision from time to time as mutually agreed upon in writing between the Developer and the -CDC's-Dir-eetor.—U-nless--otherwise specified herein, the CDC's-Director is authorized to make such revisions, as he or she deems reasonably necessary. - "Scope of Development" means the Scope of Development attached hereto as Attachment No. 5 and incorporated herein, v,hich describes the scope, amount and quality of development of the Improvements to be constructed by the Developer pursuant to the terms and conditions of this Agreement. "Site" means that certain area within the Project Area, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11t and 12`h in the City of National City, which has previously been developed for urban and commercial use. The Site is legally described in the Site Legal Description and depicted in the Site Map. "Site Acquisition Program" is defined in Section 20] hereof. "Site Legal Description" means the description of the Site, which is attached hereto as .001 Attachment No. 2 and incorporated herein. -6- "Site Map" means the map of the Site, which is attached hereto as Attachment No. 1 and incorporated herein. "Site Plan Drawings" means the plans and drawings to be submitted by the Developer and approved by the CDC, as set forth in Section 402.2 hereof. "Survey" means a current, as -built survey of the Site by a California registered surveyor made in accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys," jointly established and adopted by ALTA, ACSM and NSPS in 1999, and includes items 1 through 4, 6 through 11, and 14 through 16 (all inclusive) of Table A thereof. "Threshold Amount" is defined in Section 308.2 hereof [not defined in DDAJ. "Title Company" is defined in Section 303 hereof. "Title Policy" is defined in Section 304 hereof. "Transfer" is described in Section 703 hereof. 200. SITE ACQUISITION ASSISTANCE 201. Developer Request for Site Acquisition Assistance. The Developer may request the CDC and/or the Parking Authority to provide assistance in connection with the acquisition of any of the Remaining Parcels in accordance with this Section 201. If the Developer does not succeed in purchasing, or in entering into escrow to purchase, any of the Remaining Parcels after diligent effort on a negotiated basis, or if an owner of any of the Remaining Parcels cancels or breaches an escrow for the sale thereof to the Developer, the Developer may at its option submit a written request to the CDC and/or the Parking Authority for the CDC and/or the Parking Authority promptly to initiate the site acquisition program described below (the "Site Acquisition Program") as to any of such Remaining Parcels. 202. Undertaking Site Acquisition Assistance and Transfer of the Remaining Parcels to the Developer. As of the date of this Agreement the CDC and/or the Parking Authority does not own any of the Remaining Parcels. If the Developer requests the CDC and/or the Parking Authority and/or the Parking Authority to initiate the Site Acquisition Program in accordance with Section 201 hereof, the CDC shall use best efforts diligently to acquire each of the Remaining Parcels which are the subject of such a request by a negotiated purchase, as described below. Immediately upon, but in no event later than five (5) business days after, the CDC's and/or the Parking Authority's acquisition of any of the Remaining Parcels, the CDC and/or the Parking Authority shall convey fee ownership to such Remaining Parcels to the Developer in accordance with the terms hereof. 203. The CDC's/Parking Authority's Negotiated Acquisition of the Remaining Parcels. Within five (5) business days of the completion of the appraisal of any Remaining Parcel for which the Developer has requested site acquisition assistance, but in no event later than forty-five (45) days following the CDC's and/or the Parking Authority's receipt of the Developer's written request for such assistance, the CDC and/or the Parking Authority shall deliver a written offer to purchase any such Remaining Parcel to the owner thereof. The CDC and/or the Parking Authority shall base each such written offer upon a real property appraisal report, and shall provide a copy of each such report to the Developer prior to delivering each offer to the owner. The CDC and/or the -7- Parking Authority shall negotiate the purchase of any such Remaining Parcel in good faith in accordance with applicable law. If an owner accepts the CDC's and/or the Parking Authority's offer to purchase, the CDC and/or the Parking Authority shall immediately, but in no event later than five (5) business days of such an acceptance, open escrow to purchase the Remaining Parcel and thereafter convey it to the Developer in accordance with the terms hereof. Concurrent with the opening of said escrow, Developer shall deposit with the CDC or Parking Authority the agreed upon purchase price. 204. Acquisition by Eminent Domain. If an owner of a Remaining Parcel rejects or fails to respond to an offer to purchase submitted by the CDC and/or the Parking Authority in accordance with Section 203 hereof within thirty (30) days of the owner's receipt of the offer, or if within this 30-day period the CDC's and/or the Parking Authority's Executive Director determines that further negotiation, discussion or modification of such an offer will not likely result in the owner's acceptance of the offer, the Executive Director shall request the governing board of the CDC and/or the Parking Authority to consider initiating an action in eminent domain to acquire the Remaining Parcel. The CDC and/or the Parking Authority Board shall notice and hold a hearing on a proposed resolution of necessity to consider acquiring a Remaining Parcel within twenty (20) days of the Executive Director's request therefor. The parties acknowledge the CDC's and/or the Parking Authority's power and sole and absolute discretion to approve or disapprove the acquisition of any Remaining Parcel by eminent domain and to make the findings required under Code of Civil Procedure Sections 1240.030 and 1245.230. The CDC and/or the Parking Authority shall consider acquiring any Remaining Parcel under this Section and shall provide site acquisition assistance in a manner consistent with terms and spirit of this Agreement, and to the extent permitted by law. If the CDC and/or the Parking Authority adopts a resolution of necessity to acquire any Remaining Parcel, the CDC and/or the Parking Authority shall cause an action in eminent domain to be filed within five (5) days of such an adoption, and to seek and obtain an order of possession as soon as permitted by law to enable the Developer timely to commence all investigations, grading and construction on the Remaining Parcel necessary to construct the improvements contemplated by this Agreement. Immediately upon, but in no event later than five (5) business days of, its acquisition of any Remaining Parcel in such a proceeding, the CDC and/or the Parking Authority shall convey all of its right, title and interest in such a Remaining Parcel to the Developer pursuant to the terms of this Agreement. 205. Relocation of Occupants of Remaining Parcels. The CDC and/or the Parking Authority shall take all necessary and appropriate steps to provide for the relocation of all occupants, whether owners, tenants or operators, of each Remaining Parcel the CDC and/or the Parking Authority acquires under the Site Acquisition Program. The CDC and/or the Parking Authority shall undertake such relocation in accordance with the California Relocation Assistance Act under Government Code Sections 7260 et seq. and other applicable law. Prior to the close of escrow for each such Remaining Parcel, the CDC and/or the Parking Authority shall provide each such occupant a written notice of displacement by the CDC which instructs the occupant to vacate the premises and surrender possession thereof to the CDC and/or the Parking Authority or the Developer, if applicable, within ninety (90) days following the date of such a notice or the close of such escrow. 206. Costs and Fees of the Site Acquisition Program and Purchase Price of the Remaining Parcels Acquired by the CDC. Subject to the terms of and the reimbursement under Sections 207, 208, 209, 210 and 211 hereof, the Developer shall bear the following costs and fees associated with undertaking the Site Acquisition Program: the costs arising out of the acquisition of the Remaining Parcels or any interest in real property (including, without limitation, any public or -8- private easement) necessary to convey title to the Site to the Developer in accordance with this Agreement, including, but not limited to, purchase price payments to third party owners (including all interests of the owners, tenants, vendors, suppliers, and any and all other claimants as to the purchase price); costs incurred by the CDC by eminent domain including, but not limited to, the purchase price, just compensation for the taking of property interests in the Remaining Parcels (land, building, fixtures, equipment, loss of goodwill and improvements); costs for payment of goodwill as provided under California law in eminent domain actions; appraisal fees; costs of environmental studies performed by the CDC on the Remaining Parcels (including, but not limited to, all investigations, reports and mitigation measures done on Hazardous Substances); court costs; witness fees; expert witness fees; prorated taxes; reasonable attorney fees; deposits to obtain an order of prejudgment possession, if incurred; amounts to satisfy judgments of condemnation; any costs arising from the abandonment of any eminent domain action, including, without limitation, any litigation expenses for which the CDC or Parking Authority may be responsible under California Code of Civil Procedure Section 1268.610 and/or damages under Section 1268.610; any unrecovered costs the CDC incurs in reliance on the Polanco Redevelopment Act (Health & Safety Code § 33459 et seq.) in investigating, testing and/or remediating Hazardous Substances on the Remaining Parcels and Developer Parcels including reasonable attorneys' fees the CDC incurs in connection with such efforts; costs for relocation assistance and benefits pursuant to the California Relocation Assistance Law (Government Code § 7260 et seq.), the implementing regulations thereto (California Code of Regulations, Title 24 § 6000 et seq.) and the Uniform Relocation Assistance and Real Property Acquisition Policies Act of ] 970 (42 U.S.C. § 4201 4655, and 49 CFR part 24. Prior to the filing of any action in eminent domain by the CDC or Parking Authority, Developer shall .deposit with the CDC or Parking Authority, as appropriate, the appraised value of the property to be acquired according to the CDC or Parking Authority's appraiser. 207. Developer's Election Regarding CDC Financial Assistance. Within sixty (60) days of completing any acquisition and relocation of the Project parcels by the Developer either with or without the assistance of the CDC and/or the Parking Authority under the Site Acquisition Program, the Developer may elect either to: (a) Receive the assistance from the CDC described in Section 208 hereof. If the Developer so elects, it shall: (i) construct the Improvements utilizing prevailing wage rates as set forth -under California;andbe—responsible for maintaining adequate accounting and records concerning such wages for all contractors and subcontractors used to construct the Improvements. (b) Not receive the assistance from the CDC described in Section 208 hereof. If the Developer so elects, the CDC shall provide the Developer assistance to construct the off -site improvements, and the Developer shall construct such improvements, described in Section 211. (c) Terminate this DDA, in which case each party shall be released from all obligations hereunder. If the Developer so elects, it may, in its sole discretion, elect to convey any or all of the Developer Parcels or Remaining Parcels to the CDC at the price at which the Developer acquired these parcels. 208. CDC Financial Assistance If the Developer elects to receive the assistance described in this Section 208 ("CDC Financial Assistance"), the CDC shall provide the Developer one of the two following forms of -9- assistance based on the form of assistance the Developer elects to receive, subject to the CDC's right to reimbursement for providing such assistance as described in Section 210: (a) The amount equal to the total acquisition and relocation costs the Developer incurs in acquiring the Developer Parcels and the Remaining Parcels which exceed $80 per square foot up to a maximum of $1,875,000 ("Election A Assistance"). (b) The amount equal to the total acquisition and relocation costs the Developer incurs in acquiring the Developer Parcels and the Remaining Parcels which exceed $80 per square foot up to a maximum of $1,300,000 ("Election B Assistance"). 209. Disbursement of Financial Assistance Funds If the Developer elects to receive CDC Financial Assistance, the CDC shall deliver: (i) one half of the funds of such assistance upon the City's issuance of a building permit to construct the Improvements, and (ii) the balance of such funds upon the City's initial issuance of a certificate of occupancy for any of the Project's residential units. 210. Reimbursement to CDC (a) If the Developer elects to receive, and the CDC provides, Election A Assistance, the CDC shall be reimbursed for providing such assistance by a receipt of: (i) An amount equal to one percent of the total proceeds of: (1) the initial sale of the Project's retail space and all subsequent sales of retail space for a period of thirty (30) years thereafter, and (2) the sales of all the Project's residential units which occur after the original sale of each of such units. The CDC shall be entitled to reimbursement under this Section 210(a)(i) for a period of thirty (30) years following the date of the issuance of the final Certificate of Occupancy for the Project, and the terms of this entitlement shall be recorded upon the title of all affected property interests. (ii) An amount equal to twenty-five percent (25 %) of the total gross sale proceeds from the original sale of all the Project's residential units which exceed $100,800,000 in total gross sales revenue ("Enhanced Participation"). The CDC shall not be entitled to any Enhanced Participation if the total gross sale proceeds from the original sale of all the Project's residential units do not exceed $100,800,000 in total gross revenue. Enhanced Participation will be calculated and paid to the CDC in one payment within sixty (60) days of the closing and release of the sale proceeds of all of the residential unit sales. (b) If the Developer elects to receive, and the CDC provides, Election B Assistance, the CDC shall be reimbursed for providing such assistance by a receipt of: (i) An amount equal to one percent of the total proceeds of: (1) the initial sale of the Project's retail space and all subsequent sales of retail space for a period of thirty (30) years thereafter, and (2) the sales of all the Project's residential units which occur after the original sale of each of such units. The CDC shall be entitled to reimbursement under this Section 210(b)(i) for a period of thirty (30) years following the date of the issuance of the first Certificate of Occupancy for the Project, and the terms of this entitlement shall be recorded upon the title of all affected property interests. pok est - 10 - 211. Developer Reimbursement for Off -Site Improvements The CDC shall reimburse the Developer, up to $365,000, for the costs of constructing the "enhanced" National City Boulevard streetscape improvements and the improvements located on or adjacent to 12th and 1 lth Streets and Roosevelt Boulevard which border the Project and which improvements are deemed necessary or appropriate in connection with the construction of the Improvements. The Developer shall cause the construction of such off -site improvements consistent with utilizing "public works" bidding procedures and applicable prevailing wages, and shall be responsible for all Project management, accounting and record -keeping associated with such work. 300. CONVEYANCE OF THE REMAINING PARCELS 301. Disposition of Remaining Parcels. The Developer agrees to purchase, and the CDC and/or the Parking Authority agrees to sell, any of the Remaining Parcels the CDC and/or the Parking Authority acquires under the Site Acquisition Program at a price equal to the price at which the CDC and/or the Parking Authority acquires the Remaining Parcels. 302. Escrow. Immediately upon, but in no event later than ten (10) calendar days of, the CDC's and/or the Parking Authority's acquisition of any Remaining Parcels under the Site Acquisition Program, the parties shall open escrow ("Escrow") with the escrow division of Chicago Title Company in its San Diego County office, or another escrow company mutually satisfactory to both parties (the "Escrow Agent"). 302.1. Costs of Escrow. The Developer shall pay the premium for the Title Policy as set forth in Section 204 hereof and the documentary transfer taxes, if any, due with respect to the conveyance of the Site. The Developer and CDC and/or the Parking Authority shall each pay one- half of all other usual fees, charges; and costs that arise from Escrow (the "Escrow Costs"). 302.2. Escrow Instructions. This Agreement constitutes the joint escrow instructions of Developer and CDC and/or the Parking Authority, and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts reasonably necessary to close this Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and CDC and/or the Parking Authority will cancel its own -policies a tf er the- er ii g. All funds received in the Escrow shall be deposited with other escrow funds in a general escrow account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check from such account. However, if Escrow does not close within one (1) business day from deposit of the Purchase Price, the funds shall be deposited into an interest bearing account with such interest accruing to the benefit of the Developer. If in the opinion of either party or the Escrow Agent it is necessary or convenient in order to accomplish the Closing of this transaction, such party may require that the parties sign supplemental escrow instructions within fifteen (15) days of notice thereof; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall control. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Closing shall take place within thirty (30) days after the date when both the CDC's and/or the Parking Authority's Conditions Precedent and the Developer's Conditions Precedent as set forth in Section 305 have been satisfied or waived by the respective parties. Escrow Agent is instructed to - 11 - release the CDC's and/or the Parking Authority's escrow closing statement and the Developer's escrow closing statement to the respective parties. 302.3. Authority of Escrow Agent. Escrow Agent is authorized to, and shall: (a) Pay and charge Developer and CDC and/or the Parking Authority for their respective shares of the Escrow Costs payable under Section 302.1 of this Agreement, any endorsements to the premium of the Title Policy thereto as set forth in Section 304, and any amount necessary to place title in the condition necessary to satisfy Section 303 of this Agreement. (b) Pay and charge Developer and CDC and/or the Parking Authority for their respective shares of any escrow fees, charges, and costs. (c) Disburse funds and deliver and record the Grant Deed when both the Developer's Conditions Precedent and the CDC's Conditions Precedent have been fulfilled or waived by Developer and CDC and/or the Parking Authority. (d) Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. (e) Within the discretion of Escrow Agent, direct CDC and/or the Parking Authority and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated hereunder. CDC and/or the Parking Authority agrees to execute a Certificate of Non -Foreign Status by individual transferor and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Agent, on the form to be supplied by Escrow Agent. (f) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms are provided for or required by law. 302.4. Closing. The transaction for each Remaining Parcel shall close ("Closing") within thirty (30) days of the parties' satisfaction of all of CDC's and/or the Parking Authority's and Developer's Conditions Precedent to Closing as set forth in Section 305 hereof, but in no event later than November 30, 2005 (the "Outside Date"). The Outside Date shall be extended on a day -for -day basis for every day completion of actions required to be undertaken by the CDC and/or the Parking Authority prior to Closing is delayed beyond the deadlines set forth herein and in the Schedule of Performance, including without limitation the CDC's and/or the Parking Authority's obligations pursuant to Section 303 to obtain a Local Coastal Plan approval, City zone change and City General Plan land use amendments. The Closing shall occur at a location within San Diego County at a time and place reasonably agreed on by the parties. The "Closing" shall mean the time and day the Grant Deed is filed for record with the San Diego County Recorder. The "Closing Date" shall mean the day on which the Closing occurs. 302.5. Termination. If Escrow is not in condition to close by the Outside Date, then either party that has fully performed under this Agreement may, in writing, demand the return of money or property and terminate the Escrow. If either party makes a written demand for return of 0010 - 12 - documents or properties, the Escrow shall not terminate until five (0) days after Escrow Agent shall have delivered copies of such demand to all other parties at the respective addresses shown in this Agreement. If any objections are raised within said five (5) day period, Escrow Agent is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Developer, however, shall have the sole option to withdraw any money deposited by it with respect to the Closing less Developer's share of costs of Escrow, if any. Termination of the Escrow shall be without prejudice as to whatever legal rights either party may have against the other arising from this Agreement. If no demands are made, the Escrow Agent shall proceed with the Closing as soon as possible. 302.6. Closing Procedure. Escrow Agent shall close Escrow for the Remaining Parcels as follows: (a) Record the Grant Deed with instructions for the Recorder of San Diego County, California to deliver the Grant Deed to Developer; (b) Instruct the Title Company to deliver the Title Policy to Developer; (c) File any informational reports required by Internal Revenue Code Section 6045(e), as amended, and any other applicable requirements; and (d) Deliver the FIRPTA Certificate, if any, to Developer; and (e) Forward to both Developer and CDC and/or the Parking Authority a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon. 303. Title and Survey Review. The CDC and/or the Parking Authority shall cause Chicago Title Company, or another title company mutually agreeable to both parties (the "Title Company"), to deliver to Developer a standard preliminary consolidated title report (the "Report") with respect to the title to the each of the Remaining Parcels, together with best available copies of the documents (the "Documents-) underlying the exceptions ("Exceptions") set forth in the Report, within. sixty (60)-lays- from -the -date-o-f—this- Agreement. --The Developer shall have the right to approve or disapprove the Exceptions in its sole and absolute discretion; provided, however, that the Developer hereby approves the following Exceptions: (a) The Redevelopment Plan. (b) prorated at close of Escrow). The lien of any non -delinquent property taxes and assessments (to be Developer shall have thirty (30) days from the date of its latest receipt of the Report, the Documents and the Survey to give written notice to CDC and/or the Parking Authority and Escrow Holder of Developer's approval or disapproval of any of such Exceptions. If Developer notifies CDC and/or the Parking Authority of its disapproval of any Exceptions in the Report, CDC and/or the Parking Authority shall have the right, but not the obligation, to remove any disapproved Exceptions within thirty (30) days after receiving written notice of Developer's disapproval or provide assurances satisfactory to Developer in Developer's sole and absolute discretion that such - 13 - Exception(s) will be removed on or before the Closing. If CDC and/or the Parking Authority cannot or does not elect to remove any of the disapproved Exceptions within that period, Developer shall have fifteen (15) days after the expiration of such thirty (30) day period to either give the CDC and/or the Parking Authority written notice that Developer elects to proceed with the purchase of the Remaining Parcels subject to the disapproved Exceptions or to give the CDC and/or the Parking Authority written notice that the Developer elects to terminate this Agreement. The Exceptions to title approved by Developer as provided herein shall hereinafter be referred to as the "Condition of Title." Developer shall have the right to approve or disapprove in its sole and absolute discretion any further Exceptions reported by the Title Company after Developer has approved the Condition of Title for the Remaining Parcels (which are not created by Developer). CDC and/or the Parking Authority shall not voluntarily create any new exceptions to title following the date of this Agreement. 304. Title Insurance. Concurrently with recordation of the Grant Deed conveying title to each Remaining Parcels, there shall be issued to Developer an ALTA Form B (1970, amended 10/17/70, or if the 1970, amended 10/17/70, form is not available, the 1970 form with 1984 amendment and, if that is not available, 1992 form with no creditors' rights exclusion) extended coverage owner's title insurance policy ("Title Policy"), or equivalent form acceptable to Developer, without a creditor's rights exclusion or arbitration provision, as applicable, or including an endorsement eliminating the creditor's rights exclusion and arbitration provision, with coverage in the amount of the Purchase Price (or such greater amount, up to the total anticipated cost of acquisition, development and construction of the Property, as Developer may elect) and dated as of the date and time the Grant Deed is recorded, indicating title to the Remaining Parcel (including any easements for the benefit of the Site) and Improvements to be vested of record in Developer, subject solely to the Exceptions to Title and including such title endorsements as Developer may have requested during the review period providing in Section 203.1 hereof. The Title Company shall provide the CDC and/or the Parking Authority with a copy of the Title Policy. The CDC and/or the Parking Authority agrees to remove on or before the Closing any deeds of trust or other monetary liens against the Site. The Escrow Costs shall include the cost of any surveys necessary to issue the Title Policy and that portion of the premium for the Title Policy equal to the cost of an ALTA Standard Coverage Owner's Policy of Title Insurance in the amount of the Purchase Price. 305. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 305.1. CDC's/Parking Authority's Conditions of Closing. CDC's and/or the Parking Authority's obligation to proceed with the Closing of the sale of the Remaining Parcels is subject to the fulfillment or waiver by CDC and/or the Parking Authority of each and all of the conditions precedent (a) through (j), inclusive, described below ("CDC's Conditions Precedent"), which are solely for the benefit of CDC and/or the Parking Authority, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the Close of Escrow, Developer shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained herein shall be true and correct in all material respects. (b) Execution of Documents. The Developer shall have executed any other documents required hereunder and delivered such documents into Escrow. - 14 - (c) Payment of Funds. Prior to the Close of Escrow, Developer shall have paid the Purchase Price and all required costs of Closing into Escrow in accordance with Section 301 and 302 hereof. (d) Insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof. (e) Design Approvals. The Developer shall have obtained approval by the CDC of the Basic Concept Drawings. (f) Consistency Review. The Developer shall have obtained approval from the CDC of an Application for Consistency Review of the Improvements under the National City Downtown Specific Plan Consistency Review Application Requirements and Procedures. (g) Financing. The CDC shall have approved construction and acquisition financing as provided in Section 310.1 hereof, and such financing shall have closed and funded or be ready to close and fund upon the Closing. (h) General Contractor Contract. Developer shall have provided to CDC and/or the Parking Authority a copy of a valid and binding contract between the Developer and McCormick Construction or another duly licensed general contractor reasonably acceptable to the CDC for the construction of the Improvements, certified by the Developer to be a true and correct copy thereof. 305.2. Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of any of the Remaining Parcels is subject to the fulfillment or waiver by the Developer of each and all of the conditions precedent (a) through (k), inclusive, described below (the "Developer's Conditions Precedent"), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein: (a) No Default. Prior to the Close of Escrow, the CDC and/or the Parking Authority shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of the CDC and/or the Parking Authority contained herein shall -be -true --awl correct in all material respects. - - .-_-_-_- (b) Execution of Documents. The CDC and/or the Parking Authority shall have executed the Grant Deed and any other documents required hereunder, and delivered such documents into Escrow. (c) Review and Approval of Title. The Developer shall have reviewed and approved the condition of title of the Remaining Parcel, as provided in Section 303 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have irrevocably and unconditionally agreed to provide to the Developer the Title Policy for the Remaining Parcel upon the Close of Escrow, in accordance with Section 304 hereof. (e) Environmental. The Developer shall have approved the environmental condition of the Remaining Parcel after the completion of any required Remediation Work by the CDC and/or the Parking Authority and receipt of the Completion Letter, the - 15 - Developer's review of the Remaining Parcel and its approval of the Remaining Parcel's conditions, and the Developer's procurement of the Environmental Insurance as provided in Section 308.5 hereof. (f) Design Approvals. The Developer shall have obtained approval by the CDC and/or the Parking Authority and City of the Basic Concept Drawings, Site Plan application drawings, Site Plan application, and Construction Drawings as set forth in Section 402 hereof. (g) Land Use Approvals. The Developer and the CDC and/or the Parking Authority shall have received all land use approvals required pursuant to Section 403 hereof. (h) Building and Grading Permits. All grading permits required for the construction of the Improvements shall be available for issuance upon the payment of applicable fees, posting of required security, and similar items, and all plans necessary for the issuance of building permits for the improvements shall have been submitted to the City and accepted as complete. (i) Quitclaim of Rail Lines. The CDC and/or the Parking Authority shall have obtained quitclaims for all property rights associated with rail lines located on the Remaining Parcels, as provided in Section 403 hereof. 306. Representations and Warranties. 306.1. CDC and Parking Authority Representations. The CDC and/or the Parking Authority represent and warrant to Developer as follows: (a) Authority. The CDC and/or the Parking Authority is a public body, corporate and politic, existing pursuant to the California Community Redevelopment Law (California Health and Safety Code Section 33000), which has been authorized to transact business pursuant to action of the City. This Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by the CDC and/or the Parking Authority are and on the Closing Date will be duly authorized, executed and delivered by and are binding upon the CDC and/or the Parking Authority. The CDC and the Parking Authority have the capacity and authority to enter into this Agreement and consummate the transactions herein provided without the consent or joinder of any other party. (b) FIRPTA. The CDC and/or the Parking Authority is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of FIRPTA or any similar state statute, or that the CDC and/or the Parking Authority has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the best of the CDC's and/or the Parking Authority's knowledge, the CDC's and/or the Parking Authority's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the CDC and/or the Parking Authority is a party or by which it is bound. (d) Litigation. There are no claims, causes of action or other litigation or proceedings, including condemnation, pending or, to the Actual Knowledge of the CDC and/or the - 16 - Parking Authority, threatened with respect to the ownership, operation or environmental condition of the Site or any part thereof or the Developer's intended use of the Site (including disputes with mortgagees, governmental authorities, utility companies, contractors, adjoining landowners or suppliers of goods and services). (e) Violation. To the Actual Knowledge of the CDC and/or the Parking Authority, there are no violations of any health, safety, pollution, zoning or other laws, ordinances, rules or regulations with respect to the Site, which have not heretofore been entirely corrected, and the CDC and/or the Parking Authority has received no notices of any such violations. In the event the CDC and/or the Parking Authority becomes aware of any such violations, CDC and/or the Parking Authority shall (i) immediately provide Developer with copies of all documents evidencing such violation, and (ii) cure any such violation prior to Closing unless the Developer causes the violation. (f) No CDC/Parking Authority Bankruptcy. The CDC and/or the Parking Authority is not the subject of a bankruptcy proceeding. (g) Leases and Service Agreements. There are no leases of space at the Remaining Parcels which will be in force on the Closing Date. The CDC and/or the Parking Authority has not entered into any service agreements, equipment leasing contracts or other contracts relating to the Site that will be in force after the Closing Date. (h) Consents; No Conflict. The CDC and/or the Parking Authority has obtained all consents and permissions related to the transactions herein contemplated and required under any covenant, agreement, encumbrance; or applicable laws. Neither this Agreement nor any agreement, document or instrument executed or to be executed in connection with the same, nor anything provided in or contemplated by this Agreement or any such other agreement, document or instrument, does now or shall hereafter breach, invalidate, cancel, make inoperative or interfere with, or result in the acceleration or maturity of, any agreement, document, instrument, right or interest, affecting or relating to the CDC and/or the Parking Authority or the Site. Until the Closing, the CDC and/or the Parking Authority shall, upon the change of any fact or condition which would cause any of the warranties and representations in this Section 206.1 not to be true as of Closing, immediatelygive written noiice of such cTianged fact or condition to Developer. Such exception(s) to a representation shall not be deemed a breach by the CDC and/or the Parking Authority hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Site. If Developer elects to close Escrow following disclosure of such information, the CDC's and/or the Parking Authority's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject tosuch exception(s). If, following the disclosure of such information, Developer elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 206.1 shall survive the Closing. 306.2. Developer's Representations. Developer represents and warrants to CDC and/or the Parking Authority as follows: - 17 - (a) Authority. Developer is a limited liability company formed in and in good standing under the laws of the State of Delaware, and is qualified to do business within the State of California. Developer has full right, power and lawful authority to purchase and accept the conveyance of the Site and undertake all obligations as provided herein and the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer. (b) No Conflict. To the best of Developer's knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (c) No Developer Bankruptcy. Developer is not the subject of a bankruptcy proceeding. Until the Closing, Developer shall, upon the change of any fact or condition which would cause any of the warranties and representations in this Section 206.2 not to be true as of Closing, immediately give written notice of such changed fact or condition to CDC and/or the Parking Authority. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which CDC and/or the Parking Authority shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Site. If CDC and/or the Parking Authority elects to close Escrow following disclosure of such information, Developer's representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, CDC and/or the Parking Authority elects to not close Escrow, then this Agreement and the Escrow shall automatically terminate, and neither party shall have any further rights, obligations or liabilities hereunder. The representations and warranties set forth in this Section 206.2 shall survive the Closing. (d) Not Subject of an Investigation. Neither the Developer nor any of its principals is the subject or target of any investigation by any municipal, state or local agency. 307. Studies and Reports. Prior to the Closing, representatives of Developer shall. have the right of access to all portions of the Site for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement, including the investigation of the environmental condition of the Site pursuant to Section 208 hereof. Any preliminary work undertaken on the Site by Developer prior to the Closing shall be done at the sole expense of the Developer, and the Developer's execution of a right of entry agreement to be provided by the CDC and/or the Parking Authority. Any preliminary work shall be undertaken only after securing any necessary permits from the appropriate governmental agencies. 308. Condition of the Site. 308.1. Disclosure. Prior to the execution of this Agreement, the CDC also has caused a Limited Phase I investigation of the environmental condition of the Site, and the land adjacent to or near the Site (the "Phase 1 Report"). Developer acknowledges that Developer has been provided a copy of the Phase I Report. The Phase I Report suggests that there may be a release of Hazardous Materials at the Site, and that further investigation is required, and mitigation of property conditions to comply with Environmental Laws may also be required. - 18 - Except as may be set forth in the Phase I Report, the CDC and the Developer hereby represent and warrant to the other that they have no actual knowledge, and have not received any notice or communication from any government agency having jurisdiction over the Site, notifying such party of, the presence of surface or subsurface zone Hazardous Materials in, on, or under the Site, or any portion thereof. "Actual knowledge," as used herein, means the actual knowledge of the CDC and the Developer and their respective Board members, officers, managers, employees and agents. 308.2. Investigation of Site. In addition to conducting a physical assessment of the Site, Developer shall have the right, at its sole cost and expense, to engage its own environmental consultant ("Developer's Environmental Consultant") to conduct an environmental assessment and make such investigations as Developer deems necessary, including "Phase I" and/or "Phase II" investigations of the Site (including soil, vapor, and groundwater sampling and monitoring), and shall promptly provide CDC a copy of all final reports and test results (not including drafts) provided by Developer's Environmental Consultant ("Developer's Environmental Reports"). Developer shall also timely provide proposed plans for the Improvements at the Site, indicating where construction excavation is planned, and showing all final grades, paving and other site hardscape, in order for the CDC to develop and propose a PMP satisfactory for the proposed end use of the Site and the protection of the health of construction workers during the development phase. CDC will coordinate with the Developer to ensure the suitability of the PMP for the proposed development. 308.3. CDC's Performance of Remedial Work The CDC shall be responsible for identifying and contracting with the appropriate environmental regulatory agency for approval of plans to investigate and remediate, as necessary, any conditions at the Site in order to obtain a Completion Letter which will provide Polanco Act immunities, as allowable by law, by illustrating compliance with the PMP and all Governmental Requirements at the Site. If possible, the CDC will attempt to obtain the Completion Letter prior to the Closing. The Developer and the Developer's Environmental Consultant shall have the right to be present and oversee the Remedial Work at their sole cost and expense. Promptly upon completion of the Remedial Work, the CDC shall submit all necessary documentation to the governmental agency with oversight authority to obtain the Completion Letter. 308.4. Financial Responsibility for Remedial Work In order to underwrite the CDC's expenses the Developer sl-A1 initially advance the sum of $10,000 to the CDC for Remedial Work, and shall reimburse the CDC for itemized expenses the CDC incurs relating to remedial work, 1) upon closing, and 2) every quarter thereafter. The CDC will provide Developer with an itemized accounting of amounts spent at closing and each quarter thereafter. The CDC shall use its best efforts to recover all costs and attorneys' fees it incurs in undertaking and completing the Remedial Work from responsible parties, including, but not limited to, past and present owners and operators of the Remaining Parcels and the Developer Parcels, as authorized under the Polanco Act and other applicable law. The CDC shall reimburse the Developer for all such recovered costs and fees, up to amounts advanced or paid by Developer for Remedial work, within ten (10) calendar days of the CDC's receipt thereof. 308.5. CDC Responsibilities for Hazardous Materials and Remedial Work. CDC shall use its best efforts to secure a regulatory approval for the PMP for the Site, and, to the extent provided by law, will endeavor to secure a determination from the DEH so that Polanco Act immunities can attach, to the benefit of the Developer. However, the Developer accepts that not all contamination may be removed from the Site following completion of activities described in the - 19 - PMP, even after the issuance of the Completion Letter. The Developer understands that although the Site will be prepared to a condition in which impacts have been mitigated to a level where the Site meets human health risk criteria, and construction -related nuisance impacts have been abated (or will be abated simultaneously with construction activities), that some substances may remain at the Site, at or below concentrations consistent with regulatory guidelines for residential development. As a result of the Polanco Act, the Developer, its lender, successors and assigns should have certain immunities from liability for future remediation of these substances by operation of state law. However, should Developer, its successors or assigns determine or desire to undertake future construction or additional remediation activities at the Site, any increased costs related to the redevelopment by reason of residual impacts shall be borne by the Developer, its successor and assigns, and the CDC will have no responsibility therefor. In addition, the Developer, and its successors and assigns, accept that the immunities described in the Polanco Act do not shield or protect against liability as a result of new releases of Hazardous Materials that may occur during or after the redevelopment process. The CDC shall have no responsibility for any such new releases unrelated to the conditions existing at the Site on or prior to the date the Site or any portion thereof is conveyed to the Developer (a "New Release"), and the Developer waives and abandons any such claims for liability against the CDC for New Releases. 308.6. Warranties and Indemnities As To Site. To the extent authorized by contract or law, the CDC and/or the Parking Authority shall assign to the Developer all warranties, indemnities, and guaranties with respect to the environmental condition of the Site or any portion thereof, if any, that the CDC and/or the Parking Authority may have received from prior owners of any of the parcels comprising the Site. 308.7. Mutual Representations The Parties recognize that redevelopment of the Site is dependent upon many factors, one of which is receipt of the immunities upon completion of the Remedial Work as provided in the Polanco Act. To that end, the Parties hereto agree that each have and will continue to exercise best efforts to fulfill the obligations and duties required under the Polanco Act, including without limitation, providing notices as required, completing the Remedial Work in accordance with the approved PMP, and requesting closure and the Completion Letter. 400. DEVELOPMENT OF THE SITE 401. Scope of Development. 401.1. Developer's Obligation to Construct Improvements. Following the Closing on all Remaining Parcels, the Developer shall develop or cause the development of the Improvements in two or more phases in accordance with the Scope of Development, the City Municipal Code, and the plans, drawings and documents submitted by the Developer and approved by the CDC as set forth herein. The Project's improvements shall generally comprise of at least approximately two hundred nine (209) and up to three hundred (300) condominium residential units (the "Residential Units"), ten thousand (I0,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use (collectively, the "Improvements"). The CDC shall construct or cause the construction of all public improvements required as conditions of project approval which are located outside of the face of the curbs surrounding the Improvements. The Developer shall also construct the curbs and all other on- site improvements located inside of the face of the curbs surrounding the Improvements, as required through the City's Design Review process described herein. -20- 401.2. CDC's Obligation to Construct Infrastructure. Prior to the Closing on all the Remaining Parcels, the CDC shall demolish and clear from the Site all existing above -ground and subsurface improvements located on the Site. The CDC, at the CDC's sole cost and expense, shall further arrange for standard utilities to be brought to the Site including, without limitation, gas, water, electric, telephone, and cable television with sufficient capacity to allow the Developer to develop the Site for the Improvements and the uses contemplated by this Agreement, together with consent of the applicable utility company for the Developer to connect into such utilities. The CDC shall also at its sole cost and expense cause the construction of all offsite improvements needed for the Project, including, but not limited to, improvements related to sidewalks, utility lines, streets and traffic signals 402. Design Review. 402.1. Basic Concept Drawings. Within the time set forth in the Schedule of Performance, the Developer shall submit to the CDC's Executive Director or his/her designee conceptual drawings for the Improvements, including materials, color board, elevations of all four sides of the Improvements, preliminary landscape plans, the traffic and circulation plans, and a rendered perspective (collectively, the "Basic Concept Drawings"). Within the time set forth in the Schedule of Performance, but subject to the standards stated in Section 402.4 hereof, the CDC shall either approve the Basic Concept Drawings or set forth the reasons for its disapproval in writing. In the event that the CDC fails to act within the time set forth in the Schedule of Performance, the Basic Concept Drawings shall be deemed to have been approved by the CDC. 402.2. Site Plan Drawings. After the CDC's approval (or deemed approval) of the Basic Concept Drawings, and within the time set forth in the Schedule of Performance, the Developer shall submit to the CDC and City plans and drawings with respect to the Improvements (the "Site Plan Drawings"), which shall include all documents, plans and drawings, including any application materials required by the City Planning Services Division, which are necessary to obtain all City approvals for the construction of the Improvements. Within the time set forth in the Schedule of Performance, but subject to the standards stated in Section 402.4 hereof, the CDC shall either approve the Site Plan Drawings or set forth the reasons for its disapproval in writing. In the event that the CDC fails to act within the time set forth in the Schedule of Performance, the Site Plan Drawings shall be deemed to have been approved by the CDC. 402.3. CDC Review and Approval. The CDC shall have the right to review and reasonably approve Basic Concept Drawings and Site Plan Drawings. The CDC shall reasonably approve logical evolutions and/or extensions of drawings that it has previously approved. The CDC may review any and all aspects of the Basic Concept Drawings and Site Plan Drawings. The Developer acknowledges and agrees that the CDC is entitled to approve or disapprove the Basic Concept Drawings and Site Plan Drawings in order to satisfy the CDC's obligation to promote the sound development and redevelopment of land within the Redevelopment Project, to promote a high level of design which will impact the surrounding development, and to provide an environment for the social, economic and psychological growth and well-being of the citizens of the City and the Redevelopment Project. 402.4. Standards for Disapproval. The CDC shall have the right to disapprove the Basic Concept Drawings in its reasonable discretion. The CDC shall have the right to disapprove in its reasonable discretion any of the Site Plan Drawings if (a) the Site Plan Drawings do not conform to the approved Basic Concept Drawings, or (b) the Site Plan Drawings do not conform to the Scope -21 - of Development or this Agreement, or (c) the Site Plan Drawings are incomplete; provided, however, that the CDC shall reasonably approve logical evolutions and/or extensions of drawings which it has previously approved. The CDC shall state in writing the reasons for disapproval within fifteen (15) days of such disapproval as stated herein, and in the event that the CDC fails to do so, the drawings shall be deemed approved. The Developer, upon receipt of a disapproval based upon powers reserved by the CDC hereunder, shall revise such portions and resubmit to the CDC by the time established therefor in the Schedule of Performance. 402.5. Consultation and Coordination. During the preparation of the Basic Concept Drawings, Site Plan Drawings and Construction Drawings, staff of the CDC and the Developer shall hold regular progress meetings twice each month or as agreed upon by the parties from time to time to coordinate the preparation of, submission to, and review of the Basic Concept Drawings, Site Plan Drawings and Construction Drawings by the CDC. The staff of the CDC and the Developer shall communicate and consult as frequently as is necessary to ensure that the formal submittal of any documents to the CDC can receive prompt and thorough consideration. The CDC shall designate a CDC employee to serve as the project manager who is responsible for the coordination of the CDC's activities under this Agreement and for expediting the land use approval and permitting process. 402.6. Revisions. if the Developer desires to propose any material revisions to the CDC -approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings, it shall submit such proposed changes to the CDC, and shall also proceed in accordance with any and all State and local laws and regulations regarding such revisions, within the time frame set forth in the Schedule of Performance. At the sole discretion of the CDC, if any material change in the basic uses of the Site is proposed in the Basic Concept Drawings, Site Plan Drawings or Construction Drawings from the basic uses of the Site as provided for in this Agreement, then this Agreement is subject to re -negotiation of all terms and conditions, including without limitation, the economic terms of the Agreement. If the Basic Concept Drawings, Site Plan Drawings or Construction Drawings, as modified by the proposed change, generally and substantially conform to the requirements of this Section 302 of this Agreement and the Scope of Development, the CDC Director shall review the proposed change and notify the Developer in writing within fifteen (15) days after submission to the CDC as to whether the proposed change is approved or disapproved. In the event that the CDC fails to act within the fifteen (15) day time period set forth above, the proposed change or changes shall be deemed approved by the CDC. The CDC's Director is authorized to approve changes to the CDC - approved Basic Concept Drawings, Site Plan Drawings and Construction Drawings provided such changes: 1) do not materially reduce the quality of materials to be used; and 2) do not reduce the imaginative and unique qualities of the project design. Any and all change orders or revisions required by the City and its inspectors which are required under the Municipal Code and all other applicable Uniform Codes (e.g. Building, Plumbing, Fire, Electrical, etc.) and under other applicable laws and regulations shall be included by the Developer in its Basic Concept Drawings, Site Plan Drawings and Construction Drawings, shall be deemed approved by the CDC, and shall be completed during the construction of the improvements. 402.7. Defects in Plans. Neither the CDC nor the Parking Authority shall be responsible either to the Developer or to third parties in any way for any defects in the Basic Concept Drawings, the Site Plan Drawings or the Construction Drawings, nor for any structural or other defects in any work done according to the approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. Asios ORS - 22 - 403. Land Use Approvals. Before commencement of construction of the Improvements or other works of improvement upon the Site, the Developer shall, at its own expense, secure or cause to be secured any and all required land use and other entitlements, permits and approvals which may be required for the Improvements by the City or any other governmental agency affected by such construction or work, except for obtaining a Local Coastal Plan approval, any City zone change, City General Plan land use amendments and City adoption of a specific plan which affects the Site. Obtaining those approvals shall be the responsibility of the CDC, who will apply for and process such approvals in accordance with the time period set for in the Schedule of Performance. The CDC warrants and represents that the proposed uses and Improvements under this Agreement are allowed "as of right" under the City's ordinances and regulations, including, but not limited to, the City's Zoning Code, General Plan, Downtown Specific Plan and Redevelopment Plan, provided the Project substantially conforms to all such ordinances and regulations. The Developer shall apply for and secure the following, and pay all costs, charges and fees associated therewith: (a) Site Plan. (b) All other permits and fees required by the City, County of San Diego, and other governmental agencies with jurisdiction over the Improvements, except any permits or approvals relating to the City's Downtown Specific Plan, Redevelopment Plan, General Plan, zoning code and all other of the City's local ordinances, codes and regulations which now permit the construction of the Improvements and all the uses described in the Scope of Development "as of right". The CDC shall cooperate diligently and good faith with the Developer in connection with the Developer's efforts to seek and obtain permits and approvals. (c) Any environmental studies and documents required pursuant to the California Environmental Quality Act ("CEQA"), except the Environmental Impact Report (the "EIR") for the Downtown Specific Plan and General Plan Amendment, which EIR the City recently certified and which Plans the City recently adopted, as set forth in Recital 4 hereof, and all other EIRs and other documents considered and certified by the City under CEQA which may pertain to the Site in any manner. The execution of this Agreement does not constitute the granting of any required land use permits, entitlements or approvals required by the CDC or the City except as otherwise provided in this Agreement: 404. Schedule of Performance. Subject to extension due to Extended Delays (as defined in Section 702 hereof), any failure of the CDC timely to perform its obligations hereunder or delays caused by any failure by third parties timely to respond to Developer's timely submissions, the Developer shall submit all Basic Concept Drawings, Site Plan Drawings and Construction Drawings, commence and complete construction of all of the Improvements, and satisfy all other obligations and conditions of the Developer under this Agreement, within the times established in the Schedule of Performance. 405. Cost of Construction. Except to the extent otherwise expressly set forth in this Agreement, all of the cost of planning, designing, developing and constructing the Improvements, site preparation and grading shall be borne solely by the Developer. 406. Insurance Requirements. The Developer shall take out and maintain or shall cause its contractor, tenant, or another third party to take out and maintain until the issuance of the Release - 23 - of Construction Covenants pursuant to Section 410 of this Agreement, a comprehensive. general liability policy in the amount of Two Million Dollars ($2,000,000.00) combined single limit policy, which policy shall be issued by a "B+" rated insurance carrier. Such policy or policies shall be written on an occurrence form. The Developer shall also furnish or cause to be furnished to the CDC evidence satisfactory to the CDC that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form reasonably approved by the CDC setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City, the Parking Authority and the CDC and their respective officers, agents, and employees as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain, if commercially available at no material additional cost, a statement of obligation on the part of the carrier to notify City and the CDC of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not be contributing with any insurance maintained by the CDC or City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City and the CDC. The Developer shall furnish the required certificate prior to the Closing as a CDC Condition Precedent to the Closing. 407. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 410 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the CDC shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Improvements so long as CDC representatives comply with all safety rules. The CDC (or its representatives) shall, except in emergency situations, notify the Developer at least forty-eight (48) hours prior to exercising its rights pursuant to this Section 308. 408. Compliance with Laws. The Developer shall carry out the design, construction and operation of the improvements in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. 408.1. Nondiscrimination in Employment. Developer agrees that all persons employed or applying for employment by it, its affiliates; subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, sexual orientation, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. - 24 - Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti -discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 408.2. Prevailing Wages. If the Developer elects to receive CDC Financial Assistance under Sections 207 through 211 hereof, the Developer shall cause all work to which such assistance applies to be done in accordance with all applicable federal and state labor standards. Developer is aware of Sections 33423 — 33426 of the California Health and Safety Code and Sections 1770 — 1780 of the California Labor Code and is aware of the requirements of California Labor Code Sections 1720 et. seq. and 1770 et seq. as well as California Code of Regulations, Title 8, §16000 et. seq. ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. It is the belief and understanding of the CDC and Developer that this Agreement does involve a "public work" or "maintenance" project, as defined by the Prevailing Wage Laws. The Developer agrees to fully comply with such Prevailing Wage Laws. Developer shall defend, indemnify and hold the CDC, the Parking Authority, its elected officials, officers, employees and agents free and harmless from any and all claims, liabilities, costs, penalties or interest arising out of any failure or allege failure of Developer to comply with the Prevailing Wage Laws in connection with this Agreement. If the CDC or any of the indemnified parties are named as a party in any dispute arising from the failure of Developer or its subcontractors to pay prevailing wages, the CDC and the other indemnified parties may appoint their own independent counsel to monitor such proceedings at their own cost and expense; provided, however, Developer will be responsible, in addition to all other damages, fines, penalties and losses incurred by the CDC and the other indemnified parties as a result of the action for which indemnification is provided, to pay the reasonable attorneys' fees and defense costs of the CDC and the other indemnified parties' independent counsel in the event (i) Developer fails to undertake to defend the CDC and the other indemnified parties against an indemnified claim, (ii) such counsel becomes necessary due to a conflict of interest, or (iii) the Developer agrees to pay such costs. 408.3. Taxes and Assessments. Upon and after the Closing, at all times during which the Developer owns the Site, the Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site, subject to the Developer's right to contest in good faith any such taxes. The Developer agrees that during all times the CDC is permitted to receive property tax increment from the Redevelopment Project pursuant to Health and Safety Code Section 33670, as it may be amended or substituted from time to time. 409. Release of Construction Covenants. Promptly after completion of the Improvements in conformity with this Agreement, the CDC shall furnish the Developer with a "Release of Construction Covenants," in the form of Attachment No. 6 hereto which is incorporated herein by reference. The CDC shall not unreasonably withhold such Release of Construction Covenants. The Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the Improvements and the Release of Construction Covenants shall so state. Any party then owning or thereafter purchasing. leasing or otherwise acquiring any interest in the Site shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement except for those continuing covenants as described in the Grant Deed. If the CDC refuses or fails to furnish the Release of Construction Covenants, after written request from the Developer, the CDC shall, within fifteen (15) days of written request thereof, provide the Developer with a written statement of the reasons the CDC refused or failed to furnish -25- the Release of Construction Covenants. The statement shall also contain the CDC's opinion of the actions the Developer must take to obtain the Release of Construction Covenants. The Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the Improvements, or any part thereof. The Release of Construction Covenants is not a notice of completion as referred to in Section 3093 of the California Civil Code. - 26 - 410. Financing of the Improvements. 410.1. Approval of Financing. As required herein and as a CDC Condition Precedent to the Closing, Developer shall submit to CDC evidence that Developer has obtained sufficient commitments for construction financing necessary to undertake the development of the Site and the construction of the Improvements in accordance with this Agreement. The CDC shall approve or disapprove such evidence of financing commitments within fifteen (15) days of receipt of a complete submission. Approval shall not be unreasonably withheld or conditioned. If the CDC disapproves of the evidence of financing, CDC shall do so by a notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to CDC new evidence of financing. CDC shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 310.1 for the approval or disapproval of the evidence of financing as initially submitted to CDC. Such evidence of financing shall include the following: (a) a copy of letter of interest(s) obtained by Developer from one or more financial institutions for the mortgage loan or loans for financing to fund the construction and completion of the Improvements, subject to such lenders' reasonable, customary and normal conditions and terms, and/or (b) evidence that Developer has sufficient funds for such construction, and that such funds have been committed to such construction, and/or other documentation reasonably satisfactory to the CDC as evidence of other sources of capital sufficient to demonstrate that Developer has adequate funds to cover the difference between the total cost of the construction and completion of the Improvements, less financing authorized by those loans set forth in subparagraph (a) above. 410.2. No Encumbrances Except Mortgages and Deeds of Trust. Mortgages and deeds of trust shall be permitted for the purpose of securing loans of funds to be used for financing the construction of the Improvements (including architecture, engineering, legal, and related direct costs as well as indirect costs) on or in connection with the Site, permanent financing, and any other purposes necessary and appropriate in connection with development under this Agreement. The Developer shall notify the CDC in advance of any mortgage or deed of trust financing, if the Developer proposes to enter into the same before completion of the construction of the Improvements. 410.3." Holder NotObligatedto Construct Improvements. The holder of any mortgage or deed of trust authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the Improvements or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. 410.4. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the CDC may deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the Improvements, the CDC shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights granted by the CDC are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue with due diligence the cure or - 27 - remedy of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Improvements, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the CDC by written agreement reasonably satisfactory to the CDC. The holder, in that event, must agree to complete, in the manner provided in this Agreement, the improvements to which the lien or title of such holder relates. Any such holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 310 of this Agreement, to a Release of Construction Covenants. It is understood that a holder shall be deemed to have satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a Developer default which requires title and/or possession of the Site (or portion thereof) if and to the extent any such holder has within such sixty (60) day period commenced proceedings to obtain title and/or possession and thereafter the holder diligently pursues such proceedings to completion and cures or remedies the default. 500. COVENANTS AND RESTRICTIONS 501. Use in Accordance with Redevelopment Plan. The Developer covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any part thereof, that upon the Closing and during construction and thereafter, the Developer shall devote the Site to the uses specified in this Agreement and in accordance with the Redevelopment Plan for the periods of time specified therein. Al] uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 502. Use Covenants. For a term commencing upon the Conveyance and ending upon the expiration of the effectiveness of the current Redevelopment Plan, excluding any extensions of the Redevelopment Plan, the Developer hereby covenants and agrees for itself, its successors, its assigns and all voluntary and involuntary successors in interest to the Site, or any part thereof, that the Residential Units of the Site will only be used for residential housing purposes. 503. Maintenance Covenants and CC&Rs. The Developer shall maintain the Site and all improvements thereon, including all landscaping, in compliance with the terms of the Redevelopment Plan and with all applicable provisions of the National City Municipal Code, during the period of the Developer's ownership of the Site or portions thereof. The Developer shall prepare and submit to the CDC's legal counsel for its reasonable approval a Declaration of Covenants, Conditions and Restrictions for the Residential Units (the "Association CC&Rs"), which establishes a property owners' association for the Residential Units (the "Association"). The Association CC&Rs shall require the owners of all Residential Units constructed on the Site to be members of the Association. The Association CC&Rs shall entitle each owner to use of the common areas and facilities to be constructed on the Site and shall set forth an equitable apportionment of the costs of maintaining and operating such common areas and facilities. The Association CC&Rs shall require the maintenance of the improvements and the Site in accordance with the standards of this Section 503 and the standards of similar residential developments within the City. The Association CC&Rs shall be enforceable by the CDC, and any substantive amendments to such Association CC&Rs shall require the consent of the CDC, which consent shall not unreasonably be withheld. The Association CC&Rs shall be recorded against those portions of the Site which shall contain Residential Units before the sale of any Residential Units. The Association CC&Rs shall specifically state that the h - 28 - CDC is an intended third party beneficiary of the Association CC&Rs with the ability to enforce all the obligations set forth therein, including, without limitation, the ability to cause any and all maintenance and repair obligations to be performed. 504. Nondiscrimination Covenants. The Developer covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, sexual orientation, marital status, ancestry or national origin of any person. All such deeds, leases or contracts, including the CC&Rs, shall contain or be subject to substantially the following nondiscrimination or non -segregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale. lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of - 29 - discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 505. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The CDC is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided, without regard to whether the CDC has been, remains or is an owner of any land or interest therein in the Site or in the Redevelopment Project. The CDC shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches and to avail itself of the rights granted herein to which it or any other beneficiaries of this Agreement and covenants may be entitled. The covenants contained in this Agreement shall remain in effect for the periods described herein, specifically including, without limitation, the following: (a) The covenants pertaining to use of the Site that are set forth in Section 401 and 402 of this Agreement shall remain in effect for the term of the Redevelopment Plan. (b) The covenants against discrimination, as set forth in Section 404 of this Agreement, shall remain in effect in perpetuity. 600. DEFAULTS AND REMEDIES 601. Default Remedies. Subject to the extensions of time set forth in Section 702 of this Agreement, failure by any party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a Default shall give written notice of Default to the other party specifying the Default complained of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other party, and the other party shall not be in Default if such party within thirty (30) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. 602. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, any party may institute an action at law or equity to seek specific performance of the terms of this Agreement, or to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy available at law or in equity. Such legal actions must be instituted in the Superior Court of the County of San Diego, State of California. 603. Termination by the Developer Prior to the Conveyance. In addition to the rights provided the Developer in Section 602 hereof, in the event that (a) the CDC or Parking Authority do not tender title to the Site pursuant to the Grant Deed in the manner and condition and by the date provided in this Agreement and Developer is not then in Default under this Agreement, or (b) one or more of the Developer's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the Developer, or (c) any default of the CDC or Parking Authority prior to the Closing is not cured within the time set forth in -30- Section 501 hereof, after written demand by the Developer, or (d) the Developer timely disapproves the environmental condition of the Site pursuant to Section 208 hereof, then this Agreement may, at the option of the Developer, be terminated by written Notice thereof to the CDC (the "Notice of Termination"). From the date of the written Notice of Termination of this Agreement by the Developer to the CDC and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties with respect to the Site by virtue of or with respect to this Agreement. 604. Termination by the CDC Prior to the Conveyance. In the event that prior to the Conveyance the CDC and Parking Authority are not in Default under this Agreement and (a) the Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; or (b) one or more of the CDC's Conditions Precedent to the Closing is not fulfilled on or before the time set forth in the Schedule of Performance and such failure is not caused by the CDC or Parking Authority; or (c) the Developer is otherwise in Default of this Agreement and fails to cure such default within the time set forth in Section 501 hereof; then this Agreement and any rights of the Developer or any assignee or transferee with respect to or arising out of the Agreement or the Site, shall, at the option of the CDC, be terminated by the CDC by written Notice thereof to the Developer. From the date of the written Notice of Termination of this Agreement by the CDC to the Developer and thereafter this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties. 605. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction.. The CDC and Parking Authority have the right, at their election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the CDC and Parking Authority the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, the Developer (or its successors in interest) shall unless due to an Enforced Delay as described in Section 702 hereof: (a) Fail to start the construction of the Improvements as required by this Agreement for a period of ninety (90) days after written notice thereof from the CDC; or (b) Abandon or substantially suspend construction of the Improvements required by this Agreement for a period of sixty (60) days after written notice thereof from the CDC; or (c) Contrary to the provisions of Section 703 Transfer or suffer any involuntary Transfer in violation of this Agreement, and such transfer has not been approved by the CDC or rescinded within thirty (30) days of notice thereof from CDC to Developer. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: 1. Any mortgage or deed of trust permitted by this Agreement; 2. Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust; or 3. Any rights or interests held by a lessee in and to any portion of the Site. -31- Notwithstanding the above, however, the CDC and Parking Authority shall have no right to retake possession of Residential Units and portions of the Site sold to individual homebuyers in the ordinary course of business. The Grant Deed shall contain appropriate reference and provision to give effect to the CDC and Parking Authority's right as set forth in this Section 505, under specified circumstances prior to recordation of the Release of Construction Covenants, to reenter and take possession of the Site, with all improvements thereon, and to terminate and revest in the CDC or Parking Authority the estate conveyed to the Developer. Upon the revesting in the CDC or Parking Authority of title to the Site as provided in this Section 505, the CDC or Parking Authority shall, pursuant to their responsibilities under State law, use their reasonable efforts to resell the Site as soon and in such manner as the CDCor Parking Authority shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it exists or may be amended, to a qualified and responsible party or parties (as determined by the CDC or Parking Authority) who will assume the obligation of making or completing the Improvements, or such improvements in their stead as shall be satisfactory to the CDC or Parking Authority and in accordance with the uses specified for such Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Agreement, shall be applied: (i) First, to reimburse the CDC and Parking Authority, on its own behalf or on behalf of the City, all costs and expenses incurred by the CDC and Parking Authority, excluding Parking Authority and CDC staff costs, but specifically, including, but not limited to, any expenditures' by the CDC or the Parking Authority in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the CDC or Parking Authority from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Developer has not paid (or, in the event that Site is exempt from taxation or assessment of such charges during the period of ownership thereof by the CDC and Parking authority, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing- on the Site or part thereof at the time or revesting of title thereto in the CDC and Parking Authority, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred by the CDC or Parking Authority with respect to the making or completion of the Improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the CDC or Parking Authority by the Developer, and in the event additional proceeds are thereafter available, then (ii) Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession. - 32 - Any balance remaining after such reimbursements shall be retained by the CDC and Parking Authority as their property. The rights established in this Section 505 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the CDC will have conveyed the Site to the Developer for redevelopment purposes and not for speculation in undeveloped land. 606. Acceptance of Service of Process. In the event that the Developer commences legal action against the CDC and Parking Authority, service of process on the CDC shall be made by personal service upon the Director of the CDC and Parking Authority or in such other manner as may be provided by law. In the event that the CDC commences legal action against the Developer, service of process on the Developer shall be made by personal service on the Developer, whether made within or outside the State of California, or in such other manner as may be provided by law. 607. 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 or different times, of any other rights or remedies for the same default or any other default by the other party. 608. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 609. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 610. Non -Liability of Officials and Employees of the CDC and Parking Authority. No member, official or employee of the Parking Authority, the CDC or the City shall be personally liable to the Developer, or any successor in interest, in the event of any Default or breach by the Parking Authority or the CDC (or 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. 611. Attorneys' Fees. In any action between the parties to interpret, enforce, reform, modify, rescind, or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief, or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys' fees. 700. GENERAL PROVISIONS 701. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice ("Notice") which either party may desire to give to the other party under this Agreement must be in writing and may be given by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice. - 33 - To CDC and Parking Authority: Community Development Commission of the City of National City 140 E. 12th Street, Suite B National City, CA 91950-3312 Attention: Executive Director To Developer: ARE Holdings, LLC 12626 Bellflower Blvd. Downey, CA 90242 Attention: Samuel P. Ynzunza Copies to: Golub & Morales LLP 525 B Street, Suite 1500 San Diego, California 92101 Attention: Tomas Morales Greenberg Traurig, LLP 2450 Colorado Ave., Suite 400E Santa Monica, California 90404 Attention: Fernando Villa Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the third day from the date it is postmarked if delivered by registered or certified mail. 702. Extended Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform (an "Extended Delay"), which may include the following: war; acts of terrorism, insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of the Parking Authority or CDC which shall not excuse performance by the Parking Authority or CDC). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of CDC, Parking Authority and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Improvements shall not constitute grounds of enforced delay pursuant to this Section 602. - 34 - Awilt# 703. Transfers of Interest in Site or Agreement. The qualifications and identity of the Developer as the developer of high quality residential development are of particular concern to the CDC and Parking Authority. Furthermore, the parties acknowledge that the CDC and Parking Authority have negotiated the terms of this Agreement in contemplation of the development of the Improvements as described in the Scope of Development of this Agreement. Nevertheless, the Developer may assign or otherwise transfer its interests and rights under this Agreement and its interests in any parcel comprising the Site, so long as the Developer's assignee or transferee agrees to comply fully with the terms and conditions of this Agreement, and subject to the CDC's prior written approval, which approval shall not be unreasonably withheld. The CDC's approval, prior or otherwise, shall not be required for Permitted Transfers as defined in Section 703.1 hereof. 703.1. Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, the CDC approval of a transfer shall not be required in connection with any of the following: (a) Any transfer to a limited liability company, partnership, corporation, or other entity or entities in which ARE Holdings, LLC retains a portion of the ownership or beneficial interest and retains management and control of the transferee entity or entities. (b) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate construction of the Improvements. (c) Any requested assignment for financing purposes (subject to such financing being considered and approved by the CDC pursuant to Section 411 herein), including the grant of a deed of trust to secure the funds necessary for construction of the Improvements. (d) Any conveyance of completed Residential Units to individual homebuyers in the ordinary course of business. (e) Any leaseback to the Developer of model Residential Units for the period of the marketing of the Residential Units. (f) ordinary course of business. Any lease -of commercial -retail space within -the Site to tenants in the In the event of a transfer by the Developer under subparagraph (a) above not requiring the Parking Authority and CDC's prior approval, Developer nevertheless agrees that at least thirty (30) days before such transfer it shall give written notice to the CDC and Parking Authority of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement of all of the obligations of this Agreement. Such an assignment shall release the assigning Developer from any obligations to the Commission hereunder. 703.2. Parking Authority and CDC Consideration of Requested Transfer. The CDC and Parking Authority agree that they will not unreasonably withhold approval of a request for approval of a Transfer made pursuant to this Section 703, provided the Developer delivers written notice to the CDC and Parking Authority requesting such approval. Such notice shall be accompanied by evidence regarding the proposed transferee's development and/or operational qualifications and experience, and its financial commitments and resources, in sufficient detail to - 35 - enable the CDC and Parking Authority to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 703 and as reasonably determined by the CDC and Parking Authority. The CDC and Parking Authority may, in considering any such request, take into consideration such factors as (i) the quality of any new and/or replacement operator, (ii) the transferee's past performance as an developer of residential developments, (iii) the current financial condition of the transferee, and similar factors. The CDC and Parking Authority agree not to unreasonably withhold their approval of any such requested Transfer, taking into consideration the foregoing factors. An assignment and assumption agreement in form satisfactory to the Parking Authority and CDC's legal counsel shall also be required for all proposed Transfers. Within thirty (30) days after the receipt of the Developer's written notice requesting the Parking Authority and CDC approval of a Transfer pursuant to this Section 603, the CDC and Parking Authority shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the Parking Authority and CDC reasonably require in order to complete the request and determine whether or not to grant the requested approval. In the event of a disapproval, the CDC and Parking Authority shall state in writing each of the reasons for such a disapproval. Upon receipt of such a response, the Developer shall promptly furnish to the CDC and Parking Authority such further information as may be reasonably requested. 703.3. Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon the Developer and its permitted successors and assigns. Whenever the term "Developer" is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided. 703.4. Assignment by CDC and Parking Authority. The CDC and Parking Authority may assign or transfer any of their rights or obligations under this Agreement without the approval of the Developer, provided, however, that such an assignment shall not release the CDC and Parking Authority from any of its obligations hereunder.. 704. Relationship Between CDC, Parking Authority and Developer. It is hereby acknowledged that the relationship between the CDC, the Parking Authority and the Developer is not that of a partnership or joint venture and that the CDC, the Parking Authority and the Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the AttachmentSTereto, the CDC and Parking Authority shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 705. CDC and Parking Authority Approvals and Actions. The CDC and Parking Authority shall maintain authority of this Agreement and the authority to implement this Agreement through the CDC Executive Director (or his duly authorized representative). The CDC Executive Director shall have the authority to make approvals, issue interpretations, waive provisions, and/or enter into certain amendments of this Agreement on behalf of the CDC and Parking Authority so long as such actions do not materially or substantially change the uses or development permitted on the Site, or add to the costs incurred or to be incurred by the CDC or Parking Authority as specified herein, and such approvals, interpretations, waivers and/or amendments may include extensions of time to perform as specified in the Schedule of Performance. All other material and/or substantive interpretations, waivers, or amendments shall require the consideration, action and written consent of the CDC and Parking Authority Boards. r - 36 - r 1 706. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed to be an original. 707. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material. This Agreement includes Attachment Nos. 1 through 7, which are incorporated herein. 708. Real Estate Brokerage Commission. The CDC and Parking Authority and the Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with the Developer's acquisition of any of the Remaining Parcels from the CDC or Parking Authority. The parties agree to defend and hold harmless the other parties from any claim to any such commission or fee from any other broker, agent or finder with, respect to this Agreement which is payable by such party. 709. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers is to sections in this Agreement, unless expressly stated otherwise. 710. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both parties. 711. No Waiver. A waiver by either party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions ofthis Agreement. 712. Modifications. Any alteration, change or modification 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. 713. Severability. if any term, provision. condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. 714. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California - 37 - Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 715. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 716. Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC, the Parking Authority, the Developer of each and every obligation and condition of this Agreement. 717. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. 718. Conflicts of Interest. No member, official or employee of the CDC or Parking Authority shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 719. Time for Acceptance of Agreement by CDC and Parking Authority. This Agreement, when executed by the Developer and delivered to the CDC and Parking Authority, must be authorized; executed and delivered by the CDC and Parking Authority on or before forty-five (45) days after signing and delivery of this Agreement by the Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. IN WITNESS WHEREOF, the CDC, the Parking Authority and the Developer have executed this Disposition and Development Agreement as of the date set forth above. CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman ATTEST: , CDC Secretary - 38 - PARKING AUTHORITY: PARKING AUTHORITY OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman -39- APPROVED AS TO FORM: Tomas Morales, CDC Counsel DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing Member By: Its: By: Its: -40- ATTACHMENT NO. 1 SITE MAP LA-FS1\Vi11aF1311599v05\72826.010100 A-1 L rr2 Li ❑ :i r ri III 1 Coolidge Avenue Hoover Avenue /Roosevelt Avenue 1 f0 National City Boulevard LD LIJ uV 0 L or3 0 A Av `J B Avenue 1 N upo LJ r 1l ATTACHMENT NO. 2 SITE LEGAL DESCRIPTION LA-FS 1 \V iI1aV'311599v05172826.010100 A-2 • PARCEL 1: LOTS 1 AND 2 IN BLOCK 12 IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 2: LOTS 3 AND 4, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 3: LOT 5 AND LOTS 7 AND 8 AND LOT 11 AND THE WEST 10 FEET OF LOT 12, BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 4: LOT 6, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882 PARCEL 5: LOTS 9 AND 10 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 6: THE EAST 15 FEET OF LOT 12; ALL OF LOTS 13 TO 18, INCLUSIVE, AND THE SOUTHEASTERLY HALF OF LOT 19, ALL IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882; THE NORTHEASTERLY LIN OF SAID SOUTHEASTERLY HALF OF LOT 19 BEING PARALLEL WITH THE DIVIDING LINE BETWEEN SAID LOTS 18 AND 19. THE NORTHEASTERLY HALF OF LOT 19, ALL OF LOTS 20, 21, 22, 23 AND 24 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. ATTACHMENT NO. 3 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: This document is exempt from payment of a recording fee pursuant to Government Code Section 27383 GRANT DEED For valuable consideration, receipt of which is hereby acknowledged, the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the National City Redevelopment Project (the "Project"), under the Community Redevelopment Law of California, as of , 2005, hereby grants to ARE HOLDINGS, LLC, a Delaware limited liability company ("Developer"), the real property hereinafter referred to as the "Site," described in Exhibit A attached hereto and incorporated herein, subject to the existing easements. restrictions and covenants of record described there. 1. Reservation of Mineral Rights. CDC excepts and reserves from the conveyance herein described all interest of the CDC in oil, gas, hydrocarbon substances and minerals of every kind and character lying more than five hundred (500) feet below the surface, together with the right to drill into, through, and to use and occupy all parts of the Site lying more than five hundred (500) feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances or minerals from said Site or other lands, but without, however, any right to use either the surface of the Site or any portion thereof within five hundred (500) feet of the surface for any purpose or purposes whatsoever, or to use the Site in such a manner as to create a disturbance to the use or enjoyment of the Site. 2. Conveyance in Accordance With Redevelopment Plan, Disposition and Development Agreement. The Site is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 95-2095 of the City Council of the City of National City, and a Disposition and Development Agreement entered into between CDC and Developer dated July 19 2005 (the "DDA"), a copy of which is on file with the CDC at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to construct a mixed -use residential, retail and/or office development comprised of 219 units on the Site, and other requirements as set forth therein (the " Improvements"). All terms used herein shall have the same meaning as those used in the DDA. 3. Restrictions on Transfer. The Developer further agrees as follows: (a) For the period commencing upon the date of this Grant Deed and until the A-3 CDC's issuance of the Release of Construction Covenants as set forth in Section 310 of the DDA, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under the DDA or this Grant Deed, nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, without the prior written approval of the CDC or as otherwise permitted pursuant to Section 603 of the DDA. (b) The Developer shall not place or suffer to be placed on the Site any lien or encumbrance other than mortgages, deeds of trust, or any other form of conveyance required for financing of the construction of the Improvements on the Site, and any other expenditures necessary and or appropriate to develop the Site as provided in Section 310.2 of the DDA.. (c) All of the terms, covenants and conditions of this Grant Deed shall be binding upon the Developer and the permitted successors and assigns of the Developer. Whenever the term "Developer" is used in this Grant Deed, such term shall include any other successors and assigns as herein provided. 4. Nondiscrimination. The Developer herein covenants by and for itself, its heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the Developer itself or any person claiming under or through Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: (a) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color; creed, religion, sex, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs; executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sub lessees, subtenants, or vendees in the premises herein leased." (c) In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees of the premises." 5. CDC Right of Reentry. The CDC has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the CDC the estate conveyed to the Developer if after the Closing and prior to the issuance of the Release of Construction Covenants, the Developer (or its successors in interest) shall: a. fail to start the construction of the Improvements as required by the DDA for a period of ninety (90) days after written notice thereof from the CDC; or b. abandon or substantially suspend construction of the Improvements required by the DDA for a period of sixty (60) days after written notice thereof from the CDC; or c. contrary to the provisions of Section 603 of the DDA transfer or suffer any involuntary Transfer in violation of the DDA, and such transfer has not been approved by the CDC or rescinded within thirty (30) days of notice thereof from CDC to Developer. Such right to reenter, terminate and revest shall be subject to and be limited by and shall not defeat, render invalid or limit: 1. Any mortgage or deed of trust permitted by the DDA; or 2. Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deeds of trust. 3. Any rights or interests held by a lessee in and to the property. Notwithstanding the above, however, the CDC shall have no right to retake possession of Residential Units and portions of the Site sold to individual homebuyers in the ordinary course of business. Upon the revesting in the CDC of title to the Site as provided in this Section 5, the CDC shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as the CDC shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan; as it exists or may be amended, to a qualified and responsible party or parties (as determined by the CDC) who will assume the obligation of making or completing the Improvements. or such improvements in their stead as shall be satisfactory to the CDC and in A-3 accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Agreement, shall be applied: i. First, to reimburse the CDC, on its own behalf or on behalf of the City, all costs and expenses incurred by the CDC, excluding City and CDC staff costs, but specifically, including, but not limited to, any expenditures by the CDC or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the CDC from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Developer has not paid (or, in the event that Site is exempt from taxation or assessment of such charges during the period of ownership thereof by the CDC, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time or revesting of title thereto in the CDC, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of the Developer, its successors or transferees; any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the CDC, and in the event additional proceeds are thereafter available, then ii. Second, to reimburse the Developer, its successor or transferee, up to the amount equal to the sum of (a) the costs incurred for the acquisition and development of the Site and for the improvements existing on the Site at the time of the reentry and possession. Any balance remaining after such reimbursements shall be retained by the CDC as its property. The rights established in this Section 6 are not intended to be exclusive of any other right, power or remedy, but each and every such right, power, and remedy shall be cumulative and concurrent and shall be in addition to any other right, power and remedy authorized herein or now or hereafter existing at law or in equity. These rights are to be interpreted in light of the fact that the CDC will have conveyed the Site to the Developer for redevelopment purposes. 6. Violations Do Not Impair Liens. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any Nvay impair the lien or charge of any mortgage or deed of trust or security interest permitted by paragraph 4 of this Grant Deed; provided, however, that any subsequent owner of the Site shall be bound by such remaining covenants. conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 7. Covenants Run With Land. All covenants contained in this Grant Deed shall be covenants running with the land. All of Developer's obligations hereunder except as provided hereunder shall terminate and shall become null and void upon the expiration of the Redevelopment Plan. Every covenant contained in this Grant Deed against discrimination contained in paragraph 4 of this Grant Deed shall remain in effect in perpetuity. S. Covenants For Benefit of CDC. All covenants without regard to technical classification or designation shall be binding for the benefit of the CDC, and such covenants shall run in favor of the CDC for the entire period during which such covenants shall be in force and effect, without regard to whether the CDC is or remains an owner of any land or interest therein to which such covenants relate. The CDC, in the event of any breach of any such covenants, shall have the L A-3 right to exercise all the rights and remedies and to maintain any actions at law or suits in equity dr other proper proceedings to enforce the curing of such breach. 9. Revisions to Grant Deed. Both CDC, its successors and assigns, and Developer and the successors and assigns of Developer in and to all or any part of the fee title to the Site shall have the right with the mutual consent of the CDC to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements or restrictions contained in this Grant Deed without the consent of any tenant, lessee; easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. However, Developer and CDC are obligated to give written notice to and obtain the consent of any first mortgagee prior to consent or agreement between the parties concerning such changes to this Grant Deed. The covenants contained in this Grant Deed, without regard to technical classification, shall not benefit or be enforceable by any owner of any other real property within or outside the Project Area, or any person or entity having any interest in any other such realty. No amendment to the Redevelopment Plan shall require the consent of the Developer. 10. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, perfonnance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are due to causes beyond the reasonable control or without the fault of the party claiming an extension of time to perform, which may include the following: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City or any other public or governmental CDC or entity (other than the acts or failures to act of the CDC which shall not excuse performance by the CDC). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of CDC and Developer. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Improvements shall not constitute grounds of enforced delay pursuant to this Section 10. CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick lnzunza, Chairman ATTEST: , CDC Secretary A-3 APPROVED AS TO FORM: Tomas Morales, CDC Counsel DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing Member By: Its: By: Its: A-3 EXHIBIT "A"• PARCEL 1: LOTS 1 AND 2 IN BLOCK 12 IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 2: LOTS 3 AND 4, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 3: LOT 5 AND LOTS 7 AND 8 AND LOT 11 AND THE WEST 10 FEET OF LOT 12, BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 4: LOT 6, BLOCK 12, NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF TIIE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882 PARCEL 5: LOTS 9 AND 10 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. PARCEL 6: THE EAST 15 FEET OF LOT 12; ALL OF LOTS 13 TO 18, INCLUSIVE, AND THE SOUTHEASTERLY HALF OF LOT 19, ALL IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882; THE NORTHEASTERLY LIN OF SAID SOUTHEASTERLY HALF OF LOT 19 BEING PARALLEL WITH THE DIVIDING LINE BETWEEN SAID LOTS 18 AND 19. THE NORTHEASTERLY HALF OF LOT 19, ALL OF LOTS 20, 21, 22, 23 AND 24 IN BLOCK 12 OF NATIONAL CITY, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 348, FILED IN THE OFFICE OF THE RECORDER OF SAN DIEGO COUNTY OCTOBER 2, 1882. ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE LA-FS1\ViflaF1311599v05\92826.010100 A-4 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Execution of DDA by the Agency. The Agency and City Council shall hold a joint public hearing on the DDA, and, subject to making the requisite findings, authorize execution and execute and deliver the DDA to the Developer. 2. Submission - Architect, Landscape Architect and Civil Engineer. The Developer shall submit to the Agency for approval the name and qualifications of its Architect, Landscape Architect and Civil Engineer. 3. Approval - Architect, Landscape Architect and Civil Engineer. The Agency shall approve or disapprove the Architect, Landscape Architect and Civil Engineer. 4. Submission - Basic Concept/Schematic Drawings. The Developer shall submit to the Agency's designee for approval the Basic Concept/Schematic Drawings and related documents. 5. Approval - Basic Concept/Schematic Drawings. The Agency shall approve or disapprove the Basic Concept/Schematic Drawings and related documents. 6. Approval - Application for Consistency Review oflmprovements tinder the Downtown Specific Plan. H. SITE ACQUISITION ASSISTANCE 1. Developer 'Written Request for She Acquisition Assistance (if needed). 2. Written Offer to Purchase any Remaining Parcel by CDC or Parking Authority. LA-FS 1 \V i llan346157v03\72826.010100 Within thirty (30) days after submission of executed Agreement by Developer. Not later than execution of Agreement by the Agency. Concurrently with execution of Agreement by Agency. Not later than execution of Agreement by Developer. Concurrently with execution of Agreement by Agency. At or prior to Closing on any Remaining arce After diligent but unsuccessful efforts to acquire any Remaining Parcel. No later than forty-five (45) days after CDC or Parking Authority's Receipt of Developer's request for Site Acquisition Assistance Schedule of Performance Page 1 of 1 3. Open Escrow Upon Any Remaining Parcel Owner's Acceptance of CDC or Parking Authority's Offer to Purchase. 4. Executive Director's Request that the CDC or Parking Authority Consider Acquiring a Remaining Parcel by Eminent Domain. 5. Conduct Hearing on a Resolution of Necessity - to Consider Acquiring a Remaining Parcel by Eminent Domain. 6. File an Action in Eminent Domain to Acquire a Remaining Parcel (only if a resolution of necessity is duly adopted for this purpose). 7. Conveyance of Any Remaining Parcel to Developer. III. FINANCING COMMITMENTS 1. Preliminary Evidence of Financing (lender commitment letter). 2. Evidence of Financing. The Developer shall submit to the Agency a commitment for construction financing for the entire project, including construction loan documents, and evidence of Developer's Equity, to the extent required. 3 Approval of Financing. The Agency shall approve or disapprove the evidence of financing described in 1II.1. and 2. above. IV. ELECTION OF CDC ASSISTANCE 1. Developer's Election of CDC Assistance Under Section 208 (at Developer's sole option). LA-FS 1 \V illaF346157v03\72826.010100 Within five (5) days of Owner's acceptance of offer to purchase. Within thirty (30) days of: a) a Remaining Parcel Owner's rejection of or failure to respond to the CDC's or Parking Authority's offer to purchase, or b) the Executive Director's determination of an impasse in such negotiations. Within twenty (20) days of the Executive Director's request for such a hearing. Within five (5) days of the CDC's or the Parking Authority's adoption of a resolution of necessity therefor. Within five (5) days of the CDC's or the Parking Authority's acquisition of any Remaining Parcel by negotiation or the exercise of eminent domain. Not later than ten (10) days prior to Closing on any Remaining Parcel Not later than forty-five (45) days after Developer obtains possession of and title to all of the Site parcels. Within fifteen (15) days after Agency receives each such submission of evidence of financing. Within sixty (60) days of Developer's completion of its acquisition of the Project parcels and relocation. Schedule of Performance Page 2 of 2 2. CDC Delivery of CDC Assistance to Developer. V. CLOSING AND CONSTRUCTION 1. Submittal of Final Schematic Drawings. 2. Approval — Final Schematic Drawings. 3. Submission - 50% Complete Drawings and Specifications. The Developer shall prepare and submit to the Agency for approval the 50% Complete Drawings and Specifications. Note: These drawings will be submitted in normal increments as they are completed. 4. Approval - 50% Complete Drawings and Specifications. The Agency shall approve or disapprove the 50% Complete Drawings and Specifications. Note: These drawings will be approved in increments as they are submitted. 5. Submission - Final Constniction Drawings and Specifications. The Developer shall prepare and submit to the Agency for approval the Final Construction Drawings and Specifications. Note: These drawings will be submitted in normal increments as they are completed. 6. Approval - Final Construction Drawings and Specifications. The Agency shall approve or disapprove the Final Construction Drawings and Specifications. Note: These drawings will be .approved in increments as they are submitted. 7. Opening of Escrow. The Agency and Developer shall open an escrow for sale of any Remaining Parcel to Developer, and_._ the Closing of construction financing. LA-FS 1\V illan346157v03172826.010100 One-half of funds upon the City's issuance of the first building permit to build the Improvements, and the balance of funds upon the City's initial issuance of a certificate of occupancy for any of the Project's residential units. Within thirty (30) days of CDC's Approval of Basic Concept/ Schematic Drawings. Within thirty (30) days of submittal. Within one hundred eighty (180) days after CDC approval of the Basic Concept/Schematic Design Drawings. Within thirty (30) days after submittal. Within one hundred twenty (120) days after CDC approval of the 50% Complete Drawings. Within thirty (30) days after submittal. No later than five (5) calendar days or the CDC's and/or the Parking Authority's acquisition of any Remaining Parcel. Schedule of Performance Page 3 of 3 8. Recording Final Subdivision Map. Developer shall record the final subdivision map subdividing the ownership interests for the Project's condominium units. 9. Commencement of Construction. The Developer shall commence construction of the Improvements on the Site. 10. Completion of Construction. The Developer shall complete construction of the Improvements on the Site. 11. Construction of Public Improvements. The Developer shall commence and complete the construction of public improvement work referred to in the Scope of Development to be performed by the Developer with respect to the Site. LA-FS 1 \V i11aF\346157v03\72826.010100 Not later than forty-five (45) days following the City Council's approval of the final subdivision map for the Project. Within thirty (30) days after the City Building Department's approval and issuance of valid building permits for the Improvements. Within seven hundred eighty (780) days after the commencement of construction. On a schedule which will coordinate with the construction schedule for the development of the Site by Developer but in no event later than the City's issuance of a certificate of occupancy of the portion of the Improvements bordering National City Boulevard. Schedule of Performance Page 4 of 4 L ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT The Project's improvements shall generally comprise of at ]east approximately two hundred nine (209) and up to three hundred (300) condominium residential units (the "Residential Units"), ten thousand (10,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use (collectively, the "Improvements"). The CDC shall construct or cause the construction of all public improvements required as conditions of project approval which are located outside of the face of the curbs surrounding the Improvements. The Developer shall also construct the curbs and all other on - site improvements located inside of the face of the curbs surrounding the Improvements, as required through the City's Design Review A-5 EXHIBIT 1 TO ATTACHMENT NO. 5 SITE PLAN LA-FS1\Vil1aF\311599v05172826.010100 A-5 it < J t ❑a u � RTOn Lir CV( DLID ❑ o n J 1 l" Coolidge Avenue Hoover Avenue [O n Roosevelt Avenue L ATTACHMENT NO. 6 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: This document is exempt from payment of a recording fee pursuant to Government Code Section 27383 RELEASE OF CONSTRUCTION COVENANTS THIS RELEASE OF CONSTRUCTION COVENANTS (the "Release") is made by the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), in favor of ARE HOLDINGS, LLC, a Delaware limited liability company (the "Developer"), as of the date set forth below. RECITALS A. The CDC and the Developer have entered into that certain Disposition and Development Agreement (the "DDA") dated July 19 2005, concerning the redevelopment of certain real property situated in the City of National City, California as more fully described in Exhibit "A" attached hereto and made a hereof. B. As referenced in Section 309 of the DDA, the CDC is required to furnish the Developer or its successors with a Release of Construction Covenants upon completion of construction of the Improvements (as defined in Section 100 of the DDA), which Release is required to be in such form as to permit it to be recorded in the Recorder's office of San Diego County. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA. C. The CDC has conclusively determined that such construction and development has been satisfactorily completed. NOW, THEREFORE, the CDC hereby certifies as follows: 1. The Improvements to be constructed by the Developer have been fully and satisfactorily completed in conformance with the DDA. Any operating requirements and all use, maintenance or nondiscrimination covenants contained in the DDA and other documents executed and recorded pursuant to the DDA shall remain in effect and enforceable according to their terms. 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. A-6 IN WITNESS WHEREOF, the CDC has executed this Release this day of elk , 2006. COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman ATTEST: . CDC Secretary APPROVED AS TO FORM: Tomas Morales, CDC Counsel DEVELOPER: ARE HOLDINGS, LLC, a Delaware limited liability company By: , a California corporation, its Managing Member By: Its: By: Its: eir#4 A-6 ATTACHMENT NO. 7 CDC ENVIRONMENTAL REPORT CDC Environmental Report shall mean the report listed herein, copies of which have been provided to Developer, and the originals of which are on file at the office of the Community Development Commission of the City of National City. [Page to be inserted] A-7 SUMMARY REPORT PERTAINING TO THE SALE OF REAL PROPERTY (California Community Redevelopment Law Section 33433) PURSUANT TO A PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT Between: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY And PARKING AUTHORITY OF THE CITY OF NATIONAL CITY And: ARE HOLDINGS, LLC Prepared by: KEYSER MARSTON ASSOCIATES, INC. For: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Date: July 5, 2005 EXHIBIT 2 SUMMARY REPORT PERTAINING TO THE PROPOSED SALE OF REAL PROPERTY I. INTRODUCTION The Community Development Commission of the City of National City (Commission) and the Parking Authority of the City of National City (collectively) are considering the sale of real property to ARE Holdings, LLC (Developer) pursuant to a Disposition and Development Agreement (DDA) under review as of June 27, 2005. This Summary Report is prepared in accordance with Section 33433 of the California Community Redevelopment Law. This summary consists of six additional sections, as follows: • Section II, Description of the Proposed Project • Section III, Estimated Costs to be Incurred by the Commission under the Proposed DDA • Section IV, Estimated Value of the Site at the Highest and Best Use • Section V, Estimated Fair Re -Use Value of the Interest to be Conveyed • Section VI, Purchase Price the Developer will be Required to Pay • Section VII, Explanation Why the Sale of the Property will Assist in Elimination of Blight Summary Report The Cove at San Diego Bay ndh July 5, 2005 Page 2 16104.002.027 II. DESCRIPTION OF THE PROPOSED PROJECT A. Proposed Transaction The Developer intends to build a mixed -use project with 209 residential condominiums; 10,000 square feet (SF) of retail space; and 320 parking spaces of which 40 spaces will be reserved for the public (Project). The Project will be constructed on an approximate 1.43-acre site (Site) bounded by National City Boulevard, Roosevelt Avenue, 11th, and 121h Streets in Downtown National City. The proposed transaction is detailed in the Disposition and Development Agreement (DDA) under review as of June 27, 2005. The DDA governs the relationship between the Commission and the Developer with respect to the proposed development of the Site, the schedule of performance, and the method of financing. Key terms of the DDA are summarized below. B. Commission Responsibilities • If the Developer has been unsuccessful in acquiring the Remaining Parcels, the Commission and/or the Parking Authority will initiate the Site Acquisition Program. Upon acquisition of the Remaining Parcels, the Commission and/or Parking Authority will convey fee ownership of these parcels to the Developer at a price equal to the price the Commission and/or the Parking Authority acquired the Remaining Parcels. • The Commission will provide financial assistance toward acquisition costs in the maximum amount of either $1,875,000 (Election A) or $1,300,000 (Election B). The Developer may elect to receive either of the two forms of financial assistance, each with difference repayment terms. • The Commission shall provide, at the Developer's request, financial assistance in the amount of $365,000 to construct "enhanced" National City Boulevard streetscape. • The Commission will demolish and clear from the Site all existing above -ground and subsurface improvements located on the Site, as well as arrange for standard utilities to be brought to the Site. • The Commission will cause the construction of all off -site improvements needed for the Project, i.e., sidewalks, streets, and traffic signals. • The Commission and/or Parking Authority will provide for the relocation of all occupants of the Remaining Parcels in accordance with the California Relocation Assistance Act. Summary Report The Cove at San Diego Bay "an July 5, 2005 Page 3 16104.002.027 C. Developer Responsibilities • The Developer will attempt to acquire the parcels that comprise the Site through private negotiation (Developer Parcels). • The Developer will be responsible for the costs of the Site Acquisition Program and the Purchase Price of the Remaining Parcels acquired by the Commission and/or Parking Authority on behalf of the Developer. These costs include, but are not limited to, acquisition, costs of eminent domain, goodwill, appraisals, court costs, etc. • If the Commission provides the "Election A Assistance", the Developer will reimburse the Commission for such assistance by payment of the following: • Future Resale Proceeds. An amount equal to one percent (1%) of the total proceeds of: (i) the initial and future sales of the Project's retail space; and (ii) the sales of all the Project's residential units that occur after the original sale of each unit. The Commission will be entitled to reimbursement for a period of 30 years following the date of the final certificate of occupancy. • Enhanced Participation. An amount equal to 25% of the total gross sales proceeds from the original sale of all the Project's residential units that cumulatively exceed 20% of the Developer projected gross sales proceeds of $85,000,000. • If the Commission provides the "Election B Assistance", the Developer will reimburse the Commission for such assistance by payment of Future Resale Proceeds, as described above. Summary Report The Cove at San Diego Bay ndh July 5, 2005 Page 4 16104.002.027 -ft) III. ESTIMATED COST TO BE INCURRED BY THE COMMISSION UNDER THE PROPOSED AGREEMENT Costs to the Commission related directly to development of the Site are itemized below. They consist of the following: (1) Commission Costs Commission Financial Assistance toward Acquisition Costs $1,875,000 Commission Contribution for Enhanced Streetscape Improvements $365,000 Off -Site Improvements (2) $300,000 Demolition of Existing Improvements (3) $310,000 Legal, Economic, and Environmental Consultants (4) $50,000 Total Commission Costs $2,900,000 (1) All figures provided by the Community Development Commission of National City, except as noted. (2) Gross estimate, based on standard allowances. (3) Gross estimate, based on allowance of $5 per SF of Site area. (4) Gross estimate. Summary Report The Cove at San Diego Bay pan July 5, 2005 Page 5 16104.002.027 IV. ESTIMATED VALUE OF THE SITE AT THE HIGHEST AND BEST USE This section presents an analysis of the fair market value of the Site at the highest and best use of the properties. In appraisal terminology, the highest and best use is that use of the property, which generates the highest property value and is physically possible, financially feasible, and legally permitted. Therefore, value at the highest and best use is based solely on the value created and not on whether or not that use carries out the redevelopment goals of the City of National City. The Downtown Specific Plan governs the Site and regulates the zoning and land uses for the Site. The Site is zoned for higher -density mid -rise multi -family residential, hotel, or professional office development, with ground floor pedestrian -oriented retail, and a maximum Floor Area Ratio (FAR) of 6.0. The Project as proposed does not achieve the maximum allowable FAR due to a combination of factors such as the market risk associated with pioneering projects, design constraints imposed by the Downtown Specific Plan, and the cost impact associated with more than one level of subterranean parking. On this basis, then, KMA concludes that the Project represents the highest and best use of the Site. Therefore, KMA concludes that the fair market value of the Site at its highest and best use is equal to the fair re -use value, $4,991,000. Summary Report The Cove at San Diego Bay July 5, 2005 Page 6 ndh 1610,1.002.027 V. ESTIMATED FAIR RE -USE VALUE OF THE INTEREST TO BE CONVEYED This section presents an analysis of the fair re -use value of the interest to be conveyed to the Developer subject to conditions, covenants, and restrictions contained in the proposed DDA. In estimating the fair re -use value of the Site, KMA has reviewed the requirements that set specific conditions with respect to scope of development, the schedule of performance, and method of financing. It is the KMA conclusion that analysis of comparable transactions does not provide a useful or valid approach for valuating this development opportunity due to extensive adjustments that would be required in respect to the strength of the development opportunity, location and configuration, and other factors. Therefore, reliance has been placed upon the income, or the residual land value approach, which is a recognized method for valuing real property. Analysis of the development economics of the Project, reported separately to the Commission by KMA, indicates that pursuant to the terms and conditions under which the Site will be conveyed, the fair re -use value of the Site is estimated to be $4,991,000. Summary Report The Cove at San Diego Bay July 5, 2005 Page 7 10104.002.027 VI. PURCHASE PRICE WHICH THE DEVELOPER WILL BE REQUIRED TO PAY Under California Community Redevelopment Law, the Commission is obligated to publicly disclose information sufficient for a comparison of the purchase price contained in the proposed DDA with the estimated fair re -use value as described below. • Land Payment. The Developer is responsible for a minimum of $80 per SF, for a total of $4,991,000. • Future Resale Proceeds. Table 1 depicts KMA's estimate of additional compensation to the Commission from its participation in future sales of the condominiums and retail space. KMA conservatively assumed market value escalation of 3% per year; that each unit resells every seven years; and that the retail space is resold every 10 years. These assumptions result in cumulative payments to the Commission with a total net present value of $1,307,000, based on a discount rate of 10.0%. • Enhanced Participation. KMA conservatively estimates zero revenue from the gross sales participation provision. • Enhanced Streetscape Improvements. The Developer may elect to receive financial assistance to construct streetscape improvements along National City Boulevard. On this basis, then, KMA concludes that the effective compensation to the Commission is $5,933,000, as summarized below: Land Payment (1) $4,991,000 Add: NPV of Future Resale Proceeds $1,307,000 Add: Enhanced Participation Total Compensation to the Commission $6,298,000 (Less) Enhanced Streetscape Improvements Contribution ($365,000) Net Compensation to the Commission $5,933,000 (1) Assumed minimum $80 per SF, after Commission financial assistance. Summary Repot The Cove at San Diego Bay July 5, 2005 Page 8 ndh 16104.002.027 TABLE 1 ESTIMATE OF PROCEEDS FROM PARTICIPATION IN FUTURE RESALES THE COVE AT SAN DIEGO BAY COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27. Year 28 Year 29 Year 30 Average Resale Number of Price (1)(2) Resales (3) $430,080 $443,000 $456,000 $470,000 $484,000 $499,000 $514,000 $529,000 $545,000 $561,000 $578,000 $595,000 $613,000 $631,000 $650,000 $670,000 $690,000 $711,000 $732,000 $754,000 $777,000 $800,000 $824,000 $849,000 $874,000 $900,000 $927,000 $955,000 $984,000 $1,014,000 0.00 0.00 0.00 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 29.86 Retail Space Sale (3)(4) $3,091,000 $4,033,000 $5,420,000 $7,284,000 Total Resales $3,091,0001 $0 $0 $14,032,857 $14,450,857 $14,898,714 $15,346,571 $15,794,429 $16,272,143 $20,782,8571 $17,257,429 $17,765,000 $18,302,429 $18,839,857 $19,407,143 $20,004,286 $20,601,429 $21,228,429 $21,855,429 $27,932,286 $23,199,000 $23,885,714 $24,602,286 $25,348,714 $26,095,143 $26,871,429 $27,677,571 $28,513,571 $29,379,429 I $37,559,1431 Portion to Agency @ 1% $31,000 $0 $0 $140,000 $145,000 $149,000 $153,000 $158,000 $163,000 $208,000 $173,000 $178,000 $183,000 $188,000 $194,000 $200,000 $206,000. $212,000 $219,000 $279,000 $232,000 $239,000 $246,000 $253,000 $261,000 $269,000 $277,000 $285,000 $294,000 $376,000 NPV of CDC 1% of Resale Proceeds Over 30 Years Discount Rate $1,307,000 10.0% (1) Average unit sales price. (2) Based on assumed market escalation of 3.0% per year. (3) Assumes resale of each unit every seven years. (4) Assumes sale of retail space at years 1, 10, 20, and 30 at 8.5% cap rate. Prepared by: Keyser Marston Associates, Inc. Filename is National City\Las Terrazas_Re-use;7l5/2005;rks Page 9 • VII. EXPLANATION WHY SALE OF THE PROPERTY WILL ASSIST IN THE ELIMINATION OF BLIGHT The Project Area is characterized by an array of blighting factors, including: • The age, obsolescence, deterioration, mixed character, or shifting uses of existing buildings within the Project Area. • The subdividing and sale of lots of irregular form and shape, and inadequate size, for proper usefulness and development. • A prevalence of depreciated values and impaired investments, and social and economic maladjustment. • The defective design in character or physical condition of existing buildings. Not all of these conditions are present throughout the Project Area. The Commission's redevelopment efforts have successfully alleviated blighting conditions in some portions of the Project Area. However, many of these conditions are still apparent in the area surrounding the subject Site. Implementation of the proposed development can be expected to assist in the alleviation of blighting conditions through the following: • Improve the City's housing stock. • Consolidation of irregular parcels into a site appropriate for development. • Elimination of conditions of economic dislocation such as fragmented ownership patterns. • Expansion, renovation, and relocation of businesses within the Project Area. Summary Report The Cove at San Diego Bay ndh 16104.002.027 July 5, 2005 Page 10 ,0-.00Z = „I• =ele9S £ TISIHXi d TXa1uo3 ellS Lo Zok N ft- pp I l` Coolidge Avenue Hoover Avenue c cp)' Roosevelt Avenue National City Boulevard NOTICE OF JOINT PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, THE COMMUNITY DEVELOPMENT COMMISSION, AND THE PARKING AUTHORITY RELATING TO THE PROPOSED COVE AT SAN DIEGO BAY PROJECT NOTICE IS HEREBY GIVEN that the City Council of the City of National City, the Community Development Commission of the City of National City and the Parking Authority of the City of National City will hold a Joint Public Hearing after the hour of 6:00 p.m., Tuesday, July 19, 2005, in the City Council Chambers, Civic Center, 1243 National City Boulevard, National City, California, to provide for public comment in accordance with Sections 33433 and 33445 of the California Health & Safety Code, regarding the proposed terms and conditions for the potential sale of land proposed in a Disposition and Development Agreement (DDA) between the Community Development Commission, the Parking Authority, and ARE Holdings, LLC for real property located in the block bounded by National City Boulevard on the east, Roosevelt Avenue on the west, 11th Street on the north, and 12th Street on the south. Any person interested in this matter may appear at the above time and place and be heard. PROJECT DESCRIPTION: ARE Holdings, LLC, has submitted an application for development of a mixed -use residential and retail project, with public parking. The proposed Cove at San Diego Bay Project involves the development of a one acre site within the Morgan Square sub -district of downtown National City. The project consists of approximately 209 condominium units (for -sale), approximately 10,000 square feet of retail commercial along National City Boulevard, approximately 40 public parking spaces and approximately 280 private parking spaces. The project is located on the square block bounded by National City Boulevard on the east, Roosevelt Avenue on the west, 11`h Street on the north and 12th Street on the south. AVAILABILITY OF DOCUMENTS: A copy of the proposed Disposition and Development Agreement, a Summary Report Pertaining to the Sale of Real Property pursuant to the proposed Agreement, as well as other documentation required by Section 33445 of the California Health and Safety Code may be reviewed at the office of the Community Development Commission of the City of National City at 140 East 12th Street, Suite B, National City, and the City Clerk's Office, Civic Center, 1243 National City Boulevard, National City. Members of the public are invited to comment. Written comments should be received by the Community Development Commission on or before 3:00 p.m., July 19, 2005. Any questions regarding this matter should be directed to Byron Estes at (619) 336-4276. If you challenge the nature of the proposed action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the public hearing entity conducting the hearing at, or prior to, the public hearing. EXHIBIT 4 CITY OF NATIONAL CITY MICHAEL DALLA City Clerk PUBLISHED IN THE NATIONAL CITY STAR NEWS, FRIDAY JULY 1, JULY 8, AND JULY 15, 2005. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY July 19, 2005 AGENDA ITEM NO. 2 TO: CHAIRMAN AND BOARD MEMBERS � FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR 1�%" it VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: RESOLUTION NO. 2005-72: APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; APPROVING THE PROJECT CONCEPT PLAN; MAKING CERTAIN FINDINGS IN CONNECTION HEREWITH; AND AUTHORIZING THE TRANSMITTAL OF SAID REPORT TO THE CITY COUNCIL Recommendation: Community Development Commission staff recommends that the Parking Authority of the City of National City & the Community Development Commission of the City of National City: ADOPT Resolution No. 2005-72 approving the Health and Safety Code Section 33433 Report; approving the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority and ARE Holdings, LLC, for development of the Cove at San Diego Pay Project; approving the Project Concept Plan; and making certain findings in connection herewith. Fiscal Impact: The Disposition and Development Agreement provides for an expenditure for public infrastructure of $365,000 for enhanced streetscape on National City Boulevard within the public right-of-way. The Disposition and Development Agreement also provides for an optional subsidy formula, as further described herein, of up to $1,875,000. These funds would be covered by tax increment revenues and/or tax allocation bond proceeds. Community Development Commission Agenda Item No. 2 July 19, 2005 Page 1 of 4 The Project is expected to generate approximately $455,000 in net tax increment, $90,000 in net low -moderate income housing set -aside, and $50,000 in net sales tax on an annual basis beginning in fiscal year 2007-2008, equating to annual revenues to the Community Development Commission and the City of National City in the amount of $595,000. In addition, approximately $250,000 in up -front impact fees will be assessed to cover basic city services. Environmental: A Program Environmental Impact Report has been adopted for the Downtown Specific Plan, in accordance with CEQA Guidelines. The project has been determined to be consistent with the Downtown Specific Plan. Pursuant to Section 15182(a) of the California Environmental Quality Act, the project is deemed exempt from further CEQA review. Background: The Commission, at their meeting of October 7, 2003, selected ARE Holdings, LLC to redevelop the block bounded by National City Boulevard, Roosevelt Avenue, 11th Street and 12th Street. The selection followed an owner participation process, as required by California redevelopment law and the Redevelopment Agency's Owner Participation Rules. ARE Holdings, LLC has proposed the mixed -use Cove at San Diego Bay project, which consists of approximately 219 residential condominiums, 7,500 square feet of commercial retail space, and 360 parking spaces. The project includes a tower element of 16 stories, a mixed -use 7 story building on National City Boulevard, and two four story buildings, one on 12th Street and one on Roosevelt Avenue. Each of these building elements surround a central core of subterranean and podium parking, which remains screened from public view (Exhibit 4). The project is designed to create a village environment that complements other projects in the "Morgan Square" area between the Police Headquarters building on the south and the Education Village project on the north. The development represents a total developer investment of approximately $70,000,000 and is envisioned as a major catalyst to the revitalized downtown district. As a catalyst project, Community Development Commission staff is not recommending the inclusion of subsidized very -low or low-income housing units in this particular development proposal. The Disposition and Development Agreement provides for Redevelopment Agency and/or Parking Authority property acquisition if ARE Holdings, LLC is unsuccessful in assembling all necessary parcels. Any costs associated with Agency acquisition will be covered by ARE Holdings, LLC. In addition, Polanco Act indemnification is provided to Community Development Commission July 19, 2005 Page 2 of 4 Agenda Item No. 2 ARE Holdings, LLC for any environmental contamination that may be found during the due diligence period. National City Boulevard Streetscape improvements will be implemented, including upgraded sidewalk and landscape elements, as part of the Project development. The Community Development Commission will commit up to $365,000 for public improvements for this purpose. In addition, ARE Holdings, LLC will have the option of electing a Redevelopment Agency subsidy of up to $1,875,000,.based on the following formula: Subsidy Formula: Within sixty (60) days of completion of acquisition and relocation activities funded by the developer, the developer may elect to either: a. Proceed with a subsidy from the Community Development Commission based on acquisition and relocation costs that exceed $80/square foot, capped at $1,875,000. The Community Development Commission will be reimbursed for these costs through a one percent surcharge collected upon the resale of residential units (after the initial sale and in effect for 30 years), through the same formula applied to initial and subsequent sale of retail units, and through an additional "upside participation" formula, as further described in the Agreement. However, if the subsidy disbursed is $1,300,000 or less, the additional "upside participation" formula will not apply; b. Proceed without a subsidy from the Community Development Commission, in which case the Project is not expected to be constructed utilizing the State Prevailing Wage formula, except as this applies to the construction of National City Boulevard streetscape enhancements; c. Discontinue development and sell back to the Community Development Commission any properties acquired, at the cost of acquisition, and terminate the Disposition and Development Agreement. Timing of Development: The acquisition and relocation process is scheduled to take place as soon as possible and conclude by early Spring 2006. Depending on the outcome of that process, construction plans could be submitted for building permits by early 2006. Building permits are expected to be issued by Summer 2006 with construction planned to commence shortly thereafter. Building completion and occupancy is slated for Spring 2008. Community Development Commission staff will actively work to expedite all phases of the project. A more detailed listing of projected dates is included in the Schedule of Performance (Attachment No. 3 to the Disposition and Development Agreement). Community Development Commission Agenda Item No. 2 July 19, 2005 Page 3 of 4 With this, Community Development Commission staff recommends that the Community Development Commission Board and the Parking Authority Board approve the Health and Safety Code Section 33433 Report; approve the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority and ARE Holdings, LLC, for development of the Cove at San Diego Pay Project; approve the Project Concept Plan; and make certain findings in connection herewith; and authorizing the transmittal of said report to the City Council. ATTACHMENTS: EXHIBIT 1 — Resolution No. 2005-72 Staff member: Estes Community Development Commission July 19, 2005 Agenda Item No. 2 Page 4of4 RESOLUTION NO. 2005-72 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY (CDC) APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; APPROVING THE PROJECT CONCEPT PLAN; AND MAKING CERTAIN FINDINGS IN CONNECTION HEREWITH; AND AUTHORIZING THE TRANSMITTAL OF SAID REPORT TO THE CITY COUNCIL WHEREAS, the Community Development Commission of National City is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and, WHEREAS, the Parking Authority of National City is a public body, corporate and politic, organized and existing under the Parking Law of 1949 (Streets & Highways Code Section 32500 et seq.); and, WHEREAS, pursuant to the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), on February 1, 2005, the City Council of National City approved and adopted the Downtown Specific Plan for Downtown National City; and, WHEREAS, the Downtown Specific Plan calls for a consistency review process to ensure that development within Downtown National City is in conformance with the goals established by the City Council of National City; and, WHEREAS, in furtherance of the objectives of the California Community Redevelopment Law, the Community Development Commission and the Parking Authority desire the redevelopment of certain real property within Downtown National City, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th for a residential, retail mixed -use and public parking project; and, WHEREAS, ARE Holdings LLC, A Delaware limited liability company owns in fee certain of the parcels which comprise the Site; and, WHEREAS, Community Development Commission staff has negotiated a Disposition and Development Agreement including attachments thereto with ARE Holdings, LLC, for the Community Development Commission and Parking Authority's disposition of portions of the Site to ARE Holdings, LLC, if necessary, EXHIBIT 1 and subject to the discretion of the Community Development Commission and Parking Authority; and, WHEREAS, pursuant to the terms of the Disposition and Development Agreement, ARE Holdings, LLC shall construct at least approximately two hundred nine (209) and up to three hundred (300) condominium residential units, ten thousand (10,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use, all other on- site improvements located inside of the face of the curbs surrounding the improvements, as required through the City of National City's Design Review ; and, WHEREAS, Community Development Commission and Parking Authority staff have presented the draft Disposition and Development Agreement to the Community Development Commission Board, Parking Authority Board and City Council for consideration; and, WHEREAS, the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), at Health and Safety Code Section 33433, requires that (i) the Community Development Commission prepare a Summary Report concerning the Community Development Commission's proposed disposition of the Site as set forth in the Disposition and Development Agreement, (ii) the Community Development Commission Board, Parking Authority Board and the City Council conduct a noticed joint public hearing with respect to the Disposition and Development Agreement, and (iii) the approval of the Disposition and Development Agreement be set forth in a resolution making certain findings and determinations as set forth herein below; and, WHEREAS, pursuant to the requirements of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), a Summary Report for the Disposition and Development Agreement has been prepared by the Community Development Commission's economic consultant Keyser Marston Associates, Inc.; and, WHEREAS, a joint public hearing of the Community Development Commission Board, Parking Authority Board and City Council has been noticed and conducted in accordance with applicable requirements of law; and, WHEREAS, at the joint public hearing the Community Development Commission, Parking Authority and City Council each considered all of the information, testimony, and evidence presented, including but not limited to the draft Disposition and Development Agreement in the form presented by Community Development Commission staff concurrent with consideration of the Resolution, the Community Development Commission staff report, the Summary Report, and the oral and written testimony received from persons wishing to 2 appear and be heard concerning the proposed Disposition and Development Agreement. NOW, THEREFORE, BE IT RESOLVED, that: 1. Based on all the information, testimony, and evidence presented at the joint public hearing, including but not limited to the draft Disposition and Development Agreement and the information and evidence set forth in the Community Development Commission staff report, the Summary Report, and the oral and written testimony received, the Community Development Commission finds and determines as follows: a. That the above Recitals are true and correct and are incorporated herein. b. That the Disposition and Development Agreement effectuates the purposes of the Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), and of the Redevelopment Plan, and is in the best interests of the citizens of National City. c. That the Community Development Commission and Parking Authority's disposition of the Site pursuant to the Disposition and Development Agreement will assist in the elimination of blight. d. That the Community Development Commission and Parking Authority's disposition of the Site pursuant to the Disposition and Development Agreement is consistent with the Specific Plan and subject to the consistency review process. e. That the Disposition and Development Agreement is consistent with the Implementation Plan for the Redevelopment Plan. f. That any consideration ARE Holdings, LLC will pay for the Site is not less than the fair reuse value of the Site at the use and with the covenants and conditions and development costs authorized by the disposition. 2. The Disposition and Development Agreement, a true and correct copy of which is on file with the City Clerk/Community Development Commission Secretary, is hereby approved. 3. The Community Development Commission consents to (i) the authorization and direction given by the Community Development Commission and Parking Authority to its Executive Directors and Community Development Commission Counsel to make final modifications to the Disposition and Development Agreement that are consistent with the substantive terms of the Disposition and Development Agreement approved hereby, (ii) the authorization 3 and direction given to the Community Development Commission and Parking Authority Chairpersons to thereafter sign the Disposition and Development Agreement on behalf of the Community Development Commission and Parking Authority, and (iii) the authorization and direction given by the Community Development Commission and Parking Authority to their Executive Directors to take such other and further actions as may be necessary and proper to carry out the terms of the Disposition and Development Agreement and the purpose of this Resolution, including but not limited to signing such other and further documents, including the documents attached as exhibits to the Disposition and Development Agreement. 4. The Executive Director of the Community Development Commission is directed to file a Notice of Exemption with the County Clerk confirming that the project is exempt from further CEQA review. 5. That the Executive Director is hereby directed to transmit the Summary Report for the Disposition And Development Agreement to the City Council, as required by Health and Safety Code Section 33433. PASSED AND ADOPTED this 19th day of July 2005. ATTEST: Benjamin Martinez, Secretary APPROVED AS TO FORM: George H. Eiser, III, City -CDC Attorney Nick Inzunza, Chairman 4 City of National City COUNCIL AGENDA STATEMENT 'MEETING DATE: July 19, 2005 AGENDA ITEM NO. 3 ITEM TITLE: RESOLUTION APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BE- TWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; AP- PROVING THE PROJECT CONCEPT PLAN; AND MAKING CERTAIN FINDINGS IN CONNEC- TION HEREWITH PREPARED BY: Benjamin Martinez 13 DEPARTMENT Community Development Commission ARE Holdings, LLC, proposes to develop approximately a mixed -use development consisting of ap- proximately 219 condominium homes, 7,500 square feet of ground -floor commercial retail, and 360 parking spaces, including 40 public parking spaces, known as the Cove at San Diego Bay Project. The subject site is comprised of one square block bounded by National City Boulevard, Roosevelt Avenue, 11th Street and 12th Street. To facilitate development of this proposed project, a Disposition & Devel- opment Agreement has been prepared, which is being processed pursuant to the requirements of the California Redevelopment Law (California Health and Safety Code Section 33000 et seq.). A Supplemental Staff Report has been prepared and attached the companion Public Hearing item to provide more information on the proposed Cove at San Diego Bay Project. A Public Notice was published in the National City Star News on July 1, July 8 and July 15, 2005. Environmental Review N/A A Program Environmental Impact Report has been adopted for the Downtown Specific Plan, in accor- dance with CEQA Guidelines. The project has been determined to be consistent with the Downtown Specific Plan. Pursuant to Section 15182(a) of the California Environmental Quality Act Guidelines, the project is deemed exempt from further CEQA review. Financial Statement The DDA anticipates an expenditure for public infrastructure of $365,000 for enhanced streetscape on National City Boulevard and an optional subsidy formula as further described herein. STAFF RECOMMENDATION Adopt the Resolution. BOARD/COMMISSION RECOMMENDATION None. ATTACHMENTS (Listed Below) Resolution No. 1. Resolution 2005- RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA, APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; APPROVING THE PROJECT CONCEPT PLAN; AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH WHEREAS, the Community Development Commission of National City ("CDC") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and WHEREAS, the Parking Authority of National City is a public body, corporate and politic, organized and existing under the Parking Law of 1949 (Streets & Highways Code Section 32500 et seq.); and WHEREAS, pursuant to the Community Redevelopment Law, on February 1, 2005, the City Council of National City ("City" or "City Council", as applicable) approved and adopted the Downtown Specific Plan ("Specific Plan") for Downtown National City ("Project Area"); and WHEREAS, the Specific Plan calls for a consistency review process to ensure that development within the Project Area is in conformance with the goals established by City; and WHEREAS, the Community Development Commission of the City of National City (the "CDC") is engaged in activities necessary to execute and implement the Redevelopment Plan (the "Redevelopment Plan") for the National City Redevelopment Project (the "Redevelopment Project"); and WHEREAS, the Implementation Plan adopted by the CDC with respect to the Redevelopment Project Area calls for the CDC's objective to "increase private investment wherever possible, to promote jobs and improve the property and sales tax base of the City"; and WHEREAS, in furtherance of the objectives of the Community Redevelopment Law, the CDC and Parking Authority desire the redevelopment of certain real property within the Redevelopment Project Area, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th ("Site") for a residential, retail mixed -use and public parking project; and Attachment 1 1 WHEREAS, the development contemplated is exempt from further California Environmental Quality Act ("CEQA") review under Section 15182(a) of the CEQA Guidelines; and WHEREAS, ARE Holdings LLC ("ARE") owns in fee certain of the parcels which comprise the Site (the "Developer Parcels"); and WHEREAS, CDC staff has negotiated a Disposition and Development Agreement including attachments thereto (collectively, the "DDA") with ARE Holdings, LLC., a Delaware limited liability company ("ARE"), for the CDC and Parking Authority's disposition f portions of the Site to ARE, if necessary, and subject to the discretion of the CDC and Parking Authority; and WHEREAS, pursuant to the terms of the DDA, ARE shall construct at least approximately two hundred nine (209) and up to three hundred (300) condominium residential unites, ten thousand (10,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use; and WHEREAS, CDC and Parking Authority staff have presented the draft DDA to the CDC Board, Parking Authority and City Council for consideration; and WHEREAS, the Community Redevelopment Law, at Health and Safety Code Section 33433, requires that (i) the CDC prepare a Summary Report conceming the CDC's proposed disposition of the Site as set forth in the DDA, (ii) the CDC Board, Parking Authority Board, and the City Council conduct a noticed joint public hearing with respect to the DDA, and (iii) the approval of the DDA be set forth in a resolution making certain findings and determinations as set forth herein below; and WHEREAS, pursuant to the requirements of the Community Redevelopment Law, a Summary Report for the DDA has been prepared by the CDC's economic consultant Keyser Marston Associates, Inc.; and WHEREAS, a joint public hearing of the CDC Board, Parking Authority Board and City Council has been noticed and conducted in accordance with applicable requirements of law; and WHEREAS, at the joint public hearing the CDC, Parking Authority and City Council each considered all of the information, testimony, and evidence presented, including but not limited to the draft DDA, in the form presented by CDC staff concurrent with considerationof the Resolution, the CDC staff report, the Summary Report, and the oral and written testimony received from persons wishing to appear and be heard concerning the proposed DDA. 2 NOW, THEREFORE, THE CITY COUNCIL OF NATIONAL CITY HEREBY RESOLVES AS FOLLOWS: 1. Based on all the information, testimony, and evidence presented at the joint public hearing, including but not limited to the draft DDA and the information and evidence set forth in the CDC staff report, the Summary Report, and the oral and written testimony received, the City Council finds and determines as follows: a. That the above Recitals are true and correct and are incorporated herein. b. That the DDA effectuates the purposes of the Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), and of the Redevelopment Plan, and is in the best interests of the citizens of National City. c. That the CDC and Parking Authority's disposition of the Site pursuant to the DDA will assist in the elimination of blight. d. That the CDC and Parking Authority's disposition of the Site pursuant to the DDA is consistent with the Specific Plan and subject to the consistency review process. e. That the DDA is consistent with the Implementation Plan for the Redevelopment Plan. f. That any consideration ARE will pay for the Site is not less than the fair reuse value of the Site at the use and with the covenants and conditions and development costs authorized by the disposition. 2. That the Summary Report for the DDA required by Health and Safety Code Section 33433 is hereby approved. 3. The DDA, a true and correct copy of which is on file with the City Clerk/CDC Secretary, is hereby approved. 4. The City Council consents to (i) the authorization and direction given by the CDC and Parking Authority to its Executive Directors and CDC Counsel to make final modifications to the DDA that are consistent with the substantive terms of the DDA approved hereby, (ii) the authorization and direction given to the CDC and Parking Authority Chairpersons to thereafter sign the DDA on behalf of the CDC and Parking Authority, and (iii) the authorization and direction given by the CDC and Parking Authority to their Executive Directors to take such other and further actions as may be necessary and proper to carry out the terms of the DDA and the purpose of this Resolution, including but not limited to signing such other and further documents, including the documents attached as exhibits to the DDA. 3 5. The Executive Director of the CDC is directed to file a Notice of Exemption with the County Clerk confirming the project is exempt from further CEQA review. PASSED AND ADOPTED this 19th day of July 2005. A 1"1'E,ST: Michael Dalla, City Clerk APPROVED AS TO FORM: George Eiser, III City Attorney Nick Inzunza, Mayor 4 PARKING AUTHORITY OF THE CITY OF NATIONAL CITY July 19, 2005 AGENDA ITEM NO. 4 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTORYf VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: RESOLUTION NO. 2005-73: APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; APPROVING THE PROJECT CONCEPT PLAN; AND MAKING CERTAIN FINDINGS IN CONNECTION HEREWITH Recommendation: Parking Authority staff recommends that the Parking Authority of the City of National City & the Community Development Commission of the City of National City: ADOPT Resolution No. 2005-73 approving the Health and Safety Code Section 33433 Report; approving the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority and ARE Holdings, LLC, for development of the Cove at San Diego Pay Project; approving the Project Concept Plan; and making certain findings in connection herewith. Fiscal Impact: The Disposition and Development Agreement provides for an expenditure for public infrastructure of $365,000 for enhanced streetscape on National City Boulevard within the public right-of-way. The Disposition and Development Agreement also provides for an optional subsidy formula, as further described herein, of up to $1,875,000. These funds would be covered by tax increment revenues and/or tax allocation bond proceeds. The Project is expected to generate approximately $455,000 in net tax increment, $90,000 in net low -moderate income housing set -aside, and $50,000 in net sales tax on Parking Authority Agenda Item No. 4 July 19, 2005 Page 1 of 4 t an annual basis beginning in fiscal year 2007-2008, equating to annual revenues to the Community Development Commission and the City of National City in the amount of $595,000. In addition, approximately $250,000 in up -front impact fees will be assessed to cover basic city services. Environmental: A Program Environmental Impact Report has been adopted for the Downtown Specific Plan, in accordance with CEQA Guidelines. The project has been determined to be consistent with the Downtown Specific Plan. Pursuant to Section 15182(a) of the California Environmental Quality Act, the project is deemed exempt from further CEQA review. Background: The Commission, at their meeting of October 7, 2003, selected ARE Holdings, LLC to redevelop the block bounded by National City Boulevard, Roosevelt Avenue, 11th Street and 12th Street. The selection followed an owner participation process, as required by California redevelopment law and the Redevelopment Agency's Owner Participation Rules. ARE Holdings, LLC has proposed the mixed -use Cove at San Diego Bay project, which consists of approximately 219 residential condominiums, 7,500 square feet of commercial retail space, and 360 parking spaces. The project includes a tower element of 16 stories, a mixed -use 7 story building on National City Boulevard, and two four story buildings, one on 12th Street and one on Roosevelt Avenue. Each of these building elements surround a central core of subterranean and podium parking, which remains screened from public view (Exhibit 4). The project is designed to create a village environment that complements other projects in the "Morgan Square" area between the Police Headquarters building on the south and the Education Village project on the north. The developmentrepresentsa total developer investment of approximately $70,000,000 and is envisioned as a major catalyst to the revitalized downtown district. As a catalyst project, Parking Authority staff is not recommending the inclusion of subsidized very -low or low-income housing units in this particular development proposal. The Disposition and Development Agreement provides for Redevelopment Agency and/or Parking Authority property acquisition if ARE Holdings, LLC is unsuccessful in assembling all necessary parcels. Any costs associated with Agency acquisition will be covered by ARE Holdings, LLC. In addition, Polanco Act indemnification is provided to ARE Holdings, LLC for any environmental contamination that may be found during the due diligence period. Parking Authority July 19, 2005 Agenda Item No. 4 Page 2 of 4 National City Boulevard Streetscape improvements will be implemented, including upgraded sidewalk and landscape elements, as part of the Project development. The Community Development Commission will commit up to $365,000 for public improvements for this purpose. In addition, ARE Holdings, LLC will have the option of electing a Redevelopment Agency subsidy of up to $1,875,000, based on the following formula: Subsidy Formula: Within sixty (60) days of completion of acquisition and relocation activities funded by the developer, the developer may elect to either: a. Proceed with a subsidy from the Community Development Commission based on acquisition and relocation costs that exceed $80/square foot, capped at $1,875,000. The Community Development Commission will be reimbursed for these costs through a one percent surcharge collected upon the resale of residential units (after the initial sale and in effect for 30 years), through the same formula applied to initial and subsequent sale of retail units, and through an additional "upside participation" formula, as further described in the Agreement. However, if the subsidy disbursed is $1,300,000 or less, the additional "upside participation" formula will not apply; b. Proceed without a subsidy from the Community Development Commission, in which case the Project is not expected to be constructed utilizing the State Prevailing Wage formula, except as this applies to the construction of National City Boulevard streetscape enhancements; c. Discontinue development and sell back to the Community Development Commission any properties acquired, at the cost of acquisition, and terminate the Disposition and Development Agreement. Timing of Development: The acquisition and relocation process is scheduled to take place as soon as possible and conclude by early Spring 2006. Depending on the outcome of that process, construction plans could be submitted for building permits by early 2006. Building permits are expected to be issued by Summer 2006 with construction planned to commence shortly thereafter. Building completion and occupancy is slated for Spring 2008. Parking Authority staff will actively work to expedite all phases of the project. A more detailed listing of projected dates is included in the Schedule of Performance (Attachment No. 3 to the Disposition and Development Agreement). With this, Parking Authority staff recommends that the Community Development Commission Board and the Parking Authority Board approve the Disposition and Development Agreement by and between the Community Development Commission, Parking Authority Agenda Item No. 4 July 19, 2005 Page 3 of 4 Parking Authority and ARE Holdings, LLC, for development of the Cove at San Diego Pay Project; approve the Health and Safety Code Section 33433 Report; approve the Project Concept Plan; and make certain findings in connection herewith. ATTACHMENTS: EXHIBIT 1 — Resolution No. 2005-73 Staff member: Estes Parking Authority Agenda Item No. 4 July 19, 2005 Page 4 of 4 RESOLUTION NO. 2005-73 A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF NATIONAL CITY APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT; APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, PARKING AUTHORITY AND ARE HOLDINGS, LLC, FOR DEVELOPMENT OF THE COVE AT SAN DIEGO BAY PROJECT; APPROVING THE PROJECT CONCEPT PLAN; AND MAKING CERTAIN FINDINGS IN CONNECTION HEREWITH WHEREAS, the Parking Authority of National City is a public body, corporate and politic, organized and existing under the Parking Law of 1949 (Streets & Highways Code Section 32500 et seq.); and, WHEREAS, the Community Development Commission of National City is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and, WHEREAS, pursuant to the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), on February 1, 2005, the City Council of National City approved and adopted the Downtown Specific Plan for Downtown National City; and, WHEREAS, the Downtown Specific Plan calls for a consistency review process to ensure that development within Downtown National City is in conformance with the goals established by the City Council of National City; and, WHEREAS, in furtherance of the objectives of the California Community Redevelopment Law, the Community Development Commission and the Parking Authority desire the redevelopment of certain real property within Downtown National City, bordering National City Boulevard on the East and Roosevelt Avenue on the West between 11th and 12th for a residential, retail mixed -use and public parking project; and, WHEREAS, ARE Holdings LLC, A Delaware limited liability company owns in fee certain of the parcels which comprise the Site; and, WHEREAS, Community Development Commission staff has negotiated a Disposition and Development Agreement including attachments thereto with ARE Holdings, LLC, for the Community Development Commission and Parking Authority's disposition of portions of the Site to ARE Holdings, LLC, if necessary, and subject to the discretion of the Community Development Commission and Parking Authority; and, EXHIBIT 1 1 WHEREAS, pursuant to the terms of the Disposition and Development Agreement, ARE Holdings, LLC shall construct at least approximately two hundred nine (209) and up to three hundred (300) condominium residential units, ten thousand (10,000) square feet of retail space and approximately three hundred twenty (320) parking spaces, of which 40 spaces shall be reserved for the public to access the Project's retail use, all other on -site improvements located inside of the face of the curbs surrounding the improvements, as required through the City of National City's Design Review ; and, WHEREAS, Community Development Commission and Parking Authority staff have presented the draft Disposition and Development Agreement to the Community Development Commission Board, Parking Authority Board and City Council for consideration; and, WHEREAS, the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), at Health and Safety Code Section 33433, requires that (i) the Community Development Commission prepare a Summary Report concerning the Community Development Commission's proposed disposition of the Site as set forth in the Disposition and Development Agreement, (ii) the Community Development Commission Board, Parking Authority Board and the City Council conduct a noticed joint public hearing with respect to the Disposition and Development Agreement, and (iii) the approval of the Disposition and Development Agreement be set forth in a resolution making certain findings and determinations as set forth herein below; and, WHEREAS, pursuant to the requirements of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), a Summary Report for the Disposition and Development Agreement has been prepared by the Community Development Commission's economic consultant Keyser Marston Associates, Inc.; and, WHEREAS,_ a_ joint public hearing of the Community Development Commission Board, Parking Authority Board and City Council has been noticed and conducted in accordance with applicable requirements of law; and, WHEREAS, at the joint public hearing the Community Development Commission, Parking Authority and City Council each considered all of the information, testimony, and evidence presented, including but not limited to the draft Disposition and Development Agreement in the form presented by Community Development Commission staff concurrent with consideration of the Resolution, the Community Development Commission staff report, the Summary Report, and the oral and written testimony received from persons wishing to appear and be heard concerning the proposed Disposition and Development Agreement. 2 NOW, THEREFORE, BE IT RESOLVED, that: 1. Based on all the information, testimony, and evidence presented at the joint public hearing, including but not limited to the draft Disposition and Development Agreement and the information and evidence set forth in the Community Development Commission staff report, the Summary Report, and the oral and written testimony received, the Parking Authority finds and determines as follows: a. That the above Recitals are true and correct and are incorporated herein. b. That the Disposition and Development Agreement effectuates the purposes of the Community Redevelopment Law (Health & Safety Code Section 33000 et seq.), and of the Redevelopment Plan, and is in the best interests of the citizens of National City. c. That the Community Development Commission and Parking Authority's disposition of the Site pursuant to the Disposition and Development Agreement will assist in the elimination of blight. d. That the Community Development Commission and Parking Authority's disposition of the Site pursuant to the Disposition and Development Agreement is consistent with the Specific Plan and subject to the consistency review process. e. That the Disposition and Development Agreement is consistent with the Implementation Plan for the Redevelopment Plan. f. That any consideration ARE Holdings, LLC will pay for the Site is not less than the fair reuse value of the Site at the use and with the covenants and conditions and development costs authorized by the disposition. 2. That the Summary Report prepared for the Disposition and Development Agreement required by Health and Safety Code Section is hereby approved. 3. The Disposition and Development Agreement, a true and correct copy of which is on file with the City Clerk/Community Development Commission Secretary, is hereby approved. 4. The Parking Authority consents to (i) the authorization and direction given by the Community Development Commission and Parking Authority to its Executive Directors and Community Development Commission Counsel to make final modifications to the Disposition and Development Agreement that are consistent with the substantive terms of the Disposition and Development 3 Agreement approved hereby, (ii) the authorization and direction given to the Community Development Commission and Parking Authority Chairperson to thereafter sign the Disposition and Development Agreement on behalf of the Community Development Commission and Parking Authority, and (iii) the authorization and direction given by the Community Development Commission and Parking Authority to their Executive Directors to take such other and further actions as may be necessary and proper to carry out the terms of the Disposition and Development Agreement and the purpose of this Resolution, including but not limited to signing such other and further documents, including the documents attached as exhibits to the Disposition and Development Agreement. 5. The Executive Director of the Community Development Commission is directed to file a Notice of Exemption with the County Clerk confirming the project is exempt from further CEQA review. PASSED AND ADOPTED this 19th day of July 2005. ATTEST: Benjamin Martinez, Secretary APPROVED AS TO FORM: George H. Eiser, I11, City -CDC Attorney Nick Inzunza, Chairman 4