HomeMy WebLinkAboutOrdinance #3916 ORDINANCE NO. 3916
AN ORDINANCE OF THE CITY OF HUNTINGTON BEACH
ADOPTING A DEVELOPMENT AGREEMENT BY AND BETWEEN
THE CITY OF HUNTINGTON BEACH AND
FREEWAY INDUSTRIAL PARK(PROPERTY OWNER)
AND SARES-REGIS GROUP (DEVELOPER)
DEVELOPMENT AGREEMENT NO. 11-001)
WHEREAS, the Planning Commission approved Site Plan Review No. 10-004 to
develop an approximately 12-acre property located at 744 1 Edinger Avenue (Property) with
a mixed use project consisting of 487 apartment units, 10,000 square feet of
commercial/retail uses, 4,500 square feet of office leasing area and 9,000 square feet of
resident recreation area (Project) pursuant to the Beach and Edinger Corridors Specific Plan
(BECSP); and
The City Council adopted the Beach and Edinger Specific Plan in March, 2010; and
The City, Property Owner and Developer each mutually desire to enter into a
Development Agreement with one another to permit and ensure that the Property is
developed in accordance with the approved Site Plan Review No. 10-004 and Section 2.2.3
of the Beach and Edinger Corridors Specific Plan to achieve the mutually beneficial
development of the Property.
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
ordain as follows:
SECTION 1. The City Council hereby finds that Development Agreement No. 11-
001 conforms to Government Code Section 65864 et. seq. and that:
a. Development Agreement No. 11-001 is consistent with the Huntington Beach
General Plan and the applicable provisions of the BECSP; and
b. Development Agreement No. 11-001 is consistent with Chapter 246 of the
Huntington Beach Zoning and Subdivision Ordinance (HBZSO) and the
Huntington Beach Municipal Code; and
C. Development Agreement No. 11-001 will not be detrimental to the health,
safety and general welfare, and will not adversely affect the orderly
development of the property because it is consistent with applicable land use
regulations of the BECSP, mitigation measures adopted for the Project in
accordance with EIR No. 10-002, and conditions approved for Site Plan
Review No. 10-004; and
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Ordinance No. 3916
d. The City Council has considered the fiscal effect of Development Agreement
No. 11-001 on the City and the effect on the housing needs of the region in
which the City is situated and has balanced these needs against the public
service needs of its residents and available fiscal and environmental resources.
SECTION 2. Based on the above findings, the City Council of the City of Huntington
Beach hereby approves Development Agreement No. 11-001 and adopts it by this ordinance
pursuant to Government Code Section 65867.5. This action is subject to a referendum.
SECTION 3. This ordinance shall become effective 30 days after its adoption.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 15th day of August , 2011.
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ATTEST: INITIA D AN A PROVED:
65�- Jil$C40
ity Clerk V Director o Planning and Building
REVIE - ND APPROVED:
/APPROVED AS TO FORM:
1+1�anager
C ty Attorney
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EXHIBIT A
This Document was electronically recorded by
City of Huntington Beach
NESTED B�'AND Recorded in Official Records, Orange County
RECORDING REQUESTED Tom Daly,Clerk-Recorder
WIZEN RECORDED MAIL TO:
11111111111111111111111111111111111111111111111111111111111111111175.00
City Huntington Beach of Huntin 66 406 Al2 24 2011000408735 04:09pm 08/18/11
2000 Main Street 0.00 0.00 0.00 0.00 69.00 0.00 0.00 0.00
Huntington Beach, CA 92648
Attn: Director of Planning and Building
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
DEVELOPMENT AGREEMENT
TINS DEVELOPM NT AGREEMENT ("Agreement") is made in Orange
County, California, as of 6-�Cfs T C 2011, by and between the CITY OF
HUNTINGTON BEACH, a municipal corporation of the State of California(the"City")
and Freeway Industrial Park, a California Corporation(the "Property Owner"), and
Sares-Regis Group (the "Developer").
RECITALS
A. The City is authorized pursuant to Government Code sections 65864 through
65869.5 and Huntington Beach Zoning and Subdivision Ordinance (HBZSO)
Chapter 246 to enter into binding development agreements with persons or
entities owning legal interests in real property located within the City.
B. Property Owner is the owner of that certain real property more particularly
described in Exhibit A attached hereto and incorporated herein by this reference
(the "Property"). Developer has an option(the "Option")to acquire a 99 year
ground leasehold interest in the Property pursuant to the terms of a ground lease
(the "Ground Lease") between Property Owner, as ground lessor, and Developer,
as ground lessee. In the event Developer enters into the Ground Lease, Developer
intends to develop the Project(as defined below).
C. The City and Property Owner and Developer each desire to enter into this
Agreement affecting the Property in conformance with Government Code section
65864 et seq. and HBZSO 246 in order to achieve the mutually beneficial
development of the Property in accordance with this Agreement.
D. The Developer seeks to develop a project on the Property consisting of 487
dwelling units, 9,000 square feet of resident recreation area, 4,500 square feet of
leasing office area, and 10,000 square feet of commercial/retail uses, as more
particularly set forth in the Development Plan(collectively,the "Project"),
attached as Exhibit B and incorporated herein, all in accordance with the Beach
and Edinger Corridors Specific Plan, as may be amended from time to time (the
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"Specific Plan") adopted by the City Council of the City(the "City Council") on
March 1, 2010.
E. The Planning Commission of the City(the "Planning Commission' certified an
environmental impact report(the "EIR") for the Project on February 8, 2011 and
approved the Site Plan Review. The Site Plan Review became effective February
18, 2011.
F. The City, Property Owner and the Developer each mutually desire to obtain the
binding agreement of one another to permit and ensure that the Property is
developed strictly in accordance with the provisions of this Agreement.
G. This Agreement will benefit the Property Owner, Developer and the City by
eliminating uncertainty in planning and providing for the orderly development of
the Project. Specifically,this Agreement (1) eliminates uncertainty about the
validity of exactions to be imposed by the City, (2)provides for the construction
of needed affordable housing, (3) ensures that development of the Property occurs
within a timeframe generally consistent with that analyzed in the EIR, and (4)
generally serves the public interest within the city and the surrounding region.
H. The Planning Commission and City Council have each given notice of their
intention to consider this Agreement, and have each conducted public hearings
thereon pursuant to the relevant provisions of the Government Code. The City
Council has found that the provisions of this Agreement are consistent with the
City's 1996 General Plan for development within the City, as amended (the
"General Plan"), City zoning ordinances, as amended, and the Beach and Edinger
Corridors Specific Plan. The Planning Commission and City Council have also
specifically considered the impacts and benefits of the Project upon the welfare of
the residents of the City and the surrounding region. The City Council has
determined that this Agreement is beneficial to the residents of the City and is
consistent with the present public health, safety and welfare needs of the residents
of the City and the surrounding region.
I. On June 28, 2011 ,the Planning Commission held a duly noticed public
hearing on this Agreement.
I On August 01, 20 Lithe City Council held a duly noticed public hearing on this
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals which are hereby
incorporated into the operative provisions of this Agreement by this reference and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged,the City, Property Owner and the Developer agree as
follows:
1. Definitions.
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1.1 "Affordable Dwelling Units" shall mean a Dwelling Unit available
at Affordable Rent.
1.2 "Affordable Housing Agreement" shall collectively mean that
certain Affordable Housing Rental Agreement (AHRA)by and between the RDA,
City, Property Owner and Developer together with all attachments thereto, which
was approved as to form as part of this Development Agreement. AHRA shall
also include any and all amendments or modifications thereto.
1.3 "Affordable Rent" shall have the same meaning set forth in
California Health and Safety Code section 50053, as more specifically set forth in
the Agreement Containing Covenants Affecting Real Property to be attached to
the Affordable Housing Agreement.
1.4 "Applicable Rules"means the rules, regulations, ordinances and
official policies of the City which were in force as of the Effective Date (as
defined below), including,but not limited to,the General Plan,the Specific Plan,
City zoning ordinances and other entitlements, development conditions and
standards,public works standards, subdivision regulations, grading requirements,
and provisions related to density, growth management, environmental
considerations, and design criteria applicable to the Project. Applicable Rules
shall not include building standards adopted by the City pursuant to Health and
Safety Code sections 17922 and 17958.5.
1.5 "Area Median Income: shall mean the area median income for the
County of Orange ("County") as published annually by the Department of
Housing and Community Development and determined in accordance with the
U.S. Department of Housing and Urban Development criteria then in effect and
published from time to time. For purposes of this Agreement,the qualifying
limits shall be those limits for the County, as set forth in Title 25, California Code
of Regulations, section 6932, as that section may be amended, modified or
recodified from time to time. If the California Code of Regulations is amended or
modified during the term of this Agreement so that such regulations do not
specify the area median income from the County, the City and Developer shall
negotiate in good faith to determine an equivalent authoritative source which
determines median income for the County.
1.6 "City Council" shall mean the City Council of the City.
1.7 "City Manager" shall mean the City Manager of the City.
1.8 "County" shall mean Orange County.
1.9 "Developer" shall mean Sares-Regis Group and any of its
successors and assigns to the Ground Lease for the Property.
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1.10 "Development Impact Fees"means and includes all fees charged
by the City in connection with the application,processing and approval or
issuance of permits for the development of property, including, without limitation:
application fees;permit processing fees; inspection fees; utility capacity fees;
service or connection fees; library/cultural enrichment fees,traffic impact fees;
development impact or major facilities fees; park fees; flood control fees;
environmental impact mitigation fees; and any similar governmental fees, charges
and exactions required for the development of the Project.
1.11 "Discretionary Actions" and"Discretionary Approvals"means
those actions and approvals which require the exercise of judgment, or imposition
of a condition or obligation, by any officer, employee, review board, commission
or department of the City. Discretionary Actions and Discretionary Approvals are
distinguished from activities or approvals which merely require any officer,
employee,review board, commission or department of the City to determine
whether or not there has been compliance with applicable statutes, ordinances,
regulations or conditions of approval.
1.12 "Dwelling Unit" shall mean a place in the Project that is legally
available to be rented by a person or family.
1.13 "Effective Date"means the date on which the ordinance approving
this Agreement has been adopted by the City.
1.14 "Moderate Income Household"means persons and families whose
gross incomes do not exceed one hundred twenty percent(120%) of the Area
Median Income, adjusted'for size.
1.15 "Market Rate Rental Dwelling Unit" shall mean those Dwelling
Units in the Project that are not Affordable Dwelling Units nor governed by the
Affordable Housing Agreement.
1.16 "Periodic Review" shall have the meaning assigned to such term in
Paragraph 10(a).
1.17 "Planning Commission"means the Planning Commission of the
City.
1.18 "Project" shall mean that development contemplated pursuant to
the Development Plan, attached as Exhibit B, approved by Site Plan Review No.
10-004.
1.19 "RDA" shall mean the Huntington Beach Redevelopment
Authority.
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1.20 "Specific Plan" shall mean the Beach and Edinger Corridors
Specific Plan adopted by the City Council on March 1, 2010, as may be amended
from time to time.
1.21 "Subsequent Rules" means the rules, regulations, ordinances and
official policies of the City, adopted and becoming operative after the Effective
Date, including, but not limited to,the General Plan,the Specific Plan, City
zoning ordinances and other entitlements, development conditions and standards,
public works standards, subdivision regulations, grading requirements, and other
provisions related to density, growth management, environmental considerations,
and design criteria. [See also paragraph 3 below.]
1.22 "Very Low Income Household" shall mean persons and families
whose gross incomes do not exceed fifty percent(50%) of the Area Median
Income, adjusted for size.
2. 'Perm of Agreement. This Agreement shall become operative and
commence upon the Effective Date and remain in effect for a term of ten(10)
years. Except for continuing obligations regarding affordable housing covenants
and requirements, upon the expiration or termination of the term,this Agreement
shall be deemed terminated and have no further force and effect.
3. Vested Fight to Develop the Project. Subject to Paragraphs 3.3 through
3.8, below, and the Applicable Rules, the City hereby grants to the Property
Owner and Developer the vested right to develop the Project on the Property to
the extent and in the manner provided in this Agreement. Subject to Paragraphs
3.3 through 3.8, below, any change in the Applicable Rules adopted or becoming
effective after the Effective Date (Subsequent Rules) shall not be applicable to or
binding upon the Project or the Property. Subject to Paragraphs 3.3 through 3.8,
below,this Agreement will bind the City to the terms and obligations specified in
this Agreement and will limit,to the degree specified in this Agreement and under
state law,the future exercise of the City's ability to regulate development of the
Project.
3.1 No Conflicting Enactments. Subject to Paragraphs 3.3 through
3.8, below, neither the City Council nor any department of the City shall enact
rules, regulations, ordinances or other measures which relate to the rate,timing,
sequencing, density, intensity or configuration of the development of any part of
the Project which is inconsistent or in conflict with this Agreement during the
term of this Development Agreement.
3.2 Initiative Measures. Subject to Paragraphs 3.3 through 3.8,
below, the Property Owner, Developer and City intend that no moratorium or
other limitation(whether relating to the rate,timing or sequence of the
development of all or any part of the Project and whether enacted by initiative or
otherwise) affecting parcel or subdivision maps (whether tentative, vesting
tentative or final), building permits, certificates of occupancy or other
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entitlements shall apply to the Project to the extent such moratorium or other
limitation is inconsistent or conflicts with this Agreement.
3.3 Federal or State Laws. Notwithstanding any provision to the
contrary contained herein,the City expressly reserves the right to modify any of
the Applicable Rules to the extent necessary to comply with applicable federal or
state laws, codes or regulations which preempt local jurisdiction including, by
way of example, and without limiting the generality of the foregoing, the
California Environmental Quality Act, all building codes, and any safety
regulations, but such modifications shall be made only to the extent required
thereunder.
3.4 Emergency. Notwithstanding any provision to the contrary
contained herein,the City expressly reserves the right to apply to the Project any
development moratorium, limitation on the delivery of City-provided utility
services, or other generally applicable emergency rule, regulation, law or
ordinance affecting land use: (1)which is based on genuine health, safety and
general welfare concerns (other than general growth management issues); (2)
which arises out of a documented emergency situation, as declared by the
President of the United States, Governor of California, or the Mayor, City Council
or City Manager of the City; and(3)based upon its terms or its effect as applied,
does not apply exclusively,primarily or disproportionately to the Project or the
Property.
3.5 Project Completion . This Agreement and the EIR and
associated findings, are based on the expectation that the Project will be
constructed as follows: up to 430 Market Rate Rental Dwelling Units, 57
Affordable Dwelling Units and up to 14,500 square feet of commercial/office
space will be completed for occupancy during the term of the Agreement.
3.6 Public Health Concerns. Notwithstanding any provision to the
contrary contained herein,the City expressly reserves the right to apply to the
Project any generally applicable rule, regulation, law or ordinance which does not
affect the land use or development of the Project and which is based on concerns
for the public health, safety or general welfare, including,but not limited to,
building codes not otherwise preempted by State law.
3.7 New Engineering and Construction Standards.
Notwithstanding any provision to the contrary contained herein,the City
expressly reserves the right to modify any of the Applicable Rules if the City
adopts new and/or amended regulations governing engineering and construction
and grading standards and specifications including, without limitation, any and all
uniform codes adopted by the City, including local amendments to these codes
pursuant to state law allowing for such amendments;provided that such codes are
uniformly applied to all new development projects of similar type as the Project
within the City and provided further that any such modifications to grading
standards can only be imposed prior to grading and any such modifications to
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engineering or construction standards can only be applied prior to the initiation of
construction. Such codes include, without limitation, the City's Uniform Housing
Code, Building Code, Plumbing Code, Mechanical Code,Electrical Code and Fire
Code.
3.8 Cooperation and Indemnification. City agrees to cooperate with
Property Owner and Developer in all reasonable manners in order to keep this
Agreement in full force and effect. Notwithstanding the preceding sentence, in
the event any legal action instituted by a third parry or other government entity or
official challenging the validity of this Agreement,the City and Developer agree
to cooperate in defending such action,with the Developer to indemnify the City
pursuant to Paragraph 17 of this Agreement. In the event of any litigation
challenging the effectiveness of this Agreement or any portion thereof,this
Agreement shall remain in full force and effect while such litigation, including
any appellate review, is pending,unless a court of competent jurisdiction orders
otherwise.
4. Development of the Property.
(a) Permitted Uses. The Property Owner and Developer agree that the
Property shall only be developed in accordance with the Development Plan and
any conditions and mitigation measures imposed on the Project through final
approval of the Project, and the provisions of this Development Agreement.
Notwithstanding anything set forth in this Agreement to the contrary,unless
Developer proceed with development of the Property, Property Owner and
Developer are not obligated by the terms of this Agreement to affirmatively act to
develop all or any portion of the Project,pay any sums of money, dedicate any
land, indemnify any party, or to otherwise meet or perform any obligation with
respect to the Project, except and only as a condition of development of any
portion of the Project.
(b) Development Standards. All development and design
requirements and standards applicable to the Project shall conform to the Beach
and Edinger Corridors Specific Plan,the Huntington Beach Municipal Code, and
any Applicable Rules.
. (c) Development Impact Fees. In addition to the obligations set forth
elsewhere in this Agreement, Developer shall be responsible for paying when due
all Development Impact Fees in connection with development of the Project at the
rates then in effect. Subject to all applicable laws then in effect, City shall have
the right: (i)to charge and apply to the Property all Development Impact Fees as
may be in effect at the time applicable to the Project; and(ii)to increase or
otherwise modify any and all Development Impact Fees applicable to the Project.
Notwithstanding the Development Impact Fee obligation above,required
Traffic Impact Fees for the Development Plan shall be satisfied by the payment of
$588,597.00 to the City Traffic Impact Fee Fund. Such payment shall be made
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prior to issuance of certificates of occupancy. Payment of the Traffic Impact Fee
amount set forth herein shall constitute satisfactory mitigation for Environmental
Impact Report No. 10-002 Mitigation Measures 4.13-1 through 4.13-18.
5. Park Fee Credit and In-Lieu Fees.
The City acknowledges, as specified in the Specific Plan, approximately 0.50 acre
of the project will consist of public open space. Pursuant to conditions of
approval, the public open space shall be available for public use as provided
therein so long as the Project is developed and remains operational. Upon
recordation of the easement for public use and full improvement of the public
open space, City shall grant credit("ParkFee Credit")to Developer in an amount
equal to the sum of the value of the land and costs reasonably incurred by
Developer in connection with the engineering and construction of the
approximately 0.50 acre. Such Park Fee Credit shall be applied against Park Fees
due for development within the Project. To the extent that, at the time of issuance
of building permits for any portion of the project, adequate Park Fee Credits do
not exist to cover the applicable Park Fees,the City shall not require the payment
of Park Fees until the approval of a final inspection for that portion of the project.
If at the time of approval of final inspection, adequate Park Fee Credits still do not
exist to cover the applicable Park Fees,then Developer shall pay the Park Fees
then due to the City. At such time, if it occurs,that adequate Park Fee Credits
have accrued to cover amounts previously paid by the Developer to the City for
the Park Fees, the City shall refund any excess of amounts paid over credits to the
Developer.
6. Affordable Mousing.
The Project is subject to the requirement of providing a total of 57 Affordable
Dwelling Units, all of which shall be rental units and must remain Affordable
Dwelling Units for at least fifty-five (55) years. The City and Developer agree as
a condition precedent to Development that an Affordable Housing Agreement be
executed to memorialize the terms and conditions of the affordable housing
components (Attached Hereto as Exhibit Q. The Developer will provide
affordable units for rent, which shall be made available as follows: 10 units to and
occupied by Very Low Income Households and 47 units made available to and
occupied by Moderate Income Households. The Developer agrees to record said
affordability covenants and Deed of trust in favor of the City to assure that
affordability covenants run with the land and remain in effect for the affordability
period. The Developer agrees to comply with all terms and provisions of the
Affordable Housing Agreement and its attachments and acknowledges that any
default thereunder shall also constitute a default under this Agreement.
Prior to approval of a Final Inspection for the 60th Market Rate Rental Dwelling
Unit, Developer shall have completed construction and shall have received all
required Final Inspections for two rental Very Low Income Household Affordable
Dwelling Units and six rental Moderate Income Household Affordable Dwelling
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Units; and concurrent with issuance of a Final Inspection for the 430t'Market
Rate Rental Dwelling Unit, Developer shall have completed construction and
shall have received required Final Inspection for all 57 Affordable Dwelling
Units.
7. Extension of Project Approvals. Unless a longer term would result
under otherwise applicable state law,the term of any permits approved as part of
the Project approvals shall be automatically extended for the term of this
Agreement.
8. Additional Developer Obligations: Developer shall, at the time that a
building permit is issued by City for the Development Plan, deposit with the City
the amount of$250,000.00 ("Deposit"), which shall be used to pay for the costs
of planning, design, permits and construction of a certain pedestrian path("the
Facility")between the Property and The Village at Bella Terra/Costco
property(ies) east of the railroad tracks (as set forth in the Development Plan) and
which shall constitute the maximum amount due from Developer for this facility.
The Developer's final contribution amount toward the planning, design,
permitting and construction of the Facility shall be the lesser of. (i) $250,000; (ii)
50 percent of the total cost of the Facility; or(iii) Developer's fair share based on
the contributions of others that will benefit from the Facility. To the extent
Developer's final contribution is less than its Deposit,the remainder portion of
the Deposit shall be returned to Developer. The Developer entity that actually
posts the Deposit shall be entitled to reimbursement for any unspent portion of the
Deposit if construction of the pedestrian path has not commenced prior to
expiration of this agreement even if such entity is no longer the Developer of the
Project at the time the unspent portion of the Deposit is due to be reimbursed.
9. Subsequent Discretionary Action and Approval. The City agrees not
to unreasonably withhold, condition or delay any Discretionary Action or
Discretionary Approval or other action or approval by the City which may be
required by the Project subsequent to the execution of this Agreement. Upon the
filing of a complete application and payment of appropriate processing fees by
Developer,the City shall promptly commence and diligently schedule and
convene all required public hearings in an expeditious manner consistent with the
law and process all Discretionary Actions and Discretionary Approvals in an
expeditious manner.
10. Compliance Review.
(a) Periodic Review. Pursuant to Government Code section 65865.1,
the City Manager or his or her designee shall,not less than once in every twelve
(12)months, review the Project and this Agreement to ascertain whether or not
the Developer is in full compliance with the terms of the Agreement(the
"Periodic Review").
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(b) Review Procedure. During a Periodic Review, Developer shall
provide information reasonably requested by the City Manager or his or her
designee that the Project is being developed in good faith compliance with the
terms of this Agreement. If, as a result of a Periodic Review, the City finds and
determines on the basis of substantial evidence that the Developer has not
complied in good faith with the terms or conditions of this Agreement, the City
shall issue a written"Notice of Non-Compliance"to the Developer specifying the
grounds therefore and all facts demonstrating such non-compliance. The
Developer's failure to cure the alleged non-compliance within sixty(60) days
after receipt of the notice, or, if such noncompliance is not capable of being cured
within sixty(60) days,the Developer's failure to initiate all actions required to
cure such non-compliance within sixty (60) days after receipt of the notice and
completion of the cure of such non-compliance within one hundred twenty(120)
days, shall constitute a default under this Agreement on the part of the Developer
and shall constitute grounds for the termination of this Agreement by the City as
provided for below. If requested by Developer, City agrees to provide to
Developer a certificate that Developer is in compliance with the terms of this
Agreement, provided Developer reimburses City for all reasonable and direct
costs and fees incurred by City with respect thereto.
(c) Termination or Modification for Non-Compliance. Pursuant to
Government Code section 65865.1, if the City Council finds and determines, on
the basis of substantial evidence,that the Developer has not complied in good
faith with the terms or conditions of this Agreement,the City Council may modify
or terminate this Agreement. Any action by the City with respect to the
termination or modification of this Agreement shall comply with the notice and
public hearing requirements of Government Code section 65867 in addition to
any other notice required by law. Additionally,the City shall give the Developer
written notice of its intention to terminate or modify this Agreement and shall
grant the Developer a reasonable opportunity to be heard on the matter and to
oppose such termination or modification by the City.
11. Modification Amendment Cancellation or Termination.
11.1 Amendment and Cancellation. Pursuant to Government Code
section 65868, this Agreement may be amended or canceled,in whole or in part,
by mutual written consent of the City,Property Owner and the Developer or their
successors in interest. Public notice of the parties' intention to amend or cancel
any portion of this Agreement shall be given in the manner provided by
Government code section 65867. Any amendment to the Agreement shall be
subject to the provisions of Government Code section 65867.5.
11.2 Modification. The City Planning Director, with the consent of the
Developer and the Property Owner,may make minor modifications to the
Agreement without the need for formal action by the City's Planning Commission
or City Council as long as such modifications do not alter the Term of this
Development Agreement,the permitted uses, density or intensity of uses,the
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maximum height or size of buildings,provisions for reservations or Dedication of
land, conditions,terms, restrictions and requirements relating to Subsequent
Discretionary Actions and Approvals, and monetary contributions by Developer.
11.3 Termination By Property Owner. Property Owner shall have the
right to unilaterally terminate this Agreement, if Developer fails to execute the
Ground Lease for the Property within the prescribed time periods designated in
the Option,by sending written notice of such termination to City and Developer.
In the event Developer does not enter into the Ground Lease and Property Owner
terminates this Agreement, no party shall have any liability to another parry under
this Agreement.
12. Defaults,Notice and Cure Periods,Events of Default and Remedies.
12.1 Default By the Developer.
12.1.1 Default. If the Developer does not perform its obligations
under this Agreement in a timely manner,the City may exercise all rights and remedies
provided in this Agreement,provided the City shall have first given written notice to the
Developer as provided in Paragraph 17(a) hereof.
12.1.2 Notice of Default. If the Developer does not perform its
obligations under this Agreement in a timely manner,the City through the City Manager
may submit to the Developer a written notice of default in the manner prescribed in
Paragraph 17(a) identifying with specificity those obligations of the Developer under this
Agreement which have not been timely performed. Upon receipt of any such written
notice of default, the Developer shall promptly commence to cure the identified default(s)
at the earliest reasonable time after receipt of any such written notice of default and shall
complete the cure of any such default(s)no later than sixty(60) days after receipt of any
such written notice of default, or if such default(s) is not capable of being cured within
sixty(60) days, no later than one hundred twenty(120) days after receipt of any such
written notice of default, provided the Developer commences the cure of any such
default(s)within such sixty (60) day period and thereafter diligently pursues such cure at
all times until any such default(s) is cured.
12.1.3 Failure to Cure Default Procedure. If after the cure
period provided in Paragraph 12.1.2 has elapsed, the City Manager finds and determines
the Developer, or its successors,transferees and/or assignees, as the case may be, remains
in default and that the City intends to terminate or modify this Agreement, or those
transferred or assigned rights and obligations, as the case may be,the City's Planning and
Building Director shall make a report to the Planning Commission and then set a public
hearing before the Planning Commission in accordance with the notice and hearing
requirements of Government Code sections 65867 and 65868. If after public hearing, the
Planning Commission finds and determines, on the basis of substantial evidence,that the
Developer, or its successors,transferees and/or assigns, as the case may be, has not cured
a default under this Agreement pursuant to this Paragraph 12, and that the City shall
terminate or modify this Agreement, or those transferred or assigned rights and
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obligations, as the case may be,the Developer, and its successors, transferees and/or
assigns, shall be entitled to appeal that finding and determination to the City Council.
Such right of appeal shall include, but not be limited to, an objection to the manner in
which the City intends to modify this Agreement if the City intends as a result of a
default of the Developer, or one of its successors or assigns,to modify this Agreement.
In the event of a finding and determination that all defaults are cured,there shall be no
appeal by any person or entity. Nothing in this Paragraph 12 or this Agreement shall be
construed as modifying or abrogating the City Council's review of Planning Commission
actions or limiting the City's rights and remedies available at law or in equity,which
shall include (without limitation) compelling the specific performance of the Developer's
obligations under this Agreement.
12.1.4 'Termination or Modification of Agreements. The City
may terminate or modify this Agreement, or those transferred or assigned rights and
obligations, as the case may be, after such final determination of the City Council or,
where no appeal is taken, after the expiration of the applicable appeal periods described
herein. There shall be no modifications of this Agreement unless the City Council acts
pursuant to Government Code sections 65967.5 and 65868, irrespective of whether an
appeal is taken as provided herein.
12.1.5 bender Protection Provisions.
12.1.5.1 Notice of Default. In addition to the notice
provisions set forth in Paragraph 12.1.2,the City shall send a copy of any notice of
default sent to the Developer or any of its successors or assigns to any lender that has
made a loan then secured by a deed of trust against the Property, or a portion thereof,
provided such lender shall have (a) delivered to the City written notice in the manner
provided in Paragraph 17(a) of such lender's election to receive a copy of any such
written notice of default and(b)provided to the City a recorded copy of any such deed of
trust. Any such lender that makes a loan secured by a deed of trust against the Property,
or a portion thereof, and delivers a written notice to the City and provides the City with a
recorded copy of any such deed of trust in accordance with the provisions of this
Paragraph 12.1.5.1 is herein referred to as a"Qualified Lender."
12.1.5.2 Right of a Qualified Lender to Cure a Default.
The City shall send a written notice of any Developer default to each Qualified Lender.
From and after receipt of any such written notice of default, each Qualified Lender shall
have the right to cure any such default within the same cure periods as provided to the
Developer hereunder. If the nature of any such default is such that a Qualified Lender
cannot reasonably cure any such default without being the ground lessee of the Property,
or the applicable portion thereof, (as reasonably determined by the City), then so long as
the Qualified Lender(s) is (are) diligently proceeding (as reasonably determined by the
City)to foreclose the lien of its deed of trust against the ground lessee of the Property, or
the applicable portion thereof, and after completing any such foreclosure promptly
commences the cure of any such default and thereafter diligently pursues the cure of such
default to completion,then such Qualified Lender shall have any additional sixty(60)
days following such foreclosure to cure any such default.
Page 12 of 20
12.1.5.3 Exercise of City's Remedies. Notwithstanding
any other provision of this Agreement, the City shall not exercise any right or remedy to
cancel or amend this Agreement during any cure period.
12.2 Default by the City.
12.2.1 Default. In the event the City does not accept,
process or render a decision in a timely manner on necessary development permits,
entitlements, or other land use or building approvals for use as provided in this
Agreement upon compliance with the requirements therefore, or as otherwise agreed to
by the City and Developer, or the City otherwise defaults under the provisions of this
Agreement, subject to Paragraph 12.3,the Developer shall have all rights and remedies
provided herein or by applicable law, which shall include compelling the specific
performance of the City's obligations under this Agreement provided the Developer has
first complied with the procedures in Paragraph 12.2.2.
12.2.2 Notice of Default. Prior to the exercise of any
other right or remedy arising out of a default by the City under this Agreement,the
Developer shall first submit to the City a written notice of default stating with specificity
those obligations which have not been performed under this Agreement. Upon receipt of
the notice of default,the City shall promptly commence to cure the identified default(s) at
the earliest reasonable time after receipt of the notice of default and shall complete the
cure of such default(s) no later than thirty(30) days after receipt of the notice of default,
or such longer period as is reasonably necessary to remedy such default(s),provided the
City shall continuously and diligently pursue each remedy at all times until such
default(s) is cured. In the case of a dispute as to whether the City is in default under this
Agreement or whether the City has cured the default, or to seek the enforcement of this
Agreement, the City and the Developer may submit the matter to negotiation/mediation
pursuant to Paragraph 17(n) of this Agreement.
12.3 Monetary Damages. The Developer and City
acknowledge that neither the City nor the Developer would have entered into this
Agreement if either were liable for monetary damages under or with respect to this
Agreement or the application thereof. Both the City and the Developer agree and
recognize that, as a practical matter, it may not be possible to determine an amount of
monetary damages which would adequately compensate the Developer for its investment
of time and financial resources in planning to arrive at the kind, location, intensity of use,
and improvements for the Project, nor to calculate the consideration the City would
require to enter into this Agreement to justify such exposure. Therefore,the City and the
Developer agree that neither shall be liable for monetary damages under or with respect
to this Agreement or the application thereof and the City and the Developer covenant not
to sue for or claim any monetary damages for the breach of any provision of this
agreement. This foregoing waiver shall not be deemed to appl t� o any fees or other
monetary amounts specifically required to be paid by the Developer to the CitYpursuant
to this Agreement including but not limited to any amounts due pursuant to Paragraph
17(g) and 17(m). The foregoing waiver shall also not be deemed to apply to any fees or
Page 13 of 20
other monetary amounts specifically required to be paid or credited by the City to the
Developer pursuant to this Agreement, including, but not limited to any fee credits
specifically required to be credited by City to Developer or its assignee(s).
12.4 No Liability of Property Owner. Notwithstanding
anything to the contrary herein, in the event Developer does enter into the Ground Lease
for the Property, Properly Owner shall not be liable or responsible for any of Developer's
obligations under this Agreement or for any default or breach of this Agreement by
Developer.
13. Administration of Agreement and Resolution of Disputes. The
Developer shall at all times have the right to appeal to the City Council any decision or
determination made by any employee, agent or other representative of the City
concerning the Project or the interpretation and administration of this Agreement. All
City Council decisions or determinations regarding the Project or the administration of
this Agreement shall also be subject to judicial review pursuant to Code of Civil
Procedure section 1094.5,provided that, pursuant to Code of Civil Procedure section
1094.6, any such action must be filed in a court of competent jurisdiction not later than
ninety (90) days after the date on which the City Council's decision becomes final. In
addition,in the event the Developer and the City cannot agree whether a default on the
part of the Developer, or any of its successors or assigns, under this Agreement exists or
whether or not any such default has been cured, then the City or the Developer may
submit the matter to negotiation/mediation pursuant to Paragraph 17(n).
14. Recordation of this Agreement. Pursuant to Government Code section
65868.5,the City Clerk shall record a copy of this Agreement in the Official Records of
the County within ten(10) days after the mutual execution of this Agreement.
15. Constructive Notice and Acceptance. Every person or entity who now
or hereafter owns or acquires any right,title or interest in or to any portion of the
Property is, and shall be, conclusively deemed to have consented and agreed to every
provision contained herein,whether or not any reference to this Agreement is contained
in the instrument by which such person acquired an interest in the Property.
16. No Third Party Beneficiaries. This Agreement is made and entered into
for the sole protection and benefit of the City,the Developer,the Property Owner and
their respective successors and assigns. No other person or entity shall have any right of
action based upon any provision of this Agreement.
17. Miscellaneous.
(a) Notices. All notices which are allowed or required to be given
hereunder shall be in writing and(1) shall be deemed given and received when personally
delivered or(2) shall be sent by registered or certified mail or overnight mail service,
addressed to the applicable designated person by one parry to the other in writing, and
shall be deemed received on the second business day after such mailing.
Page 14 of 20
If to City: City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Attn: City Manager
Tel.No.: (714) 536-5575
Fax No.: (714) 536-5233
If to Developer: Sares-Regis Group
18825 Bardeen Avenue
Irvine, CA 92612
Attn: Michael J. Winter
Tel.No. (949) 809-2523
Fax.No. (949)253-0475
Allen Matkins
1900 Main Street, Suite 500
Irvine, CA 92614
Attn: William R. Devine
Te.No. (949) 553-1313
Fax.No. (949) 553-8354
If to Property Owner: Freeway Industrial Park
2032 La Colina Drive
Santa Ana, CA 92705
Attn: Janette Ditkowsky
Tel. No. (714) 744-4526
Fax. No. (714) 532-9040
Palmieri, Tyler
2603 Main Street, Suite 1300
Irvine, CA 92614
Attn: Robert C. Ihrke
Tel.No. (949) 851-9400
Fax.No. (949) 851-1554
(b) Severability. If any part of this Agreement is declared invalid for
any reason, such invalidity shall not affect the validity of the remainder of the Agreement
unless the invalid provision is a material part of the Agreement. The other parts of this
Agreement shall remain in effect as if this Agreement had been executed without the
invalid part. In the event any material provision of this Agreement is determined to be
invalid,void or voidable, City or Developer may terminate this Agreement.
(c) Entire Agreement; Conflicts. This Agreement represents the
entire agreement between the City and the Developer with respect to the subject matter
hereof and supersedes all prior agreements and understandings, whether oral or written,
between the City and the Developer with respect to the matters contained in this
Agreement. Should any or all of the provisions of this Agreement be found to be in
Page 15 of 20
conflict with any other provision or provisions found in the Applicable Rules or the
Subsequent Applicable Rules,then the provisions of this Agreement shall govern and
prevail.
(d) Further Assurances. The City and the Developer agree to perform,
from time to time, such further acts and to execute and deliver such further instruments
reasonably to effect the intents and purposes of this Agreement,provided that the
intended obligations of the City and the Developer are not thereby modified.
(e) Inurement and Assi nment. This Agreement shall inure to the
benefit of and bind the successors and assigns of the City and the Developer,may be
assigned by either the City or the Developer to any party or parties purchasing all or any
part of the Property, or any interest therein pursuant to the provisions of this Paragraph
26(e). The specific rights and obligations of this Agreement shall be deemed covenants
running with the land that concern and affect Developer's ground leasehold interest in the
Property. Prior to Developer's assignment of any rights, duties or obligations under this
Agreement, the Developer shall present such information required by the City at its sole
discretion to demonstrate to the City's satisfaction that the proposed successor and/or
assignee has the financial ability and experience to fulfill those specific rights, duties and
obligations under the Agreement that the successor and/or assignee would assume. In
addition, the Developer and the proposed assignee shall present to the City a signed
agreement delineating the right to use the credits established by this Agreement as
between such parties. City shall have the right to approve the proposed successor and/or
assignee, provided that the City's approval may not be unreasonably withheld,
conditioned or delayed. The provisions of this Paragraph 26(e) shall be self-executing
and shall not require the execution or recordation of any further document or instrument.
(f) Negation of Agency. The City and the Developer acknowledge
that, in entering into and performing under this Agreement, each is acting as an
independent entity and not as an agent of the other in any respect. Nothing contained
herein or in any document executed in connection herewith shall be construed as making
the City and the Developer joint venture's,partners or employer/employee.
(g) Attorney's Fees. In the event of any claim, dispute or controversy
arising out of or relating to this Agreement, including an action for declaratory relief,the
prevailing party in such action or proceeding shall not be entitled to recover its court
costs and reasonable out-of-pocket expenses.
(h) Waiver. No waiver of any provision of this Agreement shall be
effective unless in writing and signed by a duly authorized representative of the party
against whom enforcement of a waiver is sought.
(i) Force Mai eure. Performance by either party hereunder shall not
be deemed to be in default where delays or defaults are due to one or more of the
following events,providing that any one or more of such event(s) actually delays or
interferes with the timely performance of the matter to which it would apply and despite
the exercise of diligence and good business practices and such event(s) are beyond the
Page 16 of 20
reasonable control of the parry claiming such interference: war,terrorism, terrorist acts,
insurrection, strikes, lock-outs, unavailability in the marketplace of essential labor, tools,
materials or supplies, failure of any contractor, subcontractor, or consultant to timely
perform (so long as Developer is not otherwise in default of any obligation under this
Agreement and is exercising commercially reasonable diligence of such contractor,
subcontractor or consultant to perform, 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, or unusually severe weather. An
extension of time for any such cause (a"Force Majeure Delay") 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 parry claiming such extension is sent to the other parry within
thirty (30) days of actual knowledge of the commencement of the cause.
Notwithstanding the foregoing,none of the foregoing events shall constitute a Force
Majeure Delay unless and until the party claiming such delay and interference delivers to
the other party written notice describing the event, its cause, when and how such party
obtained knowledge,the date and the event commenced, and the estimated delay
resulting therefrom.
0) Parag_raph Headings. The paragraph headings contained in this
Agreement are for convenience and identification only and shall not be deemed to limit
or define the contents to which they relate.
(k) Time of Essence. Time is of the essence of this Agreement, and
all performances required hereunder shall be completed within the time periods specified.
Any failure of performance shall be deemed as a material breach of this Agreement.
(1) Counterparts. This Agreement and any modifications hereto may
be executed in any number of counterparts with the same force and effect as if executed
in the form of a single document.
(m) Indemnification. The Developer agrees, as a condition of
approval of this Agreement,to indemnify, defend and hold harmless at the Developer's
expense,the City, the City Council, and the City's agents, officers and employees from
and against any claim, action or proceeding to attack, review, set aside, void or annul the
approval of this Agreement,the Specific Plan or EIR to determine the reasonableness,
legality or validity of any provision hereof or obligation contained herein. Developer
also agrees to indemnify the City, the City Council, and the City's officials, agents and
employees for any claims, acts or proceedings relating to the Project's affordable housing
requirements, including,but not limited to, any challenge to the City's Housing Element
arising from such requirements.
The indemnity described in this section is not subject to the provisions of paragraph 4.a.
providing that obligations cease if the Project does not go forward.
The City shall promptly notify the Developer of any such claim, action or proceeding of
which the City receives notice, and the City will cooperate fully with the Developer in the
defense thereof. The Developer shall provide a defense to the City with counsel
Page 17 of 20
reasonably selected by Developer and City to defend both the City and Developer, and
shall reimburse the City for any court costs which the City may be required to pay as a
result of any such claim, action or proceeding. The City may, in its sole discretion,
participate in the defense of any such claim, action or proceeding at its own expense,but
such participation shall not relieve the Developer of the obligations of this Paragraph
25(m).
(n) Hold Harmless Agreement. City and Developer mutually agree to,
and shall hold each other and Property Owner and each of the other's elective and
appointed councils, boards, commissions, directors, officers,partners, agents,
representatives and employees harmless from any liability for damage or claims for
personal injury, including death, and from claims for property damage which may arise
from the activities of the other's or contractor's, subcontractors, agents, or employees
which relate to the Project whether such activities be by City or Developer, or by any of
City's or the Developer's contractors, subcontractors, or by any one or more persons
indirectly employed by, or acting as agent for Developer,any of Developer's or the City's
contractors or subcontractors. City and Developer agree to and shall defend the other and
Property Owner and each of the other's elective and appointive councils, boards,
directors, commissioners, officers,partners, agents, representatives and employees from
any suits or actions at law or in equity for damage caused or alleged to have been caused
by reason of the aforementioned activities which relate to the Project.
(o) Alternative Dispute Resolution Procedure.
(1) Dispute. If a dispute arises concerning whether the City or
the Developer or any of Developer's successors or assigns is in default under this
Agreement or whether any such default has been cured or whether or not a dispute is
subject to this Paragraph (a"Dispute"),then such dispute shall be subject to negotiation
between the parties to this Agreement, and if then not resolved shall be subject to non-
binding mediation, both as set forth below, before either party may institute legal
proceedings.
(2) Negotiation. If a Dispute arises,the parties agree to
negotiate in good faith to resolve the Dispute. If the negotiations do not resolve the
Dispute to the reasonable satisfaction of the parties within 15 days from a written request
for a negotiation,then each party shall give notice to the other party identifying an
official or executive officer who has authority to resolve the Dispute to meet in person
with the other party's designated official or executive officer who is similarly authorized.
The designated persons identified by each party shall meet in person for one day within
the 20-day period following the expiration of the 15-day period and the designated
persons shall attempt in good faith to resolve the Dispute. If the designated persons are
unable to resolve the Dispute,then the Dispute shall be submitted to non-binding
mediation.
Page 18 of 20
(3) Mediation.
(i) Within 15 days following the designated persons'
meeting described in paragraph 17(o)(2), above, either parry may initiate non-binding
mediation(the "Mediation"), conducted by Judicial Arbitration&Mediation Services,
Inc. ("JAMS") or other agreed upon mediator. Either parry may initiate the Mediation
by written notice to the other party.
(ii) The mediator shall be a retired judge or other
mediator, selected by mutual agreement of the parties, and if they cannot agree within 15
days after the Mediation notice,the mediator shall be selected through the procedures
regularly followed by JAMS. The Mediation shall be held within 15 days after the
Mediator is selected, or a longer period as the parties and the mediator mutually decide.
(iii) If the Dispute is not fully resolved by mutual
agreement of the parties within 15 days after completion of the Mediation,then either
parry may institute legal proceedings.
(iv) The parties shall bear equally the cost of the
mediator's fees and expenses,but each party shall pay its own attorneys' and expert
witness fees and any other associated costs.
(4) Preservation of Rights. Nothing in this Paragraph shall
limit a party's right to seek an injunction or restraining order from a court in
circumstances where such equitable relief is deemed necessary by a party to preserve
such party's rights.
(p) Reference of California Law. Unless expressly stated to the
contrary, all references to statutes herein are to the California codes.
(q) Interpretation. The language in all parts of this Agreement shall in
all cases be construed simply, as a whole and in accordance with its fair meaning and not
strictly for or against any party. The parties hereto acknowledge and agree that this
Agreement has been prepared jointly by the parties and has been the subject of arm's
length and careful negotiation over a considerable period of time,that each party has
independently reviewed this Agreement with legal counsel, and that each party has the
requisite experience and sophistication to understand, interpret and agree to the particular
language of the provisions hereof. Accordingly, in the event of an ambiguity in or
dispute regarding the interpretation of this Agreement,this Agreement shall not be
interpreted or construed against the party preparing it, and instead other rules of
interpretation and construction shall be utilized.
Page 19 of 20
IN WITNESS WHEREOF,the City, Property Owner and the Developer hereto
have each executed this Agreement as of the date first written above.
Developer: SARES-REGIS GROUP, a California general
partnership and/or its assignees_
Print: Michael'J. Winter
Its: Senior Vice President
Property Owner: Freeway Industrial Park, a California corporation
Pint: �f\,,z 'c-
S: Cis e O� CAr
City: Ci untingt each, a municipal corporation
of e Stat alifornia
May
ATTEST:
City Clerk
OVED AS TO FO
A`
City ttorney V S- 7-11
Page 20 of 20
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On August 17, 2011 before me, P. L. Esparza, Notary Public, personally appeared
Joan L. Flynn and Joe Carchio who proved to me on the basis of satisfactory
evidence to be the persons whose names are subscribed to the within instrument
and acknowledged to me that they executed the same in their authorized capacities,
and that by their signatures on the instrument the persons, or the entity upon behalf
of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
P. L. ESPARZA
WITNESS my hand and official seal. Commission# 1857021
a..� Notary Public-California a
Orange County
M Comm. Ex Tres Aug4,2013
(Seal)
(Notary Signature)
EXHIBIT A
EXHIBIT "A"
Legal Description of 7441 Edinger Ave., Huntington Beach, California
PARCEL 1 AS DESCRIBED IN LOT LINE ADJUSTMENT NO. 10-007 RECORDED
MAY 4, 2011 AS INSTRUMENT NO. 2011000225797 OF OFFICIAL RECORDS IN
THE OFFICE OF THE ORANGE COUNTY RECORDER.
1
EXHIBIT B
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EXHIBIT C
This Document was electronically recorded by
City of Huntington Beach
Recorded in Official Records, Orange County
Tom Daly, Clerk-Recorder
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII NO FEE
2011000406500 04:07pm 08/17/11
REQUESTED BY 0. 401 Al2 12
RECORDING RE
Q ) 0.00 0.00 0.00 0.00 33.00 0.00 0.00 0.00
AND WHEN RECORDED MAIL TO: )
City of Huntington Beach )
2000 Main Street )
Huntington Beach, CA 92648 )
Attn: City Clerk )
(Space above for Recorder's use)
This document is exempt from recording fees
pursuant to Government Code Section 27383.
AFFORDABLE HOUSING AGREEMENT RESTRICTIONS-RENTAL
(DECLARATION OF CONDITIONS, COVENANTS
AND RESTRICTIONS FOR PROPERTY)
This Affordable Housing Agreement and Declaration of Conditions, Covenants and
Restrictions for Property (the "Declaration") is made as of &G;u s ` 0/ ,
2011, by and between Freeway Industrial Park, a California Corporation(the "Property Owner"),
Sares-Regis Group (the "Developer" or the "Covenantor"), and THE CITY OF HUNTINGTON
BEACH, a California municipal corporation (the "City") and the REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the
"Agency"). Collectively, the City and Agency will be referred to as the "Covenantee."
RECITALS
A. Property Owner is the owner of record of that certain real property located at 7441
Edinger Avenue (the "Subject Property"), in the City of Huntington Beach, County of Orange,
State of California legally described in the attached "Exhibit A." Developer is the ground lessee
of the Subject Property.
B. The Developer seeks to develop a project on the Property consisting of 487
dwelling units, 9,000 square feet of resident recreation area, 4,500 square feet of leasing office
area, and 10,000 square feet of commercial/retail uses, as more particularly set forth in the
Development Plan (collectively, the "Project") approved by Site Plan Review No. 10-004,
attached as Exhibit C and incorporated herein, all in accordance with the Beach and Edinger
Corridors Specific Plan, as may be amended from time to time (the "Specific Plan") adopted by
the City Council of the City (the"City Council") on March 1, 2010.
C. The City imposed conditions of approval on the Project, in part that Developer
provide affordable housing. As part of the plan to provide affordable housing, the City and
Developer entered into a Development Agreement which requires as a condition that an
Affordable Housing Agreement be executed requiring Developer to provide affordable rental
units for a certain period of time. Specifically, the Developer provide 57 units within the Project
1
available for rent to households earning Moderate or Very Low Income (as those terms are
defined in the Development Agreement) for a period of 55 years as further defined herein. The
execution and recordation of this Declaration is intended to fully satisfy that condition.
NOW, THEREFORE,the parties hereto agree and covenant as follows:
1. Affordability Covenants. Covenantor agrees for itself and its successors and
assigns, and every successor to Covenantor's interest in the affordable unit, or any part thereof
that the Project approved by Site Plan Review No. 10-004 located at 7441 Edinger Avenue,
which consists of 487 units, 57 of which shall be designated as affordable and shall be held
subject to this Declaration for fifty-five years from the date the Certificate of Occupancy has
been issued by the City as follows:
(a) Qualified Households. Covenantor agrees to make available, restrict
occupancy to, and to lease 57 units for the duration of the Affordability Period as defined herein.
These 57 units may sometimes be referred to as an "Affordable Unit" or, collectively, the
"Affordable Units." Each Affordable Unit shall be occupied by Moderate or Very Low Income
Households as those terms are defined in the Development Agreement adjusted for the actual
number of persons in the Household that will reside in the Affordable Unit. 10 Affordable Units
shall only be occupied by Very Low-Income Households, and 47 Affordable Units shall only be
occupied by Moderate-Income Households, adjusted for the actual number of persons in the
Household that will reside in the Affordable Units.
As used in this Declaration, the term "Household" shall mean one or more
persons, whether or not related, living together in an Affordable Unit that rent or lease any
portion of the Affordable Unit.
As used in this Declaration, the term "Covenantor" shall mean Developer, its
successors and assigns, and every successor to Developer's interest in the Project, or any part
thereof. Property Owner only shall be deemed "Covenantor" if and when Property Owner
should become the Owner of the Project during the Affordability Period.
(b) Duration. The term of this agreement shall commence on the date that the
Final Inspection for the twenty-ninth affordable unit is approved by the City and will continue
for 55 years thereafter ("Affordability Period"). The covenant contained in this Section 1 shall
run with the Project and shall automatically terminate and be of no further force or effect upon
the expiration of the Affordability Period.
(c) Income Qualification. Prior to the lease of an Affordable Unit to any
Household, Covenanator shall submit to the Covenantee a completed income computation and
certification form, in such form as is generally used by City in administering its affordable
housing program as may be amended from time to time. Covenantor shall certify that, to the best
of its knowledge, each Household is a Moderate or Very Low- Income Household that meets the
eligibility requirements established for the particular Affordable Unit occupied by such
Household. Covenantor shall obtain an income certification from each adult member of the
Household and shall certify that, to the best of Covenantor's knowledge, the income of the
2
Household is truthfully set forth in the income certification form. Furthermore the Covenantor
shall, on renewal of the annual lease for the particular Affordable Unit, again obtain income
certification from each adult member of the Household and submit to the Covenantee a
recertification form that shall certify, to the best of Covenantor's knowledge, each Household is a
Moderate or Very Low-Income Household that meets the eligibility requirements established for
the particular Affordable Unit occupied by such Household. Covenantor shall verify the income
certification of the Household in one or more of the following methods as specifically requested
by Covenantee.
(1) Obtain two (2) paycheck stubs from two (2) most recent pay
periods for each adult member of the Household.
(2) Obtain a copy of an income tax return certified to be true and
complete for the most recent tax year in which a return was filed, for each adult member of the
Household.
(3) Obtain an income verification certification from the employer of
each adult member of the Household.
(4) Obtain an income verification certification from the Social
Security Administration and/or the California Department of Social Services if the Household
receives assistance from such agencies.
(5) Obtain an alternate form of income verification reasonably
requested by Covenantee, if none of the above forms of verification is available to Covenanter.
If, after renting an Affordable Unit to an eligible Household, the Household's
income increases above the income level permitted for that unit, the Household shall continue to
be permitted to reside in such Affordable Unit, for no more than one year.
(d) Determination of Affordable Rent for the Affordable Units. The rent for
each Affordable Unit (the "Affordable Rent") shall be adjusted annually by the following
formula upon the publication of revised Orange County median income figures by the United
States Department of Housing and Urban Development: (i) The Affordable Rent amount for the
Very Low-Income units shall not exceed thirty percent (30%) of 50 percent (50%) of the
monthly area median income adjusted for the actual number of persons in the Household as
determined by California Health and Safety Code Section 50053; (ii) The Affordable Rent
amount for the Moderate-Income units shall not exceed thirty percent (30%) of one-hundred
twenty% percent (120%) of the monthly area median income adjusted for the actual number of
persons in the Household as determined by California Health and Safety Code Section 50053.
The income limits and Affordable Rents in effect as of the date of this Agreement are attached
hereto as Exhibit"B" and incorporated herein by this reference.
COVENANTOR UNDERSTANDS AND KNOWINGLY
AGREES THAT THE MAXIMUM RENTAL PAYMENTS TO
BE ESTABLISHED BY THIS FORMULA ARE NOT
NECESSARILY EQUAL TO THE FAIR MARKET RENT FOR
THE AFFORDABLE UNITS, AND MAY BE ESTABLISHED
AT A LEVEL SUBSTANTIALLY BELOW THE FAIR
MARKET RENT LEVELS.
3
COVENANTOR HEREBY AGREES TO RESTRICT THE
AFFORDABLE UNITS ACCORDINGLY. /
CO NANTOR'S INITIALS
In the event state law referenced herein is amended, the terms of this Agreement shall
automatically be amended to remain consistent with State law.
(e) Annual Report. Within sixty(60) days after the end of each calendar year
during the Affordability Period, Covenantor shall submit to Covenantee a report verifying
Covenantor's compliance with the provisions of this Declaration ("Annual Report").
Covenantor's final Annual Report shall be submitted to Covenantee within sixty (60) days after
the end of the Affordability Period. Each Annual Report shall identify the location of the
Affordable Units for the applicable reporting period, the identity of each Household member
occupying an Affordable Unit during any portion of such period, the income and family size of
each such Household,the Affordable Rent for each of the Affordable Units, and the rent actually
charged pursuant to the lease or rental agreement. If Covenantee prescribes a particular form to
be utilized by Covenantor in preparing the Annual Report, Covenantor shall utilize said form,
provided that it complies substantially with the foregoing requirements.
2. Non-Discrimination Covenants. Covenantor covenants by and for itself, its
successors 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,
religion,sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital
status, handicap or disability, in the use, occupancy,tenure, or enjoyment of the Affordable Unit,
nor shall Covenantor 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, subtenants,or vendees in the Affordable Unit.
Covenantor and its successors and assigns shall refrain from restricting the leasing
of the Affordable Unit on the basis of race, color, religion, sex, sexual orientation, creed,
ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any
person. All such leases shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clause:
"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,
religion, sex, sexual orientation, creed, ancestry, national or
ethnic origin, age, family or marital status, handicap or
disability 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
4
with reference to the selection, location, number, use, or
occupancy of tenants, lessees, sublessees, subtenants, or
vendees in the premises herein leased."
3. Use Restrictions. During the Affordability Period, Covenantor shall be required
to take all reasonable steps necessary to ensure that each Household renting an Affordable Unit
has knowledge of all terms and conditions of this Declaration by including in each and every
lease and rental agreement a clause which incorporates this Declaration by reference and makes
this Declaration a part of an attachment to such lease or rental agreement. In addition, during the
Affordability Period, each lease or rental agreement for any of the Affordable Units shall contain
provisions that the Affordable Unit shall be occupied, used, and maintained as follows:
(a) The Affordable Unit shall be used only for private dwelling purposes, with
appurtenant facilities, and for no other purposes;
(b) Household Size. The number of persons that may occupy an Affordable
Unit shall be based on unit size:
Unit Size I HousehESize0 bedroom (studio 2 er1 bedroom 3 er2 bedrooms 5 per
(c) the Household shall not permit or suffer anything to be done or kept upon
the premises which will increase the rate of insurance on any building, or on the contents thereof,
and shall not impair the structural integrity thereof obstruct or interfere with the rights of other
occupants, or annoy such occupants by reasonable noises or otherwise, nor shall any Household
commit or permit any nuisance on the premises or fail to keep the premises free of rubbish,
clippings, and trash or commit or suffer any illegal act to be committed thereon;
(d) The Household shall not sublease any or all parts of the Affordable Unit
without prior approval from Covenantee;
(e) The Household shall comply with all of the lawful requirements of all
governmental authorities with respect to the premises;
(f) No person shall be permitted to occupy the premises for transient or hotel
purposes; and
(g) The Household shall comply in all respects with this Declaration and any
failure by the Household to comply with the terms of this Declaration shall be a default under the
Household's lease or rental agreement.
4. Covenants for Benefit of City and Agency. All covenants without regard
to technical classification or designation shall be binding for the benefit of the Covenantee and
5
such covenants shall run in favor of Covenantee for the entire period during which time such
covenants shall be in force and effect. The Covenantee, 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 such
action at law or suits in equity or other proper legal proceedings to enforce and to cure such
breach to which it or any other beneficiaries of these covenants may be entitled during the term
specified for such covenants, except the covenants against discrimination which may be enforced
at law or in equity at any time in perpetuity.
5. Binding on Successors and Assigns The covenants and agreements established
in this Declaration shall, without regard to technical classification and designation, be binding on
Covenantor and any successor to Covenantor's right, title, and interest in and to all or any
portion of the Project, for the benefit of and in favor of the City of Huntington Beach and the
Redevelopment Agency of the City of Huntington Beach. All the covenants contained in this
Declaration shall remain in effect for the Affordability Period, and shall automatically terminate
and be of no further force or effect after such time. Upon expiration of the Affordability Period,
Covenantee agrees to cooperate with Covenantor, at no cost to Covenantee in removing this
Declaration of record from the Subject Property.
6. Counterparts. This Agreement may be executed in a number of
counterparts, each of which shall be an original, but all of which shall constitute one and the
same document.
7. Applicable Law.
(a) If any provision of this Agreement or portion thereof, or the application of
any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or
unenforceable, the remainder of this Agreement, or the application of such provision or portion
thereof to any other persons or circumstances, shall not be affected thereby and it shall not be
deeded that any such invalid provision affects the consideration for this Agreement; and each
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
(b) This Agreement shall be construed in accordance with the laws of the
State of California and all applicable HUD Housing Quality Standards and City Codes.
[Signatures and Jurats to Follow]
6
IN WITNESS WHEREOF,the Covenantee and Covenantor have caused this instrument
to be executed on their behalf by their respective officers hereunto duly authorized as of the date
set forth above.
PROPERTY OWNER: COVENANTEE:
FREEWAY INDUSTRIAL PARK, a CITY HUNTIN BEACH,
California corporation a cipal corporation
JJ R�Ett6 TRoiTER �l t C'KrsKY Mayor
print name
ITS: C .� 02� O{ zc�r
ity Clerk
�/
DEVELOPER:
SARES-REGIS GROUP, a California T REDEVELOPMENT AGENCY OF
general partnership and/or its assignees THE CITY OF HUNTINGTON BEACH,
- - a public body corporate and politic
print name By: e'l -/4
ITS: (circle one)Chairman/Preside t/Vice President „deputy Execufiye Director
A�PP WED AS TO FORM:
City ttorney/ g y Counsel
INITIAT AND P OVED:
1 ng Director
REVIE D APPROVED:
Cit Manager
7
EXHIBIT "A"
Legal Description of 7441 Edinger Ave., Huntington Beach, California
PARCEL 1 AS DESCRIBED IN LOT LINE ADJUSTMENT NO. 10-007 RECORDED
MAY 4, 2011 AS INSTRUMENT NO. 2011000225797 OF OFFICIAL RECORDS IN
THE OFFICE OF THE ORANGE COUNTY RECORDER.
9 & 10
EXHIBIT"B"
Current Qualifying Income and Rent Schedule
.Ve " ,Low i.50% Moderate: 120%
Incame;L�mit Rent'l.�m�t .;w . . , ,..._ ... Income;L�m�t . `,Rent.lrmit, ��:::afiomiiients�,.,.; ..'_ .
1P = $32,550 iBR- 930 1P= $73,250 OR- 2 092 113R-3 persons
2P= $37,200 213R-$1,161 2P= $83,700 213R- 2,616 21311-5 persons
3P = $41,850 313R-$1,255 3P= $94,200 313R-$2,825
4P = $46,450 4P = $104,650
5P= $50,200 5P= $113,000
Income Restriction Calculations:
Very-Low Income Restrictions(50%): Median Income-$92,900
$92,900 x 50%x 70% = $32,550 - 1 person (round to closest$50)
$92,900 x 50%x 80% = $37,200 -2 people
$92,900 x 50%x 90% = $41,850 -3 people
$92,900 x 50%x 100% = $46,450-4 people
$92,900 x 50%x 108% = $50,200-5 people
Moderate Income Restrictions(120%): Median Income-$87,200
$87,200 x 120%x 70% = $73,250- 1 person (round to closest$50)
$87,200 x 120%x 80% = $83,700-2 people
$87,200 x 120%x 90% = $94,200-3 people
$87,200 x 120%x 100% = $104,650-4 people
$87,200 x 120%x 108% = $113,000-5 people
Rent Restriction Calculations:
Very Low Rent Restriction (50%)
$37,200 x 30%/ 12 = $930 for 2 people
$46,450 x 30%/ 12 = $1,161 for 4 people
$50,200 x 30%/ 12 = $1,255 for 5 people
Moderate Rent Restriction (120%):
$83,700 x 30%/ 12 = $2,092 for 2 people
$104,650 x 30%/ 12 = $2,616 for 4 people
$113,000 x 30%/ 12 = $2,825 for 5 people
11
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ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On August 17, 2011 before me, P. L. Esparza, Notary Public, personally appeared
Joan L. Flynn and Joe Carchio who proved to me on the basis of satisfactory
evidence to be the persons whose names are subscribed to the within instrument
and acknowledged to me that they executed the same in their authorized capacities,
and that by their signatures on the instrument the persons, or the entity upon behalf
of which the persons acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.
P. L. ESPARZA
WITNESS my hand and official seal. z Commission# 1857021 Notary Public-California z
z
Z Orange County
iM Comm.Expires Au 4,2013
C (Seal)
(Notary Signature) (�`
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On "MA- , 2011, before me, the undersigned, a Notary Public in and for
said State, person lly appeared �,4n e; bj-j s Tersonally known to me (or proved to
me on the basis of satisfactory evidence)to be the person whose name is subscribed to the within
instrument and acknowledged to me that he/she executed the same in 4�is/her authorized capacity,
and that by hi-a/her signature on the instrument the persons or the entities upon behalf of which
the person acted executed the instrument.
WITNESS my hand and official seal. �cHARLENE P.H GHES
Commission # 1798709
/ d a
llofary Public -California =
�!'�lIOrange County �
Signature of Notary Public �rCon�n y2Q-
(SEAL)
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On"' , 2011, before e, the and rsigned, a Notary Public in and for
said State, person y appeared i __personally known
to me (or proved to me on the basis of satisfaVtory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/&he executed the same in
his/4-4or authorized capacity, and that by his/1w signature on the instrument the persons or the
entities upon behalf of which the person acted executed the instrument.
WITNESS my hand and official seal. CHARLENE P HU6HES
Commission # 1798709
6MVCMM
Notary Public-California
Orang® County
2012
Signature of Notary Public
(SEAL)
8
Ord. No. 3916
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN, the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of Huntington
Beach is seven; that the foregoing ordinance was read to said City Council at a regular
meeting thereof held on August 01, 2011, and was again read to said City Council at a
regular meeting thereof held on August 15,2011, and was passed and adopted by the
affirmative vote of at least a majority of all the members of said City Council.
AYES: Shaw, Harper, Hansen, Carchio, Bohr, Dwyer, Boardman
NOES: None
ABSENT: None
ABSTAIN: None
I,Joan L.Flynn,CITY CLERK of the City of Huntington
Beach and ex-officio Clerk of the City Council,do hereby
certify that a synopsis of this ordinance has been
published in the Huntington Beach Fountain Valley
Independent on August 25,2011. 10
In accordance with the City Charter of said City
Joan L. Flynn, City Clerk Clerk and ex-officio Jerk
Senior Deputy City Clerk of the City Council of the City
of Huntington Beach, California