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HomeMy WebLinkAbout2010 CON CDC Palm Plaza Associates - 1640 E. Plaza Blvd.PURCHASE AND SALE AGREEMENT (1640 East Plaza Boulevard) THIS PURCHASE AND SALE AGREEMENT (1640 East Plaza Boulevard) ("Agreement") dated as of the 3rd day of November, 2009, by and between the Community Development Commission of the City of National City ("Seller"), and Palm Plaza Associates, LLC, a California limited liability company ("Purchaser"). RECITALS A. Seller currently owns an approximately 1.066 acre parcel located in the National City Redevelopment Project area and generally located at 1640 East Plaza Boulevard in the City of National City, County of San Diego ("Seller Property"), which is more particularly described on the Seller Property Legal Description attached hereto as Exhibit A. B. Purchaser currently owns a certain approximately 1.144 acre parcel located in the National City Redevelopment Project area and generally located at 1300 Palm Avenue in the City of National City, County of San Diego ("Purchaser Property"), which is more particularly described on the Purchaser Property Legal Description attached hereto as Exhibit B. C. The term Site means collectively, the Seller Property and the Purchaser Property. In furtherance of the objectives of the California Community Redevelopment Law, Seller and Purchaser desire: (i) for Seller to sell the Seller Property to Purchaser at fair market value, and for Purchaser to purchase the Seller Property from Seller; and (ii) for Purchaser to redevelop the Site by constructing 72 market rate dwelling units, together with certain off -site improvements (the "Project"). D. Provided, the various conditions to Closing set forth in this Agreement and the Joint Escrow Instructions, the Seller agrees to sell the Seller Property to Purchaser for an amount equal to its current fair market value of One Million Eight Hundred Twenty -Three Thousand and No/100 Dollars ($1,823,000.00) (which is the fair market value of the Seller Property as determined by that certain appraisal dated February 24, 2006, performed by Keagy Real Estate), plus fair market interest during the period beginning on the Effective Date through Closing. Which amount shall be payable by Purchaser to Seller in cash at Closing. Purchaser may cancel or terminate this Agreement and the Escrow, upon written notice to Seller and Escrow Agent, as set forth in Section 12(r), below. E. Seller's sale of the Seller Property to Purchaser and Purchaser's purchase of the Seller Property and construction of the Project on the Site pursuant to the terms of this Agreement, are in the vital and best interest of the City of National 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 Project has been undertaken. 1 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc AGREEMENT FOR GOOD AND VALUABLE CONSIDERATION, the receipt and adequacy of which are acknowledged, Purchaser and Seller hereby agree as follows: 1. Effectiveness of Agreement and Purchase and Sale. (a) Effectiveness of Agreement. This Agreement shall be effective and binding upon all parties hereto concurrently with the last to occur of the following (the "Effective Date"): (i) this Agreement has been duly executed by Purchaser and delivered by Purchaser to Seller; (ii) this Agreement has been formally approved by resolution of the Seller's board; and (iii) this Agreement has been duly executed by Seller and delivered by Seller to Purchaser. Under no circumstances will this Agreement be effective before all of the preceding have occurred. (b) Purchase and Sale of the Seller Property. In consideration of the mutual covenants set forth in this Agreement, and on the terms and conditions set forth herein, Seller agrees to sell the Seller Property to Purchaser, and Purchaser agrees to purchase the Seller Property from Seller. Purchaser is purchasing the Seller Property "As -Is" and without warranty. At Closing, Seller shall convey to Purchaser title to the Seller Property by recordation of the Grant Deed. Seller shall cause Escrow Agent to issue to Purchaser and Purchaser shall receive on the Closing Date the Title Policy, as defined below. 2. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Closing" means the close of Escrow as provided herein, which shall in no event be later than November 3, 2011. Notwithstanding anything to the contrary set forth herein or in the Joint Escrow Instructions, this Agreement shall survive the Closing in its entirety. "Closing Date" means the date on which the Closing occurs, which shall be one business day after the date all of the Conditions Precedent for the Benefit of Seller and all of the Conditions Precedent for the Benefit of Purchaser have been satisfied, which shall in no event be later than November 3, 2011. "Conditions Precedent for the Benefit of Purchaser" shall have the meaning set forth in the Joint Escrow Instructions. "Conditions Precedent for the Benefit of Seller" shall have the meaning set forth in the Joint Escrow Instructions. "Deposit" shall have the meaning set forth in Section 3(a) of this Agreement. "Effective Date" shall have the meaning set forth in Section 1(a) of this Agreement. "Escrow" means the escrow depository and disbursement services to be performed by Escrow Agent pursuant to the provisions of this Agreement. 2 E:\CLIENTS\National City \Palm Plaza\Purchase and Sale Agreement.Final.doc "Escrow Agent" means Chicago Title Company, located at 2365 Northside Drive, Suite 500, San Diego, California 92108. "Grant Deed" means a duly executed and acknowledged grant deed conveying fee simple title to the Seller Property from Seller to Purchaser, in substantially the form attached hereto as Exhibit C. "Immediately Available Funds" means a bank wire transfer or a certified bank or cashier's check. "Joint Escrow Instructions" means the Joint Escrow Instructions being executed by Seller and Purchaser concurrently with the execution of this Agreement and being delivered to Escrow Agent concurrently with the delivery of this Agreement to Escrow Agent. Any capitalized terms not defined in this Agreement shall have the meaning set forth in the Joint Escrow Instructions. "Project" means the 72 market rate dwelling units, together with certain off -site improvements, Purchaser intends to construct at the Site. "Purchaser" means Palm Plaza Associates, LLC, a California limited liability company. "Purchaser Property" means that certain approximately 1.144 acre parcel located in the National City Redevelopment Project area and generally located at 1300 Palm Avenue in the City of National City, County of San Diego, which is more particularly described on the Purchaser Property Legal Description attached hereto as Exhibit A. "Seller" means Community Development Commission of the City of National City. "Seller Property" means that certain approximately 1.066 acre parcel located in the National City Redevelopment Project area and generally located at 1640 East Plaza Boulevard in the City of National City, County of San Diego, which is more particularly described on the Seller Property Legal Description attached hereto as Exhibit B. "Site" means collectively the Seller Property and the Purchaser Property. "Title Policy" means a CLTA Standard Owner's policy issued by Escrow Agent insuring Purchaser's fee simple title to the Seller Property. "Transfer Tax" means any taxes imposed on transfers by deeds, instruments, writings or any other document by which any lands, tenements or other interests in property located in the City of National City or County of San Diego shall be sold, granted, assigned, transferred or otherwise conveyed to or vested in purchasers, or any other person or persons. 3 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc 3. Purchase Price. The purchase price for the Seller property shall be One Million Eight Hundred Twenty -Three Thousand and No/100 ($1,823,000.00), plus fair market interest (which the parties agree to be 1.3%) during the period beginning on the Effective Date through Closing ("Purchase Price"). The Purchase Price shall be payable by Purchaser, as follows: (a) Deposit. Purchaser shall make a deposit into Escrow of Immediately Available Funds in the amount of Fifty -Four Thousand Six Hundred Ninety and No/100 ($54,690.00) (the "Deposit") within two (2) business days of the deposit of this Agreement into Escrow. (b) Delivery of Remainder of Purchase Price into Escrow. Not less than one (1) business day prior to the Closing Date, Purchaser shall deliver to Escrow Agent Immediately Available Funds in an amount equal to the remainder of the Purchase Price minus any interest earned on the Deposit and plus or minus any adjustments for prorations and expenses required under the Joint Escrow Instructions. 4. Escrow Instructions, Incorporation and Cross -Default. The Joint Escrow Instructions are hereby incorporated into this Agreement in their entirety. A default under the Joint Escrow Instructions shall be a default under this Agreement. 5. Seller's Representations and Warranties. Seller hereby represents and warrants to Purchaser, as provided in this Section 5 which representations and warranties are true, correct and complete as of the date hereof and shall be and are true, correct and complete as of the Closing Date. Seller's representations and warranties shall survive the Closing. (a) Representations and Warranties Regarding Seller's Authority. Seller hereby represents and warrants to Purchaser that this Agreement and all documents executed by Seller which are to be delivered to Purchaser or the Escrow Agent at or prior to the Closing are, or on the Closing Date will be, duly authorized, executed and delivered by Seller. (b) Representations and Warranties Regarding Enforceability of Agreement. Seller hereby represents and warrants to Purchaser that this Agreement and all documents required hereby to be executed by Seller shall be valid, legally binding obligations of, and enforceable against, Seller in accordance with their terms. (c) Representations and Warranties Pertaining to Real Estate and Legal Matters. Seller hereby represents and warrants to Purchaser that Seller has not received written notice from any governmental authority advising Seller of the existence of any violation (or an alleged violation) relative to the Seller Property of any applicable building codes, environmental, zoning, subdivision, or land use laws. To Seller's knowledge, there are no pending or threatened legal or administrative proceedings or actions of any kind or character of which Seller is a party or by which the Seller Property is bound, which, if adversely determined, would have a material adverse effect upon the Seller Property, Seller's ownership in the Seller Property, or Purchaser's right to occupy or utilize the Seller Property. 4 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc (d) Representations and Warranties Pertaining to Operating Contracts and Leases. Seller hereby represents and warrants to Purchaser that no one has any option or right of first refusal to purchase the Seller Property or any part thereof and there are not any leases, subleases, occupancies or tenancies in effect with respect to any of the Seller Property. (e) Knowledge of Seller. For purposes of this Section 5, Seller's "knowledge" shall mean only the actual personal knowledge of Patricia Beard as of the Effective Date, and Seller's "written notice" shall only mean notices sent to the attention of Patricia Beard. The foregoing does not imply and shall not be deemed to require Seller's independent investigation. Without limiting the generality of the foregoing, Purchaser shall be solely responsible for determining the condition of the Seller Property and all aspects regarding the fees, charges and assessments relating to the Seller Property. (f) Representations, Covenants and Warranties Regarding Seller's Discovery of New Information. Seller hereby represents and warrants to Purchaser that if Seller discovers any information or facts prior to Closing that would change any of the foregoing representations and warranties or cause any of them to be untrue or misleading in any respect, Seller shall give Purchaser notice of those facts and information. 6. Purchaser's Representations and Warranties. Purchaser hereby represents and warrants to Seller as provided in this Section 6, which representations and warranties are true, correct and complete as of the date hereof and shall be true, correct and complete as of the Closing Date. Purchaser's representations and warranties shall survive the Closing. (a) Representations and Warranties Regarding Purchaser's Authority. Purchaser hereby represents and warrants to Seller that this Agreement and all documents executed by Purchaser which are to be delivered to Seller or the Escrow Agent at or prior to the Closing are, or on the Closing Date will be, duly authorized, executed and delivered by Purchaser. (b) Representations and Warranties Regarding Enforceability of Agreement. Purchaser hereby represents and warrants to Seller that none of the execution and delivery of this Agreement, nor the incurrence of the obligations herein set forth, nor the consummation of the transactions herein contemplated, nor compliance with the terms of this Agreement will conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, any judicial order, bond, note or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which Purchaser is a party. This Agreement and all documents required hereby to be executed by Purchaser shall be valid, legally binding obligations of, and enforceable against, Purchaser in accordance with their terms. (c) Representation and Warranty Regarding Independent Investigation. Purchaser hereby represents and warrants to Seller that Purchaser has made (or will make prior to Closing) all independent investigations Purchaser has deemed necessary with regard to the Seller Property and Purchaser's intended use thereof. 5 E:\CLIENTS1National City\Palm Plaza\Purchase and Sale Agreement.Final.doc (d) Property to be Sold and Purchased "As -Is". Purchaser hereby represents and warrants to Seller that Purchaser is purchasing the Seller Property on an "As -Is" basis without relying on any communications that may have been made by Seller, or any of Seller's agents or employees, with respect to the Seller Property or Purchaser's intended use thereof. Without limiting the generality of the foregoing, Purchaser shall be solely responsible for determining the condition of the Seller Property and all aspects regarding the fees, charges and assessments relating to the Seller Property. (e) Representation and Warranty Regarding Hazardous Materials. Purchaser represents, warrants, acknowledges and agrees that: (i) Purchaser has performed all of the due diligence, inspections and testing, including without limitation geotechnical and environmental testing, that Purchaser deems necessary with respect to the Seller Property; (ii) Purchaser agrees to purchase the Seller Property "as -is" and on the terms and conditions set forth herein regardless of the existence of any Hazardous Materials that may have existed, may exist now or may exist in the future on, within, under, about or from the Seller Property, or in or adjacent to any part of the Seller Property, or in the soil, groundwater or soil vapor on or under the Seller Property, or elsewhere, if any; and (iii) Purchaser hereby irrevocably waives any and all rights Purchaser has or may in the future have, at law or in equity (including without limitation under the Polanco Redevelopment Act, Division 24, Part 1, Chapter 4, Article 12.5 of the California Health and Safety Code, Sections 33459-33459.8, or any successor statute) against Seller, to receive compensation, damages, cost reimbursements or other consideration of any kind whatsoever as a result of Hazardous Materials that may have existed, may exist now or may exist in the future on, within, under, about or from the Seller Property, or in or adjacent to any part of the Seller Property, or in the soil, groundwater or soil vapor on or under the Seller Property, or elsewhere, if any, under any law. Notwithstanding the foregoing, Purchaser does not waive any rights Purchaser may have against third parties who may have contributed to, or, under any law, are determined to be responsible for, the presence of Hazardous Materials which may exist now or may exist in the future on, within, under, about or from the Seller Property, or in or adjacent to any part of the Seller Property, or in the soil, groundwater or soil vapor on or under the Seller Property, or elsewhere, if any. (f) Representations, Covenants and Warranties Regarding Seller's Discovery of New Information. Purchaser hereby represents and warrants to Seller that if Purchaser discovers any information or facts prior to Closing that would change any of the foregoing representations and warranties or cause any of them to be untrue or misleading in any respect, Purchaser shall give Seller notice of those facts and information. (g) Prevailing Wages. Purchaser hereby represents and warrants to Seller that Purchase, if required by Federal and/or California law, Purchaser will cause, the general contractor, and any and all subcontractors, to pay prevailing wages for all work done with respect to the Project. 6 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.FinaLdoc 7. Condemnation of the Seller Property. (a) Condemnation. If between the Effective Date and the Closing Date, any condemnation or eminent domain proceedings are commenced that will result in the taking of any material part of the Seller Property, Purchaser may, at Purchaser's election, either: (1) Terminate this Agreement by giving written notice to Seller and Escrow Agent (in which event all remaining funds or other things deposited in Escrow by Purchaser shall be returned to Purchaser immediately from Escrow together with any interest earned thereon and Seller shall pay all Escrow charges); or (2) Proceed with the Closing and have Seller assign to Purchaser all of Seller's right, title and interest to any award made for the condemnation or eminent domain action. (b) Notice. If Seller obtains notice of the commencement of or the threatened commencement of eminent domain or condemnation proceedings with respect to the Seller Property, Seller shall notify the Purchaser in writing. 8. Broker's Commission. Seller and Purchaser each hereby represents and warrants to one another that neither of them has engaged the services of any real estate agent or broker. Seller and Purchaser each agree that, to the extent any real estate commission or brokerage and/or finder's fee shall be earned or claimed in connection with this Agreement or the Closing, the payment of such fee or commission, and the defense of any action in connection therewith, shall be the sole and exclusive obligation of the party who requested the services of the broker and/or fmder. In the event that any claim, demand or cause of action or brokerage and/or finder's fee is asserted against the party to this Agreement who did not request such services, the party through whom the broker or finder is making the claim shall indemnify, defend (with an attorney of the indemnitee's choice) and hold harmless the other from and against any and all such claims, demands and causes of action and expenses related thereto, including (without limitation) attorneys' fees and costs. 9. No Assignment by Purchaser. The qualifications and identity of Purchaser are of particular concern to the Seller. It is because of those qualifications and identity that Seller has entered into this Agreement and the Joint Escrow Instructions with Purchaser. Neither this Agreement, nor the Joint Escrow Instructions, may be assigned by Purchaser to any person without the advance written consent of the Seller, which may be granted or withheld by Seller in its sole discretion. Notwithstanding anything to the contrary set forth herein, nothing in this Agreement shall prohibit, limit, restrict or condition, Purchaser's right to refinance all or any portion of the Purchaser Property, prior to the Closing Date. For the period commencing upon Closing Date until the date Certificates of Occupancy are issued for all of the Project, no voluntary or involuntary successor in interest of Purchaser shall acquire any rights or powers under this Agreement or the Joint Escrow Instructions, nor shall Purchaser make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the Project without prior written approval of the Seller. Any proposed total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the 7 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc whole or any part of the Site or the Project, during the period commencing upon Closing Date until the date Certificates of Occupancy for all of the Project, will entitle Seller to its right of reentry and revesting as set forth in Section 10 hereof. For the reasons cited above, Purchaser represents and agrees for itself, each member of Purchaser and any successor in interest of Purchaser that prior to issuance by the City of National City of Certificates of Occupancy for all of the Project and without the prior written approval of Seller (which shall not unreasonably be withheld conditioned or delayed), there shall be no change in the membership, management, control, or ownership or in the relative proportions thereof, or with respect to the identity of the parties in control of Purchaser or the degree thereof, by any method or means other than such changes occasioned by the death or incapacity of any individual prior to issuance of Certificates of Occupancy for all of the Project. Purchaser shall promptly notify Seller of any and all such changes whatsoever. In such event, this Agreement may be terminated by Seller, entitling Seller to its right of reentry and revesting as set forth in Section 10 hereof. 10. Reentry and Revesting of Title in Seller After Closing. (a) Conditions to Reentry and Revesting. Seller has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate this Agreement and vest the Site in the Seller if after the Closing and prior to the issuance of the Certificates of Occupancy for all of the Project, any of the following occurs, without the prior written approval of Seller: (1) Purchaser fails to commence construction of the Project within one (1) year after Closing. (2) Purchaser abandons or substantially suspends construction of the Project required by this Agreement for a period of ninety (90) days after written notice thereof from Seller. (3) Purchaser alters the Project in a manner that varies materially from the design of the same at the time of Closing, including without limitation alterations to the use of the Site as a residential project, the number of dwelling units, number or size of parking spaces, type of dwelling units, architecture, appearance, facades or landscaping and Purchaser fails to correct the same within ninety (90) days after written notice thereof from Seller. (4) Purchaser conveys or transfers or suffers any involuntary conveyance or transfer of the Site prior to issuance by the City of National City of Certificates of Occupancy for all of the Project. (5) Purchaser files for bankruptcy or enters into an insolvency arrangement with creditors. (6) Purchaser fails to obtain Certificates of Occupancy for all of the Project on or before three (3) years from the date of commencement of construction of the Project. 8 E:\CLIENTS\National City\Palm Plaza\Purchase and Sate AgreementFinal.doc (7) There is a change (voluntary or involuntary) in the membership, management, control, or ownership of Purchaser or in the relative proportions thereof, or with respect to the identity of the parties in control of Purchaser or the degree thereof, by any method or means, other than such changes occasioned by the death or incapacity of any individual prior to issuance of Certificates of Occupancy for all of the Project, which was not approved in writing by Seller prior to such event (which approval shall not unreasonably be withheld conditioned or delayed). (8) Purchaser fails to cause, the general contractor, and any and all subcontractors, to pay prevailing wages for all work done with respect to the Project if required by Federal and/or California law. (b) Limitations on Right of Reentry. Seller's right to reenter, terminate and revest the Site shall be subject to and be limited by and shall not defeat, render invalid or limit any mortgage or deed of trust consented to by Seller in a writing recorded against the Site. (c) Right of Reentry Referenced in Grant Deed. The Grant Deed shall contain appropriate reference and provision to give effect to Sellers rights as set forth in this Section 10, to reenter and take possession of the Site, with all improvements thereon, and to terminate and revest in Seller the estate conveyed to Purchaser. (d) Resale By Seller After Revesting. Upon the revesting in Seller of title to the Site as provided in this Section 10, Seller shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as Seller 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 Seller in its sole and absolute discretion) who will assume the obligation of making or completing the Project, or such improvements in their stead as shall be satisfactory to Seller in its sole and absolute discretion and in accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. Seller may resell the Site to such persons, for such amounts and on such terms and conditions as determined by Seller in its sole and absolute discretion, provided that any sale of the Site for an amount insufficient to pay-off all mortgages or deed of trust recorded against the Site which were consented to by Seller in writing, shall be subject to the approval of the beneficiaries of such deeds of trust. (e) Application of Resale Proceeds. Upon such resale of the Site by Seller, 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: (1) First, to reimburse Seller, on its own behalf or on behalf of the City of National City, all costs and expenses incurred by Seller or the City of National City, including, but not limited to: (i) an amount equal to the greater of: (A) the Purchase Price (as such term is defined in the Agreement) of the Property, plus interest at the rate set forth in the Agreement to the date of resale of the Site by Seller; or (B) the then fair market value of the Property; (ii) any expenditures by Seller or the City of National City in connection with the recapture, management and resale of the Site or part thereof, including without limitation attorneys' and experts' fees; 9 E:ICLIENTS\National City\Palm Plazad'urchase and Sale Agreement.Final.doc (iii) all taxes, assessments and water or sewer charges with respect to the Site or part thereof which Purchaser 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 Seller, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); (iv) any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time of revesting of title thereto in Seller, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Purchaser, its successors or transferees as determined by Seller in its sole and absolute discretion. (2) Second, if any, to Purchaser. (f) Rights and Remedies are Cumulative. The rights established in this Section 10 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. The rights are to be interpreted in light of the fact that Seller will have conveyed the Seller Property to Purchaser for redevelopment purposes, particularly for development of the Project and not for speculation. (g) Inaction Not a Waiver of Default. Any failures or delays by Seller in asserting any of its rights and remedies under this Section 10 shall not operate as a waiver of any default by Purchaser or of any such rights or remedies, or deprive Seller 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 shall govem the interpretation and enforcement of this Agreement. 11. Notices. All notices under this Agreement shall be in writing and sent by (a) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered seven (7) business days after deposit, postage prepaid in the United States Mail, (b) by a nationally recognized overnight courier such as Airborne Express, or Federal Express, in which case notice shall be deemed delivered one (1) business day after deposit with that courier, or (c) by personal delivery, in which case notice shall be deemed delivered upon the actual date of delivery. All notices shall be delivered to the following addresses: If to Seller: National City Seller Attn. Patricia Beard 140 E. 12th Street, Suite B National City, CA 91950 With copy to: George Eiser, Esq. City Attorney — City of National City 1243 National City Boulevard National City, CA 91950 10 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc If to Purchaser: Palm Plaza Associates, LLC c/o Mar Group Attn. Juan Pablo Mariscal 915 Camino Del Mar, Suite 200 Del Mar, CA 92014 The addresses above may be changed by written notice to the other party; provided however, that no notice of a change of address shall be effective until actual receipt of the notice. 12. General Provisions. (a) Governing Law. This Agreement shall be interpreted and construed in accordance with California law. (b) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (c) Captions. The captions in this Agreement are inserted for convenience of reference and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions of this Agreement. (d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors, heirs and permitted assigns. (e) Modifications; Waiver. No waiver, modification, amendment, discharge or change of this Agreement shall be valid unless it is in writing and signed by the party against which the enforcement of the modification, waiver, amendment, discharge or change is sought. (f) Entire Agreement. This Agreement, along with the Joint Escrow Instructions and Grant Deed, contain the entire agreement between the parties relating to Purchaser's acquisition of the Seller Property from Seller and development of the Site and all prior or contemporaneous agreements, understandings, representations or statements, oral or written, are superseded. (g) Partial Invalidity. Any provision of this Agreement which is unenforceable, invalid, or the inclusion of which would adversely affect the validity, legality, or enforcement of this Agreement shall have no effect, but all the remaining provisions of this Agreement shall remain in full effect. (h) Survival; No Merger. This Agreement, including without limitation, all representations, warranties, covenants, agreements, indemnities and other obligations of Seller and Purchaser in this Agreement, shall survive the Closing of this transaction and will not be merged into the Grant Deed or any other document. 11 E:\CL[ENTS\National City\Palm P1aza\Purchase and Sale Agreement.Final.doc (i) No Third -Party Rights. Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties to this Agreement and their respective successors and assigns, any rights or remedies. (j) Time Of Essence. Time is of the essence in this Agreement. (k) Attorneys' Fees. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of this Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. All claims, disputes, causes of action or controversies shall be subject solely to the jurisdiction of the San Diego Superior Court. (1) Relationship. Nothing contained in this Agreement shall be deemed or construed by the parties or by any third person to create a relationship of principal and agent or partnership or a joint venture between Purchaser and Seller or between either or both of them and any third party. (m) Recording. This Agreement shall not be recorded. (n) Seller Approval. Where this Agreement refers to an action or approval of the Seller, it shall mean the approval of the Executive Director of the Seller, or designee, unless otherwise provided. (o) Specific Performance. If the purchase and sale of the Seller Property is not consummated because of a default by either party, the non -defaulting party shall have all remedies at law or in equity, including without limitation, specific performance of the other parry's obligations under this Agreement. (p) Exhibits and Recitals Incorporated. All exhibits referred to in this Agreement are hereby incorporated in this Agreement by this reference, regardless of whether or not the exhibits are actually attached to this Agreement. The Recitals to this Agreement are hereby incorporated in this Agreement by this reference. (q) Capacity and Authority. All individuals signing this Agreement for a party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the Purchaser that they have the necessary capacity and authority to act for, sign and bind the respective entity or principal on whose behalf they are signing. (r) Termination. Prior to the Closing, this Agreement may be cancelled and terminated unilaterally by Purchaser upon written notice to Seller and Escrow Agent. Any cancellation and termination of this Agreement as set forth in this Section 12(r), shall automatically cancel and terminate the Joint Escrow Instructions and the Escrow. In the event of cancellation and termination of this Agreement (and by operation of law the Joint Escrow 12 E:\CLIENTS\National City\Palm Plaza\Pwchase and Sale Agreement.Final.doc Instructions and the Escrow) pursuant to this Section 12(r), then: (i) all rights and liabilities of Seller and Purchaser with respect to this Agreement and/or the Joint Escrow Instructions shall immediately terminate, except for rights and liabilities accruing prior to the date of termination of this Agreement; (ii) the Deposit (including all interest accrued thereon) shall be returned to Purchaser (provided Purchaser is not then in default under the terms of this Agreement and/or the Joint Escrow Instructions); (iii) all funds or other things deposited in Escrow by Purchaser shall be returned to Purchaser: and (iv) all funds or other things deposited in Escrow by Seller shall be returned to Seller. Provided, however, all fees and costs charged by the Escrow Agent shall be paid by Purchaser. Notwithstanding clause (i) of this Section 12(r), in the event of cancellation and termination of this Agreement pursuant to this Section 12(r), Purchaser and Seller shall cooperate with one another, execute all documents reasonably necessary and take all reasonable steps as may be required by Escrow Agent in order to accomplish the purposes of this Section 12(r). IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. SELLER: Community Development Commission of the City of National City By: �.._�v Print Name: .) ®.. .tit • .� Its: %14A47e"..„ APPROVED AS TO FORM: W r F. S Special Counsel to Se PURCHASER: Palm Plaza Associates, LLC, a California limited liability company By: Print Name: JUM - PC41, O 4V ISCG Its: pveSl e 13 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc Exhibit A Legal Description of the Seller Property All that certain real property situated in the City of National City, County of San Diego, State of California, described as follows: APN 557-410-26: PARCEL 1 OF PARCEL MAP NO. 13257, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 8, 1984. 14 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc Exhibit B Legal Description of the Purchaser Property All that certain real property situated in the City of National City, County of San Diego, State of California, described as follows: PARCEL A (APN 557-410-26): ALL OF PARCEL 2 TOGETHER WITH ALL THAT PORTION OF PARCEL 3 OF PARCEL MAP NO. 13257, IN THE CITY OF NATIONAL CITY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, MAY 8, 1984, DESCRIBED AS FOLLOWS: THE SOUTHERLY 70.48 FEET OF SAID PARCEL 3. SAID PROPERTY BEING DESCRIBED AS PARCEL "B" OF THAT AMENDED AND RESTATED CERTIFICATE OF COMPLIANCE RECORDED JUNE 11, 2007 AS INSTRUMENT NO. 2007-0392909 OF OFFICIAL RECORDS. PARCEL B: AN EASEMENT FOR SEWER SERVICE PURPOSES OVER, UNDER, ALONG AND ACROSS - THOSE PORTIONS OF PARCELS 1 AND 3 OP SAID PARCEL MAP NO. 13257, DESIGNATED AS "SEWER SERVICE EASEMENT RESERVED HEREON" ON SAID PARCEL MAP. EXCEPTING THEREFROM THAT PORTION LYING WITHIN PARCEL A ABOVE DESCRIBED. PARCEL C: A NON-EXCLUSIVE EASEMENT FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS FOR RESIDENTIAL USE ONLY, OVER AND ACROSS THE STRIP OF LAND 35.00 FEET WIDE, HAVING A LENGTH OF 150.00 FEET MEASURED FROM PALM AVENUE, LOCATED IMMEDIATELY NORTH OF THE SOUTHERLY 70.48 FEET OF PARCEL 3 OF PARCEL MAP NO 13257. 15 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.FinaLdoc Exhibit C Grant Deed 16 E:\CLIENTS\National City\Palm Plaza\Purchase and Sale Agreement.Final.doc RECORDING REQUESTED BY, MAIL TAX STATEMENTS TO AND WHEN RECORDED MAIL TO: Palm Plaza Associates, LLC c/o Mar Group Attn. Juan Pablo Mariscal 915 Camino Del Mar, Suite 200 Del Mar, CA 92014 GRANT DEED For valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Community Development Commission of the City of National City ("Grantor"), acting to carry out the Redevelopment Plan ("Redevelopment Plan") for the National City Redevelopment Project, under the Community Redevelopment Law of California, hereby grants to Palm Plaza Associates, LLC, a California limited liability company ("Grantee"), the real property ("Property") described in Exhibit A attached hereto and incorporated herein. 1. Conveyance Subject to Terms of the Agreement. The Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by the Grantor, and a Purchase and Sale Agreement and entered into between Grantor and Grantee dated as of November 3, 2009 (the "Agreement"), a copy of which is on file with the Grantor at its offices as a public record and which is incorporated herein by reference. The Agreement generally requires the Grantee to construct 72 market rate dwelling units, together with certain off -site improvements on the Property and on certain real property adjacent to the Property which is owned by Grantee (such adjacent real property, collectively with the Property, shall be referred to herein as the "Site"). All terms used herein shall have the same meaning as those used in the Agreement. 2. Use Covenants. The Grantee covenants and agrees for itself, its successors and assigns, and every successor in interest to the Site, that upon the date of this Grant Deed and until issuance of Certificates of Occupancy for all of the Project, the Grantee shall devote the Site to the uses specified in the Redevelopment Plan and the Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Grantee pursuant to the Agreement, shall conform to the Redevelopment Plan and all applicable provisions of the City of National City Municipal Code. 3. No Transfers of Further Encumbrance. Until issuance of Certificates of Occupancy for all of the Project: (a) Grantee shall not make any sale, transfer, conveyance, subdivision, refinancing or assignment of the Site or any part thereof or any interest therein, without the prior written consent of the Grantor. 1 E:\CLIENTS\National City\Palm Plaza\Grant Deed.rinal.doc (b) Grantee 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 appropriate to develop the Site pursuant to the Agreement, except as approved by Grantor in a writing recorded against the Site. (c) All of the terms, covenants and conditions of this Grant Deed shall be binding upon the Grantee and the permitted successors and assigns of the Grantee, if any. Whenever the term "Grantee" is used in this Grant Deed, such term shall include any other permitted successors and assigns as herein provided. 4. Non -Discrimination. All documents of transfer shall contain clauses that shall state that there will be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income or disability in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Grantee or any transferee in interest or any person claiming under or through Grantee, 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 Site. 5. Reentry and Revesting of Title in Grantor After Conveyance. (a) Conditions to Reentry and Revesting. The Grantor has the right, at its election, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the Grantor the estate conveyed to the Grantee if after the Closing and prior to the issuance of the Certificates of Occupancy for all of the Project (as defined in the Agreement), any of the following occurs: (1) Grantee fails to commence construction of the Project within thirty (30) days after Closing (as defined in the Agreement). (2) Grantee abandons or substantially suspends construction of the Project for a period of thirty (30) days after written notice thereof from Grantor. (3) Grantee alters the Project in a manner that varies materially from the design of the same at the time of Closing, including without limitation alterations to the use of the Site as a residential project, the number of dwelling units, number or size of parking spaces, type of dwelling units, architecture, appearance, facades or landscaping. (4) Grantee conveys or transfers or suffers any involuntary conveyance or transfer of the Site prior to issuance by the City of National City of Certificates of Occupancy for all of the Project. (5) creditors. Grantee files for bankruptcy or enters into an insolvency arrangement with 2 E:\CLTE,NTS\National City\Palm Plaza\Grant Deed.FinaLdoc (6) Grantee fails to obtain Certificates of Occupancy for all of the Project on or before two (2) years from the date of commencement of construction of the Project. (7) There is a change (voluntary or involuntary) in the membership, management, control, or ownership of Grantee or in the relative proportions thereof, or with respect to the identity of the parties in control of Grantee or the degree thereof, by any method or means, other than such changes occasioned by the death or incapacity of any individual prior to issuance of Certificates of Occupancy for all of the Project. (8) Grantee fails to cause, the general contractor, and any and all subcontractors, to pay prevailing wages for all work done with respect to the Project if required by Federal and/or California law. (b) Limitations on Right of Reentry. Such right to re-enter, 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 consented to by Grantor in a writing recorded against the Site; or (2) Any rights or interests provided in the Agreement for the protection of the holders of such mortgages or deeds of trust, including, without limitation, a deed of trust executed for the benefit of (c) Reentry and Revesting Procedure. Upon the revesting in Grantor of title to the Site as provided in this Section 5, Grantor shall, pursuant to its responsibilities under state law, use its reasonable efforts to resell the Site as soon and in such manner as Grantor 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 Grantor in its sole and absolute discretion) who will assume the obligation of making or completing the Project, or such improvements in their stead as shall be satisfactory to Grantor in its sole and absolute discretion and in accordance with the uses specified for the Site or part thereof in the Redevelopment Plan. Grantor may resell the Site to such persons, for such amounts and on such terms and conditions as determined by Grantor in its sole and absolute discretion, provided that any sale of the Site for an amount insufficient to pay-off all mortgages or deed of trust recorded against the Site which were consented to by Grantor in writing, shall be subject to the approval of the beneficiaries of such deeds of trust. (d) Application of Resale Proceeds. Upon such resale of the Site by Grantor, the net proceeds thereof after repayment of any mortgage or deed of trust encumbering the Site which is permitted by this Grant Deed, shall be applied: (1) First, to reimburse Grantor, on its own behalf or on behalf of the City of National City, all costs and expenses incurred by Grantor or the City of National City, including, but not limited to: (i) an amount equal to the greater of: (A) the Purchase Price (as such term is defined in the Agreement) of the Property, plus interest at the rate set forth in the Agreement to the date of resale of the Site by Grantor; or (B) the then fair market value of the Property; (ii) any 3 E \CLIENTS\National City\Palm Plaza\Grant Deed Final doc expenditures by Grantor or the City of National City in connection with the recapture, management and resale of the Site or part thereof, including without limitation attomeys' and experts' fees; (iii) all taxes, assessments and water or sewer charges with respect to the Site or part thereof which Grantee 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 Grantor, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); (iv) any payments made or necessary to be made to discharge any encumbrances or liens existing on the Site or part thereof at the time of revesting of title thereto in Grantor, or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults or acts of Grantee, its successors or transferees as determined by Grantor in its sole and absolute discretion. (2) Second, if any, to Grantee. (e) Rights and Remedies are Cumulative. The rights established in this Section 5 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. The rights are to be interpreted in light of the fact that Grantor will have conveyed the Property to Grantee for redevelopment purposes, particularly for development of the Project and not for speculation. (0 Inaction Not a Waiver of Default. Any failures or delays by Grantor in asserting any of its rights and remedies under this Section 5 shall not operate as a waiver of any default by Grantee or of any such rights or remedies, or deprive Grantor 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 shall govern the interpretation and enforcement of this Grant Deed. 6. Mortgagees Protection. 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 consented to by Grantor in a writing recorded against the Site; provided, however, that any subsequent owner of the Site shall be bound by the covenants, conditions, restrictions, limitations and provisions contained in this Grant Deed, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 7. Covenants Run with the Land. All covenants contained in this Grant Deed are covenants running with the land in favor of the Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. In the event of any breach of any such covenants, Grantor 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 Grantor's rights. 4 E:\CLIENTS\National City\Palm Piaza\Grant Deed.Final.doc 8. Rights of the Parties. Both Grantor, its successors and assigns, and Grantee and the successors and assigns of Grantee in and to all or any part of the fee title to the Site shall have the right with the mutual consent of the Grantor 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. 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. Any amendment to the Redevelopment Plan which proposes to change the uses or development permitted on the Site, or otherwise proposes a change of any of the restrictions or controls that apply to the Site, shall require the written consent of the Grantee or the successors and assigns of Grantee in and to all or any part of the fee title to the Site, but any such amendment which proposes a change affecting the Site shall not require the consent of any tenant, lessee, easement holder, licensee, mortgagee (other than the first mortgagee), trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Site. 9. Term. Notwithstanding anything contained herein to the contrary, all restrictions against and obligations of Grantee set forth herein shall terminate with respect to Grantee and the Site upon issuance of Certificates of Occupancy for all of the Project, provided the same are issued on or before two (2) years from the date of commencement of construction of the Project. Time is of the essence. Failure to obtain Certificates of Occupancy for all of the Project on or before two (2) years from the date of commencement of construction of the Project, gives Grantor the right to re-enter and vest the Site in Grantor as set forth in Section 5, above. GRANTOR: Community Development Commission of the City of National City By: Print Name: Its• Dated: , 20 5 E:\CLLENTS\National City\Palm Plaza\Grant Deed.Final.doc JOINT ESCROW INSTRUCTIONS TO: Chicago Title Company 2365 Northside Drive, Suite 500 San Diego, CA 92108 Attn: n sot-) tdni+ RE: Your Escrow No. q $00q I N29 1. Opening of Escrow. The Community Development Commission of the City ofNational City ("Seller") has been advised that Palm Plaza Associates, LLC, a California limited liability company ("Purchaser") has opened the above -referenced escrow ("Escrow") with you ("Escrow Agent") for the purpose of facilitating the purchase and sale of certain real property from Seller to Purchaser. Therefore, Seller and Purchaser hereby authorize and instruct you as follows: 2. Deposit of Documents. Seller and Purchaser have enclosed herewith the following: (a) Purchase and Sale Agreement (1640 East Plaza Boulevard) ("Agreement"); and (b) Grant Deed conveying from Seller to Purchaser the "Seller Property," as defined in the Agreement. 3. Escrow, Incorporation and Cross -Default. The Agreement is hereby incorporated into these Joint Escrow Instructions in its entirety. A default under the Agreement shall be a default under these Joint Escrow Instructions. Any capitalized terms not defined in these Joint Escrow Instructions shall have the meaning set forth in the Agreement. 4. Purchase Price. The purchase price for the Seller Property shall be One Million Eight Hundred Twenty -Three Thousand and No/100 ($1,823,000.00), plus fair market interest (which the parties agree to be 1.3%) during the period beginning on the Effective Date through Closing ("Purchase Price"). The Purchase Price shall be payable by Purchaser, as follows: (a) Deposit. Upon the opening of Escrow, Purchaser shall make a deposit into Escrow of Immediately Available Funds in the amount of Fifty -Four Thousand Six Hundred Ninety and No/100 ($54,690.00) (the "Deposit"). (b) Delivery of Remainder of Purchase Price into Escrow. Not less than one (1) business day prior to the Closing Date, Purchaser shall deliver to Escrow Agent Immediately Available Funds in an amount equal to the remainder of the Purchase Price minus any interest earned on the Deposit and plus or minus any adjustments for prorations and expenses required under Section 8 of these Joint Escrow Instructions. 5. Conditions Precedent for the Benefit of Seller. Seller's obligation to Close shall be conditioned upon the satisfaction or written waiver by Seller of all of the conditions precedent ("Conditions Precedent for the Benefit of Seller") set forth in this Section 5 at the times set forth hereinbelow. Any of the Conditions Precedent for the Benefit of Seller may be waived by Seller 1 E:\CLIENTS`NATIONAL CITYIPALM PL4ZA\ESCROW INSTRUCTIONS. FINALDOC unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by Seller or by email from Seller, and (ii) delivered or emailed to Purchaser and Escrow Agent. If the Conditions Precedent for the Benefit of Seller are not satisfied by the deadlines set forth in this Section 5 or expressly waived, Seller (provided Seller is not in default hereunder) may unilaterally terminate the Agreement and these Joint Escrow Instructions by mailing or emailing notice of conditional termination to Escrow Agent (with a copy to Purchaser). After receipt of such notice of conditional termination, the Purchaser shall have ten (10) business days to cure any non -satisfaction of a condition or other default specified in the notice of conditional termination. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period, then the Agreement and these Joint Escrow Instructions shall terminate at the close of business on such tenth (10th) day. Any such termination of the Agreement and these Joint Escrow Instructions shall not release Purchaser from liability under the Agreement or these Joint Escrow Instructions. Any termination of the Agreement and these Joint Escrow Instructions as a result of a failure of one of the Conditions Precedent for the Benefit of Seller set forth in this Section 5, then the Deposit shall be returned to Purchaser. (a) The making by Purchaser of the Deposit within two (2) business days of the deposit of this Agreement into Escrow. (b) The deposit by Purchaser into Escrow at least one (1) day prior to Closing (which shall in no event be later than November 3, 2011) of Immediately Available Funds equal to the amount set forth in Section 3(b), above. (c) The deposit by Purchaser into Escrow of all other documents and instruments reasonably required by Escrow or Purchaser's lender to complete the Closing, at least one (1) day prior to Closing. (d) As of the Closing Date, Purchaser has not made an assignment for the benefit of creditors, filed a bankruptcy petition, been adjudicated insolvent or bankrupt, petitioned a court for the appointment of any receiver of, or trustee for, Purchaser or any part of the Purchaser Property, or commenced any proceeding relating to Purchaser under any reorganization, arrangement, readjustment of debt, dissolution, or liquidation law or statute of any jurisdiction, whether now or later in effect. (e) Purchaser shall have secured any and all land use and other entitlements, permits and approvals which may be required for the Project by the City of National City or any other governmental agency affected by such construction or work at least one (1) day prior to Closing. Neither the Seller, nor the City of National City, shall be responsible in any way for, the processing of Purchaser's building permits or other permit applications with the City of National City. The execution of these Joint Escrow Instructions does not constitute the granting of or a commitment to obtain any required land use permits, entitlements or approvals. (f) Purchaser shall have obtained approval by the City of National City of any and all maps necessary for construction of the Project at least one (1) day prior to Closing. 2 E CLIENTSINATIONAL CITY,PALM PLAZA.ESCROW INSTRUCTIONS.FINAL.DOC (g) Purchaser shall have paid any and all applicable fees imposed by the City of National City or any other governmental agency having jurisdiction with respect to the same, prior to or concurrently with Closing. (h) Purchaser shall have pulled any and all grading and building permits which may be required for the Project by the City of National City or any other governmental agency, prior to or concurrently with Closing. (i) Purchaser shall have closed on all financing sources to be used for financing the construction of the Project, which shall be sufficient to complete construction of the Project, prior to or concurrently with Closing. All of such financing, including all documentation of the same, shall be subject to the review and approval of the Seller in its reasonable discretion. (j) The construction contract for construction of the Project, acceptable to the Agency, shall have been executed by the Purchaser and the general contractor who has been selected to do the work, prior to or concurrently with Closing. 6. Conditions Precedent for the Benefit of Purchaser. Purchaser's obligation to Close shall be conditioned upon the satisfaction or written waiver by Purchaser of all of the conditions precedent ("Conditions Precedent for the Benefit of Purchaser") set forth in this Section 6 at the times set forth hereinbelow. Any of the Conditions Precedent for the Benefit of Purchaser may be waived by Purchaser unilaterally; and if so waived, such conditions shall be of no further effect hereunder. Any such waiver shall be effective only if the same is (i) expressly waived in writing signed by Purchaser or by email from Purchaser, and (ii) delivered or emailed to Seller and Escrow Agent. If the Conditions Precedent for the Benefit of Purchaser are not satisfied by the deadlines set forth in this Section 6 or expressly waived, Purchaser (provided Purchaser is not in default hereunder) may unilaterally terminate the Agreement and these Joint Escrow Instructions by mailing or emailing notice of conditional termination to Escrow Agent (with a copy to Seller). After receipt of such notice of conditional termination, the Seller shall have ten (10) business days to cure any non - satisfaction of a condition or other default specified in the notice of conditional termination. If such matter remains unsatisfied or the default remains uncured after the expiration of such ten (10) day period, then the Agreement and these Joint Escrow Instructions shall terminate at the close of business on such tenth (10`h) day. Any such termination of the Agreement and these Joint Escrow Instructions shall not release Seller from liability under the Agreement or these Joint Escrow Instructions. Any termination of the Agreement and these Joint Escrow Instructions as a result of a failure of one of the Conditions Precedent for the Benefit of Purchaser, then the Deposit shall be returned to Seller. (a) The deposit by Seller into Escrow of a duly executed and acknowledged Grant Deed conveying fee simple title to the Seller Property to Purchaser at least one (1) day prior to Closing. (b) The deposit by Seller into Escrow of Seller's affidavit that Seller is not a foreign person and is a "United States Person" as such term is defined in Section 7761(a)(30) of the Internal Revenue Code of 1986, as amended, at least one (1) day prior to Closing. The affidavit shall be in the form prescribed by federal regulations. 3 E:CLIENTS1NAT[ONAL CITYPALM PLAZA''ESCROW INSTRUCTIONS.FINAL.DOC (c) The deposit by Seller into Escrow of a duly executed FTB Form 590 or other evidence that withholding of any portions of the Purchase Price is not required by the Revenue and Taxation Code of California, at least one (1) day prior to Closing. (d) The deposit by Seller into Escrow of all additional documents and instruments as are reasonably required by Escrow or Purchaser's lender to complete the Closing, at least one (1) day prior to Closing. (e) As of the Closing Date, there exists no lease, tenancy or occupancy agreement affecting the Seller Property. (0 As of the Closing Date there is not pending, or threatened to be pending, any action or proceeding by any person or before any government authority, the outcome of which could prohibit the use of the Seller Property as intended by Purchaser. (g) Escrow is prepared and obligated to issue in Purchaser's favor, upon the recordation of the Grant Deed, a California Land Title Association owner's policy ("Title Policy") with endorsements satisfactory to Purchaser in the amount of the Purchaser Price, insuring that title to the Seller Property is vested in Purchaser subject and subordinate only to items 12-18 shown on that certain Third Amended Preliminary Report dated as of September 2, 2009, issued by Chicago Title Company. 7. Procedure for Closing. Once all of the Conditions Precedent for the Benefit of Seller and all of the Conditions Precedent for the Benefit of Purchaser, Escrow shall close (the "Close" or "Closing") the Escrow by performing the following acts: Recording the Grant Deed. Issuing the Title Policy. Prorating the taxes, costs and expenses as provided in these Joint Escrow Instructions. (4) Disbursing the following amount to Seller: the Purchase Price, less (i) any prorated amounts and charges to be paid by or on behalf of Seller, and (ii) any costs and expenses to be paid by Seller pursuant to these Joint Escrow Instructions or the Agreement. (5) Preparing and delivering to both Seller and Purchaser one signed original copy of the Escrow Agent's closing statements showing all receipts and disbursements of the Escrow. 8. Prorations and Apportionments. (a) Property Taxes. Prior to Closing, the Seller Property is exempt from taxes. 4 E,CLlENTSINATIONAL CITYPALM PLAZA'ESCROW INSTRUCTIONS FINALDOC (b) Title Insurance and Related Costs. Purchaser shall pay the full cost of securing the CLTA Standard Owner's policy, as set forth in the definition of Title Policy, above, and any related costs including the costs of endorsements to title. (c) Payment of Taxes. Purchaser shall pay all taxes, including, but not limited to, sales taxes or transfer taxes imposed upon the conveyance of the Property to Purchaser. (d) Escrow Fees. Any Escrow fees charged by the Escrow Agent for escrow services, in excess of the cost of any policy of title insurance, shall be paid one-half (1/2) by Seller and one-half (1/2) by Purchaser. (e) Legal and Related Fees. Purchaser shall pay the legal fees and other fees incurred by Purchaser, and Seller shall pay the legal fees and other fees incurred by Seller. 9. Delivery of Instruments and Documents. (a) To Seller. All instruments and documents that are to be delivered by Escrow Agent to Seller shall be personally delivered or sent to Seller at: National City CDC Attn. Patricia Beard 140 E. 12th Street, Suite B National City, CA 91950 (b) To Purchaser. All instruments and documents that are to be delivered by Escrow Agent to Purchaser shall be personally delivered or sent to Purchaser at: Palm Plaza Associates, LLC c/o Mar Group Attn. Juan Pablo Mariscal 915 Camino Del Mar, Suite 200 Del Mar, CA 92014 10. Amendment and Termination. (a) Sole Instructions; Amendment. These Joint Escrow Instructions constitute the complete and only escrow instructions of Seller and Purchaser and shall revoke and supersede any prior oral or written instructions you may have received from Seller or Purchaser. Seller and Purchaser may revoke, cancel, waive, amend, supplement or permit deviations from, any term or condition of these Joint Escrow Instructions in writing or by email, provide that both Seller and Purchaser consent to the same. Any purported oral revocation, cancellation, waiver, amendment, supplement or deviation of these Joint Escrow Instructions, shall be ineffective and invalid. (b) Termination. Notwithstanding Section 10(a), above, or anything to the contrary set forth herein, at any time prior to the Closing, the Agreement may be cancelled and terminated unilaterally by Purchaser upon written notice to Seller and Escrow Agent, as set forth in Section 5 E:ICLIENTS NATIONAL CITY'3ALM PLAZA,ESCRO W INSTRUCT IONSFINALDOC 12(r) of the Agreement, which shall automatically cancel and terminate these Joint Escrow Instructions and the Escrow. In the event of cancellation and termination of the Agreement (and by operation of law these Joint Escrow Instructions and the Escrow) pursuant to Section 12(r) of the Agreement, then Escrow Agent shall: (i) return the Deposit (including all interest accrued thereon) to Purchaser (provided Purchaser is not then in default under the terms of the Agreement and/or these Joint Escrow Instructions); (ii) return to Purchaser all funds or other things deposited in Escrow by Purchaser: and (iii) retum to Seller all funds or other things deposited in Escrow by Seller. Provided, however, all fees and costs charged by the Escrow Agent shall be paid by Purchaser. 11. Time of the Essence. Time is of the essence with respect to each and every provision of these Joint Escrow Instructions and in the performance, occurrence, fulfillment, or satisfaction of each and every term and condition of the Escrow and these of these Joint Escrow Instructions. 12. Request for Acknowledgement of Acceptance. Upon receipt of these Joint Escrow Instructions, please acknowledge your receipt and acceptance of the same and your agreement to hold, dispose and/or record any funds, instruments, documents, or items that Seller or Purchaser deposits with you in accordance with the terms and conditions of these Joint Escrow Instructions, by signing the acknowledgment and acceptance set forth below and returning your original signature page to the Seller with a copy to the Purchaser. Accepted and Agreed to by Seller and Purchaser dated as of the 3`d day of November, 2009 SELLER: Community Development Commission of the City of National City By: fiL. Print ame: /j y ,f9A .,/o.J Its: MigyAr „ APPOVED AS TO FORM: alter F. S Special Counsel to PURCHASER: Palm Plaza Associates, LLC, a California limited liability company By: Print Name: JUCtili Its: '/eSl kA,VI S C� 6 F.,,CLIFNTS4CATIONALCITYNALM PLAZA,ESCROW INSTRUCTIONS.FLNAL.DOC Acknowledgment and Acceptance by Escrow Holder Chicago Title Company acknowledges receipt of the foregoing instructions. Chicago Title Company agrees that any funds, instruments, documents, or other items deposited by Seller or Purchaser shall be held and disposed of in accordance with the terms and conditions of the Joint Escrow Instructions and such amendments or additional instructions as may be submitted by the Seller and Purchaser. DATED: November 2009 ESCROW Chicago Title Company By: Print Name: Its: 7 EaCLIENTSNATIONAL CITYPALM PLAZATSCROW INSTRUCTIONS.FINAL.DOC RESOLUTION NO. 2010 — 15 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE A PURCHASE AND SALE AGREEMENT IN THE AMOUNT OF $1,823,000 WITH PALM PLAZA ASSOCIATES, LLC, FOR CDC -OWNED PROPERTY LOCATED AT 1640 EAST PLAZA BOULEVARD FOR THE DEVELOPMENT OF A 72-UNIT MULTI -FAMILY HOUSING PROJECT WHEREAS, the Community Development Commission of the City of National ity ("CDC") owns 1.066 acres of land at 1640 East Plaza Boulevard within the National City edevelopment Project area; and WHEREAS, Palm Plaza Associates, LLC, owns 1.144 acres of land at 1300 'alm Avenue contiguous with the CDC land; and WHEREAS, Palm Plaza Associates, LLC, desires to acquire the CDC land to levelop a multi -family housing project consisting of 72 market rate condominiums; and WHEREAS, the proposed sale of the CDC land has been analyzed as required inder Section 33433 of the California Redevelopment Law; and WHEREAS, the City Council has approved the Summary Report as required by Health and Safety Code Section 33433; and WHEREAS, the CDC desires to clits n ocoprerty to Palm Plaza Associates, LLC, so that redevelopment with the described project can NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission of the City of National City hereby authorizes 00t the Chithair man to e Associates, LLC, execute the Purchase and Sale Agreement in the amount of $1,823,000 theesalemof thef CDC -owned ul-fam6l housing 6 acres of land proje t Said Agreement isonzfile in office of thedevelopment of a 72 the City Clerk. PASSED and ADOPTED this 19th day of Januar� 1 10. on Morrison, alrma ATTEST: on, Secretary APPROVED AS TO FORM: George H. iser, III Legal Counsel Passed and adopted by the Community Development Commission of the City of National City, California, on January 19, 2010, by the following vote, to -wit: Ayes: Commissioners Morrison, Parra, Sotelo-Solis, Van Deventer. Nays: None. Absent: None. Abstain: Commissioner Zarate. AUTHENTICATED BY: RON MORRISON Chairman, Community Development Commission Secr iunity Development Commission By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2010-15 of the Community Development Commission of the City of National City, California, passed and adopted on January 19, 2010. Secretary, Community Development Commission By: Deputy caooG-a , City of National City, California COMMUNITY DEVELOPMENT COMMISSION AGENDA STATEMENT tio(- a -'a MEETING DATE January 19, 2010 AGENDA ITEM NO. 21 ITEM TITLE A resolution authorizing the Chairman to execute a Purchase and Sale Agreement for $1,823,000 with Palm Plaza Associates, LLC to develop a 72-unit multi family housing project in part on property owned by the Community Development Commission at 1640 East Plaza Boulevard. PREPARED BY Patricia Beard (ext 4255) Redevelopment Manager DEPARTMENT Redevelopment Divisio EXPLANATION The CDC owns 1.066 acres at 1640 East Plaza Boulevard and Palm Plaza Associates, LLC owns 1.144 acres contiguous at 1300 Palm Avenue. The attached resolution would conditionally sell the CDC land to Palm Plaza for development of a 72-unit market rate multi -family housing project, to be potentially rented as apartments prior to sale as condominium when the condominium market recovers. This Purchase and Sale Agreement has been under discussion since Palm Plaza Associates, LLC entered into an Exclusive Negotiation Agreement on January 10, 2006. The physical development approach to the site was presented to the City Council on January 5, 2010. The proposed transaction was discussed under a companion item called "Summary Report" on the CDC agenda on January 5 and by the City Council at tonight's meeting. The attached Background Report describes the iistory of the redevelopment discussions surrounding this site. Environmental Review Analysis under the California Environmental Quality Act was completed prior to consideration of this Purchase and Sale Agreement. Financial Statement The Purchase Price for the CDC land is $1,823,000. Palm Plaza Associates will immediately deposit $54,590 into escrow and must provide evidence of project financing and pay the balance by no later than January 19. 2012. A fair market interest rate of 1.3 percent applies to the balance due in 2012. STAFF RECOMMENDATION Adopt the resolution. BOARD / COMMISSION RECOMMENDATION Not applicable. STRATEGIC GOAL 2a) Work with qualified developers on key development opportunities. ATTACHMENTS 1. Background Report 4. Grant Deed Resolution No. ° \ ° ' \ 2. Proposed Purchase and Sale Agreement 3. Proposed Escrow Instructions OFFICE OF THE CITY CLERK 1243 National City Blvd. National City, California 91950 Michael R. Dalla, CMC - City Clerk 619-336-4228 phone • 619-336-4229 fax PALM PLAZA ASSOCIATES Resolution No. 2010-15 Purchase & Sale Agreement 1640 East Plaza Blvd. Colby Young (CDC) Forwarded Copy of Agreement to Purchaser