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HomeMy WebLinkAbout2005 09-13 CC ADJ AGENDA PKTCity of National City Joint Meeting Agenda Adjourned Regular Meeting of the City Council Adjourned Regular Meeting of the Community Development Commission City Council Chambers Civic Center 1243 National City Boulevard National City, California Tuesday — September 13, 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 espan"ol se proporclona durante sesiones del Consejo Municipal Los audiofonos estan disponibles en el pasillo al principio de la junta. 1 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 and CDC AGENDA 9/13/05 PAGE 2 Community Development Commission 1. PUBLIC HEARING AND RESOLUTION NO. 2005-84: Public Hearing of the Community Development Commission of the City of National City to consider public necessity in conjunction with the acquisition of Real Property located at 2626 through 2700 National City Boulevard, and Resolution of Necessity of the Community Development Commission of the City of National City to acquire Real Property located at 2626 through 2700 National City Boulevard, owned by the Dailey Family Partnership, by eminent domain City Council / Community Development Commission 2. JOINT PUBLIC HEARING: of the City Council and the Community Development Commission on the proposed Disposition and Development Agreement by and between the Community Development Commission and Mossy Nissan, Incorporated for the development of a new car dealership located at 2626 through 2700 National City Boulevard 3. RESOLUTION NO. 2005-83: 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 and Mossy Nissan, Incorporated, for development of a new car dealership located at 2626 through 2700 National city Boulevard, making certain findings in connection therewith and authorizing the transmittal of said report to the City Council 4. 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 and Mossy Nissan, Incorporated and making certain findings in connection therewith Community Development Commission APPROVAL OF MINUTES CONSENT: Adjourned Meeting of June 7, 2005 Regular Meeting of June 14, 2005 Regular Meeting of July 12, 2005 5. REPORT: Cash and Investment Report for the Quarter ended June 30, 2005 and request to direct staff to send the Fourth Quarter Report to the California Debt and Advisory Committee as required by California Government Code Section 53646 2 Council and CDC AGENDA 9/13/05 PAGE 3 6. RATIFICATIONS: Expenditures for the period of 08/13/05 THROUGH 08/31/05 of $1,782,977.35 7. RESOLUTION NO. 2005-88: approving the First Amendment to the Disposition and Development Agreement with the Olson Company and authorizing the Chairman to execute the Agreement NON -CONSENT: 8. RESOLUTION NO. 2005-89: approving an Agreement with Guevara, Phippard & James in conjunction with Best, Best & Krieger to provide redevelopment -related legal services and authorizing the Chairman to execute said Agreement 9. REPORT: selection process for Cleveland Avenue Industrial Project and select members to serve on the Selection Committee 10. REPORT: Status Report and request for the Community Development Commission Board to provide direction to the Community Development Commission staff to return with full proposals for the acquisition and development of three Community Development Commission owned housing parcels 11. REPORT: accept and file the Report, hear the presentation from Community Development Commission staff, Community Development Commission attorney and Unidev, LLC representatives regarding the Senior Village Housing Project and direct Community Development Commission staff to submit a 2006 New Markets Tax Credit application to the Community Development Financial Institutions Fund STAFF: MAYOR/CHAIRMAN: COUNCILMEMBERS/COMMISSIONERS: ADJOURNMENT: Next Regular City Council Meeting — Tuesday — September 20, 2005 - 6:00 p.m. — Council Chambers, Civic Center Next Regular CDC Meeting — Tuesday — September 27, 2005 - 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 3 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 1 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT'g - SUBJECT: PUBLIC HEARING AND RESOLUTION NO. 2005-84: PUBLIC HEARING OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY TO CONSIDER PUBLIC NECESSITY IN CONJUNCTION WITH THE ACQUISITION OF REAL PROPERTY LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD, AND RESOLUTION OF NECESSITY OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY TO ACQUIRE REAL PROPERTY LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD, OWNED BY THE DAILEY FAMILY PARTNERSHIP, BY EMINENT DOMAIN Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: HOLD the Public Hearing of the Community Development Commission to consider public necessity in conjunction with the acquisition Real Property located at 2626 through 2700 National City Boulevard; and, APPROVE Resolution of Necessity of the Community Development Commission of the City of National City to acquire Real Property located at 2626 through 2700 National City Boulevard, owned by the Dailey Family Partnership, by eminent domain. Fiscal Impact: A developer deposit of $7 million will be used for the acquisition from Account 900822. The developer will reimburse all legal and associated fees associated with the project. Community Development Commission Agenda Item No. 1 August 23, 2005 Page 1 of 5 Environmental Impact: The project is consistent with the Certified EIR for the Redevelopment Plan for National City Redevelopment Project certified by Resolution No. 95-98 on June 20, 1995, for the National City General Plan and with the Zoning Designation of Automotive Commercial for the National City Mile of Cars and, consistent with Section 15180 of the California Environmental Quality Act Guidelines, does not require additional analysis. Notification of the Property Owner: As required by law, the CDC mailed an Owner Participation letter, requiring a response within 45 days, to the address of record for the property on April 1, 2005. This address is as follows: Trust 00-1714 401 B St #220 San Diego CA 92101 No response to the Owner Participation letter was received by CDC within the 45 day time period allowed. On July 14, 2005, the CDC sent a reminder letter about Owner Participation procedures to Mr. and Mrs. Lawrence Daily at their home in Bonita, California. On July 15, 2005, the Law Offices of Don Detisch, special counsel to the CDC, hand delivered an letter Offering to Purchase the property to Trust 00-1714, Daily Family Partnership in Bonita, California, and to Patrick and Barbara Daily in National City, California. On August 1, 2001 a Notice of Intent to Adopt a Resolution of Necessity for the use of eminent domain was mailed to Trust 00-1714 and to the Daily Family Partnership in Bonita, California. The CDC received no communication until Mr. Lawrence Daily walked into the offices on Friday morning, August 18th. On August 18, Mr. Daily signed the Statement of Interest from the Owner Participation Letter and the Offer Letter which had been sent by Mr. Detisch. At the CDC meeting of August 23, representatives of the Daily family indicated that Trust 00-1714 was an obscure address which prevented the property owner from timely receipt of the Owner Participation letter. Attached to this staff report is property title information that clearly shows Trust 00-1714 as the address of record. Also attached is a fax received by CDC from Peterson & Price, attorneys to Mossy Nissan. This fax, originally sent by the Daily Family Partnership on April 6 2005, clearly shows that the Community Development Commission Agenda Item No. 1 August 23, 2005 Page 2 of 5 Daily Family Partnership was in possession of the Owner Participation letter on April 4, 2005. Background: The redevelopment of the National City Redevelopment Project is dependent upon the acquisition of the blighted property that currently exists at 2626-2700 National City Boulevard in the National City Mile of Cars. The Community Development Commission's acquisition agent has attempted to acquire the above referenced property unsuccessfully, and has made an offer of just compensation to the property owner based on the professional appraisal prepared for the Community Development Commission. Mr. Steve Kahlil, of McMillan Real Estate and Mortgage, Inc. stated in testimony before the CDC on August 23, 2005 that there was a signed Letter of Intent LOI between the parties, dated from February 7, 2005. Attached to this staff report is a copy of the referenced LOI, clearly stating that the LOI "does not constitute a legally binding agreement." The subject property, approximately 4.53 acres, is located at 2626-2700 National City Boulevard. The property is blighted as defined by California Redevelopment Law due to inadequate storm water management, excessive solid waste production, obsolete disposal practices for petroleum products and by-products causing the potential for environmental contamination, visual blight and inadequate on and off -site traffic management. It is in the best public interest with the least injury that the site be acquired to allow for the elimination of blight, the opportunity for redevelopment, the creation of additional jobs, and the increase of public benefit. No other location in the National City Mile of Cars is available for the project. The project will include the redevelopment of Mossy Nissan, including the demolition of most of the current improvements and reconstruction of state-of-the-art facilities and equipment. A new storm water management system will be installed which will catch surface grease, solid debris and contaminates for on -site treatment prior to release into the City of National City's storm drains. Increased recycling facilities will be constructed to reduce the production of solid waste and state- of-the-art new and used oil systems and practices will be put in place. Interior traffic parking and stacking will be designed to increased traffic and pedestrian safety for those walking and driving in the area and new pedestrian and directional signage will be installed. The use of eminent domain to facilitate redevelopment is necessary and appropriate. The developer was unable to acquire the site after more than 18-months of diligent effort including the Community Development Commission's attempt to facilitate those efforts by providing an independent appraisal. The site is the only one currently useable Community Development Commission Agenda Item No. 1 August 23, 2005 Page 3 of 5 for the project in National City and the project is required by Nissan Corporation to be completed by Mossy within 24 months. Mossy Nissan has stated that if it cannot acquire the site based upon reasonable terms and upon the appraised value of the site, they would be compelled to give serious consideration to moving the dealership out of National City. Mossy Nissan currently provides more than $1 million in tax support to the City of National City and the Community Development Commission. The project would result in an increase of $200,000 -$300,000 in annual sales tax revenue to the City of National City by 2010 and would increase the Community Development Commission's revenue in property tax increment by $100,000 per year. Additionally, Mossy intends to add 25 new employees as the result of this project. In order for the Community Development Commission to exercise its power of eminent domain the Community Development Commission must first conduct a Public Hearing of Necessity at which the property owners are entitled to appear and voice their concerns on the following issues: 1. Does the public interest and necessity require the project? The proposed action will redevelop and improve the existing business activity on the site and will not eliminate any current business operation or any jobs. The site is the only one in National City useable for the project and completion of the project will add 25 jobs for National City and South Bay residents. It will eliminate obsolete environmental practices currently existing and allow the construction of state-of-the- art storm water management and petroleum disposal systems. It will also improve traffic circulation and pedestrian safety by reducing on -street customer and delivery parking through improved site design and the installation of improved directional signage. It will eliminate visual blight. It will further allow increased sales of new motor vehicles in the National City Mile of Cars, providing increased revenues to the City of National City and the Community Development Commission with which to provide public services and facilities. The acquisition will allow the above improvements in a way that is most compatible with the greatest public good and is consistent with the National City Redevelopment Plan. 2. Is the project planned or located in a manner that will be most compatible with the greatest public good and the least private injury? The proposed action for condemnation of the parcels included at 2626-2700 National City Boulevard is within the National City Mile of Cars sub -area of the National City Redevelopment Project and is consistent with the National City Redevelopment Plan. The assemblage of property interests and the elimination of environmental, visual and other blighting conditions will improve the neighborhood and the quality of life for residents, visitors, property owners and tenants of this area, consistent with furthering redevelopment goals. All aspects of the public good, including but not limited to social, economic, environmental and aesthetic Community Development Commission Agenda Item No. 1 August 23, 2005 Page 4 of 5 considerations mandate the implementation of this project. The property owner will be paid fair market value for the property, based upon an appraisal prepared by an appraiser retained by the Community Development Commission. 3. Is the property to be acquired necessary for the project? The acquisition of the parcels is necessary because no other parcels in National City are reasonably suitable for this project. Fee simple acquisition is necessary because of the size and cost of the permanent structures. Failure of Mossy Nissan to acquire the property may result in the dealership being compelled to move out of National City. 4. The offer required by Section 7267.2 of the Government Code has been made to the owner of record on July 22, 2005 without any written response. The offer was based on an independent appraisal, with such appraisal being approved and is in the full amount so determined. Representatives of the Daily Family Partnership recommended the independent appraiser selected. 5. The use for which any publicly owned parcels are to be taken is a more necessary public use than the property is currently appropriated and the taking as to any publicly owned parcels is for a more necessary public use consistent with and authorized by Code of Civil Procedure Section 1240.610. The property owner has the opportunity to address these issues at the Public Hearing of Necessity held in conjunction with the consideration of this Resolution. The purpose of tile Hearing is not to address the amount of compensation to be paid to the property owner. Attached hereto is a copy of the Notice of Intent to Adopt Resolution of Necessity to Acquire Certain Retail Property by Eminent Domain (Code of Civil Procedure, Section 1245.235) sent to Mr. and Mrs. Lawrence F. Dailey) ATTACHMENTS: Exhibit — 1 Resolution No. 2005-84 Exhibit — 2 Legal Description Exhibit — 3 Site map Exhibit — 4 Notice of Intent Exhibit — 5 Title information Exhibit — 6 Fax received from Peterson & Price Exhibit — 7 Letter of Intent Exhibit — 8 Don Detisch letter re: CDC's offer to purchase Staff member: Beard Community Development Commission Agenda Item No. 1 August 23, 2005 Page 5 of 5 RESOLUTION NO. 2005-84 A RESOLUTION OF NECESSITY OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY NATIONAL CITY (CDC) TO ACQUIRE REAL PROPERTY LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD, OWNED BY THE DAILEY FAMILY PARTNERSHIP, BY EMINENT DOMAIN WHEREAS, the City Council of the City of National City, by adoption of Ordinance No. 95-2095 on July 18, 1995, approved and adopted the Redevelopment Plan for the National City Redevelopment Project; and, WHEREAS, said Redevelopment Plan provides for the acquisition of real property, if necessary by eminent domain, including the real property commonly known as 2626 through 2700 National City Blvd., National City, California, more particularly described in Exhibit "A" attached hereto and depicted in the Map attached herein: and, WHEREAS, the Community Development Commission of the City of National City has served The Daily Family Partnership, the owners of the real property located at 2626 through 2700 National City Blvd., National City, California with a Notice of Intent to Adopt a Resolution of Necessity to Acquire Real Property by Eminent Domain as required by California Code of Civil Procedure, Section 1245.235. A copy of the Notice is attached hereto as Exhibit "B"; and, WHEREAS, pursuant to the above referenced Notice, the Community Development Commission of the City of National City held a hearing on August 23, 2005, in the City Council Chambers, 1243 National City Boulevard, National City, California, to consider acquiring the real property at 2626 through 2700 National City Blvd., National City, California, by eminent domain, for redevelopment purposes and provided all persons a reasonable opportunity to appear and be heard on the matters in Section 1240.030 of the California Code of Civil Procedure. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City, by a vote of two-thirds or more of its members, hereby finds, determines, declares and resolves as follows: I. That the public interest, convenience and necessity require the proposed project; and, II. That project is planned or located in a manner that will be most compatible with the greatest public good and the least private injury; and, EXHIBIT 1 i III. The property to be acquired as described herein is necessary for the proposed project; and, IV. The offer required by Government Code Section 7267.2 together with an appraisal summary statement has been made to the owners of record which offer and appraisal summary statement were in a form and contained all of the disclosures required. (No evidence was presented contending the appraisal summary statement was inadequate as a matter of law); and, V. The real property to be taken is generally described as a portion of 2626 through 2700 National City Blvd., National City, California and is more particularly described in Exhibit "A" attached hereto and made a part hereof which takes precedence over all other descriptions. A map depicting the location of the property is also attached to Exhibit "A"; and, VI. All conditions and statutory requirement necessary to exercise the power of eminent domain ("the right to take") to acquire the property for the Project have been complied with by the Commission; and, VII. The Commission further finds and declares: a. The acquisition of the subject parcel is in conformity with the National City Redevelopment Project. b. The proposed acquisition for redevelopment of this site is planned in accordance with the National City Redevelopment Project and that the acquisition is necessary for the removal of blighting conditions and influences and to facilitate the redevelopment of property within the Project area. c. That said acquisition has been preceded by the review, adoption and certification of all appropriate environmental documents and reports. BE IT FURTHER RESOLVED, that the legal counsel for the Community Development Commission of the City of National City is hereby authorized and directed to commence such actions and proceedings of eminent domain in the Superior Court of the State of California, County of San Diego, as are necessary to acquire in fee, for the purpose and uses aforesaid, that certain real property commonly known as 2626 through 2700 National City Blvd., which is situated in the City of National City, and within the County of San Diego, State of California. BE IT FURTHER RESOLVED, that the taking of said real property for redevelopment purposes, specifically, is authorized by Health and Safety Code Sections 33000, 333020, 333021, 33342, 33391, 33392 and 33691 and is a public use. 2 BE IT FURTHER RESOLVED, that Sections 1240.010, 1240.110, 1240.210, 1240.510 and 1240.610 of the California Code of Civil Procedure, and Sections 37350.5 of the Government Code permit the acquisition referenced herein and are relied upon herein as authority for these proceedings. PASSED AND ADOPTED this 23`d day of August 2005. ATTEST: By: Ben Martinez, Executive Director APPROVED AS TO FORM: By: George H. Eiser, III, City/CDC Attorney By: Nick Inzunza, Chairman 3 08/09/2005 14:50 FAX 6192359100 Don Detisch Q006/006 Parcel A: (APN: 562-340-47) SITE LEGAL DESCRIPTION The northerly 164.00 feet of lot 5 of E.J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office of the County Recorder of San Diego County, November 7, 1974 Parcel B: (APN: 562-340-48) Lot 5 of E.J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office of the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet EXHIBIT "A" fig lfl0/9flflr. TIM% 1G. cn ► n rl.� 06 I1-iOQ=345-733q faun VIa M (NATIONAL) .. w 14 M+ 1 1.11 AC 1 TRANSPORTATION wsrw,a AVE . + ( Fi PUNK. n was r- IVI i ® ® y -M 4 .. l /� astac Prams art ma 1az ® �T'w PM ^ Mo. = w•• I AOLIC Qe 10 PM11 Lw 1 MA 3 II N 3 j i.r 1 IMAMS KW[ T x (COOLIDGE) ea-...,. .• i wLlas•2• M �w MA r�1 ILA ...,. AVER 1 aaw.111.1 Iisei ® e Z wl DIN town fft NI Wtu a M a[U09147=2; 611la dq OaT. A MQ96{ In for GNPs •m .wa 1110,601 a uai ppLAji 582-34 IHDOVER AVE e'IAROING AVE MAP 348- NATIONAL CITY MAP 31038-E.1 CHRISTMAN BUSINESS AND INDUSTRIAL PARK 1 • ROS 04913 IIN+ 0 NOTICE OF INTENT TO ADOPT RESOLUTION OF NECESSITY TO ACQUIRE CERTAIN REAL PROPERTY BY EMINENT DOMAIN (Code of Civil Procedure, Section 1245.235) TO: Mr. and Mrs. Lawrence F. Dailey 3959 Acacia Avenue Bonita, CA 91902 Pursuant to the provisions of the California Code of Civil Procedure, Section 1245.235, you have been identified as an owner of certain real property, or interest therein, consisting of the real property and improvements located at 2626 and 2700 National City Boulevard, National City, California 91950, which is proposed to be acquired by the Community Development Commission of the City of National City for redevelopment purposes. California Code of Civil Procedure Section 1240.030 provides that the power of eminent domain may be exercised to acquire property for a proposed project only if the following conditions are established: a. The public interest and necessity require the project. b. The project is planned or located in the manner that will most compatible with the greatest public good and the least private injury. c. The property sought to be acquired is necessary for the project. You are hereby notified that it is the intent of the Community Development Commission of the City of National City, at a hearing to be held on August 23, 2005 at 6:00 p.m. in the City Council Chambers, 1243 National City Boulevard, National City, California 91950, to adopt a Resolution of Necessity to Acquire by Eminent Domain. Said resolution will authorize the Community Development Commission of the City of National City to acquire your real property, or interest therein, for redevelopment Page 1 of 2 EXHIBIT "B" purposes, specifically new automobile sales facility and related uses, by the exercise of power of eminent domain, as authorized by Health and Safety Code Sections 33342 and 33391. You are further notified that if you file a written request to appear and be heard within fifteen (15) days of the mailing of this notice, you will have the right to appear and be heard concerning the above -quoted conditions set forth in California Code of Civil Procedure 1240.030 as they relate to the intent of the Community Development Commission of the City of National City to acquire your property. Failure to file a written request to appear and be heard by August 22, 2005, will result in a waiver of your right to appear and be heard. Your written request must actually be on file with the Executive Director of the Community Development Commission of the City of National City, on the above -indicated filing date. Mere deposit of your request in the mail within this time limitation will not suffice to avoid waiver. All such requests to appear and be heard must be filed with the Executive Director of the Community Development Commission of the City of National City, 140 East 12th Street, Suite B, National City, California 91950. For your convenience, the Board of the Community Development Commission of the City of National City will consider any written comments you may wish to submit to it, pursuant to this notice in lieu of your personal appearance at the hearing. Dated: August 1, ! 05 By: anon Martinez, Executive Director Page 2 of 2 GEORGE H. EISER, III (No. 065706) City/CDC Attomey COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY 140 E. 12th Street, Suite B National City, California 91950 Telephone (619) 336-4250 Facsimile: (619) 336-4286 PROOF OF SERVICE [CCP 1013A (3)] I, the undersigned, am employed in the County of San Diego, State of California. I am over the age of 18 and not a party to the within action; my business is at 140 E. 12th Street, Suite B, National City, CA 91950. On August 1, 2005 I served the foregoing document(s) described as NOTICE OF INTENT TO ADOPT A RESOLUTION OF NECESSITY TO ACQUIRE CERTAIN REAL PROPERTY BY EMINENT DOMAIN on the parties in this action by placing true copies in a sealed envelope addressed as follows: Mr. and Mrs. Lawrence F. Dailey 3959 Acacia Avenue Bonita, CA 91902 [X] BY MAIL — as follows: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at National City, California in the ordinary course of business. The envelope was sealed and placed for collection and mailing on this date following our ordinary practices. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after the date of deposit for mailing an affidavit. [ ] BY FAX — as follows: I personally sent to the addressee's telecopier number a true copy of the above -described documents. Thereafter I sent a true copy in a sealed envelope addressed and mailed as indicated above. Executed on August 1, 2005 at National City California. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. ELIZABETH CUMMING 08/09/2005 14:50 FAX 8192359100 Don Detlsch Q 006/006 SITE LEGAL DESCRIPTION Parcel A: (APN: 562-340-47) The northerly 164.00 ieet of lot 5 of E.J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office of the County Recorder of San Diego County, November 7, 1974 Parcel B: (APN: 562-340-48) Lot 5 of E.J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office of the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet EXHIBIT 2 na/na/enn= "MTV te.en J rnn am enPn\ P9. ,. ., .. 1Eia��ra[.��p,'. a4BT " r -irr �uiie�m ffE� F fFT' � fiEr'1111 FETFCQ E!EVEI'ABDl11111 E Iflhl'11111E1E.oIIIeuuu - HISZ to wR-.w.-r GI - 114 v -.% «.. IS "'�' H.LCZ C, "`-r-f SOOU sssr i w• •` ww �r Q° g� R •w. R -442 l!uuAt".a- P� xa4Y.%—.K% SJ 1/11 ONZZ ONIOUVH a vy hid NOTICE OF INTENT TO ADOPT RESOLUTION OF NECESSITY TO ACQUIRE CERTAIN REAL PROPERTY BY EMINENT DOMAIN (Code of Civil Procedure, Section 1245.235) TO: Mr. and Mrs. Lawrence F. Dailey 3959 Acacia Avenue Bonita, CA 91902 Pursuant to the provisions of the California Code of Civil Procedure, Section 1245.235, you have been identified as an owner of certain real property, or interest therein, consisting of the real property and improvements located at 2626 and 2700 National City Boulevard, National City, California 91950, which is proposed to be acquired by the Community Development Commission of the City of National City for redevelopment purposes. California Code of Civil Procedure, Section 1240.030 provides that the power of eminent domain may be exercised to acquire property for a proposed project only if the following conditions are established: a. The public interest and necessity require the project. b. The project is planned or Located in the manner that will most compatible with the greatest public good and the least private injury. c. The property sought to be acquired is necessary for the project. You are hereby notified that it is the intent of the Community Development Commission of the City of National City, at a hearing to be held on August 23, 2005 at 6:00 p.m. in the City Council Chambers, 1243 National City Boulevard, National City, California 91950, to adopt a Resolution of Necessity to Acquire by Eminent Domain. Said resolution will authorize the Community Development Commission of the City of National City to acquire your real property, or interest therein, for redevelopment Page 1 of 2 EXHIBIT 4 purposes, specifically new automobile sales facility and related uses, by the exercise of power of eminent domain, as authorized by Health and Safety Code Sections 33342 and 33391. You are further notified that if you file a written request to appear and be heard within fifteen (15) days of the mailing of this notice, you will have the right to appear and be heard concerning the above -quoted conditions set forth in California Code of Civil Procedure 1240.030 as they relate to the intent of the Community Development Commission of the City of National City to acquire your property. Failure to file a written request to appear and be heard by August 22, 2005, will result in a waiver of your right to appear and be heard. Your written request must actually be on file with the Executive Director of the Community Development Commission of the City of National City, on the above -indicated filing date. Mere deposit of your request in the mail within this time limitation will not suffice to avoid waiver. All such requests to appear and be heard must be filed with the Executive Director of the Community Development Commission of the City of National City, 140 East 12th Street, Suite B, National City, California 91950. For your convenience, the Board of the Community Development Commission of the City of National City will consider any written comments you may wish to submit to it, pursuant to this notice in lieu of your personal appearance at the hearing. Dated: August 1, ±05 By: jamin Martinez, Executive Director Page 2 of 2 GEORGE H. EISER, III (No. 065706) City/CDC Attorney COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY 140 E. 12`h Street, Suite B National City, California 91950 Telephone (619) 336-4250 Facsimile: (619) 336-4286 PROOF OF SERVICE [CCP 1013A (3)] I, the undersigned, am employed in the County of San Diego, State of California. I am over the age of 18 and not a party to the within action; my business is at 140 E. 12th Street, Suite B, National City, CA 91950. On August 1, 2005 I served the foregoing document(s) described as NOTICE OF INTENT TO ADOPT A RESOLUTION OF NECESSITY TO ACQUIRE CERTAIN REAL PROPERTY BY EMINENT DOMAIN on the parties in this action by placing true copies in a sealed envelope addressed as follows: Mr. and Mrs. Lawrence F. Dailey 3959 Acacia Avenue Bonita, CA 91902 [X] BY MAIL — as follows: I am `readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at National City, California in the ordinary course of business. The envelope was sealed and placed for collection and mailing on this date following our ordinary practices. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after the date of deposit for mailing an affidavit. [ ] BY FAX — as follows: I personally sent to the addressee's telecopier number a true copy of the above -described documents. Thereafter I sent a true copy in a sealed envelope addressed and mailed as indicated above. Executed on August 1, 2005 at National City Califomia. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. ELIZABETH CUMMING 1 07/13/2005 14:46 FAX 6192359100 07-13-2005 02:10PM FROM- Don Detisch MIN i RECORDING REQUESTED BY: MAIL TAX STATE.mENT$ AND WHEN RECORDED MAIL T0: La safe Bank National Association 401 B Street, SuRe 2220 df- San Diego, CA 92101 EsstvwN .: 13035 APN: 562-340.47 a 5624140-48 It004/013 T-272 P.003 F-256 DOC # 2004-071 1 852 I I I I II1I 1111 ll l ll I I II I tlit ll III 1IIII II III IIIII hil l II II I lilll II II 1111 JUL 29, 2004 10 $7 AM SAN DIE60 COlaltY REC0R ER'S OFFICE GRE6ORYJ, SheTN,COtJNiy RECDarER ave OC tNA mass: 2 I'am"t��DB>�9�lI�III�I�DB� o 2004-0711852 - QUITCLAIM DEED For valuable consideration, receipt of which Is hereby acknowledged, La Salle Bank National Association, Successor interest to Security Trust Company as Trustee of its Trust No. 00-1714 hereby REMISE(S), RELEASE(S) AND QUITCLAIM(S) to La Sage Bank National Association, Trustee of Trust No. 00-1714 the reel property situatod in the County of, State of California, more partioularly described 2s follows: See Exhibit "A" attached hereto and made a part hereof Dated: _July 19, 2004 La Salle Bank NA, Trustee of Trust No.00-1714 STATE OF CALIFORNIA COUNTY of Sock)7Ida � SS, On So6 al Adair before me, "PfA>t!i /etna .5 • Clem figs , personally appeared SAl/kq FST"6d14W F! ,w LtAhJtta/V personally known to me I be the person(s) whose name s) subscribed to the within Instrument and acknowledged to me that he/she/as executed the same in his/h au orized capacitye , rand that by hIsrher +eiysIgnatute(a) on the Instrument the pereon(e), or the snowupon behalf of which the persons acted, executed the Instrument WITNESS my hand and oNldai seal. Signature - 4,41,1 . HI • et, rt.,.te M41L TAX STATEMENTS A$ DOtECTED ABOVE az2 prop: 562-340-48 -A- - SD:2004 00711852 • . •drill EXHIBIT 5 ior2 • 07/13/2005 14:47 FAX 6192359100 0T-13-2005 02:10PM1 FROM- - ./ r ti Don Detisch EXHIBIT "ONE" 0005/013 T-2T2 P.004/012 F-259 13036 Parcel A: The Northerly 164.00 feet of Lot 5 of E. J. Christman Business end Industrial Park 1, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, fled in the Office of the County Recorder of San Diego County, November 7. 1974. Parcel B: Lot 6 of V. J. CMstman Business and industrial Park 1. in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, filed in the Office of the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the Northerly 184.00 Mt. :Assessor's Parcel No: 562-340.47and 562-340-48 2 • az2 prop: 562-340.48 -A- - SD:2:004 00711852 2 of 2 07/13/2005 14:47 FAX 6192359100 07-13-2006 02:10PM FROM - Don Detisch Q 006/013 T-272 P.006/012 F-266 CHICAGO TITLE COMPANY PRELIMINARY REPORT Reference: 2626 & 2700 NATIONAL CITY BLVD Regarding: 2626 & 2700 NATIONAL CITY BLVD, CA Dated as of: May 5, 2006 Order No.: 53030507- U16 at 7:30 AM CHICAGO TITLE COMPANY hereby reports that It Is prepared to issue, or cause to be issued, as of the date hereof, a Policy or Policies of Title Insurance describing the land and the estate or Interest therein hereinafter set forth, Insuring against loss: which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an Exception in Schedule.H,or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations of said Policy forms. .Dae..printed Exceptions and Exclusions from the coverage of said Policy or Policies are set forth in the attached list Copies of the Policy forms are :available upon request. Please read the exceptions shown or referred to In Schedule B and the exceptions and exclusions set forth In the attached Ilst of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of title insurance policy and should be carefully considered. It is Important to note that this preliminary report Is not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land. THIS REPORT (AND ANY SUF'PLEMENTS OR AMENDMENTS HERETO) IS ISSUED SOLELY FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF POLICY OF TITLE INSURANCE AND NO LIABILITY I5 ASSUMED HEREBY, IF IT IS DESIRED THAT LIABILITY BE ASSUMED PRIOR TO THE ISSUANCE OF POUCY OF TITLE INSURANCE. A BINDER OR COMMITMENT SHOULD BE REQUESTED 411e.form of policy of title insurance contemplated by this report is: CAUFORNIA LAND TITLE: ASSOCIATION STANDARD COVERAGE POLICY Title Depanrr.ent: Visit Us On The Web: westemdivision. cZL corn CHICAGO TITLE COMPANY 2365 NORTNSIDE DRIVE #500 SAN DIEGO. CA 92108 (619)521-3535 fax: (619)521-3605 lode Sierra .1TLE OFFICER PFP -W/CB/Caw 07/13/2005 14:47 FAX 6192359100 Don Detisch 07-13-2005 02:IOPH FROM- SCHEDULE A OrdcrNo: 53030507 U16 Q 007/013 T-272 P.0O6/012 F-259 YourR.ef: 2626 & 2700 NATIONAL CITY BLVD 1. The estate or interest in the land hereinafter described or referred to covered by this report is: s A FEE 2. Title to said estate or interest at the date hereof is vested in: LA SALLE BANK NATIONAL ASSOCIATION, TRUSTEE OF TRUST NO. 00-1714 3. The land referred to in this report is situated in the State of California, County of SAN DIEGO and 's described as follows: PARCEL; A; (APN: 562-340-47) THE NORTHERLY 164,.00 FEET OF LOT 5 OF E. J. CHRISTMAN BUSINESS AND INDUSTRIAL, PARK I, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF 'CALIFORNIA, ACCORDING TO MAP THEREOF NO. 8038, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 7, 1974. PARCEL B: (APN: 562-340-48) LOT 5 OF E. J. CHRISTMAN BUSINESS AND INDUSTRIAL PART( I, IN THE CITY OF. NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 803e, PILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMSER 7, 1974. EXCEPTING THEREFROM THE NORTHERLY 164.00 FEET. PREA •10/01077oY 07/13/2005 14:47_FAX'6192359100 Don Detisch Z1008/013 0T-13-2005 02:10PM ' FROM- T-272 P.007/012 F-250 SCHEDULE B ?age 1 OrderNo: 53030507 U16 YourRef; 2626 & 2700 NATIONAL CITY BLVD sar At the date hereof exceptions to coverage in addition to the printed Exceptions and Exclusions in the pollry form designated on the face page of this Report would be as follows: A 1. PROPERTY TAKES, INCLUDING ANY ASSESSMENTS COLLELrr:u WITH TAXES, TO BE LEVIED FOR T.3E FISCAL YEAR 2005-2006 THAT ARE A LIEN NOT YET DUE. • 2..THE LIEN OF SUPPLEMENTAL TAXES, IP ANY, ASSESSED PURSUANT TO THE PROVISIONS OF CHAPTER 3.5 (COMMENCING WITH SECTION 75) OF THE REVENUE AND TAXATION CODE. OF THE STATE OF CALIFORNIA. • 3. THE TERMS AND PROVISIONS CONTAINED IN THE DOCUMENT ENTITLED "DECLARATION OF RESTRICTIVE COVENANTS" RECORDED SEPTEMBER 17, 1973, AS INSTRUMENT NO. 73-260660, OFFICIAL RECORDS. • 4. AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO AS SET FORTH IN A DOCUMENT GRANTED TO: PURPOSE: RECORDED; AFFECTS: SAN DIEGO CAS AND ELECTRIC COMPANY PUBLIC UTILITIES, INGRESS AND EGRESS OCTOBER 24, 1973, AS INSTRUMENT NO. 73-298298, OFFICIAL RECORDS THE EXACT LOCATION AND EXTENT OF SAID EASEMENT IS NOT DISCLOSED OF RECORD. • 5. AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL rurxETO AS SET FORTH IN A DOCUMENT GRANTED TO: PURPOSE: RECORDED: AFFECTS: SAN DIEGO GAS AND PUBLIC UTILITIES. JUNE 25, 1980, AS OFFICIAL RECORDS THE ROUTE THEREOF AND IS MORE FULLY ELECTRIC COMPANY INGRESS AND EGRESS INSTRUMENT NO. 80-200314, AFFECTS A',PORTION OF SAID LAND DESCRIBEDIN SAID DOCUMENT • 6. THE FACT THAT SAID LAND IS INCLUDED WITHIN A PROJECT AREA OF THE REDEVELOPMENT AGENCY SHOWN BELOW, AND THAT PROCEEDINGS FOR THE REDEVELOPMENT OF SAID PROJECT HAVE BEEN INSTITUTED UNDER THE REDEVELOPMENTLAW (SUCH REDEVELOPMENT TO PROCEED ONLY AFTER THE ADOPTION OF THE REDEVELOPMENT PLAN) AS DISCLOSED BY A DOCUMENT. REDEVELOPMENT AGENCY: RECORDED: NATIONAL CITY DOWNTOWN REDEVELOPMENT PROJECT AREA DECEMBER 9, 1981 AS INSTRUMENT NO. 81-3868331 DECEMBER 4, 1981 AS INSTRUMENT NOS. 81-381663, 81-381664 AND 81-381665; AND JULY 19, 1995 AS INSTRUMENT NO. 1995-0306927, ALL OFFICIAL RECORDS FAEe .10/3l/ 7bI Order N0: 53030507 U16 07/13/2005 14:47 FAX 6192359100 Don Detisch QD009/013 07-13-2005 02:11PM FROM- T-272 P.000/012 F-250 Page 2 SCIJEDULE 13 (continued) YoW Rcf: 2626 & 2700 NATIONAL CITY BLVD c 7. RESOLUTION OF THE CITY COUNCIL #95-15 OF THE CITY OF NATIONAL CITY, ORDERING WORK, FORMING ASSESSMENT DISTRICT AND CONFIRMING DIAGRAM AND ASSESSMENT, RECORDED MARCH 3, 1995, AS INSTRUMENT NO. 1995-0092128, OFFICIAL RECORDS. i► 8. PROPOSED BOUNDARIES OF LANDSCAPE MAINTENANCE DISTRICT NO. 1 (MILE OF CARS), RECORDED MARCK.3, 1995, AS FILE NO. 1995-0092126, OFFICIAL RECORDS. t 9. ASSESSMENT EIAGRAM OF LANDSCAPE MAINTENANCE DISTRICT NO. 1 (MILE OF CARS), RECORDED MARCH 3, 1995, AS FILE NO. 1995-0092127, OFFICIAL RECORDS_ . 10. RESOLUTION CF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY ORDERING WORK, FORMING ASSESSMENT DISTRICT AND CONFIRMING DIAGRAM AND ASSESSMENT, R.$CORDED MARCH 3, 1995, AS FILE NO. 1995-0092128, OFFICIAL RECORDS. • 11. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY CONFIRMING THE DIAGRAM AND ASSESSMENT AND PROVIDING FOR THE LEVY OF THE ANNUAL ASSESSMENT IN A SPECIAL MAINTENANCE DISTRICT, RECORDED SEPTEMBER 4, 1996, AS FILE NO. 1996-0449220, OFFICIAL RECORDS. 12. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA, CONFIRMING THE DIAGRAM AND ASSESSMENT AND PROVIDING FOR THE LEVY OF THE ANNUALAS-SESSMENT IN A SPECIAL MAINTENANCE DISTRICT RECORDED AUGUST 8, 19971AS FILE NO. 1997.0379883, OPFICIAL RECORDS. 13. A DEED OF T3,UST TO SECURE AN INDEBTEDNESS IN THE ORIGINAL, AMOUNT SHOWN BELOW AMOUNT: DATED, TRUSTOR, TRUSTEE: BENEFICIARY: RECORDED: s 14. AN ASSIGNMENT OF ALL SAID LAND, TO SECURE TERMS AND CCNDITIONS AMOUNT: ASSIGNED TO: BY: RECORDED: $1,070,000.00 AUGUST 17, 2004 LA SALLE BANK NATIONAL ASSOCIATION, TRUSTEE OF TRUST NO. 00-1714 FIDELITY NATIONAL TITLE INSURANCE COMPANY CALIFORNIA DANK & TRUST, A CALIFORNIA BANKING CORPORATION SEPTEMBER 20, 2004, A$ INSTRUMENT NO. 2004-0891955, OFFICIAL RECORDS MONIES DUE, OR TO BECOME DUE AS RENT OR OTHERWISE FROM PAYMENT OF AN INDEBTEDNESS, SHOWN BELOW AND UPON THE THEREIN $1,070,000.00 CALIFORNIA BANK & TRUST, A CALIFORNIA BANKING CORPORATION DAILY FAMILY PARTNERSHIP, A CALIFORNIA GENERAL PARTNERSHIP SEPTEMBER 20, 2004, AS DOCUMENT NO. 2004-0891956, PREUNSCs/23/e3ow 07/13/2005 14:48 FAX 6192359100 07-13-2005 02:11PM FROM - Page 3 Don Detisch C j010/013 T-272 P.009/012 F-259 SCHEDULE B (continued) OrdcrNo: 53030507 1716 YourRef: 2626 & 2700 NATIONAL CITY BLVD OFFICIAL RECORDS o 15. A DOCUMENT ENTITLED "SUBORDINATION, NON-DISTURHANCE AND ATTORNMENT AGREEMENT", DATED ADGUST 17, 2004, EXECUTED BY DAILY FAMILY PARTNERSHIP, A .CALIFORNIA GENERAL PARTNERSHIP; LA SAI,LE BANK NATIONAL ASSOCIATION, TRUSTEE OF TRUST NO. 00-1714; MOSSY NISSAN, INC., A CALIFORNIA CORPORATION; AND CALIFORNIA BANK & TRUST, A CALIFORNIA BANKING CORPORATION, SUBJECT TO ALL .TEE TERMS, PROVISIONS AND CONDITIONS THEREIN CONTAINED, RECORDED SEPTEMBER 20, 2004, AS DOCUMENT NO. 2004-0891957, OFFICIAL RECORDS. 16. RIGHTS OF PARTIES IN POSSESSION OF SAID LAND. MATTERS AFFECTING THE RIGHTS OF SAID PARTIES ARE NOT SHOWN HEREIN. 17. MATTERS WHICH MAY BE DISCLOSED BY AN INSPECTION OR SURVEY OF SAID LAND OR By INQUIRY OF THE PARTIES IN POSSESSION THEREOF. A s END OF SCHEDULE B NOTE NO. 1: PROPERTY TAXES FOR THE FISCAL YEAR SHOWN BELOW ARE PAID. FOR INFORMATION PURPOSES TEE AMOUNTS ARE; FISCAL YEAR: 2004-2005 1ST INSTALLMENT: $5,10r: 50 2ND INSTALLMENT: $5,804.50 EXEMPTION: $NOT SHOWN CODE AREA: 06025 ASSESSMENT NO: 562-340-47 PROPERTY TAXES FOR THE FISCAL YEAR SHOWN BELOW ARE PAID. FOR INFORMATION PURPOSES TES AMOUNTS• -ARE: FISCAL YEAR: 2004-2005 1ST INSTALLMENT: $20,073.69 2ND INSTALLMENT; $20,073.69 EXEMPTION: $NOT SHOWN CODE AREA: D6025 ASSESSMENT NO: 562-340-48 r AS MIELJMBC-6/21,9 ra ti 0 an 0 0 Ias W Don Detisch 6192359100 0_7/13/2005 411.4 0 0 ti ,V 0 Y.. a tiJ w 5411 uEm caertll BM MI IPA a4 (NATIONAL) NYr7 PAP a t It At PAR 1 5.A4 AC .0, PAR z.7TAC A..NP N 13333 srs•.r4 1 Amy J.tY TRANSPORTATION 1 ay P117424 .r 3.31 AC PAR ! 'se r. sn.Ia ® 10 zti1Ac PM 4 '�j~ PM74t4 vll� (COOLIDGE} y. n70V 3H .muvrc AVE I,4cC. i .A i 4a.r KA- 4 flair •1 C.I4AC. n� FAA i .r.•01•/.7 1,14nf 3fR4 un "4 b!f AC. 1 $$ -t L04AL 81k PMI PM la PAR 7 4.4).MOBILE HOME • 5" w -am. ( +n.4 Jr1 aF` • -r... S 7 6D L-1 ifs J. • IL394Qi IQ 4t i • ti PAR/ n momi Ca . r ZNIAC • L74 AL mr•.ryar �`' MOTII' Y MAI HOOVER AWE 1 19 Q CARDING AVE 134a M n a.ur II/I11/01 AN IN-UtLLD?lT wR 315R9tlevesom .Dorn S waw u'iriaikaraaar al rlan MAP 803e-E-1 CHRISTMAN BUSINESS AND INDUSTRIAL PARR 1 ROS I3498 • •- 07/13/2005 14:48 FAX 6192359100 Don Detisch 2D012/013 0T-13-2005 02:11PM FROM- T-2T2 P.011/012 F-2511 CHICAGO TITLE INSURANCE COMPANY Fidelity National Financial Group of Companies' Privacy Statement July 1, 2001 We recognize and respect the privacy expectation of today's consumers and the requirements of applicable federal and state privacy laws. We believe that making you aware of how we use your non-public personal information ('Personal Information'), and to whom it is disclosed, will form the basis for a relationship of trust between us and the public that we serve. This Privacy Statement provides that explanation. We reserve the right to change this Privacy Statement from time to time consistent with applicable privacy laws. In the course. of our business, we may collect Personal Information about you from the following sources: From applications or other forms we receive from you or your authorized representative; * From your transactions with, or from the services being performed by, us, our affiliates, or others; * From our Internet web sites; * From the public records maintained by governmental entities that we either obtain directly from those entitles, or from our affiliates or others; and From consumer or other reporting agencies. Our Policies Regarding The Protection Of The Confidentiality And Security Of Your Personal Information We maintain physical, electronic and procedural safeguards to protect your Personal Information from unauthorized access or intrusion. We limit access to the Personal Information only to those employees who need such access in connection with providing prod JCIS or services to you or for other legitimate business purposes. Our Policies and Practices Regarding the Sharing of Your Personal Information We may share your Personal Information with our affiliates. such as insurance companies, agents, and other real estate settlement service providers. We may also disclose your Personal Information: * to agents, brokers or representatives to provide you with services you have requested? — to third -party contrac:ors or service providers who provide services or perform marketing or other functions on our behalf; and * to others with whom we enter into joint marketing agreements for products or services that we believe you may find of interest. In addition, we will disclose your Personal Information when you direct or give us permission, when we are required by law to do so, or when we susp°act fraudulent or criminal activities. We also may disclose your Personal Information when otherwise permitted by applim.ble privacy laws such as, for example, when disclosure is needed to enforce our rights ._arising out of any agreement, tnansaction or relationship with fit_ _ . One of the Important responsibilities of some of our affiliated companies Is to record documents in the public domain. Such documents may contain your Personal Information. Right To Access Your Person2f Informati•on And Ability To Correct Errors Or Request Change Or Deletion Certain states afford you the right to access your Personal Information and, under certain circumstances, to find out to whom your Personal Information has been disclosed. Also, certain states afford you the right to request correction, amendment or deletion of your Personal Information. We reserve the right, where permitted by law. to charge a reasonable fee to cover the cos:s Incurred in responding to such requests. All requests must be made in writing to the following address: Privacy Compliance Officer Fidelity National Financial, Inc. 601 Riverside Drive Jacksonville, FL 32204 Multiple Products or Services: If we provide you with more than one financial product or service, you may receive more than one privacy notice from us. We apologize for any inconvenience this may cause you. 07/13/2005 14:46 FAX 6192359100 OT-la-1006 02:OOPM FROII- EDW ARD F. WFDTTLER MARSHAL A. SCARR MATTHEW A. PETERSON LARRY N. MURNANE CHRISTOPHER J. CONNOLLY VICTORIA E. ADAMS ERIC J. PRSSER ELOISE H. FEINSTEIN OF COLmSe. PAUL A. PETERSON Don Detisch PETERSON & PRICE A PROFESSIONAL CORPORATION LAWYERS Union Bank of California Building 530 B" Sweet, Suite 1700 San Diego, California 92101-4454 Telephone(619)234-0361 Fax(619)214-4786 July 13, 2005 Don Detisch, Esq. 110 West C Street, Suite 1803 San Diego, CA 92101 Re: Mossy Nissan/City of National City Dear Don: 1003/013 T-2T2 P.002 F-261 Www.petersonprice.com i VIA FACSIMILE AND U.S. MAIL Per our conversation, enclosed please find a copy of the most recent title report which Alex Zirpolo obtained from Chicago Title with respect to the Daily Property. Please note that vesting has been shown to be in the name of LaSalle Bank National Association, Trustee of Trust No. 00-1714 (°LaSalle"). Also attached is a copy of the deed whereby the Property was transferred into the Trust in July of 2004 which shows the address for La Salle to be 401 B Street, Suite 2220, San Diego California 92101. The earlier letter sent out on March 29, 2005 by the City regarding the owner participation process was sent to LaSalle at the above address and, in fact, we have a copy in our file which shows that It was recaived by LaSalle on April 4, 2005,1 It would appear that the proper address to send the notice to LaSalle Bank National Association since they are currently the vested owners. However, we were advised by Stephen Khalil, the broker for the Daily Family, the Daily Family was going to be transferring the Property back to the Daley Family Partnership soon. Out of abundance of caution, you may also want to send in any offer to the Daily Family Partnership. The following is the only address that Mossy has for the Daily's: Larry Daily, 3959 Acacia Avenue, Bonita, California 91 E02. Please let me know if you need any other information. Very truly yours, PETERSON & PRICE A Profession Corporation EFW:egw Edwa rd`F-U11Fiittler EXHIBIT 6 G:1Wp‘501110191CorresWetisrh Ltrr071405.doe Rpr 06 05 03:35p Doreen DailAar Chairmen Nick Iraurea Members Ron Morrison Louie Natividad Frank Parra Fidel* Ungeb Executive Biroctor Paul Desrochera 619-267-2952 p.1e. p+�mriny Hktary... 'P$nt the future Community Development Commission of National City LETTER OF TRANSMITTAL To: Trust 00-1714 Date: April 1, 2005 Via: ._x U.S. Mail Fax Email Courier Internal Subject: Incomplete copy sent to Trust 00-1714 of the Rules Governing Participation and Preferences and Property Owners and Business Occupants in the National City Redevelopment Project WE ARE TRANSMITTING: ( ) For your review and comment (x) For your use ( ) For your action ( ) For execution of agreement (Please sign and retum) As requested For approval Sign & Retum Records REMARKS: Enclosed is a complete copy of the Rules Governing Participation and Preferences by Property Owners and Business Occupants in the National City Redevelopment Project. Thank you. EC LIVED 5ijnature: APR - 4 an LaSalle Bank N.A j Iir:,hctik Cummins txce.utivet Annintrnt 140 E. 121' Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fay mar 3st;.a9 to Apr 06 05 03:35p Doreen Daii1 11) Chairmen Nick Inzunzi Members Run Morrison I auie Natividad Frank Pana Rom . Zara: Execuoue Director Datjamin Maim.,: 615-267-2952 p.2 lilligitio PrysEr�� .yin Mbt rry... Shaping the Future Community Development Commission of National City March 29, 2005 Trust 00-1714 401 B St #220 San Diego, CA 92101 SUBJECT: OWNER PARTICIPATION PROCESS Dear Sirs: The responsibility of the Community Development Commission of National City (CDC) is to plan and implement redevelopment projects in National City. CDC works with owners and tenants to obtain qualified developers, acquire property, relocate occupants, demolish existing buildings, rehabilitate appropriate structures, and construct public improvements and facilities to carry out adopted redevelopment plans within National City. The CDC received a request from Mossy Nissan, Inc. (developer) for a development proposal on parcels at 2626 and 2700 National City Boulevard. On March 22, 2005, the CDC authorized staff to initiate the Owner Participation process for Assessor Parc9I Numbers 562-340-47-00 & 48-00. The property that you own would be affected by the proposed project. The proposed project would combine the properties to renovate and improve the Nissan auto dealership. As an affected property owner, you have the right to submit an alternative proposal or otherwise comment on the project. These rights are set forth in the' enclosed "Rules Governing Participation and Preferences by Property Owners 140 E. 12tn Street, Suite 8; National City, California 91950 Rpr 06 05 03:36p Doreen Daily Trust 00-1714 March 29, 2005 Page2of2 61S-267-2952 p,S and Businesses Occupants in the National City Redevelopment Project" (the "OP Rules") (Exhibit 1). These rules explain what assistance the CDC will provide to any persons or businesses that are displaced by a redevelopment project. They also explain the standard procedures that the Agency follows to provide assistance. Before considering the Mossy Nissan proposal, the CDC wishes to ask you whether or not, and if so in what way, you would like to participate in the redevelopment of the site. Enclosed with this letter is a Statement of Interest response form (Exhibit 2). According to the OP Rules you have forty-five (45) days from the date of this letter to retum the enclosed Statement of Interest to express your interest to participate or not participate. The failure to retum the Statement of Interest response form within the forty-five (45) days will be considered an affirmation of non -interest to participate. Please Note: If you are in escrow or currently negotiating to sell your property you may continue with your escrow or your negotiations concurrently with any action the CDC may take regarding your property. If you have any questions, please contact Patricia Beard at (619) 336-4255 or by email at pbeard@ci.national-city.ca.us. Sincerely, Benjamin Martinez Executive Director BM:pb Enclosure: 1. Rules Governing Participation and Preferences by Property Owners and Businesses Occupants 2. Statement of Interest Form Cc: Patricia Beard, Redevelopment Projects Manager 140 E. 12u' Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fax: (619) 336.4206 4g::;pr 06 05 03:36p Doreen Daila 619-267-2952 p.4 RULES GOVERNING PARTICIPATION AND PREFERENCES BY PROPERTY OWNERS AND BUSINESS OCCUPANTS IN THE NATIONAL CITY REDEVELOPMENT PROJECT Prepared: February 17, 1995 Adopted: May 16, 1995 Prepared for: Community Development Commission of the City of National City 140 E. 12th Street, Suite B National City, California 91950-3312 619-336-4250 Prepared by: Rosenow Spevacek Group, Inc. 540 North Golden Circle, Suite 305 Santa Ana, California 92705 714/541-4585 619/967-6462 Apr 06 05 03:36p Doreen Daily 619-267-2952 RULES GOVERNING PARTICIPATION AND PREFERENCES BY PROPERTY OWNERS AND BUSINESS OCCUPANTS IN THE NATIONAL CITY REDEVELOPMENT PROJECT SECTION 1. (100) PURPOSE AND INTENT p P. 5 -- These rules are adopted to implement the provisions of the Redevelopment Plan for the National City Redevelopment Project (the "Project') regarding participation and the exercise of preferences by property owners and business occupants within the National City Redevelopment Project Area (the Project Area"). These rules set forth the procedures governing such preferences and participation. The Health and Safety Code of the State of California Section 33000 et seq. requires the adoption of these rules by the Community Development Commission of the City of National City to permit participation by owners of real property and the extension of preferences to persons engaged in business within the boundaries of the Project Area to reenter the redeveloped area to the maximum extent feasible consistent with the objectives of the Redevelopment Plan for the Project. SECTION IL(200) GENERAL DEFINITIONS As used herein, the following definitions apply: A. "CDC" means the Community Development Commission of the City of National City. B. "Business Occupant" means any person, persons, corporation, association, partnership, or other entity engaged in a lawful business within the Project Area for so Tong as such Business Occupant remains in business within the Project Area. Apr 06 05 03:36p Doreen Dai19 C. "City" means the City of National City. 616-267-2952 p.6 "Disposition and Development Agreement" means a contractual agreement between a developer and the CDC that sets forth terms and conditions for development. E. "Long -Term Lease" means a lease of real property with a term of twenty (20) years or more, with at least ten (10) years remaining on such term. F. "Owner" means any person, persons, corporation, association, partnership, or other entity holding recorded fee title to or a Tong -term lease of real property in the Project Area for so long as such Owner holds such title or Tong -term lease. G. "Participant" means an Owner who has entered into a Participation Agreement with the CDC. H. "Participation Agreement" means an agreement entered into by an Owner with the CDC providing for such Owner to participate in the development or redevelopment of property within the Protect Area in accordance with the provisions of the Redevelopment Plan and these Rules. I. "Plan" means the Redevelopment Plan for the National City Redevelopment Project adopted on June 18, 1995 by Ordinance No. 95-2095. J. "Project Area" means the Project Area of the CDC which is subject to the Redevelopment Plan, as depicted on Exhibit A attached hereto. K. "Rules" means these Rules Governing Participation and Preferences by Property Owners and Business Occupants in the National City Redevelopment Project. Apr 06 05 03:36p Doreen Daily 618-267-2852 p.7 SECTION 111. (300) OPPORTUNITIES FOR OWNER PARTICIPATION AND PREFERENCES TO BUSINESS OCCUPANTS TO REENTER IN BUSINESS WITHIN REDEVELOPED AREA A. (301) Opportunities for Owner Participation Owners of real property within the Project Area shall be extended reasonable opportunities to participate in the redevelopment of property in the Project Area if such Owners agree to participate in the redevelopment in conformity with the Plan and these Rules. B. (302) Preferences for Persons Engaoed in Business in the Protect Area Business Occupants engaged in business in the Project Area shall be extended reasonable preference to reenter in business within the redeveloped area if they otherwise meet the requirements prescribed by the Plan and these Rules. SECTION IV. (400) METHODS OF PARTICIPATION AND LIMITATIONS THEREON A. (401) Methods of Participation Participation methods include remaining in substantially the same location either by retaining all or portions of the property, or by retaining all or portions of the property and purchasing adjacent property from the CDC or joining with another person or entity for the rehabilitation or development of the Owner's property and, if appropriate, other property, or submitting to the CDC for its consideration another method of participation proposal pursuant to these Rules. An Owner who participates in the same location may be required to rehabilitate or demolish all or a part of his/her existing buildings, or the CDC may acquire the buildings only and then remove or demolish the buildings. Participation methods also include the CDC buying land and improvements at fair market value from Apr 06 05 03:36p Doreen Daily 61S-267-2852 p.8 Owners and offering other parcels for purchase and rehabilitation or development by such Owners, or offering an opportunity for such Owners to rehabilitate or develop property jointly with other persons or entities. (402) Limitations on Participation Opportunities Owner Participation opportunities shall be subject to and limited by factors such as hereafter listed and the following minimum requirements: 1, The Participant(s) can demonstrate to the reasonable satisfaction of the CDC that he is financially capable and has the qualifications and/or experience to perform any and all development, modification, rehabilitation, modernization, construction, land assembly, and/or acquisition of the subject property or properties in order that it will conform to the Plan, any specific plan or design guide, and the redevelopment proposal, if any, contemplated by the CDC with respect 10 the subject property. 2. The Participant's proposed improvements and/or redevelopment will conform to: the goals and objectives established by the CDC; the Plan; any specific plan or design guide; any applicable zoning, building and safety laws and regulations; and/or the redevelopment proposal approved by the CDC. 3. The CDC retains its authority to determine in its sole and reasonable discretion whether the proposed Participant(s) development conforms to and furthers the goals and objectives of the Plan and any specific development proposals on the basis of all the facts and circumstances pertaining to the proposed Participant's development. Apr 06 05 03:37p ilinimmemunDoreen Daily 618-267-2852 p,9 4. The CDC shall consider whether the proposed owner participant development necessitates that the Participant and/or the CDC shall remove, relocate and/or install public utilities and public facilities determined necessary by the CDC for the proposed development. 5. Consideration of the elimination and/or change of land uses, particularly nonconforming land uses as specified in City codes. 6. The CDC shall consider the need to realign, abandon, vacate, widen, or open public rights -of -way and the indirect effects of such acts. 7. Consideration of any reduction in the total number of individual parcels in the Project Area. 8. Consideration of whether the proposal involves land assembly and development of areas for public and/or private development in accordance with the Plan. C. (403) Establishing Preferences Amona Owners If conflicts develop between the desires of participants for particular sites or land uses, the CDC is authorized to exercise its reasonable discretion and establish reasonable priorities and preferences among the Participants and to determine a solution by consideration of objective facts concerning the proposals, including, for example; development experience and qualifications, financial ability to perform, length of time in the area, accommodation of as many potential participants as possible, and conformity with intent and purpose of the Plan. Participation, to the extent feasible, may be available for two or more persons, firms, or institutions, to join together in partnerships, corporations, or other joint entities. To the extent multiple owners are included within a proposed development site, an Owner with a majority interest in the total proposed C....1.116.11.111pr 06 OS 03:37p Doreen Dailu 618-267-2952 p.10 development site may be determined by the CDC to have a preference over an Owner with a minority interest in the proposed development site. SECTION V. (500) METHODS FOR EXTENDING REENTRY PREFERENCES, AND LIMITATIONS THEREON A. (501) Methods for Extending Reentry Preferences Whenever a Business Occupant will be displaced by CDC action from the Project Area, the CDC will, prior to such displacement, determine: 1) whether such Business Occupant desires to relocate directly to another location within the Project Area, or 2) if suitable relocation accommodations within the Project Area are not available prior to displacement, whether such Business Occupant would desire to reenter in business within the Project Area at a later date should suitable accommodations become available. For those Business Occupants who desire to relocate directly to another location within the Project Area, the CDC will make reasonable efforts to assist such Business Occupants to find accommodations suitable to their needs. A record of the Business Occupants who cannot be or do not want . to be directly relocated within the proposed development site, but who have stated that they desire to reenter into business in the Project Area whenever suitable locations and rents are available, will be maintained by the CDC. The CDC will make reasonable efforts to assist such Business Occupants to find reentry accommodations at locations and rents suitable to their needs. In order to implement the operation of this Section 501, the CDC will provide in all Participation Agreements, disposition and development agreements, and other agreements, as applicable, that in the renting or leasing of premises rehabilitated or developed pursuant to such agreements the Participant or developer will give reasonable preferences (over other potential tenants or lessees) to Business Occupants who will be or who have been displaced from Doreen Daily 613-267-2952 p.11 their places of business by the CDC to lease or rent premises within the newly rehabilitated or developed facilities. B. (502) Limitations on the Extension of Preferences The following are the minimum requirements that must be met by any business to establish its eligibility for the reasonable preference to reenter in business in the Project Area after displacement: 1. The business use proposed shall be consistent with the land use standards of the Plan and any specific plan and development standards and criteria adopted by the CDC or the City. 2. The improvement on the business premises made or proposed to be made shall (unless otherwise approved by the CDC) meet, or shall be brought up to meet, a structural condition equal to or better than that required for a new structure or improvement of equivalent size, location, use and occupancy as required by the building and safety laws and regulations then applicable in the City, and shall conform to the Plan. 3. The business operator shall demonstrate to the satisfaction of the CDC thathe is financially capable and qualified to perform any and all modifications or rehabilitation or modernization on the property at the new location in order that it will conform to the Plan and capable of meeting the financial requirements to occupy space in the new location. 4, The business shall agree in writing that in the use, occupancy and conduct of business in the premises there shall be no discrimination because of race, sex, marital status, color, creed, religion, national origin, ancestry, sexual orientation, physical handicap, or medical condition. 619-267-2952 p.12 (503) Establishing Preferences Among Business Occupants Seeking Similar Preferences If conflicts develop between the desires of participants for particular sites or land uses, the CDC is authorized to exercise its reasonable discretion and establish reasonable priorities and preferences among the Business Occupants and to determine a solution by consideration of objective facts concerning the proposals, including, for example: financial ability to perform, length of time in the area, accommodation of as many potential Business Occupants as possible, appropriateness of the type of business within the proposed premises or location, the feasibility of business success, and conformity with intent and purpose of these Rules and the Plan. Participation, to the extent feasible, may be available for two or more persons, firms or institutions, to join together in partnerships, corporations, or other joint entities. SECTION VI. (600) PARTICIPATION PROCEDURES A. (601) Notice and Statement of Interest Before entering into any Participation Agreements or Disposition and Development Agreements relating to the acquisition, development, or rehabilitation of real property in the Project Area, the CDC shall first comply with these Rules relating to soliciting interest in owner participation from Owners of property, which may be acquired, developed, or rehabilitated and call upon them to submit a Statement of Interest in the proposed development or in otherwise participating in the redevelopment of the Project Area. Those desiring to submit a Statement of Interest in Participation must complete and submit said Statement to the CDC within forty-five (45) days of receipt. Any owner may also submit such a Statement at any time before such notification. 4::706 05 03:37p Doreen Dai19 619-267-2852 p.13 Such Statement shall include information requested by the CDC and shall be in the form requested by the CDC. The CDC shall consider such Statements as submitted on time and shall seek to develop reasonable participation for those submitting such Statements whether to stay in place or to move to another location. The CDC may in its sole discretion determine that a participation proposal is not feasible or in the best interest of the Project or the community, or is otherwise limited by one or more of the criteria set forth in Section 402 hereof. In such event, the CDC may select a developer from among prospective participants submitting statements of interest in participating and others invited to submit proposals. The CDC retains and shall exercise the discretion vested in it by law to consider and determine whether the proposal or proposals for redevelopment submitted by an Owner or Owners for participation in the Project Area conforms to, and meets the goals and objectives of, the Plan. The CDC shall exercise said discretion reasonably, in good faith, and without discrimination. B. (602) Participation Agreements 1. (603) General Public and private Owners wishing to develop or improve their properties within the Project Area may be required, as a condition to CDC approval of such development, to enter into a binding written Participation Agreement with the CDC if the CDC determines it is necessary to impose upon such property any of the standards, restrictions and controls of the Plan, or of any design guide adopted by the CDC pursuant to the Plan. Apr 06 05 03:37p Doreen Daily 2. (604) Contents 618-267-2352 p.14 A Participation Agreement shall obligate the Owner, and the Owner's heirs, successors and assigns to acquire, rehabilitate, develop and use the property, as may be applicable, in conformance with the Plan and/or to be subject to such other provisions and conditions of the Plan as the CDC may require for the period of time that the Plan is in force and effect, excepting those provisions related to nondiscrimination and nonsegregation which shall run in perpetuity. Each Participation Agreement will contain such terms and conditions and will require the potential Participant to join in the recording of such documents as the CDC may require in order to insure the property will be acquired, rehabilitated, developed and used in accord with the Plan and the agreement. Participation Agreements will be effective only if approved by a majority vote of the members of the CDC. SECTION VII. (700) ENFORCEMENT In the event a property is not acquired, developed, rehabilitated, or used in conformance with the Plan, with a CDC determination of conformance, or a Participation Agreement, then the CDC is authorized to (1) purchase the property, (2) purchase any interest in the property sufficient to obtain conformance, or (3) take any other appropriate action sufficient to obtain such conformance. The CDC shall not acquire real property retained or developed under an approved Participation Agreement if the Participant fully performs under the agreement. SECTION VIII. (800) AMENDMENT OF RULES The CDC may amend these rules at any regular meeting or duly called special meeting held after their adoption, but only after notice to the CDC members and the public. The 619-267-2952 p.15 text of the proposed change shall be made available and notice of said meeting shall be published in a newspaper of general circulation. Such notice shall be published at least fourteen (14) calendar days before the date of the meeting at which the proposed amendment will be considered. The method of notice is at the discretion of the CDC. No such amendment shall retroactively impair the rights of any parties who have executed Participation Agreements with the CDC in reliance upon these rules as presently constituted. Rpr 06 05 03:38p Doreen Daily 619-267-2852 p.16 STATEMENT OF INTEREST FORM TO: Patricia Beard Redevelopment Projects Manager Community Development Commission 140 East 12°' Street, Suite B National City CA 91950-3312 FROM: Trust 00-1714 401 B Street, #220 San Diego CA 92101 SUBJECT: 2626-2700 National City Blvd, National City CA 91950 APN: 556-340-47-00 & 48-00 I am interested in: Selling my property to the Agency Selling my property to the Agency and working with the Agency to participate in Redevelopment elsewhere in the Project Area. Submitting a competing proposal. Signature Name (Please Print) Address City State Zip Code 619-287-2952 P. EXIIBIT "A" NATIONAI, CITY REDEVELOPMENT PROJECT AREA Via U. S. Mall & Facsimile (76Q) 634-4266 January 25, 2005 Mr. Alexander Znpolo AVCAM, INC. 617 Saxony Place, Suite 10/ Encinitas, CA 92024 RE: Counter Proposal to Purchase Dated January 11, 2005 ' 2626, 2700National City Blvd., National City, C� APN#562-340-47. 562440-48 Dear Mr. Zirpolo: Thank you for your counter proposal dated January 11. 2005 on behalf of your client to purchase the above.referenced Property. We have reviewed the counter proposal with Ownership (the "Seller") and they have authorized us to respond as outlined below. Upon execution of this letter of intent, Buyer and Seller shall in good faith negotiate mutually acceptable terms of a purchase and sale contract. The revised purchase terms areas follows: 1. purchac. Price: Eight million ($8,000,000.00) dollars. 2. BUYER; The Buyer shall be Mosey Nissan, Inc. and/or Assignee. Any assignee shall be subject to Seller approval. 3. LEASE OPTION; Upon opening of escrow, Buyer shall exercise is third 5-year lease option to extend its Lean, pursuant to the Original Leases dated October 15, 1989 and May 22, 1990 with the final lease option period ending July 31, 2012; and Buyer and Seller shall execute a Lease Amendment documenting the lease ext erasion by Much 1, 2005. Mossy's rent will remain consistent with the terms ofthe existing Lease and will be adjusted annually pursuant to the CPI for the remainder of its current option period and through its third and final option period No other appraisals will be performed to determine fair market rent for the final option period. 4. pEPOSIT AND RIENT CU-DUB; Upon the execution of the Puroi>ase and Sale Contract, Lease Amendment and opening of escrow, Buyer shall deposit with Escrow -holder a deposit equal to five hundred thousand ($500,000.00) dollars. The total deposit shall be non-reftmdable and immediately released to Seller by Escrow -holder for application to the purchase price at the close of escrow. With the reduction of the deposit amount, rent credits will no longer apply. 5. OPENING AND CLOSE OP ESCROW: Escrow shall be opened no later than sixty (60) days from the date of' acceptance of this Letter of Intent by both parties. Escrow shall close no later than August 1, 2012. Suer may accelerate the escrow closing date by giving Buyer a ninety (90) day written notice of said intent Buyer agrees to cooperate with Seller as Seller intends to conduct an IRS 1031 Deferred Exchange. 6. CONTINGENCIES: All contingencies shall be addressed and drafted usingthe AIR form - Standard Off, Agreement and Escrow Instructions for Purchase of Real Estate. Al] contingency time periods including financing, and remodel to be completed bye} Qt7. ileC-e-,atts<h 3, yOoa 7. )1ROZERS: McMillin Real Estate & Mortgage Conpany, Inc. (MREM) represents the Seller and AVCAM, Inc. represents the Buyer. EXHIBIT 7 Mr. Alexander Zirpolo Counter Proposal to Purchase — 2626. 2700 National Ciry Blvd January25.2005 Page 2 8. SETTLEMENT SERVICES & CHARGES: Standard fbee and costs to be split between Buyer and Seller as are customary and will not conflict with any of the terms of the existing lease. All service providers including Escrow and Title Companies shall be determined prior to the execution of the Purchase and Sale Contract. This offer is an expression of Seller's intent, but does not constitute a legally binding agreement. The transaction is wholly subject to the terms of a mutually acceptable purchase and sale agreement and other documentation to be prepared by Seller's counsel as is usual in transactions of this nature for Buyer's and Seller's review and approval We appreciate the written acknowledgment of your acceptance of the terms of this letter by January 31, 2005 after which time this offer shall automatically expire. lithe terms of this proposal arc acceptable to you, kindly sign a copy of this letter and return it via facsimile to (619) 336-3065. Very truly yours, MCMILIJN REAL ESTATE & MORTGAGE, INC. Steve Khalil Vice President The undersigned authorized representative of Buyer hereby accepts Sells Offer and agrees to the transaction terms of the foregoing pare graphs. SELLER: DAILY 1; AMILY PARTNERSHIP BUYER: MOSSY NISSAN, INC. A California General Partnership A Calif tio By: Dated: Lawrence Daily, Managing Partner cc: Pat &Tun Daily By: Tide: Dated: LAW OFFICES of DON DETISCH Attorneys at Law Donald W. Detisch Jackie Ni Mhartin Shelly Johnson, Paralegal/Notary Public HAND DELIVERED Daily Family Partnership Lawrence F. and Doreen A. Daily 3959 Acacia Drive Bonita, California 91902 July 15, 2005 110 West A Street, Suite 750 San Diego, California 92101 Tel. (619) 515-1140 Fax (619) 235-9100 e-mail: detischlawAsbc2lobal.net Patrick and Barbara Daily 2700 National City Blvd. National City, California 91950 LaSalle Bank National Association Trustee of Trust No. 00-1714 401 B Street, Suite 2220 San Diego, California 92101 RE: 2626-2700 National City Blvd, National City, California 91950 562-340-47, 48 Dear Property Owner: The Community Development Commission of the City of National City has previously approved plans for the downtown National City redevelopment project. This project requires the acquisition of your property. Therefore, in exchange for fee title to the subject property, free and clear of any and all recorded or unrecorded adverse encumbrances or conditions, the Community Development Commission of the City of National City hereby offers to acquire your property located at 2626 - 2700 National City Blvd., National City, California 91950 for the sum of $7,000,000.00. This offer is subject to the Commission's approval at its sole discretion of the proposed price and of the acceptance of a deed to the property free and clear of all encumbrances. If this contingent offer is acceptable to you we will prepare the necessary documents for your execution and will open an escrow at your earliest convenience. EXHIBIT 8 The Commission's offer is the full amount determined to be just compensation for the property and is based upon an independent appraisal made of your property by John G. Slagle, MAI. The basis for that determination is explained in the attached Information and Appraisal Summary Statement. It is the Commission's hope that this price is agreeable to you and that the acquisition can begin immediately. The Commission's special counsel, Donald W. Detisch, will work with you in the acquisition of your property and answer any questions you may have regarding this letter and the Information and Appraisal Summary Statements. Mr. Detisch can be contacted at (619) 515-1140. This offer is further subject to and conditioned upon acceptable soils conditions and the absence. from the property of toxic or hazardous substances and any other kind of soil or water contamination, and to the grant of a right -of -entry to the Commission for the purpose of conducting a soils, toxic and hazardous substances investigation of the subject property at Commissioner's expense. This offer may be subject to modification depending on the results of said investigation to the extent that the result of such investigation could have an impact on the value of the subject property. For your information, the Community Development Commission is a State Redevelopment Agency created by the City of National City to administer the National City Redevelopment Project. In that capacity, the Commission is authorized to make offers for acquisition of property on behalf of the Commission and to oversee the negotiation process as it pertains to your particular piece of property. In order to establish your eligibility or the eligibility of those occupying your property, for relocation purposes, it is requested that you acknowledge receipt of this offer by signing a copy of this letter and returning the same to Donald W. Detisch. Furthermore, by signing below, you are acknowledging receipt of the Owner Participation letter and the appraisal summary statement, which are being provided to you with this offer. Your signature on the copy does not signify acceptance of this offer to settle the acquisition by the Commission, it only acknowledges receipt of the Commission's offer. Your cooperation in this matter will be greatly appreciated. Sincerely, Donald W. Detisch, Esq. DWD:sj cc: Client W:\Clients\CDC - Mossy Nissan (Dailey)1Property Owners 7.12.05.doc I hereby acknowledge receipt of the following: 1. Offer Letter; 2. Appraisal Summary Statement and Information Dated: Signed: SUMMARY OF THE BASIS FOR THE AMOUNT ESTABLISHED AS JUST COMPENSATION ACCOMPANYING OFFER MADE PURSUANT TO GOVERNMENT CODE §7267.2 The following is a summary of the basis for the amount that the Community Development Commission ("CDC") of the City of National City estimated as just compensation, which amount was derived from an appraisal as approved by the CDC of National City. The appraisal was made in accordance with accepted appraisal principles, consistent with California Law. A statement of the appraisal process, which was the basis for the valuation conclusions, follows. Project: National City Redevelopment Project Parcel Nos.: 562-340-47,48 Thomas Bros. No.: SD 1309-J3 Ownership Data: Daily Family Partnership c/o Lawrence F. and Doreen A. Daily 3959 Acacia Drive Bonita, CA 91902 LaSalle Bank National Association, Trustee of Trust No. 00-1714 401 B Street, Suite 2220 San Diego, CA 92101 Property Location: 2626-2700 National City Boulevard, National City, California 91950 Legal Description: Parcel A (APN 562-340-47) The Northerly 164.00 feet of Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California according to Map thereof No. 8038, filed in the office of the County Recorder of San Diego County, November 7, 1974. Parcel B (APN 562-340-48) Lot 5 of E.J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof, No. 8038, filed in the Office of the County Recorder of San Diego County, November 7, 1974. . Excepting therefrom the Northerly 164.00 feet. Land Area: 197,326 square feet; 4.53 Acres Land Area Being Acquired: Improvements: Zoning: 4.53 Acres - Total Take This property is improved with 42,582 square feet of building used as a Nissan Car Dealership consisting of a showroom building which includes a showroom, offices, common.areas, parts department, parts storage and three service buildings. CA-PD (Commercial Automotive Within a Planned Development Overlay Zone) This zone allows for only new automobile dealerships. Present Use: Automobile Dealership Interest Being Appraised: Fee Interest Date of Value: April 30, 2005 Summary of Value Conclusions/Just Compensation Property Mossy Nissan Improvement Size (SF) 42,582 Land Size (SF) 197,326 Cost Approach $7,050,000 Sales Approach $7,015,000 Income Approach $6,900,000 Concluded Value $7,000,000 Per SF of Building $164.39 Per SF of Land $35.47 Definitions: Fair Market Value is defined as: (a) The Fair Market of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (b) The Fair Market Value of property taken for which there is no relevant, comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable. Fee Simple is defined as: Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. Highest and Best Use Highest and Best Use is defined as the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Present Use: Automobile Dealership Applicable Zoning: CA-PD (Commercial Automotive Within a Planned Development Overlay Zone) This zone allows for only new automobile dealerships. Highest and Best: "As if vacant": To be developed only as a new automobile dealership "As improved": Present Use Highest and Best • Use for Both Tenant and Owner: Valuation Introduction Continued use by Mossy Nissan There are three conventional methods that can be used to estimate value of real property. These are the Sales Comparison Approach, the Cost Approach, and the Income Approach. The appraiser used all three Approaches to Value the land and the Improvements. The appraiser considered these approaches to be the best indicators of fair market value of the interests acquired. Sales Comparison Approach When using the Sales Comparison Approach the appraiser estimates the fair market value of the property by comparing the sales price of recent transactions involving similar properties, by analyzing the comparables for differences from the subject property. In this case the transactions attached hereto are considered to be the best indicators of value. Other Comparables Used in conjunction with the improved comparable sales are: 1. Hyundai/Subaru Dealership: 8118 Clairemont Mesa Blvd., San Diego (1) 9225 Clairemont Mesa Blvd., San Diego (2.061 Acres) (2) 8330 Engineer Rd., San Diego (2.74 Acres) (3) South West Corner of Ruffin Rd & Green Craig, San Diego (4.61 Acres) 2. Ford: 4570 Mission Bay Drive, San Diego (1) 4654 De Soto Street, San Diego (2.52 Acres) (2) '1190 Morena Blvd., San Diego (6.19 Acres) (3) 1865 Hotel Circle South, San Diego (3.44 Acres) 3. Tovota: 8340 Buckthorn Street, San Diego (1) 9225 Clairemont Mesa Blvd. (2.061 Acres) (2) 8330 Engineer Road (2.74 Acres) (3) South West Comer of Ruffin Rd & Green Craig, San Diego (4.61 Acres) Concluded Value of Subject Building: $35.00 per square foot x 42,582=$1,4903.70 Concluded Value of Land Sales: $28.00 per square foot x 197,326 sft = $5,525,000 Total: $7,015,370.00 Rounded: $7,015,000.00 Improvement Information Introduction: The subject property is presently improved with a showroom building containing a showroom, offices, common areas, parts department, parts storage and three service buildings. Building Sizes: Date Building A Constructed Areas Building No. 1 (Northeast) 1981 Offices & Showroom 11,652 6,952 Service Bay Area 4,700 Building No. 2 (Middle East) 1974 Offices & Showroom 11,366 6,466 Service Bay Area 4,900 Building No. 3 (South) 1974 Offices & Showroom 12,163 3,451 Service Bay Area 8,712 Building No. 4 (West) 1974 Offices & Showroom 7,401 Service Bay Area Total Area Under Roof 0 7,401 42,582 Offices & Showroom Service Bay Area 16,869 25,713 Land Area Acres Sq. Ft. APN 562-340-47 1.240 54,014 APN 562-340-48 1.240 54,014 Totals 4.530 197,326 Land to Building Ratio 4.634 Parking: Age & Condition: Typical and adequate for use. 1974 to 1981. The buildings are in average condition. Classification/Quality: Average/Average Effective Age: 25 years (weighted average) Remaining Economic Life: 20 years Functional Utility: Good as a car dealership facility II. COST APPROACH Quality Average DIRECT COSTS OF CONSTRUCTION Site Improvements $394,652 Site Size in SF 197,326 Cost Per SF of Land Area $2.00 Building Improvements $2,623,3Q7 Building Size in SF 42,582 Cost per SF of Building Area $61.61 This is based on quality of roof top parking Total Direct Costs of Construction $3,017,959 DEVELOPER'S PROFIT 6.0% $203,132 TOTAL COSTS OF NEW IMPROVEMENTS $3,385,530 Less: DEPRECIATION by Capitalization Physical Depreciation $846,382 Curable 0.0% Incurable 25.0% Functional Obsolescence $1,015,659 Curable & Incurable 30.0% External Obsolescence Incurable $0 0.0% Total Depreciation $1,862,041 DEPRECIATED VALUE Per SF of Building $1,523,488 $35.78 Plus: LAND VALUE $5,525,000 Per SF of Building $129.75 (See attached Land Comparables) INDICATED MARKET VALUE Adjustments $7,048,488 $0 INDICATED MARKET VALUE "As Is" $7,048,488 Upon Reaching Stabilized Occupancy Rounded $7,050,000 Per SF Bldg $165.56 Taxable Land Value (Fee Only) 55,525,000 Length of Construction in Years 0.75 Taxable Improvement Value Percent of Total costs of Improvements 500.092,765 .0% Total Taxable Value During Construction Time Tax Rate $7,217,765 RE Taxes During Construction 1.442% $104,080 III. INCOME APPROACH Total Building Area Land Area POTENTIAL GROSS INCOME Rental Income 42,582 SF 197,326 SF Annual Rent Auto Dealershihp $61,750 Per Mo $741,000 $1.450 Per SF of Building $0.313 Per SF of Land (See attached Rental Comparables) Reimbursements Less: VACANCY Auto Dealership % 5.0% $144,739 Annual $37,050 $885,739 $37,05.0 Equals: EFFECTIVE GROSS INCOME Less: EXPENSES Reimbursable Expenses Real Estate Taxes Direct Assessments Total Insurance • Maintenance Utilities 1.44200% Annual $102,157 $100,347 $1,810 $0.25 Per SF per YR $10,646 $0.60 Per SF per YR $25,549 $0.15 Per SF per YR $6,387 Non -reimbursable Expenses Miscellaneous 1.0% Management Fees- % of EGI Inc. 2.0% Reserves 0.0% NET OPERATING INCOME Divided By: CAPITALIZATION RATE Equals: MARKET VALUE "As Is" $25,461 $16,974 $0 Rounded REMARK: The rent cap rate per property owners The Cap Rate without expenses or vacancy from derived value VALUE CONCLUSIONS -Executive Summary (Coned) Property Improvement Size (SF) Land Size (SF) Cost Approach Sales Approach Income Approach Concluded Value Per SF of Building Per SF of Land Nissan 42,582 197,326 $7,050,000 $7,015,000 $6,900,000 $7,000,000 $164.39 $35.47 $848,689 $170,199 $678,489 9.75% $6,958,865 $6,960,000 12.73% Location Comparable Land Sales Summary of Vacant Land Sales • Sale City No. .Man 1. 2729 National City Blvd. National City, CA SD 1309-13 2. 2501 National City Blvd. National City, CA SD 1309-H3 3. 3035 East 8` St National City. CA SD 1290-C7 4 . Otay Lakes E of St Clair Dr. National City, CA SD 1309-.13 5. 8330 Engineer Road San Diego, CA SD 1249-C2 6. 8330 Engineer Road San Diego, CA SD 1249-C2 7. 9190 Clairemont Mesa Blvd. San Diego, CA SD 1249-DI 8. Ruffin Road San Diego, CA SD 1249-E2 Net SF Date Frontages 6-Apr-01 35,283 Nat'l. City Blvd. 30-Apr-99 18,400 Nat'l. City Blvd. 27-Oct-04 19,166 8° East and Rachael. 9-Sep-04 192,970 Otay Lakes and St Clair. 2-Apr-02 122,404 Engineer Rd. & Kearny Mesa 13=]an-04 122,404 Engineer Rd. & Kearny Mesa 1-Dec-04 117,176 Clairemont Mesa Blvd. & Overland Ave. 8-Feb-05 102,366 Ruffin Road. & Kearny Mesa Zoning .Intended Use CA Auto Dealership CA Auto Dealership CA Commercial CA Commercial M-1B Auto dealership M-IB Auto dealership M Industrial Price Adj Imorov, Per SF Terms $27.49 Cash to Seller $23.10 Cash to Seller $23.48 Cash to Seller $23.52 Cash to Seller $37.78 Cash to Seller $43.04 Cash to Seller $47.79 Cash to Seller IL-2-1 • $31.36 Auto dealership Cash to Seller Location Sale. City No. Map Summary of Vacant Land Sales Net SF Date Frontages 9. 3600 East Foothill Blvd. 4-Feb-05 Pasadena, CA LA 566-H4 10. Auto Ctr. w/o Valencia Blvd. 3-Nov-04 Valencia, CA. LA 4550-G2 11. 1333 East 223" St. Carson, CA LA 764-F7 12. 5150 W. Rosecrans Ave. Hawthorne, CA LA 733-B4 239,580 East Foothill & 1-210 206.779 Auto Ctr & Valencia Blvd 27-May-04 273,784 Santa Margarita 27-Mar-02 315,347 Rosecrans Oeean Gat e Zoning Intended' Use Price Adi Imnrov. Per SF Terms MG1, Pasadena $35.90 Toyota Auto dealership Cash to Sella C3-A25, County • $26.02 Auto dealership ML, Carson Auto dealership M1 Auto dealership Cash to Seller . $22.10 Cash to Seller • $33.22 Cash to Sella IDENTIFICA TI ON ProPerry Type Street City Map Location APN Document No. Rights DESCRIPTION Net Area Acres Square Feet Frontage Shape Topography by Utilities Street Orientation Zoning H/B Use Improvements SALES INFORMATION Sale Date • Sales Price Price Per SF (net area) Terns Exposure Time Escrow Period Time Held by Seller Intended Use Seller/Type Buyer/Type VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Summary of Land Sales Comparable No. 1 Land & building 2729 National City Blvd. National City, CA SD 1309-J3 562-100-13 207993 Fee Simple 0.810 35,283 National City Blvd. & 28th St. RectanLevel gular National City Blvd. & 28th St. All to site Corner , CA Auto Dealership 3,720 SF building 6-Apr-01 $1,100,000 $31.18 ($27.49 Adj.) Cash to Seller 4 months 1.5 months 3 years Part of new dealership Diaz-Kope/User John Ball/User John Ball/Buyer Ball Enterprise (619) 474-6431 John Slagle Sep-01 The estimated building value is $35.00/SF. Hence, the adjusted land value is $27.49/SF. Comparable No. 2 Land & building 2501 National City Blvd. National City, CA SD 1309-H3 562-031-14 291123 Fee Simple 0.422 18,400 National City Blvd. & 26th St. Rectangular Level National City Blvd. & 26th St. All to site Corner CA Auto Dealership Small office 30-Apr-99 $425,000 $23.10 Cash to Seller 12 months 3 months NAv Part of new dealership Northern Tr Bank/Foreclosure Richard McCune/User Richard McCune/Buyer McCune Auto (619) 226-6544 John Slagle Mar-01 Bank sale. Building added no value. No adjustment is made to sales price. IDENTIFICATION Property Type Street City Map Location APN Document No. Rights DESCRIPTION Net Area Acres Square Feet Frontage Shape Topography Access Utilities Street Orientation Zoning H/B Use Improvements SALES INFORMATION Sale Date Sales Price Price Per SF (net area) Temps Exposure Time Escrow Period Time Held by Seller Intended Use Seller/Type Buyer/Type VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Summary of Land Sales Comparable No. 3 Commercial Land • 3109 East 8th St. National City, CA SD 1290-C7 554-180-04 & 05 1018023 0.440 19,166 8th Street & Rachael Ave. Rectangular Level 8th Street & Rachael Ave. Corner CA Commercial None 27-Oct-04 $450,000 $23.48 Cash to Seller NAv 2 months NAv Jose Melia et al / Investor Venture One Mtg / Developer Venture One Mortgage Venture One Mortgage (619) 474-4200 John Slagle May-05 Comparable No. 4 Commercial Land Otay Lakes East of Clair Dr. Chula Vista, CA SD 1311-E5 595-070-49 & 55 0857284 4.430 192,970 Otay Lakes & St Clair Dr. Triangular N/A Otay Lakes & St Clair Dr. Comer CA Commercial None 9-Sep-04 $4,538,903 $23.52 Cash to Seller 3 months 9 months Construct LA Fitness EastLake Co / Developer LAF Partners / Developer Michael Seiber / Banker Floch & Avoyer (619) 3984674 John Slagle May-05 IDENTIFICATION Property Type Street City Map Location APN Document No. Rights DESCRIPTION Net Area Acres Square Feet Frontage Shape Topography Access Utilities Street Orientation Zoning H/B Use Improvements SALES INFORMATION Sale Date Sales Price Price Per SF (net area) Terms Exposure Time Escrow Period Time Held by Seller Intended Use SelleriType Buyer/Type VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Summary of Land Sales Comparable No. 5 Commercial Land 8330 Engineer Rd. San Diego, CA 92111 SD 1249-C2 356-212-09. 13 & 16 275872 Fee Simple 2.810 122,404 Engineer Rd. & Kearny Mesa Irregular Level Engineer Rd. All to site Corner M-1B Auto dealership None 2-Apr-02 $4,625,000 $37.78 Cash to Seller 2 months 6 months Over 3 years Toyota dealership Station Venture Operations/ Investor Automotive Group Realty/ Developer Randy LaChance, broker Voit Commercial 858-453-0505 John Slagle Oct-03 Comparable No. 6 Commercial Land 8330 Engineer Rd. San Diego, CA 92111 SD 1249-C2 356-212-09, 13, 16 0024536 Fee Simple 2.810 122,404 Engineer Rd. & Kearny Mesa Rd. Irregular Level Engineer Rd. & Kearny Mesa Rd. All to site Interior M-1B, San Diego Auto Dealership None 13-Jan-04 $5,268,490 $43.04 Cash to Seller NAp 1.5 months 3 years To use as parking lot for Mercedes Benz Automotive Group Realty/Investor Car Kearny Land/User Lee Toolson, buyer Car Kearny Land, LLC (858) 499-8732 John Slagle May-05 IDENTIFICATION Property Type Street City Map Location APN Document No. Rights DESCRIPTION Net Area Amos Square Feet Frontage Shape Topography Access Utilities Street Orientation Zoning HB Use Improvements SALES INFORMATION Sale Date Sales Price Price Per SF (net area) Terms Exposure Time Escrow Period Time Held by Seller Intended Use Seller/Type Buyer/Type VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Suinmary of Land Sales Comparable No. 7 Commercial Land 9190 Clairemont Mesa Blvd. San Diego, CA 92123 SD 1249-D1 369-100-01 1130845 Fee Simple 2.690 117,176 Clairemont Mesa Blvd. & Overland Ave. Irregular Level Clairemont Mesa Blvd. & Overland Ave. All to site Interior M, San Diego Commercial None 1-Dec-04 $5,600,000 $47:79 Cash to Seller NAp 3 months 3 years To hold for development Trepte Industrial Park/Investor San Diego Gas & Electric/User Jim Seifert, buyer San Diego Gas & Electric (619)696-2000. John Slagle May-05 Comparable No. 8 Commercial Land Ruffin Rd. San Diego, CA 92123 SD 1249-E2 369-181-18,19 0104379 Fee simple 2.350 102,366 Ruffin Rd. Irregular Level Ruffin Rd. All to site Interior IL-2-1, San Diego Commercial None 8-Feb-05 $3,210,500 $31.36 Cash to Seller 2 months 2.5 months Over 3 years Medical/Office Condos American National Red Cross/Investor Ruffin Partners/User Chuck Wasker, broker IPC Commercial Real Estate 858-450-3000 John Slagle May-05 IDENTIFICATION Property Type Street City Map Location APN Document No. Rights DESCRIPTION Net Area Acres Square Feet Frontage Shape Topography Access Utilities Street Orientation Zoning H/B Use Improvements SALES INFORMATION Sale Date Sales Prix Price Per SF (net area) Teens Exposure Time Escrow Period Time Held by Seller Intended Use Seller/Type Buyer/Type VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Summary of Land Sales Comparable No. 9 Comparable No. 10 • Commercial Land 3600 East Foothill Blvd Pasadena, CA 91107 LA 566-H4 5757-029-047 267327 Fee Simple 5.500 239,580 East Foothill Irregular Level Foothill Blvd & 1-210 All to Site Comer MG1, Pasadena Commercial None -at -Close 4-Feb-05 $8,600,000 $35.90 Cash to Seller 2 months 3 months Over Three Years Toyota Auto Dealership Air Logistics / User Symes Properties/Developer William Symes / Patemer Symes Properties GP (626) 795-3381 John Slagle. May-05 Auto Dealership Land Auto Ctr. West of Valencia Blvd Valencia, CA 91355 LA 4550-G2 28114367-017 2845490 Fee Simple 2.830 123,275 Auto Center Irregular Level Auto Center Ct &Valencia Blvd All to Site Interior C3-A25, County Commercial None 3-Nov-04 $3,207,500 $26.02 Cash to Seller 12 months 4 months Over Three Years Auto Dealership Newhand Land / Investor UCN / Developer Morris Schrage / Pres UCN Partners LP (818) 769-8100 John Slagle May-05 IDENTIFICATION Street Type City Map Location APN Document No. Rights DESCRIPTION Net Area Acres Square Feet Frontage Shape Topography Access Utilities Street Orientation Zoning HB Use Improvements SALES INFORMATION Sale Date Sales Price Price Per SF (net area) Terms Exposure Time Escrow Period Time Held by Seller Intended Use Seller/Type Buyer/rype VERIFICATION Source/Position Company Phone By Whom Date COMMENTS Summary of Land Sales Comparable No.11 Commercial Land 1333 East 223'd St. Carson, CA 90745 LA 764-F7 7615-038-015-t1u.u-018 7315-038-021-thru-024 1360933 Fee Simple 6.285 273,784 223rd St. & Lucerne St. Inegular Level 223" St. & Lucerne St. All to Site Corner ML, Carson Commercial None 27-May-04 $6,050,000 $22.10 Cash to Seller NAp 6 months Over Three Years Expand Toyota Auto Dealership Watson Land / Investor Carson Redevelop / City Ronald E Winkler Carson Redevelopment Agency (310)952-1764 John Slagle May-05 Comparable No. 12 Vacant land 5150 W. Rosecrans Ave. Hawthorne, CA 90701 LA. 733-B4 . 4149-001-122 1205148 Fee Simple 7.24 315,347 Rosecrans, Ocean Gate Irregular Level Rosecrans, Ocean Gate All to site Corner M1, Hawthorne Commercial None 27-Mar-02 $10,478,000 $33.22 Cash to Seller 6 months 3 months Over 3 years Ford dealership Mission-Oceangate/Investor Oceangate Properties/User Steve Wood, buyer South Bay Ford 562-790-3673 John Slagle Jan-03 a trfrppflo M1 1 9 131; Y lifix : 81 + 1' 0.E itrIblifig w 1 ;i if i a Y M w v la ER ype of Dealership bat Street City Zip Map uyer eller unseat Number ad Antis Acreage -Usable • Square Peet ending Areas ad to Building Ratio ear Buit/Remod ales Price Price/SF/Bldg Area F/Laod Area red Land Value/SF mated Land Value provemeal Value Improv Value/SF of Bldg Area operty Rights Percent Adjustment dittoed Sales Price/SF of Bldg chid Percent Adjustment djusted Sales Price/SF of Bag ouditlm of Sale Percent Adjustment djusted Sales Price/SF of Bldg ate of Sale ate of Appraisal anpe in Market Conditions djusted Sales Price/SF of Bldg Physical Characteristics Loudon Percent Adjustment Effective Age Percent Adjustment Quality & Condition Percent Adjustment Size Percent Adjustment Utility Percent Adjustment Other Percent Adjustment Net Physical Char Adjmts Adjusted Sales Price Per Sq Ft of Bldg Area erificatlon By Whom Phone Comparable Improved Sales Subject Macy Niaaa MO Medina City 11 National City 91950 SD 1309-J3 NAv NAv NAv 4-53 197.326 42,582 4.63 1974/1981 NAp NAp NAp S28.00 35,525,000 NAv NAv Pee Simple None None NAp NAp flood Average Average None NAp 30-Apr.0 25 42,58 1 Hyundai Subaru site a.,..... tte. Sao Diego 92111 SD 1249-B I Chart Poems art nrahy Corp 1500910 3 130,660 16, 7. 1974 S3,690,000 S221.57 328.24 325.00 $3,267,000 $423,000 S25.40 Pee Simple/User 0.096 S25-40 S.1w 0.. S25.40 0.0% $25.40 23-Dec-03 30-Apr-0S 0.0% S25.40 Equivalent 0.0% 25 0.0% Equivalent 0.0% 16,654 0.0% Average Equivalent 0.0% 0.0% 0.0% S25.40 Buyer Chuck Peterson 916-353-2000 2 3 Honda Nene Vacant Sirs C.r Coney Dr 2729 NNI.ea111 Carlsbad City 92083 9 SD 1126-H2 SD 1309 J3 Mem Grow John D.5.1 S.YB.. plan R.b.. Dier-gWe 321046 207993 1.75 76,230 14 5 1989 S3,200,000 S220.69 S41.98 S25.00 S1,905,750 S 1,294,250 S89.26 Pee Simple/User OD% S89.26 Cat to Sala Nona 0.0% $8926 OD% S8926 24-Mar-03 30-Apr-05 0.0% S8926 0.81 33,284 3, 9.48 1985 S1,100.000 $295.70 S31.18 S25.00 $882,090 S217,910 358.58 Pee Simple/User 0-0096 358.58 C.48 to Seller ono% 358.58 es -25.00% S43.93 6-Apr-01 30-Apr-05 0.0% S43.93 Equivalent trivalent 0.0% 0.0 10 20 -15.0% -5.0% Superior Inferior -10.0% 10.0 14 rr 3,720 0.0% O. Superior Equivalent • -10.0% 0.0 Equivalent None 0.0% -35.0% 0.0 5.0% 558.02 $46.13 Buyer Robert Hoehn 760438-1818 Buyer John D. Ball II 619-474-6431 Comparable Improved Sales NUMBER . 4 5 Minimum Maximum Average's Median Type of Dealership Lecadult Street City Zip Map Buyer Seller Document Number Land Area Acreage -Usable Square Feat Building Arew Laud to Bu0ding Ratio Year Boft/Remod Sides Price Ford 4370 Minion Bay Or San Diego 92109 SD 1087-G6 Lyons Realty Bard Leasing Deed Co 452325 .3.48 151,589 24.280 6.24 N Av S4,441.500 Toyota e340 Bockhwe St Son Diego 92111 SD 1249-C2 a, Bas u y LLC C Td.Ci y lo..i. jtxe - 24182 4.06 176,853 67,288 2.63 2003 S11,597,000 Minimum Maximum S295.70 Maximum. S93-50 Maxhnum S9350 Maximum S58.02 Average's 5218.65 Average's S62.K Average's $5933 Average's 54437 Median 8220.69 . Median 558 58 Median 54537 Median $46.13 Price/SF/Bldg Area 5182.93 517235 S172.35 Price/SF/Land Area Estimated Land Value/SF Estimated Land Value Improvement Value S2930 S22.00 S3,334.954 51.106.546 36557 S30.00 S5,305,590 56,291,410 Minimum Improv Value/SF of Bldg Area 34557 S93-50 525.40 Property Right Percent Adjdetmo t Adjusted Sales Price/SF of Bldg Financing Percent Adjustment Adjusted Sales Price/SF of Bldg Condition of Sate Percent Adjustment Adjusted Sales Price/SF of Bldg - Pee Simple/Veer 0.00% $4557 Cub b Sa ler 0.00% 545.57 None 0.00% 345.57 Fee Simple/Wet 0.00% 293.50 Cash M Sella 0.00% $93.50 None 0.00% S9350 Minimum S25.40 Minimum 525.40 Date of Sale 2-.1u1-01 13-3an-04 Date of Appraisal Change In Market Conditions 30-Apr-05 0.0% 30-Apr-05 0.0% Adjusted Sales Price/SF of Bldg 345.57 S93.50 Physical Characteristics • Location Percent Adjustment Effective Age Percent Adjustment Quality ar Condition Percent Adjustment Sim Percent Adjustment Utility Percent Adjustment Other Percent Adjustment Net Physical Char Adjmts Equivalent 0.0% 25 0.0% Equivalent 0.0% 24,280 0.0% Equivalent OA% None 0.0% 0.096 Equivalent 0.0% 1 -25.0% Superior -15.0% 67,288 0.0% Superior -10.0% None 0.096 -50.0% Adjusted Sales Price Per Sq Ft of Bldg Area $45.57 $46.75 Verification By Whom Phone . Seller 313-323-7339 Nick Siroskey 602-916-5000 Buyer David Fowler Land Value 8118 Claremont Mesa San Diego, CA Location Map APN No. Use Sales Price Terms Price/SF Date of Sale 8118 Claremont Mesa Blvd. NAp San Diego, CA 92111 23-Dec-03 SD 1249-BI 356-070-11 1. 9225 Clairemont Mesa Blvd. San Diego, CA SD 1249-DI 369-120-45 2. 8330 Engineer Road San Diego, CA SD 1249-C2 356-212-09, 13, & 16 3. SWC Ruffin Rd. & Greencraig San Diego, CA SD 1249-El 369-181-18 thru 22 $2,016,000 Cash to Seller $23.03 29-May-02 $4,625,000 Cash 10 Seller $38.75 2-Apr-02 $4,537,000 Cash to Seller $23.25 26-Jul-01 Size Characteristics Compared to Comp 3.0 acres Rectangular Corner lot Not in auto mall 2.01 acres Rectangular Interior lot Not on freeway 2.74 acres Irregular Corner lot Minor street 4.61 Irregular Corner lot Not on freeway Not in auto mall Indicated Net Land Adjustments Value NAp $25.00 Time: 0% $24.87 Location: +8% Characteristics: 0% Other: 0% Net: +8% Time: 0% $29.06 Location: 0% Characteristics: 0% Other: -25% Net: -25% Time: Location: Characteristics: Other: Net: 0% $23.25 0% 0% 0°% 0% M' Land Value of 4570 Mission Bay Drive San Diego, CA Location Map APN No. Use 4570 Mission Bay Dr. San Diego, CA 92109 SD 1248-05 1. 4654 DeSoto St. San Diego, CA SD 1248-C4 424-571-20,21 2. 1190 Morena Blvd. San Diego, CA SD 1268-E3 436-180-20 Sales Price Terms Price/SF Date of Sale NAp 2-Jul-01 $4,200,000 Cash to Seller $38.26 31-Ju1-00 $4,500,000 Cash $16.69 7-May-99 3. 1865 Hotel Circle South $3,850,000 San Diego, CA Cash SD 1268-H4 $25.69 443-040-39 3-Oct-00 Size Characteristics Compared to Comp 3.48 acres On main highway Not in auto park 2.52 acres. On main highway Not in auto park Excellent exposure 6.19 acres On main highway Not in auto park 3.44 acres On main street Not in auto park Indicated Net Land Adjustments Value NAp $25.00 Time: +4% $30.49 Location:-15% Characteristics: 0% Other. -10% Net:-21% Time: +7% $20.03 Location:+20% Characteristics: 0% Other. 0% Net:+27% Time: +4% $24.66 Location: -8% Characteristics: 0% Other. 0% • Net: -4% A Location Map APN No. Use 8340 Buckhorn St. San Diego, CA 92111 SD 1249-C2 1• 9225 Clairemont Mesa Blvd. San Diego, CA SD 1249-D1 369-120-45 • 2. 8330 Engineer Road San Diego, CA SD 1249-C2 356-212-09, 13, & 16 3. SWC Ruffin Rd. & Greencraig San Diego, CA SD 1249-E1 369-181-18 thru 22 Land Value of 8340 Buckhorn St. San Diego, CA Sales Price Terms Price/SF Date of Sale NAp 13 Jan-04 $2,016,000 Cash to Seller $23.03 29-May-02 $4,625,000 Cash to Seller $38.75 2-A -02 Pr $4,537,000 Cash to Seller $23.25 26-1ul-01 Size Characteristics Compared to Com 4.06 acres Irregular Corner lot • Not in auto mall 2.01 acres Rectangular Interior lot Not on freeway 2.74 acres Irregular Corner lot Minor street 4.61 Irregular Corner lot Not on freeway Not in auto mall Indicated Net Land Ad ustments Value NAp $30.00 Time: 0% $27.64 Location:+20% Characteristics: 0% Other .0% Net:+20% Time: 0% $31.00 Location: 0% Characteristics: 096 Other-20% Net: -20% Time:+10% $29.06 Location:+15% Characteristics: 0% Other 0% Net:+25% Summary of Value Derived from the Sales Comparison Approach Property Mossy Nissan Improvement Value Depredated $1,490,370 Size in SF 42,582 Value/SF $35.00 Land Value $5,525,000 Size of Fee Land 197,326 Value/SF $28.00 Total Market Value "As Is" $7,015,370 Total Market Value (Rounded) $7,015,000 Per SF Bldg $164.74 Per SF Fee Land $35.55 Lease Rate Based on Indicated Value At the Indicated Cap Rates Lease Rate Per Mo 558,458 Per SF of Bldg $1 37 Per SF of Land $0.30 Capitalization Rate 10.0% Lease Rate Per Mo $70,150 Per SF of Bldg $1.65 Per SF of Land $0.36 Capitalization Rate 12.0% Summary of Rent Comparables Comp. No. 1 2 3 Nance Mossy Nissan Ball Automotive Corona Location 2700 National City Blvd. 1807 National City Blvd. 1080 Pomona National City, CA National City, CA Corona, CA 91950 91950 92862 Bldg. Size Year Built 42,556 SF 1974 to 1981 1,000 SF 1970s 41,516 SF 2004 Land Area 197,326 SF 12,632 SF LTB Ratio 4.53 5.50 7 SF 2 Land Value/SF $ 25.00 $25.00 $]0.0.00 aim Date Jul-02 Mid-2000 Jun-04 T15 years 5 years 25 years One 5-yr option One 5-yr option One 5-yr option Rent/Mo. $51,934 $4,300 Rent/SF/Bldg. $1,22/M o$65,000 Rent/SF/Land $0.263 $1.30/Mo $1.572/Mo Rent Increases $1.34 $0.273 CPI per year CPI in 5th year Fixed/5 years Comments Not along freeway Not alongfreeway In auto park. Alongotiauto a 1n' auto park. Not in auto park. Good visibility. Good visibility. Good visibility. Summary of Rent Comparables Comp. No. 4 5 6 Name Kott Ford Volvo Buena Park Calabasas Volvo Location 21212 S. Avalon Blvd. 6692 Manchester Ave. 24400 Calabasas Rd Carson City, CA Buena Park, CA Calabasas, CA 90745 90621 91302 Bldg. Size 64,455 SF 21,379 SF 28,031 SF Year Built 1974 1986 2004 Land Area 383,532 SF 108,377 SF 50,736 SF LTB Ratio 5.45 5.07 1.81 Land Value/SF $35.00 $25.00 $35.00 Lease Date Feb-02 Inn-04 Dec-04 Term' 15 years 5 years 20 years Two 5-year options Two5-year options Two 5-year options Rent/Mo. $90,000 $40,500 $45,000 Rent/SF/Bldg. $1.396/Mo $1.89/Mo $1.605/Mo Rent/SF/Land $0.235 $0.374 $0.887 Rent Increases CPI in 10° year Fixed/5yrs Fixed/5yrs Comments Along freeway. Near freeway Not in auto park. Not in auto park. Good visibility. . Good visibility. Along freeway No in auto park. Good visibility. Mossy Nissan Dealership Value Year 1 2 3 From 5/1/05 5/1/06 5/1/07 To 4/30/06 4/30/07 6/30/07 Total Building Area 42,556 42,556 42,556 Total Land Area 197,326 197,326 197,326 Land Value Per SF $28.00 $28.84 - $28.98 ' Land Value $5,525,000 $5,690,750 $5,719,204 Percent Increases/Year 3.0% 3.0% Building Value Per SF $35.00 $33.60 $33.38 Building Value $1,489,460 $1,429,882 $1,420,349 Percent Change 0% -4.0% -4.0% Accum % Change Bldg -4.0% -8.0% Total Property Value $7,014,460 $7,120,632 $7,139,553 Percent Increases 1.51% 0.27% Marketing Costs 5.0% 5.0% 5.0% Reversion $6,663,737 $6,764,600 $6,782,575 Gross Income (lease Pmt) $682,280 $702,749 $120,639 Jul thru Jun $56,857 $58,562 $60,319 Percent Increases 3.0% 3.0% Estimated Annual Inflation 3.0% 3.0% Vacancy & Expenses $13,646 $14,055 $2,413 Percent of Gross Income 2.0% 2.0% 2.0% Net Income $668,635 $688,694 $118,226 Discount Rate/Yr of Rents 8.00%% 8.00% 8 00% Discount Rate of Reversion 10.00% 10.00% 10.00% PV of Cash Flows $619,106 $590,444 $100,065 Accum of PV CF $619,106 $1,209,550 $1,309,615 PV of Reversion $6,057,943 $5,590,579 $5,516,920 Market Value Leased Fee Cap Rate 9.79% Rounded I $6,830,000'Based on Value Per Sq Ft Bldg Per Sq Ft Land $6,826,535 $160.49 $34.61 INFORMATION STATEMENT This approved offer is presented in settlement of the acquisition of your property. $7,000,000 4.53 Acres The value of your property interest being purchased is based upon a market value appraisal prepared by an independent appraisal firm in accordance with accepted appraisal procedures. Where applicable, the valuation of your property is based upon an analysis of recent sales of comparable sites and similar properties in this locality with consideration given to the highest and best use for development of the property. Additionally, an income approach based on the potential fair rental for your property has been considered; along with a replacement cost approach considering the estimated depreciated cost of the improvements, together with the value of the land. Before arriving at a conclusion of value, the appraiser conducted an investigation in order to obtain the information necessary. The investigation generally includes an inspection of the property and improvements, and review of the improvements, a review of the immediate surrounding and regional influences, the property's zoning and uses permitted, a study of the highest and best use to which the property can be put, easements which may exist on the property, the availability of utilities, access and street 'improvements. The appraiser conducted interviews with knowledgeable persons, collected comparable sales data, information relating to the fair rental value of the property and the cost of reproducing the improvements on the property. The offer is the full amount believed by the Commission to be just compensation for your property. It is not less than the Commission's highest approved appraisal of the Fair Market Value of the property. Any decreases or increases in the Fair Market Value of the real property to be acquired prior to the date of the valuation caused by the public improvements or project for which the property is to be acquired, or by the likelihood that the property would be acquired for such improvement or project, other than that due to physical deterioration with the reasonable control of the owner, has been disregarded by Commission and its appraiser in making their determination of the Fair Market Value of such property. FAIR MARKET VALUE, as used in the appraisal, is "... the highest price on the date of valuation that would be agreed by a seller, being willing to sell but under no particular or urgent necessity for doing so, nor obligated to sell, and a buyer, being ready, willing and able to buy but under no particular necessity for doing so, each dealing with the full knowledge of all the uses and purposes for which the property is reasonably adaptable and available." (Section 1263.320 Code of Civil Procedure) The determination of just compensation does not reflect any consideration of or allowance for relocation assistance and payments to which you may be entitled to receive under applicable State or Federal Law of the Commissioner's agreement to pay certain settlement costs. The summary of the basis of the amount offered as just compensation is presented in compliance with State, and where applicable, Federal Law. Attached is an Appraisal Summary Statement including information pertinent to our offer to acquire the property. In the event you are the owner of a business conducted on the property being acquired by the Commission, you may be entitled to compensation for loss of goodwill, if any, if you are able to make a showing of such loss pursuant to the requirements of California Code of Civil Procedure Section 1263.510. For your information, Section 1263.510 is set out below in its entirety. (A) The owner of a business conducted on the property taken, or on the remainder if such property is part of a larger parcel, shall be compensated for loss of goodwill if the owner proves all of the following: (1) The loss is caused by the taking of the property or the injury to the remainder. (2) The loss cannot reasonably be prevented by a relocation of the business or by taking steps and adopting procedures that a reasonably prudent person would take and adopt in preserving the goodwill. (3) Compensation for the loss will not be included in payments under Section 7262 of the Government Code. (4) Compensation for the loss will not be duplicated in the compensation otherwise awarded to the owner. (B) Within the meaning of this article, "goodwill" consists of the benefits that accrue to a business as a result of its location, reputation for dependability, skill or quality, and any other circumstances resulting in probable retention of old or acquisition of new patronage. W:\Clients\CDC - Mossy Nissan (Dailey)Unformation Statement.doc COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION AGENDA OF THE CITY OF NATIONAL CITY MEETING DATE: September 13, 2005 AGENDA ITEM NO. 2 ITEM TITLE: JOINT PUBLIC HEARING ON THE PROPOSED DIS POSITION & DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION AND MOSSY NISSAN, INCORPORATED, FOR THE DEVELOPMENT OF ANEW CAR DEALERSHIP LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD PREPARED BY: Benjamin Martinez �% DEPARTMENT Community Development Commission Executive Director EXPLANATION: Mossy Nissan, Incorporated proposes to develop a new automobile dealership on a 4.53 acre site lo- cated at 2626 through 2700 National City Boulevard in the National City Mile of Cars. To facilitate de- velopment of this proposed project, a Disposition & Development 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 to provide more information on the proposed Mossy Nissan Project. A Public Notice was published in the National City Star News on August 5 and 12, 2005. /Environmental Review N/A The project is consistent with the Certified EIR for the Redevelopment Plan for National City Redevel- opment Project certified by Resolution No. 95-98 on June 20, 1995, for the National City General Plan and with the Zoning Designation of Automotive Commercial for the National City Mile of Cars and, consistent with Section 15180 of the California Environmental Quality Act Guidelines, does not require additional analysis. Financial Statement The DDA anticipates no public expenditures. STAFF RECOMMENDATION Conduct the public hearing. BOARD/COMMISSION RECOMMENDATION ,None. ATTACHMENTS (Listed Below) Resolution No. 1. Supplemental Staff Report 3. Proposed Disposition and Development Agreement 2. Public Hearing Notice 4. 33433 Summary Report 1 PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMISSION AND MOSSY NISSAN, INCORPORATED FOR THE DEVELOPMENT OF A NEW CAR DEALERSHIP LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD SUPPLEMENTAL STAFF REPORT Public Notification: Pursuant to Section 33433 of the California Health & Safety Code, a Joint Public Hearing Notice was published in the Star News on August 5 and 12, 2005. Fiscal Impact: Pursuant to Section 33433 of the California Health & Safety Code, a financial summary report has been prepared to evaluate the financial considerations under the terms of the proposed Disposition and Development Agreement, as well as the economic benefits of the proposed project to both the Community Development Commission and National City. A copy of the completed 33433 Financial Report has been attached for review. The Disposition and Development Agreement provides that Mossy Nissan, Inc. will purchase the site for $7 Million plus expenses incurred by the Community Development Commission in acquiring the property. The price is the Fair Market Value as determined by an independent appraisal dated May 27, 2005. There is no subsidy involved in this project. It is anticipated that $152,000 in increased real estate taxes will be generated per year to fund the following: • CDC: $115,447 • Affordable Housing: $30,400 • Office of Education: $3,220 • Southwestern College: $2,933 The project is expected to yield additional sales tax revenues of $300,000 annually to the City of National City. Environmental Impact: The project is consistent with the Certified EIR for the Redevelopment Plan for National City Redevelopment Project certified by Resolution No. 95-98 on June 20, 1995, for the National City General Plan and with the Zoning Designation of Automotive Commercial for the National City Mile of Cars and, consistent with Section 15180 of the California Environmental Quality Act Guidelines, does not require additional analysis. 1 Attachment 1 Property Description: The subject property is located at 2626 through 2700 National City Boulevard in the National City Mile of Cars. The site is comprised of two (2) parcels containing a total of approximately 4.53 acres. The San Diego County Assessor's Parcel Numbers for the subject property are 562- 340-47 and 562-340-48. Project Description: Mossy Nissan, Incorporated proposes to develop a new Nissan Auto Dealership on the site of the existing Mossy Nissan Dealership in the National City Mile of Cars. The project will include the demolition of most of the existing structure and redevelopment of a $3 million new facility. Designs for the project will be finalized and submitted over the Planning Counter for review. Financial Considerations of the Proposed DDA: The fair market value of the subject property, according to the Community Development Commission's appraiser, is $7 Million ($7,000,000). The price to be paid to the Community Development Commission for the property by Mossy Nissan, Incorporated shall be: (1) in the event the property is acquired by the Community Development Commission through a negotiated purchase, the actual price paid by the Community Development Commission for the property, plus any other acquisition costs incurred to that date, or (2) in the event the property is acquired by the Community Development Commission through eminent domain proceedings, the amount of just compensation awarded to the owner of the property, plus the amount of acquisition costs incurred by the Community Development Commission. Economic Benefits: Health and Safety Code Section 33433 Report: On August 8, 2005, the CDC's redevelopment financial consultant (KMA) completed a financial summary report, pursuant to Section 33433 of the California Health & Safety Code. The purpose of this report is to evaluate the financial considerations in order to determine economic benefits of the CDC's participation in this proposed DDA. A copy of this 33433 Financial Summary Report is attached for your review. It is anticipated that $152,000 in increased real estate taxes will be generated per year to fund the following: ■ CDC: $115,447 • Affordable Housing: $30,400 • Office of Education: $3,220 • Southwestern College: $2,933 The project is expected to yield additional sales tax revenues of $300,000 annually to the City of National City. 2 NOTICE OF A JOINT PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AND THE COMMUNITY DEVELOPMENT COMMISSION ON THE PROPOSED MOSSY NISSAN PROJECT The City Council of the City of National City and the National City Community Development Commission (CDC) will hold a Joint Public Hearing after the hour of 6:00 p.m. Tuesday, August 23, 2005, in the City Council Chambers, Civic Center, 1243 National City Boulevard, National City, on the proposed Disposition & Development Agreement (DDA) and Owner Participation Agreement for the proposed Mossy Nissan project. Any person interested in this matter may appear at the above time and place and be heard. Mossy Nissan, Inc., is proposing the development of a new automobile dealership on 4.53 acres located at 2626 and 2700 National City Boulevard within the National City Mile of Cars. The dealership will be constructed to accommodate anticipated increased sales volume forecasts of Nissan Motors for the next five years and beyond. The purpose of the Joint Public Hearing is 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 sale of land proposed in a Disposition & Development Agreement (DDA) by and between the CDC and Mossy Nissan, Inc., for the real property located at 2626 and 2700 National City Boulevard. Said land is proposed to be sold for the development of the Mossy Nissan project. A copy of the proposed DDA, a summary report pertaining to the sale of real property pursuant to the proposed Agreement, and other documentation required by Section 33445 of the California Health & Safety Code for the proposed Mossy Nissan project may be reviewed at the office of the Community Development Commission, at 140 East 12th Street, Suite B, National City, and the City Clerk's Office, 1243 National City Blvd., National City as of August 9, 2005. 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., August 17, 2005. Any questions regarding this matter should be directed to Patricia Beard at (619) 336-4250. 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. MICHAEL DALLA City Clerk PUBLISHED IN THE NATIONAL CITY STAR NEWS, Friday, August 5 and August 12, 2005 Attachment 2 DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and MOSSY NISSAN, INC. Attachment 3 017.262230.5 Attachment No. 1 Site Map Attachment No. 2 Site Legal Description Attachment No. 3 Grant Deed Attachment No. 4 Schedule of Performance Attachment No. 5 Scope of Development Attachment No. 6 Release of Construction Covenants Attachment No. 7 Operating Covenant 017.2E12230.5 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of August 23, 2005, by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), on the one hand, and MOSSY NISSAN, INC., a California corporation (the "Developer") on the other. RECITALS The following recitals are a substantive part of this Agreement: A. In furtherance of the objectives of the California Community Redevelopment Law, the CDC desires to redevelop a certain approximately 4.53 acre portion of the National City Redevelopment Project (the "Redevelopment Project") located at 2626 and 2700 National City Boulevard (APNs 562-340-47 and -48) (the "Property" or the "Site", more fully described below) in the City of National City (the "City"). B. The CDC and Developer desire by this Agreement for the Developer to redevelop and remodel upon the Property a new automobile sales, service and repair facility (the "Project"). C. The CDC and Developer (singularly, a `Warty"; jointly the "Parties") desire to cause the Property to be redeveloped in order to aid in alleviating blighted conditions and to stimulate economic development in the Redevelopment Project area. D. In order to accomplish the successful completion of the Project, subject to the terms and conditions of this Agreement, the Agency may acquire the Property and convey the Property to Developer in order to enable Developer to construct the Project. E. The completion of the Project is in the vital and best interest of the City and the 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 has been undertaken. NOW, THEREFORE, the CDC and the Developer agree as follows: 100. DEFINITIONS "Acquisition Costs"is defined in Section 203. "Agreement" means this Disposition and Development Agreement between the CDC and the. Developer. "Attachments" to this Agreement are integral parts of the Agreement and are as enforceable as if set forth in the body of the Agreement. 017.262230.5 "Basic Concept Drawings" means the initial drawings for the Project showing site plans, elevations and landscape features for the Project that have been submitted by the Developer and approved by the CDC concurrently with the approval of this Agreement. "CDC" or "Agency" 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 for the benefit of the CDC, as set forth in Section 208.1 hereof. "City" means the City of City of National City, a California municipal corporation. "Closing" means the close of Escrow for the Conveyance of the Property from the CDC to the Developer, as set forth in Section 205.4 hereof. "Closing Date" means the date of the Closing, as set forth in Section 205.4 hereof. "Condition of Title" is defined in Section 206 hereof. "Construction Drawings" means the detailed construction drawings and plans to be prepared with respect to the Improvements, as set forth in Section 302.2 hereof. "Conveyance"means the conveyance of the Property by the CDC 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. "Developer" means Mossy Nissan, Inc., a California corporation or its assignee pursuant to Section 603.1. "Developer's Conditions Precedent" means the conditions precedent to the Closing for the benefit of the Developer, as set forth in Section 208.2. "Developer Deposits" is defined in Section 202 hereof. "Enforced Delay" is defined in Section 602. "Environmental Laws" means shall mean any and all federal, state and local statutes, ordinances, orders, rules, regulations, guidance documents, judgments, governmental authorizations, or any other requii eii►ents of governmental authorities presently relating to the release, generation, use, handling, treatment, storage, transportation or disposal of Hazardous 2 017.262230.5 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. "Escrow" is defined in Section 205 hereof. "Escrow Costs" is defined in Section 205.1 hereof. "Escrow Holder" is defined in Section 205 hereof. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of San Diego, the City, or any other political subdivision in which the Property is located, and of any other political subdivision, CDC or instrumentality exercising jurisdiction over the CDC, the Developer or the Property. "Grant Deed" means the grant deed for the conveyance of the Property from the CDC to the Developer, in the form of Attachment No. 3 hereto which is incorporated herein by reference. "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 Governmental 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. 017.262230.5 3 "Improvements" means the improvements to be constructed by the Developer upon the Property, all more particularly described in Section 301.1 hereof and in the Scope of Development. "Notice" means a notice in the form prescribed by Section 601 hereof. "Operating Covenant" means the Operating Covenant in the form of Attachment No. 7 hereto which is incorporated herein by reference. "Outside Date"means the last date the Closing shall occur, as set forth in Section 205.4 hereof. "Parties" means the CDC and the Developer. "Permitted Exceptions" means the following exceptions to title with respect to the Property: (1) applicable building and zoning laws and regulations; (2) the provisions of this Agreement; (3) the Operating Covenant; (4) any lien for current taxes or taxes accrued subsequent to Closing; (5) such other conditions, covenants, restrictions or easements of record as may be expressly approved by the Developer in writing; and (6) the liens, encumbrances, conditions and other matters set forth in the Report approved by Developer pursuant to Section 206. "Possession Deposit" is defined in Section 202. "Project" means the Property and the Improvements. "Property" or "Site" means the approximately 4.53 acre portion of the Redevelopment Project located at 2626 and 2700 National City Boulevard in the City, which is legally described in the Property Legal Description and depicted on the Site Map. "Property Legal Description" means the legal description of the Property in Attachment No. 2. "Purchase Price" means the price to be paid by the Developer to the CDC in consideration for the Conveyance of fee title to the Property, as set forth in Section 204.2 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. 4 017.262230.5 "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 309 hereof, in the form of Attachment No. 6 hereto which is incorporated herein. "Report" means the preliminary title report, as described in Section 206 hereof. "Schedule of Performance" means the Schedule of Performance in Attachment No. 4, 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 Director. Unless 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 in Attachment No. 5, that 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 Map" means the depiction of the Property in Attachment No. 1. "Title Company" is defined in Section 206 hereof. "Title Policy" is defined in Section 207 hereof. "Transfer" is defined in Section 603 hereof. "Triple Net Lease" is defined in Section 203.3 hereof. 200. ACQUISITION AND CONVEYANCE OF THE SITE 201. Developer Efforts to Acquire Property. The Developer has attempted to acquire the Property. During the time after Developer executes this Agreement and the time at which the CDC may approve this Agreement, the Developer shall continue to negotiate for the acquisition of the Property in good faith with the owners of the Property. CDC will reasonably determine that Developer has made such good faith efforts to acquire the Property. Developer, to the extent its negotiations are unsuccessful with respect to the acquisition of the Property, desires CDC to assist in the acquisition of the Property and to consider the possible use of its eminent domain powers. Should the CDC acquire the Property, Developer desires the CDC to transfer the Property to it. In connection with any such acquisition, CDC shall determine in good faith and within its sole, absolute and independent discretion, whether it will or will not adopt a resolution of necessity and proceed with eminent domain. Developer acknowledges and agrees that the CDC has not pre -committed itself to commencement of eminent domain proceedings with respect to the Property and the CDC reserves the right, in its sole and absolute discretion, to approve or disapprove a resolution of necessity in connection therewith. Unless and until CDC decides to utilize its power of eminent domain as provided in Section 202, this Agreement does 5 017.262230.5 not bind the CDC to exercise its power of eminent domain, and CDC's failure to exercise said power shall not constitute a default by CDC hereunder. 202. Acquisition by Eminent Domain. If the CDC in its absolute and sole discretion decides, following appropriate hearings and evidence presented, to utilize its eminent domain power for the acquisition of the Property, provided Developer is timely making all Developer Deposits and paying all Acquisition Costs as set forth below in this Agreement, CDC will use its best efforts and diligently follow the Eminent Domain Law of the State of California and not voluntarily terminate or stop such proceeding. Developer shall be responsible for and shall advance to CDC, from time to time, upon written request of the CDC, all sums necessary for the completion of such proceedings (the "Developer Deposits"), including, without limitation, all Acquisition Costs, including, but not limited to, court costs, deposits necessary to obtain orders for pre judgment possession (the "Possession Deposit"), the amount of just compensation set forth in any final judgment of condemnation, payments for loss of business goodwill or pre - condemnation damages, relocation expenses and costs, any interest awarded by the court to the Property owner (net of any interest received by the CDC on the Possession Deposit, if any), title and litigation guarantees and any and all associated costs. The CDC shall use (again assuming it has decided after full and fair hearings to proceed with the acquisition) its best efforts to pro rate taxes, assessments, and other charges applicable to the Property as of the date of CDC's acquisition. Any advances requested by CDC shall be tendered by Developer by wire transfer or cashiers check within five (5) business days of receipt of CDC's written demand. 203. Acquisition Costs. For the purposes of this Agreement the term "Acquisition Costs" shall refer to any and all costs and expenses set forth in Section 202 above (whether previously advanced by Developer or not) as well as all other costs and expenses contemplated as being the responsibility of the Developer under this Agreement. Acquisitions Costs shall also include any and all costs and expenses of CDC in acquiring or attempting to acquire the Property through a negotiated purchase and enforcing its right to require Developer Deposits and supplements thereto pursuant to Section 202 above and this Section 203. In the event of termination of this Agreement at any time for any reason other than CDC's Default, Developer's obligation to pay Acquisition Costs shall survive the termination of this Agreement with respect to all Acquisition Costs (collectively, the "Post Termination Costs") either: (i) paid or incurred but not yet billed or paid as of such termination, or (ii) arising from (a) the subsequent abandonment of any eminent domain action as provided in Section 203.2, including, without limitation, any litigation expenses for which CDC may be responsible under California Code of Civil Procedure Section 1268.610 and/or damages under Section 1268.620 (including, but not limited to attorneys fees) and (b) any claims, actions, or other causes arising out of or related to actions taken by CDC prior to such termination. Developer hereby agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents from and against any and all claims, losses, liabilities, costs, expenses (including reasonable attomeys' fees), actions, causes of action, penalties or interest arising out of or in connection with any third party objections to CDC efforts to acquire the Property through a negotiated purchase or exercise of its power of eminent domain, including, without limitation, the adoption of any resolution of necessity or the filing of any complaint in eminent domain. If an eminent domain action is commenced, abandonment thereof sought, but the judge in such action for any reason does not allow the abandonment of the action, Developer shall be obligated to pay all awards, damages, costs and expenses awarded to the property owner in such action as "Acquisition Costs". 6 017.262230.5 Developer shall deliver to CDC all Acquisition Costs (not previously advanced by Developer) and all Post Termination Costs within thirty (30) days after written demand from the CDC. Subject to the indemnification provisions above, CDC shall bear all costs incurred by CDC regarding the Property and this Agreement up to the date hereof. In carrying out its rights and obligations pursuant to this Agreement, CDC is authorized to select and hire those consultants, appraisers, expert witnesses, legal counsel, and other professionals as CDC deems necessary to effectuate and complete its rights and obligations hereunder and under the law of the State of California. Reasonable costs incurred by CDC for such consultants, appraisers, expert witnesses, legal counsel and other professionals shall be considered part of the Acquisition Costs. The payment of such amounts by Developer to CDC for any of these costs shall be effected within thirty (30) days of the date of mailing of such invoice and/or billing. 203.1 Possession Deposit. Notwithstanding anything set forth in Section 202 above, Developer and CDC understand and agree that Developer may not be in a position to make the Possession Deposit in which event it will not be possible to secure an order of possession in any eminent domain action prior to the entry of a judgment in any such action. Accordingly, in the event CDC decides to utilize its power of eminent domain, CDC shall not file a complaint for eminent domain for the Property until Developer advises CDC that it elects to have CDC seek an order of possession prior to the entry of judgment in any such action. Developer shall make such election no later than the last date set forth therefore in the Schedule of Performance. If and when the CDC decides to utilize its power of eminent domain, and if and when Developer timely elects an order of possession in any such action prior to entry of judgment, the CDC and Developer shall reasonably cooperate with Developer's lender and the Title Company in an effort to provide Developer's lender with security provided by Developer, including without limitation, an assignment of this Agreement as security and secure title insurance coverage for Developer and/or Developer's lender in connection with any Possession Deposit sufficient to cause said lender to advance the Possession Deposit to Developer. The failure of Developer to both timely elect an order of possession and to timely make the Possession Deposit shall result in all of Developer's rights ceasing under this Agreement while all of Developer's obligations pursuant to Section 203 shall continue. Time is of the essence in connection with this Section 203.1. In the event that Developer fails to timely make the Possession Deposit and the valuation date in any eminent domain action is changed and/or lost, Developer agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents from and against any and all claims, liabilities, costs, expenses (including reasonable attorneys' fees), actions, causes of action, penalties or interest arising out of or in connection with change in or loss of the valuation date. 203.2 Option to Abandon Eminent Domain Action. If and after such time as the CDC may decide to commence a condemnation action in connection with the Property pursuant to its power of eminent domain, notwithstanding Developer's obligations pursuant to Section 202 above to pay all sums necessary for the completion of any such action, including, but not limited to, the Possession Deposit and the amount necessary to satisfy any judgment in such an action, if the judgment in such action is greater than Eight Million Dollars ($8,000,000), or at such time as it becomes apparent in the reasonable judgment of the Developer and CDC that the judgment in such an action will exceed $8,000,000, unless additional funding is then 017.262230.5 available from the CDC or other third party source, at the option of Developer, to be exercised by written notice to CDC, the CDC shall attempt to abandon the condemnation action whereupon (i) Developer shall remain liable for all Acquisition Costs and Post Termination Costs set forth above in Sections 202 and 203, and (ii) this Agreement shall terminate. 203.3 Triple Net Lease. Beginning on the date that any order for possession pursuant to California Code of Civil Procedure § § 1255.410 et seq. may become effective, or such other date that the CDC obtains possession of the Property, CDC agrees to lease the Property to Developer pursuant to a triple net lease for Ten Dollars ($10) per month rent with Developer being completely responsible for any and all costs of the Property and CDC having no obligations whatsoever in connection with any repairs or modifications or costs and expenses of the Property (the "Triple Net Lease"). Developer and CDC agree to use a modified version of the AIR Single Tenant Lease -Net fonn for the Triple Net Lease. 204. Sale and Purchase. 204.1 Purchase and Sale. If Developer is unable to acquire the Property through its own efforts and in the event that CDC, following public hearings and receiving evidence, acquires the Property either through eminent domain or otherwise, then in accordance with and subject to all of the terms, conditions and covenants of this Agreement, CDC agrees to sell and Developer agrees to buy the Property. 204.2 Purchase Price. The Purchase Price to be paid by Developer for the Property ("Purchase Price") shall be: (a) In the event the Property is acquired by CDC through a negotiated purchase, the actual price paid by CDC for the Property, plus any other Acquisition Costs incurred to that date; or (b) in the event the Property is acquired by CDC through eminent domain proceedings, the amount of just compensation awarded to the owner of the Property, plus the amount of Acquisition Costs incurred by CDC. The actual Purchase Price shall be determined in accordance with the mandates of Section 33433 of the Health and Safety Code, if applicable, and shall not be less than the fair market value of the Property. The Developer Deposits shall be applied to the Purchase Price at the close of Escrow. In the event that CDC acquires the Property through its power of eminent domain or otherwise, the provisions of the sections below shall apply. 205. Escrow. The Parties shall open escrow ("Escrow") no later than thirty (30) days after CDC acquires title to the Property with Commonwealth Land Title Company, 1455 Frazee Road, Suite 600, San Diego, California 92108 or other title company mutually agreeable to the parties ("Escrow Holder"). 205.1 Costs of Escrow. CDC shall pay the premium for a standard CLTA Title Policy as set forth in Section 207 hereof and the documentary transfer taxes, if any, due with respect to the conveyance of the Property by CDC. Developer shall pay the added cost of an ALTA Extended Owners Policy if elected by Developer plus the cost of any required ALTA survey and/or endorsements. All other usual fees, charges and costs which arise from Escrow ("Escrow Costs") shall be paid by CDC and Developer, one-half by each. 8 017.262230.5 205.2 Escrow Instructions. This Agreement constitutes the joint escrow instructions of CDC and Developer, and Escrow Holder, 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 Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and CDC will cancel its own policies, if any, after the Closing. 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 five (5) business days from deposit of the Purchase Price, the funds shall be deposited into an interest bearing account with such interest accruing to the benefit of Developer. If, in the opinion of either Party or the Escrow Holder, it is necessary or convenient in order to accomplish the Closing, 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 Conditions Precedent and the Developer's Conditions Precedent as set forth in Sections 208.1 and 208.2 have been satisfied or waived by the respective Party. Escrow Holder is instructed to release CDC's escrow closing statements and Developer's escrow closing statements to the other Party. 205.3 Authority of Escrow Holder. Escrow Holder is authorized to, and shall: (a) Pay and charge Developer and CDC for their respective shares of the Escrow Costs payable under Section 205.1 of this Agreement. (b) Disburse funds and deliver and record the Grant Deed and Operating Covenant, when both the Developer's Conditions Precedent and the CDC's Conditions Precedent have been fulfilled or waived by Developer and CDC. (c) Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. (d) Within the discretion of Escrow Holder, direct CDC 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 thereunder. CDC agrees to execute a Certificate of Non -Foreign Status and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Holder and a California Form 593-C (if applicable), on the form to be supplied by Escrow Holder. (e) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an 017.262230.5 9 IRS 1099-S form, and be responsible for withholding taxes, if any such forms as provided for or required by law. 205.4 Closing. This transaction shall close ("Closing") within thirty (30) days of the parties' satisfaction of all of CDC's and Developer's Conditions Precedent to Closing as set forth in Section 208 hereof, but in no event later than December 31, 2007 (the "Outside Date"). The Closing shall occur at the offices of Escrow Holder or other 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. 205.5 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 documents or properties, the Escrow shall not terminate until five (5) days after Escrow Holder 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 Holder is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. 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, Escrow Holder shall proceed with the Closing as soon as possible. 205.6 Closing Procedure. Escrow Holder shall close Escrow for the purchase of the Property as follows: (a) Record the Grant Deed and Operating Covenant with instructions for the Recorder of San Diego County, California to deliver the Grant Deed to Developer and Operating Covenant to the CDC. (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, and Form 593-C (if applicable) to Developer; and (e) Forward to both Developer and CDC 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. 206. Review of Title. CDC shall cause Escrow Holder ("Title Company") to deliver to Developer a standard preliminary consolidated title report ("Report") with respect to the title to the Property if Developer has not previously received a Report, together with legible copies of the documents ("Documents") underlying the exceptions ("Exceptions") set forth in the Report, within thirty (30) days from the date of this Agreement. Developer shall have the right to 10 017.262230.5 reasonably approve or disapprove the Exceptions in its sole and absolute discretion; provided, however, that Developer hereby approves the following Exceptions: (a) The Redevelopment Plan; (b) The Redevelopment Project; and (c) The lien of any non -delinquent property taxes and assessments (to be prorated at Close of Escrow. Owner shall have thirty (30) days from the date of its latest receipt of the Report and the Documents to give written notice to CDC and Escrow Holder of Developer's approval or disapproval of any such Exceptions. If Developer timely disapproves any Exceptions, CDC shall have thirty (30) days from the receipt of Developer's written notice to either cause such exceptions to be removed from the Report or provide assurance to Developer such Exceptions will be removed at or before the Closing. If CDC does not either cause the disapproved Exceptions to be removed or provide assurances thereof, Developer may terminate this Agreement. If Developer pays to CDC the Purchase Price, Developer shall be deemed to have approved the Exceptions for the Property. The Permitted Exceptions plus the Exceptions approved by Developer as provided herein shall be referred to as the "Condition of Title." CDC shall not voluntarily create any new exceptions to title following CDC's acquisition of the Property. Title to the fee shall be delivered to Developer free of all mortgages, deeds or trust, judgments and mechanics liens, not suffered or incurred by Developer. 207. Title Insurance. Concurrently with recordation of the Grant Deed from CDC to Developer conveying title to the Property, there shall be issued to Developer at Developer's election either a CLTA Owners Policy or an ALTA Extended Coverage Owner's policy of title insurance ("Title Policy"), together with such endorsements as are reasonably requested by Developer, issued by the Title Company insuring that the title to the Property is vested in Developer in the condition required by Section 206 of this Agreement. The Title Company shall provide CDC with a copy of the Title Policy. The Title Policy shall be for the amount of the Purchase Price. 208. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 208.1 CDC's Conditions of Closing. CDC's obligation to proceed with the Closing of the sale of the Site is subject to the fulfillment or waiver by CDC of each and all of the conditions precedent (a) through (f), inclusive, described below ("CDC's Conditions Precedent"), which are solely for the benefit of CDC, 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. 017.262230.5 11 (b) Execution of Documents. The Developer shall have executed any documents required hereunder and delivered such documents into Escrow, including the Operating Covenant. (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 205.1 hereof. (d) Design Approvals. The Developer shall have obtained approval by the City of the Basic Concept Drawings. (e) Insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof. (f) Financing. The CDC shall have approved acquisition financing as provided in Section 310 hereof, and such financing shall have closed and funded or be ready to close and fund upon the Closing. 208.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of the Site is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (e), inclusive, described below ("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, CDC shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of CDC contained herein shall be true and correct in all material respects. (b) Execution of Documents. The CDC shall have executed the Grant Deed and Operating Covenant and any other documents required hereunder, and delivered such documents into Escrow. (c) Review and Approval of Title. Developer shall have reviewed and approved the condition of title of the Site, as provided in Section 206 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to provide the Title Policy to Developer for the Site upon the Close of Escrow, in accordance with Section 207 hereof. Notwithstanding the foregoing, if CDC has not obtained title to the Property, but has obtained a judicial order authorizing the CDC to take possession thereof, at the Developer's option CDC shall convey and the Developer shall accept the Property if the following conditions are met: (i) The CDC delivers exclusive possession of the Property to the Developer by Grant Deed, on or prior to the time set for conveyance thereof; (ii) The right of possession which the Developer acquires from the CDC is such that Title Company will issue a policy or 12 017.262230.5 as follows: policies of title insurance acceptable to Developer's lender as to the interest conveyed by said Grant Deed subject to only those items described in Section 206; and (iii) The Developer is able to secure financing for the acquisition of the Property on the basis of said Title Policy. In connection with such title policy, CDC (if required by the Title Company) and Developer agree to provide Title Company with an indemnity agreement in a form reasonably requested by the Title Company. 209. Representations and Warranties. follows: 209.1 CDC Representations. CDC represents and warrants to Developer as (a) Authority. CDC 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. (b) FIRPTA. CDC is not a "foreign person" within the parameters of FIRPTA or any similar state statute, or is exempt from the provisions of F1RPTA or any similar state statute, or that CDC has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the best of CDC's knowledge, CDC'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 CDC is a party or by which it is bound. 209.2 Developer Representations. Developer represents and warrants to CDC (a) Authority. Developer is a corporation formed in and in good standing under the laws of the State of California, 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 and any necessary third parties. (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) proceeding. No Bankruptcy. Developer is not the subject of a bankruptcy 017.262230.5 13 210. "As Is" Sale. DEVELOPER ACKNOWLEDGES THAT, SUBJECT TO THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF CDC UNDER THIS AGREEMENT, DEVELOPER IS PURCHASING THE SITE "AS IS" IN RELIANCE SOLELY ON: (A) DEVELOPER'S OWN INSPECTIONS OF THE SITE; (B) DEVELOPER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY DOCUMENTS MADE AVAILABLE TO DEVELOPER; AND (C) THE OPINIONS AND ADVICE CONCERNING THE SITE OF CONSULTANTS ENGAGED BY DEVELOPER DEVELOPER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF CDC EXPRESSLY SET FORTH IN THIS AGREEMENT, CDC IS NOT MAKING ANY OTHER WARRANTIES OR REPRESENTATIONS EXPRESS OR IMPLIED OF ANY KIND OR CHARACTER WITH RESPECT TO THE SITE, INCLUDING WITHOUT LIMITATION: (i) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE SITE, (ii) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS, GEOLOGY AND ANY GROUNDWATER RELATING TO THE SITE, (iii) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE SITE, (iv) THE SITE'S USE, HABITABILITY, MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE SITE FOR ANY PARTICULAR PURPOSE, (v) THE COMPLIANCE OF THE SITE WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI -GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY, (vi) THE PRESENCE OF ANY HAZARDOUS MATERIALS ON, UNDER OR ABOUT THE SITE OR THE ADJOINING OR NEIGHBORING SITE, (vii) THE CONDITION OF TITLE TO THE SITE, AND (viii) THE ECONOMICS OF THE OPERATION OF THE SITE AS AN AUTOMOBILE SALES, SERVICE AND REPAIR FACILITY OR ANY OTHER USE. DEVELOPER WARRANTS AND REPRESENTS THAT IT HAS NOT RELIED AND WILL NOT RELY ON, EITHER DIRECTLY OR INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF CDC OR ITS AGENTS NOT EXPLICITLY SET FORTH IN THIS AGREEMENT. 300. DEVELOPMENT OF THE SITE 301. Scope of Development. 301.1 Developer's Obligation to Construct Improvements. The Developer shall develop or cause the development of the Improvements 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 and City as set forth herein. 302. Design Review. 302.1 Basic Concept Drawings. The Developer has submitted conceptual drawings for the Improvements (collectively, the "Basic Concept Drawings") which the CDC has approved. 302.2 Site Plan Drawings. Within the time set forth in the Schedule of Performance, the Developer and CDC shall submit to the City plans and drawings with respect to 14 017.262230.5 the Improvements (the "Site Plan Drawings"), which must include all documents, plans and drawings (the "Construction 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. 302.3 Consultation and Coordination. During the preparation of additional Site Plan Drawings, if any, and Construction Drawings, and other documents by Developer, staff of the CDC and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of the Site Plan Drawings and Construction Drawings. 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/consultant to serve as the project manager who is responsible for the coordination of the CDC's activities under this Agreement. Approval of progressively more detailed drawings and specifications will be promptly granted by the CDC or designee if developed as a logical evolution of drawings or specifications theretofore approved. Any items so submitted and approved by the CDC or designee shall not be subject to subsequent disapproval. Any disapproval shall state in writing the reasons for disapproval and the changes which the CDC or designee requests to be made. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved hereunder. Approval of progressively more detailed drawings and specifications will be promptly granted by the CDC or designee if developed as a Logical evolution of drawings or specifications theretofore approved. Any items so submitted and approved by the CDC or designee shall not be subject to subsequent disapproval. Any disapproval shall state in writing the reasons for disapproval and the changes which the CDC or designee requests to be made. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved hereunder. 302.4 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. 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 and completed during the construction of the Improvements. 302.5 Defects in Plans. The CDC shall not 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, or other documents prepared by or for the Developer, nor for any structural or other defects in any work done according to the approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings or other documents 15 017.262230.5 prepared by or for the Developer, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 303. 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 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. The Developer shall, without limitation, apply for and secure the following, and pay all costs, charges and fees associated therewith: (a) City Site Plan Approval. (b) All other permits and fees required by the City, County of San Diego, and other governmental agencies with jurisdiction over the Improvements. (c) Any environmental studies and documents required pursuant to the California Environmental Quality Act, if any. The execution of this Agreement does not, however, constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals required by the CDC or the City. 304. Schedule of Performance. Each party to this Agreement shall perform the obligations to be performed by such party pursuant to this Agreement within the respective times provided in the Schedule of Performance, and if no such time is provided, within a reasonable time. The Schedule of Performance shall be subject to amendment from time to time upon the mutual agreement of the CDC and Developer. 305. Cost of Construction. All of the cost of planning, designing, developing, site preparation and constructing all of the Improvements shall be borne solely by the Developer. 306. Insurance Requirements. The Developer shall take out and maintain or shall cause its general contractor to take out and maintain until the issuance of the Release of Construction Covenants pursuant to Section 309 of this Agreement, a comprehensive general liability policy in the minimum amount of Three Million Dollars ($3,000,000.00) combined single limit policy, or such other policy limits as the CDC may approve at its discretion, including contractual liability, as shall protect the Developer, City and CDC from claims for such damages, and which policy shall be issued by a "B+" or higher 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 approved by the CDC setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City 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 a statement of obligation on the 017.262230.5 16 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. 307. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 309 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the CDC shall have the right of reasonable 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 Iimited 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 307. 308. 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. 308.1 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, 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. 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. 308.2 Prevailing Wages. All work pursuant to this Agreement shall 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. 17 017.262230.5 ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. In light of the fact that the Site is being purchased by Developer for its fair market value without public subsidy, it is the belief and understanding of the CDC and Developer that this Agreement does not involve a "public work" or "maintenance" project, as defined by the Prevailing Wage Laws. Notwithstanding the foregoing, Developer hereby expressly acknowledges and agrees that neither the City nor CDC has represented to Developer that the Project will not be a "public work" and in the event a determination should ever be made that this Agreement does involve a "public work" or "maintenance project" or is otherwise subject to Prevailing Wage Laws, Developer agrees to fully comply with such Prevailing Wage Laws. Developer shall defend, indemnify and hold the CDC, 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 alleged failure 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 described in this Section 308.2, Developer agrees that the CDC and the other indemnified parties may appoint their own independent counsel who are reasonably acceptable to Developer, and Developer agrees to pay all reasonable attorneys' fees and defense costs of the CDC and the other indemnified parties, in addition to all other damages, fmes, penalties and losses incurred by the CDC and the other indemnified parties as a result of the action. 308.3 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. 308.4 Lien and Stop Notices. Developer shall not allow to be placed on the Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Improvements, Developer shall, within sixty (60) days of such recording or service or, within five (5) days of CDC's demand thereafter, whichever last occurs: (a) Pay and discharge the same; or (b) Effect the release thereof by recording and delivering to CDC a surety bond in sufficient form and amount, or otherwise; or (c) Provide CDC with other assurances, which CDC deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of CDC from the effect of such lien or bonded stop notice. 309. 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 017.262230.5 18 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 ten (10) days of written request thereof, provide the Developer with a written statement of the reasons the CDC refused or failed to furnish 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 fmance 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. 310. Financing of the Improvements. 310.1 Approval of Financing. Developer shall submit to CDC reasonable assurances that Developer has sufficient funds on hand or 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 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. CDC agrees to make reasonable modifications of Sections 310 and 503 that may be requested by Developer's lender, provided such modifications do not adversely affect the receipt of any material benefit by CDC hereunder. Upon the reasonable request of a Developer's lender, CDC shall execute from time - to -time estoppel certificates to the extent they are consistent with the terms of this Agreement. CDC shall respond to any request under this paragraph within fifteen (15) days after receipt of the request accompanied by sufficient information as may be reasonably required in order for the CDC to act on such request. 310.2 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, Iegal, 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. 310.3 Bolder Not Obligated to 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 017.262230.5 19 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. 310.4 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 one hundred twenty (120) 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 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 Improvements 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 one hundred twenty (120) 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 one hundred twenty (120) 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. 310.5 Failure of Holder to Complete Improvements. In any case where, if within one hundred twenty (120) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from the CDC of a default by the Developer in completion of construction of any of the Improvements under this Agreement, and such holder has not exercised the option to construct as set forth in Section 310.4, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the CDC may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the CDC, if it so desires, shall be entitled to a conveyance from the holder to the CDC upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); 017.262230.5 20 attorneys' fees; (b) All expenses with respect to foreclosure, including reasonable (c) The net expense, if any (exclusive of general overhead) incurred by the holder as a direct result of the subsequent ownership or management of the Site or part thereof, such as insurance costs and taxes; (d) The costs of any Improvements made by such holder, (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by CDC; and, (f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by Developer. 310.6 Right of the CDC to Cure Mortgage or Deed of Trust. In the event of a mortgage or deed of trust default or breach by Developer prior to the completion of the construction of any of the Improvements or any part thereof, Developer shall immediately deliver to CDC a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, or Developer has not cured or commenced a cure of such default, CDC shall have the right but not the obligation to cure the default. In such event, CDC shall be entitled to reimbursement from Developer of all proper costs and expenses incurred by CDC in curing such default. CDC shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to Section 310. 400. COVENANTS AND RESTRICTIONS 401. 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 for the periods of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to this Agreement and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 402. Use Covenants. For a term commencing upon the Conveyance and ending upon the expiration of the Operating Covenant, the Developer hereby covenants and agrees for itself, its successors, and assigns and all voluntary and involuntary successors in interest to the Site, or any part thereof, that the Site will only be used in compliance with the Operating Covenant. 403. Maintenance Covenants. The Developer shall maintain the Site and all Improvements thereon, including all landscaping and erosion control, in a commercially reasonable manner. 017.262230.5 21 404. Nondiscrimination Covenants. The Developer covenants 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, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer 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, 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 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, 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, 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, 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 017.262230.5 22 discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 405. 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. 406. Indemnification. Developer hereby agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents (the "Indemnified Parties") from and against any and all claims, losses, liabilities, costs, expenses (including reasonable attorneys' fees), actions, causes of action, penalties or interest arising out of or in connection with any third party challenges or objections to actions taken by any of the Indemnified Parties pursuant to this Agreement. 500. DEFAULTS AND REMEDIES 501. Default Remedies. Subject to the extensions of time set forth in Section 602 of this Agreement, failure by either 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 for the obligations set forth in Sections 202 and 203, for which time is of the essence, or 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. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either Party may institute an 017.262230.5 23 4 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, or in the District of the United States District Court in which such county is located. 503. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction. Subject to the notice and cure provisions of this Agreement and the rights of a holder of any mortgage or deed of trust encumbering the Site, 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) Unless due to an Enforced Delay as described in Section 602 hereof, fail to start the construction of the Improvements as required by this Agreement for a period of one hundred twenty (120) 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 one hundred twenty (120) days after written notice thereof from the CDC; or (c) Contrary to the provisions of Section 603 Transfer or suffer any involuntary Transfer in violation of this Agreement, and such transfer has not been approved by the CDC or rescinded within sixty (60) 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: (a) Any mortgage or deed of trust permitted by this Agreement; (b) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust; or (c) Any rights or interests held by a lessee in and to the Property. The Grant Deed shall contain appropriate reference and provision to give effect to the CDC's right as set forth in this Section 503, 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 the estate conveyed to the Developer. Upon the revesting in the CDC of title to the Site as provided in this Section 503, 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 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 017.262230.5 24 in full of any loan evidenced by a 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 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 503 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. 504. Acceptance of Service of Process. In the event that the Developer commences legal action against the CDC, service of process on the CDC shall be made by personal service upon the Director of the CDC 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 017.262230.5 25 017.262230.5 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. 505. 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. 506. 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. 507. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 508. Non -Liability of Officials and Employees of the CDC. No member, official or employee of 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 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. 509. 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. 600. GENERAL PROVISIONS 601. 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. To CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY 140 E. 12th Street, Suite B National City, CA 91950-3312 Attention: Executive Director 26 Copy to: Richard L. Moskitis, Esq. FOLEY & LARDNER LLP 401 West Broadway, 23'I Floor San Diego, CA 92101-3542 To Developer: MOSSY NISSAN, INC. 9755 Clairemont Mesa Blvd. San Diego, CA 92124 Attention: Philip E. Mossy Telephone: (858) 654-2850 Facsimile: (858) 614-0132 Copy to: Edward F. Whittler, Esq. PETERSON & PRICE, APC 530 B Street, Suite 1700 San Diego, CA 92101 Telephone: (619) 234-0361 Facsimile: (619) 234-4786 Copy to: Alex Zirpolo 617 Saxony Place, Suite 101 Encinitas, CA 92024 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. 602. Enforced Delay; Extension of Times of Performance. In addition to specific provisions of this Agreement, performance 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; acts of international and domestic terrorism, insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; Iack 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 CDC which shall not excuse performance by the CDC) (an "Enforced Delay"). 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 602. 017.262230.5 27 603. Transfers of Interest in Site or Agreement. The qualifications and identity of the Developer as the developer of high quality Project are of particular concern to the CDC. Furthermore, the Parties acknowledge that the CDC has negotiated the terms of this Agreement in contemplation of the development of the Improvements as described in the Scope of Development of this Agreement. Accordingly, for the period commencing upon the date of this Agreement and until the CDC's issuance of the Release of Construction Covenants as set forth in Section 309 hereof, (a) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, and (b) nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, of the whole or any part of the Site (a "Transfer")without the prior written approval of the CDC, except as expressly set forth herein. 603.1 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, CDC approval of a Transfer of the Site or a portion of the Site 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 Developer or one of its members or shareholders 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 310.1 herein), including the grant of a deed of trust to secure the funds necessary for construction of the Improvements. (d) Any lease of commercial space within the Site to tenants in the ordinary course of business. In the event of a Transfer by Developer under subparagraph (a) above not requiring the CDC's prior approval, Developer nevertheless agrees that at least fifteen (15) days before such Transfer it shall give written notice to CDC of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of the obligations of this Agreement. Such assignment shall release the assigning Developer from any obligations to the CDC hereunder. 603.2 CDC Consideration of Requested Transfer. The CDC agrees that it will not unreasonably withhold approval of a request for approval of a Transfer made pursuant to this Section 603, provided the Developer delivers written notice to the CDC 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 enable the CDC to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 603 and as reasonably determined by the CDC. 017.262230.5 28 The CDC 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 operator of new automobile dealerships, (iii) the current financial condition of the transferee, and similar factors. The CDC agrees not to unreasonably withhold its approval of any such requested Transfer, taking into consideration the foregoing factors. An assignment and assumption agreement in form satisfactory to the 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 CDC approval of a Transfer pursuant to this Section 603, the CDC shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, the CDC reasonably requires in order tocomplete the request and determine whether or not to grant the requested approval. Upon receipt of such a response, the Developer shall promptly fumish to the CDC such further information as may be reasonably requested. 603.3 Successors and Assigns. Subject to the restrictions on Transfer set forth above in Section 603, 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. 603.4 Assignment by CDC. The CDC may assign or transfer any of its rights or obligations under this Agreement without the approval of the Developer. 604. Relationship Between CDC and Developer. It is hereby acknowledged that the relationship between the CDC and the Developer is not that of a partnership or joint venture and that the CDC 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 Attachments hereto, the CDC shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 605. CDC Approvals and Actions. The CDC shall maintain authority of this Agreement and the authority to implement this Agreement through the CDC Executive (or acting) Director (or his/her duly authorized representative). The CDC Executive (or acting) 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 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 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 Board. 606. 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. 017.262230.5 29 607. 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. 608. Real Estate Brokerage Commission. Except for Developer's obligation to pay Mr. Alex Zirpolo a commission pursuant to a separate agreement between Developer and Mr. Zirpolo, the CDC 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 the Site from the CDC. Each of the Parties agrees to defend and hold harmless the other Party 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. 609. 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. 610. 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. 611. 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 of this Agreement. 612. 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. 613. 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. 614. 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 017.262230.5 30 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 Govemment Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 615. 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 attomeys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 616. Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC, and the Developer of each and every obligation and condition of this Agreement. 617. 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. 618. Conflicts of Interest. No member, official or employee of the CDC 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/her personal interests or the interests of any corporation, partnership or association in which he/she is directly or indirectly interested. 619. Time for Acceptance of Agreement by CDC. This Agreement, when executed by the Developer and delivered to the CDC, must be authorized, executed and delivered by the CDC 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. 017.262230.5 31 IN WITNESS WHEREOF, the CDC and the Developer have executed this Disposition and Development Agreement as of the date set forth above. ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel 017.262230.5 CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman DEVELOPER: MOSSY NISSAN, INC., a California corporation By: By: Philip E. Mossy, President , Secretary Signature Page of Disposition and Development Agreement 32 ATTACHMENT NO. 1 SITE MAP 017.252230.5 Attachment No. 1-1 50£ZZ9Z'L1.0 1-1 'ON 1,11011111021.1V • • sore rum Iiw ir1l • f TRANSPORTATION r as 15 /M 74&4 tVPM 3 fit � MN Lit Mi'H!4 We (COOLIDGE) ." o u.ia x►I anw, PIA 141 AVE • 41 Y$ 4 LSAC. S '-vas a 1 * Mn' t.Mooi1.E HOME ain !HOMER hit 19 Iit HARCWG /ME 4.4.10 . rF:-3 5132-34 ' ■/awolRi� of u ®.7.:Stil INII4-1r STG'7►113 .11NMI :? lrll'!� EWE �1f� .d l:P'!� MIN ETA iw4hinuwa cr!1r!MMin u err, m=o IN MI 1:331:1 mowMINI MN Ell Iat11 MEEEEM 017.262230.5 ATTACHMENT NO. 2 SITE LEGAL DESCRIPTION Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Attachment No. 2 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 , 200hereby grants to MOSSY NISSAN, INC., a California corporation ("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 26, 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 rehabilitate, remodel, construct and maintain in a first class condition a new automobile sales, service and repair facility and related parking 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. 017.262230.5 Attachment No. 3-1 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 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, 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, 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: 017.262230.5 Attachment No. 3-2 property. 017.262230.5 "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, 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, 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 one hundred twenty (120) 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 one hundred twenty (120) 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 sixty (60) 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 permitted by the DDA in and to the Attachment No. 3-3 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 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 way 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. 017.262230.5 Attachment No. 3-4 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. 8. 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 right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or 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, performance 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 faultof 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) (an "Enforced Delay"). 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. Attachment No. 3-5 017.262230.5 ATTEST: CDC Secretary APPROVED AS TO FORM: CDC Counsel CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman MOSSY NISSAN, INC., a California corporation By: By: Philip E. Mossy, President , Secretary Signature Page of Grant Deed 017262230.5 Attachment No. 3-6 EXHIBIT "A" LEGAL DESCRIPTION OF SITE Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park 1, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. 017.262230.5 Exhibit A-1 ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE GENERAL PROVISIONS 1. Approval and Execution Disposition and Development Agreement ("Agreement") CDC shall consider this Agreement and, if approved, shall authorize, execute and deliver the Agreement to Developer. ACQUISITION AND POSSESSION 2. Acquisition and Possession If appropriate and necessary, CDC may make the necessary findings, conduct appropriate public hearings and take all necessary actions to acquire possession of the Property. 3. Developer Election to Make Possession Deposit 4. Open Escrow If applicable, CDC and Developer shall open an escrow for the purpose of CDC conveying Property to Developer. 5. Satisfy Conditions Precedent CDC and Developer shall satisfy or waive all of their respective Conditions Precedent to Close of Escrow. 6. Close Escrow CDC shall either convey possession and/or fee title to the Property to Developer and Escrow shall close. August 23, 2005 August 23, 2005 through December 31, 2007. November 1, 2005 No later than thirty (30) days after CDC possession of the Site or concurrent with Developer election to make Possession Deposit. No later than earlier of thirty (30) days after CDC acquires title to the Property through negotiated purchase or through an Order of Possession and/or Final Order of Condemnation. No Iater than thirty (30) days after satisfaction or waiver of all Conditions Precedent to Close of Escrow. 017.262230.5 Attachment No. 4-1 SCHEDULE OF PERFORMANCE CONSTRUCTION 7. Preliminary Design Developer shall complete preliminary design and submit to CDC for review. 8. Preliminary Design Approval CDC shall review, request modifications if necessary and approve preliminary design 9. Construction Drawings and approval Applications Developer shall submit to CDC Construction Drawings, including application materials required by City Planning Services to obtain City approvals for construction of Improvements. 10. Review and Approval Construction Drawings CDC shall review, request modifications if necessary, and approve Construction Drawings. During this period of time, CDC staff and Developer shall hold progress meetings to coordinate preparation, review and modification of Construction Drawings and applications. Building permits shall be issued. 11. Submit final Construction Drawings Developer shall submit its final revision of Construction Drawings. 12. Building Permits Building Permits shall be issued. 13. Commence Construction Developer shall commence construction of the 017.262230.5 Attachment No. 4-2 No later than sixty (60) days after earlier of (i) CDC obtaining order of possession, or (ii) Close of Escrow. Thirty (30) days after receipt by CDC. One hundred twenty (120) days after earlier of: (i) CDC obtaining order of possession; or (ii) Close of Escrow. Thirty (30) days after CDC receipt of Construction Drawings. Thirty (30) days after receipt of CDC comments. Ninety (90) days after submittal of final construction drawings. Thirty (30) days after receipt of permits. SCHEDULE OF PERFORMANCE Improvements of the Site. 14. Complete Construction Two hundred forty (240) days after commencement of Developer shall complete construction of the construction. Improvements on the Site. 017.262230.5 Attachment No. 4-3 ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT The Improvements shall consist of new buildings for the Mossy Nissan Dealership, all to be built in accordance with the new Nissan Image Program and shall consist of the following: Approximately 35,000 - 40,000 square feet of new buildings consisting of (a) Showroom/Sales Offices of approximately 6,000 - 8,000 square feet; (b) Service/Detail/Body Shop Bays (approximately 30-40 Bays) of approximately 26,000 square feet; and (c) Parts Department of approximately 8,000 square feet. Attachment No. 5-1 017.262230.5 ATTACHMENT NO. 6 RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WREN 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 MOSSY NISSAN, INC., a California corporation (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 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 part 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. 017.262230.5 Attachment No. 6-1 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. IN WITNESS WHEREOF, the CDC has executed this Release this _ day of 200 . ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel 017.262230.5 COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman Attachment No. 6-2 EXHIBIT "A" SITE DESCRIPTION Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. 017.262230.5 Exhibit A ATTACHMENT NO. 7 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: FOLEY & LARDNER LLP Attn: Richard L. Moskitis 402 West Broadway, Suite 2300 San Diego, California 92101-3542 APNs: 562-340-47 562-340-48 OPERATING COVENANT THIS OPERATING COVENANT is made this day of , 200 , by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "Agency"), and MOSSY NISSAN, INC., a California corporation (the "Participant"), with reference to the following: A. The Agency and the Participant have executed a Disposition and Development Agreement (the "Agreement"), dated as of July 26, 2005 which provides for the development of certain real property located in the City of National City (the "City"), County of San Diego, State of California, more fully described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Site"). The Agreement is available for public inspection and copying at the office of the Agency, 140 E. 12th Street, Suite B, National City, California. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Operating Covenant by reference as though written out at length herein and the Agreement and this Operating Covenant shall be deemed to constitute a single instrument or document. Capitalized terms used herein and not otherwise defined shall have the same meaning as set forth in the Agreement. B. The Agreement provides for, among other things, the Participant's conveyance to the Agency of an operating covenant with respect to the Improvements on the Site (the "Facility"). NOW, THEREFORE, the Participant hereby conveys to the Agency the following Operating Covenant: 1. Operation of Automobile Dealership. For a term commencing upon the date that the City issues a certificate of occupancy for the Facility, and ending upon the tenth anniversary thereof (which ten year period constitutes the "Operating Covenant Period"), the Participant hereby covenants and agrees to operate (or cause its successors or assigns to operate) the Facility on the Site on a continuous basis, devoted to the sale of new automobiles and trucks as a factory - authorized new automobile dealer as the principal activity conducted on the Site. The sale of used automobiles and trucks, and the servicing and repair of vehicles may also be conducted on the Site 017.262230.5 Attachment No. 7-1 as a secondary use. In addition, the Participant shall conduct all activities for the leasing of automobiles from the Facility either on the site or at an office located within the City of National City. No other uses may be made on the Site during the Operating Covenant Period without the prior written approval of the Agency, which approval may be withheld in Agency's sole discretion. The requirements of this Section 1 shall run with the land. 2. Nondiscrimination. The Participant by and for itself and any successors in interest covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Participant 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. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: i. 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, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." ii. 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: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, ancestry or national origin in the Ieasing, 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." iii. 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, marital status, physical or mental disability or medical condition, ancestry or national origin, 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, sublessees or vendees of the premises." 017.262230.5 Attachment No. 7-2 This covenant regarding non-discrimination shall remain in effect in perpetuity. 3. Performance of Maintenance. a. Participant shall maintain the Site and the Facility in a first class condition, including, but not limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Site and any and all other improvements on the Site. b. To accomplish the maintenance, Participant shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Operating Covenant. c. The following standards ("Maintenance Standards") shall be complied with by Participant and its maintenance staff, contractors or subcontractors: i. Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. ii. Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. iii. All maintenance work shall conform to all applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of maintenance. iv. Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all governing regulations. Precautionary measures shall be employed recognizing that all areas are open to public access. v. The Site and Facility shall be maintained in conformance and in compliance with the approved Site construction and architectural plans and design scheme, as the same may be amended from time to time with the approval of the City, and reasonable commercial development maintenance standards for similar projects, including, but not limited to: painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements and public improvements to the curb line. Attachment No. 7-3 017.262230.5 vi. The Site and Facility shall be maintained as required by this Section 3 in good condition and in accordance with the custom and practice generally applicable to comparable automobile dealership facilities located in Southern California. 4. Failure to Maintain Site and Facility. In the event Participant does not maintain the Site or the Facility in the manner set forth herein and in accordance with the Maintenance Standards, Agency and/or City shall have the right to maintain such private and/or public improvements, or to contract for the correction of such deficiencies, after written notice to Participant. However, prior to taking any such action, Agency agrees to notify Participant in writing if the condition of said improvements do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Participant to cure the deficiencies. Upon notification of any maintenance deficiency, Participant shall have thirty (30) days within which to correct, remedy or commerce and diligently pursue the cure the deficiency. If the written notification states the problem is urgent relating to the public health and safety of the City or the Agency, then Participant shall have forty-eight (48) hours to rectify the problem. In the event Participant fails to correct, remedy, or cure or has not commenced correcting, remedying or curing such maintenance deficiency after notification and after the period of correction has lapsed, then City and/or Agency shall have the right to maintain such improvements. Participant agrees to pay Agency such charges and costs. Until so paid, the Agency shall have a lien on the Site for the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the Site. Upon recordation of a Notice of a Claim of Lien against the Site, such lien shall constitute a lien on the fee estate in and to the Site prior and superior to all other monetary liens except: (i) all taxes, bonds, assessments, and other levies which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or their security interest then of record made in good faith and for value, it being understood that the priority of any such lien for costs incurred to comply with this Agreement shall date from the date of the recordation of the Notice of Claim of Lien. Any such lien shall be subject and subordinate to any lease or sublease of the interest of Participant in the Site or any portion thereof and to any easement affecting the Site or any portion thereof entered into at any time (either before or after) the date of recordation of such a Notice. Any lien in favor of the Agency created or claimed hereunder is expressly made subject and subordinate to any mortgage or deed of trust made in good faith and for value, recorded as of the date of the recordation of the Notice of Claim of Lien describing such lien as aforesaid, and no such lien shall in any way defeat, invalidate, or impair the obligation or priority of any such mortgage or deed of trust, unless the mortgage or beneficiary thereunder expressly subordinates his interest, of record, to such lien. No lien in favor of the Agency created or claimed hereunder shall in any way defeat, invalidate, or impair the obligation or priority of any lease, sublease or easement unless such instrument is expressly subordinated to such lien. Upon foreclosure of any mortgage or deed of trust made in good faith and for value and recorded prior to the recordation of any unsatisfied Notice of Claim of Lien, the foreclosure - purchaser shall take title to the Site free of any lien imposed by the Agency that has accrued up to the time of the foreclosure sale, and upon taking title to the Site, such foreclosure -purchaser shall only be obligated to pay costs associated with this Agreement accruing after the foreclosure - purchaser acquires title to the Site. If the Site is ever legally divided with the written approval of the Agency and fee title to various portions of the Site is held under separate ownerships, then the burdens of the maintenance obligations set forth herein and in this Agreement and the charges levied by the Agency to reimburse the Agency for the cost of undertaking such maintenance obligations of Participant and its successors and the lien for such charges shall be apportioned 017.262230.5 Attachment No. 7-4 among the fee owners of the various portions of the Site under different ownerships according to the square footage of the land contained in the respective portions of the Site owned by them. Upon apportionment, no separate owner of a portion of the Site shall have any liability for the apportioned liabilities of any other separate owner of another portion of the Site, and the lien shall be similarly apportioned and shall only constitute a lien against the portion of the Site owned in fee by the owner who is liable for the apportioned charges levied by the Agency and secured by the apportioned lien and against no other portion of the Site. Participant acknowledges and agrees City and Agency may also pursue any and all other remedies available in law or equity. Participant shall be liable for any and all attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs. 5. Compliance with Law. Participant shall comply with all local, state and federal laws relating to the uses of or condition of the Site and the Facility. 6. Effect of Violation of the Terms and Provisions of this Operating Covenant. The covenants established in this Operating Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Operating Covenant shall remain in effect for the periods of time specified therein. The Agency is deemed the beneficiary of the terms and provisions of this Operating Covenant and of the covenants running with the land, for and in its own rights 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 Operating Covenant and the covenants running with the land have been provided. The Operating Covenant and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if the Operating Covenant 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 to which it or any other beneficiaries of this Operating Covenant and covenants may be entitled. 7. Miscellaneous Provisions. a. If any provisions of this Operating Covenant or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Operating Covenant, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Operating Covenant; and each provision of this Operating Covenant shall be valid and enforceable to the fullest extent permitted by law. b. This Operating Covenant shall be construed in accordance with the laws of the State of California. c. This Operating Covenant shall be binding upon and inure to the benefit of the successors and assigns of the Participant. d. In the event action is instituted to enforce any of the provisions of this Operating Covenant, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. 017.262230.5 Attachment No. 7-5 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first hereinabove written. ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel 017.262230.5 AGENCY: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman PARTICIPANT: MOSSY NISSAN, INC., a California corporation By: By: Philip E. Mossy, President Secretary Signature Page of Operating Covenant Attachment No. 7-6 • . , w 017.262230.5 EXHIBIT A LEGAL DESCRIPTION OF SITE Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Exhibit A - Page 1 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: MOSSY NISSAN, INC. Prepared by: KEYSER MARSTON ASSOCIATES, INC. For: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Date: August 8, 2005 Attachment 4 SUMMARY REPORT PERTAINING TO THE PROPOSED SALE OF REAL PROPERTY 1. INTRODUCTION The Community Development Commission of the City of National City (Commission) is considering the acquisition and sale of real property to Mossy Nissan, Inc. (Developer) pursuant to a Disposition and Development Agreement (DDA) under review as of August 1, 2005. This Summary Report is prepared in accordance with Section 33433 of the Califomia 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 Fair Re -Use Value of the Interest to be Conveyed • Section V, Estimated Value of the Site at the Highest and Best Use • Section VI, Purchase Price the Developer w ill be Required to Pay • Section VII, Explanation Why the Sale of the Property will Assist in Elimination of Blight Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 2 1I. DESCRIPTION OF THE PROPOSED PROJECT A. Proposed Transaction The Developer intends to remodel the existing Nissan dealership located at 2626 to 2700 National City Boulevard. The dealership is situated on a 4.53-acre site (Site), which is being leased to the Developer by the current property owner. It is KMA's understanding that the current lease has 2.5 years remaining with one five year renewal option at market rent, but the Developer does not intend to exercise the option. The Site is improved with four buildings comprising approximately 43,000 square feet (SF), which includes a showroom, office space, and service bays. The Site is bounded by National City Boulevard, Transportation Avenue, and 26"' and 28t° Streets in National City. Specifically, the Site is located on the City's main retail thoroughfare, National City Boulevard, and is rectangular in shape, essentially flat, and at grade with the frontage roads. A major part of this arterial street has been d esignated and zoned as an automobile park known as the "Mile of Cars". Although the area is exclusively zoned for new automobile dealerships, some pre-existing non -automotive retail uses remain. The proposed transaction is detailed in the Disposition and Development Agreement (DDA) under review as of August 1, 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. Agency and Develo per Responsibilities • The Developer will attempt to acquire the Site thro ugh private negotiation w ith the property owner. • If the Developer is unsuccessful in acquiring the Site, the Commission in its absolute and sole discretion can decide to initiate eminent domain proceedings. Upon acquisition of the Site, the Commission will convey fee ownership of the Site to the Developer at a price equal to the price paid by the Commission to acquire the Site. • If the Commission decides to use its power of eminent domain, the Developer will advance to the Commission the Possession Deposit. • The Developer will pay a Purchase Price to the Commission in the amount of: (a) the actual price negotiated by the Commission for acquisition of the Site, plus any Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 3 other acquisition costs incurred by the Commission; or (b) the amount of just compensation awarded to the current property owner, plus the amount of acquisition costs incurred by Commission, such as completion of the eminent domain proceedings, and the amount necessary to satisfy any judgment in the action. • If the condemnation action is greater than $8 million, the Commission will attempt to abandon condemnation proceedings at the optio n of the Developer. • It is the belief and understanding of the Commission and the Developer that the DDA between the parties does not involve a "public work" as defined by the State prevailing wage laws, since the Developer will purchase the Site from the Commission for its fair market value without public subsidy. • The Developer agrees to devote the Site to the sale of new automobiles and trucks as a factory -authorized new automobile dealer as the principal activity conducted on the Site for a minimum of 10 years. Summary Report Mossy Nissan, Inc. 16104. 002.035 05373mm August 8, 2005 Page 4 111. 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 Site Acquisition (Estimate) $7,000,000 Other Agency Acquisition Costs TBD DDA Costs (Legal, Economic, and Appraisal) (2) $25,000 Total Commission Costs $7,025,000 (Less) Purchase Price from Developer (not Tess than Site Acquisition Cost) ($7,000,000) (Less) Reimbursement to Commission for Other Commission Acquisition Costs (TBD) (Less) Reimbursement from Developer for Commission DDA Costs ($25,000) Net Commission Costs $0 (1) All figures provided by the Community Development Commission of National City, except as noted. (2) Gross estimate. Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 5 IV. 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. Re -use value is defined as the highest price in terms of cash or its equivalent which a property or development right is expected to bring for a specified use in a competitive open market, subject to the covenants, conditions, and restrictions imposed by the DDA. The proposed DDA sets specific conditions with respect to the scope of development, the schedule of performance, and method of financing. The Commission contracted with John G. Slagle, MAI, of Real Estate Professionals to conduct an appraisal of the Site. The appraiser determined the fair market value of the fee simple interest of the Site "As Is" as of April 30, 2005. The appraiser concluded that the fair market value for the Site is $7,000,000, or approximately $33 per SF. On this basis, then, KMA concludes that the fair re -use value of the Site is estimated to be $7,000,000, or $33 per SF land. Summary Report August 8, 2005 Mossy Nissan, Inc. Page 8 16104.002.035 05373mm V. 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 its highest and best use. In appraisal terminology, the highest and best use is that use of the property that 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 Redevelopment Plan of the City of National City governs the Site and regulates the zoning and land uses for the Site. The Site is zoned for commercial automotive within a planned development overlay (CA-PD). The zoning strictly allows only for new car dealerships. On this basis, then, KMA concludes that the proposed use represents the highest and best use of the Site. Therefore, the fair market value at highest and be st use is equal to the fair re -use value, or $7,000,000, or $33 per SF land. Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 7 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. On this basis, then, KMA concludes that the effective compensation to the Commission is $7,000,000. Summary Report Mossy Nissan. Inc. 16104.002.035 05373mm August 8, 2005 Page 8 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 im paired 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 som e portions of the Project Area. Implementation of the proposed developm ent can be expected to assist in the alleviation of blighting conditions through the following: • Consolidation of irregular parcels into a site appropriate for development. • Elimination of conditions of economic dislocation such as fragmented ownership pattems. Expansion, renovation, and relocation of businesses within the Project Area. Summary Report Mossy Nissan, inc. 18104.002.035 05373mm August 8, 2005 Page 9 CITY COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 3 TO: CHAIRMAN AND BOARD MEMBERS 0"-1 FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: RESOLUTION NO. 2005-83: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT, AUTHORIZING THE TRANSMITTAL OF SAID REPORT TO THE CITY COUNCIL, APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION AND MOSSY NISSAN, INCORPORATED FOR DEVELOPMENT OF A NEW CAR DEALERSHIP LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: HOLD the Public Hearing of the Community Development Commission of the City of National City approving the Health and Safety Code Section 33433 Report; and, ADOPT Resolution No. 2005-83 approving the Disposition and Development Agreement by and between the Community Development Commission and Mossy Nissan, Incorporated for development of a new car dealership located at 2626 through 2700 National City Boulevard; make certain findings in connection herewith; and, AUTHORIZE the transmittal of said report to the City Council. Public and Other Notification: Pursuant to Section 33433 of the California Health & Safety Code, a Joint Public Community Development Commission Agenda Item No. 3 September 13, 2005 Page 1 of 4 Hearing Notice was published in the Star News on August 5 and 12, 2005. As well as these public notices, the following correspondence was provided to the Daily Family Partnership pursuant to and exceeding requirements of California Redevelopment Law and the National City Redevelopment Plan: • Owner Participation Letter — March 29, 2005 • Follow Up Owner Participation reminder letter — July 14, 2005 • Offer Letter — July 15, 2005 The Owner Participation Letter of March 29, 2005 was mailed to the address of record for the subject property. When no response was received, a follow up letter was mailed to the personal residence of Mr. and Mrs. Lawrence Daily on July 14, 2005. Fiscal Impact: Pursuant to Section 33433 of the California Health & Safety Code, a financial summary report has been prepared to evaluate the financial considerations under the terms of the proposed Disposition and Development Agreement, as well as the economic benefits of the proposed project to both the Community Development Commission and National City. A copy of the completed 33433 Financial Report has been attached for review. It is anticipated that $152,000 in increased real estate taxes will be generated per year to fund the following: • CDC: $115,447 • Affordable Housing: $30,400 • Office of Education: $3,220 • Southwestern College: $2,933 The project is expected to yield additional sales tax revenues of $300,000 annually to the City of National City. Environmental Impact: The project is consistent with the Certified EIR for the Redevelopment Plan for National City Redevelopment Project certified by Resolution No. 95-98 on June 20, 1995, for the National City General Plan and with the Zoning Designation of Automotive Commercial for the National City Mile of Cars and, consistent with Section 15180 of the California Environmental Quality Act Guidelines, does not require additional analysis. Property Description: The subject property is located at 2626 through 2700 National City Boulevard in the National City Mile of Cars. The site is comprised of two (2) parcels containing a total of approximately 4.53 acres. The San Diego County Assessor's Parcel Numbers for the subject property are 562-340-47 and 562-340-48. Community Development Commission Agenda Item No. 3 September 13, 2005 Page 2 of 4 Project Description: Mossy Nissan, Incorporated proposes to develop a new Nissan Auto Dealership on the site of the existing Mossy Nissan Dealership in the National City Mile of Cars. The project will include the demolition of most of the existing structure and redevelopment of a $3 million new facility. Designs for the project will be finalized and submitted over the Planning Counter for review. Owner Participation: As required by law, the CDC mailed an Owner Participation letter, requiring a response within 45 days, to the address of record for the property on April 1, 2005. This address is as follows: Trust 00-1714 401 B St #220 San Diego CA 92101 No response to the Owner Participation letter was received by CDC within the 45 day time period allowed. On July 14, 2005, the CDC sent a reminder letter about Owner Participation procedures to Mr. and Mrs. Lawrence Daily at their home in Bonita, California. The CDC received no communication until Mr. Lawrence Daily walked into the offices on Friday morning, August 18th. On August 18, Mr. Daily signed the Statement of Interest from the Owner Participation Letter and the Offer Letter which had been sent by Mr. Detisch. At the CDC meeting of August 23, representatives of the Daily family indicated that Trust 00-1714 was an obscure address which prevented the property owner from timely receipt of the Owner Participation letter. Attached to this staff report is property title information that clearly shows Trust 00-1714 as the address of record. Also attached is a fax received by CDC from Peterson & Price, attorneys to Mossy Nissan. This fax, originally sent by the Daily Family Partnership on April 6 2005, clearly shows that the Daily Family Partnership was in possession of the Owner Participation letter on April 4, 2005. Financial Considerations of the Proposed DDA: The fair market value of the subject property, according to the Community Development Commission's appraiser, is $7 Million ($7,000,000). The price to be paid to the Community Development Commission for the property by Mossy Nissan, Incorporated shall be: (1) in the event the property is acquired by the Community Development Commission through a negotiated purchase, the actual price paid by the Community Development Commission for the property, plus any other acquisition costs incurred to that date, or (2) in the event the property is acquired by the Community Development Community Development Commission Agenda Item No. 3 September 13, 2005 Page 3 of 4 Commission through eminent domain proceedings, the amount of just compensation awarded to the owner of the property, plus the amount of acquisition costs incurred by the Community Development Commission. Economic Benefits; Health and Safety Code Section 33433 Report: On August 8, 2005, the CDC's redevelopment financial consultant (KMA) completed a financial summary report, pursuant to Section 33433 of the California Health & Safety Code. The purpose of this report is to evaluate the financial considerations in order to determine economic benefits of the CDC's participation in this proposed DDA. A copy of this 33433 Financial Summary Report is attached for your review. It is anticipated that $152,000 in increased real estate taxes will be generated per year to fund the following: • CDC: $115,447 • Affordable Housing: $30,400 • Office of Education: $3,220 • Southwestern College: $2,933 The project is expected to yield additional sales tax revenues of $300,000 annually to the City of National City. Conclusion: Staff recommends that the Community Development Commission Board approve the Health and Safety Code Section 33433 Report; adopt Resolution No. 2005-83 approving the Disposition and Development Agreement by and between the Community Development Commission and Mossy Nissan, Incorporated for development of a new car dealership located at 2626 through 2700 National City Boulevard; make certain findings in connection herewith; and authorize the transmittal of said report to the City Council. ATTACHMENTS: Exhibit 1 — Resolution No. 2005-83 Exhibit 2 — 33433 Financial Summary Report Exhibit 3 — Joint Public Hearing Notice Exhibit 4 — Proposed Disposition and Development Agreement Exhibit 5 — Owner Participation Letter Exhibit 6 — Owner Participation reminder letter Staff member: Beard Community Development Commission September 13, 2005 Agenda Item No. 3 Page 4 of 4 RESOLUTION NO. 2005-83 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY (CDC) APPROVING THE HEALTH AND SAFETY CODE SECTION 33433 REPORT, AUTHORIZING THE TRANSMITTAL OF SAID REPORT TO THE CITY COUNCIL, APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION AND MOSSY NISSAN, INCORPORATED FOR DEVELOPMENT OF A NEW CAR DEALERSHIP LOCATED AT 2626 THROUGH 2700 NATIONAL CITY BOULEVARD AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH 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, on June 20, 1995, pursuant to Resolution No. 95-98, the City Council of the City of National City certified the completion of a Final Environmental Impact Report for the Redevelopment Plan for the National City Redevelopment Project; and, WHEREAS, pursuant to the Community Redevelopment Law, on July 18, 1995, pursuant to Ordinance No. 95-2095 the City Council approved and adopted the Redevelopment Plan for the National City Redevelopment Project; and, WHEREAS, the Community Development Commission of the City of National City 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 Community Development Commission with respect to the Redevelopment Project Area calls for the Community Development Commission's objective to "increase private investment wherever possible, to promote jobs, and improve the property and sales tax base of the City of National City"; and, WHEREAS, in furtherance of the objectives of the Community Redevelopment Law, the Community Development Commission desires the redevelopment of certain real property within the Redevelopment Project Area, located at 2626 through 2700 National City Boulevard, for a new car dealership; and, WHEREAS, the development contemplated is consistent with the Environmental Impact Report for the Redevelopment Plan for the National City Redevelopment Project, and therefore is exempt from further California Environmental Quality Act ("CEQA") review under Section 15180 of the CEQA Guidelines; and, EXHIBIT 1 1 WHEREAS, the Dailey Family Partnership owns in fee the real property commonly known as 2626 through 2700 National City Boulevard (the "Site") and was afforded the opportunity to submit a proposal to develop the Site in accordance with the Community Development Commission's Owner Participation Rules by letter dated March 29, 2005, but did not submit a proposal; and, WHEREAS, Mossy Nissan, Inc., a California corporation, is currently the lessee of the Site and desires to purchase the Site in order to construct a new car dealership; and, WHEREAS, Community Development Commission staff has negotiated a Disposition and Development Agreement including attachments thereto with Mossy Nissan, Inc. for the Community Development Commission's disposition of the Site to Mossy Nissan, Inc., if necessary, and subject to the discretion of the Community Development Commission; and, WHEREAS, pursuant to the terms of the Disposition and Development Agreement, Mossy Nissan, Inc. shall construct a $3 Million ($3,000,000) new car dealership on the Site; and, WHEREAS, Community Development Commission staff has presented the draft Disposition and Development Agreement to the Community Development Commission Board and City Council for consideration; and, WHEREAS, the Community Redevelopment Law, 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 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 Section 33433 of the Community Redevelopment Law, 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 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 and the 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, THE COMMUNITY DEVELOPMENT COMMISSION 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 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: herein. a. That the above Recitals are true and correct and are incorporated 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'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's disposition of the Site pursuant to the Disposition and Development Agreement is consistent with the Redevelopment Plan and the National City General Plan. e. That the Disposition and Development Agreement is consistent with the Implementation Plan for the Redevelopment Plan. f. That any consideration Mossy Nissan, Inc. will pay for the Site is not less than the fair market value or 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 to its Executive Director 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 and direction given to the Community Development Commission Chairperson to thereafter sign the Disposition and Development Agreement on behalf of the Community Development Commission, and (iii) the authorization and direction given by the Community Development Commission to their Executive Director 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. 3 4. 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. 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 13th day of September 2005. ATTEST: Ben Martinez, Secretary APPROVED AS TO FORM: George H. Eiser, III, Legal Counsel Nick Inzunza, Chairman 4 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: MOSSY NISSAN, INC. Prepared by: KEYSER MARSTON ASSOCIATES, INC. For: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Date: August 8, 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) is considering the acquisition and sale of real property to Mossy Nissan, Inc. (Developer) pursuant to a Disposition and Development Agreement (DDA) under review as of August 1, 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 Fair Re -Use Value of the Interest to be Conveyed • Section V, Estimated Value of the Site at the Highest and Best Use • Section VI, Purchase Price the Developer w ill be Required to Pay • Section VII, Explanation Why the Sale of the Property will Assist in Elimination of Blight Summary Report August 8, 2005 Mossy Nissan, Inc Page 2 15104.002.035 05373mm 11. DESCRIPTION OF THE PROPOSED PROJECT A. Proposed Transaction The Developer intends to remodel the existing Nissan dealership located at 2626 to 2700 National City Boulevard. The dealership is situated on a 4.53-acre site (Site), which is being leased to the Developer by the current property owner. It is KMA's understanding that the current lease has 2.5 years remaining with one five year renewal option at market rent, but the Developer does not intend to exercise the option. The Site is improved with four buildings comprising approximately 43,000 square feet (SF), which includes a showroom, office space, and service bays. The Site is bounded by National City Boulevard, Transportation Avenue, and 26th and 28th Streets in National City. Specifically, the Site is located on the City's main retail thoroughfare, National City Boulevard, and is rectangular in shape, essentially flat, and at grade with the frontage roads. A major part of this arterial street has been d esignated and zoned as an automobile park known as the "Mile of Cars'. Although the area is exclusively zoned for new automobile dealerships, some pre-existing non -automotive retail uses remain. The proposed transaction is detailed in the Disposition and Development Agreement (DDA) under review as of August 1, 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. Agency and Developer Responsibilities • The Developer will attempt to acquire the Site thro ugh private negotiation w ith the property owner. • If the Developer is unsuccessful in acquiring the Site, the Commission in its absolute and sole discretion can de cide to initiate eminent domain proceedings. Upon acquisition of the Site, the Commission will convey fee ownership of the Site to the Developer at a price equ al to the price paid by the Commission to acquire the Site. • If the Commission decides to use its power of eminent domain, the Developer will advance to the Commission the Possession Deposit. • The Developer will pay a Purchase Price to the Commission in the amount of: (a) the actual price negotiated by the Commission for acquisition of the Site, plus any Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 3 other acquisition costs incurred by the Commission; or (b) the amount of just compensation awarded to the current property owner, plus the amount of acquisition costs incurred by Commission, such as completion of the eminent domain proceedings, and the amount necessary to satisfy any judgment in the action. • If the condemnation action is greater than $8 million, the Commission will attempt to abandon condemnation proceedings at the option of the Developer. • It is the belief and understanding of the Commission and the Developer that the DDA between the parties does not involve a "public w ork' as defined by the State prevailing wage laws, since the Developer will purchase the Site from the Commission for its fair market value without public subsidy. • The Developer agrees to devote the Site to the sale of new automobiles and trucks as a factory -authorized new automobile dealer as the principal activity conducted on the Site for a minimum of 10 years. Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 4 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 Site Acquisition (Estimate) $7,000,000 Other Agency Acquisition Costs TBD DDA Costs (Legal, Economic, and Appraisal) (2) $25,000 Total Commission Costs $7,025,000 (Less) Purchase Price from Developer (not less than Site Acquisition Cost) ($7,000,000) (Less) Reimbursement to Commission for Other Com mission Acquisition Costs (TBD) (Less) Reimbursement from Developer for Commission DDA Costs ($25.000) Net Commission Costs $0 (1) All figures provided by the Community Development Commission of National City, except as noted. (2) Gross estimate. Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 5 IV. 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. Re -use value is defined as the highest price in terms of cash or its equivalent which a property or development right is expected to bring for a specified use in a competitive open market, subject to the covenants, conditions, and restrictions imposed by the DDA. The proposed DDA sets specific conditions with respect to the scope of development, the schedule of performance, and method of financing. The Commission contracted with John G. Slagle, MAI, of Real Estate Professionals to conduct an appraisal of the Site. The appraiser determined the fair market value of the fee simple interest of the Site As Is" as of April 30, 2005. The appraiser concluded that the fair market value for the Site is $7,000,000, or approximately $33 per SF. On this basis, then, KMA concludes that the fair re -use value of the Site is estimated to be $7,000,000, or $33 per SF land. Summary Report Mossy Nissan, Inc. 16104.002.035 05373mm August 8, 2005 Page 6 V. 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 its highest and best use. In appraisal terminology, the highest and best use is that use of the property that 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 Redevelopment Plan of the City of National City governs the Site and regulates the zoning and land uses for the Site. The Site is zoned for commercial automotive within a planned development overlay (CA-PD). The zoning strictly allows only for new car dealerships. On this basis, then, KMA concludes that the proposed use represents the highest and best use of the Site. Therefore, the fair market value at highest and best use is equal to the fair re -use value, or $7,000,000, or $33 per SF land. Summary Report Mossy Nissan, inc. 16104.002.035 05373mm August 8, 2005 Page 7 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 comparison of the purchase price contained in the proposed DDA with the estimated fair re -use value as described below. On this basis, then, KMA concludes that the effective compensation to the Com mission is $7,000,000. Summary Report Mossy Nissan, Inc. 76104.002.035 05373mm August 8, 2005 Page 8 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 im paired 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 som e portions of the Project Area. Implementation of the proposed developm ent can be expected to assist in the alleviation of blighting conditions through the following: • 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 Mossy Nissan, Inc. 15104.002.035 05373mm August 8, 2005 Page 9 NOTICE OF A JOINT PUBLIC HEARING OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AND THE COMMUNITY DEVELOPMENT COMMISSION ON THE PROPOSED MOSSY NISSAN PROJECT The City Council of the City of National City and the National City Community Development Commission (CDC) will hold a Joint Public Hearing after the hour of 6:00 p.m. Tuesday, August 23, 2005, in the City Council Chambers, Civic Center, 1243 National City Boulevard, National City, on the proposed Disposition & Development Agreement (DDA) and Owner Participation Agreement for the proposed Mossy Nissan project. Any person interested in this matter may appear at the above time and place and be heard. Mossy Nissan, Inc., is proposing the development of a new automobile dealership on 4.53 acres located at 2626 and 2700 National City Boulevard within the National City Mile of Cars. The dealership will be constructed to accommodate anticipated increased sales volume forecasts of Nissan Motors for the next five years and beyond. The purpose of the Joint Public Hearing is to provide for public comet, in accordance with Sections 33433 and 33445 of the California Health & Safety Code, regarding the proposed terms and conditions for the sale of land proposed in a Disposition & Development Agreement (DDA) by and between the CDC and Mossy Nissan, Inc., for the real property located at 2626 and 2700 National City Boulevard. Said land is proposed to be sold for the development of the Mossy Nissan project:. A copy of the proposed DDA, a summary report pertaining to the sale of real property pursuant to the proposed Agreement, and other documentation required by Section 33445 of the California Health & Safety Code for the proposed Mossy Nissan project may be reviewed at the office of the Community Development Commission, at 140 East 12th Street, Suite B, National City, and the City Clerk's Office, 1243 National City Blvd., National City as of August 9, 2005. 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., August 17, 2005. Any questions °regarding this matter should be directed to Patricia Beard at (619) 336-4250. 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. MICHAEL DALLA City Clerk PUBLISHED lN THE NATIONAL CITY STAR NEWS, Friday, August 5 and August 12, 2005 EXIT 3 DISPOSITION AND DEVELOPMENT AGREEMENT By and Between the COMMUNITY. DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY and MOSSY NISSAN, INC. 017.262230.5 EXHIBIT 4 Attachment No. 1 Attachment No. 2 Attachment No. 3 Attachment No. 4 Attachment No. 5 Attachment No. 6 Attachment No. 7 Site Map Site Legal Description Grant Deed Schedule of Performance Scope of Development Release of Construction Covenants Operating Covenant 017.262230.5 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement") is entered into as of August 23, 2005, by and between the COMMUNITY DEVELOPMENT COMMJSSION OF THE CITY OF NATION_4L CITY, a public body, corporate and politic (the "CDC"), on the one hand, and MOSSY NISSAN, INC., a California corporation (the "Developer") on the other. RECITALS The following recitals are a substantive part of this Agreement: A. In furtherance of the objectives of the California Community Redevelopment Law, the CDC desires to redevelop a certain approximately 4.53 acre portion of the National City Redevelopment Project (the "Redevelopment Project") located at 2626 and 2700 National City Boulevard (APNs 562-340-47 and -48) (the `Property" or the "Site", more fully described below) in the City of National City (the "City"). B. The CDC and Developer desire by this Agreement for the Developer to redevelop and remodel upon the Property a new automobile sales, service and repair facility (the `Project"). C. The CDC and Developer (singularly, a "Party"; jointly the `Parties") desire to cause the Property to be redeveloped in order to aid in alleviating blighted conditions and to stimulate economic development in the Redevelopment Project area. D. In order to accomplish the successful completion of the Project, subject to the terms and conditions of this Agreement, the Agency may acquire the Property and convey the Property to Developer in order to enable Developer to construct the Project. E. The completion of the Project is in the vital and best interest of the City and the 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 has been undertaken. NOW, THEREFORE, the CDC and the Developer agree as follows: 100. DEFINITIONS "Acquisition Costs is defined in Section 203. "Agreement" means this Disposition and Development Agreement between the CDC and the Developer. "Attachments"to this Agreement are integral parts of the Agreement and are as enforceable as if set forth in the body of the Agreement. 017262230.5 "Basic Concept Drawings" means the initial drawings for the Project showing site plans, elevations and landscape features for the Project that have been submitted by the Developer and approved by the CDC concurrently with the approval of this Agreement. "CDC" or "Agency"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 for the benefit of the CDC, as set forth in Section 208.1 hereof. "City" means the City of City of National City, a California municipal corporation. "Closing" means the close of Escrow for the Conveyance of the Property from the CDC to the Developer, as set forth in Section 205.4 hereof. "Closing Date"means the date of the Closing, as set forth in Section 205.4 hereof. "Condition of Title" is defined in Section 206 hereof. "Construction Drawings"means the detailed construction drawings and plans to be prepared with respect to the Improvements, as set forth in Section 302.2 hereof. "Conveyance"means the conveyance of the Property by the CDC 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. "Developer" means Mossy Nissan, Inc., a California corporation or its assignee pursuant to Section 603.1. "Developer's Conditions Precedent" means the conditions precedent to the Closing for the benefit of the Developer, as set forth in Section 208.2. "Developer Deposits" is defined in Section 202 hereof. "Enforced Delay" is defined in Section 602. "Environmental Laws" means 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 2 017.262230.5 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, "Escrow" is defined in Section 205 hereof. "Escrow Costs" is defined in Section 205.1 hereof. "Escrow Holder" is defined in Section 205 hereof. "Governmental Requirements" means all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State of California, the County of San Diego, the City, or any other political subdivision in which the Property is located, and of any other political subdivision, CDC or instrumentality exercising jurisdiction over the CDC, the Developer or the Property. "Grant Deed" means the grant deed for the conveyance of the Property from the CDC to the Developer, in the form of Attachment No. 3 hereto which is incorporated herein by reference. "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 Governmental 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. 017.262230.5 3 "Improvements" means the improvements to be constructed by the Developer upon the Property, all more particularly described in Section 301.1 hereof and in the Scope of Development. "Notice" means a notice in the form prescribed by Section 601 hereof. "Operating Covenant" means the Operating Covenant in the form of Attachment No. 7 hereto which is incorporated herein by reference. "Outside Date" means the last date the Closing shall occur, as set forth in Section 205.4 hereof. "Parties" means the CDC and the Developer. "Permitted Exceptions" means the following exceptions to title with respect to the Property: (1) applicable building and zoning laws and regulations; (2) the provisions of this Agreement; (3) the Operating Covenant; (4) any lien for current taxes or taxes accrued subsequent to Closing; (5) such other conditions, covenants, restrictions or easements of record as may be expressly approved by the Developer in writing; and (6) the liens, encumbrances, conditions and other matters set forth in the Report approved by Developer pursuant to Section 206. "Possession Deposit" is defined in Section 202. "Project" means the Property and the improvements. "Property" or "Site" means the approximately 4.53 acre portion of the Redevelopment Project located at 2626 and 2700 National City Boulevard in the City, which is legally described in the Property Legal Description and depicted on the Site Map. "Property Legal Description" means the legal description of the Property in Attachment No. 2. "Purchase Price" means the price to be paid by the Developer to the CDC in consideration for the Conveyance of fee title to the Property, as set forth in Section 204.2 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. 4 017262230.5 "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 foith in Section 309 hereof, in the form of Attachment No. 6 hereto which is incorporated herein. "Report"means the preliminary title report, as described in Section 206 hereof. "Schedule of Performance" means the Schedule of Performance in Attachment No. 4, 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 Director. Unless 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 in Attachment No. 5, that 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 Map" means the depiction of the Property in Attachment No. 1. "Title Company" is defined in Section 206 hereof. "Title Policy" is defined in Section 207 hereof. "Transfer" is defined in Section 603 hereof. "Triple Net Lease" is defined in Section 203.3 hereof. 200. ACQUISITION AND CONVEYANCE OF THE SITE 201. Developer Efforts to Acquire Property. The Developer has attempted to acquire the Property. During the time after Developer executes this Agreement and the time at which the CDC may approve this Agreement, the Developer shall continue to negotiate for the acquisition of the Property in good faith with the owners of the Property. CDC will reasonably determine that Developer has made such good faith efforts to acquire the Property. Developer, to the extent its negotiations are unsuccessful with respect to the acquisition of the Property, desires CDC to assist in the acquisition of the Property and to consider the possible use of its eminent domain powers. Should the CDC acquire the Property, Developer desires the CDC to transfer the Property to it. In connection with any such acquisition, CDC shall determine in good faith and within its sole, absolute and independent discretion, whether it will or will not adopt a resolution of necessity and proceed with eminent domain. Developer acknowledges and agrees that the CDC has not pre -committed itself to commencement of eminent domain proceedings with respect to the Property and the CDC reserves the right, in its sole and absolute discretion, to approve or disapprove a resolution of necessity in connection therewith. Unless and until CDC decides to utilize its power of eminent domain as provided in Section 202, this Agreement does 917.262230.5 5 not bind the CDC to exercise its power of eminent domain, and CDC's failure to exercise said power shall not constitute a default by CDC hereunder. 202. Acquisition by Eminent Domain. If the CDC in its absolute and sole discretion decides, following appropriate hearings and evidence presented, to utilize its eminent domain power for the acquisition of the Property, provided Developer is timely making all Developer Deposits and paying all Acquisition Costs as set forth below in this Agreement, CDC will use its best efforts and diligently follow the Eminent Domain Law of the State of California and not voluntarily terminate or stop such proceeding. Developer shall be responsible for and shall advance to CDC, from time to time, upon written request of the CDC, all sums necessary for the completion of such proceedings (the "Developer Deposits"), including, without limitation, all Acquisition Costs, including, but not limited to, court costs, deposits necessary to obtain orders for pre judgment possession (the `Possession Deposit"), the amount of just compensation set forth in any final judgment of condemnation, payments for loss of business goodwill or pre - condemnation damages, relocation expenses and costs, any interest awarded by the court to the Property owner (net of any interest received by the CDC on the Possession Deposit, if any), title and litigation guarantees and any and all associated costs. The CDC shall use (again assuming it has decided after full and fair hearings to proceed with the acquisition) its best efforts to pro rate taxes, assessments, and other charges applicable to the Property as of the date of CDC's acquisition. Any advances requested by CDC shall be tendered by Developer by wire transfer or cashiers check within five (5) business days of receipt of CDC's written demand. 203. Acquisition Costs. For the purposes of this Agreement the term "Acquisition Costs" shall refer to any and all costs and expenses set forth in Section 202 above (whether previously advanced by Developer or not) as well as all other costs and expenses contemplated as being the responsibility of the Developer under this Agreement. Acquisitions Costs shall also include any and all costs and expenses of CDC in acquiring or attempting to acquire the Property through a negotiated purchase and enforcing its right to require Developer Deposits and supplements thereto pursuant to Section 202 above and this Section 203. In the event of termination of this Agreement at any time for any reason other than CDC's Default, Developer's obligation to pay Acquisition Costs shall survive the termination of this Agreement with respect to all Acquisition Costs (collectively, the "Post Termination Costs") either: (i) paid or incurred but not yet billed or paid as of such termination, or (ii) arising from (a) the subsequent abandonment of any eminent domain action as provided in Section 203.2, including, without limitation, any litigation expenses for which CDC may be responsible under California Code of Civil Procedure Section 1268.610 and/or damages under Section 1268.620 (including, but not limited to attorneys fees) and (b) any claims, actions, or other causes arising out of or related to actions taken by CDC prior to such termination. Developer hereby agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents from and against any and all claims, losses, liabilities, costs, expenses (including reasonable attorneys' fees), actions, causes of action, penalties or interest arising out of or in connection with any third party objections to CDC efforts to acquire the Property through a negotiated purchase or exercise of its power of eminent domain, including, without limitation, the adoption of any resolution of necessity or the filing of any complaint in eminent domain. If an eminent domain action is commenced, abandonment thereof sought. but the judge in such action for any reason does not allow the abandonment of the action, Developer shall be obligated to pay all awards, damages, costs and expenses awarded to the property owner in such action as "Acquisition Costs". 6 017262230.5 Developer shall deliver to CDC all Acquisition Costs (not previously advanced by Developer) and all Post Termination Costs within thirty (30) days after written demand from the CDC. Subject to the indemnification provisions above, CDC shall bear all costs incurred by CDC regarding the Property and this Agreement up to the date hereof. In carrying out its rights and obligations pursuant to this Agreement, CDC is authorized to select and hire those consultants, appraisers, expert witnesses, legal counsel, and other professionals as CDC deems necessary to effectuate and complete its rights and obligations hereunder and under the law of the State of California. Reasonable costs incurred by CDC for such consultants, appraisers, expert witnesses, legal counsel and other professionals shall be considered part of the Acquisition Costs. The payment of such amounts by Developer to CDC for any of these costs shall be effected within thirty (30) days of the date of mailing of such invoice and/or billing. 203.1 Possession Deposit. Notwithstanding anything set forth in Section 202 above, Developer and CDC understand and agree that Developer may not be in a position to make the Possession Deposit in which event it will not be possible to secure an order of possession in any eminent domain action prior to the entry of a judgment in any such action. Accordingly, in the event CDC decides to utilize its power of eminent domain, CDC shall not file a complaint for eminent domain for the Property until Developer advises CDC that it elects to have CDC seek an order of possession prior to the entry of judgment in any such action. Developer shall make such election no later than the last date set forth therefore in the Schedule of Performance. If and when the CDC decides to utilize its power of eminent domain, and if and when Developer timely elects an order of possession in any such action prior to entry of judgment, the CDC and Developer shall reasonably cooperate with Developer's lender and the Title Company in an effort to provide Developer's lender with security provided by Developer, including without limitation, an assignment of this Agreement as security and secure title insurance coverage for Developer and/or Developer's lender in connection with any Possession Deposit sufficient to cause said lender to advance the Possession Deposit to Developer. The failure of Developer to both timely elect an order of possession and to timely make the Possession Deposit shall result in all of Developer's rights ceasing under this Agreement while all of Developer's obligations pursuant to Section 203 shall continue. Time is of the essence in connection with this Section 203.1. In the event that Developer fails to timely make the Possession Deposit and the valuation date in any eminent domain action is changed and/or lost, Developer agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents from and against any and all claims, liabilities, costs, expenses (including reasonable attorneys' fees), actions, causes of action, penalties or interest arising out of or in connection with change in or loss of the valuation date. 203.2 Option to Abandon Eminent Domain Action. Hand after such time as the CDC may decide to commence a condemnation action in connection with the Property pursuant to its power of eminent domain, notwithstanding Developer's obligations pursuant to Section 202 above to pay all sums necessary for the completion of any such action, including, but not limited to, the Possession Deposit and the amount necessary to satisfy any judgment in such an action, if the judgment in such action is greater than Eight Million Dollars (S8,000,000), or at such time as it becomes apparent in the reasonable judgment of the Developer and CDC that the judgment in such an action will exceed S8,000,000, unless additional funding is then 017.262230.5 7 available from the CDC or other third party source, at the option of Developer, to be exercised by written notice to CDC, the CDC shall attempt to abandon the condemnation action whereupon (i) Developer shall remain liable for all Acquisition Costs and Post Termination Costs set forth above in Sections 202 and 203, and (ii) this Agreement shall terminate. 203.3 Triple Net Lease. Beginning on the date that any order for possession pursuant to California Code of Civil Procedure §§ 1255.410 et seq. may become effective, or such other date that the CDC obtains possession of the Property, CDC agrees to lease the Property to Developer pursuant to a triple net lease for Ten Dollars ($10) per month rent with Developer being completely responsible for any and all costs of the Property and CDC having no obligations whatsoever in connection with any repairs or modifications or costs and expenses of the Property (the "Triple Net Lease"). Developer and CDC agree to use a modified version of the AIR Single Tenant Lease -Net form for the Triple Net Lease. 204. Sale and Purchase. 204.1 Purchase and Sale. If Developer is unable to acquire the Property through its own efforts and in the event that CDC, following public hearings and receiving evidence, acquires the Property either through eminent domain or otherwise, then in accordance with and subject to all of the terms, conditions and covenants of this Agreement, CDC agrees to sell and Developer agrees to buy the Property. 204.2 Purchase Price. The Purchase Price to be paid by Developer for the Property ("Purchase Price") shall be: (a) In the event the Property is acquired by CDC through a negotiated purchase, the actual price paid by CDC for the Property, plus any other Acquisition Costs incurred to that date; or (b) in the event the Property is acquired by CDC through eminent domain proceedings, the amount of just compensation awarded to the owner of the Property, plus the amount of Acquisition Costs incurred by CDC. The actual Purchase Price shall be determined in accordance with the mandates of Section 33433 of the Health and Safety Code, if applicable, and shall not be less than the fair market value of the Property. The Developer Deposits shall be applied to the Purchase Price at the close of Escrow. In the event that CDC acquires the Property through its power of eminent domain or otherwise, the provisions of the sections below shall apply. 205. Escrow. The Parties shall open escrow ("Escrow") no later than thirty (30) days after CDC acquires title to the Property with Commonwealth Land Title Company, 1455 Frazee Road, Suite 600, San Diego, California 92108 or other title company mutually agreeable to the parties ("Escrow Holder"). 205.1 Costs of Escrow. CDC shall pay the premium for a standard CLTA Title Policy as set forth in Section 207 hereof and the documentary transfer taxes, if any, due with respect to the conveyance of the Property by CDC. Developer shall pay the added cost of an ALTA Extended Owners Policy if elected by Developer plus the cost of any required ALTA survey and/or endorsements. All other usual fees, charges and costs which arise from Escrow ("Escrow Costs") shall be paid by CDC and Developer, one-half by each. 8 017.262230.5 205.2 Escrow Instructions. This Agreement constitutes the joint escrow instructions of CDC and Developer, and Escrow Holder, 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 Escrow in the shortest possible time. Insurance policies for fire or casualty are not to be transferred, and CDC will cancel its own policies, if any, after the Closing. 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 five (5) business days from deposit of the Purchase Price, the funds shall be deposited into an interest bearing account with such interest accruing to the benefit of Developer. lf, in the opinion of either Party or the Escrow Holder, it is necessary or convenient in order to accomplish the Closing, 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 alter the date when both the CDC's Conditions Precedent and the Developer's Conditions Precedent as set forth in Sections 208.1 and 208.2 have been satisfied or waived by the respective Party. Escrow Holder is instructed to release CDC's escrow closing statements and Developer's escrow closing statements to the other Party. 205.3 Authority of Escrow Holder. Escrow Holder is authorized to, and shall: (a) Pay and charge Developer and CDC for their respective shares of the Escrow Costs payable under Section 205.1 of this Agreement. (b) Disburse funds and deliver and record the Grant Deed and Operating Covenant, when both the Developer's Conditions Precedent and the CDC's Conditions Precedent have been fulfilled or waived by Developer and CDC. (c) Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. (d) Within the discretion of Escrow Holder, direct CDC 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 thereunder. CDC agrees to execute a Certificate of Non -Foreign Status and/or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as may be required by Escrow Holder and a California Form 593-C (if applicable), on the form to be supplied by Escrow Holder. (e) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an 017.262230.5 9 IRS 1099-S form, and be responsible for withholding taxes, if any such forms as provided for or required by law. 205.4 Closing. This transaction shall close ("Closing") within thirty (30) days of the parties' satisfaction of all of CDC's and Developer's Conditions Precedent to Closing as set forth in Section 208 hereof, but in no event later than December 31, 2007 (the "Outside Date"). The Closing shall occur at the offices of Escrow Holder or other 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. 205.5 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 documents or properties, the Escrow shall not terminate until five (5) days after Escrow Holder 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 Holder is authorized to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. 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, Escrow Holder shall proceed with the Closing as soon as possible. 205.6 Closing Procedure. Escrow Holder shall close Escrow for the purchase of the Property as follows: (a) Record the Grant Deed and Operating Covenant with instructions for the Recorder of San Diego County, California to deliver the Grant Deed to Developer and Operating Covenant to the CDC. (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, and Form 593-C (if applicable) to Developer, and (e) Forward to both Developer and CDC 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. 206. Review of Title. CDC shall cause Escrow Holder ("Title Company") to deliver to Developer a standard preliminary consolidated title report ("Report") with respect to the title to the Property if Developer has not previously received a Report, together with legible copies of the documents ("Documents") underlying the exceptions ("Exceptions") set forth in the Report, within thirty (30) days from the date of this Agreement. Developer shall have the right to 10 017262230.5 reasonably approve or disapprove the Exceptions in its sole and absolute discretion; provided, however, that Developer hereby approves the following Exceptions: (a) The Redevelopment Plan; (b) The Redevelopment Project; and (c) The lien of any non -delinquent property taxes and assessments (to be prorated at Close of Escrow. Owner shall have thirty (30) days from the date of its latest receipt of the Report and the Documents to give written notice to CDC and Escrow Holder of Developer's approval or disapproval of any such Exceptions. If Developer timely disapproves any Exceptions, CDC shall have thirty (30) days from the receipt of Developer's written notice to either cause such exceptions to be removed from the Report or provide assurance to Developer such Exceptions will be removed at or before the Closing. If CDC does not either cause the disapproved Exceptions to be removed or provide assurances thereof, Developer may terminate this Agreement. If Developer pays to CDC the Purchase Price, Developer shall be deemed to have approved the Exceptions for the Property. The Permitted Exceptions plus the Exceptions approved by Developer as provided herein shall be referred to as the "Condition of Title." CDC shall not voluntarily create any new exceptions to title following CDC's acquisition of the Property. Title to the fee shall be delivered to Developer free of all mortgages, deeds or trust, judgments and mechanics liens, not suffered or incurred by Developer. 207. Title Insurance. Concurrently with recordation of the Grant Deed from CDC to Developer conveying title to the Property, there shall be issued to Developer at Developer's election either a CLTA Owners Policy or an ALTA Extended Coverage Owner's policy of title insurance ("Title Policy"), together with such endorsements as are reasonably requested by Developer, issued by the Title Company insuring that the title to the Property is vested in Developer in the condition required by Section 206 of this Agreement. The Title Company shall provide CDC with a copy of the Title Policy. The Title Policy shall be for the amount of the Purchase Price. 208. Conditions of Closing. The Closing is conditioned upon the satisfaction of the following terms and conditions within the times designated below: 208.1 CDC's Conditions of Closing. CDC's obligation to proceed with the Closing of the sale of the Site is subject to the fulfillment or waiver by CDC of each and all of the conditions precedent (a) through (f), inclusive, described below ("CDC's Conditions Precedent"), which are solely for the benefit of CDC, 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. 017.262230.5 11 (b) Execution of Documents. The Developer shall have executed any documents required hereunder and delivered such documents into Escrow, including the Operating Covenant. (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 205.1 hereof. (d) Design Approvals. The Developer shall have obtained approval by the City of the Basic Concept Drawings. (e) insurance. The Developer shall have provided proof of insurance as required by Section 306 hereof. (f) Financing. The CDC shall have approved acquisition financing as provided in Section 310 hereof, and such financing shall have closed and funded or be ready to close and fund upon the Closing. 208.2 Developer's Conditions of Closing. Developer's obligation to proceed with the purchase of the Site is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (e), inclusive, described below ("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, CDC shall not be in default in any of its obligations under the terms of this Agreement and all representations and warranties of CDC contained herein shall be true and correct in all material respects. (b) Execution of Documents. The CDC shall have executed the Grant Deed and Operating Covenant and any other documents required hereunder, and delivered such documents into Escrow. (c) Review and Approval of Title. Developer shall have reviewed and approved the condition of title of the Site, as provided in Section 206 hereof. (d) Title Policy. The Title Company shall, upon payment of Title Company's regularly scheduled premium, have agreed to provide the Title Policy to Developer for the Site upon the Close of Escrow, in accordance with Section 207 hereof. Notwithstanding the foregoing, if CDC has not obtained title to the Property, but has obtained a judicial order authorizing the CDC to take possession thereof, at the Developer's option CDC shall convey and the Developer shall accept the Property if the following conditions are met: 017.262230.5 (i) The CDC delivers exclusive possession of the Property to the Developer by Grant Deed, on or prior to the time set for conveyance thereof; (ii) The right of possession which the Developer acquires from the CDC is such that Title Company will issue a policy or 12 as follows: policies of title insurance acceptable to Developer's lender as to the interest conveyed by said Grant Deed subject to only those items described in Section 206; and (iii) The Developer is able to secure financing for the acquisition of the Property on the basis of said Title Policy. In connection with such title policy, CDC (if required by the Title Company) and Developer agree to provide Title Company with an indemnity agreement in a form reasonably requested by the Title Company. 209. Representations and Warranties. follows: 209.1 CDC Representations. CDC represents and warrants to Developer as (a) Authority. CDC 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. (b) FIRPTA. CDC 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 CDC has complied and will comply with all the requirements under FIRPTA or any similar state statute. (c) No Conflict. To the best of CDC's knowledge, CDC'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 CDC is a party or by which it is bound. 209.2 Developer Representations. Developer represents and warrants to CDC (a) Authority. Developer is a corporation formed in and in good standing under the laws of the State of California, 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 and any necessary third parties. (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. proceeding. 017.262230.5 (c) No Bankruptcy. Developer is not the subject of a bankruptcy 13 210. "As Is" Sale. DEVELOPER ACKNOWLEDGES THAT, SUBJECT TO THE EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF CDC UNDER THIS AGREEMENT, DEVELOPER IS PURCHASING THE SITE "AS IS" IN RELIANCE SOLELY ON: (A) DEVELOPER'S OWN INSPECTIONS OF THE SITE; (B) DEVELOPER'S INDEPENDENT VERIFICATION OF THE TRUTH OF ANY DOCUMENTS MADE AVAILABLE TO DEVELOPER; AND (C) THE OPINIONS AND ADVICE CONCERNING THE SITE OF CONSULTANTS ENGAGED BY DEVELOPER. DEVELOPER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE REPRESENTATIONS, WARRANTIES AND COVENANTS OF CDC EXPRESSLY SET FORTH IN THIS AGREEMENT, CDC IS NOT MAKING ANY OTHER WARRANTIES OR REPRESENTATIONS EXPRESS OR IMPLIED OF ANY KIND OR CHARACTER WITH RESPECT TO THE SITE, INCLUDING WTTHOUT LIMITATION: (i) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE SITE, (ii) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF SOILS, GEOLOGY AND ANY GROUNDWATER RELATING TO THE SITE, (iii) THE EXISTENCE, QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE SITE, (iv) THE SITE'S USE, HABITABILITY, MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE SITE FOR ANY PARTICULAR PURPOSE, (v) THE COMPLIANCE OF THE SITE WITH ANY APPLICABLE CODES, LAWS, REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY GOVERNMENTAL OR QUASI -GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY, (vi) THE PRESENCE OF ANY HAZARDOUS MATERIALS ON, UNDER OR ABOUT THE SITE OR THE ADJOINING OR NEIGHBORING SITE, (vii) THE CONDITION OF TITLE TO THE SITE, AND (viii) THE ECONOMICS OF THE OPERATION OF THE SITE AS AN AUTOMOBILE SALES, SERVICE AND REPAIR FACILITY OR ANY OTHER USE. DEVELOPER WARRANTS AND REPRESENTS THAT IT HAS NOT RELIED AND WILL NOT RELY ON, EITHER DIRECTLY OR INDIRECTLY, ANY WARRANTY OR REPRESENTATION OF CDC OR ITS AGENTS NOT EXPLICITLY SET FORTH IN THIS AGREEMENT. 300. DEVELOPMENT OF THE SITE 301. Scope of Development. 301.1 Developer's Obligation to Construct Improvements. The Developer shall develop or cause the development of the Improvements 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 and City as set forth herein. 302. Design Review. 302.1 Basic Concept Drawings. The Developer has submitted conceptual drawings for the Improvements (collectively, the "Basic Concept Drawings") which the CDC has approved. 302.2 Site Plan Drawings. Within the time set forth in the Schedule of Performance, the Developer and CDC shall submit to the City plans and drawings with respect to 14 017.262230.5 the Improvements (the "Site Plan Drawings"), which must include all documents, plans and drawings (the "Construction 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. 302.3 Consultation and Coordination. During the preparation of additional Site Plan Drawings, if any, and Construction Drawings, and other documents by Developer, staff of the CDC and the Developer shall hold regular progress meetings to coordinate the preparation of, submission to, and review of the Site Plan Drawings and Construction Drawings. 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/consultant to serve as the project manager who is responsible for the coordination of the CDC's activities under this Agreement. Approval of progressively more detailed drawings and specifications will be promptly granted by the CDC or designee if developed as a logical evolution of drawings or specifications theretofore approved. Any items so submitted and approved by the CDC or designee shall not be subject to subsequent disapproval. Any disapproval shall state in writing the reasons for disapproval and the changes which the CDC or designee requests to be made. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved hereunder. Approval of progressively more detailed drawings and specifications will be promptly granted by the CDC or designee if developed as a logical evolution of drawings or specifications theretofore approved. Any items so submitted and approved by the CDC or designee shall not be subject to subsequent disapproval. Any disapproval shall state in writing the reasons for disapproval and the changes which the CDC or designee requests to be made. Such reasons and such changes must be consistent with the Scope of Development and any items previously approved hereunder. 302.4 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. 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 and completed during the construction of the Improvements. 302.5 Defects in Plans. The CDC shall not 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, or other documents prepared by or for the Developer, nor for any structural or other defects in any work done according to the approved Basic Concept Drawings, Site Plan Drawings or Construction Drawings or other documents 317.262230.5 15 prepared by or for the Developer, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 303. 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 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. The Developer shall, without limitation, apply for and secure the following, and pay all costs, charges and fees associated therewith: (a) City Site Plan Approval. (b) All other permits and fees required by the City, County of San Diego, and other governmental agencies with jurisdiction over the Improvements. (c) Any environmental studies and documents required pursuant to the California Environmental Quality Act, if any. The execution of this Agreement does not, however, constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals required by the CDC or the City. 304. Schedule of Performance. Each party to this Agreement shall perform the obligations to be performed by such party pursuant to this Agreement within the respective times provided in the Schedule of Performance, and if no such time is provided, within a reasonable time. The Schedule of Performance shall be subject to amendment from time to time upon the mutual agreement of the CDC and Developer. 305. Cost of Construction. All of the cost of planning, designing, developing, site preparation and constructing all of the Improvements shall be borne solely by the Developer. 306. Insurance Requirements. The Developer shall take out and maintain or shall cause its general contractor to take out and maintain until the issuance of the Release of Construction Covenants pursuant to Section 309 of this Agreement, a comprehensive genera] liability policy in the minimum amount of Three Million Dollars ($3,000,000.00) combined single limit policy, or such other policy limits as the CDC may approve at its discretion, including contractual liability, as shall protect the Developer, City and CDC from claims for such damages, and which policy shall be issued by a "B+" or higher 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 sh-all furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by the CDC setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City 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 a statement of obligation on the 017262230.5 l6 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. 307. Rights of Access. Prior to the issuance of a Release of Construction Covenants (as specified in Section 309 of this Agreement), for purposes of assuring compliance with this Agreement, representatives of the CDC shall have the right of reasonable 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 307. 308. 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. 308.1 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, 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. Labor Code Section l 197.5, 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. 308.2 Prevailing Wages. All work pursuant to this Agreement shall be done in accordance with all applicable federal and state labor standards. Developer is aware of Sections 33423 — 33426 of the Califomia 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. 017.262230.5 17 ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on certain "public works" and "maintenance" projects. In light of the fact that the Site is being purchased by Developer for its fair market value without public subsidy, it is the belief and understanding of the CDC and Developer that this Agreement does not involve a "public work" or "maintenance" project, as defined by the Prevailing Wage Laws. Notwithstanding the foregoing, Developer hereby expressly acknowledges and agrees that neither the City nor CDC has represented to Developer that the Project will not be a "public work" and in the event a determination should ever be made that this Agreement does involve a "public work" or "maintenance project" or is otherwise subject to Prevailing Wage Laws, Developer agrees to fully comply with such Prevailing Wage Laws. Developer shall defend, indemnify and hold the CDC, 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 alleged failure 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 described in this Section 308.2, Developer agrees that the CDC and the other indemnified parties may appoint their own independent counsel who are reasonably acceptable to Developer, and Developer agrees to pay all reasonable attorneys' fees and defense costs of the CDC and the other indemnified parties, 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. 308.3 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. 308.4 Lien and Stop Notices. Developer shall not allow to be placed on the Site or any part thereof any lien or stop notice. If a claim of a lien or stop notice is given or recorded affecting the Improvements, Developer shall, within sixty (60) days of such recording or service or, within five (5) days of CDC's demand thereafter, whichever last occurs: (a) Pay and discharge the same; or (b) Effect the release thereof by recording and delivering to CDC a surety bond in sufficient form and amount, or otherwise; or (c) Provide CDC with other assurances, which CDC deems, in its sole discretion, to be satisfactory for the payment of such lien or bonded stop notice and for the full and continuous protection of CDC from the effect of such lien or bonded stop notice. 309. 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 18 017.262230.5 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 ten (10) days of written request thereof, provide the Developer with a written statement of the reasons the CDC refused or failed to furnish 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. 310. Financing of the Improvements. 310.1 Approval of Financing. Developer shall submit to CDC reasonable assurances that Developer has sufficient funds on hand or 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. lithe CDC disapproves of the evidence of financing, CDC shall do so by 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. CDC agrees to make reasonable modifications of Sections 310 and 503 that may be requested by Developer's lender, provided such modifications do not adversely affect the receipt of any material benefit by CDC hereunder. Upon the reasonable request of a Developer's lender, CDC shall execute from time - to -time estoppel certificates to the extent they are consistent with the terms of this Agreement. CDC shall respond to any request under this paragraph within fifteen (15) days after receipt of the request accompanied by sufficient information as may be reasonably required in order for the CDC to act on such request. 310.2 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. 310.3 Holder Not Obligated to 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 portionthereof, or to 017.262230.5 19 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. 310.4 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 one hundred twenty (120) 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 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 Improvements 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 one hundred twenty (120) 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 bolder has within such one hundred twenty (120) 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. 310.5 Failure of Holder to Complete Improvements. In any case where, if within one hundred twenty (120) days after the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from the CDC of a default by the Developer in completion of construction of any of the Improvements under this Agreement, and such holder has not exercised the option to construct as set forth in Section 310.4, or if it has exercised the option but has defaulted hereunder and failed to timely cure such default, the CDC may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the CDC, if it so desires, shall be entitled to a conveyance from the holder to the CDC upon payment to the holder of an amount equal to the sum of the following: (a) The unpaid mortgage or deed of trust at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings); 20 017.262230.5 attomeys' fees; (b) All expenses with respect to foreclosure, including reasonable (c) The net expense, if any (exclusive of general overhead) incurred by the holder as a direct result of the subsequent ownership or management of the Site or part thereof, such as insurance costs and taxes; (d) The costs of any Improvements made by such holder, (e) An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by CDC; and, (f) Any customary prepayment charges imposed by the lender pursuant to its loan documents and agreed to by Developer. 310.6 Right of the CDC to Cure Mortgage or Deed of Trust. In the event of a mortgage or deed of trust default or breach by Developer prior to the completion of the construction of any of the Improvements or any part thereof, Developer shall immediately deliver to CDC a copy of any mortgage holder's notice of default. If the holder of any mortgage or deed of trust has not exercised its option to construct, or Developer has not cured or commenced a cure of such default, CDC shall have the right but not the obligation to cure the default. In such event, CDC shall be entitled to reimbursement from Developer of all proper costs and expenses incurred by CDC in curing such default. CDC shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to Section 310. 400. COVENANTS AND RESTRICTIONS 401. 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 for the periods of time specified therein. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to this Agreement and all applicable provisions of the City Municipal Code. The foregoing covenants shall run with the land. 402. Use Covenants. For a term commencing upon the Conveyance and ending upon the expiration of the Operating Covenant, the Developer hereby covenants and agrees for itself, its successors, and assigns and all voluntary and involuntary successors in interest to the Site, or any part thereof, that the Site will only be used in compliance with the Operating Covenant. 403. Maintenance Covenants. The Developer shall maintain the Site and all Improvements thereon, including all landscaping and erosion control, in a commercially reasonable manner. 017.262230.5 2l 404. Nondiscrimination Covenants. The Developer covenants 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, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer 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, 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 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 ail 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, 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, 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, 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 22 017.262230.5 discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 405. 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 fix- 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 teen of the Redevelopment Plan. (b) The covenants against discrimination, as set forth in Section 404 of this Agreement, shall remain in effect in perpetuity. 406. Indemnification. Developer hereby agrees to indemnify, defend and hold harmless the CDC, its elected officials, officers, employees and agents (the "Indemnified Parties") from and against any and all claims, losses, liabilities, costs, expenses (including reasonable attorneys' fees), actions, causes of action, penalties or interest arising out of or in connection with any third party challenges or objections to actions taken by any of the Indemnified Parties pursuant to this Agreement. 500. DEFAULTS AND REMEDIES 501. Default Remedies. Subject to the extensions of time set forth in Section 602 of this Agreement, failure by either 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 for the obligations set forth in Sections 202 and 203, for which time is of the essence, or 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. 502. Institution of Legal Actions. In addition to any other rights or remedies and subject to the restrictions otherwise set forth in this Agreement, either Party may institute an 017.262230.5 23 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, or in the District of the United States District Court in which such county is located. 503. Reentry and Revesting of Title in the CDC After the Closing and Prior to Completion of Construction. Subject to the notice and cure provisions of this Agreement and the rights of a bolder of any mortgage or deed of trust encumbering the Site, 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) Unless due to an Enforced Delay as described in Section 602 hereof, fail to start the construction of the Improvements as required by this Agreement for a period of one hundred twenty (120) 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 one hundred twenty (120) days after written notice thereof from the CDC; or (c) Contrary to the provisions of Section 603 Transfer or suffer any involuntary Transfer in violation of this Agreement, and such transfer has not been approved by the CDC or rescinded within sixty-(60) 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: (a) Any mortgage or deed of trust permitted by this Agreement; (b) Any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deeds of trust; or (c) Any rights or interests held by a lessee in and to the Property. The Grant Deed shall contain appropriate reference and provision to give effect to the CDC's right as set forth in this Section 503, 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 the estate conveyed to the Developer. Upon the revesting in the CDC of title to the Site as provided in this Section 503, 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 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 017.262230.5 24 C in full of any loan evidenced by a 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 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 503 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. 504. Acceptance of Service of Process. In the event that the Developer commences legal action against the CDC, service of process on the CDC shall be made by personal service upon the Director of the CDC 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 017.262230.5 25 017.262230.5 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. 505. 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. 506. 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. 507. Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 508. Non -Liability of Officials and Employees of the CDC. No member, official or employee of 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 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. 509. 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. 600. GENERAL PROVISIONS 601. 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. To CDC: COMMU JTYDEVELOPMENTCOMMISSION OF THE CITY OF NATIONAL CITY 140 E. 12th Street, Suite B National City, CA 91950-3312 Attention: Executive Director 26 Copy to: Richard L. Moskitis, Esq. FOLEY & LARDNER LLP 401 West Broadway, 23n1 Floor San Diego, CA 92101-3542 To Developer: MOSSY NISSAN, INC. 9755 Clairemont Mesa Blvd. San Diego, CA 92124 Attention: Philip E. Mossy Telephone: (858) 654-2850 Facsimile: (858) 614-0132 Copy to: Edward F. Whittler, Esq. PETERSON & PRICE, APC 530 B Street, Suite 1700 San Diego, CA 92101 Telephone: (619) 234-0361 Facsimile: (619) 234-4786 Copy to: Alex Zirpolo 617 Saxony Place, Suite 101 Encinitas, CA 92024 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. 602. Enforced Delay; Extension of Times of Performance. in addition to specific provisions of this Agreement, performance 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; acts of international and domestic 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 CDC which shall not excuse performance by the CDC) (an "Enforced Delay"). 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 602. 017.262239.5 27 603. Transfers of Interest in Site or Agreement. The qualifications and identity of the Developer as the developer of high quality Project are of particular concern to the CDC. Furthermore, the Parties acknowledge that the CDC has negotiated the terrns of this Agreement in contemplation of the development of the Improvements as described in the Scope of Development of this Agreement_ Accordingly, for the period commencing upon the date of this Agreement and until the CDC's issuance of the Release of Construction Covenants as set forth in Section 309 hereof, (a) no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement, and (b) nor shall the Developer make any total or partial sale, transfer, conveyance, assignment, subdivision, of the whole or any part of the Site (a "Transfer")without the prior written approval of the CDC, except as expressly set forth herein. 603.1 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, CDC approval of a Transfer of the Site or a portion of the Site 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 Developer or one of its members or shareholders 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 310.1 herein), including the grant of a deed of trust to secure the funds necessary for construction of the Improvements. (d) Any lease of commercial space within the Site to tenants in the ordinary course of business. In the event of a Transfer by Developer under subparagraph (a) above not requiring the CDC's prior approval, Developer nevertheless agrees that at least fifteen (15) days before such Transfer it shall give written notice to CDC of such assignment and satisfactory evidence that the assignee has assumed in writing through an assignment and assumption agreement all of the obligations of this Agreement_ Such assignment shall release the assigning Developer from any obligations to the CDC hereunder. 603.2 CDC Consideration of Requested Transfer. The CDC agrees that it will not unreasonably withhold approval of a request for approval of a Transfer made pursuant to this Section 603, provided the Developer delivers written notice to the CDC 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 enable the CDC to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 603 and as reasonably determined by the CDC. 28 017.262230.5 The CDC 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 operator of new automobile dealerships, (iii) the current financial condition of the transferee, and similar factors. The CDC agrees not to unreasonably withhold its approval of any such requested Transfer, taking into consideration the foregoing factors. An assignment and assumption agreement in form satisfactory to the 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 CDC approval of a Transfer pursuant to this Section 603, the CDC shall either approve or disapprove such proposed assigrunent or shall respond in writing by stating what further information, if any, the CDC reasonably requires in order to complete the request and determine whether or not to grant the requested approval. Upon receipt of such a response, the Developer shall promptly furnish to the CDC such further information as may be reasonably requested. 603.3 Successors and Assigns. Subject to the restrictions on Transfer set forth above in Section 603, 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. 603.4 Assignment by CDC. The CDC may assign or transfer any of its rights or obligations under this Agreement without the approval of the Developer. 604. Relationship Between CDC and Developer. It is hereby acknowledged that the relationship between the CDC and the Developer is not that of a partnership or joint venture and that the CDC 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 Attachments hereto, the CDC shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Improvements. 605. CDC Approvals and Actions. The CDC shall maintain authority of this Agreement and the authority to implement this Agreement through the CDC Executive (or acting) Director (or his/her duly authorized representative). The CDC Executive (or acting) 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 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 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 Board. 606. 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. 017.262230.5 29 607. 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. 608. Real Estate Brokerage Commission. Except for Developer's obligation to pay Mr. Alex Zirpolo a commission pursuant to a separate agreement between Developer and Mr. Zirpolo, the CDC 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 the Site from the CDC. Each of the Parties agrees to defend and hold harmless the other Party 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. 609. 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. 610. 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. 61]. 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 of this Agreement. 612. 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. 613. 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. 614. 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 017.262230.5 30 017.262230.5 the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The tens "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 615. 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. 616. Time of Essence. Time is expressly made of the essence with respect to the performance by the CDC, and the Developer of each and every obligation and condition of this Agreement. 617. 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. 618. Conflicts of Interest. No member, official or employee of the CDC 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/her personal interests or the interests of any corporation, partnership or association in which he/she is directly or indirectly interested. 619. Time for Acceptance of Agreement by CDC. This Agreement, when executed by the Developer and delivered to the CDC, must be authorized, executed and delivered by the CDC 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. 31 IN WITNESS WHEREOF, the CDC and the Developer have executed this Disposition and Development Agreement as of the date set forth above. ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel 017262230.5 CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By. Nick inzunza, Chairman DEVELOPER: MOSSY NISSAN, INC., a California corporation By: By: Philip E. Mossy, President , Secretary Signature Page of Disposition and Development Agreement 32 017262230.5 ATTACHMENT NO. 1 SITE MAP Attachment No. 1-1 kat ♦1w %xV 3n tl3nDOFt� r.,.. wJ �IHI `VE mat: $L wry, g 1' 91191111.100 t (3Dari00 ) CI ITO Ni ► R If/ ►7rlNJ w„.4 'JVIr`2 O! WWI l� ► 0 i, e A iu fin K O " *V I NOLWL80d9NV Ii iiwKAH401 MINI NM NUM Ell t11111tltttltt111 MN 111111111M11 ttliIIIIII� t rro� IN-'MINN CI triclatimm M'.1 4w11® MIMI liltliiiiGAIL i trimmrwriame tiaLiripqMiniii Ii:Lri%' rr,i dts ri4QI ` . A L'i c _lLAIMI +`1rCirl: ®tiriiI!tt l CJ1140, li11ttt pamtlinti cm f*'7:I I MINT AOM.III PM II 1.1..1�...AiLtli•I,i1..J1�....V...�....,LL • 017.262230.5 017.262230.5 ATTACHMENT NO. 2 SITE LEGAL DESCRIPTION Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Attachment No. 2 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 , 200hereby grants to MOSSY NISSAN, INC., a California corporation ("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 26, 2005 (the "DDA"), a copy of which is on fine with the CDC at its offices as a public record and which is incorporated herein by reference. The DDA generally requires the Developer to rehabilitate, remodel, construct and maintain in a first class condition a new automobile sales, service and repair facility and related parking 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. 017.262230.5 Attachment No. 3-1 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 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, 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, 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: 017.262230.5 Attachment No. 3-2 "That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, 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, 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 one hundred twenty (120) 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 one hundred twenty (120) 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 sixty (60) 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 permitted by the DDA in and to the property. Attachment No. 3-3 017.262230.5 46,fr 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 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 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 way 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. 017.262230.5 Attachment No. 3-4 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. 8. 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 right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or 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, orto 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, performance 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) (an "Enforced Delay"). 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. 017.262230.5 Attachment No. 3-5 ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick Inzunza, Chairman MOSSY NISSAN, INC_, a California corporation By: By: Philip E. Mossy, President Signature Page of Grant Deed , Secretary 017.262230.5 Attachment No. 3-6 017.262230.5 EXHIBIT "A" LEGAL DESCRIPTION OF SITE Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Exhibit A- 1 ATTACHMENT NO. 4 SCHEDULE OF PERFORMANCE GENERAL PROVISIONS 1. Approval and Execution Disposition and Development Agreement ("Agreement") CDC shall consider this Agreement and, if approved, shall authorize, execute and deliver the Agreement to Developer. ACQUISITION AND POSSESSION 2. Acquisition and Possession If appropriate and necessary, CDC may make the necessary findings, conduct appropriate public hearings and take all necessary actions to acquire possession of the Property. 3. Developer Election to Make Possession Deposit 4. Open Escrow If applicable, CDC and Developer shall open an escrow for the purpose of CDC conveying Property to Developer. 5. Satisfv Conditions Precedent CDC and Developer shall satisfy or waive aU of their respective Conditions Precedent to Close of Escrow. 6. Close Escrow CDC shall either convey possession and/or fee title to the Property to Developer and Escrow shall close. August 23, 2005 August 23, 2005 through December 31, 2007. November 1, 2005 No later than thirty (30) days after CDC possession of the Site or concurrent with Developer election to make Possession Deposit. No later than earlier of thirty (30) days after CDC acquires title to the Property through negotiated purchase or through an Order of Possession and/or Final Order of Condemnation. No later than thirty (30) days after satisfaction or waiver of all Conditions Precedent to Close of Escrow. 017.262230.5 Attachment No. 4-] SCHEDULE OF PERFORMANCE CONSTRUCTION 7. Preliminary Design Developer shall complete preliminary design and submit to CDC for review. 8. Preliminary Design Approval CDC shall review, request modifications if necessary and approve preliminary design Construction Drawings and approval Applications Developer shall submit to CDC Construction Drawings, including application materials required by City Planning Services to obtain City approvals for construction of Improvements. 10. Review and Approval Construction Drawings CDC shall review, request modifications if necessary, and approve Construction Drawings. During this period of time, CDC staff and Developer shall hold progress meetings to coordinate preparation, review and modification of Construction Drawings and applications. Building permits shall be issued. 11. Submit final Construction Drawings Developer shall submit its final revision of Construction Drawings. 12. Building Permits Building Permits shall be issued. 13. Commence Construction Developer shall commence construction of the 017.262230.5 Attachment No. 4-2 No later than sixty (60) days after earlier of(i) CDC obtaining order of possession, or (ii) Close of Escrow. Thirty (30) days after receipt by CDC. One hundred twenty (120) days after earlier of: (i) CDC obtaining order of possession; or (ii) Close of Escrow. Thirty (30) days after CDC receipt of Construction Drawings. Thirty (30) days after receipt of CDC comments. Ninety (90) days after submittal of final construction drawings. Thirty (30) days after receipt of permits. 01 7.262230.5 SCHEDULE OF PERFORMANCE Improvements of the Site. l4. Complete Construction Two hundred forty (240) days after commencement of Developer shall complete construction of the construction. Improvements on the Site. Attachment No. 4-3 ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT The Improvements shall consist of new buildings for the Mossy Nissan Dealership, all to be built in accordance with the new Nissan Image Program and shall consist of the following: Approximately 35,000 - 40,000 square feet of new buildings consisting of (a) Showroom/SaIes Offices of approximately 6,000 - 8,000 square feet; (b) Service/Detail/Body Shop Bays (approximately 30-40 Bays) of approximately 26,000 square feet; and (c) Parts Department of approximately 8,000 square feet. Attachment No. 5-1 017.262230.5 tot 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 COMMUNJTY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "CDC"), in favor of MOSSY NISSAN, INC., a California corporation (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 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 part 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. 017262230.5 Attachment No. 6-1 2. Nothing contained in this instrument shall modify in any other way any other provisions of the DDA. IN WITNESS WHEREOF, the CDC has executed this Release this day of 200 . ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By Nick Inzunza, Chairman 017.262230.5 Attachment No. 6-2 017.262230.5 EXHIBIT "A" SITE DESCRIPTION Parcel A: (APN: 562-340-47) The northerly 164.00 feet of lot 5 of E. J. Christman Business and Industrial Park I, in the Cityof National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f-the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Exhibit A ATTACHMENT NO. 7 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: FOLEY & LARDNER LLP Attn: Richard L. Moskitis 402 West Broadway, Suite 2300 San Diego, California 92101-3542 APNs: 562-340-47 562-340-48 OPERATING COVENANT THIS OPERATING COVENANT is made this day of , 200 , by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic (the "Agency"), and MOSSY NISSAN, INC., a California corporation (the "Participant"), with reference to the following: A. The Agency and the Participant have executed a Disposition and Development Agreement (the "Agreement"), dated as of July 26, 2005 which provides for the development of certain real property located in the City of National City (the "City"), County of San Diego, State of California, more fully described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Site"). The Agreement is available for public inspection and copying at the office of the Agency, I40 E. 12th Street, Suite B, National City, California. All of the terms, conditions, provisions and covenants of the Agreement are incorporated in this Operating Covenant by reference as though written out at length herein and the Agreement and this Operating Covenant shall be deemed to constitute a single instrument or document. Capitalized terms used herein and not otherwise defined shall have the same meaning as set forth in the Agreement. B. The Agreement provides for, among other things, the Participant's conveyance to the Agency of an operating covenant with respect to the Improvements on the Site (the "Facility"). NOW, THEREFORE, the Participant hereby conveys to the Agency the following Operating Covenant: 1. Operation of Automobile Dealership. For a term commencing upon the date that the City issues a certificate of occupancy for the Facility, and ending upon the tenth anniversary thereof (which ten year period constitutes the "Operating Covenant Period"), the Participant hereby covenants and agrees to operate (or cause its successors or assigns to operate) the Facility on the Site on a continuous basis, devoted to the sale of new automobiles and trucks as a factory - authorized new automobile dealer as the principal activity conducted on the Site. The sale of used automobiles and trucks, and the servicing and repair of vehicles may also be conducted on the Site Attachment No. 7-1 017262230.5 ow' as a secondary use. In addition, the Participant shall conduct all activities for the leasing of automobiles from the Facility either on the site or at an office located within the City of National City. No other uses may be made on the Site during the Operating Covenant Period without the prior writ -ten approval of the Agency, which approval may be withheld in Agency's sole discretion. The requirements of this Section 1 shall run with the land. 2. Nondiscrimination. The Participant by and for itself and any successors in interest covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Participant 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. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: i. 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, marital status, physical or mental disability or medical condition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee 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, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." ii. 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: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, physical or mental disability or medical condition, ancestry or national origin 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." iii. 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, marital status, physical or mental disability or medical condition, ancestry or national origin, 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, sublessees or vendees of the premises." 017.262230.5 Attachment No. 7-2 This covenant regarding non-discrimination shall remain in effect in perpetuity. 3. Performance of Maintenance. a. Participant shall maintain the Site and the Facility in a first class condition, including, but not limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Site and any and all other improvements on the Site. b. To accomplish the maintenance, Participant shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Operating Covenant. c. The following standards ("Maintenance Standards") shall be complied with by Participant and its maintenance staff contractors or subcontractors: i. Landscape maintenance shall include, but not be limited to: watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. ii. Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly, removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers. iii. All maintenance work shall conform to all applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of maintenance. iv. Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all governing regulations. Precautionary measures shall be employed recognizing that all areas are open to public access. v. The Site and Facility shall be maintained in conformance and in compliance with the approved Site construction and architectural plans and design scheme, as the same may be amended from time to time with the approval of the City, and reasonable commercial development maintenance standards for similar projects, including, but not limited to: painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements and public improvements to the curb line. Attachment No. 7-3 017.262230.5 4br vi. The Site and Facility shall be maintained as required by this Section 3 in good condition and in accordance with the custom and practice generally applicable to comparable automobile dealership facilities located in Southern California. 4. Failure to Maintain Site and Facility. In the event Participant does not maintain the Site or the Facility in the manner set forth herein and in accordance with the Maintenance Standards, Agency and/or City shall have the right to maintain such private and/or public improvements, or to contract for the correction of such deficiencies, after written notice to Participant. However, prior to taking any such action, Agency agrees to notify Participant in writing if the condition of said improvements do not meet with the Maintenance Standards and to specify the deficiencies and the actions required to be taken by Participant to cure the deficiencies. Upon notification of any maintenance deficiency, Participant shall have thirty (30) days within which to correct, remedy or commerce and diligently pursue the cure the deficiency. If the written notification states the problem is urgent relating to the public health and safety of the City or the Agency, then Participant shall have forty-eight <48) hours to rectify the problem. In the event Participant fails to convect, remedy, or cure or has not commenced correcting, remedying or curing such maintenance deficiency after notification and after the period of correction has lapsed, then City and/or Agency shall have the right to maintain such improvements. Participant agrees to pay Agency such charges and costs. Until so paid, the Agency shall have a lien on the Site for the amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice of Claim of Lien" against the Site. Upon recordation of a Notice of a Claim of Lien against the Site, such lien shall constitute a lien on the fee estate in and to the Site prior and superior to all other monetary liens except: (i) all taxes, bonds, assessments, and other levies which, by law, would be superior thereto; (ii) the lien or charge of any mortgage, deed of trust, or their security interest then of record made in good faith and for value, it being understood that the priority of any such lien for costs incurred to comply with this Agreement shall date from the date of the recordation of the Notice of Claim of Lien. Any such lien shall be subject and subordinate to any lease or sublease of the interest of Participant in the Site or any portion thereof and to any easement affecting the Site or any portion thereof entered into at any time (either before or after) the date of recordation of such a Notice. Any lien in favor of the Agency created or claimed hereunder is expressly made subject and subordinate to any mortgage or deed of trust made in good faith and for value, recorded as of the date of the recordation of the Notice of Claire of Lien describing such lien as aforesaid, and no such lien shall in any way defeat, invalidate, or impair the obligation or priority of any such mortgage or deed of trust, unless the mortgage or beneficiary thereunder expressly subordinates his interest, of record, to such lien. No lien in favor of the Agency created or claimed hereunder shall in any way defeat, invalidate, or impair the obligation or priority of any lease, sublease or easement unless such instrument is expressly subordinated to such lien. Upon foreclosure of any mortgage or deed of trust made in good faith and for value and recorded prior to the recordation of any unsatisfied Notice of Claim of Lien, the foreclosure - purchaser shall take title to the Site free of any lien imposed by the Agency that has accrued up to the time of the foreclosure sale, and upon taking title to the Site, such foreclosure -purchaser shall only be obligated to pay costs associated with this Agreement accruing after the foreclosure - purchaser acquires title to the Site. If the Site is ever legally divided with the written approval of the Agency and fee title to various portions of the Site is held under separate ownerships, then the burdens of the maintenance obligations set forth herein and in this Agreement and the charges levied by the Agency to reimburse the Agency for the cost of undertaking such maintenance obligations of Participant and its successors and the lien for such charges shall be apportioned 017.262230.5 Attachment No. 7-4 among the fee owners of the various portions of the Site under different ownerships according to the square footage of the land contained in the respective portions of the Site owned by them. Upon apportionment, no separate owner of a portion of the Site shall have any liability for the apportioned liabilities of any other separate owner of another portion of the Site, and the lien shall be similarly apportioned and shall only constitute a lien against the portion of the Site owned in fee by the owner who is liable for the apportioned charges levied by the Agency and secured by the apportioned lien and against no other portion of the Site. Participant acknowledges and agrees City and Agency may also pursue any and all other remedies available in law or equity. Participant shall be liable for any and all attorneys' fees, and other legal costs or fees incurred in collecting said maintenance costs. 5. Compliance with Law. Participant shall comply with all local, state and federal laws relating to the uses of or condition of the Site and the Facility. b. Effect of Violation of the Terms and Provisions of this Operating Covenant. The covenants established in this Operating Covenant shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, as to those covenants which are for its benefit. The covenants contained in this Operating Covenant shall remain in effect for the periods of time specified therein. The Agency is deemed the beneficiary of the terms and provisions of this Operating Covenant and of the covenants running with the land, for and in its own rights 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 Operating Covenant and the covenants running with the land have been provided. The Operating Covenant and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if the Operating Covenant 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 to which it or any other beneficiaries of this Operating Covenant and covenants may be entitled. 7. Miscellaneous Provisions. a. If any provisions of this Operating Covenant or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Operating Covenant, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Operating Covenant; and each provision of this Operating Covenant shall be valid and enforceable to the fullest extent permitted by law. b. This Operating Covenant shall be construed in accordance with the laws of the State of California. c. This Operating Covenant shall be binding upon and inure to the benefit of the successors and assigns of the Participant. d. In the event action is instituted to enforce any of the provisions of this Operating Covenant, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attomey's fees and costs. 017.262230.5 Attachment No. 7-5 IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first hereinabove written. ATTEST: , CDC Secretary APPROVED AS TO FORM: CDC Counsel AGENCY: COMMUNITY DEVELOPMENT COMMISSION OF THE OF THE CITY OF NATIONAL CITY, a public body, corporate and politic By: Nick lnzunza, Chairman PARTICIPANT: MOSSY NISS.4N, INC., a California corporation By. By: Philip E. Mossy, President , Secretary Signature Page of Operating Covenant 017.262230.5 Attachment No. 7-6 , , v 017262230.5 EXHIBIT A LEGAL DESCRIPTION OF SITE Parcel A: (APN: 562-340-47) The northerly 164.00feet of lot 5 of E. J. Christman Business and Industrial Park 1, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Parcel B: (APN: 562-340-48) Lot 5 of E. J. Christman Business and Industrial Park I, in the City of National City, County of San Diego, State of California, according to Map thereof No. 8038, Filed in the Office f the County Recorder of San Diego County, November 7, 1974. Excepting therefrom the northerly 164.00 feet. Exhibit A - Page 1 Chairman Nick Inzunza Members Ron Morrison Louie Natividad Frank Pans Rosalie Zarate Executive Director Benjamin Martinez Preserving History... Shaping the Future Community Development Commission of National City March 29, 2005 Trust 00-1714 401 B St #220 San Diego, CA 92101 SUBJECT: OWNER PARTICIPATION PROCESS Dear Sirs: The responsibility of the Community Development Commission of National City (CDC) is to plan and implement redevelopment projects in National City. CDC works with owners and tenants to obtain qualified developers, acquire property, relocate occupants, demolish existing buildings, rehabilitate appropriate structures, and construct public improvements and facilities to carry out adopted redevelopment plans within National City. The CDC received a request from Mossy Nissan, Inc. (developer) for a development proposal on parcels at 2626 and 2700 National City Boulevard. On March 22, 2005, the CDC authorized staff to initiate the Owner Participation process for Assessor Parcel Numbers 562-340-47-00 & 48-00. The property that you own would be affected by the proposed project. The proposed project would combine the properties to renovate and improve the Nissan auto dealership. As an affected property owner, you have the right to submit an alternative proposal or otherwise comment on the project. These rights are set forth in the' enclosed "Rules Goveming Participation and Preferences by Property Owners 140 E. 12tn Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fax: (619) 336.4286 EXHIBIT 5 Trust 00-1714 March 29, 2005 Page 2 of 2 and Businesses Occupants in the National City Redevelopment Project" (the "OP Rules") (Exhibit 1). These rules explain what assistance the CDC will provide to any persons or businesses that are displaced by a redevelopment project. They also explain the standard procedures that the Agency follows to provide assistance. Before considering the Mossy Nissan proposal, the CDC wishes to ask you whether or not, and if so in what way, you would like to participate in the redevelopment of the site. Enclosed with this letter is a Statement of Interest response form (Exhibit 2). According to the OP Rules you have forty-five (45) days from the date of this letter to retum the enclosed Statement of Interest to express your interest to participate or not participate. The failure to retum the Statement of Interest response form within the forty-five (45) days will be considered an affirmation of non -interest to participate. Please Note: If you are in escrow or currently negotiating to sell your property you may continue with your escrow or your negotiations concurrently with any action the CDC may take regarding your property. If you have any questions, please contact Patricia Beard at (619) 336-4255 or by email at pbeard@ci.national-city.ca.us. Sincerely, Benjamin Martinez Executive Director BM:pb Enclosure: 1. Rules Governing Participation and Preferences by Property Owners and Businesses Occupants 2. Statement of Interest Form Cc: Patricia Beard, Redevelopment Projects Manager 140 E. 121° Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fax: (619) 336.4286 RULES GOVERNING PARTICIPATION AND PREFERENCES BY PROPERTY OWNERS AND BUSINESS OCCUPANTS IN THE NATIONAL CITY REDEVELOPMENT PROJECT Prepared: February 17, 1995 Adopted: May 16, 1995 Prepared for: Community Development Commission of the City of National City 140 E. 12th Street, Suite B National City, California 91950-3312 619-336-4250 Prepared by: Rosenow Spevacek Group, Inc. 540 North Golden Circle, Suite 305 Santa Ana, California 92705 714/541-4585 619/967-6462 RULES •GOVERNING PARTICIPATION AND PREFERENCES BY PROPERTY OWNERS AND BUSINESS OCCUPANTS IN THE NATIONAL CITY REDEVELOPMENT PROJECT SECTION 1. (100) PURPOSE AND INTENT These rules are adopted to implement the provisions of the Redevelopment Plan for the National City Redevelopment Project (the "Project") regarding participation and the exercise of preferences by property owners and business occupants within the National City Redevelopment Project Area (the "Project Area"). These rules setforth the procedures governing such preferences and participation. The Health and Safety Code of the State of California Section 33000 et semc . requires the adoption of these rules by the Community Development Commission of the City of National City to permit participation by owners of real property and the extension of preferences to persons engaged in business within the boundaries of the Project Area to reenter the redeveloped area to the maximum extent feasible consistent with the objectives of the Redevelopment Plan for the Project. SECTION 11. (200) GENERAL DEFINITIONS As used herein, the following definitions apply: A. "CDC" means the Community Development Commission of the City of National City. B. "Business Occupant" means any person, persons, corporation, association, partnership, or other entity engaged in a lawful business within the Project Area for so long as such Business Occupant remains in business within the Project Area. "City" means the City of National City, D. "Disposition and Development Agreement" means a contractual agreement between a developer and the CDC that sets forth terms and conditions for development. E. "Long -Term Lease" means a lease of real property with a term of twenty (20) years or more, with at least ten (10) years remaining on such term. F. "Owner" means any person, persons, corporation, association, partnership, or other entity holding recorded fee title to or a long-term lease of real property in the Project Area for so long as such Owner holds such title or long-term lease. "Participant" means an Owner who has entered into a Participation Agreement with the CDC. H. "Participation Agreement" means an agreement entered into by an Owner with the CDC providing for such Owner to participate in the development or redevelopment of property within the Project Area in accordance with the provisions of the Redevelopment Plan and these Rules. "Plan" means the Redevelopment Plan for the National City Redevelopment Project adopted on June 18, 1995 by Ordinance No. 95-2095. J. "Project Area" means the Project Area of the CDC which is subject to the Redevelopment Plan, as depicted on Exhibit A attached hereto. K. "Rules" means these Rules Governing Participation and Preferences by Property Owners and Business Occupants in the National City Redevelopment Project. SECTION III. (300) OPPORTUNITIES FOR OWNER PARTICIPATION AND PREFERENCES TO BUSINESS OCCUPANTS TO REENTER IN BUSINESS WITHIN REDEVELOPED AREA A. (301) Opportunities for Owner Particjpation Owners of real property within the Project Area shall be extended reasonable opportunities to participate in the redevelopment of property in the Project Area if such Owners agree to participate in the redevelopment in conformity with the Plan and these Rules. B. (302) Preferences for Persons Engaged in Business in the Project Area Business Occupants engaged in business in the Project Area shall be extended reasonable preference to reenter in business within the redeveloped area if they otherwise meet the requirements prescribed by the Plan and these Rules. SECTION IV. (400) METHODS OF PARTICIPATION AND LIMITATIONS THEREON A. (401) Methods of Participation Participation methods include remaining in substantially the same location either by retaining all or portions of the property, or by retaining all or portions of the property and purchasing adjacent property from the CDC or joining with another person or entity for the rehabilitation or development of the Owner's property and, if appropriate, other property, or submitting to the CDC for its consideration another method of participation proposal pursuant to these Rules. An Owner who participates in the same location may be required to rehabilitate or demolish all or a part of his/her existing buildings, or the CDC may acquire the buildings only and then remove or demolish the buildings. Participation methods also include the CDC buying land and improvements at fair market value from Owners and offering other parcels for purchase and rehabilitation or development by such Owners, or offering an opportunity for such Owners to rehabilitate or develop property jointly with other persons or entities. (402) Limitations on Participation Opportunities Owner Participation opportunities shall be subject to and limited by factors such as hereafter listed and the following minimum requirements: 1. The Participant(s) can demonstrate to the reasonable satisfaction of the CDC that he is financially capable and has the qualifications and/or experience to perform any and all development, modification, rehabilitation, modernization, construction, land assembly, and/or acquisition of the subject property or properties in order that it will conform to the Plan, any specific plan or design guide, and the redevelopment proposal, if any, contemplated by the CDC with respect to the subject property. 2. The Participant's proposed improvements and/or redevelopment will conform to: the goals and objectives established by the CDC; the Plan; any specific plan or design guide; any applicable zoning, building and safety laws and regulations; and/or the redevelopment proposal approved by the CDC. 3. The CDC retains its authority to determine in its sole and reasonable discretion whether the proposed Participant(s) development conforms to and furthers the goals and objectives of the Plan and any specific development proposals on the basis of all the facts and circumstances pertaining to the proposed Participant's development. 4. The CDC shall consider whether the proposed owner participant development necessitates that the Participant and/or the CDC shall remove, relocate and/or install public utilities and public facilities determined necessary by the CDC for the proposed development. 5. Consideration of the elimination and/or change of land uses, particularly nonconforming land uses as specified in City codes. The CDC shall consider the need to realign, abandon, vacate, widen, or open public rights -of -way and the indirect effects of such acts. 7. Consideration of any reduction in the total number of individual parcels in the Project Area. 8. Consideration of whether the proposal involves land assembly and development of areas for public and/or private development in accordance with the Plan. C. (403) Establishing Preferences Among Owners If conflicts develop between the desires of participants for particular sites or land uses, the CDC is authorized to exercise its reasonable discretion and establish reasonable priorities and preferences among the Participants and to determine a solution by consideration of objective facts concerning the proposals, including, for example: development experience and qualifications, financial ability to perform, length of time in the area, accommodation of as many potential participants as possible, and conformity with intent and purpose of the Plan. Participation, to the extent feasible, may be available for two or more persons, firms, or institutions, to join together in partnerships, corporations, or other joint entities. To the extent multiple owners are included within a proposed development site, an Owner with a majority interest in the total proposed development site may be determined by the CDC to have a preference over an Owner with a minority interest in the proposed development site. SECTION V. (500) METHODS FOR EXTENDING REENTRY PREFERENCES, AND LIMITATIONS THEREON A. (501) Methods for Extending Reentry Preferences Whenever a Business Occupant will be displaced by CDC action from the Project Area, the CDC will, prior to such displacement, determine: 1) whether such Business Occupant desires to relocate directly to another location within the Project Area, or 2) if suitable relocation accommodations within the Project Area are not available prior to displacement, whether such Business Occupant would desire to reenter in business within the Project Area at a later date should suitable accommodations become available. For those Business Occupants who desire to relocate directly to another location within the Project Area, the CDC will make reasonable efforts to assist such Business Occupants to find accommodations suitable to their needs. A record of the Business Occupants who cannot be or do not want . to be directly relocated within the proposed development site, but who have stated that they desire to reenter into business in the Project Area whenever suitable locations and rents are available, will be maintained by the CDC. The CDC will make reasonable efforts to assist such Business Occupants to find reentry accommodations at locations and rents suitable to their needs. In order to implement the operation of this Section 501, the CDC will provide in all Participation Agreements, disposition and development agreements, and other agreements, as applicable, that in the renting or leasing of premises rehabilitated or developed pursuant to such agreements the Participant or developer will give reasonable preferences (over other potential tenants or lessees) to Business Occupants who will be or who have been displaced from their places of business by the CDC to lease or rent premises within the newly rehabilitated or developed facilities. (502) Limitations on the Extension of Preferences The following are the minimum requirements that must be met by any business to establish its eligibility for the reasonable preference to reenter in business in the Project Area after displacement: 1. The business use proposed shall be consistent with the land use standards of the Plan and any specific plan and development standards and criteria adopted by the CDC or the City. 2. The improvement on the business premises made or proposed to be made shall (unless otherwise approved by the CDC) meet, or shall be brought up to meet, a structural condition equal to or better than that required for a new structure or improvement of equivalent size, location, use and occupancy as required by the building and safety laws and regulations then applicable in the City, and shall conform to the Plan. 3. The business operator shall demonstrate to the satisfaction of the CDC that he is financially capable and qualified to perform any and all modifications or rehabilitation or modernization on the property at the new location in order that it will conform to the Plan and capable of meeting the financial requirements to occupy space in the new location. The business shall agree in writing that in the use, occupancy and conduct of business in the premises there shall be no discrimination because of race, sex, marital status, color, creed, religion, national origin, ancestry, sexual orientation, physical handicap, or medical condition. (503) Establishing Preferences Among Business Occupants Seeking Similar Preferences If conflicts develop between the desires of participants for particular sites or land uses, the CDC is authorized to exercise its reasonable discretion and establish reasonable priorities and preferences among the Business Occupants and to determine a solution by consideration of objective facts concerning the proposals, including, for example: financial ability to perform, length of time in the area, accommodation of as many potential Business Occupants as possible, appropriateness of the type of business within the proposed premises or location, the feasibility of business success, and conformity with intent and purpose of these Rules and the Plan. Participation, to the extent feasible, may be available for two or more persons, firms or institutions, to join together in partnerships, corporations, or other joint entities. SECTION VI. (600) PARTICIPATION PROCEDURES A. (601) Notice and Statement of Interest Before entering into any Participation Agreements or Disposition and Development Agreements relating to the acquisition, development, or rehabilitation of real property in the Project Area, the CDC shall first comply with these Rules relating to soliciting interest in owner participation from Owners of property, which may be acquired, developed, or rehabilitated and call upon them to submit a Statement of Interest in the proposed development or in otherwise participating in the redevelopment of the Project Area. Those desiring to submit a Statement of Interest in Participation must complete and submit said Statement to the CDC within forty-five (45) days of receipt. Any owner may also submit such a Statement at any time before such notification. Such Statement shall include information requested by the CDC and shall be in the form requested by the CDC. The CDC shall consider such Statements as submitted on time and shall seek to develop reasonable participation for those submitting such Statements whether to stay in place or to move to another location. The CDC may in its sole discretion determine that a participation proposal is not feasible or in the best interest of the Project or the community, oris otherwise limited by one or more of the criteria set forth in Section 402 hereof. In such event, the CDC may select a developer from among prospective participants submitting statements of interest in participating and others invited to submit proposals. The CDC retains and shall exercise the discretion vested in it by law to consider and determine whether the proposal or proposals for redevelopment submitted by an Owner or Owners for participation in the Project Area conforms to., and meets the goals and objectives of, the Plan. The CDC shall exercise said discretion reasonably, in good faith, and without discrimination. B. (602) Participation Agreements 1. (603) General Public and private Owners wishing to develop or improve their properties within the Project Area may be required, as a condition to CDC approval of such development, to enter into a binding written Participation Agreement with the CDC if the CDC determines it is necessary to impose upon such property any of the standards, restrictions and controls of the Plan, or of any design guide adopted by the CDC pursuant to the Plan. (604) Contents A Participation Agreement shall obligate the Owner, and the Owner's heirs, successors and assigns to acquire, rehabilitate, develop and use the property, as may be applicable, inconformance with the Plan and/or to be subject to such other provisions and conditions of the Plan as the CDC may require for the period of time that the Plan is in force and effect, excepting those provisions related to nondiscrimination and nonsegregation which shall run in perpetuity. Each Participation Agreement will contain such terms and conditions and will require the potential Participant to join in the recording of such documents as the CDC may require in order to insurethe property will be acquired, rehabilitated, developed and used in accord with the Plan and the agreement. Participation Agreements will be effective only if approved by a majority vote of the members of the CDC. SECTION VII. (700) ENFORCEMENT In the event a property is not acquired, developed, rehabilitated, or used in conformance with the Plan, with a CDC determination of conformance, or a Participation Agreement, then the CDC is authorized to (1) purchase the property, (2) purchase any interest in the property sufficient to obtain conformance, or (3) take any other appropriate action sufficient to obtain such conformance. The CDC shall not acquire real property retained or developed under an approved Participation Agreement if the Participant fully performs under the agreement. SECTION VIII. (800) AMENDMENT OF RULES The CDC may amend these rules at any regular meeting or duly called special meeting held after their adoption, but only after notice to the CDC members and the public. The 111 text of the proposed change shall be made available and notice of said meeting shall be published in a newspaper of general circulation. Such notice shall be published at least fourteen (14) calendar days before the date of the meeting at which the proposed amendment will be considered. The method of notice is at the discretion of the CDC. No such amendment shall retroactively impair the rights of any parties who have executed Participation Agreements with the CDC in reliance upon these rules as presently constituted. Chairman Nick Inzunza Members Ron Morrison Louie Natividad Frank Parra Rosalie Zarate Executive Director Benjamin Martinez July 14, 2005 Preserving History... Shaping the Future Community Development Commission of National City Mr. and Mrs. Lawrence F. Dailey 3959 Acacia Avenue Bonita CA 91902 SUBJECT: OWNER PARTICIPATION PROCESS Dear Mr. and Mrs. Dailey: Attached please find the Owner Participation sent to you by the Community Development Commission of National City on March 29, 2005. The responsibility of the Community Development Commission of National City (CDC) is to plan and implement redevelopment projects in National City. CDC works with owners and tenants to obtain qualified developers, acquire property, relocate occupants, demolish existing buildings, rehabilitate appropriate structures, and construct public improvements and facilities to carry out adopted redevelopment plans within National City. The CDC received a request from Mossy Nissan, Inc. (developer) for a development proposal on parcels at 2626 and 2700 National City Boulevard. On March 22, 2005, the CDC authorized staff to initiate the Owner Participation process for Assessor Parcel Numbers 562-340-47-00 & 48-00. The property that you own would be affected by the proposed project. The proposed project would combine the properties to renovate and improve the Nissan auto dealership. As an affected property owner, you have the right to submit an alternative proposal or otherwise comment on the project. These rights are set forth in the enclosed "Rules Governing Participation and Preferences by Property Owners 140 E. 12th Street, Suite B; National City, California 91950 Tel: 16191 336.4250 Fax: (6191336.4286 EXHIBIT 6 Mr. Lawrence F. Dailey July 14, 2005 Page 2 of 2 and Businesses Occupants in the National City Redevelopment Project" (the "OP Rules") (Exhibit 1). These rules explain what assistance the CDC will provide to any persons or businesses that are displaced by a redevelopment project. They also explain the standard procedures that the Agency follows to provide assistance. To date, we have received no response from you regarding our March 29, 2006 Owner Participation letter. Before considering the Mossy Nissan proposal, the CDC wishes to ask you whether or not, and if so in what way, you would like to participate in the redevelopment of the site. Enclosed with this letter is a Statement of Interest response form (Exhibit 2). If you have any questions, please contact me at (619) 336-4250. Sincerely, Byron Estes Deputy Director BE:pb Enclosure: 1. Rules Governing Participation and Preferences by Property Owners and Businesses Occupants 2. Statement of Interest Form Cc: Patricia Beard, Redevelopment Projects Manager 140 E. 12`" Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fax: (619) 336.4286 COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION AGENDA OF THE CITY OF NATIONAL CITY MEETING DATE: September 13, 2005 AGENDA ITEM NO. 4 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL APPROVING THE HEALTH AND SAFE CODE SECTION 33433 REPORT, APPROVING THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION AND MOSSY NISSAN, INCORPORATED, AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH PREPARED BY: Benjamin Martinez Executive Director EXPLANATION: DEPARTMENT Community Development Commission Mossy Nissan, Incorporated proposes to develop a new automobile dealership on a 4.53 acre site lo- cated at 2626 through 2700 National City Boulevard in the National City Mile of Cars. To facilitate de- velopment of this proposed project, a Disposition & Development 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 to the Joint Public Hearing item to pro- vide more information on the proposed Mossy Nissan, Incorporated Project. A Public Notice was published in the National City Star News on August 5 and 12, 2005. Environmental Review N/A 1 The project is consistent with the Certified EIR for the Redevelopment Plan for National City Redevel- opment Project certified by Resolution No. 95-98 on June 20, 1995, for the National City General Plan and with the Zoning Designation of Automotive Commercial for the National City Mile of Cars and, consistent with Section 15180 of the California Environmental Quality Act Guidelines, does not require additional analysis. Financial Statement The DDA anticipates no public expenditures. STAFF RECOMMENDATION Approve the Resolution. BOARD/COMMISSION RECOMMENDATION None. ATTACHMENTS (Listed Below) 1. Resolution 2005- Resolution No. RESOLUTION NO. 2005 — 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 AND MOSSY NISSAN, INCORPORATED, 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, on June 20, 1995, pursuant to Resolution No. 95-98, the City Council of the City of National City (the "City" or "City Council") certified the completion of a Final Environmental Impact Report ("EIR") for the Redevelopment Plan for the National City Redevelopment Project; and WHEREAS, pursuant to the Community Redevelopment Law, on July 18, 1995, pursuant to Ordinance No. 95-2095 the City Council approved and adopted the Redevelopment Plan for the National City Redevelopment Project; 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 desires the redevelopment of certain real property within the Redevelopment Project Area, located at 2626 through 2700 National City Boulevard, for a new car dealership; and WHEREAS, the development contemplated is consistent with the EIR for the Redevelopment Plan for the National City Redevelopment Project, and therefore is exempt from further California Environmental Quality Act ("CEQA") review under Section 15180 of the CEQA Guidelines; and WHEREAS, the Dailey Family Partnership owns in fee the real property commonly known as 2626 through 2700 National City Boulevard (the "Site") and was afforded the opportunity to submit a proposal to develop the Site in accordance with the Community Development Commission's Owner Participation Rules by letter dated March 29, 2005, but did not submit a proposal; and ATTACHMENT 1 Resolution 2005 — September 13, 2005 Page 2 WHEREAS, Mossy Nissan, Inc., a California corporation ("Mossy"), is currently the lessee of the Site and desires to purchase the Site in order to construct a new car dealership; and WHEREAS, CDC staff has negotiated a Disposition and Development Agreement including attachments thereto (collectively, the "DDA") with Mossy for the CDC's disposition of the Site to Mossy, if necessary, and subject to the discretion of the CDC; and WHEREAS, pursuant to the terms of the DDA, Mossy shall construct a $3 Million ($3,000,000) new car dealership on the Site; and WHEREAS, CDC staff has presented the draft DDA to the CDC Board 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 concerning the CDC's proposed disposition of the Site as set forth in the DDA, (ii) the CDC 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 Section 33433 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 and City Council has been noticed and conducted in accordance with applicable requirements of law; and WHEREAS, at the joint public hearing the CDC and the 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 consideration of 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. 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: herein. a. That the above Recitals are true and correct and are incorporated Resolution 2005 — September 13, 2005 Page 3 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's disposition of the Site pursuant to the DDA will assist in the elimination of blight. d. That the CDC's disposition of the Site pursuant to the DDA is consistent with the Redevelopment Plan and the National City General Plan. e. That the DDA is consistent with the Implementation Plan for the Redevelopment Plan. f. That any consideration Mossy will pay for the Site is not less than the fair market value or 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 to its Executive Director 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 Chairperson to thereafter sign the DDA on behalf of the CDC, and (iii) the authorization and direction given by the CDC to their Executive Director 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. 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 13th day of September, 2005. Nick Inzunza, Mayor ATTEST: APPROVED AS TO FORM: Michael Della, City Clerk George H. Eiser, III City Attorney COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 5 TO: CHAIRMAN AND BOARD MEMBERS (� FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: JEANETTE LA 0, DEPUTY DIRECTOR OF FINANCE AND ADMINISTRATIO SUBJECT: REPORT: CASH AND INVESTMENT REPORT FOR THE QUARTER ENDED JUNE 30, 2005 AND REQUEST TO DIRECT STAFF TO SEND THE FOURTH QUARTER REPORT TO THE CALIFORNIA DEBT AND ADVISORY COMMITTEE AS REQUIRED BY CALIFORNIA GOVERNMENT CODE SECTION 53646 Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: ACCEPT AND FILE the Cash and Investment Report for the quarter ended June 30, 2005; and, DIRECT STAFF TO SEND the fourth quarter report to the California Debt and Advisory Committee as required by California Government Code Section 53646. Fiscal Impact: None. Environmental Impact: CEQA is not applicable. Community Development Commission September 13, 2005 Page 1 of 3 Agenda Item No. 5 Background: California Law requires that Community Development Commission staff submit an investment report to the Community Development Commission Chairman and Commissioners within thirty (30) days following the end of the quarter, which consists of the following information: > Type of investment or description > Issuers (bank or institution) > Dollar amount > Interest rate > Current market valuation as of the date of the report > The date of maturity In addition, revisions to the California Government Code Section 53646 require that copies of the second and fourth quarter reports be submitted to the California Debt and Advisory Commission within sixty (60) days after the close of the second and fourth quarters of each calendar year. The source of the valuation of each investment must be reported and a statement indicating the agency's ability, or lack thereof, to meet the next six (6) months cash flow requirements is required. The source of market valuations has been quoted from documents received from the bank or institution that is the issuer of each of the investments. If staff did not receive this information from the bank or institution, market value has been listed as equal to the carrying amount. The Community Development Commission invests most of its money in the California Treasurer's Local Agency Investment Fund (LAIF). This is a liquid investment pool, which allows participants to earn market rate returns of large investments, while retaining access to funds within 24 hours of a withdrawal request. Other investments consist primarily of Negotiable Certificates of Deposit and Federal Horne Loan Bank investments. Most funds have remained in LAIF and Union Bank to. meet Community Development Commission staff's cash flow objectives. The investment of debt service reserves on deposit with fiscal agents is controlled by the designated fiscal agent. On an overall basis, appropriate funding is available to meet the cash flow requirements for the next six (6) months. With this, staff recommends that the Community Development Commission Board accept and file the Cash and Investment Report for the quarter ended June 30, 2005 and direct staff to send the fourth quarter report to the California Debt and Advisory Committee as required by California Government Code Section 53646. Community Development Commission Agenda Item No. 5 September 13, 2005 Page 2 of 3 ATTACHMENTS: Exhibitl — CDC Investment Inventory with Market Values as of June 30, 2005 Exhibit 2 — CDC Cash and Investments Chart Exhibit 3 — CDC Investment Maturity Matrix Chart Community Development Commission September 13, 2005 Agenda Item No. 5 Page 3 of 3 Chairman Nick Inzunza Members Ron Morrison Louie Natividad Frank Parra Rosalie Zarate Executive Director Benjamin Martinez August 30, 2005 Preserving History..... Shaping the Future Community Development Commission of National City California Debt and Investment Advisory Commission Attention: Frank Moore 915 Capital Mall, Room 400 Sacramento, CA 95814 Dear Mr. Moore: As required by the State of California Legislation AB 943, I have enclosed the Community Development Commission of National City Treasurer's Report for the period ending June 30, 2005. If you have any questions, please feel free to contact me at (619) 336-4251. Sincerely, Jeanette H. Ladrido Deputy Director of Finance and Administration EXHIBIT 1 140 E. 12" Street, Suite B; National City, California 91950 Tel.: (619) 336.4250 Fax: (619) 336.4286 JUNE 30, 2005 TREASURER'S REPORT I certify that the Community Development Commission of National City Treasurer's Report is in conformance with the Adopted Community Development Commission Investment Policy. The investment report accurately reflects all CDC investments as of June 30, 2005. To the best of my knowledge, sufficient investment liquidity and anticipated revenues are available to meet the Community Development Commission of National City's estimated expenditures for the next six months. Jeanette A. Ladrido Deputy Director of Finance and Administration Date: 8/30/2005 CSH UNION BANK Redevelopment Fund Section 8 Fund Low and Moderate Income Fund Nutrition Center Patron Fund Family Self Sufficiency Fund Education Village TOTAL CASH LAIF LOCAL AGENCY INVESTMENT FUND TOTAL LAIF CD AMERICAN CHARTERED BANK 12/4/2006 2.750% CD AMERICAN NATIONAL BANK 1/16/2009 3.650% COMMUNITY DEVELOPMENT ,i)IMISSION OF NATIONAL CITY INVESTMENT INVENTORY WITH MARKET VALUE AS OF JUNE 30, 2005 N/A N/A $ 8,824,786.50 $ 8,824,786.50 $ 8,824,786.50 $ 2,563,604.68 $ 2,563,604.68 $ 2,563,604.68 $ 54,694.43 $ 54,694.43 $ 54,694.43 $ 23,150.32 $ 23,150.32 $ 23,150.32 $ 50,874.29 $ 50,874.29 $ 50,874.29 $ - $ - $ $ 11,517,110.22 $ 11,517,110.22 $ 11,517,110.22 $ 3,127,452.03 $ 3,127,452.03 $ 3,127,452.03 $ $ 3,127,452.03 $ 3,127,452.03 $ 3,127,452.03 $ 025121BK9 $ 95,000.00 $ 95,000.00 $ $ 56.78% $ $ 93,210.20 $ 1,302.67 $ (1,789.80) 98.116% 028402AD7 $ 99,000.00 $ 99,000.00 $ 96,243.84 $ - 306.90 $ (2,756.16) 97.216% CD BANK & TRUST OF PUERTO RICO 06035AMA8 $ 95,000.00 $ 95,000.00 $ 95,181.45 10/17/2005 4.400% $ 181.45 100.191% CD BANK OF OKLAHOMA 064207RL9 $ 95,000.00 $ 95,000.00 $ 90,654.70 4/16/2009 3.200% $ (4,345.30) 95.426% CD BRIDGEVIEW B&T CO 108551AU6 $ 97,000.00 $ 97,000.00 $ 94,684.61 $ (2,315.39) 5/5/2009 3.850% 97.613% CD CARROLL COUNTY TC OF MO 145150AK4 $ 95,000.00 $ 95,000.00 $ 91,083.15 $ 238.02 $ (3,916.85) 6/18/2008 2.950% 95.877% CD CITIZENS COMMUNITY BANK 17453TAW2 $ 95,000.00 $ 95,000.00 $ 93,089.55 $ (1,910.45) 7/25/2006 2.100% 97.989% 15.42% EXHIBIT 1 CD COLONIAL BANK, NA 11/13/2007 3.000% CD COMMERCE BANK 3/30/2007 3.000% COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY INVESTMENT INVENTORY WITH MARKET VALUE AS OF JUNE 30, 2005 195554HK9 $ 98,000.00 $ 98,000.00 $ 95,123.70 97.065% 20056QBZ5 $ 98,000.00 $ 98,000.00 $ 96,049.80 98.010% CD COMMUNITY BANK OF RAVENSWOOD 203584BN6 $ 97,000.00 $ 97,000.00 $ 93,570.08 4/14/2009 3.500% CD DORAL BANK 1/26/2007 2.950% 96.464% 256115JB1 $ 99,000.00 $ 99,000.00 $ 97,196.22 98.178% CD EUROBANK 29870LDL0 $ 95,000.00 $ 95,000.00 $ 92,161.40 5/14/2008 3.300% 97.012% CD EVERBANK 29976DAJ9 $ 97,000.00 $ 97,000.00 $ 94,528.44 4/30/2009 3.800% 97.452% $ (2,876.30) $ (1,950.20) $ (3,429.92) $ (1,803.78) $ (2,838.60) $ (2,471.56) CD FARMERS B&T 309166AY2 $ 99,000.00 $ 99,000.00 $ 96,434.91 $ 290.08 $ (2,565.09) 5/9/2008 3.450% 97.409% CD FIRST BANK OF PUERTO RICO 33761KYB5 $ 99,000.00 $ 99,000.00 $ 99,299.97 $ 378.37 $ 299.97 11/28/2005 4.500% 100.303% CD FIRST FINANCIAL BANK, NA 32021SCL8 $ 99,000.00 $ 99,000.00 $ 96,927.93 $ 235.43 $ (2,072.07) 2/5/2007 2.800% 97.907% CD FIRST INTERNET BK OF IN 32056GBQ2 $ 95,000.00 $ 95,000.00 $ 93,100.95 $ 334.84 $ (1,899.05) 1/28/2010 4.150% 98.001% CD HUDSON UNITED BANK 444168DQ8 $ 100,000.00 $ 100,000.00 $ 97,546.00 $ (2,454.00) 5/13/2008 3.500% 97.546% CD INDEPENDENT BANKERS' BANK 45383QDD3 $ 99,000.00 $ 99,000.00 $ 96,839.82 $ 252.25 $ (2,160.18) 5/14/2007 3.000% 97.818% CD INTERCREDIT BANK 4/30/2007 4.900% CD MBNA BANK 458657EV1 $ 95,000.00 $ 95,000.00 $ 96,119.10 $ 1,119.10 101.178% 55264DUK0 $ 95,000.00 $ 95,000.00 $ 95,732.45 $ 732.45 En. 1DIT 1 10/3/2006 COMMUNITY DEVELOPMENT CAISSION OF NATIONAL CITY INVESTMENT INVENTORY WITH MARKET VALUE AS OF JUNE 30, 2005 4.750% 100.771% CD MERIDIAN BANK 11/7/2006 2.700% CD MILLENNIUM BANK, NA 11/7/2008 3.600% CD NORTHPOINTE BANK 7/21/2006 2.500% 589581AD9 $ 95,000.00 $ 95,000.00 $ 93,260.55 60037UCU6 $ 99,000.00 $ 99,000.00 $ 666613AS3 $ 99,000.00 $ 99,000.00 $ 98.169% $ (1,739.45) 96,287.40 $ 302.70 $ (2,712.60) 97.260% 97,424.91 $ 210.21 $ (1,575.09) 98.409% CD ONE BANK & TRUST 68232YAC6 $ 99,000.00 $ 99,000.00 $ 99,709.83 $ 395.19 $ 709.83 9/26/2005 4.700% 100.717% CD PEACHTREE NATL BANK 70467XAM8 $ 95,000.00 $ 95,000.00 $ 91,853.60 $ (3,146.40) 10/31/2008 3.400% 96.688% CD PROVIDENT BANK 743838U44 $ 95,000.00 $ 95,000.00 $ 92,969.85 $ (2,030.15) 97.863% 5/7/2007 3.000% CD REPUBLIC BANK, UT 760310DR0 $ 95,000.00 $ 95,000.00 $ 92,954.65 $ (2,045.35) 5/11/2007 3.000% 97.847% CD SOVEREIGN BANK 84603MHJ8 $ 99,000.00 $ 99,000.00 $ 95,926.05 $ 306.90 $ (3,073.95) 5/5/2009 3.650% 96.895% CD THE FIRST NB OF SHELBY 33354PAP2 $ 99,000.00 $ 99,000.00 $ 94,781.61 $ 243.84 $ (4,218.39) 6/18/2008 2.900% 95.739% CD THE GRUNDY NB 400451AC4 $ 95,000.00 $ 95,000.00 $ 95,670.70 $ 670.70 9/28/2006 4.700% 100.706% CD TRANSPORTATION ALLIANCE BANK 89387WDA0 $ 99,000.00 $ 99,000.00 $ 97,063.56 $ 222.82 $ (1,936.44) 11/17/2006 2.650% 98.044% Cash Account Balance $ 1,116.79 $ 1,116.79 $ 1,116.79 TOTAL CD - CDC $ 3,106,116.79 $ 3,106,116.79 $ 3,043,797.77 $ 5,020.22 $ (62,319.02) 15.01% EXHIBIT 1 COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY INVESTMENT INVENTORY WITH MARKET VALUE AS OF JUNE 30, 2005 CD AMERICAN NATIONAL BANK 1/16/2009 3.650% CD BANK OF OKLAHOMA 4/16/2009 3.200% CD CARROLL COUNTY TC OF MO 11/7/2007 3.100% CD COLONIAL BANK 11/13/2007 3.000% Cash Account Balance TOTAL CD - SECTION 8 FHLB FEDERAL HOME 12/19/2006 FHLB FEDERAL HOME 6/18/2007 FHLB FEDERAL HOME 2/5/2007 FHLB FEDERAL HOME 2/16/2007 FHLB FEDERAL HOME 5/12/2009 LOAN BANK 2.450% LOAN BANK 3.030% LOAN BANK 4.025% LOAN MTG CORP 4.010% LOAN BANK 3.250% Cash and Money Market TOTAL FHLB 028402AD7 $ 99,000.00 $ 99,000.00 $ 96,243.84 $ 306.90 $ (2,756.16) 97.216% 064207RL9 $ 95,000.00 $ 95,000.00 $ 90,654.70 95.426% $ (4,345.30) 145150AP3 $ 99,000.00 $ 99,000.00 $ 96,317.10 $ 260.65 $ (2,682.90) 97.290% 195554HK9 $ 95,000.00 $ 95,000.00 $ 92,211.75 $ (2,788.25) 97.065% $ 40.65 $ 40.65 $ 40.65 $ 388,040.65 $ 388,040.65 $ 375,468.04 $ 567.55 $ (12,572.61) 1.85% 31339XFA7 $ 1,000,000.00 $ 1,000,000.00 $ 980,020.00 $12,250.00 $ (19,980.00) 98.002% 3133X4H46 $ 500,000.00 $ 500,000.00 $ 490,480.00 $ 98.096% 3133XBLA1 $ 250,000.00 $ 250,000.00 $ 249,795.00 99.918% 3128X4AR2 $ 200,000.00 $ 200,000.00 $ 199,948.00 99.974% 3133X6NP7 $ 300,000.00 $ 300,000.00 $ 300,000.00 100.000% $ 1.71 $ 1.71 $ 1.71 $ (9,520.00) $ (205.00) $ (52.00) $ 2,250,001.71 $ 2,250,001.71 $ 2,220,244.71 $12,250.00 $ (29,757.00) 10.95% GRAND TOTAL $ 20,388 72140 $ 20 388 721.40 20,284,072 77 $17 837 77 $(104 648 63) 100.00% EX. J CDC Cash and Investments As of June 30, 2005 ■ CASH ■ LAIF ❑CD - REDEVELOPMENT FUND OCD - SECTION 8 FUND ■ FHLB - REDEVELOPMENT FUND EXHIBIT 2 25 20 5 0 CDC Investment Maturity Matrix As of June 30, 2005 ■ Due within 1 year ■ Due within 3 years Length of Time ❑ Due within 5 years EXHIBIT 3 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 6 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: JEANETTE LADRI9EPUTY DIRECTOR OF FINANCE AND ADMINISTRATIO SUBJECT: .RATIFICATIONS: EXPENDITURES FOR THE PERIOD OF 08/13/05 THROUGH 08/31/05 Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: RATIFY EXPENSES. Fiscal Impact: Total expenditures for the period of 08/13/05 THROUGH 08/31/05 amount to $1,782,977.35. Environmental Impact: Not Applicable. Background: See attached report. Community Development Commission September 13, 2005 Agenda Item No. 6 Page 1 of 1 Payee CDC ARROWHEAD MTN SPRING WTR CO. BEARD, PATRICIA BENNETT PEJI DESIGN CHAPMAN, TERESA CHAPMAN, TERESA CHRISTENSEN SCHWERDTFEGER CITY OF NATIONAL CITY CORPORATE EXPRESS INC CUMMING, ELIZABETH DELL MARKETING L.P. DPRA INC. ELIZONDO, MARIA ANGELINA ENVIRONMENTAL BUSINESS SOLUTION ESTRADA LAND PLANNING FEDERAL EXPRESS FIRST BANKCARD CENTER FIRST BANKCARD CENTER GE CAPITAL GE CAPITAL HARRIS & ASSOCIATES KEYSER MARSTON ASSOCIATES, INC LASER SAVER, INC. LAW OFFICE OF DON DETISCH LAW OFFICE OF DON DETISCH M.S.I. MAYER REPROGRAPHICS, INC. NATIONAL CITY SENIOR NUTRITION NEXTEL COMMUNICATIONS OLIVE GARDEN OPPER & VARCO LLP PASACAT PETTY CASH - CDC PETTY CASH - CDC PIP PRINTING PITNEY BOWES RANDALL CONSTRUCTION RED LOBSTER ROSENOW SPEVACEK GROUP INC. SAN DIEGO COUNTY OFFICE OF ED SANTOS, REFUGIO SOUTHWESTERN COMMUNITY COLLEGE STARBUCKS COFFEE STATE COMPENSATION INSURANCE TETRA TECH EM INC. TETRA TECH EM INC. UNIDEV LLC. UNIDEV LLC. VELASCO, XAVIER CDBG CITY OF NATIONAL CITY QUINTERO, LETICIA NUTRITION AIRGAS - WEST AT SYSTEMS WEST, INC. CALIFORNIA BAKING CO. CALIFORNIA BAKING CO. CENTRAL MEAT & PROVISION FOR MEETING OF SEPTEMBER 13, 2005 RATIFICATION OF EXPENDITURES FOR PERIOD: 08/13/05.08/31/05 Description BILLING PERIOD 7/21/05-8/20/05-CDC AIR FARE REIMBURSEMENT FILIPINO VILLAGE T-SHIRTS 2005 STAFF PICNIC SUPPI.IFS REIMBURSEMENT 2005 STAFF PICNIC SUPPLIES REIMBURSEMENT PROFESSIONAL SERVICES - HA PENNY INSURANCE PREMIUMS JAN. 05 TO MAY 05 OFFICE SUPPLIES AIRPLANE TICKET REIMBURSEMENT/B. ESTES DELL COMPUTERS PROFESSIONAL SERVICES - BROWNFIELD 6/25/05 TO 7/22/05 2005 CDC STAFF PICNIC PROFESSIONAL SERVICES - HARBOR DISTRICT/JULY 2005 HIGHLAND AVE STREETSCAPE IMPROVEMENTS DELIVERY CHARGES AIRFARE -A. NAZARENO-CDBG TRAINING LODGING-CDBG TRAINING & LUNCH MEETING MONTHLY FEES FOR 07/13/2005-CANON IR2200 MONTHLY FEES FOR 08/13/2005-CANON IR2200 PROFESSIONAL SERVICES - H & A PROJECT/JULY 2005 PROFESSIONAL SERVICES - ARE HOLDING JUNE 2005 TONER CARTRIDGES LEGAL SERVICES - PACIFIC STEEL 5/21/05 - 6/17/05 LEGAL SERVICES - MOSSY NISSAN AUDIO-VISUAL EQUIPMENT FOR CDC NC BLVD, 7TH & 12TH CATERING - AUGUST 11, 2005 CELL PHONE CHARGES 6/27/05 - 7/26/05 EMPLOYEE RECOGNITION ARE HOLDINGS JUNE 2005 PASACAT FOCUS 3/1/05 - 6/30/05 PETTY CASH REPLENISHMENT PETTY CASH REPLENISHMENT 25 BUDGET BOOKS MONTHLY CHARGES FOR 6/30/05 TO 7/30/05 SERVICES RENDERED: FOODLAND BUDGET EMPLOYEE RECOGNITION SERVICES FOR JUNE 2005 PASS THRU - FY 04 - 05 TACOS FOR STAFF PICNIC 8/26/05 PASS THRU - FY04 - 05 EMPLOYEE RECOGNITION WORKERS COMP/JULY 2005 PROFESSIONAL SERVICES FOR 4/30/05-5/27/05 NC BLVD IMPROVEMENT 5/28 - 7/1/05 SERVICES RENDERED 1ST AMENDMENT 4/26/05 FEES FOR SERVICES - JULY 2005 REIMBURSEMENT FOR TREE PLANTING EVENT -HIGHLAND SUBTOTAL - CDC: CDBG REIMBURSEMENT IDIS TRAINING PER DIEM L.A. SUBTOTAL - CDBG: MONTHLY FEE -NUTRITION CENTER MONTHLY SVC FEE/AUG 2005-NUTRITION CENTER FOOD -NUTRITION CENTER FOOD -NUTRITION CENTER FOOD -NUTRITION CENTER Chk No 15192 15193 15136 15160 15200 15139 15191 15165 15152 15166 15140 15194 15167 15168 15169 15141 15170 15142 15171 15172 15132 15144 15174 15195 15153 15145 15147 15148 15154 15149 15179 15180 15196 15155 15181 15156 15157 15158 15198 15190 15199 15159 15151 15134 15201 15135 15202 15203 15131 15197 15161 15162 15137 15163 15138 Amount 66.78 238.80 1,707.62 103.21 294.64 391.50 198,259.10 109.62 280.40 8,747.66 760.99 60.00 2,553.73 33,125.66 291.35 1,853.60 256.25 206.60 206.60 6,620.00 10,603.75 107.70 2,236.00 2,445.25 2.594.54 223.83 82.40 645.81 100.00 2,295.00 2,013.00 199.39 53.30 888.94 175.00 1,120.00 80.00 9,228.10 204,548.00 360.00 186,358.00 40.00 5,992.69 18,734.00 17,375.94 16,238.80 15,101.74 251.40 756,226.69 675,241.23 168.91 675,410.14 19.28 908.53 139.90 800.20 48.90 Payee CENTRAL MEAT & PROVISION JOSEPH WEBB FOODS JOSEPH WEBB FOODS MCGUIRE DISTRIBUTION MCGUIRE DISTRIBUTION MISSION UNIFORM SERVICE OFFICE SUPPLIES PLUS PADRE JANITORIAL SUPPLIES, INC PADRE JANITORIAL SUPPLIES, INC REEDS RESTAURANT EQUIP. SVC. SAN DIEGO GAS & ELECTRIC SANCIHEZ, MANUEL SBC/MCI SLETTENGREN, INGRID SYSCO SAN DIEGO THE COOLING STORE WILLIAMS, RAY 2004 TAX ALLOCATION BONDS NEWSBANK INC. HOUSING ASSISTANCE PAYMENTS CITY OF NATIONAL CITY GMAC MORTGAGE NEXTEL COMMUNICATIONS PIP PRINTING PITNEY BOWES STATE COMPENSATION INSURANCE PAYROLL PAYROLL FOR MEETING OF SEPTEMBER 13, 2005 RATIFICATION OF EXPENDITURES FOR PERIOD: 08/13/05.08/31/05 Description FOOD -NUTRITION CENTER CONS/FOOD-NUTRMON CENTER FOOD/CONSUMABLES-NUTRITION CENTER FOOD -NUTRITION CENTER FOOD -NUTRITION CENTER CLOTH SUPPLIES-NUTRmON CENTER OFFICE SUPPLIES -NUTRITION CENTER JANITORIAL SUPPLIES -NUTRITION CENTER JANITORIAL SUPPLIES -NUTRITION CENTER MAINTENANCE -NUTRITION CENTER UTILITY CHARGES-1415 D AVE HM-NUTRITION CENTER MILEAGE REIMBURSEMENT-JULY 2005 MONTHLY FEES -NUTRITION CENTER CATERING & SUPPLIES FOOD/CONS-NUTRITION CENTER ROUTINE INSPECTION -NUTRITION CENTER MAINTENANCE -NUTRITION CENTER SUBTOTAL - NUTRITION: PERIODICALS -LIBRARY SUBTOTAL - 2004 TAX ALLOCATION BONDS: TOTAL -GENERAL FUND: MANUAL PAYMENTS INSURANCE PREMIUMS FOR JAN 05 TO MAY 05. ELECTRICITY CHARGES JULY 2005 CELL PHONE CHARGES 6/27/05 - 7/26/05 SECTION 8.2000 ENVELOPES MONTHLY LEASE CHARGES FOR 6/30 TO 7/30/05 WORKERS' COMP/JULY 2005 TOTAL - SECTION 8: PPE 08/12/2005 PPE 08/26/2005 TOTAL - ADMINISTRATIVE REVOLVING FUND: Chk No Amount 15164 3,946.03 15143 2,244.76 15173 5,807.86 15146 207.50 15175 896.35 15176 78.88 15177 163.95 15150 776.20 15178 959.32 15182 1,436.25 15183 2,099.69 15184 42.53 15185 91.89 15186 138.03 15187 6,285.65 15188 77.16 15189 100.00 $27,268.86 15133 10,635.00 10053 10051 10049 10054 10052 10050 10,635.00 $1,469,540.69 $5,556.03 91,121.35 231.58 192.17 289.74 175.00 1,145.36 $98,711.23 $103,883.46 $110,841.97 $214,725.43 TOTAL OF ALL FUNDS: $1,782,977.35 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 7 TO: CHAIRMAN AND BOARD MEMBERS (� FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: RESOLUTION NO. 2005-88: APPROVING THE FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE OLSON COMPANY AND AUTHORIZING THE CHAIRMAN TO EXECUTE THE AGREEMENT Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: ADOPT Resolution No. 2005-88 approving the First Amendment to the Disposition and Development Agreement with The Olson Company and authorizing the Chairman to execute the agreement. Fiscal Impact: There is no fiscal impact from approving this agreement. Environmental Impact: CEQA is not applicable to this action. Background: One March 23, 2004, the Community Development Commission and The Olson Company entered into a Disposition and Development Agreement on property located at 835 Bay Marina Drive in the Harbor District. The proposed Project would consist of 40 live -work housing units and approximately 700 square feet of retail space on the block at the northwest corner of Bay Marina Drive and Cleveland Avenue. The Community Development Commission September 13, 2005 Agenda Item No. 7 Page 1 of 2 Staff Member: Beard Assessors Parcel Numbers associated with the Project are 559-117-04, 05, 06, 07, and 12. As discussions continued with the Developer about the Project, it was learned that it would take an additional three (3) to fifteen (15) months for the California Coastal Commission to process a required Amendment to the National City Local Coastal Program. This Disposition and Development Agreement Amendment would allow for the Disposition and Development Agreement schedule to be extended until the California Coastal Commission approves the Local Coastal Program Amendment or until November 30, 2006, whichever is sooner. With this, staff recommends that the Community Development Commission Board adopt Resolution No. 2005-88 approving the First Amendment to the Disposition and Development Agreement with The Olson Company and authorizing the Chairman to execute the agreement. ATTACHMENTS: Exhibit 1 - Resolution No. 2005-88 Exhibit 2 — First Amendment to Disposition and Development Agreement Community Development Commission Agenda Item No. 7 September 13, 2005 Page 2 of 2 RESOLUTION NO. 2005-88 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY (CDC) APPROVING THE FIRST AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT WITH THE OLSON COMPANY AND AUTHORIZING THE CHAIRMAN TO EXECUTE THE AGREEMENT WHEREAS, on March 23, 2004, the Community Development Commission of the City of National City and The Olson Company entered into a Disposition and Development Agreement to explore the feasibility of redeveloping the property located at 835 Bay Marina Drive in the City of National City Harbor District Redevelopment Project; and, WHEREAS, the Community Development Commission needs to amend the Local Coastal Program to achieve the project defined in the Disposition and Development Agreement and the goals for redeveloping the National City Harbor District; and, WHEREAS, the Amendment process for the Local Coastal Program is expected to take three (3) to fifteen (15) months; and, WHEREAS, the Community Development Commission and The Olson Company desire to extend the timelines represented in the Disposition and Development Agreement to allow the processing of the Amendment by the California Coastal Commission; and, WHEREAS, all other terms and provisions of the Disposition and Development Agreement shall remain in full force and effect. NOW, THEREFORE, BE IT RESOLVED, that the Community Development Commission of National City hereby approves the First Amendment to the Disposition and Development Agreement with The Olson Company. BE IT FURTHERED RESOLVED, that the Community Development Commission of National City authorizes the Chairman to execute the agreement. // // // // // EXHIBIT 1 1 PASSED AND ADOPTED this 13TH day of September 2005. ATTEST: By: Benjamin Martinez, Executive Director APPROVED AS TO FORM: By: George H. Eiser, III, City/CDC Attorney By: Nick Inzunza, Chairman 2 FIRST AMENDMENT to DISPOSITION AND DEVELOPMENT AGREEMENT between COMMUNITY DEVELOPMENT COMMISSION of THE CITY OF NATIONAL CITY and THE OLSON COMPANY On March 23, 2004, the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic ("CDC"), and THE OLSON COMPANY, a Delaware limited liability company ("Developer"), entered into an DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA') for Developer to explore the feasibility of redeveloping the property located at 835 Bay Marina Drive, County Assessors Parcel numbers 559-117-04, 05, 06, 07, 12, in the City of National City Harbor District Redevelopment Project (the "Site"). WHEREAS, CDC needs to amend the Local Coastal Program ("Amendment") to achieve the project defined in the DDA and the goals for redeveloping the National City Harbor District; and WHEREAS, the Amendment process will still take three (3) to fifteen (15) months; and WHEREAS, the CDC and Developer desire to extend the timelines represented in the DDA to allow the processing of the Amendment by the California Coastal Commission, THE PARTIES AGREE TO AMEND THE AGREEMENT AS FOLLOWS: All the deadlines and time frames shall commence upon the Amendment's certification or approval by the Coastal Commission, or November 30, 2006, whichever date is earlier. However, if the Coastal Commission has not certified, approved or acted on the Amendment by November 30, 2006, then CDC and Developer shall negotiate another amendment to the DDA for an additional, reasonable extension of the applicable DDA deadlines and time frames. With the foregoing exception, all other terms and provisions of the DDA shall remain in full force and effect. IN WITNESS WHEREOF, the Parties have entered into this Amendment as of September 13, 2005. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public body, corporate and politic: By: Nick Inzunza, Chairman EXHIBIT 2 Page 1 of 2 1st Amendment to DDA, 835 Bay Marina Drive ATTEST: Benjamin Martinez, CDC Secretary APPROVED AS TO FORM: By: George H. Eiser, III, City -CDC Attomey DEVELOPER: Olson Urban Housing, LLC, A Delaware Limited Liability Company By: The Olson Company, a California corporation, Managing Member By: Its: Page 2 of 2 1st Amendment to DDA, 835 Bay Marina Drive COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 8 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTO VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: RESOLUTION NO. 2005-89: APPROVING AN AGREEMENT WITH GUEVARA, PHIPPARD & JAMES IN CONJUNCTION WITH BEST, BEST & KRIEGER TO PROVIDE REDEVELOPMENT -RELATED LEGAL SERVICES AND AUTHORIZING THE CHAIRMAN TO EXECUTE SAID AGREEMENT Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: ADOPT Resolution No. 2005-89 approving an Agreement with Guevara, Phippard & James in conjunction with Best, Best & Krieger to provide redevelopment -related legal services and authorizing the Chairman to execute said Agreement. Fiscal Impact: Under the terms of the proposed Agreement, expenditures will not exceed $50,000. Environmental Impact: CEQA is not applicable to this action. Background: Currently, the Community Development Commission is experiencing tremendous redevelopment -related workload, resulting in the need for additional legal advice, particularly with respect to property transactions and negotiations. The Community Community Development Commission September 13, 2005 Agenda Item No. 8 Page 1 of 2 Development Commission has and would continue to use several different legal firms for various specialized services. The firm of Guevara, Phippard & James, in conjunction with Best, Best & Krieger will provide the Community Development Commission with some of the top legal talent in the local area. This will help ensure that the Community Development Commission continues to receive top-notch legal advice and services while tackling a variety of complex development issues, particularly in the downtown and harbor districts. Community Development Commission staff selected this firm based on the depth and variety of their expertise and their ability to move swiftly to provide services and advice on an as -needed basis. Guevara, Phippard & James, as well as Best, Best & Krieger, are also strongly committed to diversity in the workplace. With this, Community Development Commission staff recommends that the Community Development Commission Board adopt Resolution No. 2005-89 approving an Agreement with Guevara, Phippard & James in conjunction with Best, Best & Krieger to provide redevelopment -related legal services and authorizing the Chairman to execute said Agreement. ATTACHMENTS: Exhibit 1 — Resolution No. 2005-89 Exhibit 2 — Agreement (to be distributed at the meeting) Community Development Commission September 13, 2005 Agenda Item No. 8 Page 2 of 2 RESOLUTION NO. 2005-89 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY (CDC) AUTHORIZING THE CHAIRMAN TO EXECUTE AN AGREEMENT BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION, GUEVARA, PHIPPARD & JAMES P.C. AND BEST, BEST & KRIEGER LLP WHEREAS, the Community Development Commission of the City of National City (CDC) desires to employ a law firm to provide on -call professional legal services; and, WHEREAS, the CDC has determined that Guevara, Phippard & James P.C. and Best, Best & Krieger, LLP are qualified by experience and ability to perform the legal services desired by the CDC and are willing to perform such services. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of National City authorizes the Mayor to execute an agreement with Guevara, Phippard & James P.C. and Best, Best & Krieger, LLP to provide on -call legal services. Said agreement is on file in the office of the Secretary. PASSED AND ADOPTED this 13th day of September 2005. ATTEST: Benjamin Martinez, Secretary APPROVED AS TO FORM: George H. Eiser, III, City -CDC Attorney Nick lnzunza, Chairman EXHIBIT 1 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 9 TO: CHAIRMAN AND BOARD MEMBERS FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT OE SUBJECT: REPORT: SELECTION PROCESS FOR CLEVELAND AVENUE INDUSTRIAL PROJECT AND SELECT MEMBERS TO SERVE ON THE SELECTION COMMITTEE Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: RECEIVE AND FILE this Report on the Selection Process for the Cleveland Avenue Industrial Project; and, SELECT members to serve on the Selection Committee. Fiscal Impact: There is no fiscal impact as a result of this report. Environmental Impact: CEQA is not applicable. Background: On June 14, 2005, the Community Development Commission approved a Date of Valuation with Pacific Steel, Inc. for the acquisition of property in the 1700 block of Cleveland Avenue in the National City Harbor District. On July 12, 2005, the Community Development Commission adopted a Resolution of Necessity for the acquisition of properties owned by BNSF Railroad and currently leased by Pacific Steel, Inc. in the same block of Cleveland Avenue. Community Development Commission September 13, 2004 Agenda Item No. 9 Page 1 of 2 Subsequently THE Community Development Commission Issued a Request for Qualifications (RFQ) for the Cleveland Avenue Industrial Project. Proposals in response to the RFQ were due on September 1, 2005 and ten proposals were received. Community Development Commission Staff is currently reviewing the proposals to identify finalists. A Selection Committee is being established with the objective of selecting a developer to enter an Exclusive Negotiating Agreement for the project by the end of October. Action Requested: The Community Development Commission Board is asked to select one or two members to serve on a Selection Committee for the developer of the Cleveland Avenue Industrial Project. With this, staff recommends that the Community Development Commission Board receive and file this Report on the Selection Process for the Cleveland Avenue Industrial Project and select members to serve on the Selection Committee. Staff member: Beard Community Development Commission Agenda Item No. 9 September 13, 2004 Page 2 of 2 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 10 TO: CHAIRMAN AND BOARD MEMBERS FROM: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: REPORT: STATUS REPORT AND REQUEST FOR THE COMMUNITY DEVELOPMENT COMMISSION BOARD TO PROVIDE DIRECTION TO COMMUNITY DEVELOPMENT COMMISSION STAFF TO RETURN WITH FULL PROPOSALS FOR THE ACQUISITION AND DEVELOPMENT OF THREE COMMUNITY DEVELOPMENT COMMISSION OWNED HOUSING PARCELS Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: ACCEPT AND FILE this Status Report, and; PROVIDE DIRECTION to Community Development Commission staff to return with full proposals for the acquisition and development of three Community Development Commission owned housing parcels. Fiscal Impact: None. Environmental Impact: Not Applicable. Background: On March 28, 2005, the Community Development Commission issued a Request for Proposals for the development of three Community Development Commission owned parcels located at 1441 Harding Avenue, 405 West 18th Street, and 1820 G Avenue. Community Development Commission September 13, 2005 Agenda Item No. 10 Page 1 of 2 The Request for Proposals included a provision that some portion of the total units created would be affordable to low-income families, based on original acquisition through restricted funding sources. Proposals were received from four entities: 1. Ahuage, Saunderson and Guzman; 2. Habitat for Humanity; 3. National Oaks Development; and 4. St. Anthony's Church (for 405 West 18th Street only). All proposals were reviewed and ranked by a team of Community Development Commission staff members, and then reviewed with a Community Development Commission Subcommittee consisting of Chairman Inzunza and Commissioner Parra. The proposals were evaluated based upon developmentteam experience, financial resources and project financing, and approach to development design. Community Development Commission staff and the Community Development Commission Subcommittee, after their review, have recommended the selection of Ahuage, Saunderson and Guzman to begin more specific negotiations. The selected developer's approach includes a very urban rowhome design that should be a good fit for each of the neighborhood locations (two in Old Town and one in Mid - Town). The team's architect, Kevin DeFreitas, has had great success with rowhome design, including downtown San Diego's "Rowhomes on F," which has garnered numerous design awards. At this point in time, Community Development Commission staff is requesting direction to move forward with development of conceptual design for the three sites with the selected development team. Community Development Commission staff would also request direction from the Community Development Commission Board to continue to work with the St. Anthony's Church team to explore options that could provide both new housing, provided by the selected development team, as well as some expansion opportunities for the Church. To this end, Community Development Commission staff and the development team have met with the Church development committee and are continuing a dialogue. It is thought that a more specific proposal for the 1820 G Avenue site will be the initial focus of the development and design team, followed by the other two sites. Depending on progress and timing, it is likely that staff will bring back an Exclusive Negotiation Agreement or Disposition and Development Agreement for one or more of the sites within the next several months. Community Development Commission Agenda Item No. 10 September 13, 2005 Page 2 of 2 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY September 13, 2005 AGENDA ITEM NO. 11 TO: CHAIRMAN AND BOARD MEMBERS ;n FROM: BENJAMIN MARTINEZ, EXECUTIVE DIRECTOR VIA: BYRON ESTES, DEPUTY DIRECTOR OF REDEVELOPMENT SUBJECT: REPORT: ACCEPT AND FILE THE REPORT, HEAR THE PRESENTATION FROM COMMUNITY DEVELOPMENT COMMISSION STAFF, COMMUNITY DEVELOPMENT COMMISSION ATTORNEY AND UNIDEV, LLC REPRESENTATIVES REGARDING THE SENIOR VILLAGE HOUSING PROJECT AND DIRECT COMMUNITY DEVELOPMENT COMMISSION STAFF TO SUBMIT A 2006 NEW MARKETS TAX CREDIT APPLICATION TO THE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND Recommendation: Community Development Commission staff recommends that the Community Development Commission Board: ACCEPT AND FILE THE REPORT; and, HEAR THE PRESENTATION from Community Development Commission staff, Community Development Commission Attorney and Unidev, LLC representatives regarding the Senior Village Housing Project; and, DIRECT Community Development Commission staff to submit a 2006 New Markets Tax Credit application to the Community Development Financial Institutions Fund. Fiscal Impact: There will be no fiscal impact as a result of this action. Environmental: CEQA is not applicable. Community Development Commission Agenda Item No.11 September 13, 2005 Page 1 of 2 Background: On behalf of the Community Development Commission, Unidev, LLC would like to pursue New Markets Tax Credits as a potential financing source for the proposed Senior Village Housing Project. If awarded, these tax credits could provide financing to benefit low-income residents, such as the proposed assisted living component within the scope of the Senior Village Housing Project. The decision to apply for the tax credits was made after considerable analysis of project costs and the realization that these additional funds can increase affordable housing opportunities within the project. The application is time -sensitive with a due date of Friday, September 16, 2005. The application must be submitted in this round of tax credits, as it is essential to determine the total amount of funds available for Project financing. Due to the time constraints and the need to complete the application within the next week, Community Development Commission staff is working diligently to provide the Community Development Commission Board with pertinent application information. Community Development Commission staff will provide additional information for the Community Development Commission Board's review and consideration prior to the meeting on September 13, 2005. With this, staff Community Development Commission staff recommends that the Community Development Commission Board accept and file the Report, hear the presentation from Community Development Commission staff, Community Development Commission attorney and Unidev, LLC representatives regarding the Senior Village Housing Project and direct Community Development Commission staff to submit a 2006 New Markets Tax Credit application to the Community Development Financial Institutions Fund. Community Development Commission Agenda Item No.11 September 13, 2005 Page 2 of 2