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HomeMy WebLinkAboutAbdelmuti Development Company - 1991-05-28CITY OF HUNTINGTON BEACH MEETING DATE: February 3, 2003 DEPARTMENT ID NUMBER: CA 03-01 Council/Agency Meeting Held: Deferred/Continued to: �5�7'r'<< e t Xpproved D Conditionally Approved ❑ Denied City Clerk's ignature Council Meeting Date: February 3, 2003 Department ID Number: CA 03-01 CITY OF HUNTINGTON BEACH a REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY�ACTION 0 SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS; REDEVELOPMENT AGENCY CHAIRPERSON AND --MEMBERS SUBMITTED BY: JENNIFER McGRA ity Attorney and General C w- nCel RAY SILVER, City Ad inistrator/Executive Directori�X-P PREPARED BY: JENNIFER McGRAT ty Attorney and General Counsel DAVID BIGGS, Directo of Economic Development/Deputy Exec utiv Director SUBJECT: Approve Settlement Agreement to resolve the following suits regarding the Strand Project: Citizens Against Redevelopment Excess, etc., et al vs. City of Huntington Beach, etc. et at, Orange County Superior Court Case No. 811519, Court of Appeals Case No. G027828 (CARE 1); Citizens Against Redevelopment Excess, etc., et al vs. City of Huntington Beach, etc. et a/, Orange County Superior Court Case No. OOCC14550, Court of Appeals Case No. 030388 (CARE 11); and Citizens Against Redevelopment Excess vs. City of Huntington Beach, etc., et al., Orange County Superior Court Case No. 02CCO0344 (CARE 111) Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: Whether to enter into a Settlement Agreement and a Fourth Amendment to the Abdelmuti OPA (Jack's Surf Shop) in order to settle three lawsuits challenging the Strand Project. Funding -Source: RDA Cap Project Area/Administration City Attorney- $100,000; Account # 30515101.69375 G:%RCA120031CARE.doc -Z 1/29/2003 2:18 PM REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: February 3, 2003 DEPARTMENT ID NUMBER: CA 03-01 Recommended Action: 1. That the City Council and Redevelopment Agency approve, authorize the Mayor and Chairperson to sign, and the City Clerk and Agency Clerk to attest to the `SETTLEMENT AGREEMENT AND MUTUAL RELEASE" by and among Abdelmuti Development Company, Citizens Against Redevelopment Excess, an unincorporated association, James and Victoria Lane, Ronald and Ann Mase, the City of Huntington Beach, the Redevelopment Agency of the City of Huntington Beach, and CIM/Huntington, LLC. 2. That the Redevelopment Agency approve, authorize the Chairperson to sign, and Agency Clerk to attest to the "FOURTH AMENDMENT TO OWNER PARTICIPATION AGREEMENT" by and between the Redevelopment Agency and Abdelmuti Development Company. Alternative Actions : Do not approve the Settlement Agreement and Fourth Amendment to the OPA. Analysis: To date, Abdelmuti and Citizens Against Redevelopment Excess ("CARE") have sued the City and Agency three times regarding the CIM redevelopment project for Blocks 1041105 ("The Strand"). The first suit, known as CARE 1, challenged the June 1999 DDA between CIM and the Agency on the grounds that (1) the DDA committed the City to incur a long-term indebtedness without the approval of two-thirds of the electorate; and (2) the Agency violated CEQA because it failed to prepare an EIR for the DDA. At the trial level, the Agency won on both claims. At the Court of Appeal, the Agency prevailed on the CEQA claim, but lost on the long-term indebtedness issue. In part to cure the long-term indebtedness issue, Agency Staff and CIM negotiated an Implementation Agreement to the DDA to provide an alternative form of financing consistent with the Court decision. The Agency approved the Implementation Agreement on October 21, 2002. In CARE 11, CARE challenged the November 2000 amendment to the Downtown Parking Master Plan on the ground the City did not comply with CEQA: The Downtown Parking Master Plan was adopted in 1995 for the Downtown Area adjacent to Main Street. The Parking Plan modified the citywide parking standards to allow for "shared parking" in Downtown. Instead of requiring all parking to be located on -site (like in a strip mall), parking would be shared through a City -subsidized parking lot, metered street parking, and on -site parking through complementary uses (e.g. offices and movie theater could share parking, since their customers arrived a different times). Under the 1995 Parking Plan, the first 500,000 square feet of commercial development vrould be able to use shared parking, but further development would be subject to the standard on -site parking standards. In December 2000, the City Council reviewed the Parking Plan, finding that there was a surplus of parking, and consequently increased the shared parking threshold from 500,000 to GARCX2W31CARE.doc -3- V2912043 2:23 PM REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION MEETING DATE: February 3, 2003 DEPARTMENT ID NUMBER: CA 03-01 715,000 square feet of commercial square footage. CARE and Abdelmuti challenged this amendment because it facilitated The Strand development. In fact, other Downtown owners have benefited from the Parking Master Plan. For example, Oceanvew Promenade (Abdelmuti) received a 132 space parking variance, and pursuant to its CUP, only 2 spaces were required on site. Instead, at least 132 public parking spaces were required within 350 feet of the project. Both The Strand parking garage (403 spaces), the Main -Pier Parking Garage (over 600 spaces), and street parking more than meet these requirements for Oceanview Promenade. At the trial court, the City prevailed. CARE 11 is now on appeal, but the appeal has been stayed while settlement discussions continue. On October 21, 2002, the City approved the land use entitlements for The Strand as well as approving an implementation agreement modifying the CIM DDA to correct the financing issues found unconstitutional in the CARE 1 decision. On November 21, 2002, CARE and Abdelmuti filed CARE 1!1 challenging the land use entitlements, the implementation agreement and CEQA compliance for the October 21, 2002 actions. On October 14, 2002 and November 18, 2002, the City Council provided staff.direction on' negotiating a settlement agreement to bring these years of litigation to a close. These negotiations have been successful and staff recommends the approval of the attached Settlement Agreement. The principal terms of the settlement are as follows: 1. Attorne 's fees. At the beginning of negotiations, CARE sought recovery of $225,000 in attorney's fees. They claim they had incurred fees in excess of that amount. Arguably, they may be able to recover some attorney's fees in connection with the partially favorably appellate ruling in CARE /. However, no attorney's fees have been awarded to date. The Settlement Agreement provides that the City will pay $100,000 in attorney's fees and CIM will pay $75,000 of attorneys fees to Abdelmuti and CARE. 2. Parking. The focus of the settlement negotiations has been the impact of The Strand on parking presently available for office tenants of Abdelmuti (Oceanside Promenade,101-115 Main Street and 406-410 Pacific Coast Highway) and to a lesser degree, the Lanes (125-127 Main Street) and the Mases (123 Main Street). To address these concerns, Abdelmuti's redevelopment agreement will be amended to provide that if available shared parking usage in The Strand garage and the Main Pier garage exceed 85% of parking spaces during regular Monday through Friday business hours, the City will be obligated to initiate a parking study and present reasonable solutions to address the parking insufficiency. Further, the Agency will reimburse Abdelmuti the cost of any parking pass increases in excess of 10% GARCA120031CARE.doc -4- 1/29/2003 2:18 PM REQUEST FOR COUNCIL/REDEVELOPMENT AGENCY ACTION MEETING DATE: February 3, 2003 DEPARTMENT ID NUMBER: CA 03-01 per year for the first five years following the settlement and 6% per year for all subsequent years. As a matter of background, currently, annual parking passes for Main Street and the beach cost $125. Abdelmuti is specifically concerned that parking may become unavailable for its tenants during Monday through Friday business hours. To address that concern, the agreement allows the City or Agency to create a new parking pass that could only be used during normal business hours. It is only the cost of that new pass that would be limited. This reimbursement provision is limited to 130 parking passes for Abdelmuti. It is also being extended to five parking passes each for the Lanes and the Mases. Environmental Status: Not applicable. Attachment(s): RCA Author: SFF G:\RCA\2003\CARE.doc -5- 1/29/2003 5:25 PM ATTACHMENT #1 .1 • J& LO JJ CITY OF HUNTINGTON BEACH Inter -Department Communication TO: HONORABLE CONNIE BOARDMAN, MAYOR, AND MEMBERS OF THE CITY COUNCIL FROM: Scott Field, Assistant City Attorney DATE: January 29, 2003 SUBJECT: CARE Litigation This is the final version of the Settlement Agreement It is not signed by the City Attorney because it has not yet been signed by Jun Lane We will forward the fully signed agreement by way of a Late Submittal to the City Clerk Scott Field Assistant City Attorney Attachment G \FIELD\2003 MemosTARE doc • CITY OF HUNTINGTON BEACH Inter -Department Communication TO: HONORABLE CONNIE BOARDMAN, MAYOR, AND MEMBERS OF THE CITY COUNCIL REDEVELOPMENT AGENCY �` J CONNIE BROCKWAY, CITY CLERKpt`,���• RAY SILVER, CITY ADMINISTRATORt, I FROM: SCO_ TT FIELD, ASSISTANT CITY ATTORNEY , q c P'D DATE: February 3, 2003 ���0L - 4,;'^ SUBJECT: Late Transmittal In Connection With Item E-14 on February 3, 2003, City Council Agenda — Approve Settlement Agreement To Resolve Three Lawsuits Involving Abdelmuti Development Company Owner Participation Agreement (OPA)/Jack's Surfboard; Jim Lane, CIM/Huntington LLC; and the Downtown Project, The Strand: Citizens Against Redevelopment Excess, etc., et al. vs. City of Huntington Beach, etc., et al. (CARES I, II and III) At the time that the City Attorney's Office submitted the above -referenced Settlement Agreement, it had not yet received the signatures of all the parties to the agreement. We now have the signature on behalf of CARE, the Lanes and CIM. Attached please find a copy of the settlement agreement with signatures of all the parties as well as the City Attorney. Scott Field Assistant City Attorney Attachment G \FIELD\2003 Memos\CARE 2-3 doc SETTLEMENT AGREEMENT AND MUTUAL RELEASE This Settlement Agreement and Mutual Release (the "Settlement Agreement") is entered into to be effective as of the P day of February 2003 (the "Effective Date), by and among Abdelmuti Development Company, a California general partnership (the "Participant"), Citizens Against Redevelopment Excess, an unincorporated association in the City of Huntington Beach ("CARE"), James A. Lane and Victoria Jean Lane, as Trustees of the James A. Lane and Victoria Jean Lane 1997 Trust, (the "Lanes"), the City of Huntington Beach, a municipal corporation (the "City"), the Redevelopment Agency of the City of Huntington Beach, a public body corporate and politic (the "Agency") and CIM/Huntington, LLC, a California limited liability company ("CIM") (collectively referred to herein as the "Parties" and individually sometimes referred to herein as a "Party"). RECITALS A. Participant and the Agency entered into an Owner Participation Agreement dated May 28, 1991, providing for a mixed use office and retail commercial development on the real property located at 101-115 Main Street and 406-410 Pacific Coast Highway, Huntington Beach (APN 024-153-23) ("Participant's Property"). Said Owner Participation Agreement was amended by a First Amendment to Owner Participation Agreement dated November 4, 1991, a Second Amendment to Owner Participation Agreement entered into on or about August 31, 1992, and a Third Amendment to Owner Participation Agreement entered into on or about December 30, 1994. (The original Owner Participation Agreement as amended by the First, Second, and Third Amendments thereto is collectively referred to herein as the "Abdelmuti OPA.") Pursuant to Conditional Use Permit No. 91-35, Participant completed and currently operates the development on the Participant's Property that is commonly known as "Oceanview Promenade." Condition No. 18 of CUP #91-35 stated that 132 off -site parking spaces be provided within 350 feet of Oceanview Promenade. Such spaces have,been provided pursuant to a temporary plan approved by the City pursuant to Condition No. 17 of CUP 991-35. B. The Agency and CIM Group, LLC, predecessor in interest to CIM, entered into a Disposition and Development Agreement dated June 17, 1999, and three Implementation Agreements dated April 6, 2000, March 5, 2001, and October 21, 2002 (collectively referred to as the "CIM DDA"). The CIM DDA provides for the development of a mixed use retail - commercial and hotel development (the "Strand Project") on the real property described in the CIM DDA (the "Strand Project Site"). The Strand Project includes 411 parking spaces, including 6 on -site surface level parking spaces and a 405-space two -level subterranean public parking structure on the Strand Project Site (the "Strand Public Parking Structure"). C \WNDOWS\Temporary Intemet Files\OLK30341CARE agrmnt-clean toe Last pnnted 1/28/2003 8 19 AM C. On November 20, 2000, the City amended the parking component of the Downtown Specific Plan pursuant to Ordinance 3483. The amended parking component of the Downtown Specific Plan is known as the Downtown Parking Master Plan (the "DPMP'). D. At the meeting of the City Council of October 21, 2002, the City Council of the City heard certain appeals from the Planning Commission's certification of the environmental impact report for the Strand Project (the "Strand Project EIR") and approval of various entitlements for the development of the Strand Project, including Tentative Tract Map No. 16406, Conditional Use Permit No. 99-45, Special Permits Nos. 2-6, inclusive, and CDP No. 99-16 (the "Strand Project Entitlements"). At said City Council meeting the City Council denied all appeals, certified the Strand Project EIR, made certain findings in connection therewith, and upheld the approval of the Strand Project Entitlements by the Planning Commission. As part of the Strand Project Entitlements, the Planning Commission and the City Council found and approved that the 411 parking spaces contained within the Strand Project complied with the requirements of the DPMP, constituted the approved permanent plan for the 132 parking spaces required for Oceanview Promenade in satisfaction of Conditions 17 and 18 of CUP #91-35, and satisfied the parking obligations of the Agency under the Abdelmuti OPA. E. CARE filed the following lawsuits concerning the subject matter of this Settlement Agreement and Release (the "Pending Litigation"): 1. Citizens Against Redevelopment Excess, etc., et al vs. City of Huntington Beach, etc. et al, Orange County Superior Court Case No. 811519, Court of Appeals Case No. G027828, concerning the validity of the CIM DDA as originally approved and entered into and related Cooperation Agreement between the City and the Agency; 2. Citizens Against Redevelopment Excess, etc., et al vs. City of Huntington Beach, etc. et al, Orange County Superior Court Case No. OOCC14550, Court of Appeals Case No. 030388, concerning the validity of the City's approval of the DPMP; and 3. Citizens Against Redevelopment Excess vs. City of Huntington Beach, etc., et al., Orange County Superior Court Case No. 02CCO0344 concerning the validity of the Third Implementation Agreement to the CIM DDA, the Strand Project Entitlements and the Strand Project EIR. In connection with this case, Participant and CARE represent and warrant that (i) they have published a summons pursuant to Code of Civil Procedure § 860 et seq., providing that any responsive pleading to the complaint in this action is due not later than January 16, 2003, (ii) C \WINDOWS\Temporary Internet Fi1es\0LK3034\CARE agrmnt-clean �Is Last printed 1/28/2003 8 19 AM that as of the Effective Date, Participant and CARE have no actual knowledge that an answer has been filed, and (iii) Participant and CARE have not extended the time for any person to answer or otherwise respond to the complaint, except the City, Agency and CIM. The Parties agree that as of the Effective Date of this Agreement, all persons not already parties to Case No. 02CCO0344 are barred from filing any action challenging the validity of the Third Implementation Agreement to the CIM DDA, the Strand Project Entitlements and the Strand Project EIR. F. The Lanes are the owners of that certain real property located adjacent to the Strand Project Site at 125-127 Main Street (APN 024-153-04). The Lanes are concerned about the impacts of the Strand Project on their property, including without limitation with respect to impacts on traffic circulation and parking supply. G. On November 15, 2002, CARE and Participant appealed the Strand Project Entitlements to the California Coastal Commission. Said appeal was denied on January 10, 2003. CARE, Participant and the Lanes represent and warrant that they have taken no action, and are unaware of any other person taking any action to judicially challenge the Coastal Commission decision. H. Participant, CARE and the Lanes represent and warrant that they have not filed any legal actions other than the Pending Litigation that challenge the validity of the Third Implementation Agreement to the CIM DDA, the Strand Project Entitlements, and/or the Strand Project EIR and further represent and warrant that they have no actual knowledge of the filing of any such legal actions by any third parties . I. In addition to the Pending Litigation, Participant has threatened to file a lawsuit concerning whether the Agency has complied with its obligations under the Abdelmuti OPA concerning parking for the Oceanview Promenade (including without limitation whether the Agency has complied with its obligations under Section 201.6 of the Abdelmuti OPA and the City has complied with its obligations under Conditions 17 and 18 of CUP # 91-35) and whether CIM has wrongfully induced the Agency to interfere with and breach said obligations; further, Participant and CARE have threatened to file a lawsuit concerning whether the Coastal Commission denial of the appeal of City's approval of the Strand Project Entitlements was valid (collectively, the "Threatened Litigation"). J. Agency, City and CIM dispute the validity of the claims set forth in the Pending Litigation and threatened by way of the Threatened Litigation. NOW, THEREFORE, the Participant, CARE, the Lanes, the Agency, the City and C:\WINDOWS\Temporary Internet Files\OLK3034\CARE agrmntclean.�oc Last printed 1/28/2003 8:19 AM CIM agree as follows: 1. Purpose. The Parties have concluded that, in light of the costs of litigation and the uncertainty regarding the outcome of- the Pending Litigation_ and the Threatened Litigation, it would be in the best interests of all concerned to settle the Pending Litigation and the Threatened Litigation on the terms set forth below. Furthermore, the Parties desire to resolve their disputes involved in the Pending Litigation and the Threatened Litigation, to further their respective purposes, and to set forth procedures for the protection of their respective interests. The City Council of the City and the Redevelopment Agency of the City have determined that the public interest is served by settlement of the Pending Litigation and the Threatened Litigation on the terms specified herein. 2. Recitals. The recitals set forth at the beginning of this Settlement Agreement shall be deemed to be a part of this Settlement Agreement as though set forth in full. 3. Fourth Amendment to the Abdelmuti OPA. Concurrently with entering into this Settlement Agreement, the City, Agency and Participant shall execute the Fourth Amendment to the Abdelmuti .OPA, a true and correct copy of which is attached hereto, labeled "Exhibit A" and incorporated herein by this reference. 4. Dismissal of Pending Litigation and Withdrawal of Coastal Commission Appeal. Immediately upon City and Agency approval and execution of this Settlement Agreement and the Fourth Amendment to the Abdelmuti OPA, CARE and Participant shall file Requests for Voluntary Dismissal with prejudice of the Pending Litigation. Notice of entry of the dismissals shall be served promptly on the Parties by the counsel for CARE following entry of the dismissals. At the same time, Participant and CARE shall promptly withdraw their appeal to the Coastal Commission of City's approval of the Strand Project Entitlements. 5. Amreement not to File Threatened Litijzation orNew Litigation. Participant, the Lanes, and CARE covenant and agree not to file any Threatened Litigation. Participant, the Lanes and CARE further covenant and agree not to file or join in the filing of any Threatened Litigation and not to file, join or otherwise fund or support any other complaint, petition, or other judicial proceeding, pleading or action challenging (i) the validity and/or the approval of the Strand Project Entitlements and/or the CIM DDA by the City and/or Agency, (ii) the adequacy of the Strand Project EIR, (iii) whether the City and/or Agency has complied with the California Environmental Quality Act in connection with their approval of the Strand Project Entitlements and/or the Third Implementation Agreement, and (iv) whether the California Coastal Commission validly denied the appeal of City's approval of the Strand CAWNDOWW mporary Intemet FiWOLK3034TARE agrmnt-cka41_1 East printed I/2&7003 & 19 ACE Project Entitlements (collectively, the "New Litigation"). 6. Release byCity/Ag_encyand Cii4i. As of the Effective Date of this Agreement, and excepting only the obligations arising out of or created by this Agreement, the City, . Agency, and .CIM each, for themselves . and their respective successors and assigns. (collectively, the "Section 6 Releasing Parties"), hereby release and discharge Participant, CARE and the Lanes , and their heirs and assigns, shareholders, officers, officials, directors, employees, agents, successors and assigns as applicable (collectively, the "Section 6 Released Parties"), from any and all sums of money, accounts, claims, liabilities, demands, contracts, actions, debts, controversies, agreements, damages, attorney fee claims, and causes of action whatsoever or of whatever kind or nature, whether known or unknown, suspected or unsuspected, which the Section 6 Releasing Parties, or any of them or their respective successors or assigns may possess relating to or arising out of or in connection with the subject matter of the Pending Litigation, the Threatened Litigation, the New Litigation, the Strand Project, the Strand Project Entitlements, the Strand Project EIR, the Abdelmuti OPA (except to the limited extent of the reserved rights and claims expressly set forth in Section 8 of this Settlement Agreement), or the CMI DDA (collectively, the "Section 6 Released Claims'). In this regard, to the full extent of the Section 6 Released Claims, the Section 6 Releasing Parties each Acknowledge that they are familiar with Section 1542 of the Civil Code, which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release, which if known by him must have materially affected the settlement with the debtor. The Section 6 Releasing Parties each waive and relinquish any right or benefit which they have or may have under Civil Code § 1542 against the Section 6 Released Parties to the full extent that such rights or benefits may lawfully be waived. In connection with such waiver and relinquishment, the Section 6 Releasing Parties each acknowledge that they or their respective attorneys may hereafter discover claims or facts in addition to, or different from, those they now know or believe to exist with respect to the Section 6 Released Claims, but that it is their intention to settle and release the Section 6 Released Claims, fully, finally and forever. 7. Release by Participant CARE, and the Lanes. As of the Effective Date of this Agreement and the Fourth Amendment to the Abdelmuti OPA, and excepting only the obligations arising out of or created by this Agreement, Participant, CARE, and the Lanes each, for themselves and their respective successors and assigns (collectively, the "Section 7 Releasing Parties"), hereby release and discharge CIM, Agency and City, and their heirs and assigns, shareholders, officers, officials, directors, employees, agents, successors and assigns as applicable (collectively, the "Section 7 Released Parties"), from any and all sums of CAWNDOWS\Temporary Intemet Filce:OLK.3034`.CARE agrmnt-clean $r Last printed 1128.2003 9:19 AEI money, accounts, claims, liabilities, demands, contracts, actions, debts, controversies, agreements, damages, attorney fee claims, and causes of action whatsoever or of whatever kind or nature, whether known or unknown, suspected or unsuspected, which the Section 7 Releasing Parties, or any of them or their respective successors or assigns may possess relating to or arising out of or in connection with the subject matter of the Pending Litigation, the Threatened Litigation, the New Litigation, the Strand Project, the Strand Project Entitlements, the Strand Project EIR, the Abdelmuti OPA (except to the limited extent of the reserved rights and claims expressly set forth in Section 8 of this Settlement Agreement), or the CIM DDA (collectively, the "Section 7 Released Claims'). The Section 7 Releasing Parties each acknowledge that they are familiar with Section 1542 of the Civil Code, which provides as follows: A general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release, which if known by him must have materially affected the settlement with the debtor. The Section 7 Releasing Parties each waive and relinquish any right or benefit which they have or may have under Civil Code § 1542 against the Section 7 Released Parties to the full extent that such rights or benefits may lawfully be waived. In connection with such waiver and relinquishment, the Section 7 Releasing Parties each acknowledge that they or their. respective attorneys may hereafter discover claims or facts in addition to, or different from, those they now know or believe to exist with respect to the subject matter of this Agreement, but that it is their intention to settle and release the matters which are the subject of this Settlement Agreement, fully, finally and forever. 8. Limited Modification of Abdelmuti OPA. No Release of Claims Arising From Acts or Omissions After Effective Date and No Release of Claims Relating to Mulligan Action. Notwithstanding the foregoing Sections 6 and 7, it is understood and agreed that this Settlement Agreement is not intended to amend the Abdelmuti OPA, as amended by the Fourth Amendment to the Abdelmuti OPA, except that from and after the Effective Date, Agency's and City's obligations to provide parking for the benefit of the Participant's Property as referred to in Section 201.6 of the Abdelmuti OPA, Conditions 17 and 18 of CUP 9 91-35 and the DPMP shall be limited to those Agency obligations set forth in the Fourth Amendment to the Abdelmuti OPA. In addition, nothing set forth in this Settlement Agreement, the Abdelmuti OPA, or the Fourth Amendment to the Abdelmuti OPA is intended by either Agency or Participant to release the rights of any Party against any other Party arising out of acts or omissions of the other Party after the Effective Date of this Settlement Agreement, including without limitation future acts or omissions of either Agency or Participant arising out of the Abdelmuti OPA or the Fourth Amendment to the Abdelmuti OPA. Finally, this Agreement has no applicability to the rights, claims or obligations as between Participant, City or Agency arising out of Mulligan v. Redevelopment Agency, and CATMOWS1Tempomry Internet Fild.OL.K301WARE agrmnt<iean 61c L ut printed 112&"2003 8.19 AM Related Cross -Claims, OCSC No. 740099 and Court of Appeal No. G028980. 9. Limitation on Prevailing Rates_ in Pubic Parking Structure for the Lanes. The Agency covenants to extend to the Lanes with respect to their property the same rights and benefits that the Agency has extended to Participant with respect to Participant's Property that are set forth in Paragraph 3 of the Fourth Amendment to the Abdelmuti OPA; provided, that Agency's obligation to reimburse the Lanes for the cost of Annual Public Parking Passes or Business Hour Parking Passes in excess of the Threshold Cost Increase, as applicable, shall be limited to a maximum of five (5) such passes for the Lanes and their respective tenants. 10. Cooperation During Construction of Strand_Proiect; Minimization of interference with Operation of Businesses. CIM shall incorporate in the construction contract for the Strand Project a requirement that the contractor use good construction practices in preventing unreasonable adverse effects on neighboring properties owned by Participant and the Lanes. CIM further agrees to present complaints from such Parties to the contractor and to have the contractor meet with such neighbors, and CIM shall cooperate in good faith with its contractor and such Parties to address any complaints, including compliance with City ordinances and regulations and City -imposed mitigation measures relating to such Parties' property. -The covenants contained in this Section are between CIM, on the one hand, and Participant and the Lanes only, and do not include the Agency or the City. No rights shall accrue to Participant and the Lanes against the City or Agency if CIM should materially breach the covenants of this Section. 11. Parking Management Plan of Strand Project. Clhi shall submit for Agency approval a parking management plan for the Strand Public Parking Structure consistent with the permanent parking plan approved by the City for the Participant's Property and the DPMP. The parking management plan may address designation of short-term parking, employee parking, attendant parking and other relevant issues. Agency and CIM shall consult with Participant prior to CIM's submittal of the parking management plan to the City. 12.. . Costs and Attornen Fees. Except for the payments referred to in the second paragraph of this Section, each Party will bear its own costs and expenses, including, but not limited to, attorneys' fees, incurred or to be incurred in connection with the Pending Litigation and in connection with negotiating and preparing this Settlement Agreement and in carrying out its obligations under this Settlement Agreement. Within fifteen (15) days of the Effective Date, Agency shall pay the sum of One Hundred Thousand Dollars ($100,000) and CIM shall pay Seventy -Five Thousand Dollars ($75,000) to Rutan & Tucker, LLP, the attorneys for Participant and CARE as partial reimbursement for attorneys' fees incurred by Participant and CARE in connection with the C:tWr4DOWSITempomry Internet Files10LK72651CARE agrmnt-c a , v last printed 112&2D03 11:37 AM Pending Litigation. 13. Notices. Any notices, certificates, or other communications hereunder shall be given either by personal delivery to the Parties or to City as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below. Any party may designate a different address to which subsequent notices, certificates or other communications shall be sent by notifying the other Parties via personal delivery, a reputable overnight carrier or U. S. certified mail -return receipt requested: CIM John Given, Vice President CIM Group 6922 Hollywood Boulevards, Ninth Floor Hollywood, California 90028 With Copy To: Matthew Fragner, Esq. Liner, Yankelevitz, Sunshine & Regenstreif, LLP 1100 Glendon Ave., 14th Floor Los Angeles, California 90024 Abdelmuti Abdelmuti Development Company 101 Main Street Huntington Beach, California 92648 With Copy To: Jeffrey M. Oderman, Esq. RUTAN & TUCKER, LLP 611 Anton Boulevard, Ste. 1400 Costa Mesa, California 92626-1998 CARE Jeffrey M. Oderman, Esq. RUTAN & TUCKER, LLP 611 Anton Boulevard, Ste. 1400 Costa Mesa, California 92626-1998 City/Redevelopment Agency City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 C \WINDOWS\Temporary Internet Fdes\OLK3034\CARE ag=t-clean_80c Last pnnted 1/28/2003 8 19 AM With Copy To: Jennifer McGrath, City Attorney City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 C \WINDOWS\Temporary Internet Files\OL.K3034\CARE agrmnt-cleaj. Last printed 1/28/2003 8 19 AM James A. Lane and James A. Lane and Victoria Jean Lane, Victoria Jean Lane as Trustees of the James A. Lane and Victoria Jean Lane 1997 Trust 637 Frankfort Avenue Huntington Beach, California 92648 With Copy To: Jeffrey M. Oderman, Esq. RUTAN & TUCKER, LLP 611 Anton Boulevard, Ste. 1400 Costa Mesa, California 92626-1998 14. Effect of Headings. The subject headings of the sections of this Settlement Agreement are included for convenience only and will not affect the construction or interpretation of any of its provisions. 15. Word Usage. Unless the context clearly requires otherwise: (a) Plural and singular numbers will each be considered to include the other; (b) The masculine, feminine, and neuter genders will each be considered to include the others; (c) "Shall," "will," "must," "agree," and "covenants" are each mandatory; (d) "May" is permissive; (e) "Or" is not exclusive; and (f) "Includes" and "including" are not limiting. 16. Entire Agreement; Modification; Waiver. Except for the Abdelmuti OPA and the Fourth Amendment to the Abdelmuti OPA as to the Participant and the Agency, and except for the CIM DDA as to the Agency and CIM, this Settlement Agreement constitutes the entire agreement between and among the Parties pertaining to the subject matter contained herein and supersedes all prior and contemporaneous agreements, representations, and understandings of the Parties with respect thereto. Except as set forth hereinbelow, no supplement, modification, or amendment of this Settlement Agreement will be binding unless executed in writing by all the Parties, and no waiver of any of the provisions of this Settlement Agreement will be binding unless approved in writing by the Party or Parties to be C:\WINDOWS\Temporary Internet Files\OLK3034\CARE agrmnt-clear Last printed 1/28/2003 8:19 AM charged. No waiver of any of the provisions of this Settlement Agreement will constitute a waiver of any other provision, whether or not similar, nor will any waiver constitute a continuing waiver. Notwithstanding the foregoing, any provision of this Settlement Agreement that affects or concerns less than all the Parties may be amended, modified, or waived by only the Parties or Party so affected or concerned. 17. Severability. Should any of the provisions of this Agreement be declared or determined by any court to be illegal or invalid, the validity of the remaining parts, terms, or provisions shall not be affected thereby and said illegal or invalid part, term, or provision shall be deemed not to be a part of this Settlement Agreement. 18. Third Party Beneficiaries. Nothing in this Settlement Agreement, whether express or implied, is intended to confer any rights or remedies under or by reason of this Settlement Agreement on any persons other than the Parties to it and their respective successors and assigns. 19. Litigation Costs. If any legal action or any mediation or arbitration or other proceeding is brought for the enforcement or interpretation of this Settlement Agreement, or because of an alleged dispute, breach, default, or misrepresentation in connection with any provision of this Settlement Agreement, each Party or Parties shall bear its own attorneys' fees and other costs (including experts' fees and costs) incurred in that action or proceeding. 20. Governing, Law. This Settlement Agreement shall be governed, construed, interpreted and enforced in accordance with and under the laws of the State of California. 21. No Waiver of Police Power. Nothing in this Settlement Agreement shall be understood or construed to alter, affect or limit in any way the police power which may be exercised by the City nor to require approval of any applications or entitlements of any kind or any part thereof. 22. Construction. The provisions of this Settlement Agreement shall be liberally construed 'to effectuate its purposes. The Ianguage of this Settlement Agreement shall be construed simply according to its plain meaning and shall not be construed for or against any Party, as each Party has participated in the drafting of this Settlement Agreement and has had its counsel review it. 23. Successors and Assigns. This Settlement Agreement shall be binding on and shall inure to the benefit of the Parties and their respective heirs, legal representatives, successors, and assigns. For purposes of this Settlement Agreement, the successors and assigns of Participant shall be deemed to be the successor(s) to Participant's fee ownership interest in the Participant's Property and the successors and assigns of the Lanes shall be C:1 INDOWSWemporary Internet Fi1es\OLK7265\CARE zS mntrleanl -, Wt printed 112MD03 1:27 P.M deemed to be the successor(s) to the Lanes' fee interests in their property described in Recital F of this Settlement Agreement. 24. Authorizations. All persons and entities executing this Settlement Agreement and other documents on behalf of the respective Parties certify and warrant that they have the capacity and have been duly authorized to so execute the documents on behalf of the entity so indicated. Each signatory shall also indemnify the other Parties to this Settlement Agreement, and hold them harmless, from any and all damages, if the signatory is not so authorized. The Parties hereto have executed this Agreement as of the dates set forth below. Dated: - / Z - D 3 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVED AS TO FORM: Agency General Counsel By: ", M- Agency eneral C&hsel ATTEST: City Clerk C \WINDOWSWemporary Intemet Files\OL.K7265\CARE agnnnt-cleanldy Last pnnted 1/28/2003 127 PM �r r KANE, BALLMER & BERKMAN By: Murray O. Itane, Esq. Special Counsel for Redevelopment Agency of the City of Huntington Beach Dated: Dated: APPROVED AS TO FORM: RUTAN & TUCKER, LLP JAMES A. LANE and VICTORIA JEAN LANE, AS TRUSTEES OF THE JAMES A. LANE AND VICTORIA JEAN LANE 1997 TRUST James A. Lane Victoria Jean Lane Jeffrey M. Oderman, Esq. Attorney for James Lane and Victoria Jean Lane, Trustees Dated: APPROVED AS TO FORM: RUTAN & TUCKER, LLP M- Jeffrey M. Oderman, Esq. CITIZENS AGAINST REDEVELOPMENT EXCESS ("CARE') cAWINDowsWEMPTARE agl.dac -12- Last printed 1/29/2003 10:23 AM KANE, BALLMER & BERKMAN Murray O Kane, Esq Special Counsel for Redevelopment Agency of the City of Huntington Beach Dated '_t er, 3 ,1003 Dated 3, a o o 3 APPROVED AS TO FORM RUTAN & TUCKER, LLP LIM JAMES A LANE and VICTORIA JEAN LANE, AS TRUSTEES OF THE JAMES A LANE AND VICTORIA JEAN LANE 1997 TRUST ct James A Lane Ytt -+&U& Q e am lairw Victoria Jean Lane Jeffrey M Oderman, Esq Attorney for James Lane and Victoria Jean Lane, Trustees Dated - , a DO 3 CITIZENS AGAINST REDEVELOPMENT EXCESS ("CARE") By C \WINDOWS\Temporary Intemet Files OLK7265\CARE agrmnt-clea�oc Last pnnted 1/31/2003 5 22 PM Murray O. Kane, Esq. Special Counsel for Redevelopment Agency of the City of Huntington Beach JAMES A. LANE and VICTORIA JEAN LANE, AS TRUSTEES OF THE JAMES A. LANE AND VICTORIA JEAN LANE 1997 TRUST Dated: James A. Lane Dated: Victoria Jean Lane APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: UAs� /J-efre-y M. Gderman, Esq. Attorney for James Lane and Victoria Jean Lane, Trustees Dated: APPROVED AS TO FORM: RUTAN & TUCKER, LLP CITIZENS AGAINST REDEVELOPMENT EXCESS ("CARE") By: kwvt,-,-- beerey M. 10derman, Esq. Attorney for CARE C \WINDOWS\Temporary Intemet Fdes\0LK3034\CARE agmnt-dw113c Last pnnted 1/28/2003 8 19 AM r- Dated: 02�/ a- 3 APPROVED AS TO FORM: CITY ATTORNEY B City Attorney ATTEST: By: City Clerk CITY OF HUNTINGTON BEACH Dated: ,2ll -)- f O 3 ABDELMU DEVELOPMENT C A Califaeneral Pd—Aa A A I A General Partner APPROVED AS TO FORM: RUTAN & TUCKER, LLP ANY l 61 " / C \WINDOWS\Temporary Internet Files\0LK3034\CARE agrmnt-cleanlW Last printed 1/28/2003 8 19 AM I By: Te*jj1a-/6derman, Esq. Attorney for Abdelmuti Development Company, Dated: CIM/HUNTINGTON, LLC En APPROVED AS TO FORM: LINER, YANKELEVITZ, SUNSHINE & REGENSTREIF, LLP By: Matthew C. Fragner, Esq. Attorney for CIMMUNTINGTON, LLC C:\WINDOWS\Temporary Internet Files\OLK3034\CARE agrmnt-cleaff�c Last pnnted 1/28/2003 8.19 AM 02/03/2003 15:12 FAX 3104535901 LFS&:R 10002 Dated: 243103 CIM&UNTINGTON, LLC By: APPROVED AS TO FORM: LINER, YANKELEVITZ, SUNSHINE & REGENSTREIF, LLP By: ,*A,— C AVMatthew C. Fragner, omyfor CIM/HLTN'TIN O ,LLC CAWiNDOWS\Temporary lntcmct Ftla\OLK61B0\CARL• a&-mnttl-1'4c Last printcd 1129R003 3.51 PM C� EXHIBIT A FOURTH AMENDMENT TO OPA [On pages following] (- r, FOURTH AMENDMENT TO OWNER PARTICIPATION AGREEMENT This FOURTH AMENDMENT TO OWNER PARTICIPATION AGREEMENT (the "Fourth Amendment') is dated as of February 3, 2003 (the "Effective Date'), and is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency') and ABDELMUTI DEVELOPMENT COMPANY ("Participant') (collectively, the "Parties'). RECITALS A. The Agency and Participant entered into that certain Owner Participation Agreement dated May 28, 1991, as amended by a First Amendment to Owner Participation Agreement dated November 4, 1991, by a Second Amendment to Owner Participation Agreement entered into on or about August 31, 1992, and by a Third Amendment to Owner Participation Agreement entered into on or about December 30, 1994 (collectively, the "Abdelmuti OPA'), which Abdelmuti OPA is incorporated herein by this reference. Reference herein to the Abdelmuti OPA shall include any and all Attachments thereto.. B. Pursuant to the Abdelmuti OPA, Participant developed and operates certain improvements (the "Project') on real property described therein as "Oceanview Promenade." C. Pursuant to Section 201.6 of the Abdelmuti OPA, the Agency has certain obligations concerning the provision of parking spaces for the development and operation of Oceanview Promenade. The parties desire to enter into this Fourth Amendment to effectuate the provisions of said Section 201.6 by agreeing to a process to provide for the parking contemplated for Oceanview Promenade. D. The City Council has found and determined that the parking requirements for Oceanview -Promenade asset forth in Conditions 17 and 18 to CUP # 91-35 are satisfied by the construction of the parking spaces to be pro%ided in that certain public parking structure within the Strand Project (the "Strand Public Parking Structure) to be developed pursuant to TTM #16406, CUP #99-45, Special Permits 402-06, and CDP # 99-16 that were approved by the City Council on October 21, 2002 (the "Strand Project Entitlements'). The Agency has determined there is no necessity for providing additional offsite parking for any uses in Oceanview Promenade. E. The Agency, Participant, and other parties have entered into that certain Settlement Agreement and Mutual Release dated as of February 3, 2003 (the "Settlement Agreement') to resolve certain pending and threatened litigation between the parties relating to the Strand Project and the adequacy of the parking to be provided for the benefit of the Participant in the Strand Public Parking Structure. This Fourth Amendment is part of the settlement addressed in the Settlement Agreement. F. The Parties are entering into this Fourth Amendment for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged. TERMS 1. Recitals. The foregoing Recitals are incorporated into this Fourth Amendment and are a part of hereof. 2. Use of Strand Public Parking Structure. Agency shall require the developer of the Strand Project to prepare for the approval of the Agency a parking management plan for the Strand Public Parking Structure consistent with the permanent parking plan approved by the City for the Site pursuant to Conditions 17 and 18 ofCUP # 91-35 and consistent with the Downtown Parking Master Plan ("DPMP'), as such permanent plan and DPMP may be amended from time to time. The parking management plan may address designation of short-term parking, employee parking, attendant parking and other relevant issues. Agency shall consult with Participant and shall cause the developer of the Strand Project to consult with Participant prior to the developer's submittal of the parking management plan to the City of Huntington Beach. Participant acknowledges that because the Strand Public Parking Structure is a public parking facility to be constructed by tax-exempt bond funds, any member of the public may park and buy parking passes in that Structure. 3. Limitations on Prevailing Rates. The Parking Management Plan for the Strand Public Parking Structure may provide that parking passes be sold in addition to or as alternative(s) to the annual public parking passes the City currently sells (the "Annual Public Parking Passes'). (The Annual Public Parking Pass currently entitles the permittee to park in either the Downtown Parking Structure (located within the DPMP), and the beach -side parking lots. In the future, the Parties agree that City may limit the Annual Public Parking Passes to parking within the parking structures located within the boundaries of the DPMP.) Upon issuance of a Certificate of Occupancy for the Strand Project until September 20, 2032 (the last date Agency is entitled to have allocated and paid to it tax increment revenues from the Redevelopment Project) (herein, the "Redevelopment Project Termination Date'), Agency warrants, represents, and covenants to Participant that Agency will cause the City or the entity responsible from time to time for such matters to -18- CAWNDOWS\Temporary Inmmet Fi &OLK3034.CARE agrmnttlean.doc either (i) continue to sell Annual Public Parking Passes that are available for tenants, employees, customers, and invitees of the businesses on the Site (on a non-discriminatory basis with the public generally) or (ii) sell a `Business Hours Parking Pass" as described herein. In the event the City or the entity responsible from time to time for selling such passes increases the cost of Annual Public Parking Passes by more than the Threshold Cost Increase, as defined below, then Agency agrees to do one of the following: A. Reimburse Participant (or at Participant's direction, Participant's tenants) by such excess amount for each such Annual Public Parking Pass up to a maximum of one hundred thirty (130) such Passes actually purchased by Participant or its tenants or their respective employees. (Such reimbursement is limited only to passes used by Participant, its tenants, and their respective employees; said 130 passes shall not be sold or made available to Participants' or its tenants' customers, or members of the general public); or B. Sell or cause the City or the entity responsible from time to time for selling such passes to sell to the public (including Participant and its tenants and employees) a Business Hours Parking Pass at a price which is equal to or less than the Threshold Cost Increase; or C. Sell or cause the City or the entity responsible from time to time for selling such passes to sell to the public (including Participant and its tenants and employees) a Business Hours Parking Pass or other alternative parking pass at a price which is more than the Threshold Cost Increase, and reimburse Participant (or at Participant's direction, Participant's tenants) by such excess amount for up to one hundred thirty (130) such Business Hours Parking Passes or alternative parking passes, provided such passes are only used by Participant or its tenants or their respective employees. Collectively, these three options will be referred to as the "Business Hours Parking Pass Subsidy." For purposes of this Fourth Amendment, the term "Threshold Cost Increase" shall mean a percentage increase in the cost of the Annual Public Parking Passes, calculated from January 1, 2003 to the date of any increase by the City or other entity responsible from time to time for selling such passes in the cost of Annual Parking Passes which exceeds (i) the higher of the percentage increase in the applicable Consumer Price Index ("CPI") or ten percent (10%) per annum for the first five (5) full calendar years, beginning January 1, 2003 ("Threshold Date"),and (ii) the percentage increase in the CPI for all subsequent years, beginning January 1, 2008. When calculating the Threshold Cost -19- CAWINDOWS\Temporary Intemet Files\OLK3034\CARE agrmnt-clean.doc Increase, all percentage increases shall be compounded annually. By way of example, the parking pass cost as of the Threshold Date is $125. After five years, the Threshold Cost Increase would be $201.3I . By way of further example, after two years, the Threshold Cost increase would be $151.25. if the City was charging S 175 for an Annual Parking Pass in 2005, but the Certificate of Occupancy had not been issued for the Strand Project, then the Agency would not be obligated to provide the Business Hours Parking Pass Subsidy. However, if the Certificate of Occupancy was issued on July 1, 2005, then the Agency would be obligated to provide the Business Hours Parking Pass Subsidy as of that date, and would be obligated to reimburse Participant $11.88 for up to 130 parking passes (i.e., $175 — $151.25, divided by two for a half year subsidy), or otherwise provide one of the options permitted under the Business Hours Parking Pass Subsidy. For purposes of this Fourth Amendment, the term `Business Hours Parking Pass " shall mean a parking pass which entitles the holder to park a motor vehicle in a public parking lot or facility located within 350 feet of the Oceanview Promenade during week days (Monday through Friday, inclusive), excluding holidays, between the hours of 7:00 A.M. and 6:00 P.M. The term "CPI" means the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Anaheim -Riverside Average, Sub -group "All Items (1982-1984=100)," or, if said index does not continue to be published or is not available to the Parties, the most closely comparable index to said index. 4. Participant's Notice of Parkin Insuffticienc . If at any time after Participant commences use of the Strand Public Parking Structure, Participant determines that there are insufficient parking spaces actually made available for Participant and its tenants in the Structure during Business Hours based upon the actual use and needs of Participant and its tenants, then Participant may so notify the Agency in writing (the "Participant Parking Insufficiency Notice'). For purposes of this Fourth Amendment, the term "Business Hours" shall mean weekdays (Monday through Friday, inclusive), excluding holidays, between the hours of 7:00 a.m. and 6:00 p.m. Within sixty (60) days of receipt by Agency of a Participant Parking Insufficiency Notice, Agency shall cause the commencement and diligent completion of a study to determine whether or not, and to what extent, insufficient Business Hours parking has been made available for the needs of Participant and its tenants (the `Business Hours Parking Sufficiency Study'). The Business Hours Parking Sufficiency Study shall be prepared by a qualified independent professional or firm approved by Agency. Agency shall cause the professional or firm preparing such study to meet and confer with Participant regarding the scope and methodology of the study and any information that Participant may have -20- CAWLN'D0WS\Tempmry Internet Fi1csMK3034`CARE agrmnt-ckean.doe that Participant believes is or may be relevant to the study and Agency shall make available to Participant a copy of the Business Hours Parking Insufficiency Study upon its completion. If the Agency reasonably determines based upon the results of the Business Hours Parking Sufficiency Study that the Business Hours use and occupancy of all public parking located within 350 feet of the Site is regularly less than eighty five percent (85%) then no further action of the Agency shall be required. If such use and occupancy number is equal to or greater than eighty five percent (85%) during Business Hours then the Agency shall do all of the following: A. Meet and confer in good faith with Participant for the purpose of devising solutions to any parking insufficiency that may exist at the time of the Study or, based on the Study, in the near future; and B. Propose reasonable solutions to the parking insufficiency, and use the reasonable best efforts of the Agency to obtain any required governmental approvals for the implementation of such proposals. Such solutions may include, for example, the amendment of the City required parking management plan for the Strand Public Parking Garage and/or other public parking facilities, the designation of spaces therein to be short-term spaces, the designation of spaces in certain public parking facilities to be for employee parking, the use of attendant parking, and the like. After consultation with Participant, such solutions shall be presented to the appropriate approval authority of the City and any other governmental agency having jurisdiction thereof for consideration in the form of proposed amendments to the parking management plan, and, if necessary or appropriate, possible amendments to the DPMP at the earliest feasible date. The Agency shall include appropriate provisions in all operating agreements for the Strand Public Parking Structure in order to effectuate the provisions of this Fourth Amendment. -21- C \WINDOWS\Temporary Intemet Files\OLK3034\CARE agrmnt-clean doc Limitation On Amendment. This Fourth Amendment sets forth in full Participant's right as to the Agency for any additional parking pursuant to the Abdelmuti OPA, Conditions 17 and 18 of CUP # 91-35 and the DPMP. Except as expressly provided otherwise in this Fourth Amendment, the Abdelmuti OPA remains in full force and effect, enforceable in accordance with its terms. Date: -9 // -7- f O3 ATTEST: Agency Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH mMIMI- 1$e$$� .Gib_! I �, , 11 -22- CAWINDOWS\Temporary Intemet Fi1es\0LK3034\CARE agrmnt-clean.doc APPROVED AS TO FORM: KANE, BALLMER & BERKMAN Agency Special Counsel ABDELMUTI DEVELOPMENT COMPANY A California General Partner Date: APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: Jeffrey M. Oderman, Esq. Attorney for Abdelmuti Development Company -22- General Partner CAWINDOWS\TEMP\CARE agl.doc APPROVED AS TO FORM: KANE, BALLMER & BERKMAN Agency Special Counsel Date: Z (? APPROVED AS TO FORM: RUTAN & TUCKER, LLP By: Q IAA,,,. AAQkl-'-� e frey A Oderman, Esq. Attorney for Abdelmuti Development Company -23- I CAWINDOWS\Temporary Internet Files\OLK3034\CARE agrmnt-clean.doc • ' REQUEST FOR CITY COUNCIL/ yGyl� ;Submitted EDBYA VELOPMENT AGENCY ACTION 41 !]11 /Vd CC D Co i t 9& ED 94-54 Date: November 21 1994f� cr; cl, . K y to: onorable Mayor/Chairman and City Council/Redevelopment Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Executive Direct ��. Prepared by: Barbara A. Kaiser, Deputy City AdministratoNEconom�'Ic Development Subject: Third Amendment to Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/htain-Pier Redevelopment Project Area R94 46sy ,*wt- .263 Consistent with Council Policy? [XI Yes [ ] New Policy or Exception Statement of issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmitted to the City Council/Redevelopment Agency for consideration is a Third Amendment to the Abdelmuti Development Company Owner Participation Agreement. This Amendment provides for minor modifications to the existing agreement. RECOMMENDED COUNCIUAGENCY ACTION: 1. Conduct a joint public hearing on the Third Amendment to the Owner Participation Agreement. 2. Adopt City Council Resolution No. and Agency Resolution No. authorizing the execution and implementation of the Third Amendment to the Owner Participation Agreement. ANALYSIS: On May 28, 1991, the City/Agency entered into an Owner Participation Agreement (OPA) providing for the Agency to assist Abdelmuti Development Company (Developer) in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and approximately 24.000 square feet of office use on the second and third floors. The location of this project is the northeast corner of Main Street and Pacific Coast Highway. (Staff Report attached) ED 94-54 November 21, 1994 Page 2 On November 4, 1991, the City/Agency approved an amendment to the Abdelmuti OPA providing for a four-story building consisting of 17,140 square feet of new commercialhetail on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fourth floors - for a total of 48,060 square feet. (Staff Report attached). On August 31, 1992, the Agency approved a Second Amendment to the OPA. The purpose of the Second Amendment was to increase the loan amount by approximately $500,000 from the previous maximum of $3.5 million, or $1101square foot, whichever is less. Additionally, the agreement provided for relocation assistance at a cost to the Agency not to exceed $120,000. (Staff Report attached) Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in redevelopment project areas. At this time, the Agency and the Participant are proposing to modify the financial terms of the Agreement in the form of a Third Amendment to the Agreement. The existing Agreement allowed the Participant to borrow $3,980,000 from the Agency for construction financing. As of the effective date of the proposed Third Amendment, the Participant has borrowed $2,974,671. As of January 1, 1994, $113,382 in interest charges had accrued on the Agency loan, and $51,046 in debt service payments had been made by the Participant. The proposed Third Amendment calls for the forgiveness of interest that would have otherwise been accrued during 1994. Thus, the outstanding principal balance of the Agency loan will be $3,037,007 as of January 1, 1995. The Participant has completed project construction with the exception of tenant improvements for the as yet unleased space. Within the parameters of the Agreement, the Participant has the right to borrow additional funds, up to a maximum total of $3,980,000, to complete the tenant improvements construction. The Agency loan to the Abdelmuti Development Company will be fully amortized over a fifteen year term commencing on January 1, 1995. The monthly debt service payments will be based on a 7% interest rate, which equates to a 10.79% mortgage constant. Based on the $3,037,007 outstanding balance as of January 1, 1995, the monthly debt service payments total $27,297, which equates to $327,570 annually. The debt service amount will increase commensurably with any additional loan disbursements to complete the construction of tenant improvements. ED 94-54 November 21, 1994 Page 3 The Third Amendment includes the following financial modifications to the Agreement terms: a. The rental subsidy payments from the Agency to the Developer will not commence until January 1,1995. These payments will continue through December 31, 2018. Under the executed Agreement terms, the rental subsidy payments would have commenced on January 1, 1994 and continued through December 31, 2017. b. The Agency will pay $0.25 per square foot per month in triple net charges to the Developer. These charges will commence on January 1, 1995 and terminate on December 31, 2018. The charges will remain fixed at $0.25 over the entire tern of the Agreement. The Third Amendment results in a projected increase in Agency costs of $35,900. This amount represents a less than 1 % increase in the Agency costs projected to be incurred for the implementation of the executed Agreement. FUNDING SOURCE: Main -Pier Account ED-TM-888 7 75-00 ALTERNATIVE ACTIONS: 1. Continue action on the Owner Participation Agreement and related resolutions to allow for additional review time. 2. Direct staff to further negotiate specific points of the agreement with the developer. ATTACHMENTS: 1. Health and Safety Code Report 33433 2. Third Amendment to the Owner Participation Agreement 3. City Council Resolutions 4. Redevelopment Agency Resolutions 5. Staff Report dated May 28, 1991 6. Staff Report dated November 4, 1991. 7. Staff Report dated August 31, 1992 LIFJ I VA:W:14:i:11.1r. 9:WhMc -u THIRD AMENDMENT TO OWNER PARTICIPATION AGREE- MENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY This Third Amendment to Owner Participation Agreement (the "Third Amendment") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and ABDELMUTI DEVELOPMENT COMPANY, a California general partnership ("Participant"). A. On or about May 28, 1991, Agency and Participant entered into an Owner Participation Agreement (the "Original OPA") for the development of a commercial building and related improvements (the "Project") on.certain real property (the "Site") located at the corner of Main' Street and Pacific Coast Highway within Agency's Main Pier -Redevelopment Project Area. On or about November 4, 1991, Agency and Participant entered into a First Amendment to Owner Participation Agreement (the "First Amendment") relating to the Project. On or about August 31, 1992, Agency and Participant entered into a Second Amendment to Owner Participation Agreement (the "Second Amendment") relating to the Project. The Original OPA, the First Amendment, and the Second Amendment are collectively referred to herein as the "Existing Agreement." B. On or about November 16, 1992, Participant executed that certain "Promissory Note For Construction Loan To Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Existing Note") in favor of Agency. C. Agency and Participant desire to amend the Existing Agreement and to have Participant execute and deliver to Agency an endorsement to the Existing Note, all on the terms and conditions set forth herein. QQYFdKAi1T2: Based upon the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both parties, Agency and Participant hereby agree as follows: 1. Section 201.4 of the Existing Agreement, entitled "Construction Costs; Construction Loan," is hereby amended to read in its entirety as follows: F=t 12V1452MW312103245.4 I1/11/94 4. Construction Cost., Construction Loan. In addition to those design, engineering, and construction costs for which Agency may be responsible under subpara- graph 3 above, Agency shall provide Agency Assistance in the form of a loan, as evidenced by the Existing Note and modified by that certain "Endorsement To Promissory Note For Construction Loan to Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Endorse- ment") in the form attached hereto Exhibit "A." Partici- pant shall execute the Endorsement and deliver the same to Agency concurrently with the execution and delivery of this Third Amendment. It is understood that the Existing Note, as modified by the Endorsement, supersedes the Construction Loan form set forth as Attachment No. 5 to the Existing Agreement. The principal amount of the Existing Note, as modified by the Endorsement, is THREE MILLION NINE HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00). As of the date of this Third Amendment, Agency has disbursed to Participant the sum of TWO MILLION NINE HUNDRED SEVENTY- FOUR THOUSAND SIX HUNDRED SEVENTY-ONE ($2,974,671.00) pursuant to the Existing Note (exclusive of sums disbursed by Agency for public improvements for which Agency is financially responsible under the Existing Agreement), Participant has repaid to Agency the sum of FIFTY-ONE THOUSAND FORTY-SIX DOLLARS ($51,046.00), the outstanding principal under the Existing Note, as modified by the Endorsement, is TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-FIVE DOLLARS ($2,923,625.00), and the total accrued and unpaid interest under the Existing Note, as modified by the Endorsement, is ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). Agency and Participant agree that as of the date of this Third Amendment, Participant has satisfactorily completed its obligations under the Existing Agreement for development of the Project on the Site and that no further loan disbursements are needed by Participant with respect thereto, with the exception, however, that Participant shall be entitled to disbursements of additional loan funds (in an amount which, when combined with the disbursements previously made, does not exceed the total principal amount of the Existing Note, as modified by the Endorsement) for the construction and installation of tenant improvement items on the second and third floors of the building. Participant shall repay the loan to Agency in accordance with the terms and conditions of the Existing Note, as modified by the Endorsement. Generally, the Existing Note, as modified by the Endorsement, shall be payable in monthly installments fully amortized over fifteen (15) years commencing upon the Initial Repayment M11=14E20.0009121032.5.4 111111% - 2 - Commencement Date referred to therein. Interest shall accrue from the time of disbursement at an interest rate of seven percent (7%) per annum; provided, however, that no interest shall accrue during the period commencing January 1, 1994, and ending December 31, 1994, on any funds previously advanced or on any funds advanced between the date of this Third Amendment and December 31, 1994. The Existing Note, as modified by the Endorsement, is secured by a first trust deed on the Site (the "Deed of Trust") which was recorded as Document No. 93-0105327 on February 19, 1993, in the Official Records of the Orange County Recorder's Office. All references to the Deed of Trust in the Existing Agreement, as :codified by this Third Amendment, shall be deemed to refer to said recorded document, which shall supersede the form deed of trust set forth as Attachment No. 6. 2. Section 201.8 of the Existing Agreement, entitled "Differential Rent Payment," is hereby amended to read in its entirety as follows: 8. pifferential Rent -Payment. On the first day of each month of the "Differential Rent Payment Period," Agency shall pay to Participant, in advance, the "Differential Rent Payment" for the "Differential Rent Payment Building Area." As used herein, the term "Differential Rent Payment Period" shall mean the period commencing on January 1, 1995, and terminating on December 31, 2017. Notwith- standing the foregoing, in the event that, prior to December 31, 2017, the City and Agency determine to require a change of use of the upper --floor office/commercial space within the building on the site to residential uses, the Differential Rent Payment Period shall terminate on such earlier date that is the latest of the following: (i) the date Agency has fully performed its obligations under Section 201.3 (payment for costs of conversion); (ii) the date Agency has fully performed its obligations under 201.6 (provision of code - required parking for residential units); and (iii) the date on which a final Certificate of Occupancy is issued by City with respect to the converted upper -floor (residential) space. As used herein, the term "Differential Rent Payment Building Area" shall mean the total rentable floor area (excluding elevator shafts, stairways, and exterior balconies) of the second floor and one-half of the third floor in the building located on the Site. Agency and Participant agree that the total rentable floor area on the second floor of the building is 14,318 square feet, FS IM014s240003UIM245., UMN -3 - that the total rentable floor area on the third floor is 11,964 square feet and, accordingly, that the total Differential Rent Payment Building Area on which the Differential Rent Payment provided for in this Section 201.8 is to be calculated is 20,300 square feet (14,318 square feet plus [11,964 square feet x .501 = 20,300 square feet). As used herein, the term "Differential Rent Payment" shall mean the remainder, if any, derived during each month of the Differential Rent Payment Period by sub- tracting the "Contract Rent" for such period from the "Guaranteed Rent" for such period. Notwithstanding the foregoing, the amount of the Differential Rent Payment shall be adjusted annually at the end of each calendar year during the Differential Rent Payment Period such that the total of the Differ- ential Rent Payments for such year do not exceed the remainder, if any, derived by subtracting the total "Contract Rent" for that year from the total "Guaranteed Rent" for that year. Any adjustment to the Differential Rent Payment required by operation of this paragraph, including, if applicable, a refund by Participant to Agency, shall be made at the time the last monthly Differential Rent Payment would ordinarily be due for that year (i.e., on or before December 1). In no event shall the total of the Differential Rent Payments cal- culated pursuant to this Section 201.8 for any calendar year be less than zero. Example No. 1: The Guaranteed Rent for the entire 1995 calendar year is Four Hundred Thirty -Eight Thousand Four Hundred Eighty Dollars ($438,480.00) ($1.80 per square foot per month x 20,300 square feet x 12 months) or $36,540.00 per month. Assume that the Contract Rent for January 1995 is $30,000. In this circumstance, Agency would make a Differential Rent Payment to Participant on January 1, 1995, of $6,540.00 ($36,540.00 - $30,000.00 - $6,540.00). Further assume that the Contract Rent for each of the months from February 1995 through October 1995 is $36,540.00 per month. In this circum- stance, Agency would make no Differential Rent Payment to Participant during any of these months ($36,540.00 - $36,540.00 w $0). Further assume that the Contract Rent for November 1995 is $43,080.00. In this circumstance, Agency would make P9 UTD14d20.000 U103245.4 11/111% — 4 — no Differential Rent Payment to Partici- pant for November, but Participant would not be required to refund any portion of the January 1995 Differential Rent Payment at this time. Further 'assume that the Contract Rent for December 1995 is $43,080.00. In this circumtance, Participant would refund to Agency the sum of $6,540.00 (since the total Contract Rent for 1995 exceeded the total Guaranteed Rent for that year), but Participant would be permitted to retain the $6,540.00 amount by which the total Contract Rent for 1995 exceeded the total Guaranteed Rent for 1995, and this sum would not be carried forward or consi- dered in determining the amount of any Differential Rent Payments (or adjust- ments thereto) in the succeeding calendar year or years. As used herein, the term "Contract Rent" shall mean the total rent payable by all tenants leasing space within the Differential Rent Payment Building Area. In calculating the Contract Rent, the following rules shall apply: (1) Rent from tenants shall include the following: (i) all charges by the landlord to the tenant for occupancy of space in the building (including exterior balcony areas) on the Site, whether fixed, percentage, or other- wise; and (ii) any "Triple Net Costs" payable by the tenant pursuant to its lease. As used herein, the term "Triple Net Costs" shall include all of the following items, but only if and to the extent payable by a tenant pur- suant to its lease for the period in question: (x) any "Taxes" levied and assessed upon the Site and the underlying realty; (y) the cost of any insurance that Participant elects to maintain on the Site or the improvements thereon, including, but not limited to, public liability and property damage insurance and fire and extended coverage and/or "All Risks" insurance, with such endorsements and/or additional coverages as Participant may deem appropriate; and W "Common Area Expenses." As used herein, the term "Taxes" shall include amounts payable by tenants for any form of real estate tax or assessment, general, special, ordinary, or extraordinary, and any improvement bond or bonds, imposed or levied at any time by any governmental authority, as F=11=14a20.000 M03Z45.4 11111M - 5 - against any legal or equitable interest of Participant or the tenant, or both, in the premises or in the underlying realty. As used herein, the term "Common Area Expenses" shall mean all sums payable by tenants for the repair, maintenance, and replacement of any equipment, facilities, and structures of the common areas on the Site (but not within the spaces exclusively leased to the tenants), including without limitation: general mainte- nance and repairs, replacement, painting, cleaning, sweeping, and janitorial services; maintenance, repair, and replacement of toilets, floors, walls, ceilings, roofs, skylights, windows, sidewalks, curbs, signs, sprinkler systems, planting and landscaping, lighting, and other utilities, directional signs and other markers and bumpers; main- tenance, repair, and replacement of fire protection systems, lighting systems, storm drainage systems and other utility systems; personnel to implement any such services including, if Participant deems necessary, the cost of security guards; on -site costs and personnel expenses in managing the property, costs and expense pertaining to any security alarm system; and any amount payable by tenants for Participant's actual cost for the accounting, bookkeeping, and collection of the Common Area Expenses. (2) Rent from tenants shall exclude the following: (i) late charges, penalties, and interest payable by tenants pursuant to their leases; (ii) security or cleaning deposits during the period any such amounts are held by Participant as security for the tenant's performance of its obligations under its lease (including without limitation cleaning of the premises upon vacation thereof); and (iii.) Participant's income (if any) from telephones and vending machines located on the Site. (3) Contract Rent shall be calculated based upon the leases and rental agreements in effect from time to time, regardless of whether or not Participant actually receives the rent provided for therein. Pamele No. 2• Participant leases space within the Differential Rent Payment Building Area to Tenant A for the period of January 1, F=11=14620.00031I103245.4 11/11M - 6 - 1995 - December 31, 1995. Tenant A fails to pay the rent for the month of December 1995 and vacates the premises on Decem- ber 31, 1995. The Contract Rent calcula- ted pursuant to this Section 201.8 includes the December 1995 rent attribu- table to Tenant A's lease notwithstanding that Participant did not receive the rent. Example No. 3• Participant leases space within the Differential Rent Payment Building Area to Tenant B for the period of January 1, 1995 - December 31, 1995. Tenant B defaults on its obligation to pay rent commencing in March 1995. Participant terminates Tenant B's lease and is required to file an unlawful detainer action against Tenant B to remove Tenant B from the premises. Participant recovers possession of the premises on July 1, 1995. The Contract Rent includes the rent attributable to Tenant B's lease for the period from January 1, 1995 - June 30, 1995, notwithstanding that Participant did not receive the rent from March 1995 - June 1995; the Contract Rent does not include the rent attributable to Tenant B's lease after July 1, 1995, since Tenant B's lease has been termi- nated and the premises are available for occupancy by another tenant after that date. (4) In the event Participant itself occupies space on the second or third floors of the building or leases such space to any person or entity affiliated with Participant (including without limitation Jack's Surf and Sport or Ahmad Abdelmuti), the portion of the Contract Rent attributable to such occupancy or lease shall be deemed to be the greater of the actual rental payable pursuant to the lease or the pro rata portion of the Guaranteed Rent attributable to such space. Example No. 4• Participant leases 6,000 square feet of the net rentable area (excluding elevator shafts, stairwells, and exterior balconies) on the second floor of the M11W14S2o-00 U1M243.4 1111 M - 7 - building to Jack' s Surf and Sport for the period of January 1, 1995 - December 31, 1995, at a total rent (including Triple Net Costs) of $1.60 per square foot. The Guaranteed Rental Rate for the Differen- tial Rent Payment Building Area for such period is $1.80 per square foot ($1.55 per square foot plus Triple Net Costs of 25 cents per square foot). The portion of the Contract Rent attributable to the Jack's Surf and Sport lease on the second floor for such period is Ten Thousand Eight Hundred Dollars ($10,800.00) per month ($1.80 per square foot x 6,000 square feet = $10,800.00). (5) From the effective date of this Third Amendment through the entire Differen- tial Rent Payment Period, Participant shall submit to Agency for approval all leases of space on the second and third floors of the building to the extent such leases provide for payment of rent (including Triple Net Costs) at less than that space's pro rata portion of the Guaranteed Rent. Agency shall approve or disapprove such submittals within fifteen (15) business days of ter receipt of U) a copy of the proposed lease and (ii) Participant's written request for approval. Agency's role in reviewing and approving leases shall be limited to: (i) determining whether the proposed use is a permitted use of the premi- ses under City's and Agency's ordinances and regulations and (ii) determining whether the business terms of the lease are reasonable from the landlord's standpoint in order to minimize the risk to Agency of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder. Approval of such request(s) shall not be unreasonably denied. In the event Agency disapproves a lease on the ground that the rent provided for in the lease is less than fair rental value (and thereby subjects Agency to an unaccept- able risk of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder) , Agency shall notify Participant in writing at the time of such disapproval of Agency's opinion regarding the fair rental value for the premises in question and the minimum acceptable rental amount required to obtain Agency's approval. In the event Participant leases space on the second or third floors of the building at a rental rate FS2111=1482Q40 M1Q324S.4 W111" - 8 - less than the pro rata portion of the Guaran- teed Rent after Agency has disapproved such lease or prior to the date Agency approves the same, nothing herein is intended to render such lease invalid or unenforceable, and, if Participant has simply failed to obtain Agency's approval in advance, nothing herein shall prohibit Participant from seeking Agency's approval after the fact or limit or restrict Agency's obligation not to unreason- ably deny such approval; provided, however, that if Agency reasonably disapproves any such lease, the portion of the Contract Rent attri- butable to such lease shall be deemed to be the greater of the actual rent payable pursuant to the lease or such greater amount of rent that Agency has reasonably determined is the fair rental value for the premises at such time (but not to exceed such tenant's pro rata portion of the Guaranteed Rent), based upon the other approved leases in the building on the Site and prevailing market rents in the vicinity for commercial/office space similar to the space leased by such tenant. Notwithstanding any other provision in this Agreement, Participant shall not be required to seek Agency's approval of any minor amendments or modifications to leases on the second or third floors of the building which amendments or modifications do not impact the rent payable by the tenant or the term of the lease. (6) The portion of the Contract Rent attributable to the second and third floors of the building shall be zero for the following spaces: (i) vacant space (i.e., unleased and unoccupied) and (ii) space that is leased but for which no rent is payable (e.g., with respect to new leases prior to the rent com- mencement date, subject to Agency's approval rights set forth in subparagraph (5) above). (7) In determining the portion of the Contract Rent derived from the third floor space in the building, all third floor rents shall be accumulated and then divided by two in order to obtain an average contract rental amount for said floor without regard to the particular location of tenants on that floor. i'SI►1170148'0-00=103245.4 11/11/W - s - Example No. 5: For the month of January 1995, 3,000 square feet of net rentable area on the third floor is unleased and unoccupied; 1,000 square feet of net rentable area on the third floor is leased but no rental is yet due and payable; 3,000 square feet of net rentable area on the third floor is leased at a rate of $1.40 per square foot gross rent (including Triple Net Costs); and the remaining 4,964 square feet of net rentable area on the third floor is leased at a rent of $2.25 per square foot (including Triple Net Costs) . The portion of the Contract Rent attri- butable to the third floor in the build- ing for the month of January 1995 is $7,684.50, calculated as follows: (3,000 sq. ft. x $1.40 per sq. ft.) + 4,964 sa. ft. x $2.25 per sa. ft. - $7,684.50 2 As used herein, the term "Guaranteed Rent" shall mean the product derived by multiplying the Differential Rent Payment Building Area (i.e., 20,300 square feet) by the "Guaranteed Rental Rate" in effect from time to time during the Differential Rent Payment Period. As used herein, the term "Guaranteed Rental Rate" shall mean for each month during the Differential Rent Payment Period the sum of (i) ONE DOLLAR AND FIFTY-FIVE CENTS ($1.55) per square foot of net rentable area within the Differential Rent Payment Building Area, with such amount adjusted periodically by the "CPI Adjustment" or "Fair Rental Value Adjustment" calculated as provided hereinbelow, plus (ii) FIVE THOUSAND SEVENTY-FIVE DOLLARS ($5,075.00) (an assumed and fixed rate of $0.25 per square foot allocable to "Triple Net Costs" multiplied by the 20,300 square feet of space located within the Differential Rent Payment Building Area) . The portion of the Guaranteed Rental Rate determined pursuant to clause (i) of the preceding sentence shall be recalculated commencing January 1, 1996 (the first "Adjustment Date") and on January 1 of each calendar year thereafter during the Differential Rent Payment Period (the subsequent "Adjustment Dates") by multiplying the portion of the Guaranteed Rental Rate determined pursuant to clause (i) of the preceding sentence for the preceding calendar year (the "Base Year Guaranteed Rental Rate") by a frac- tion in which the numerator is the CPI for the third month prior to each such Adjustment Date and the denomi-._ nator is the CPI for the 15th month prior to each such Adjustment Date. As used herein, the term 11CPI" shall FS2\112\014820-"3\2103245.4 11/11/94 - 1 0 - mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index For Urban Wage Earners And Clerical Workers, Los Angeles -Anaheim - Riverside average, sub -group, "All Items" (1982-84 100) . In the event said CPI index is discontinued or is not available for purposes of calculating the CPI Adjustment, the parties shall use a comparable index in determining the CPI Adjustment. As an alternative to the CPI Adjustment, at the sole discretion of Agency, Agency may require that the Base Year Guaranteed Rental Rate be adjusted on an Adjustment Date by utilizing the appraisal method net out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Base Year Guaranteed Rental Rate be adjusted by such appraisal process to an amount below the Base Year Guaranteed Rental Rate then in effect. In the event that the adjustment to the Base Year Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such adjusted portion of the Guaranteed Rental Rate shall remain in effect for a period of three (3) years, and said portion of the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI Adjustment, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency. Agency shall have the option of leasing any vacant space on the second or third floors of the building at the Guaranteed Rental Rate and on the terms otherwise contained within Participant's standard form lease. 3. Agency hereby acknowledges that Participant has fully performed its obligations under Article III of the Existing Agree- ment to construct the Project on the Site. Pursuant to Section 309 of the Existing Agreement, Agency agrees to furnish Participant with a Certificate of Completion for the Project within thirty (30) days after Agency's approval of this Third Amendment. 4. This Third Amendment (including the Endorsement modifying the Existing Note) and the provisions of the Existing Agreement which remain in effect integrate all of the terms and conditions of the agreement between the parties, and supersede all negotiations or previous attempts between the parties with respect to the subject matter hereof. S. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this Third Amendment, that all authorizations and approvals required to make this Third Amendment binding upon such party have been obtained, and that the person or persons executing this Third Amendment on behalf of such parties have been fully authorized to do so. MZ,11Y 1400.00 U103245.4 11111M -11- The effective date of this Third Amendment shall be the date of execution by the Agency. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH , '1994 By: Chairperson ATTEST: Secretary APPROVED AS TO FORM: Agency Counsel ABDELMUTI DEVELOPMENT COMPANY, a California general partnership , 1994 By: Partner 1. M%112\014820-0003\2103245.4 11/11/94 - 1 2 - IN WITNESS WHEREOF, this•Endorsement was executed as of this day of , 1994. A3DELMUTI DEVELOPMENT COMPANY, a California general partnership 10 mad Xdd6l ziilei ' Gener 1 Partner . "Borrower" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: By: Agency Clerk Chairman "Agency" M1131014EM.00MU 103Z45.4 MUM Exhibit "A" Page 2 of 2 EXHIBIT "A" ENDORSEMENT TO PROMISSORY NOTE FOR CONSTRUCTION LOAN TO ABDELMUTI DEVELOPMENT COMPANY PURSUANT TO OWNER PARTICIPATION AGREEMENT THIS ENDORSEMENT TO PROMISSORY NOTE FOR CONSTRUCTION LOAN TO ABDELMUTI DEVELOPMENT COMPANY PURSUANT TO OWNER PARTICIPATION AGREEMENT (this "Endorsement") is affixed to and forms a part of that certain Promissory Note for Construction Loan to Abdelmuti Development Company pursuant to Owner Participation Agreement dated November 16, 1992, in the original principal amount of THREE MILLION NINE HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00) ("Note") made by Abdelmuti Development Company, a California general partnership ("Borrower"), in favor of the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic ("Agency"). All capitalized terms not otherwise defined in this Endorse- ment shall have the meaning ascribed to such terms in the Note. The Note is hereby endorsed and modified as follows: 1. Interest Rate. Section 2 of the Note is hereby deleted in its entirety and replaced with the following: "Interest shall be charged by the Agency on the aggregate of all sums advanced hereunder remaining unpaid, from the date funds are advanced, at the rate of seven percent (7%) per annum. Notwithstanding the foregoing, no interest shall accrue on any funds advanced hereunder during the period commencing January 1, 1994 and ending December 31, 1994." 2. Initial Regayments;algIllation Date. The Initial Repay- ment Calculation Date, as such term is used in the Note, shall hereinafter mean January 1, 1995. 3. QgtstAudi ng. r-inc,iv _and Accrued Interest . Borrower and Agency hereby agree that as of the date this Endorsement was executed, the total outstanding principal under the Note is equal to TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-FIVE DOLLARS ($2,923,675.00) and the total accrued and unpaid interest is equal to ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). 4. Full Force and Effect. Except as expressly modified by this Endorsement, the Note shall remain unmodified and in full force and effect. Exhibit "A" Psniinous�a0003uimz,s.4 ev�us+ Page 1 of 2 THIRD AMENDMENT TO OWNER PARTICIPATION AGREE- MENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY This Third Amendment to Owner Participation Agreement (the "Third Amendment") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and ABDELMUTI DEVELOPMENT COMPANY, a California general partnership ("Participant"). A. On or about May 28, 1991, Agency and Participant entered into an Owner Participation Agreement (the "Original OPA") for the development of a commercial building and related improvements (the "Project") on certain real property (the "Site") located at the corner of Main Street and Pacific Coast Highway within Agency's Main. Pier Redevelopment Project Area. On or about November 4, 1991, Agency and Participant entered into a First Amendment to Owner Participation Agreement (the "First Amendment") relating to the Project. On or about August 31, 1992, Agency and Participant entered into a Second Amendment to Owner Participation Agreement (the "Second Amendment") relating to the Project.. The Original OPA, the First Amendment, and the Second Amendment are collectively referred to herein as the ."Existing Agreement." B. On or about November 16, 1992, Participant executed that certain "Promissory Note For Construction Loan To Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Existing Note") 'in favor of Agency. C. Agency and Participant desire to amend the Existing Agreement and to have Participant execute and deliver to Agency an endorsement to the Existing Note, all on the terms and conditions set forth herein. Based upon the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both parties, Agency and Participant -hereby agree as follows: 1. Section 201.4 of the "Construction Costs; Construction in its entirety as follows: Existing Agreement, entitled - Loan," is hereby amended to read F=11=14E204MM2103243.4 I L111194 4. Cons ruction __Costs. ConsrlUction Loan. In addition to those design, engineering, and construction costs for which -Agency may be responsible under subpara- graph 3 above, Agency shall provide Agency Assistance in the form of a loan, as evidenced by the Existing Note and modified by that certain "Endorsement To Promissory Note For Construction Loan to Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Endorse- ment") in the form attached hereto Exhibit "A." Partici- pant shall execute the Endorsement and deliver the same to Agency concurrently with the execution and delivery of this Third Amendment. It is understood that the Existing Note, as modified by the Endorsement, supersedes the Construction Loan form set forth as Attachment No. 5 to the'Existing Agreement. The principal amount of the Existing Note, as modified by the Endorsement, is THREE MILLION NINE .HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00). As Of '-the date of this Third Amendment, Agency has disbursed to Participant the sum of TWO MILLION NINE HUNDRED SEVENTY- FOUR THOUSAND SIX HUNDRED SEVENTY-ONE ($2,974,671.00) pursuant to the Existing Note (exclusive of sums disbursed by Agency for public improvements for which Agency is financially responsible under. the Existing Agreement), Participant has repaid to Agency the sum of FIFTY-ONE THOUSAND FORTY-SIX DOLLARS ($51,046.00), the outstanding principal under the Existing Note, as modified by the Endorsement, is TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-FIVE DOLLARS ($2,923,625.00), and the total accrued and unpaid :interest under the Existing Note, as modified by the Endorsement, is ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). Agency and Participant agree that as of the date of this Third Amendment, Participant has satisfactorily completed its obligations under the Existing Agreement for development of the Project on the Site and that no further loan disbursements are needed by Participant with respect thereto, with the exception, however, that Participant shall be entitled to disbursements of additional loan funds (in an amount which, when combined with the disbursements previously made, does not exceed the total principal amount of the Existing Note, as modified by the Endorsement) for the construction and installation of tenant improvement items on the second and third floors of the building. Participant shall repay the loan to Agency in accordance with the terms and conditions of the Existing Note, as modified by the Endorsement. Generally, the Existing Note, as modified by the Endorsement, shall be payable in monthly installments fully amortized over fifteen (15) years commencing upon the Initial Repayment F=II I4VXM o U103us.4 ItILIM - 2 - Commencement Date referred to therein. Interest shall accrue from the time of disbursement at an interest rate of seven percent (7%) per annum; provided, however, that no interest shall accrue during the period commencing January 1, 1994, and ending December 31, 1994, on any funds previously advanced or on any funds advanced between the date of this Third Amendment and December 31, 1994. The Existing Note, as modified by the Endorsement, is secured by a first trust deed on the Site (the "Deed of Trust") which was recorded as Document No. 93-0105327 on February 19, 1993, in the Official Records of the Orange County Recorder's office. All references to the Deed of Trust in the Existing Agreement, as modified by this Third Amendment, shall be deemed to refer to said recorded document, which shall supersede the form deed of trust set forth as Attachment No. 6. 2,. Section 201.8 of the Existing Agreement, entitled "Differential Rent Payment," is hereby amended to read in its entirety as follows: S. pifferential Rent Payment. on the first day of each month of the "Differential Rent Payment Period," Agency shall pay to Participant, in advance, the "Differential Rent Payment" for the "Differential Rent Payment Building Area." As used herein, the term "Differential Rent Payment Period" shall mean the period commencing on January 1, 1995, and terminating on December 31, 2017. Notwith- standing the foregoing, in the event that, prior to December 31, 2017, the City and Agency determine to require a change of use of the upper -floor office/commercial space within the building on the Site to residential uses, the Differential Rent Payment Period shall terminate on such earlier date that is the latest of the following: (i) the date Agency has fully performed its obligations under Section 201.3 (payment for costs of conversion) ; (ii) the date Agency has fully performed its obligations under 201.6 (provision of code - required parking for residential units); and (iii) the date on which a final Certificate of occupancy is issued by City with respect to the converted upper -floor (residential) space. As used herein, the term "Differential Rent Payment Building Area" shall mean the total rentable floor area (excluding elevator shafts, stairways, and exterior balconies) of the second floor and one-half of the third floor in the building located on the Site. Agency and Participant agree that the total rentable floor area on the second floor of the building is 14,318 square feet, =1129 IMOoM12103243A tirf2f94 -3- that the total rentable floor area on the third floor is 11,964 square feet and, accordingly, that the total 'Differential Rent Payment Building Area on which the Differential Rent Payment provided for in this Section 201.8 is to be calculated is 20,300 square feet (14,318 square feet plus 111,964 square feet x .501 = 20,300 square feet) . As used herein, the term "Differential Rent Payment" shall mean the remainder, if any, derived during each month of the Differential Rent Payment Period by sub- tracting the "Contract Rent" for such period from the "Guaranteed Rent" for such period. Notwithstanding the foregoing, the amount of the Differential Rent Payment shall be adjusted annually at the end of each calendar year during the Differential Rent Payment Period such.that the total of the Differ- ential Rent Payments for such year do not exceed the remainder, if any, derived by subtracting the total "Contract Rent" for that year from the total "Guaranteed Rent" for that year. Any adjustment to the Differential Rent Payment required by operation of this paragraph, including, if applicable, a refund by Participant to Agency, shall be made at the time the last monthly Differential Rent Payment would ordinarily be due for that year (i.e., on or before December 1).- In no event shall the total of the Differential Rent Payments cal- culated pursuant to this Section 201.8 for any calendar year be.less than zero. Example No. 1- The Guaranteed Rent for the entire 1995 calendar year is Four hundred Thirty -Eight Thousand Four Hundred Eighty Dollars ($438,480.00) ($1.80 per square foot per month x 20,300 square feet x 12 months) or $36,540.00 per month. Assume that the Contract Rent for January 1995 is $30,000. In this circumstance, Agency would make 'a Differential Rent Payment to Participant on January 1, 1995, of $6,540.00 ($36,540.00 - $30,000.00 $6,540.00). Further assume that the Contract Rent for each of the months from February 1995 through October 1995 is $36,540.00 per month. In this circum-, stance, Agency would crake no Differential Rent Payment to Participant during any of these -months ($36,540.00 - $36,540.00 $0). Further assume that the Contract Rent for November 1995 is $43,080.00. In this circumstance, Agency would make Psniin 14rA)-M%21a3us.4 ienir% -4- no Differential Rent Payment to Partici- pant for November, but Participant would not be required to refund any portion of the January 1995 Differential Rent Payment at this time. Further 'assume that the Contract Rent for December 1995 is $43,080.00. In this circumtance, Participant would refund to Agency the sum of $6,540.00 (since the total Contract Rent for 1995 exceeded the total Guaranteed Rent for that year), but Participant would be permitted to retain the $6,540.00 amount by which the total Contract Rent for 1995 exceeded the total Guaranteed Rent for 1995, and this sum would not be carried forward or consi- dered in determining the amount of any Differential Rent Payments (or adjust- ments thereto) in the succeeding calendar year or years. As used herein, the term "Contract Rent" shall mean the total rent payable by all tenants leasing space within the Differential Rent Payment Building Area. In calculating the Contract Rent, the following rules shall apply: , U) Rent from tenants shall include the following: (i) all charges by the landlord to the tenant for occupancy of space in the building (including exterior balcony areas) on the Site, whether fixed, percentage, or other- wise; and (ii) any "Triple Net Costs" payable by the tenant pursuant to its lease. As used herein, the term "Triple Net Costs" shall include all of the following items, but only if and to the extent payable by a tenant pur- suant to its lease for the period in question: (x) any "Taxes" levied and assessed upon the Site and the underlying realty; (y) the cost of any insurance that Participant elects to maintain on the Site or the improvements thereon, including, but not limited to, public liability and property damage insurance and fire and extended coverage and/or "All Risks" insurance, with such endorsements and/or additional coverages as Participant may deem appropriate; and (z) "Common Area Expenses." As used herein, the term "Taxes" shall include amounts payable by tenants for any form of real estate tax or assessment, general, special, ordinary, or extraordinary, and any improvement bond or bonds, imposed or levied at any time by any governmental authority, as F=1121014820-000312103245.4 11/11/94 - 5 - against any legal or equitable interest of Participant or the tenant, or both, in the premises or in the underlying realty. As used herein, the term "Common Area Expenses" shall mean all sums payable by tenants for the repair, maintenance, and replacement of any equipment, facilities, and structures of the common areas on the Site (but not within the spaces exclusively leased to the tenants), including without limitation: general mainte- nance and repairs, replacement, painting, cleaning, sweeping, and janitorial services; maintenance, repair, and replacement of toilets, floors, walls, ceilings, roofs, skylights, windows, sidewalks, curbs, signs, sprinkler systems, planting and landscaping, lighting, and other utilities, directional signs and other markers and bumpers; main- tenance, repair, and replacement of fire protection systems, lighting systems, storm drainage systems and other utility systems; personnel to implement any such services including, if Participant deems necessary, the cost of security guards; on -site costs and personnel expenses in managing the property, costs and expense pertaining to any security alarm system; and any amount payable by tenants for Participant's actual cost for the accounting, bookkeeping, and collection of the Common Area Expenses. (2) Rent from tenants shall exclude the following: M late charges, penalties, and interest payable by tenants pursuant to their leases; (ii) security or cleaning deposits daring the period any such amounts are held by Participant as security for the tenant's performance of its obligations under its lease (including without limitation cleaning of the premises upon vacation thereof); and (iii) Participant's income (if any) from telephones and vending machines located on the Site. (3) Contract Rent shall be calculated based upon the leases and rental agreements in effect from time to time, regardless of whether or not Participant actually receives the rent provided for therein. Participant leases space within the Differential Rent Payment Building Area to Tenant A for the period of January 1, B3 IW14dlJWM\21o3245.4 11/11194 - 6 - 1995 - December 31, 1995. Tenant A fails to pay the rent for the month of December 1995 and vacates the premises on Decem- ber 31, 1995. The Contract Rent calcula- ted pursuant to this Section 201.8 includes the December 1995 rent attribu- table to Tenant A's lease notwithstanding that Participant did not receive the •• rent. Participant leases space within the Differential Rent Payment Building Area to Tenant B for the period of January 1, 1995 - December 31, 1995. Tenant B defaults on its obligation to pay rent commencing in March 1995. Participant terminates Tenant B's lease and is required to file an unlawful detainer action against Tenant B to remove Tenant B from the premises. Participant recovers possession of the premises on July 1, 1995. The Contract Rent includes the rent attributable to Tenant B' s lease for the period from January 1, 1995 - June 30, 1995, notwithstanding that Participant did not receive the rent from March 1995 - June 1995; the Contract Rent does not include the rent.attributable to Tenant B's lease after July 1, 1995, since Tenant B's 'lease has been termi- nated and the premises are available for occupancy by another tenant after that date. (4) In the event Participant itself occupies space on the second or third floors of the building or leases such space to any person or entity affiliated with Participant (including without limitation Jack's Surf and Sport or Ahmad Abdelmuti), the portion of the Contract Rent attributable to such occupancy or lease shall be deemed to be the greater of the actual rental payable pursuant to the lease or the pro rata portion of the Guaranteed Rent attributable to such space. Example: Participant leases 6,000 square feet of the net rentable area (excluding elevator shafts, stairwells, and exterior balconies) on the second floor of the FS2%11TO 14S20.=\21Q324$., l u»►9+ - 7 - building to Jack's Surf and Sport for the period of January 1, 1995 - December 31, 1995, at a total rent (including Triple Net Costs) of $1.60 per square foot. The Guaranteed Rental Rate for the Differen- tial Rent Payment Building Area for such period is $1.80 per square foot ($1.55 per square foot plus Triple Net Costs of 25 cents per square foot). The portion of the Contract Rent attributable to the Jack's Surf and Sport lease on the second floor for such period is Ten Thousand Eight Hundred Dollars ($10,800.00) per month ($1.80 per square foot x 6,000 square feet = $10,800.00). (5) From the effective date of this Third Amendment through the entire Differen- tial Rent Payment Period, Participant shall submit to Agency for approval all leases of space on the second and third floors of the building to the extent such leases provide for payment of rent (including Triple Net Costs) at less than that space's pro rata portion of the Guaranteed Rent. Agency shall approve or disapprove such submittals within fifteen (15) business days after receipt of (i) a copy of the proposed lease and (ii) Participant's written request for approval. Agency's role in reviewing and approving leases shall be limited to: (i) determining whether the proposed use is a permitted use of the premi- ses under City's and Agency's ordinances and regulations and (ii) determining whether the business terms .of the lease are reasonable from the landlord's standpoint in order to minimize the risk to Agency of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder. Approval of such requests) shall not be unreasonably denied. In the event Agency disapproves a lease on the ground that the rent provided for in the lease is less than fair rental value (and thereby subjects Agency to an unaccept- able risk of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder) , Agency shall notify Participant in writing at the time of such disapproval of Agency's opinion regarding the fair rental value for the premises in question and the minimum acceptable rental amount required to obtain Agency's approval. In the event Participant leases space on the second or third floors of the building at a rental rate PM112 MSZ).OM9 2103245•4 11111/94 - 8 - less than the pro rata portion of the Guaran- teed Rent after Agency has disapproved such lease or prior to the date Agency approves the same, nothing herein is intended to render such lease invalid or unenforceable, and, if Participant has simply failed to obtain Agency's approval in advance, nothing herein shall prohibit Participant from seeking Agency's approval after the fact or limit or restrict Agency's obligation not to unreason- ably deny such approval; provided, however, that if Agency reasonably disapproves any such lease, the portion of the Contract Rent attri- butable to such lease shall be deemed to be the greater of the actual rent payable pursuant to the lease or such greater amount of rent that Agency has reasonably determined is the fair rental value for the premises at such time (but not to exceed such tenant's pro rata portion of the Guaranteed Rent), based upon the other approved leases in the building on the Site and prevailing market rents in the vicinity for commercial/office space similar to the space leased by such tenant. Notwithstanding any other provision in this Agreement, Participant shall not be required to seek Agency's approval of any minor amendments or'modifications to leases on the second or third floors of the building which amendments or modifications do not impact the rent payable by the tenant or the term of the lease. (6) The portion of the Contract Rent attributable to the second and third floors of the building shall be zero for the following spaces: (i) vacant space (i.e., unleased and unoccupied) and (ii) space that is leased but for which no rent is payable (e.g., with respect to new leases prior to the rent com- mencement date, subject to Agency's approval rights set forth in subparagraph (5) above). (7) 3n determining the portion of the Contract Rent derived from the third floor space in the building, all third floor rents shall be accumulated and then divided by two -in order to obtain an average contract rental amount for said floor without regard to the particular location of tenants on that floor. Fsx 11=1<asa4 %2103245.4 11111t% - 9 - For the month of January 1995, 3, 000 square feet of net rentable area on the third floor is unleased and unoccupied; 1,000 square feet of net rentable area on the third floor is leased but no rental is yet due and payable; 3,000 square feet of net rentable area on the third floor is leased at a rate of $1.40 per square foot gross rent (including Triple Net Costs); and the remaining 4,964 square feet of net rentable area on the third floor is leased at a rent of $2.25 per square foot (including Triple Net Costs) . The"portion of the Contract Rent attri- butable to the third floor in the build- ing for the month of January 1995 is $7,684.50, calculated as follows; (3,000 sq. ft. x $1.40 per sq. ft.) + $7,684.50 2 As used herein, the term "Guaranteed Rent" shall mean the product derived by multiplying the Differential Rent Payment Building Area (i.e., 20,300 square feet) by the "Guaranteed Rental Rate" in effect from time to time during the Differential Rent Payment Period. As used herein, the term "Guaranteed Rental Rate" shall mean for each month during the Differential Rent Payment Period the sum of (i) ONE DOLLAR AND FIFTY-FIVE CENTS ($1.55) per square foot of net rentable area within :the Differential Rent. Payment Building Area, with such amount adjusted periodically by the "CPI Adjustment" or "Fair Rental Value Adjustment" calculated as provided hereinbelow, plus (ii) FIVE THOUSAND SEVENTY-FIVE DOLLARS ($5,075.00) (an assumed and fixed rate of $0.25 per square foot allocable to "Triple Net Costs" multiplied by the 20,300 square feet of space located within the Differential Rent Payment Building Area) .. The portion of the Guaranteed Rental Rate determined pursuant to clause M of the preceding sentence shall be recalculated commencing January 1, 1996 (the first "Adjustment Date") and -on January 1 of each calendar year thereafter during the Differential. Rent Payment Period (the subsequent "Adjustment Dates") by multiplying the, portion of the Guaranteed Rental Rate determined pursuant to clause (i) of the preceding sentence for the preceding calendar year (the "Base Year Guaranteed Rental Rate") by a frac- tion in which the numerator is the CPI for the third month prior to each such Adjustment Date and the denomi-. nator is the CPI for the 15th month prior to each such Adjustment Date. As used herein, the term "CPI" shall i=1IT0I4M0MM%.2105US-4 IMIM -10- mean the United States Department of babor, Bureau of Labor Statistics, Consumer Price Index For Urban Wage Earners And Clerical Workers, Los Angeles -Anaheim - Riverside average, sub -group, "All Items" (1982-84 r 100). In the event said CPI index is discontinued or is not available for purposes of calculating the CPI Adjustment, the parties shall.use a comparable index in determining the CPI Adjustment. As an alternative to the CPI Adjustment, at the sole discretion of Agency, Agency may require that the Base Year Guaranteed Rental Rate be adjusted on an Adjustment Date by utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Base Year Guaranteed Rental Rate be adjusted by such appraisal process to an amount below the Base Year Guaranteed Rental Rate then in effect. In the event that the adjustment to the Base Year Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such adjusted portion of the Guaranteed Rental Rate shall remain in effect for a period of three (3) years, and said portion of the Guaranteed Rental Rate shall be adjusted on an annual basis by the CP1 Adjustment, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency. Agency shall have the option of leasing any vacant space on the second or third floors of the building at the Guaranteed Rental Rate and on the terms otherwise contained within Participant's standard form lease. 3. Agency hereby acknowledges that Participant has fully performed its obligations under Article III of the Existing Agree- ment to construct the Project on the Site. Pursuant to Section 309 of the Existing Agreement, Agency agrees to furnish Participant with a Certificate of Completion for the Project within thirty (30) days after Agency's approval of this Third Amendment. 4. This Third Amendment (including the Endorsement modifying the Existing Note) and the provisions of the Existing Agreement which remain in effect integrate all of the terms and conditions of the agreement between the parties, and supersede all negotiations or previous attempts between the parties with respect to the subject' matter hereof. S. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and 'execute this Third Amendment, that all authorizations and approvals required to make this Third Amendment binding upon such party have been obtained, and that the person or persons executing this Third Amendment on behalf of such parties have been fully authorized to do so. F=112 IMO-MM2103Z1s.4 u►11/94 -11- The effective date of this Third Amendment shall be the date of execution by the Agency. REDEVELOPMENT AGENCY OF THE CITY OF IRJNTINGTON BEACH 1994 By: //4etc-Ie ' Chairperson ATTEST: Secretary APPROVED AS TO FORM: C;4 4-Q�� Agency Counsel /i-.za-S fo ABDELMUTI DEVELOPMENT COMPANY, a California general partnership , 1994 By: t Genei-al Partner f YS21112 IUM-fl0 U103US.i 111111M -12- EXHIBIT "A" ENDORSEMENT TO PROMISSORY NOTE FOR CONSTRUCTION LOAN TO ABDELMUTI DEVELOPMENT COMPANY PURSUANT TO OWNER PARTICIPATION AGREEMENT THIS ENDORSEMENT TO PROMISSORY VOTE FOR CONSTRUCTION LOAN TO ABDELMUTI DEVELOPMENT COMPANY PURSUANT TO OWNER PARTICIPATION AGREEMENT (this "Endorsement") is affixed to and forms a part of that certain Promissory Note for Construction Loan to Abdelmuti Development Company pursuant to Owner Participation Agreement dated 21ovember 16, 1992, in the original principal amount of THREE MILLION NINE HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00) ("Note") made by Abdelmuti Development Company, a California general partnership ("Borrower"), in favor of the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic ("Agency"). All capitalized terms not otherwise defined in this Endorse- ment shall have the meaning ascribed to such terms in the Note. The Note is hereby endorsed and modified as follows: 1. Interest Rate. Section 2 of the Note'is hereby deleted in its entirety and replaced with the following: "Interest shall be charged by the Agency on the aggregate of all suds advanced hereunder remaining unpaid, from the date funds are - advanced, at the rate of seven percent (7%-) per annum. Notwithstanding the foregoing, no interest shall accrue on any funds advanced hereunder during the period commencing January 1, 1994 and ending December 31, 1994." 2. Initial Rerayment Calculation Date. The Initial Repay- ment Calculation Date, as such term is. used in the Note, shall hereinafter mean January 1, 1995. 3. Outstanding Principal and Accrued Interest. Borrower and Agency hereby agree that as of the date this Endorsement was executed, the total outstanding principal under the Note is equal to TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-FIVE DOLLARS ($2,923,675.00) and the total accrued and unpaid interest is equal to ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). 4. sill Force and Effect. Except as expressly modified by this Endorsement, the Note shall rertiain unmodified and in full force and effect. Exhibit "A" F'sz 1IWUa2QMV1o32ts.4 ttnit% Page 1 of 2 IN WITNESS WHEREOF, this Endorsement was executed as of this day of , 1994. ABDELMUTI DEVELOPMENT COMPANY, a California general partnership By: a4LI' (vW1X1k' "Borrower" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic Agency Clerk / 3d 1 Chairman "Agency" Exhibit -"A" FM%11=14820-M%2103U5.4 iintM Page 2 of 2 11-04-1994 17:31 213 622 5204 KEYSER rMSTON ASSOC. P.02 S Y IT FMCIM TO BIMX0X 33433 of the CAL ICOXXA M MUXIIRtfift LAN ?SIAD DOLT TO AX O'NYl1t PARTICIpMON by and betv*= the �.fr f • f fj. JR ' • f •1 rf 0 i ' •1 ♦ .d. .f► f 1► ► f•� tl •i f This summary report has bean prepared for the Huntington Beach Redevelopment Agency ("Agony") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Third Amendment to the Owner participation Agreement ("Third Amendment") between the Agency and Abdelauti Development Company ("Participant") related to a 47,050 square foot commercial development. The development is located at the corner of Hain Meet and Pacific Coast Highway in the main pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The Agency costs associated with the financial modifications 'embodied in the proposed Third uaandment to the owner Participation•Agrsomentf 2. The estimated value of the interests conveyed to the Participant, determined at the highest use permitted under the Redevelopment Plant 3. The purchase price paid by the Participant and the reasons for any difference from the fair market value determined for the highest use allowed by the Redevelopment Plarf and 4. The manner in which the proposed project meets the Agancyf's established goals for eliminating blight within the redevelopment project area. This report and the proposed Tblyd Aaandment to the Owner Participation Agreement are to be made available for public inspection prior to the approval of the Third Anent. A. -anx9 '!' VOMN OF Tn The Agency executed an Owner Participation Agreement with Ahmad Abdo anition Kay 2a, 1991, which required the development of a four story retailjatfice complex totaling 47,050 square foot of gross building area. On November 4, 1991 and August 31, 1992 the Agency and the Participant entered into First and Second Amendments to the Owner Participation Agreement. On November 16, 2992 the 1 _,11-04-1994 17:33 213 622 5204 KEYSER MARSTON ASSOC. R.03 Participant executed the Promissory Note for the Construction Loan to Abdelmuti Development Company in accordance with the terms of the Owner Participation Agreement. The original Owner Participation Agreement, the two Amendments to the Agreement and the Promissory Note will be collectively referrad to as the "Agreement" for the purposes of this report. At this time, the Agency and the Participant are proposing to modify the financial terms of the Agreement in the form of a Third Amsndmant to the Axp* ment. The focus of this report is to identify the financial ramifications of the proposed modifications. • 1. In accordance with the terms of the Agreement, the Participant has completed the following activities: a. Domolished the existinq buildings on the subject site and conveyed sufficient property to the Agency to mast the set -back requirements for the construction: of a "Public Plaxa". b. Constructed 47,050 squaw feet of commercial space at the corner of !Rain Street and pacific Coast Highway. c. Contributed a minimum of $1.3 million to the construction of the Improvements. The Agreement allowed the Participant to borrow $3,9800000 from the Agency for construction financing. As of the effeativs date of the propose! Third Amendment, the Participant has borrowed $28974,671. As of January 1, 1994, $113,382 in interest charges had accrued on the Agency loan, and $51,046 in debt service payments bad been made by the Participant. The proposed Third Amendment calls for the forgiveness of interest that would have otherwise been accrued during 1994. Thus, the outstanding principal balance of the Agency loan will be $3,037,007 as of January 1, 1995. The Participant has completed project construction with the exception of tenant improvements for the as yet unleased space. Within the parameters of the Agreement, the Participant has the right to borrow additional funds, up to a maximum total of $3,9e0,oDo, to complete the tenant AVro ements construction. The Agency loan must be fully amortised over a fifteen year term commencing on January 10 1995. The monthly debt services payments will be based on a 7% interest rate, which equates to a 10.79t xortgage constant. Based on the $3,037,007 outstanding balance an of January 1, 1995, the monthly debt service payments total $27,397, which equates to $327,570 2 •,i1- -1994 17:35 213 622 5204 KEYSER MARSTON ASSOC. p•04 annually. The debt service amount will increase commensurately with any additional loan disbursements to complete the construction of tenant improvements. • 2. agency MM="ibilitin Ynn accordance kith the terms of the Agreement, the Agency has completed the rollowinq activities: 00 Conveyed a portion of an Agency -owned parcel in exaharige for the Participant's conveyance of the parca3 used for the Public plaza. 'b. financed $250000 in off -site improvement costs. • c. Compensated the Participant for $120,000 in temporary relocation costs incurred over a twelve month period. d. Provided a construction loan to the project that"Kill be fully amortized over fifteen years, at an interest rate of 7%. The outstanding principal balance as of January It 1999 is $3,0376007. The maximum potential loan amount is $3,9808000. The executed Agreement also requires the Agency to accept the following responsibilities in the futures a. Compensate the Participant for the difference between the base rent for office space of $1.55 per square foot and the actual rent achieved by 20,30O square feat of office space an the second and third floors of the building. The bass rant will increase annually at an &mount equal to the percentage increase in the Consumers • Price Index. b. It required, the Agency moat construct a parking garage adjacent the vita, providing 141 parking spaces to serve the Pro3ect. The Third Amendment includes the following financial modifications to the Agreement terms: a. The rental subsidy payments will not commence until January 1, 3993. These payments will continue through December 31, leis. Under the executed Agreement terms, - the rental subsidy payments would have commenced on January 1, 1994 and continued through December 31, 1017. b. The Agency must pay $.35 per square loot per month in triple net charges to the Participant. These charges will commence on January 1, .1995 and terminate on December 3i, 3Q1s. The charge will remain fixed at $.25 over the entire term of the agreement. 3 .`11-04-1994 17:36 213 622 S204 KEV5ER FIARSTON ASSOC. P.Fn As detailed in the Summary Report submitted for the Second Amendment to the Agreement, the net Agency costs associated with the executed Agreement are $4,961,000. The financial impacts of the modifications proposed in the Third are$ Coat IngXAMM Tcregcne Interest Payments $3g037,007 for 12 Months 1 7% interest Triple Not Charges 20,300 of $ $.25/month for 24 years Total Cost Increases roet Sayinaa - Rent Subsidy Deferral Savings in 1994 (Less) PV Subsidy in 2018 Not Subsidy Deferral Savings Decrease in projected Rant Subsidy Total Cost Savings Total Cost Increase $219,500 -142-292 $766 67 00 $330,300 1 16,100i 6314,100 9415.if�., $730,B00 $ 35,900 As can be seen above, the financial modifications embodied in the Third Amendment result in a projected increase in Agency costs of $350900. This amount represents a less than it increase in the Agency costs projected to be incurred for the implementation of the executed Agreement, which can be considered a nominal increase. C. an VAUM cif TXs X31 TZWWT5 To as COX94AT TO TU M=c%V3XT nsTr. XXXID AT TIM =91M 992 PIWTTSD MWXZ TXa WMzv=APXZXr VL%X The exchange of Participant wid Agency owned properties that occurred in accordance with the executed Agreement has been deemed an equal exchange. The Third Amendment to the Agreement in no way modifies the terms of the -conveyance. D. PO =29 9RiC1 n= BY TM nXTICOAST AIND AiUCWS P'QR AIM VIA-arlmR YROM TX2 "n IMMM ULUR Dy I in I T RD 7M "M The Participant granted an equal amount of land to the project as vas received from the Agency. The Agency and Participant properties embody similar attributes, and have essentially equivalent market values. Thus, there is no difference between the purchase price paid by the Participant and the fair market value determined at the highest use permitted under the Redevelopmant plan: 4 0 11-04-1994 17:38 213 622 5204 KEV5ER MAR570N A550C. P.06 f a. xamn xx wa=cap sae P==0 nonm NMS sal XaMVII RVIS ={= aWA FOR 31=31=xx XXG 8L=WT MITM Tip • The subject site represents a key parcel in the revitalization activities planned for the Bain pier Redevelopment Project Area. The existing inprovemants on the site Mere physically unsound and created a health and safety hazard. in addition, the existing project represented an underutilization of the property, Vhich was rectified by the development of a nev fo= story retail and office mixed -use project. The mixed -use project fulfills the Agency goals of attracting both daytime and nighttime uses to the downtown. E RESOLUTION NO. 263 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING A THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY. OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the `Agency") and Abdelmuti Development Company (the "Participant") entered into a certain Owner Participation Agreement, dated as of May 28, 1991 (the "OPK) for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a officelcommercial use building and other public improvements; and The Agency amended the Agreement on November 4, 1991, and again on August 31, 1992; and The Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and The Participant and the Agency desire to approve a Third Amendment to the OPA (in the form attached hereto as Attachment "A' and incorporated herein) which constitutes the "Amendment' to supplement the terms of the OPA; and The Agency and the City Council of the City of Huntington Beach (the 'City Council') have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with California Health & Safety Code Sections 33431 and 33433; and 51abdelOPA111/10/94 The staff report pertaining to the Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health & Safety Code contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the Agency does resolve as follows: Section 1: The Agency finds and determines that EIR 82-2, certified and approved, including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. Section 2: - The Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelopment Plan, but that such lesser consideration is necessary to secure the commitment of Participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues and providing for high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the OPA. Section 3: The Agency finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. K 51abdelOPAl1119194 Section 4: The Agency approves the Amendment in the form of Attachment "A' and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attomey to be necessary or appropriate to effectuate the OPA as now amended. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting thereof held on this st day of _ November . 1994. Chairman ATTEST: APPROVED AS TO FORM: Agency Clerk A en y Counsel I I_10 f. REVIEWED AND APPROVED: INITIATED AND APPROVED: 11 Ck Executive Director Director of Economic Development 3 5labdelOPA111/9194 Res. No. 263 STATE OF CALIFORNIA } COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH } . I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO BEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 21st day of November, 1994, and that it was do adopted by the following vote: AYES: Members: Silva, Bauer,Robitaille, Moulton -Patterson, Winchell, Leipzig, NOES: Members: Sullivan ABSENT: Members: None Clerk of the Redevelopment Agency of the City of Huntington Beach, Ca. RESOLUTION NO. 6654 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the'Agency*) and Abdelmuti Development Company (the'Participant') entered into a certain Owner Participation Agreement, dated as of May 28, 1991 (the 'OPA7) for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a office/commercial use building and other public improvements; and The City Council amended the Agreement on November 4, 1991, and again on August 31, 1992; and The Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and The Participant and the Agency desire to approve a Third Amendment to the OPA (in the form attached hereto as Attachment `A' and incorporated herein) which constitutes the "Amendment* to supplement the terns of the OPA; and The Agency and the City Council of the City of Huntington Beach (the 'City Council") have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with• California Health & Safety Code Sections 33431 and 33433; and 5labdelOPA111110194 The staff report pertaining to the Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health & Safety Code contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the City Council does'resolve as follows: Section 1: The City Council finds and determines that EIR 82 2, certified and approved, including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. Section 2: The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelcpment Plan, but that such lesser consideration is necessary to secure the commitment of Participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues and providing for high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the OPA. Section 3: The City Council finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington 2 51abdelOPAII 119194 Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. Section 4: The City Council approves the Amendment in the form of Attachment wX and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the OPA as now amended. PASSED AND ADOPTED by the City of Huntington Beach at an adjourned regular meeting thereof held on this 21st day of November , 1994. ATTEST: Mayor APPROVED AS TO FORM: City Clerk C�t�y IsjtPr�e�y t+-tip- 5¢ REVIEWED AND APPROVED: INITIATED AND APPROVED: TitivyAdministrator Director of Economic Development 3 5labdelOPAl1119/94 Res. No. 6654 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 21st of November, 1994 the following vote: AYES: Councilmembers: Silva, Bauer, Robitaille, Moulton -Patterson, Winchell, Leipzig, NOES: Councilmembers: Sullivan ABSENT: Councilmembers: None ���04$a City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California REQUEST FOR CITY COUNCIL/ . REDEVELOPMENT AGENCY ACTION ED 92-39 Date August 31, 1992 Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted to: Submitted by: Michael T. Uberuaga, City Administrator/Executive Dire ` Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development f� Second Amendment to Owner Participation Agreement between Abdelmuti Subject: Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area Consistent with Council Policy? 64 Yes [ j New Policy or Exception L.aj Statement of Issue, Recommendation, Analysis, Funding Source, A ftffn6ye Actions Attachments: 7�t"a 3/ dt- (0 193A p ' %[rY'l;i IM7. Transmitted to the City Council/Redevelopment Agency for consideration is a Second Amendment to the Abdelmuti Development Company Owner Participation Agreement. This Amendment provides for a $500,000 increase in their construction loan and for assistance in relocating to a 3,616 square foot retail space located at 200 Main Street. .41 MOZINA . • MLei 1) Conduct a joint public hearing on the Second Amendment to the Owner Participation Agreement. 2) Adopt City Council Resolution . No. 6'1a'z and Agency Resolution No. a 3 1 authorizing the execution and implementation of the Second Amendment to the Owner Participation Agreement. 3) Approve the reallocation of $620,000 from redevelopment funds previously allocated to cover business losses for this project. The balance of $940,000 will revert to the Main -Pier fund balance. 4) 'Authorize the Chairman and Clerk of the Agency to execute the attached lease with Robert Koury Properties and the lease with Abdelmuti Development. On May 28, 1991, the City/Agency entered into an Owner Participation Agreement (OPA) providing for the Agency to assist Abdelmuti Development Company (Developer) in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and approximately 24,000 square feet of office use on the second and third floors. The location of this proposed project is the northeast corner of Main street and Pacific Coast Highway. On November 4, 1991, the City/Agency approved an amendment to the Abdelmuti OPA providing for a four-story building consisting of 17,140 square feet of new commercial/retail on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fourth floors - for a total of 48,060 square feet. 3 PIO 4/84 /IF 'The participant is now requesting a Second Amendment to the OPA. The purpose of the proposed Second Amendment is to increase the loan amount by approximately $500,000 from the previous maximum of $3.5 million, or $110/square foot, whichever is lesser. Additionally, the participant is requesting relocation assistance at a cost to the Agency not to exceed $120,000. This relocation assistance will be provided as follows: 1) The Agency will lease 3.616 square feet of retail space from Robert Koury Properties located at 200 Main Street (northeast corner of Main Street and Walnut Avenue) which in turn the Participant subleases from the Agency for a term of 13 months for $1.00 (one month is to allow tenant improvement work to be completed). Note: The participant must start construction by January 1, 1993, or costs of the lease must be paid for by Mr. Abdelmuti for the entire 13 months. 2) If the participant should lease additional retail space for relocation purposes, the Agency will reimburse the participant the difference of $120,000, less the cost of the Koury space for one year. For example: Total relocation budget $ 120,000 Koury lease for one year 98.000 Available to apply to additional relocation space rent $ 21___,590 In order to secure a lease with Koury Properties, the Agency will be required to enter into a five-year lease. In today's financial market, lenders are requiring that income property be at a minimum 90% leased with long-term leases (at least five-year Ieases) to be eligible for take-out financing. Therefore, the Agency is required to enter into a five-year agreement to secure the proposed lease. The Agency's potential exposure (very unlikely) for the additional four years of the lease if the space were to remain vacant would be $445,770. In exchange for the above described loan increase and relocation assistance, the participant is waiving its right to the $1,560,000 in potential business interruption losses previously agreed to in the OPA. Therefore, the Agency has effectively reduced its net financial exposure by $494,230. In addition, the Second Amendment to the OPA provides for the Participant to hire a construction manager, at his cost, for the project, and to use the former Terry Buick site as a construction staging area in conjunction with other property owners on the block. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector Investments in redevelopment project areas. The proposed Owner Participation Agreement Second Amendment obligates the Agency to be responsible for the following: 'OPP i 11 Agency's Responsibilities: The Agency is responsible and shall commit the following to the project as it relates to this Second Amendment: a) Provide a loan at a maximum amount of $4 million or equal to $110 per square foot of building area, whichever is lesser, less $1.3 million participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7%. b) Compensate the participant for legitimate temporary relocation costs for a 13--month period. The Agency shall lease, on behalf of the participant, 3,616 square feet of ground floor retail space at 200 Main Street in the Koury building. The participant will, in turn, sublease the 3,616 square foot retail space from the Agency at a rental of $1.00. In the event the participant leases additional temporary business space in addition to the Koury building, the Agency shall reimburse the participant the rent paid on the additional temporary business location in a total not to exceed $120.000, less the rent paid by the Agency to the Koury building. In addition to the Agency costs detailed above, as a part of the Agreement, the Agency accepts a contingent liability to lease 3,616 square feet of space for an additional four year term. The maximum potential cost to the Agency, which would be incurred in the event the space cannot be subleased during the four year period, is $445,770 in nominal dollars ($340,170 in net present value terms). This reflects the base rent rate of $2.00 per square foot per month, plus $ .27 per square foot per month triple net charges, escalated at 5% annually over the four year term. On May 28, 1991, funds totaling $4,810,000, were originally allocated for this project - $1,560,000 of that was for potential business interruption losses. The funds needed as it relates to this Second Amendment are a maximum of $500,000 for an increase of the construction loan and a maximum of $120.000 for relocation for a total of $620,000. The $620,000 required for this second amendment is to be reallocated from the $1,560,000 previously allocated as stated above. The balance of $940,000 will revert to the Main -Pier fund balance. 1) Continue action on the Owner Participation Agreement and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. 1) Health and Safety Code Report 33433 2) Second Amendment to the Owner Participation Agreement 3) Redevelopment Agency Resolutions 4) City Council Resolutions 5) Koury Lease 6) Abdelmutl Lease MTU/BAK/KBB:jar I226r 3 SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a SECOND AMENDMENT TO AN OWNER PARTICIPATION AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and AHMAD ABDELMUTI Thi,= summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the Cal*fornia Health and Safety Code. This report sets forth certain de`ra i s of the proposed Owner Participation Agreement ("Agreement") between the Agency and Ahmad Abdelmuti ("Participant") for the development of 18,061 square feet -of commercial space and 28,989 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition costs, infrastructure costs, public parking costs, temporary relocation costs, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; and 3. The purchase price to be paid by the Participant for the interests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. T.. SALIENT POINTS OF THE AGREEMENT 1. Darticiaant Responsibilities Under the proposed Agreement, the Participant agrees to construct ground floor retail space of 18,061 square feet, and second,third and fourth floor office space totaling 28,989 square feet. The four-story development will comply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second and third stories to either a residential or restaurant use at some point in the future. H The Participant must contribute $1.3 million to the construc- tion of the improvements. The Participant will borrow the remaining funds required to complete construction from the Agency on the basis of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site and dedicate sufficient prc,n-arty to meet the set- back requirements for the constructi-f- of a "Public Plaza". The portion of the Participant Parcel to be conveyed to the Agency for the Plaza is defined as the "Remainder Parcel". 2. Agency, Responsibilities The Agency is responsible for and shall commit the following to the project: a. Convey approximately 75% of the Agency -owned parcel ("Agency Parcel"), or the portion n0cessary to accommo- date 18,061 square feet of building area on the ground floor of the Project. b. Finance off -site improvement costs estimated at $250,000. C. If required, construct a parking garage adjacent to the site, providing 121 parking spaces to serve the Project. d. Provide a loan at a maximum amount of $4 million, or $110 per square foot of building area less the $1.3 million Participant contribution to the Project. The Agency loan will be payable in monthly instal'-:,.2nts, fully amortized over fifteen years, at an interest rate of 7%. e. Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor and loot of the fourth floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to insure that a reasonable rental rate is being assessed. f. Compensate the Participant for legitimate temporary relocation costs for a twelve month period. On behalf of the Participant, the Agency shall lease 3,616 square feet of ground floor retail space at 200 Main Street. The Participant will sublease the 3,616 square foot retail space from the Agency for 1 year for $1.00. In the event the Participant leases temporary business space in excess of the 3,616 square feet, the Agency shall reim- burse the Participant for the rent paid on the additional temporary business location. The total amount of rent to be paid by the Agency cannot exceed $120,000. 2 B. COST OF AGREEMENT TO AGENCY The estimated costs of the Agreement to the Agency are as follows: Agency Land Acquisition Off -site Costs Parking Structure - 121 Spaces @ $13,750 PV of Interest Gap for Agency Loan Differential Rent Payment for Office Temporary Relocation Costs (Koury Building) Temporary Relocation Costs (Additional Bldg) Total Costs to Agency (Less) Property Tax Increment Revenues (Less) Capitalized Value of Parking Revenues Net Costs to Agency $1,194, 000") 250,000 1,664,4n0 915 , O0001 1,264, .Wco) 94,000«} 26,000 $5,407,bCD (220,000) _(430,000) $4,757,1-inO 11)75% of Gosney parcel, which was acquired for $1,035,000; 23% of Terry Buick parcel, which was acquired for $1,800,000. u'Opportunity cost of issuing a $3.87 million loan at 7.0% interest versus earning 8.3% interest on invested funds. O"Based on achievable rent of $1.00 per square foot from KMA market analysis, and defined fair market rent of $1.55 per square foot. "'Twelve month rent expense on 3,916 square feet of space at rent of $2.00 per square foot per month. Participant pays maintenance and utilities expenses. «Reimbursement to Participant for rent paid on the additic^al temporary business location, equal to $120,000 less the rsnt paid by the Agency on the Koury building. In addition to the Agency costs detailed above, as a part of the Agreement, the Agency accepts a contingent liability to lease 3,616 square feet of space for an additional four year term. The maximum potential cost to the Agency, which will be incurred in the event the space cannot be sub-lea3ed during the four year period, is $445,770 in nominal dollars ($240,170 in net present value terms) . This reflects the base rent rate of $2.00 per square foot per month, plus $.27 per square foot per month triple net charges, escalated at 5% annually over the four year term. C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED TO THE 3 PARTICIPANT DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The Agency will convey the necessary portion of the Agency parcel to accommodatc: 18,061 square feet of building area on the ground floor-,. the project. In return, the Participant will grant to the Project a portion of the Remainder Parcel required for the _construction of the Public Plaza. The transfer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for the purposes of this Agreement, are considered an equal exchange. D. PURCHASE PRICE PAID BY PARTICIPANT AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOP- MENT PLAN The Participant is-- granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant Parcels embody similar attributes, and have essentially equivalent market values. The Participant's pur..chase price for the Agency Parcel shall be the sum of One U:.11ar ($1.00) , payable in cash at the close of escrow. Thus, the transaction represents an even exchange. 4 SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HU1%7INGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY This Second Amendment to Owner Participation Agreement (the "Second Amendment") is entered into by and between the REDEVELOP- MENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic (the "Agency"), and ABDELMUTI DEVELOPMENT COMPANY, a California general partnership (the "Participant"). A. On or about May 28, 1991, Agency and Participant entered into an Owner Participation Agreement for the development of a commercial building and related improvements (the "Project") on certain real property (the "Site*) located at the corner of Main Street and Pacific Coast Highway within Agency's Main Pier Redeve- lopment Project Area. On or about November 4, 1991, Agency and Participant entered into a First Amendment to Owner Participation Agreement relating to the Project. The Oumer Participation Agreement and the First Amendment to Owner Participation Agreement are collectively referred to herein as the "Existing Agreement." B. Agency and Participant desire to amend the Existing Agreement as provided herein. c Q v_ E N A N I E: Based upon the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both parties, Agency and Participant hereby agree as follows: 1. Section 201.4 of the Existing Agreement, entitled "Construction Costs; Construction Loan," is hereby amended to read in its entirety as follows: 14. Construction Costs: Construction. Loan. In addition to those design, engineering, and construction costs for which Agency may be responsible for under subparagraph 3 above, Agency shall provide Agency Assistance in the form of a loan, as evidence by the construc- FS211121014320-000112001734.4 0!l21192 tion loan document attached hereto and incor- porated herein as "Attachment No. 5" (the "Construction Loan") to Participant for those verified costs in excess of One Million Three Hundred Thousand Dollars ($1,300,000) which are Participant's responsibility and are expended by Participant in demolishing and clearing the existing improvements from the Participant Parcels and planning, designing, engineering, and constructing the Project. The maximum amount of the Construction Loan shall not exceed the lesser of (i) an amount based on One Hundred and Ten Dollars ($110.00) per square foot of building costs including tenant improvements minus the $1,300,00 contribution by Participant or (ii) Four Million Dollars ($4,000,000). In no event shall Agency have any obligation to disburse any of the Construction Loan funds until Participant has provided satisfactory evidence to Agency that Participant has expended its entire $1,300,000 commitment as set forth herein. Participant's construction contract with its general contractor and the budget for Project costs (the "Budget") shall be reviewed and approved in writing in advance by the Executive Director of the Agency. The Budget shall include a reasonable contingency. The Budget shall not include an expense for a developer fee or other profit to Participant. Verification of approved costs pursuant to the Budget shall accompany any request for disbursement of funds. Agency shall act reasonably in considering any amendment to the Budget in the event of Project cost overruns. However, Project change orders beyond the scope of the original Project shall not be included. Agency shall have the option of making loan disbursements directly to Participant or through a construction escrow or similar account. In the event Agency elects to utilize an escrow account or retain a disbursement agent or similar professional to assist Agency in performing its obligations and protecting its interests as a lender, Agency shall be solely responsible for the costs thereof. F42X11Z014b20-000112001n4.4 OWIM -2- Participant's contract with the construc- tion manager for the Project shall be subject to the approval of Agency's Executive Director (not to be unreasonably withheld) for the purpose of enabling Agency to verify that the construction manager is qualified to oversee the contractor's work and protect Agency's and Participant's mutual interest in the proper application of Participant's equity investment and Construction Loan disbursements to completion of the Project. Participant shall be solely responsible for the cost of retaining its construction manager; provided, that such cost is an eligible Project cost that may be included in calculating Partici- pant's investment and for which Construction Loan funds may be applied. Participant acknowledges that City/Agency's Public Works staff may desire to exercise their normal construction management oversight of the Offsite Improvements being constructed by Participant on behalf of Agency (see Section 302 and Attachment No. 4, 1 III), and in such event Participant shall cause its construction manager to coordinate with Public Works. During the course of Participant's expenditure of Participant's $1,300,000, Participant shall report to Agency's Executive Director or designee in such detail as may be reasonably requested by Agency in order to enable Agency to verify that Participant's expenditures are consistent with the approved Budget and that work is satisfactorily progressing. In addition, each request by Participant for a loan disbursement shall be accompanied by written certification by Participant's construction manager, supported by documentation (including construction photographs if necessary) in such detail as is custor.�arily required by construction lenders on similar projects in Southern California, to enable Agency (or its agent retained for that purpose) to verify satisfactory progress on work for which disbursements are requested. Requests for disbursements shall be made no more frequently than monthly. Provided that Participant's submittal is reasonably satis- factory to Agency's Executive Director or designee (including any agent retained by Agency for that purpose), disbursements shall M1121014620aOIN20617M.4 Otr IM - 3 - be made within fifteen (15) business days after receipt. Agency recognizes that time is of the essence in performance of Agency's obligation to disburse the Construction Loan proceeds: Participant shall repay the loan to Agency in accordance with the terms and conditions of the Construction Loan set out in Attachment No. 5 attached hereto and incor- porated herein by this reference. Generally, the Construction Loan shall be payable in monthly installments fully amortized over fifteen (15) years commencing upon the earlier of (i) issuance of certificate of occupancy for the ground floor commercial/retail portion of the Project or (ii) date for completion of the ground floor cormercial/retail portion of the Project in the Schedule of Performance. Interest shall accrue from the time of disbursement at an interest rate of seven percent (7%) per annum. The Construction Loan shall be secured by a first trust deed on the Site (the "Deed of Trust"). The Deed of Trust shall be substan- tially in the form of Attachment No. 6 attached hereto and incorporated herein by this reference. The deed of Trust shall be recorded at the time Agency conveys the Agency Parcel to Participant. If the Agency elects to obtain a title insurance policy insuring the enforceability or priority of its deed of trust, Agency shall pay the premium therefor." 2. Section 201.5 of the Existing Agreement, entitled "Business Interruption Costs," is hereby amended to read in its entirety as follows: "5. Bus iness_Interrrupti-on Co ts. Agency agrees to lease on behalf of Participant (i) the approximately 3,616 square feet of ground floor retail space now available for lease in the building owned by Robert J. Koury and located at 200 Main Street. Such lease by Agency shall be for a term of not less than thirteen (13) months, commencing on October 1, 1992, and ending on October 31, 1993, all in substantial conformity with the form of lease attached hereto as Exhibit "A." Participant agrees to sublease said premises from Agency n21J1Z0J48204W1U00]7M.4 OWIM -4- ff for the aforesaid thirteen (13) month period at a rental of $1.00 and, in addition, Parti- cipant agrees to pay for (i) all utilities and maintenance expense associated with Partici- pant's occupancy and (ii) any tenant improve- ments not required to be provided by the landlord pursuant to Exhibit "A" (such as carpeting, painting, and shelving). If Agency's lease term exceeds thirteen (13) months, Participant's sublease shall still be for thirteen (13) months only. In this regard, Participant acknowledges that the thirteen (13) month sublease term is fixed and that, unless Agency approves an extension of such term in writing, Participant shall not be entitled to hold over past the end of the thirteen (13) month term for any reason, including without limitation a delay in completion of the Project on the Site. If for any reason Participant does hold over beyond the thirteen (13) month sublease term, Participant shall be responsible for all of the rent and other occupancy expenses which are the tenant's responsibility under the lease (Exhibit "A") during the holdover period. In addition, Participant agrees to provide a ninety (90) day notice to Agency of Participant's estimated date for vacating the Koury building based upon the progress of construction of the Project at that time. In addition to the foregoing, Agency agrees to provide temporary relocation assistance to Participant as set forth in this paragraph. Participant has represented to Agency that the 3,616 square feet of space in the Koury building referred to in the preceding paragraph is insufficient for Participant's business and that Participant will be required to attempt to secure another temporary business location along or near Main Street for the construction period of the Project. Agency shall have no responsibility for securing any such additional temporary business location for Participant and no responsibility under any lease or other occupancy agreement that Participant may enter into with respect to such additional temporary business location. In the event that Partici- pant (or related person or entity) does enter into such an agreement, however, and does in FS2U M0I48204=112001734.4 OL121M - S - fact occupy and conduct business from such location (in addition to the business conducted from the Koury building) during the construction period of the Project, Agency agrees to reimburse Participant for rent paid to the owner(s) of such additional temporary business location in a total amount not to exceed the sum of (i) One Hundred Twenty Thousand Dollars ($120,000) less (ii) the amount of rent required to be paid by Agency to the owner(s) of the Koury building during the period of Participant's sublease of said building as set forth in the preceding paragraph herein. Participant shall provide Agency a copy of the lease for the additional temporary business location at such time as Participant enters into same. Agency's reim- bursement payments shall then be calculated, prorated monthly over the 13-month period of Participant's sublease of the Koury building, and paid to Participant on the first day of the month (at the time rent becomes due). The purpose of this Section 201.5 is to provide Participant with a temporary business location or locations during construction of the Project on the Site. Participant accepts the sublease of the Koury building and Agency's limited reimbursement obligation with respect to the additional temporary business location (if any) in lieu of any other rights against the City or Agency for damages and business interruption losses, including without limitation the rights set forth in Section 201.5 of the Existing Agreement. Notwithstanding the foregoing, if Participant defaults hereunder by failing to obtain a building permit and commence construction of the Project on the Site prior to January 1, 1993 (commencement of construc- tion being defined for purposes of this Section 201.5 as demolition of the existing building on the Participant Parcel and commencement of the foundation for the new building included in the Project), Participant agrees to reimburse Agency for (f) all rental payments required to be made by Agency under its lease of the Koury building for the entire period of Participant's sublease (including the period prior to January 1, 1993, but less FS21112X014E20-0001=01734.4 OE/IM - ( - income attributable to Agency's mitigation of its damages) and (ii) all rent reimbursements paid by Agency to Participant for the additional temporary business location." 3. A new Section 201.9, entitled "Staging Area," is hereby added to read in its entirety as follows: "9. Staging Area. Agency agrees to allow Parti- cipant to utilize the former Terry Buick property at Walnut and Sth Streets as a staging area during the course of construction of the Project on the Site, at no cost to Participant. Participant acknowledges that said property may also be used at the same time as a staging area for construction of improvements for other projects within the block bounded by Main Street, Pacific Coast Highway, Sth Street, and Walnut Street. Participant agrees to cause its contractor to cooperate with Agency and any other contrac- tor(s) utilizing the staging area in a fair and reasonable manner." 4. Subparagraph (ii) in Section 209 of the Existing Agree- ment shall be amended to read as follows: "(ii) Participant shall have provided satisfactory evidence to Agency's Executive Director that Participant has placed on deposit with a bank or other financial institution acceptable to Agency and has available and committed to the Project cash in the amount of One Million Three Hundred Thousand Dollars ($1,300,000), less the amounts expended by Participant in demolishing and clearing the previously existing improvements from the Participant Parcels and planning, designing, and engineer- ing the Project prior to the close of escrow ("Participant's Pre -Conveyance Costs"). No later than thirty (30) days prior to the scheduled close of escrow, Participant shall submit to Agency's Executive Director an itemization of Participant's Pre -Conveyance Costs. Agency's Executive Director shall have fifteen (15) days within which to review and approve said submittal. After approval, Agency and Participant shall submit a written statement satisfactory to the Escrow Agent memorializing Participant's satisfaction of this condition;" M1112X014220-000 V001734.4 OWIM -7- 5. This Second Amendment and the provisions of the Existing Agreement which remain in effect integrate all of the terms and conditions of agreement between the parties, and supersede all negotiations or previous agreements between the parties with respect to the subject matter hereof. 6. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this Second Amendment, that all authorizations and approvals required to make this Second Amendment binding upon such party have been obtained, and that the person or persons executing this Second Amendment on behalf of such parties have been fully authorized to do so. The effective date of this Second Amendment shall be the date of execution by the Agency. ATTEST: i APPROVED AS TO FORM: Agency Counsel p-u4y FS2111=14E20- Mu0Q1T74.4 0&21/92 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By. de,122 yhairr.idn ABDELMUT1 DEVELOPMENT a California g9neralrpp By; Genera -8- EXHIBIT "A" FORM OF LEASE FOR KOURY BUILDING [to be inserted] FS21112101492.0-000 2D017M.4 0E12 M EXHIBIT " A " RESOLUTION N0. 231 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE LEASING OF REAL PROPERTY AND FINANCING OF CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main --Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a Second Amended Owner Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Ifealth.and Safety Code, Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California ; lthanQ Safety Code, - 1 - detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements, which are a benefit to the project area and are essential -to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The Agency has reviewed the EIR for this project which was certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983, and January 21, 1992. NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1. The Redevelopment Agency finds and determines that EIR 82-2 and EIR 89-6, certified and approved including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. Section 2. The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the 001 231 Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the project area, and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are of benefit to the project area and are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The Redevelopment Agency hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 1992. 31st day of August Chairman ATTES . APPROVED AS f TO FORM: Agency Clerk A"Agency Counsel REVIEWED AND PROVED: INITIATED AND APPROVED: r _ Cl- Ex cutive irec or Director of Economic Development 3 771 • Reso No. 231 - STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 31st day of _ Ausust_ , 1992, and that it was so adopted by the following vote: AYES: Members: NOES: Members: ABSENT: Members: 4 Clerk of the Redevelo_ ent Agency of thS City of Huntington Beach,CA RESOLUTION NO. 6422 A RESOLUTION OF THE CITY OF 11UNTINGTON BEACH APPROVING THE LEASING OF REAL PROPERTY AND FINANCING OF CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDEL?WTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area' (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a Second Amended Participation Agreement (the "Agreement") with Abdelmuti. Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of ruin Street and Pacific Coast Highway and the provision of a commercial and/or residential use building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California ealth and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California , - 1 - detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements,, which are a'benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The City Council has reviewed the EIR for this project which was certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983, and January 21, 1992. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows; Section I. The City Council finds and determines that EIR 82-2 and EIR 89-6, as previously certified and approved including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the Developer by Deed constitutes 2 6422 the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the project area, and based upon the covenants and restrictions established by the Agreement. The City Council further finds that the provision of the public improvements, as provided for in the Agreement, are of benefit to the project area and are necessary to effectuate the purpose of the Redevelopment Plan applicable to the project area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The City Council hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Mayor and the City Administrator to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 1992. 31st day of August ATT : APPROVED AS TO FORM: 404?9z' 4�! 6- i i- z� City Clerk 4v- City Attorney yr Z1—JL REVIEWED AND l*!QZOVED: i y Adminis ra or K3 INITIATED AND APPROVED: Director of Economic Development 6422 Reso No. 6422 STATE OF CALIFORNIA ) COUNTY OF ORANGE } CITY OF HUNTINGTON BEACH) 1, CONNIE BROCKWAY, the duly elected, qualified City Clerk of the City of Huntington Beach, and ea-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 resolution was adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 31st day of August 1992, by the following vote: AYES: Councilmembers: Robita-ille.-Moulton-Patterson, Kjr-he t ,_S lva. Green. MacAllister, Kelly NOES: Councilmembers: ABSENT: Councilmembers: 4 City Clerk and ea -off io Clerk of the City Council of the City of Huntington Beach, California i REQUEST FOR CITY COUW�IL/ ~' REDEVEL'bPMENTAGENCY A ION RH91 75 November 4, 1991 Date Submitted to: Honorable Mayor/Chairman & City Council/Redevelopment Agency Members No• Z Submitted by: Michael T-Uberuaga, City Administrator/Chief Executive OfficerZ�T Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development First Amendment to the Owner Participation Agreement between Abdelmuti Subject, Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area R.0�1 -W A Consistent with Council Policy? Yes t 1 New Policy or Exception !moo Statement of issue, Recommendation, Analysis, Funding Source, AlteMapqsq�R. U-XCtL I - U -- 21- �s Transmitted for City Council/Redevelopment Agency consideration is , tfie"� Fir=_ Amendment to the Owner Participation Agreement with Abdelmuti Development Company previously approved on May 28, 1991. The original Agreement provides for. the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The proposed Amendment calls for the development of a four-story building consisting of 17,140 square feet of new comm erci al/re tall on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fourth floors -- for a total of 48,060 square feet. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the First Amendment to the Owner Participation Agreement; and 2) Adopt City Council Resolution No. 4U!Z and Agency Resolution No. e4Z T , - authorizing the execution and implementation of the First Amendment to the Owner Participation Agreement between the Redevelopment Agency and AbdeImuti Development Company. On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company ("Participant') for the development of a new three-story building, consisting of approximately 18,000 sf of new commercial/retail on the ground floor, and a total of approximately 24,000 sf of -office use on the second and third floors. V On July 12, 1991, the Participant submitted plans illustrating a proposed fgur stony building, totaling 48,433 sf. Staff and Agency members expressed concerns about the following items: * The addition of a fourth floor and the resulting height; * The size and ration of the plaza at the corner of Main Street and Pacific Coast Highway; * The use of the 10' dedications at either side of the building; * Responsibility for providing required parking in excess of 42,000 sf; and * The layout of access corridors for the upper stories. During a Redevelopment study session on September 30, 1991, the Agency gave staff informal direction as to the issues outlined above. Staff and the Agency Special Counsel have drafted the attached First Amendment to the OPA, incorporating language that accurately reflects the agreed upon design changes. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The salient points of the Agreement are outlined in the attached 33433 Report prepared by the Agency's economic consultant, Keyser Marston Associates, Inc. A summary of the changes incorporated into the First Amendment to the OPA are listed below: a) The Participant agrees to construct ground floor retail space of approximately 17,140 sf, and second, third & fourth floor office space totaling approximately 30,920 sf, for a total building area of approximately 48,060 square feet. b) The Participant will remove all (5) proposed parking spaces onsite and provide upgraded site improvements from the back of the building to the property line. c) Participant shall pay 50% of the offsite parking in -lieu fee of Twelve Thousand ($12,000) per space for all square footage in excess of 42,000 sf per code. As proposed, the Participant will be required to pay in -lieu fees for the additional 6,000 sf of office being constructed at a rate of four spaces per 1,000 sf, equaling 24 spaces at $6.000 per space, totaling $144,000. d) Participant shall not provide any parking onsite for the project. e) Participant shall construct a plaza at the corner of Main Street and Pacific Coast Highway of no less than 1,000 sf in size. f) Participant shall not encroach into 10' dedication on Pacific Coast Highway for the purpose of constructing pedestrian or upper story access, but rather to be preserved for future development, therefore. any stairways in this vicinity will need to be internalized. On October 24, 1991, the Design Review Board (DRB) reviewed Abdelmuti's site plans, elevations, colors, materials, and a scaled -down model of the proposed project. The DRB stated that the roof line, as illustrated in the submitted plans, encroached into the 10' dedication and would need to be either eliminated or redesigned so there would be no encroachment into the 10' dedication. g) Participant shall provide internal corridor circulation for upper story office uses. On October 10, 1991, the Redevelopment Committee reviewed and supported these changes to the First Amendment to the OPA as outlined above. There is no significant fiscal impact as a result of the recommended action. 1) Continue action on the OPA and related resolutions to allow for additional review time. 21 Direct staff to further negotiate specific points of the agreement with the developer. 1) Health & Safety Code Report 33433 2) First Amendment to OPA 3) Redevelopment Agency Resolutions 4) Staff Report dated May 28, 1991 S) City Council Resolutions b) Site Map MTU/BAK/KBB:ls 9771r SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a OW"R PARTICIPATION AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and ABDELMUTI DEVELOPMENT COMPANY This summary report has been prepared for the Huntington Beach Redevelopment Agency (+'Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Owner Participation Agreement ("Agreement") between the Agency and Abdelmuti Development Company ("Participant") for the development of approximately IS,000 square feet of commercial space and approximately 24,000 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition costa, infrastructure costs, public parking costs, business interruption costa, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; 1 3. The purchase price to be paid by the Participant for the in- terests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. A. SALIENT POINU OF THE AGREEMENT 1. participaant ReBponsi ilitiei, Under the proposed Agreement, the Participant agrees to con- struct ground floor retail space of approximately 18,400 square teat, and second and third floor office space totaling approximately 24,000 square feet. The Participant will provide 7 parking spaces on-sito. The three-story development will corply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second and third stories to either a residential use at some point in the future. The Agency also retains the right to convert to restaurant should the Participant sell the property, except if sold within the immediate family. The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remain- ing funds required to complete construction from the Agency on the basis of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property for the con- struction of a 4'Public Plaza" and for the widening of Main Street. The Participant will also provide all required set- backs. 2 JJA1 15 91 14 "35 htl Dtr- i imrz i ii The Agency is responsible for and shall commit the following to the project: a Convey approximately 754 of the Agency -owned parcel ("Agency Parcel"), or the portion necessary to accom- modate 18,000 square feet of building area on the ground floor of the Project b Finance off -site improvement costs estimated at $250,000. c Provide 121 parking spaces to serve the Project d Provide a loan at a maximum amount equal to $110 per square foot of building area, less the $1 million Par- ti,oipant contribution to the project The Agency loan will be payable in monthly installments, fully amortized over f iftsen years, at an interest rate of 7.0%. M e. Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rental achieved by the office component of the project, with the exception of 504 of i the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective of- fice leases to insure that a reasonable rental rate is being assessed. f. compensate the Participant for legitimate relocation and business interruption costs, including temporary trailers, during the close -down period. said compensa- tion will not exceed 24 months. 3 i I B. COST OF AGREEMENT TO AGENCY The estimated costs of the agreement to the Agency are as fol- lows; Agency Acquisition of Gooney Parcel $ 776,000 (1) Off -site Costs 250,000 Parking structure - 121 spaces 1 $13,750 11664,000 PV of interest gap for Agency loan 363,000 (2) Differential rent payment for office 1,2641000 (3) Business interruption and Temporary Trailers 1#646t400 (4) -rr.r rwrtir Total Costs to Agency $ 5,963,400 (Less) Property Tax Increment Revenues (198,000) (Lees) Capitalized Value of Parking Revenues (430,000) rrrr-wrw -r Net Costs to Agency $ 5,335,400 (1) 751 of Gooney parcel, which was acquired for $1,035,000. (2) opportunity cost of issuing a 7.0% loan versus earning 8.3% Interest on invented funds. (3) Based an achievable rent of $1.00 per square foot from KMA market analysis, and defined fair market rent of $1.55 per square foot. (4) Business losses estimated at $65,000 per month for a maximum of 24 months. Three temporary trailers provided at $1,200 per month for a maximum of 24 months. C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED TO THE PAR- TICIPANT DETERMINED AT THE HIGHEST UBE PERMITTED UNDER THE REDEVELOPMENT PLAN The Agency will convey the necessary portion of the Agency Parcel to accommodate 18,00D square fact of building area on the ground floor of the project. In return, the participant will grant to the project a portion of the Remainder Parcel required for future dedication and the widening of Walnut Avenue. The transfer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this agreement, are considered an equal exchange. 4 D. TURCHASE PRICE PAID BY PARTICIPANT AND REASONS ?OR DIFFERENCE IN FAIR MARKET VALVE FOR THE HIGHEST USE QNDIR THL" REDEVELOP• KENT PLAN The Participant is granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant parcels embody similar attributes, and have essentially equivalent market values. The Participant's purchase price for the Agency Parcel sha11 be the sure of One Dollar ($1.ao), payable in cash at the close of escrow. The Agency purchase price for the Remainder Parcel shall be the suYr, of One Dollar ($1.00)1 payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY THIS FIRST AMENDMENT ("First Amendment") is entered into this 4th day of Noy- , 1991, by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ABDELMUTI DEVELOPMENT COMPANY (the "Participant"). $ E E I I A L a WHEREAS, the Agency and the Participant entered into an Owner Participation Agreement, dated May 28, 1991 (the "OPA"), a copy of which is on file as.a public record with the City Clerk of the City of'Huntington Beach and which is incorporated herein by reference; and WHEREAS, the Agency and the Participant agree that it is in their mutual best interest that the proposed project be expanded; NOW, THEREFORE, the Agency and the Participant do hereby agree to amend the OPA as follows: Section_1. Amend Section 201(3), Project Design; Design and Construction Costs, to read as follows: 3. Project_ Desi : psign-an S:onst_ruc ion Costs. Participant shall at his cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a four-story building totaling a maximum of 48,437 square feet with an approximately 18,000 square foot commercial/retail ground floor area and with high quality office/commercial on the second, third and fourth stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second, third and fourth stories from office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that is no closer in familial relationship than that of the third degree as that term would be defined under the California Probate Code, to'a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require a change from office/commercial use, the I Agency will pay those additional construction costs needed to convert the second, third or fourth floors to a residential or restaurant use. Section_2. Amend Section 201(6), Excess Parking Costs and Provision of Parking Spaces, to read as follows: 6. Ezcess Parking_Costsand Provision of_Qarlsing Spaces. There shall be no on -site parking for the Project. Participant shall pay fifty percent (50%) of the offsite parking in -lieu fee of Twelve Thousand Dollars ($12,000) or Six Thousand Dollars ($6,000) per space necessary due to the increase in size of the proposed Project from 42,000 square feet to 48,000 square feet. The additional 6,000 square feet of office space requires four (4) parking spaces per 1,000 square feet, pursuant to the Huntington Beach Municipal Code, for a total of twenty-four (24) spaces at Six Thousand Dollars ($6,000) per space which equals One Hundred Forty -Four Thousand Dollars ($144,000) to be paid on or before issuance of a certificate of occupancy. In exchange for this, the Participant will provide upgraded site improvements from back of the building to the property line at the same quality as the plaza area located at the corner of Main Street and Pacific Coast Highway (i.e., pavers rather than asphalt). Agency shall pay any additional costs necessary to provide offsite parking for the Project ("Excess Parking Costs"). The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City. In the event, however, that Agency authorizes upper --story residential uses on the Site, Agency shall be responsible for providing full code -required parking for all residential units on the Site, with the parking spaces to be located off of the Site and within the block bounded by Main Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue. Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site. Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens the parcel(s) on which the parking is to be located. Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to 10/17/91 7788u/2460/009 -2- Participant maintaining spaces. shall not exceed the reasonable cost of and repairing at -grade surface parking Section 3. Amend Section 201(8), Differential Rent Payment, to read as follows: 8. In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements and/or vacant units for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CPI" as defined herein (the "Differential Rent Payment"). In determining the third floor Differential Rent Payment pursuant to the approved rental agreements and/or vacant units for the third floor, all rents, including nonapproved rental agreement rents which exceed One Dollar and Fifty -Five Cents ($1.55) per square foot, shall be averaged and the Agency shall pay the Differential Rent Payment based on the amount necessary to insure that one-half of the total average per square foot amount is brought up to the Guaranteed Rental Rate. CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and clerical Workers, Los Angeles -Anaheim - Riverside Average, Sub -Group, "All Items" (1982/84-100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8. The Differential Rent Payment term shall commence with the issuance of the Certificate of Occupancy for the second and third floor space and terminate on 10/17/91 7788u/2460/009 -3- January 1, 2017. The City/Agency shall have the option of leasing any vacant second or third floor office space at the Guaranteed Rental Rate. Any business affiliated with the Participant (including, but not limited to, Abdelmuti Development Company and/or Jack's Surf & Sport) must pay a minimum of One Dollar and Fifty -Five Cents ($1.55) per square foot. Agency shall have the right to approve all leases of second and third story space. Failure to obtain Agency written approval of a lease for the second or third floor shall result in a loss of the right to obtain the Differential Rent Payment as described in this Paragraph 8 of Section 201 for the space subject to the nonapproved lease. Section A. Amend Section 11 of Attachment No. 4 (Scope of Development), Participant's Responsibilities, to read as follows: The Participant shall develop the Site with a four-story building totaling approximately 48,437 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 30,000 total square feet of office on the second, third and fourth floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the same may be amended from time to time. Section I. This First Amendment and the provisions of the OPA which remain in effect collectively constitute the "Amended OPA." The Amended OPA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. Section I. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the 'person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. 10/17/91 7788u/2460/009 -4- The effective date of this First Amendment shall be the date of execution by the Agency. November 4. , 19_U ATTEST: s Secretary PROVED AS TO -FORM: REDEVE NT AGENCY OF THE CITY OF HU 4TINGT BEACH By: hax man Stradling, Yocca, kfarlson & Rauth, Special Counsel to the Age .f-f K ati t3v Agency CounselOQ ABDELKUTI DEVELOPMENT ANY, California gen ral er By: e uti, neral Partner Participant" 10/17/91 7788u/2460/009 51! RESOLUTION NO. 6329 A RESOLUTION OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND • CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTOH BEACH AND ABDELM3TI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a First Amended Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition _€ and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific'Coast Highway and the provision of a commercial and/or residential use building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Health and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance i with Section 33433 of the California Health -and Safety Code, - 1 - contains a detailed description of the provisions of the •� Agreement; and The Agreement provides for the development of a commercial and/or residential use building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and .i The City Council has reviewed the EIR for this project which was previously certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1. The City Council finds and determines that EIR 82-2, as previously certified and approved including the finding of overriding considerations, is adequate for this project. Section 2. The City Council finds and determines, based upon the testimony and information presented during the public 2 - 6329 IN M hearing with respect to the. -Agreement that the consideration for the real property to be.transferred to the Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The City Council hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 4th day of November , 1991. Mayor ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator APPROVED AS TO FORM: City Attorney INITIATED AND APPROVED: Director of Economic Development - 3 - 6329 O Res. No. 6329 STATE OF CALIFORNIA COUNTY OF ORANGE ss: ' CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 4th day of November 19 91 , by the follcwing vote: AYES: Councilmembers: MacAllister, Silva, _Kelly,Robitaille NOES: Councilmembers: Winchell, Green ABSENT: Councilmembers: Moulton -Patterson Lity er an ex-o is er of the City Council of the City of Huntington Beach, California Res. No. 6329 0-7- i STATE OF CALIFORNIA COUNTY OF ORANGE ss: ' CITY OF HUNTINGTON BEACH } I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 4th day Of November 19 91 , by the following vote: AYES: Councilmembers: MacAllisterg Silva Kelly, Robitaille NOES: Councilmembers: Winchell, Green ABSENT: Councilmembers: Moulton -Patterson e*.6- W,,a� y L I erk and ex -of iFW Merk of the` City Counci 1 of the City of Huntington Beach, California RESOLUTION NO. 218 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE .DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real Property for private development; and The Agency desires to enter into a First Amended Owner Participation. Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential building and other public improvements, all- as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Hgalth and Safgty Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health -and Safety Code, - 1 - contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation.by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The Agency has reviewed the EIR for this project which was certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983. NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1. The Redevelopment Agency finds and determines that EIR 82-2, certified and approved including the finding of overriding considerations by the City Council in its -position as the -lead agency, is adequate for this project. Section 2. The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the - 2 - IN Developer by Deed constitutes the fair -market 'value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are of benefit to the Project Area and are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The Redevelopment Agency hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the -Agreement. PASSED AND ADOPTED this 4th of Chairman ATTEST: Agency Clerk REVIEWED AND APPROVED: *xecutiv'd Director APPROVED AS TO FORM: Caaa,i- Agency Cou 0� Special Counsel INITIATED AND APPROVED: e:: �•{ u -+ Director of Economic Development - 3 - Res. 218 --� STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 4th day of November 19 91 , and that it was so adopted by the following vote: AYES: Members: MacAllister, Silva, Kelly, Robitaille } NOES: Members: -% Winchel1, Green ABSENT: Members: Moulton -Patterson 4w(,.� Clerk of the Redevelopmen gency of the City of Huntington Beach, Ca. RESOLUTION No. 213 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO AN -OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into an Owner Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a o f f i c e and/or residential building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Health anO Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health and Safety Code, - 1 - contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The Agency has reviewed the EIR for this project which was certified as being.in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on julyr is, 1g93 NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1. The Redevelopment Agency finds and determines that EIR Ft7--?_, certified and approved including the finding of overriding considerations by the City Council in its position -as the lead agency, is adequate for this project. Section 2. The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the - 2 - 213 Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and. restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The Redevelopment Agency hereby approves the Agreement and all of its provisions, icluding without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 28t of May , 1991. Chairman ATTEST: Agency Clerk REVIEWED AND APPROVED: /f c Executive Director APPROVED AS TO FORM: for —Agency Counsel 6\ $-11-1 f Special'Counsel INITIATED AND APPROVED: Director of Economic Development 3 - 213 Res. No. 213 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a/mejetinge of said Redevelopment Agency held on the 28th day of May , 19 91, and that it was so adopted by the following vote: AYES: Members: MacAllister, Winchell, Silva, Green, Kelly, RohitaillP, Moulton-Pattersc NOES: Members: None ABSENT: Members: None Clerk of the Redevelopment gency of the City of Huntington Beach, Ca. { RESOLUTION NO. 6288 A RESOLUTION OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO AN OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main --Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into an Owner Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which . Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a o f f i ce and/or residential use building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Health and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health -and Eafefy Code, contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential use building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The City Council has reviewed the EiR for this project which was previously certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983 NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1. The City Council finds and determines that E1R 82-2 , as previously certified and approved including the finding of overriding considerations, is adequate for this project. Section 2. The City Council finds and determines, based upon the testimony and information presented during the public - 2 - 6283 hearing with respect to the Agreement that the consideration for the real property to be transferred to the Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The City Council hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 28th day of May 1991. Mayor ATTEST:' APPROV S TO FORM: City Clerk f!t*- City Attorney REVIEWED AND APPROVED: INITIATED AND APPROVED: �ViAAinisr a t o r Director of Economic 7Development - 3 - 6288 SITE MAP Ir_ cc n .._ I ADJACENT PROPERTY w _.I Q ADJACENT PROPERTY !-- 7.5' DEDICATION 4' DEDICATION i0' ❑EDICATI- 10' DEDICATION ALLEY 7.5' DEDICATION a 0• ADJACENT PROPERTY r, i 5' DEDICATI4N.-�� , 90, ,u•+.,•t. •fir I IJ! a.r,..,. .. .. 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HIGHWAY • AND MAIN ' STREET 6288 199 7dehm i4Qy su.li 110 Irvine. eR y271e Tel 714 M-0201 F+s714 7$".21 Res. No. 6288 STATE OF CALIFORNIA COUNTY OF ORANGE ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular__a_iQUrned meeting thereof held on the 28th day of May , 19 91 , by the following vote: AYES: Councilmembers: MacAllister, Winchell, Silva, Green, Kelly, Robitaille, Moulton -Patterson NOES: Councilmembers: !done ABSENT: Councilmembers: None City Cler and ex-officio MerK of the City Council of the City of Huntington Beach, California �0 Submitted to: Submitted by: Prepared by: Subject: REQUEST FOR CITY COUNCIL./ . REDEVELOPMENT AGENCY ACTION RH 91-29 May 29, 1991 Date _ Honorable Mayor/Chairman & City Council/Redevelopment Agency Members F Michael T. Uberuaga. City Administrator/Chief Executive Os ' P Barbara A. Kaiser, Deputy City Adminis ator/Economic Development Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area Consistent with Council Policy? M Yes ( j New Policy or Exception s =�'GQ88 29- 02/3 Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT -OE ISSUE: Pa to iJ 7 Transmitted for City Council/Redevelopment Agency consideration is an Owner Participation Agreement with Abdelmuti Development Company. This agreement provides for the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 19,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The property is located at Main Street and Pacific Coast Highway. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the Owner Participation Agreement; 2) Adopt City Council Resolution No. 05"t and Agency Resolution No. l authorizing the execution and implementation of the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development. Company; and 3) Approve the allocation of $4,810,000 from redevelopment funds to cover project costs. ANALYSIS Since late 1984, the Agency has been attempting to put together an Owner Participation/Disposition & Development Agreement with the remaining property owners and various developers for the Main -Pier Phase II project. This proposed mixed -use project consists of the two blocks bordered by Main and Sixth Streets, Pacific Coast Highway and Walnut Avenue. On September 17, 1990, the Agency authorized staff to prepare a Request for Proposals (RFPs) which wad issued in October of 1990. Staff is presently negotiating with Coultrup Development and the Main Street Property Owners for development of the remainder of Block 104, excluding the Abdelmutt site and all of Block 105, excluding the Worthy site (site map attached). Mr. Abdelmuti did not respond formally under the RFP, but initiated negotiations with staff upon the closure of his building. On December 11, 1990, the city's Community Development Department determined that the existing building at 101 Main Street was "unsafe to occupy" due to the loosening and falling of bricks from the facade, and was therefore, vacated and closed. At that time, the property owner revived old plans that called for the rehabilitation of the existing two-story structure. Allowing the property owner to proceed with rehabilitation would ensure that the City/Agency would not receive the street and plaza dedications and setbacks as already provided across the street on the Pierside Pavilion project. Further, the owner would be permitted to retain the existing non -conforming second story apartment uses. Therefore, the Agency directed staff to negotiate an agreement with the property owner that would enable the Agency to achieve its goals of the Main -Pier Redevelopment Plan, and yet be an economically viable plan for the participant to develop. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The proposed OPA obligates the respective parties to be responsible for the following: Participant's Responsibilities: a) The Participant agrees to construct ground floor retail space of approximately 18,000 square feet, and second and third floor office space totaling approximately 24,000 square feet for a total building area of approximately 42,000 square feet. b) The Participant will provide approximately seven (7) parking spaces onsite. c) The three-story development will comply with the City's design standards. The Agency may, at its discretion, determine to change the use of the second and third stories to residential use at some point in the future should the office market never materialize. d) The Agency retains the option to convert the office to a restaurant should the Participant transfer the property to non -family ownership. e) The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remaining funds required to complete construction from the Agency on the basis of a 15 year promissory note at 7% interest. This amount is estimated at $3 million for a total building and tenant improvement cost of $4 million. f) The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property to allow for the construction of a "Public Plaza." the widening of Main Street, and will also provide required setbacks. agency Res nsibilities: The Agency is responsible for and shall commit the following to the project: a) Convey approximately 75% of the Agency -owned parcel on Pacific Coast Highway ("Agency Parcel"), or the portion necessary to accommodate 18,000 square feet of building area on the ground floor of the project. 4 b) Finance offsite improvement costs estimated at $250.000. c) Construct parking adjacent to the site. providing 121 parking spaces to serve the project or the number of spaces required by the City/Agency. d) Provide a loan (estimated at $3 million) at a maximum amount equal to $110 per square foot of building area, less the $1 million Participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen (15) years, at an interest rate of 7.0%. e) Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot, and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to ensure that a reasonable rental rate is being assessed. f) Compensate the Participant for legitimate relocation and business interruption costs, (as determined by actual IRS statements) during the close -down period from December 11. 1990, until open for business, in an amount not to exceed $1,560.000. Income from insurance proceeds and other retail sales will be deducted from this amount. The Agency will also provide temporary trailers in an attempt to reduce business losses. FUNDING SOURCE• Funds of $4,810,000 will be needed to cover the building construction loan ($3 million), potential business interruption losses ($1,560,000) and offsite improvements ($250,000). Sources of funds for the $4,810,000 include Main -Pier Unencumbered funds of $1,530,000, bond proceeds of $2,045.000, and payment by R. Koury as land sales proceeds $1,235,000. AL-TEMA3= ACTIONS: 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. ATTACHMENTS: I) Health & Safety Code Report 33433 2) OPA ' 3) RedeveIopment Agency Resolutions 4) City Council Resolutions 5) Site Map 6) Fiscal Impact Statement MTU/BAK/KBB:ls ' 9020r I # UUXARY REPORT POR$OAbT TO OICTXOY 33433 of the CALIFORNIA COXXUXXTY RIDRVELOINEHT LAX on a' OWWZR PARTICIPATION AORErXZKT by and between the REDSVELOVXENT YLUNCY 0! THS CITY 07 RMMINGTOY BRACH sad ABDaLXUTI IDSVELCUENT COHPMM This summary report has been prepared for the Huntington Brach Redevelopment Agency ("Agencyt') pursuant to Section 33433 of the California Health and safety Code. This report seta forth certain details of the proposed Owner Participation Agreement ("Agreement") between the Agency and Abdalmuti Development Company ("Participant") :for the development of approximately 18,000 square feet of commercial space and approximately 30,000 square feet of office space. The proposed commercia_1 development is located at the corner of Main street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and apeciffes: 1. The cost of the proposed agrasment to the Agency, including site acquisition coats, infrastructure costs, public parkin7 costs, business interruption costs, subsidized rent costs, plus the expected intereat,on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted undar the Redevelopment Plant 1 r L� �J 3. - The purchase price to be paid by the Participant for the in- terasts being conveyed. This report and the proposad Agreement are to be made available for public inspection prior to the approval of the Agreement. A. oALXZYT POINTS or THS AQRZXXM ��� - W� X-Mr. Me. RHO i Under the proposed Agreement, the participant agrees to con- atruct ground floor retail space of approximately 18,000 square foot, and second, third and fourth floor office space totaling approximately 30,000 square feet. The Participant will not be required to provide any parking on site. The tour -story development will comply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second, third and fourth stories to either a residential usa at some point in the future. The Agency also retains the right to convert to restaurant should the Participant sell the property, except if sold within the immediate family. The participant must contribute $1 million to the conotruction of the improvements. The Participant•vill borrow the remain- ing funds required (up to -a maximum of $3.5 million) to com- plete construction from the Agency on the basin of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site: and dedicate sufficient property for the con- struction of a "Public Plaza" and for the widening of Hain Street. The Participant will also provide all required set- backs. 2 :+ 1 : •., • The Agency is responsible for and shall commit the tollowin9 to the projocti a& convey approximately 75W of the Agency -owned parcel ("Agency Parcel"), or the portion necessary to accom- modate 18,000 square feat of building area on the ground floor of the Project. b. Finance oft -site improvement coats estimated at $250,000. c. Provide 121 parking spaces to serve the Project. d. Provide the developer with a loan at a maximum amount equal to $3.5 million. The agency loan will be payable in monthly inmtallments, fully amortized over fifteen years, at an interest rate of 7.0%. e. Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rental achieved by the off ioe component of the project, with the exception of 50t of the third floor and loot of the fourth floor, which will be leased by the Participant. The Agency will have the right to approve prospactive office ceases to insure that a reasonable rental rake in being assessed. f. Compensate the Participant for legitimate relocation and business interruption coats, including temporary trailers, during the close -down period. Said compensa- tion will not exceed 24 months. 3 8. COST OT AQRLLXtJiZ' TO AGENCY The estimated costs of the agreement to the Agency are as fol- lows: Agency Acquisition of Gosney Parcel Oft -site Costs Parking Structure -- 121 spaces @ $13,750 Pv of interest gap for Agency loan Diffarential rant payment for office Business Interruption and Temporary Trailers r Total Costs to Agency (Lass) Property Tax Increment Ravenuen (Lana) Capitalized Value of parking Revenues Net Costs to Agency $ 776,000 (1) 250,000 Y,d64,000 363,000 (2) 1,2640000 (3) 1j,6461400 (4) ..rMrrrrr• $ 51963FA00 (198, 000) (430, 000) ---rr�..w $ 5133514;0 (1) 75% of Gonn$y parcel, which was acquired for $1,035,000. (2) Opportunity coat of issuing a 7.0% loam versus earning 8.34 interest on invested funds. (3) For the 15,000 square feet of office on the second and third floors. Based on achievable rent of $1.00 per square foot from MA market analysis, and defined fair market rent of $1.55 per square foot. (4) Business losses estimated at $65,000 per month for a maximum of 24 months. Three temporary trailers provided at $1.,200 per month for a maximum of 24 months. C. 88TIMAM VALVE OV TRZ INTRARSTS TO BSI CONVEYED TO TER FAR- TICIPANT DBTERXINID A'T THIS HI0Ha8T USE YERXXTTED M DSR TEN AIDIVELopXZM PLAN The Agency will convey the neceseary portion of the Agency Parcel to accommodate 18,000 square feet of building area on the ground floor of the project. 'In return, the Participant will grant to the project a portion of the Remainder Parcel required for future dedication and the widening of Walnut Avenue. The transfer of the Agency Parcel to -the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this agreement, are considered an equal exchange. 4 10 W" D. PURCHUN PRICE PAID BY PARTICIPAXT UD REASONS YOR DIYYZRZXCE IN PAIR i UKVT VALUII , rOR THIS HrGHN$T USN U M3M THE ItEDRVXLCY- XEW Vi" The Participant is granting an equal amount of land to the project as is being received from the Agency. it ha■ been desned that the Agency and Participant parcels embody similar attributes, and have asaontially equivalent market vaLlusa. The Participantfs purchase price for the Agency Parcel shall be the sum of one Dollar ($1.00), payable in cash at the close of escrow. The Agency purchase price for they Remainder Parcel shall be the ■um of one Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. PJ %10) ATT�..eHMENT NO. 3 CITYIAGENCY BENEFITS Traffic Impact $ 18,000 In -Lieu Parking 72,000 Library 7,000 Plan Check & Permits __20,Q44 $117,000 School District Fee 13.000 Total One time Revenues $130,000 On Going CitvlAgency Revenues: Total Property Taxes Paid $ 54,000 City Share (14%) 1,400 Agency Tax Increment 44,000 Sail LDx Revenues: (1 % of Gross Sales) This information is unavailable due to confidentiality. As a result of modernization and a size incease of one-third, sales tax revenues are projected to increase significantly. Agency ConstrutionLoan: Maximum Loan Available $49000,000 Terms: 15 years fully Amortized at 7% interest Amount Borrowed $3,000,000 Principal Repayment $3,000,000 Plus Interest Paid Total Payback $4,850,000 4 r OWNER PARTICIPATION AGREEMENT by and between the REDEVELOLMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, AGENCY, and ABDELMUTI DEVELOPMENT COMPANY, PARTICIPANT i f 1 TABLE OF CONTENTS I. (5100] SUBJECT OF AGREEMENT A. [§101] Purpose of Agreement B. [§102] The Redevelopment Plan C. [§103] The Site D. [§104] Parties to the Agreement 1. [§105] The Agency 2. [§106] The Participant 3. [§107] Representations and Warranties of the Parties 4. [§108] Prohibition Against Change in Ownership, Management and Control of Participant S. [§109] Relationship of Agency and Participant II. ]§200] DISPOSITION OF AGENCY PARCEL AND CREATION OF THE RECONFIGURED SITE A. [§201] Disposition of Agency Parcel; Creation of the Reconfigured Site; Agency Assistance B. [§202] Escrow C. 1§203] Conveyance of Title D. [§204] Condition of Title for the Conveyance E. [§205] Time for and Place of Delivery of Documents F. [§206] Title Insurance for the Conveyance G. [§207] Taxes and Assessments H. (§208) Condition of the Agency Parcel 1. [§209) Conditions Precedent to the Conveyance J. I§210] Zoning of the Site y. (i) W III. [§300] DEVELOPMENT OF THE SITE A. [§301] Development of the Site by the Participant 1. [§302] Scope of Development 2. [§303] Site Plan 3. [§304] Construction Drawings and Related Documents 4. [§305] Cost of Construction 5. [§306] Construction Schedule 6. [§307] Anti -Discrimination During Construction 7. [§308] Bodily Injury and Property Damage Insurance B. (§309] Certificate of Completion IV. [§400] USE OF THE SITE A. [§401] Uses B. [§402] Maintenance of the Site C. [§403] Rights of Access D. [§404] Effect. of Violation of the Terms and Provisions of this Agreement After Completion of Construction V. [§500] GENERAL PROVISIONS A. [§501] Notices, Demands and Communications Between the Parties B. [§502) Conflicts of Interest C. [§503] Enforced Delay; Extension of Times of Performance D. [§504] Nonliability of Officials and Employees of the Agency `. . .*; ' ■ VI. [§600] DEFAULTS AND REMEDIES A. [§601] Defaults -- General B. [§602] Legal Actions I. [§603] Institution of Legal Actions 2. [§604] Applicable Law 3. [§605] Acceptance of Service of Process C. [§606] Rights and Remedies Are Cumulative D. [§607) Inaction Not a Waiver of Default E. [§608] Remedies and Rights of Termination 1. 1§609] Damages 2. [§610) Specific Performance 3. [§611] Termination by the Participant 4. [§612) Termination by the Agency (a) [§613] Termination Due to Default by Participant VII. [§700] SPECIAL PROVISIONS -A. [§701) Real Estate Commissions B. [§702) Successors In Interest C. 157031 Amendments to this Agreement D. [§704] Attorney Fees VIII. [§800] ENTIRE AGREEMENT, WAIVERS IX. [§900] TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY M ATTACHMENTS Attachment No. 1 Site Map Attachment No. 2 Legal Description Attachment No. 3 [Reserved] Attachment No. 4 Scope of Development Attachment No. 5 Construction Loan Attachment No. 6 Deed of Trust Attachment No. 7 Schedule of Performance Attachment No. 8 Agency Parcel Grant Deed Attachment No. 9 Certificate of Completion Attachment No. 10 Covenants Attachment No. 11 Remainder Parcel Grant Deed Attachment No. 12 Appraisal Procedure (iv) OWNER PARTICIPATION AGREEMENT THIS AGREEMENT is entered into by and between the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, (the "Agency") and Abdelmuti Development Company, a California general partnership (the "Participant"). The Agency and the Participant hereby agree as follows: I. (§100] SUBJECT OF AGREEMENT A. 1§101] Purpose of Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan (as hereinafter defined) for the Main Pier Redevelopment Project by providing for the disposition and development of certain property situated at the corner of Main Street and Pacific Coast Highway within the Project Area (the "Site"). The Site is depicted on the "Site Map", which is attached hereto as Attachment No. 1 and incorporated herein by reference. The Site consists of a new parcel to be created pursuant to this Agreement, as shown in the "Site Map" (Attachment No. 1), and developed, pursuant to this Agreement, for commercial and/or residential use, as described in more detail hereinafter in the Scope of Development (Attachment No. 4) (the "Project"). This Agreement is entered into for the purpose of developing the Site and not for speculation in land holding. Completing the development on the Site pursuant to this Agreement, is in the vital and best interest of the City of Huntington Beach, California (the "City") and the health, safety 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 Plan has been undertaken. B. [§102] The Redevelo ment Plan The Redevelopment Plan was approved and adopted by the City Council of the City of Huntington Beach by Ordinance No. 2578, as amended by Ordinance No. 2634; said ordinances and the Redevelopment Plan as so approved and amended (the "Redevelopment Plan") are incorporated herein by reference. C. [§103] The Site The Site is that portion of the project area designated on the Site Map (Attachment No. 1). t • 7 The Site consists of the following: 1. Six parcels owned by the Participant (the "Participant Parcels"), excluding that portion of the Participant Parcel(s) to be conveyed to the Agency (the "Remainder Parcel"); 2. A portion of a parcel or parcels owned by the Agency (the "Agency Parcel"); 3. A portion of a public right of way to be vacated subject to the terms and conditions set forth herein (the "Alley"); Each of the foregoing enumerated parcels or portions of a parcel is designated on the Site Map (Attachment No. 1). The legal descriptions of the Participant Parcels and the Agency Parcel are attached hereto as "Attachment No. 2" and incorporated herein by this reference. Pursuant to this Agreement, the Participant Parcels, the Agency Parcel, and the Alley shall be reconfigured into the Site pursuant to the procedures required by the City under the Subdivision Map Act. D. 1§104) Parties to the Agreement 1. 1§1051 The Agency The Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California. The principal office of the Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648. "Agency", as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. 2. (§1061 The Participant The Participant is Abdelmuti Development Company, a California general partnership. The general partners are Fawzi Abdelfattah, Lufti Abdelfattah, Ahmad H. Abdelmuti, Mahmoud Abdelmuti, and Jamal Abdelmuti. The address of the Participant for the purposes of this Agreement is 113 Main Street, Huntington Beach, California 92648. 05/13/91 5127u/2460/009 -2- ti . y�'• a 3. 1§1071 Representations and Warranties of the Parties - A. The Participant, to the best of his knowledge, represents and warrants to the Agency as follows: M The Participant has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Participant prior to execution of this Agreement in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (ii) The Participant does not have any material contingent obligations or any material contractual agreements which could materially adversely affect the ability of the Participant to carry out his obligations hereunder. (iii) There are no known material pending or, so far as is known to the Participant, threatened, legal proceedings to which the Participant is or may be made a party or to which any of its property is or may become subject, which has not been fully disclosed to the Agency which could materially adversely affect the ability of the Participant to carry out his obligations hereunder. Participant is aware of the claim(s) by Griffin Realty and Robert Terry. (iv) There is no action or proceeding pending or, to the Participant's best knowledge, threatened, by or against the Participant which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Participant to carry out his obligations hereunder. (v) The Participant has performed all of his obligations to be performed at or prior to the date of Participant's execution of the Agreement in accordance with the Schedule of Performance and is not in default hereunder. Each of the foregoing items i to v, inclusive shall be deemed to be an ongoing representation and warranty. The Participant shall advise the Agency in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items i to v, inclusive. B. The Agency, to the best of its knowledge, warrants and represents to the Participant as follows: 05/13/91 5127u/2460/009 -3- M (i) The Agency has duly authorized, executed and delivered this Agreement and any and all other agreements and documents required to be executed and delivered by the Agency prior to the execution of this Agreement in order to carry out, give effect to, and consummate the transactions contemplated by this Agreement. (ii) The Agency does not have any known material contingent obligations or any known material contractual agreements which could materially adversely affect the ability of the Agency to carry out its obligations hereunder. (iii) There are no known material pending or threatened, legal proceedings to which the Agency is or may be made a party or to which any of its property is or ray become subject, which has not been fully disclosed to the Participant which could materially adversely affect the ability of the Agency to carry out its obligations hereunder. (iv) There is no action or proceeding pending or, to the Agency's best knowledge, threatened, looking toward the dissolution or liquidation of the Agency, and there is no action or proceeding pending or, to the Agency's best knowledge, threatened by or against the Agency which could affect the validity and enforceability of the terms of this Agreement, or materially and adversely affect the ability of the Agency to carry out its obligations hereunder. (v) The Agency has performed all of its obligations to be performed at or prior to the date of Agency's execution of this Agreement in accordance with the Schedule of Performance and is not in default hereunder. Each of the foregoing items i to v, inclusive shall be deemed to be an ongoing representation and warranty. The Agency shall advise the Participant in writing if there is any change pertaining to any matters set forth or referenced in the foregoing items i to v, inclusive. 3. j§1081 Prohibition_ Against Change in Ownership, Management and Control of Participant The qualifications and identity of the Participant are of particular concern to the City and the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Participant. No voluntary or involuntary successor in interest of the Participant shall acquire any rights or powers under this Agreement except as expressly set forth herein. 05/13/91 5127u/2460/009 -4- The Participant shall not assign or transfer all or any part of this Agreement or the Site or any rightb hereunder prior to the issuance of a Certificate of Completion as defined in Section 309 of this Agreement without obtaining the prior written approval of the Agency. Notwithstanding any other provision of this Agreement to the contrary, the Participant shall have the right to assign this Agreement and any rights hereunder or in the Site without obtaining Agency approval in connection with any of the following: (i) Transfers resulting from the death or mental or physical incapacity of an individual. (ii) Transfers or assignments in trust for the benefit of a spouse, children, grandchildren, or other family members. (iii) The granting of an interest in any portion of the Site to a lender, provided that the sum of the principal amount of the loan and the unpaid principal amount owed on the Promissory Note provided for herein does not exceed eighty percent (80%) of the fair market value of the Site at the time such loan is recorded, as evidenced by a letter to that effect from the lender seeking an interest. The Agency shall determine at its reasonable discretion whether the proposed loan and the Lender letter as to the appraisal value meet the requirements of this subparagraph (iii). (iv) A sale of any portion of the Site at foreclosure (or a conveyance thereof in lieu of a foreclosure) pursuant to a foreclosure thereof by a lender meeting the requirements of subparagraph (iii) above. (v) The conveyance or dedication of any portion of the Site to the city or other appropriate governmental agency, or the granting of easements or permits to facilitate the development of the Site. (vi) Transfers aggregating an amount of up to thirty percent (30) of Participant's interest so long as Participant retains the management and control of the property. (vii) Transfers to a general or limited partnership in which Participant is a general partner with a minimum of seventy percent (70%) of the beneficial interest and management control. (viii) The leasing of any part or parts of a building for occupancy in the normal course of owning and operating the Project on the Site. 05/13/91 5127u/2460/009 -5- All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Parties and the permitted successors and assigns of the Parties. Whenever the term "Participant" or "Agency" is used herein, such term shall include any other permitted successors and assigns as herein provided. Upon the issuance of the Certificate of Completion (Attachment No. 9) pursuant to Section 309 of this Agreement, this Section 108 shall be of no further force or effect. 4. (§109} Relationship of Agency and Participant It is hereby acknowledged that the relationship between the Agency and the Participant is not that of a partnership nor a joint venture and that the Agency and the Participant shall not be deemed or construed for any purpose to be the agent of the other. II. 1§200) DISPOSITION OF THE AGENCY PARCEL AND CREATION OF THE RECONFIGURED SITE A. 1§2011 Disposition of Agency Parcel; Creation of the Reconfigured Site; Agency Assistance Subject to applicable terms and conditions of this Agreement, the Agency agrees to provide Agency Assistance as described below, and to sell the Agency Parcel to the Participant and the Participant shall purchase the Agency Parcel from the Agency. Further, the Participant agrees to sell to the Agency and the Agency shall purchase from the Participant the Remainder Parcel. The Agency acknowledges that its acquisition of the Remainder Parcel and Participant's dedication of the set -backs and the area for public plaza use (as referenced in subparagraph 2 of this Section 201) are being made under threat of eminent domain pursuant to Health and Safety Code Sections 33342 and 33391 and the applicable provisions of the Redevelopment Plan, and that Agency's conveyance of the Agency Parcel to Participant is in consideration of and exchange for the taking of such portions of the Participant Parcels. If Agency and Participant had not agreed to settle their respective positions in accordance with this Agreement, Agency would have proceeded to schedule a hearing to consider the adoption of a resolution of public necessity as the first step to acquire such portions of the Participant Parcel with or without Participant's consent, by use of Agency's power of eminent domain if necessary, to implement the Redevelopment Plan. 1. Subdivision Approval. Participant and Agency will cooperate in applications to City under the applicable subdivision approval requirements for reconfiguration of the parcels comprising the Site and vacation of the 05/13/91 5127u/2460/009 MM M Alley. Agency shall be responsible for preparing and processing such applications. The final parcel map shall record concurrently with Agency's transfer to Participant of the Agency Parcel and the Participant's transfer to the Agency of the Remainder Parcel. 2. Site Demolition and Clearance. The Agency shall demolish and clear the existing buildings on the Agency Parcel prior to conveying the Agency Parcel to Participant pursuant to Sections 202-209 herein. Participant shall demolish and clear the existing buildings on the Participant Parcels and the Remainder Parcel and dedicate to the City the set -backs and the area for public plaza use as illustrated on the Site Map (Attachment No. 1) and as specified in the Scope of Development (Attachment No. 4). The dedications shall be shown on the final map to be recorded at the time Agency conveys the Agency Parcel to Participant pursuant to subparagraph 1 of this Section 201. 3. Project Design; Design and Construction Costs. Participant shall at his cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a three-story building totaling approximately 42,000 square feet with an approximately 18,000 square foot commercial/retail ground floor area and with high quality office/commercial on the second and third stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second and third stories from office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that is no closer in familial relationship than that of the third degree as that term would be defined under the California Probate Code, to a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require a change from office/commercial use, the Agency will pay those additional construction costs needed to convert the second and third floors to a residential or restaurant Use. 4. Construction_Costs; Construction Loan. In addition to those design, engineering, and construction costs for which Agency may be responsible for under subparagraph 3 above, Agency shall provide Agency Assistance in the form of a loan, as evidence by the construction loan document attached hereto and incorporated herein as "Attachment No. 5" (the "Construction Loan") to Participant for those verified costs in excess of One Million Dollars ($1,000,000) which are Participant's responsibility and are expended by Participant in 05/13/91 5127u/2460/009 -7- . . + demolishing and clearing the existing improvements from the Participant Parcels and planning, designing, engineering, and constructing the Project. The maximum amount of the Construction Loan shall not exceed the lesser of (i) an amount based on One Hundred and Ten Dollars ($110.00) per square foot of building costs including tenant improvements minus the One Million Dollar contribution by Participant or (ii) Three Million Five Hundred Thousand Dollars ($3,500,000). The budget for Project costs (the "Budget") shall be reviewed and approved in writing in advance by the Executive Director of the Agency. The Budget shall include a reasonable contingency. The Budget shall not include an expense for a developer fee or other profit to Participant. Verification of approved costs pursuant to the Budget shall accompany any request for disbursement of funds. Agency shall act reasonably in considering any amendment to the Budget in the event of Project cost overruns. However, Project change orders beyond the scope of the original Project shall not be included. Agency or its agent shall have thirty (30) days to review adequacy of verification and to approve or disapprove a fund disbursement. Agency shall select and delegate disbursement control to a trustee experienced in construction loan disbursement. Participant shall repay the loan to Agency in accordance with the terms and conditions of the Construction Loan set out in Attachment No. 5 attached hereto and incorporated herein by this reference. Generally, the Construction Loan shall be payable in monthly installments fully amortized over fifteen years commencing upon the earlier of (i) issuance of certificate of occupancy for the ground floor com-nercial/retail portion of the Project or (ii) date for completion of the ground floor commercial/retail portion of the Project in the Schedule of Performance. Interest shall accrue from the time of disbursement at an interest rate of seven percent (7%) per annum. The Construction Loan shall be secured by a first trust deed on the Site (the "Deed of Trust"). The Deed of Trust shall be substantially in the form of Attachment No. 6 attached hereto and incorporated herein by this reference. The Deed of Trust shall be recorded at the time Agency conveys the Agency Parcel to Participant. If the Agency elects to obtain a title insurance policy insuring the enforceability or priority of its deed of trust, Agency shall pay the premium therefor, 5. Business Interruption Costs. Agency shall pay business interruption lossesJ verified by documentation acceptable to Agency including but not limited to Internal Revenue Service filings, incurred 05/13/91 5127u/2460/009 -8- by the Participant at an average rate of Sixty-five Thousand Dollars ($65,000) per month with an annual cap of Seven Hundred Eighty Thousand Dollars ($780,000) and for a total amount not to exceed One Million Five Hundred Sixty Thousand Dollars ($1,560,000). The time of eligible business interruption costs shall be from December 11, 1990, until the earlier of: (i) the time designated on the Schedule of Performance for completion of construction (as the same may be extended by mutual agreement of the parties or pursuant to Section 503); or (ii) issuance of certificate of occupancy for the commercial/retail portion of the Project. The amount determined by a comparison to the prior three years of net business operation proceeds for Jack's Surf Shop and the net income from the commercial and residential rental units located in the existing L-L building(s) on the Participant Parcels, less (i) available business interruption insurance roceeds and (ii) net income received from temporary facility operations (the "Net Business Interruption Losses"). Subject to availability, the Agency shall provide trailers for a temporary retail facility during the construction period within a thousand foot radius of the Site. Participant shall pay all operating costs for the trailers. Participant shall be entitled to periodic payments of accrued Net Business Interruption Losses by making written request to Agency, with appropriate verification of losses, not more frequently than quarterly. Payment of accrued Net Business Interruption Losses shall be due within sixty (60) days of the approval of the Agency of the documentation, including Internal Revenue Service statements, provided by the Participant to support the claimed amount due. Participant -shall cooperate with Agency with respect to the recovery of available Insurance procee s. At Agency's request, Participant shall ^assign to_Acencv Particinant's right to recover us ch insurance proceeds. Participant's actual and �- re 1cQs s111currea in attempting to recover insurance proceeds (including without limitation payments to Participant's public adjuster and attorney's fees) shall be considered part of Participant's business interruption losses. 6. Excess Parking Costs and Provision of Parkina Spaces. Agency shall pay any costs necessary to provide offsite parking for the Project in excess of the proposed twelve surface onsite spaces ("Excess Parking Costs"). The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City. In the event, however, that Agency authorizes upper -story 4- 05/13/91 5127u/2460/009 -9- residential uses on the Site, Agency shall be responsible for providing full code -required parking for all residential units on the Site, with the parking spaces to be located off of the Site and within the block bounded by Main Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue. Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site. Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens the parcel(s) on which the parking is to be located. Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to Participant shall not exceed the reasonable cost of maintaining and repairing at -grade surface parking spaces. 7. Offsite Improvement Costs. Within the time set out in the Schedule of Performance (Attachment No. 7), Agency shall pay for and construct or cause to be constructed all off -site improvements as defined in the Scope of Development (Attachment No. 4) including sidewalks, the plaza, and any required off -site utilities (the "Offsite Improvement costs"). 8. Differential Rent Payment. In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant achieves for the upper -floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CPI" as defined herein (the "Differential Rent Payment"). CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and clerical Workers, Los Angeles -Anaheim- Riverside Average, Sub -Group, "All Items" (1982/84=100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachement No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the 05/13/91 5127u/2450/009 -10- . J Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8. The Differential Rent Payment term shall commence with the issuance of the Certificate of Occupancy for the upper -floor space and terminate on January 1, 2017. The City/Agency shall have the option of leasing any vacant upper -floor office space at the Guaranteed Rental Rate. Subject to the Agency's right to change the use pursuant to subparagraph 3 above, Participant shall lease fifty percent (50%) of the third floor office space to be located as agreed between the parties for an amount equal to the Guaranteed Rental Rate. Agency shall have the right to approve all leases of second and third story space. Notwithstanding anything to the contrary set forth in this Agreement, the Agency shall have no obligation to transfer the Agency Parcel or to provide and pay any amounts of other Agency Assistance as hereinabove set forth unless all of the "Agency's Conditions Precedent to the Conveyance" (as hereafter defined in Section 209 of this Agreement) have been satisfied or waived by Agency in its sole and absolute discretion. B. 1§2021 Escrow The Agency agrees to open an escrow (the "Escrow") with a mutually agreeable escrow company (the "Escrow Agent"), by the time established therefor in the Schedule of Performance (Attachment No. 7). The Escrow Agent shall accomplish the recordation of the Grant Deed (Attachment No. 8) and the Covenants (Attachment No. 10), all as more particularly set forth herein. This Agreement constitutes the joint basic escrow instructions of the Agency and the Participant for the conveyance of the Agency Parcel and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the Escrow. The Agency and the Participant shall provide such additional escrow instructions as shall be necessary for and consistent with this Agreement. The Escrow Agent is hereby empowered to act under this Agreement, and the Escrow Agent, upon indicating within five (5) days after the opening of the Escrow its acceptance of the provisions of this Section 202, in writing, delivered to the Agency and the Participant, shall carry out its duties as Escrow Agent hereunder. Participant's purchase price for the Agency Parcel shall be the sum of One Dollar ($1.00), payable in cash at close of escrow. Agency's purchase price for the Remainder Parcel shall be the sum of One Dollar ($1.00), payable in cash at close of escrow. Upon delivery of the Agency Parcel Grant Deed substantially in the form of Attachment No. 8 attached hereto and 05/13/91 5127u/2460/009 -11- incorporated herein by this reference, to the Escrow Agent by the Agency and the Remainder Parcel Grant Deed substantially in the form of Attachment No. 11 by the Farticipant pursuant to Section 205 of this Agreement, the Escrow Agent shall record such deeds when title can be vested respectively in the Participant and the Agency in accordance with the terms and provisions of this Agreement. The Escrow Agent shall pay any applicable transfer tax. Any insurance policies covering the Agency Parcel or any parcel are not to be transferred. The Participant and the Agency shall pay in escrow to the Escrow Agent all fees, charges and costs as those costs are customarily paid by a buyer and seller of property as to their respective roles with the Agency Parcel and the Remainder Parcel promptly after the Escrow Agent has notified the Participant and the Agency of the amount of such fees, charges and costs, but not earlier than ten (10) days prior to the scheduled date for closing the Escrow, including, without limitation, the following: 1. Costs necessary to place title in the condition for conveyance Section 204 of this Agreement; 2. The escrow fee; 3. Cost of drawing the deeds; 4. Recording fees; S. Notary fees; to the Agency Parcel pursuant to 6. Any State, County or City documentary stamps; 7. Any transfer tax; S. The premium for title insurance as set forth in Section 206 of this Agreement; and 9. Ad valorem taxes, if any, upon the Participant Parcel for any time prior to transfer of title. Under verification that all conditions precedent under Section 209 of this Agreement have been satisfied or waived by the appropriate party or parties, the Escrow Agent is authorized to: 1. Pay, and charge the Participant and the Agency for any fees, charges and costs payable under this Section 202 of this Agreement. Before such payments or charges are made, the Escrow Agent shall notify the Participant and the Agency of the fees, charges and costs necessary to clear title and close the Escrow. 05/13/91 5127u/2460/009 -12- 2. Disburse any funds deposited necessary to satisfy all outstanding deeds of trust necessary to satisfy the title requirements of Section 206 of this Agreement. 3. Deliver the deeds and other documents to the parties entitled thereto when the conditions of this Escrow have been fulfilled by the Agency and the Participant. 4. Record the Deed of Trust (in the form of Attachment No. 6) securing Participant's obligation to pay the Agency loan to be provided pursuant to Section 201.4 of this Agreement, the parking covenant referenced in Section 201.6 (if applicable), and any other instruments delivered through this Escrow, if .necessary or proper, to comply with the terms and conditions of this Agreement and vest title in the Participant in accordance with the terms and provisions of this Agreement. All funds received in this Escrow shall be deposited by the Escrow Agent, with other escrow funds of the Escrow Agent in an interest earning general escrow account or accounts with any state or national bank doing business in the State of California. Such funds may be transferred to any other general escrow account or accounts. All disbursements shall be made by check of the Escrow Agent. All adjustments are to be made on the basis of a thirty (30) day month. If this Escrow is not in condition to close on or before the time for conveyance established in the Schedule of Performance (Attachment No. 7) of this Agreement, either party who then shall have fully performed the acts to be performed before the conveyance of title may, in writing, demand from the Escrow Agent the return of its money, papers or documents deposited with the Escrow Agent. No demand for return shall be recognized until ten (10) days after the Escrow Agent shall have mailed copies of such demand to the other party or parties at the address of its or their principal place or places of business. Objections, if any,. shall be raised by written notice to the Escrow Agent and to the other party within the ten (10) day period, in which event the Escrow Agent is authorized to hold all money, papers and documents with respect to the Disposition Parcel until instructed by a mutual agreement of the parties or by a court of competent jurisdiction. If no such demands are made, the Escrow shall be closed as soon as possible. The Escrow Agent shall not be obligated to return any such money, papers or documents except upon the written instructions of both the Agency and the Participant or until the party entitled thereto has been determined by a final decision of a court of competent jurisdiction. 05/13/91 5127u/2460/009 -13- Any amendment to these Escrow instructions shall be in writing and signed by both the Agency and the Participant. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. All communications from the Escrow Agent to the Agency or the Participant shall be directed to the addresses and in the manner established in Section 501 of this Agreement for notices, demands and communications between the Agency and the Participant. The liability of the Escrow Agent under this Agreement is limited to performance of the obligations imposed upon it under Sections 202 to 209, both inclusive, of this Agreement. C. [§203] Conveyance of Title Subject to any extensions of time mutually agreed upon between the Agency and the Participant, conveyance of title to the Agency Parcel and to the Remainder Parcel shall be completed on or prior to the date specified therefor in the Schedule of Performance (Attachment No. 7). Said Schedule of Performance (Attachment No. 7) is subject to revision from time to time as mutually agreed upon in writing between the Participant and the Executive Director of the Agency. D. 152041 Condition of Title for the Conveyance The Agency shall convey title to the Agency Parcel and Alley free and clear of encumbrances except the dedications shown on the Site Map (Attachment No. 1) and otherwise as may hereafter be expressly approved by the Participant in its discretion. The Participant shall convey title to the Remainder Parcel free and clear of encumbrances except the dedications shown on the Site Map (Attachment No. 1) and otherwise as may hereafter be expressly approved by the Agency's Executive Director at his discretion. E. [62051 Time for and Place of Delivery of Documents Subject to any mutually agreed upon extension of time, the Grant Deed (Attachment No. 8) and the "Covenants", which are attached hereto as Attachment No. 10 and are incorporated herein by reference, shall be executed, acknowledged, and delivered to the Escrow Agent on or before the date established for the date for the Conveyance pursuant to the Schedule of Performance (Attachment No. 7). F. 1§2061 Title Insurance _for the Conveyance Concurrently with recordation of the Grant Deed (Attachment No. 8), First American Title Insurance Company or such other title company as may be mutually approved by the parties (the "Title Company") shall deliver to the Participant a CLTA title insurance policy issued by the Title Company with coverage OS/13/91 / 5127u/2460/009 -14- in the amount of Seven Hundred and Fifty Thousand Dollars ($750,000) insuring that the title to the Agency Parcel is vested in the Participant in the condition required by Section 204 of this Agreement. All costs and premiums incurred for or related to such title insurance shall be borne solely by the Agency unless the Participant, at his option and at his cost, obtains coverage in excess of the foregoing amount and for endorsements or an ALTA policy. Concurrently with recordation of the Grant Deed (Attachment No. 8), First American Title Insurance Company or such other title company as may be mutually approved by the parties (the "Title Company") shall deliver to the Agency a CLTA title insurance policy issued by the Title Company with coverage in the amount of One Hundred Thousand Dollars ($100,000) insuring that the title to the Remainder Parcel is vested in the Agency in the condition required by Section 204 of this Agreement. All costs and premiums incurred for or related to such title insurance shall be borne solely by the Participant unless the Agency, at its option and at its cost, obtains coverage in excess of the foregoing amount and for endorsements or an ALTA policy. G. [§2071 Taxes and Assessments Ad valorem taxes and assessments, if any, on the Agency Parcel, levied, assessed or imposed for any period commencing prior to conveyance of title to the Participant shall be borne by the Agency. H. [§208) Condition of the Agency Parcel Agency shall convey the Agency Parcel to Participant in a level, rough graded condition, with all existing surface and subsurface improvements inconsistent with Participant's Project demolished and cleared from the property at no cost to Participant. Agency warrants that it has no knowledge of any contamination of the soil and no knowledge of any other subsurface condition that would make the Agency Parcel unsuitable or impracticable to develop as the Project. After close of the Escrow, Participant agrees to indemnify and defend the City and/or Agency for any claims which may be asserted against the City and/or the Agency under the Comprehensive Environmental Response and Compensation and Liability Act; as amended, (42 U.S.C. Section 9601 et. seg.) ("CERCLA") and/or any other remedial environmental legislation which claims are based on the fact that the City or Agency holds a first trust deed on the Site. 05/13/91 5127u/2460/009 -15- I. 1§2091 Conditions Precedent to the Conveyance Notwithstanding any other provision of this Agreement to the contrary, Agency's obligation to convey the Agency Parcel to Participant and the close of escrow shall, in addition to any other conditions set forth herein in favor of Agency, be conditional and contingent upon the satisfaction or waiver by Agency in its sole and absolute discretion, of each and all of the following conditions (collectively, the "Agency's Conditions Precedent to the Conveyance"): (i) Participant shall have obtained all of the development and building approvals required for development of the Site in accordance with this Agreement; provided, that nothing herein is intended to modify or limit Agency's obligations with respect to such matters; (ii) Participant shall have provided to the construction loan trustee One Million Dollars ($1,000,000.00) in the form of cash or a letter of credit in form acceptable to Agency. (iii) Participant shall have deposited into escrow all of the documents, fees, charges, costs, and items required to be deposited therein by Participant pursuant to this Agreement; (iv) Participant shall have demolished all existing structure on the Participant Parcels inconsistent with the proposed Project; (v) Participant shall have submitted to Agency's Executive Director evidence of liability insurance required pursuant to Section 308 of this Agreement; and (vi) Participant shall not be in material default of this Agreement. In the event Agency is not in default under this Agreement but any of the Agency's Conditions Precedent to the Conveyance are not satisfied or waived by Agency within the time periods provided herein and, with respect to any claimed default by Participant hereunder Participant has not cured said default within thirty (30) days after written notice from Agency, Agency may, at its option, terminate this Agreement and any escrow opened hereunder. In the event of such a termination, neither party shall have any further rights or obligations to the other under this Agreement with respect to the Site; provided, however, that nothing in this Section 209 is intended to limit or restrict Agency's rights under Article VI herein in the event of a termination due to an uncured default by Participant. 05/13/91 5127u/2460/009 -16- .. 1 Notwithstanding any other provisions of this Agreement to the contrary, Participant's obligation to accept conveyance of the Agency Parcel from Agency, and the close of escrow shall, in addition to any other conditions set forth herein in favor of Participant, be conditional and contingent upon the timely satisfaction, or waiver by Participant in its sole and absolute discretion, of each and all of the following conditions (collectively, the "Participant's Conditions Precedent to the Conveyance"): (i) Participant shall have obtained all of the development and building approvals required for development of the Site in accordance with this Agreement; provided, however, that nothing herein is intended to modify or limit the Participant's obligations with respect to such matters; (ii) The City shall have approved the vacation of the public alley on the Site which is to be vacated consistent with the Scope of Development (Attachment No. 4); (iii) Agency shall have timely tendered conveyance of title to the Agency Parcel to Participant in the manner and condition and by the date provided in this Agreement; (iv) The Title Company shall have committed to issuing.to Participant a title insurance policy complying with the requirements set forth in Section 306 herein; (v) Agency shall have provided satisfactory evidence to Participant of Agency's ability to fund its obligations set forth in Section 201.4 - 201.8 herein; (vi) Agency shall have deposited into escrow all of the documents, fees, charges, costs and items required to be deposited therein by Agency pursuant to this Agreement; (vii) Agency shall have demolished and cleared all existing improvements on the Agency Parcel inconsistent with the proposed Project; and (viii) Agency shall not be in default of its obligations under this Agreement. (ix) Agency shall have provided the Construction Loan Trustee with cash or a letter of credit in the amount of the Budget used in estimating the amount of the Construction Loan, less the $1,000,000.00 contribution to be made by Participant, and not to exceed the amount specified in Section 201.4 of this Agreement. in the event Participant is not in default under this Agreement but any of the Participant's Conditions Precedent to 05/13/91 5127u/2460/009 -17- the Conveyance are not satisfied or waived by Participant within the time periods provided herein and, with respect to any claimed default by Agency hereunder, Agency has not cured said default within thirty (30) days after written notice from Participant, Participant may, at its option, terminate this Agreement and any escrow opened hereunder. In the event of such termination by Participant, neither party shall have any further rights or liabilities to the other under this Agreement with respect to the Site; provided, however, that nothing in this Section 209 is intended to limit or restrict Participant's rights under Article VI herein in the event of a termination due to an uncured default by Agency. J. E§210] Zoning of the Site Zoning of the Site at the time of Conveyance shall be such as to permit development of the Project and the use, operation and maintenance of such improvements in accordance with this Agreement. The Participant as to the Participant Parcel and Agency as to the Agency Parcel shall be responsible and shall cooperate and assist in making appropriate application to the City of Huntington Beach to satisfy all provisions of the California Subdivision Map Act (Government Code Section 66410, et sere .) and local enactments pursuant thereto as well as any other land use entitlements including, but not limited to, coastal development permit, conditional use permit and tentative and final tract map, that are applicable with respect to the development of the Site. III. (§300] DEVELOPMENT OF THE SITE A. {§301] Development of the Site by the__Participant 1. [§302] Scope of Development The Participant shall c construction of the Project according Development (Attachment No. 4) and by established therefor in the Schedule No. 7). ommence and complete to the Scope of the respective times of Performance (Attachment The Agency shall commence and complete construction of the Offsite Improvements as described in the Scope of Development as the responsibility of the Agency by the respective times established therefor in the Schedule of Performance (Attachment No. 7). The development shall include any plans and specifications approved by the City and/or Agency, and shall incorporate or show compliance with all applicable mitigation measures. 05/13/91 5127u/2460/009 -18- 2. [§303] Site Plan By the respective times set forth therefor in the Schedule of Performance (Attachment No. 7), the Participant shall prepare and submit to the Agency for its reasonable approval Preliminary Design Drawings for the Project and site plan and related documents containing the overall plan for development of the Site in sufficient detail to enable the Agency to evaluate the proposal for conformity to the requirements of this Agreement. The Site shall be developed as established in this Agreement and such documents, except as changes may be mutually agreed upon between the Participant and the Agency. 3. [§304] Construction Drawings and Related Documents By the time set forth therefor in the Schedule of Performance (Attachment No. 7), the Participant shall prepare and submit to the City and the Agency for written approval construction drawings, a landscape plan, and related documents for development of the Site. 4. [§305) Cost of Construction The cost of developing the Site and constructing all improvements thereon shall be borne by the Participant with the exception of the Agency participation as described in Section 201 of this Agreement. 5. [§306] Construction Schedule The Participant shall promptly begin and thereafter diligently prosecute to completion the construction and the development of the Site within the times specified therefor in the Schedule of Performance (Attachment No. 7). The Agency shall promptly begin and thereafter diligently prosecute to completion the construction and the development of the Off -Site Improvements within the times specified therefor in the Schedule of Performance (Attachment No. 7). 6. [§307] Anti -Discrimination During Construction The Participant, for himself and his successors and assigns, agrees that in the construction of the improvements provided for in this Agreement, the Participant will not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. 05/13/91 5127u/2460/009 -19- 7. 1§3081 _Bodily Injury and Property Damage Tnsurance The Participant shall defend, assume all responsibility for and hold the Agency, its officers and employees, harmless from, all claims or suits for, and damages to, property and injuries to persons,'including accidental death (including attorneys fees and costs), which may be caused by any of the Participant's activities under this Agreement, whether such activities or performance thereof be by the Participant or anyone directly or indirectly employed or contracted with by the Participant and whether such damage shall accrue or be discovered before or after termination of this Agreement. Prior to the commencement of construction, the Participant shall take out and shall maintain in effect during the entire course of construction a comprehensive liability policy in the amount of Two Million Dollars ($2,000,000) combined single limit policy (part of which coverage may be provided by umbrella policies), including contractual liability, as shall protect the Participant, City and Agency from claims for such damages. The Participant shall furnish a certificate of insurance in form reasonably acceptable to the Agency countersigned by an authorized agent of the insurance carrier on a form of the insurance carrie- setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and the Agency and their respective officers, agents, and employees as additional insureds under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City and the Agency of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Participant shall be primary insurance and not contributing with any insurance maintained by the Agency or City, and the policy shall contain such an endorsement. The insurance policy or the certificate of insurance shall contain a waiver of subrogation for the benefit of the City and the Agency. The required certificate shall be furnished by the Participant prior to the Agency Conveyance. The Participant shall also furnish or cause to be furnished to the Agency evidence satisfactory to the Agency that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. The obligations set forth in this Section 308 shall remain in effect only until a final Certificate of 05/13/91 5127u/2460/009 -20- Completion has been furnished for all of the Participant Improvements as hereafter provided in Section 309 of this Agreement. B. [§309) Certificate of Completion Promptly after the completion of all of the improvements in substantial conformity with this Agreement (as determined by the Executive Director of the Agency) and upon the written request of the Participant, the Agency shall furnish the Participant with a Certificate of Completion, substantially in the form attached hereto as Attachment No. 9, which evidences and determines the satisfactory completion of such construction and carries forward those provisions and covenants specified in this Agreement, the Redevelopment Plan and the California Community Redevelopment Law. The issuance and recordation of the Certificate of Completion (Attachment No. 9) with respect to the improvements shall not supersede, cancel, amend or limit the continued efficacy of any obligations relating to the maintenance of the Site, use restrictions, payment of monies, or any other obligations except for the obligation to complete construction of the improvements as of the time of the issuance of such certificate. If the Agency refuses or fails to furnish a Certificate of Completion with respect to the Site substantially in the form of Attachment No. 9 after written request from the Participant, the Agency shall, within forty-five (45) days of the written request, provide the Participant with a written statement of the reasons the Agency reused or failed to furnish such Certificate of Completion. Upon issuance of a Certificate of Completion (Attachment No. 9) for the improvements, construction of such improvements shall be deemed to have been completed in conformity with this Agreement. The Certificate of Completion (Attachment No. 9) is not a notice of completion as referred to in Section 3093 of the California Civil Code. IV. (§400) USE OF THE SITE A. (§401) Uses The Participant covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site that the Participant, such successors and such assignees, shall not devote the Site to any uses other than the uses specified in or permitted by the Redevelopment Plan, the Covenants (Attachment No. 10), and this Agreement (in conformity with the limitations of the Scope of Development, Attachment No. 4, as the same may be amended from time to time in accordance with Participant's rights under this Agreement lb- 05/13/91 5127u/2460/009 -21- and applicable law) for the periods of time specified therein. The foregoing covenant shall run with the land. - The Participant covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Participant itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land. The Participant shall refrain from restricting the rental, sale or lease of the Property or any portion of the Site on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: 05/13/91 5127u/2460/009 -22- "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." Except for covenants against discrimination or segregation, which shall continue in effect in perpetuity, the covenants set forth in this Section 401 shall terminate on January 1, 2017. B. f§4021 Maintenance of the Site The Participant shall maintain the improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. The Participant shall also maintain the landscaping required to be planted on the Site pursuant to the Scope of Development (Attachment No. 4) in a healthy condition. If, at any time, Participant fails to maintain said landscaping, and said condition is not corrected after expiration of thirty (30) days from the date of written notice from the Agency, either the Agency or the City may perform the necessary landscape maintenance and Participant shall pay such costs as are reasonably incurred for such maintenance. 05/13/91 5127u/2460/009 -23- Issuance of a Certificate of Completion by the Agency shall not affect Participant's obligations under this section. The covenants set forth in this Section 402 shall terminate on January 1, 2017. C. 1§4031 Rights_of_Access The Agency, for itself and for the City and other public agencies, at their sole risk and expense, reserves the right to enter onto the Site or any part thereof which is owned or controlled by the Participant, at all reasonable times for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located within dedicated public easements on or adjacent to the Site. Any such entry shall be made only after reasonable notice to Participant. Agency shall repair any damage to the Site and restore the Site to its pre-existing condition. In addition, Agency shall indemnify, defend, and hold Participant harmless from any costs, claims, damages or liabilities pertaining to any entry. This Section 403 shall not be deemed to diminish any rights the Agency, the City, or any other public agencies may have without reference to this Section 403. D. [§404] Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The Agency is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. The Agreement and the covenants shall run in favor of the Agency, without regard to whether the Agency has been, remains or is an owner of any land or interest therein in the Site or in the Project Area. The Agency shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. V. 1§5001 GENERAL PROVISIONS A. [§501] Notices Demands and Communications Between the Parties Written notices, demands and communications between the Agency and the Participant shall be sufficiently given if delivered by hand {and a receipt therefor is obtained or is 05/13/91 5127u/2460/009 -24- refused to be given) or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency and the Participant. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 501. Any written notice, demand or communication shall be deemed received immediately if delivered by hand or if delivered by registered or certified mail return receipt requested on the date received. B. [§502) Conflicts of Interest No member, official or employee of the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. The Participant warrants that it has not paid or given, and will not pay or give, any money or other consideration to any member, official, employee, or consultant of Agency for obtaining this Agreement. C. (§503) Enforced Delay1 Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to: war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation delays not the fault and beyond the reasonable control of the party claiming an extension of time to perform; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other party; acts or failures to act of the City of Huntington Beach or any other public or governmental agency or entity (other than the acts or failures to act of the Agency which shall not excuse performance by the Agency); or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, 05/13/91 5127u/2460/009 -25- if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the Participant and the Executive Director of the Agency. D. [§504] Nonliability of Officials and Employees of the Agency No member, official or employee of the Agency shall be personally liable to the Participant, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Participant or its successors, or on any obligations under the terms of this Agreement. VI. [§6001 A. [§601) DEFAULTS AND REMEDIES Defaults -- General Subject to the extensions of time set forth in Section 503, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct, or remedy such failure or delay, and shall complete such cure, correction or remedy with diligence. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not institute proceedings against the party in default until thirty (30) days after giving such notice or, provided that the party is proceeding with diligence to cure, such greater time as may be necessary to cure given the nature of the default. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default. B. 1§6021 Legal Actions 1. [§603) Institution of Legal Actions In addition to any other rights or remedies and subject to the restrictions in Section 601, either party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such legal actions must be instituted in the Superior Court of the County of Orange, State of California, in an appropriate 05/13/91 5127u/2460/009 -26- municipal court in that county, or in the Federal District Court in the Central District of California. 2. (§6041 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. 3. (§605] Acceptance of Service of Process In the event that any legal action is commenced by the Participant against the Agency, service of process on the Agency shall be made by personal service upon the Director or in such other manner as may be provided by law. In the event that any legal action is commenced by the Agency against the Participant, service of process on the Participant shall be made by personal service and shall be valid whether made within or without the State of California or in such other manner as may be provided by law. C. 1§6061 Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. D. [§607] Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. E. [§608] Remedies and Rights of Termination 1. (§609) Damages. If either party defaults with regard to any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If a solely monetary default is not cured by the defaulting party within thirty (30) days after service of the notice of default (or within such other period as is set forth herein), the defaulting party shall be liable to the other party for any damages caused by such default. For a default 05/13/91 5127u/2460/009 -27- which includes a nonmonetary obligation, if the default is not cured by the defaulting party within thirty (30) days after service of the notice of default or, if the default is of such a nature that it cannot reasonably be curred within said time, and the defaulting party does not commence to cure within said thirty (30) day period and diligently pursue such cure to completion, the defaulting party shall be liable to the other party for any damages caused by such default. 2. 1§6101 Specific_ Performance If either party defaults under any of the provisions of this Agreement, the non -defaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days of service of the notice of default or, if the default is of such a nature that it cannot reasonably be curred within said time, and the defaulting party does not commence to cure within said thirty (30) day period and diligently pursue such cure to completion, the non -defaulting party at its option may thereafter (but not before) commence an action for specific performance of the terms of this Agreement. 3. 1§6111 Termination by the Participant In the event that: (a) The Agency fails to timely perform those actions necessary to complete the Conveyance by the time set forth in the Schedule of Performance (Attachment No. 7), and any such failure is not cured within thirty (30) days after the date of written demand by the Participant or, if the failure is of such a nature that it cannot reasonably be curred within said time, and the Agency does not commence to cure within said thirty (30) day period and diligently pursue such cure to completion, then this Agreement may, at the option of the Participant, be terminated by written notice thereof to the Agency (the "Notice of Termination"). Upon issuance and receipt of a valid Notice of Termination pursuant to this Section 611, the Agency and the Participant shall execute any documents deemed necessary by the Escrow Officer to close the Escrow and return all monies and documents on deposit to the party which initially deposited same. Thereafter, neither the Agency nor the Participant shall have any further rights against or liability to the other under the Agreement with respect to the Site. In the event of the Agency failure or default with respect to any event set forth in this Section 611, said right of termination provided in this Section 611 shall be Participant's sole and exclusive remedy. 05/13/91 5127u/2460/009 -28- 4. (§612J Termination by__the Agency (a) [§613) Termination due to default by Participant In the event that: (i) The Participant (or any successor in interest) assigns the Agreement or any rights therein or in the Site in violation of this Agreement; or (ii) The Participant fails to execute and deposit into escrow the Covenants (Attachment No. 10) by the times established therefor in the Schedule of Performance (Attachment No. 7) for the Conveyance; or (iii) Any of the Agency's Conditions Precedent to the Conveyance are not satisfied by the time established therefor in the Schedule of Performance (Attachment No. 7); or then this Agreement and any rights of the Participant or any assignee or transferee in the Agreement, or arising therefrom with respect to the Agency or the Site, shall, at the option of the Agency, be terminated by the Agency. In the event of Participant's failure or default under this Section 613 (i) - (iii) above and any such failure is not cured or commenced to be cured within thirty (30) days after the date of written demand by the Agency; then this Agreement may, at the option of the Agency, be terminated by written notice thereof to the Participant. Upon issuance and receipt of a valid Termination Notice pursuant to this Section 613, the Agency and the Participant shall execute any documents deemed necessary by the Escrow Officer to cancel the Escrow and return all monies and documents on deposit to the party which initially deposited same. Thereafter, neither the Agency nor the Participant shall have any further rights against or liability to the other under the Agreement with respect to the Site. In the event of the Participant failure or default with respect to any event set forth in this Section 613, said right of termination provided in this Section 613 shall be Agency's sole and exclusive remedy. In the event of Participant's failure or default under this Section 613(v) and any such failure is not cured within thirty (30) days after the date of written demand by the Agency; then this Agreement may, at the option of the Agency, be terminated by written notice thereof to the Participant and neither party shall have any further obligations with respect to this Agreement. 05/13/91 5127u/2460/009 -29- VII. [§7001 SPECIAL PROVISIONS A. [§701] Real Estate Commissions The Agency and the Participant each represent to the other party that it has not engaged the services of any finder or broker and that it is not liable for any real estate commissions, broker's fees, or finder's fees which may accrue by means of the acquisition of the Agency Parcel, and agrees to hold harmless the other party from such commissions or fees as are alleged to be due from the party making such representations. B. [§7021 Successors In Interest The terms, covenants, conditions and restrictions of this Agreement shall extend to and shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the Parties. Upon the termination of the restrictions imposed by Section 107 of this Agreement, which terminate upon the issuance by the Agency of a Certificate of Completion for the Project, all of the terms, covenants, conditions and restrictions of this Agreement which do not terminate upon the issuance by the Agency of the Certificate of Completion for the entire Site shall be deemed to he and shall constitute terms, covenants, conditions and restrictions running with the land. C. 1§7031 Amendments to this Agreement The Participant and the Agency agree to mutually consider reasonable requests for amendments to this Agreement provided said requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. D. [§704) Attorney Fees If either party to this Agreement is required to initiate or defend litigation in any way connected with this Agreement, the prevailing party in such litigation, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Except as may be expressly provided elsewhere in this Agreement, if either party to this Agreement is required to initiate or defend litigation with a third party because of the violation or alleged violation of any term or provision of this Agreement, or obligation of the other part to this Agreement, then the party so litigating shall be entitled to reasonable attorney's fees from the other party to this Agreement. Attorney's fees shall include attorney's fees on any appeal, and in addition a 05/13/91 5127u/2450/009 -30- party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery, and all other necessary costs incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. VIII. 1§8001 ENTIRE AGREEMENT, WAIVERS This Agreement may be signed in counter -parts, each of which is deemed to be an original. This Agreement includes pages 1 through 31 and Attachments 1 through 10, which constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All waivers of the provisions of this Agreement must be in writing signed by the appropriate authorities of the Agency and the Participant, and all amendments hereto must be in writing signed by the appropriate authorities of the Agency and the Participant. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld, conditioned, or delayed. 05/13/91 5127u/2460/009 -31- IN WITNESS WHEREOF, the Agency and the Participant have signed this Agreement on the respective dates set forth below. �$ 19 REDEV MENT AGENCY OF THE CITY OF UNTING N BEACH By: — — Ch 'rman ✓0 &ARAa 2: Secretary APPROVED AS TO FORM: Stradling, Yocca, Carl on Rauth, Special Counsel to the ncy Agency Counsels,,Al �(&<- JU ABDELMUTI DEVELOPMENT COMPA , a California general past ip "Participant" 05/13/91 5127u/2460/009 -32- ` - STATE OF CAI.IFORNIA }ss. COUNTY OF ` On before me, Ctry y personalty ap eared , personally known to me (er-prored•- to be the personKwhose namev Ware subscribed to the within i Instrument and acknowledged to me that he;rtsa.Zlaey executed the same in his.'beYRheir authorized capacityj+os}, and that by hisAw Ahelr signatureXon the instrument the person0iorthe04oti upon behalf of which the t7 person acted, executed the Instrument. OFFICIAL SM LBIDA S. PATTiNS(M — 43TARV PUBLIC-CALKOFM WITNESS my hand d o[rcial seal. CRANSE COUNTY 4. EXP. OCT. 8 Signal a tri�,� come W _, (This area for official notarial seaafl STATE OF CALIFORNIA ) ss. COUNTY OF / ) On o2j /F� before me, the undersigned,,lotar Tublic in and for said State, personally appeared 6 personally known to me on the basis of satisfactory evidence to be the person who executed the within instrument as WITNESS my hand and official seal. (SEAL) 05/13/91 5127u/2460/009 ATTACHMENT NO. 1 — SITE MAP ADJACENT PROPERTY 10' DEDICATION 71 ALLEY F , DEDI AC TION o� ADJACENT PROPERTY LDEDICATION ..__'. 90, 117.5* I , }. ADJACENT PROPERTY LtJ In r : !-- 7.5' DEDICATION 4' DEDICATION .10_ DEDICATIC .1111 livid, IIIur, ,1y]{, rl 1141011 66061+111104lari►! '!:!afro r•• !.dtntif+r•11rgP N11i f]r]Nrl•1Iau.IrrN rnrllrarualuigll,l, {lrl,lltlr;+� . r!!:! �Artllwlt V•l{.,nlll.ygl[sli • i•.nn• yftsidw•nnl Hl{i • ^ dtl 1:1H•np st• ii lyE11M 11tJ pr,rtl • r:ln.NII/t•lull.l�l1:!'I++J:{N;HI,.., }EuN,1.li•111sr11il U+If'+hlilEhlrll+H (k+f,tl q ilrl rI141+t.. ,I!•IRI+t� (�tlR(r 1R� r,.ltlip,l+El (<Sd1t11]111E131tl1HJ ,{+l'1111r,lII�I, I}•uHh1Ilr4kylryv+t(1 r, +w+rh-drfili{l++t +yci111)~61iyHr(11I .ar r1w us.do,t dlF.lIII f{r1`K+rrh.l IEIh[tf lr+:illlu+?il�lrt„hlllllllNNrll/1tplUllrl+'n .aeil]•{kI,E•lli:ll+lfrlirpu}Nld[[1[lluaklJlrlfd+hrl. u slrlHkd['Iri1r 111 i1111h,NN�I F{h�gtlrlHell,YElpr, p ulflL l.lt• nl►ay ,rllrl llrfy.►!,n•Irt•dnif,4b,�rlt�t� !• tEtNdlrPl,y!lalliµrNut41TH1t11AfEi,y It1iM•U: I• rl?,11vEltlltl►]1'IrytH111r1ANlrltil3.[6a1Lfl,fll•1r ! M �1r11'flyl11y1fl1hN11111r{{r11,1tMry,+iiilulrrlrl:IC' •' IkrF;e+.rt.yttllit11:1�+}t,.ur+iellN:t,i.ysy.puluvlu .�lr "�'��fr'•; { I�Inrt+Igl.n.trpltl:alp!:lPlllaLlja'+/+1•l4rd.IMuhlullu .rr• � i..y,'��i.-ar.h.k•laa'lp:.lbyt,.r5r l+llrllaplluq•ltll: •Il,n4•41Nnehfl �'r ua�Sw �.�„�/ }..+.a H.a.,r,,,. nn ,h,n:1 :,.l rt4t,.ltHrlq+llt•:.Ph1+1l.l.r,rs '""•Y4H, 1 A:rpI1.1,.rJ :Iu.•5.1E1a.fPiSN Eu.1.•q il'°•r+r YuaNHrra. rl lr �. t1.n'r l'•:.,rn•,drr:q•Lni'r.1!Lrn.51•1l,.Uilltt.11tl�Iyl.�tlr•lu•rtl.,nu�R 4`i`.I 1+. v14.1n:'ar•on.r'1.11••�:�n,lNiEu1r1i11u+S1•i1•Ihl„lerlr+•1' �+ .1, �bl+;lt lir I'111i11 F''iHal�li1111+F l,y Pj,tµitlpllr+tl gr,rnll.}> 11 .711 r•1 0. •• gliltr.•.;•ll'f •llri.rlrlll.:1•ryt. itipt ltl.l+iHr•i till-isv 11'•'�1 ,�• 111.61 II.111 rt1 IKIIt4rI•„':ailj,t 111,irrit 111 Nr•1111.11.1Lrj•j+o lr till•, ii.. ':1 '1'IYlldrt«»,.t,l•i641'Gtp{iJk+U{Mr}•liflr'11!4!1+1.1:;t'•1+•rlr %11141.+Y I iEr 1'1'�,1.1.l:1'{IN.lI Ft 1•tr•1�.:1'l•EI,.1 •:I.. ylty yl.. - - 1•INo it ltyrrl• I. lir lla111eH.:+i j1 1+ •dta.p.•;.t:,<+.sl h!,1 rli,. r`p. ,y.yn�j.Iri�Nr1 Ihlll.ld,:�Nl../, u,rr•:!+1'r• Iltllcr.r:I iplltll]1•.ai_i-1fl:�ifllia;-•{ Iit �a.ii•r:.wpa•+.tnu..dddd.l �,Ey�gq.i•1'%-41 PROPOSED _liru,.ILrr4yld: .! �tslil�u l:1•,i,r. !11l+yrrlulltlt111' lb ._ PACIFIC COAST HIGHWAY :PACIFIC COAST HIGHWAY • AND MAIN STREET (9 NORTH SCALE 0=40".0" IIIAV OA Inn4 5' BUILDING SETBA w z_ Q ZE 199 TeCnno.o9Y 36+,la l 10 Irtr.n�, G�► 92 )18 Tel 714 753-0201 Fatc 714 753.0221 ATTACHMENT NO. 2 LEGAL DESCRIPTION (To Be Inserted] 05/13/91 ATTACHMENT NO. 2 5127u/2450/009 ATTACHMENT NO. 3 [RESERVED] 05/13/91 ATTACHMENT NO. 3 5227u/2460/009 . _ , ATTACHME14T NO. 4 SCOPE OF DEVELOPMENT I. ARCHITECTURAL AND DESIGN: The improvements to be constructed on the Site shall be of high architectural quality, shall be well landscaped, and shall be effectively and aesthetically designed in accordance with the City's design guidelines. The shape, scale of volume, exterior design, and exterior finish of the structure must be consonant with, visually compatable to, physically related to, and an enhancement to the Project Area. The Participant's plans, drawings, and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Participant Improvements. The open spaces where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity with the Amended Redevelopment Plan for the Main -Pier Redevelopment Project Area, Downtown Specific Plan, City's Design Guidelines and subject to Agency review. All of the improvements required to be constructed by the Participant pursuant to this Attachment No. 4 collectively constitute the "Participant Improvements". After approval by the City of a Tentative Tract Asap, Coastal Development Permit, and Conditional Use Per.. -it, in the event of any inconsistency between this Scope of Development and said specific approvals, the specific approvals shall control. II. PARTICIPANT'S RESPONSIBILITIES: The Participant shall develop the Site with a three-story building totaling approximately 42,000 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 24,000 total square feet of office on the second and third floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the same may be amended from time to time. III. AGENCY RESPONSIBILITIES: The approved physical improvements for the Site located in the public right of way or off of the Site (the "Offsite 05/13/91 ATTACHMENT NO. 4 5127u/2460/009 Page 1 of 2 Improvements") shall be constructed and financed by the Agency. The Agency may, at its option, elect to utilize the Participant to construct all Offsite Improvements and reimburse the Participant upon completion of such improvements after presentment of invoices, checks, and such other evidence of the cost of such Offsite Improvements. The Agency represents that all utilities required to serve the project (including without limitation water, sewer, gas, electricity, telephone and cable television) are available on or at the perimeter of the Site, and with sufficient capacities to serve the improvements to be constructed by the Participant. The Participant shall be responsible for all costs for connections, meters, and extending such utilities from such locations to the locations on the Site where utilities are required. 05/13/91 ATTACHMENT NO. 4 5127u/2460/009 Page 2 of 2 ATTACHMENT NO. 5 CONSTRUCTION LOAN $ Huntington Beach, California 199 1. Promise to Pay. Abdelmuti Development Company ("Borrower," also referred to as "Participant") promises to pay the Redevelopment Agency of the City of Huntington Beach, a public body, 'corporate and politic ("Agency") and/or its assigns, at the office of the Agen::y in Huntington Beach, California, or at such other place as the holder hereof may designate in writing, the principal sum of Dollars ($ ) or so much thereof as may be disclosed by the construction management trustee from time to time or for the benefit or account of Borrower pursuant to that certain Owner Participation Agreement dated , 1991, between the Borrower and the Agency (the "OPA") (the "Note Amount"). 2. Interest Rate. Interest shall be charged by the Agency on the aggregate of all sums advanced hereunder remaining unpaid, from the date funds are advanced, at the rate of seven percent (7%) per annum. 3. Principal and Interest Payment . The payment of principal and interest shall be due and payable in one hundred eighty (180) equal monthly installments of Dollars ($ ) (the Note Amount fully amortized over fifteen (15) years) commencing upon the earlier of (i) the date a certificate of occupancy was issued for the ground floor commercial/retail portion of the Project as defined in the OPA; or (ii) the date of completion in the Schedule of Performance of the OPA, as that date may be amended by agreement of the parties. 4. A_ pp lication of Payments. Any sums received hereunder may, at the option of holder hereof, be applied in any order to the payment of costs, interest, or principal due hereunder. 5. Prepayment. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 6. Non -Waiver. Failure to exercise any right the holder may have or be entitled to, in the event of any default hereunder, shall not constitute a waiver of such right or any other right in the event of subseg•aent default. 05/13/91 5127u/2460/009 ATTACHMENT NO. 5 Page 1 of 3 7. Waiver of Presentment, etc. The Borrower hereby waives presentment for payment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Note. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. B. Collection Costs. If any attorney is engaged by the Agency to enforce or construe any provision of this Note or the Deed of Trust securing same, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Agency, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 9. Security of Note. ;his Note is secured by a Deed of Trust (Attachment No. 6 to the OPA) executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. 10. Maximum Interest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the Maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 11. Notice. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the holder hereof to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 12. Default. In the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default in any other instrument executed by Borrower in favor of the Agency, the Agency may at its election and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the 05/13/91 5127u/2460/003 ATTACHMENT NO. 5 Page 2 of 3 Agency elects to declare default as stated herein this Note shall bear interest after default at the same rate prevailing under the terms of this Note, immediately prior to default and take such action under the law or under the security document securing this Note as Agency may determine necessary to enforce its rights hereunder. 13. Acceleration. The Whole of the Note Amount plus accrued interest and all other payments due hereunder shall become due and be immediately payable to the Holder by the Participant when Participant sells or otherwise transfers title to the property described in the Deed of Trust (except as permitted by the Agency). IN WITNESS HEREOF, this instrument has been executed as of the date set forth on the first page hereof. DATED: , 1991. 05/13/91 5127u/2460/009 ABDELMUTI DEVELOPMENT COMPANY Ahmad Abdelmuti, General Partner ATTACHMENT NO. 5 Page 3 of 3 "PARTICIPANT" ATTACHMENT NO. 6 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) Redevelopment Agency of the } City of Huntington Beach ) 2000 Main Street ) Huntington Beach, CA 9264E ) Attn: Director ) This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTI IGTON BEACH By: Its: Dated: , 19 DEED OF TRUST (Orange County) THIS DEED OF TRUST AND ASSIGNMENT OF RENTS is made as of the day of 1991, by and among ABDELNUTI DEVELOPMENT COMPANY (the 'Trustor"), whose address is California (the "Trustee"), whose address is California , and the Redevelopment Agency of the City of Huntington Beach (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the property located in the County of Orange, State of California, that is described in Exhibit A, attached hereto and by this reference incorporated herein (the "Property"). TOGETHER WITH all rents, issues, profits, royalties, income and other benefits derived from the Property (collectively, the "rents"), provided that so long as Trustor is not in default hereunder, it shall be permitted to collect rents and operate the "Project," as hereinafter defined; 05/10/91 ATTACHMENT NO. 6• 5127u/2460/009 Page 1 of 15 TOGETHER WITH all interests, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights -of -way and rights used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property, including, without limitation, all fixtures, attachments, appliances, furnishings, equipment and machinery (whether fixed or movable) and other articles (including, in each instance, improvements, restorations, replacements, repairs, additions, accessions or substitutions thereto or therefor); TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Property or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature; TOGETHER WITH all right, title and interest of Trustor in and to all options to purchase or lease the Property or any portion thereof or interest therein, and any greater estate in the Site owned or hereafter acquired; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property; TOGETHER WITH all the estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages; 05/10/91 5127u/2460/009 ATTACHMENT NO. 6 Page 2 of 15 All of the foregoing, together with the Property, is herein referred to as the "Security". FOR THE PURPOSE OF SECURING: (a) Payment of the "Note Amount" according to Section 201.4 of the Agreement and the "Construction Loan" as defined in Section 201.4 and Attachment No. 5 of the Agreement; (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to advance said sums and the expiration of any applicable cure period and upon five (5) business days notice to the Trustor, with interest thereon as provided herein; and (c) Payment of such additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, when evidenced by a promissory note or notes or other documents reciting that they are secured by this Deed of Trust. ARTICLE I DEFINITIONS 1. "Agreement" means that Owner Participation Agreement entered into by and among the Trustor and the Beneficiary hereof, dated , 19 ; said Agreement (a copy of which is on file with the Beneficiary at the address stated above, and including all of its attachments) is incorporated herein by reference. 2. The term "Expiration Date" means the date upon which the principal amount of the Construction Loan (the "Note Amount") together with all interest accrued therein has been paid in full, and all other obligations the performance of which is secured by this Deed of Trust have been satisfied. 3. "Mortgage" means any permanent or long-term loan (other than a loan by an entity related to or controlled by the Trustor), or any other financing device (including without limitation deeds of trust) the proceeds of which are used in the construction of the Project, which loan is secured by a security financing interest in the Trustor's interest in the Project; 4. "Project" means all improvements existing on the Property from time to time. 5. "Property" is defined in the second paragraph hereof. The Property is also defined herein as the "Security". 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 3 of 15 6. "Standards" means those standards of construction and operation characteristic of commercial/retail developments similar to the Project which have been constructed within Orange County with the five (5) years preceding the execution of the Agreement. 7. "Trustor" means Abdelmuti Development Company, and his transferees and successors in interest. Where an obligation is created herein binding upon Trustor, the obligation shall be joint and several and shall also apply to and bind any transferees or successors in interest. Where the terms of the Deed of Trust have the effect of creating an obligation of the Trustor and a transferee, such obligation shall be deemed to be a joint and several obligation of the Trustor and such transferee. Unless the context clearly otherwise requires, any capitalized term used herein and not defined herein shall have the meaning given to it under the Agreement (and any amendments thereto). PAS 0to] 4�01 MAINTENANCE AND MODIFICATION OF THE PROJECT AND SECURITY; RELEASE UPON PAYMENT Section 2.1 Maintenance and Modification of the Project by Trustor. The Trustor agrees that at all times prior to the Expiration Date, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Project or cause the Project to be maintained, preserved and kept in a condition conforming to the Standards. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Project. Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of completion upon completion of construction of any part of the Security, diligently file or procure the filing of a notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security or any part thereof. Section 2.2 Release of Land and Im rovements. Upon its receipt of the entire Note Amount and all amounts secured by this Deed of Trust, the Beneficiary shall, upon the request of the Trustor, deliver to the Trustor such instruments as are 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 4 of 15 reasonably necessary to confirm the release of the Security from the lien of this Deed of Trust. Section 2.3 Granting of Easements. Trustor may grant easements, licenses, rights -of -way or other similar rights or privileges in the nature of easements with respect to any property or rights included in the Security without the prior written approval of the Beneficiary. In the event such rights are granted, the Trustor shall prcmptly so advise the Beneficiary in writing. ARTICLE III TAXES AND INSURANCE; ADVANCES Section 3.1 Taxes, Other Governmental Charges and Utility Charges. Trustor shall pay, or cause to be paid, at least fifteen (15) days prior to delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1 in accordance with generally accepted accounting principles. With respect to special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security unless the Trustor has secured the prior written approval of the Beneficiary to pay such amounts in installments over a period of years. In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay any such item within seven (7) business days of the earlier of the receipt or mailing of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted under Section 1(2) of Article XV of the California Constitution, shall become an additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor hereby agrees to pay all such amounts. Section 3.2 Provisions Respecting Insurance. (a) Trustor agrees to provide insurance covering one hundred percent (1007.) of the replacement cost of all insurable 05/10/91 5127u/2460/009 ATTACHMENT NO. 6 Page 5 of 15 items within the Project during the course of construction and following completion in the event of fire, lightning, debris removal, windstorm, flood, vandalism, malicious mischief, theft, mysterious disappearance and hazards, casualties and contingencies, excluding earthquake, as are normally and usually covered by all-risk policies in effect in the locality where the Project is situated. (b) Trustor agrees to carry or cause to be carried: (i) comprehensive general liability insurance with respect to the Project with limits of not less than $500,000 per individual and $2,000,000 for each occurrence for personal injury (including without limitation bodily injury) and $500,000 with respect to property damage. Coverages thereunder shall include contractual liability, personal injury, owners' and contractors' protection, products and completed operations coverage; and (ii) workers' compensation insurance as required by law. (c) All such insurance policies and coverages (i) shall be maintained at Trustor's sole cost and expense so long as any part of the amounts secured by its Deed of Trust have not been paid, (ii) shall be with insurers of recognized responsibility, and in form and substance satisfactory to the Beneficiary, (iii) shall name Beneficiary as additional insured, and (iv) shall contain a provision to the effect that the insurer shall not cancel the policy or modify it materially and adversely to the interests of Beneficiary without first giving at least thirty (30) days' prior written notice thereof. Certificates of insurance for all of the above insurance policies,'showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Expiration Date. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Project in good repair and operating condition, the Beneficiary may (but shall be under no obligation to) take out the required policies of insurance and pay the premium on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and, provided that the Beneficiary provides five (5) business days' notice to the Trustor all amounts so advanced therefor by the Beneficiary shall become an additional obligation of the Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby, which amounts the Trustor agrees to pay on demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 6 of 15 ARTICLE IV DAMAGE, DESTRUCTION OR CONDEMNATION Section 4.1 Damage and Destruction. If, prior to the Expiration Date, the Project or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, the Trustor shall (a) cause any insurance proceeds arising from insurance referred to in Section 3.2 hereof and any other coverage acquired by the Trustor to be used to promptly rebuild and replace the Project, and (b) repair and replace the Project as necessary to bring the Project into conformity with the Standards; provided that such covenants shall be subordinated to the provisions of all senior obligations to which this Deed of Trust is subordinate. There shall be no abatement in, and Trustor shall be obligated to continue to pay, the amounts payable under the Construction Loan and this Deed of Trust. Section 4.2 Condemnation. Subject to the provisions of senior obligations to which this Deed of Trust is subordinate, if title to or any interest in or the temporary use of the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, including any proceeding or purchase in lieu thereof, the proceeds as a result of such taking shall be paid as provided by the law of the State of California. ARTICLE V REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE TRUSTOR Section 5.1 Defense of the Title. The Trustor covenants that it is lawfully seised and possessed of title in fee simple to the Property, that it has good right to sell, convey or otherwise transfer or encumber the same, and that the Trustor, for itself and its successors and assigns, warrants and will forever defend the right and title to the foregoing described and conveyed property unto the Beneficiary, its successors and assigns, against the claims of all persons whomsoever, excepting only encumbrances approved by the Beneficiary. Section 5.2 Inspection of the Project. The Trustor covenants and agrees that at any and all reasonable times and upon reasonable notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Property. 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 7 of 15 ARTICLE VI FURTHER ASSURANCES; PAYMENT OF THE NOTE AMOUNT Section 6.1 Further Assurances; After Acquired Property. At any time, and from time to time, upon request by the Beneficiary, the Trustor shall make, execute and deliver, or cause to be made, executed and delivered, to the Beneficiary and, where appropriate, cause to be recorded and/or filed, and from time to time thereafter to be recorded and/or filed, and from time to time thereafter to be re -recorded and/or refiled, at such time and in such offices and places as shall be deemed desirable by the Beneficiary, any and all such other and further deeds of trust, security agreements, financing statements respecting personal property, instruments of further assurance, certificates and other documents as may, in the opinion of the Beneficiary, be necessary or desirable in order to effectuate, complete or perfect, or to continue and preserve, (a) the obligations of the Trustor under this Deed of Trust, and (b) the lien of this Deed of Trust as a lien prior to all liens except those obligations which shall be senior obligations pursuant to the provisions of this Deed of Trust. Upon any failure by the Trustor to do so, the Beneficiary may make, execute, record, file re-record and/or refile any and all such deeds of trust, security agreements, instruments, certificates and documents for and in the name of the Trustor, and the Trustor hereby irrevocably appoints the Beneficiary the agent and attorney -in -fact of the Trustor to do so. The lien hereof shall automatically attach, without further act, to all after -acquired property deemed to be part of the Security as defined herein. Section 6.2 Agreement to Pay Attorne 's Fees and Expenses. In the event of an Event of Default hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such expenses are incurred at the maximum rate permitted by Section 1(2) of Article XV of the Califcrnia Constitution. Section 6.3 The Trustor shall Construction Loan Construction Loan 05/10/91 5127u/2460/009 Payment of the Project Construction Costs. pay to the Beneficiary the Note Amount of the in the amount and by the time set out in the Attachment No. 5 to the Agreement. ATTACHMENT NO. 6 Page 8 of 15 Section 6.4 Subrogation; Payment of Claims. Provided that the Beneficiary gives notice of at least five (5)•business days to the Trustor, the Beneficiary shall be subrogated to the claims and liens of all parties whose claims or liens are discharged or paid by the Beneficiary pursuant to the provisions hereof. If permitted in the Mortgage, the Beneficiary shall have the right to pay and discharge the obligations secured by the Mortgage. Section 6.5 _Operation of_the Property. The Trustor agrees and covenants to operate the Property .(and, in case of a transfer of a portion of the Property, the transferee shall operate such portion of the Property in full compliance with the Agreement and the Covenants. Section 6.6 Transfer. No sale, transfer, lease, pledge, encumbrance, creation of a security interest in or other hypothecation of the Security shall relieve or release the Trustor from primary liability under this Deed of Trust. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES Section 7.1 Events of Default Defined. The occurrence of any failure of the Trustor to perform under this Deed of Trust, and the continuation of said failure for a period of thirty (30) business days as to monetary obligations and sixty (60) business days as to non -monetary obligations, after written notice specifying such failure and requesting that it be remedied shall have been given to Trustor from the Beneficiary, shall be an Event of Default under this Deed of Trust. Section 7.2 Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then the entire indebtedness secured hereby shall, at the option of the Beneficiary, immediately become due and payable without notice or demand which are hereby expressly waived, and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. Section 7.3 The Beneficiary's_ Right_ to Enter and _Take Possession. If an Event of Default shall have occurred andbe continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary 05/10/91 ATTACHMENT NO. 6 5127u/246O/009 Page 9 of 15 or desirable to preserve the value, marketability or rentability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Security hereof and, with or without taking possession of the Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Property, the collection of such rents, issues and profits and the application thereof, as aforesaid, shall not cure or waive any Default or notice of Default hereunder or invalidate any act done in response to such Default or pursuant to such notice of Default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of rents, issues or profits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, the Agreement or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. Trustor requests that a copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to him at his address given herein; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the property to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the County in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to the Property, including any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Section 7.4 Foreclosure By Power of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the Note Amount is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to L_ 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 10 of 15 Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Property, at the time and place of sale fixed by it in said Notice of Sale, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in Such order as it may determine, at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (i) the accrued interest and unpaid principal under the Construction Loan; (ii) all other sums then secured hereby; and (iii) the remainder, if any, to the person or persons legally entitled thereto. (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under Security, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property, unless such receivership is sooner terminated. Section 7.6 remedy conferred Deed of Trust is Remedies Cumulative. No right, power or upon or reserved to the Beneficiary by this intended to be exclusive of any other right, 05/10/91 ATTACHMENT No. 6 5127u/2460/009 Page 11 of 15 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 given hereunder or now or hereafter existing at law or in equity. Section 7.7 No Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Default or acquiescence therein; and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach by the Trustor in the performance of the obligations hereunder shall be deemed or construed to be a consent to or waiver of obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights powers or remedies consequent on any breach or Default by the Trustor. (b) If the Beneficiary (i) grants forbearance or an extension of time for the payment of any sums secured hereby, (ii) takes other or additional security or the payment of any suns secured hereby, (iii) waives or does not exercise any right granted herein, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements of this Deed of Trust, (v) consents to the filing of any map, plat or replat affecting the Security, (vi) consents to the granting of any easement or other right affecting the Security, or (vii) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in the event of any Default then made or of any subsequent Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Site, the Beneficiary, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Security (or a part thereof) or the indebtedness secured hereby, or with reference to any of the 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 12 of 15 terms, covenants, conditions or agreements hereof, as fully and to the same extent as it might deal with the Trustor and without in any way releasing or discharging any liabilities, obligations or undertakings of the Trustor. Section 7.8 Suits to Protect the Security. The Beneficiary shall have power (upon. ninety (90) days notice to the Trustor) to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security (and the rights of the Beneficiary as secured by this Deed of Trust) by any acts which may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as'described in this Deed of Trust) in the Security and in the rents, issues, profits and revenues arising therefrom, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the security thereunder or be prejudicial to the interests of the Beneficiary. Section 7.9 Trustee May File Proofs of Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings for the entire amount due and payable by the Trustor under this Deed of Trust at the date of the institution of such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. ARTICLE VIII MISCELLANEOUS Section 8.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought. _Section 8.2 Trustor Waiver of Rights. Trustor hereby acknowledges that it is aware of and has the advice of counsel of its choice with respect to its rights under the Constitution of the United States, including, but not limited to, its rights arising under the Fourth, Fifth, Sixth and Fourteenth Amendments thereto, and the Constitution of the State of California. Trustor agrees that Beneficiary may exercise its rights hereunder in accordance with the provisions hereof, 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 Page 13 of 15 including, but not limited to, the exercise of the power of sale pursuant to Section 7.4 hereof, and Trustor hereby expressly waives and releases its rights under such Constitutions with respect thereto, including, but not limited to, its rights, if any, to notice and a hearing upon the occurrence of an Event of Default hereunder; provided, however, nothing contained herein shall be deemed to be a waiver of Trustor's rights to reinstate or redeem this Deed of Trust in accordance with applicable law. Trustor further waives to the extent permitted by law, (a) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Security, (b) all rights of valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created, and (c) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties. Section 8.3 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or person legally entitled thereto." Section 8.4 Notices. Whenever Beneficiary, Trustor or Trustee shall desire to give or serve any notice, demand, request or other communication with respect to this Deed of Trust, each such notice, demand, request, or other communication shall be in writing and shall be effective only if the same is delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipts requested, or by telegram, addressed to the address set forth in the first paragraph of this Deed of Trust. Any party may at any time change its address for such notices by delivering or mailing to the other parties hereto, as aforesaid, a notice of such change. Section 8.5 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Section 8.6 Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. 05/10/91 ATTACHMENT 110. 6 5127u/2460/009 Page 14 of 15 Section 8.7 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid on and applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. Section 8.8 No Mergeer. If title to the Property shall become vested in the Beneficiary, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary under this Deed of Trust. In addition, upon foreclosure under this Deed of Trust pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Security shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice of termination to such tenant or subtenant. Section 8.9 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. Section the singular include the so requires. 8.10 Gender and Number. In this Deed of shall include the plural and the masculine feminine and neuter and vice versa, if the Trust shall context IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written. 05/10/91 5127u/2460/009 ABDELMUTI DEVELOPMENT COMPANY AHMAD ABDELMUTI, General Partner ATTACHMENT NO. 6 Page 15 of 15 "Trustor" STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as WITNESS my hand and official seal. (SEAL) STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as WITNESS my hand and official seal. (SEAL) 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 EXHIBIT A LEGAL DESCRIPTION OF THE SITE All that certain land situated in the State of California, County of Orange, City of Huntington Beach, described as follows: 05/10/91 ATTACHMENT NO. 6 5127u/2460/009 EXHIBIT A ATTACHMENT NO. 7 SCHEDULE OF PERFORMANCE I. GENERAL PROVISIONS 1. Execution of Agreement Not later than forty-five by the Agency. The Agency (45) days after the date shall approve and execute of execution and submission this Agreement, and shall of three (3) copies of deliver one (1) copy this Agreement by the thereof to the Participant. Participant. II. ENTITLEMENT AND MAP APPLICATION CONSTRUCTION DOCUMa.TS AND BUILDING PERMITS WITH RESPECT TO THE SITE 2. Participant and Agency Application for Discretionar Permits for Project. The Participant and Agency shall apply for the conditional use permit, tentative tract map, street vacation and coastal development permit required for the construction of the project (Section 302). Within forty-five (45) days after Agency approval of this Agreement. 3. Submittal of Construction Not later than one hundred Drawings. The Participant twenty (120) days after shall submit to the City approval, of discretionary complete construction draw- entitlements (or appraisals). ings for all of the Partici- pant Improvements. 4. Review of Complete Within forty-five (45) days Drawings. The City and after submittal by its Building Official shall Participant. review the construction drawings submitted by the Participant. 5. Final Review of Complete Within twenty (20) days Drawings. The City and after resubmittal by the its Building Official shall Participant. review the construction drawings (revisions) sub- mitted by the Participant. 05/10/91 5127u/2460/009 ATTACHMENT NO. 7 Page 1 of 2 I 6. Obtainina of Building Permits. Participant shall obtain all building and other permits needed to commence construction of the Participant Improvements. III. ESCROW 7. Opening of Escrows. Agency and Participant open escrows for the Agency Parcel Conveyance and the Remainder Conveyance. S. Close of Escrow. Escrow closes. IV. CONSTRUCTION PHASE 9. Commencement of Construction. Participant shall obtain building permits and commence construction of the Partici- pant Improvements. 10. Completion of Construction. Participant shall complete construction of all of the Participant Improvements. 05/10/91 5127u/2460/009 Not later than twenty (20) days after approval of construction plans. Within sixty (60) days after approval by Agency of this Agreement. Within ten (10) days after the satisfaction (or waiver by the appropriate party) of all of the Conditions Precedent to Conveyance. Not later than forty- five (45) 'days after the Agency Parcel Conveyance. Not later than twenty- four (24) months after the Agency Parcel Conveyance. ATTACHMENT NO. 7 Page 2 of 2 ATTACHMENT NO. 8 RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO ) AND MAIL TAX STATEMENTS TO: } ) ) ) (Space above for recorder.] GRANT DEED For a valuable consideration receipt of which is hereby acknowledged, The REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, of the State of California, herein called "Grantor" acting to carry out the Main Pier Redevelopment Plan, herein called "Redevelopment Plan" for the Main Pier Redevelopment Project, herein called "Project", under the Community Redevelopment Law of California, hereby grants to ASDELMUTI DEVELOPMENT COMPANY, a California general partnership as its sole and separate property, herein called "Grantee", the real property hereinafter referred to as "Property", described in Exhibit "A" attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants or record described therein. 1. Said Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 2578, as amended by Ordinance No. 2634 of the City Council of the City of Huntington Beach, and an Owner Participation Agreement entered into between Grantor and Grantee dated (the "OPA"), a copy of which is on file with the Grantor at its offices as a public record and which is incorporated herein by reference. 2. The Grantee hereby covenants and agrees, for itself and its successors and assigns, that during construction and thereafter, the Grantee shall not use the Property for other than commercial and/or residential use without the prior written approval of the Agency (which the Agency may grant or deny at its sole discretion). 3. The Property is conveyed to grantee for the consideration set forth in the OPA, the sufficiency of which is 05/10/91 ATTACHMENT NO. 8 5127u/2460/009 Page 1 of 4 hereby acknowledged. Therefore, Grantee hereby covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property that the Grantee, such successors and such assigns, shall develop, maintain, and use the Property only as follows: (a) Grantee shall develop the Property and certain adjacent property owned by Grantee (collectively, the "Site") as required by the OPA. (b) Grantee shall maintain the improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. Grantee shall also maintain the required landscaping in a healthy condition. If, at any time, Grantee fails to maintain the said landscaping, and said condition is not corrected after expiration of five (5) days from the date of written notice from the Grantor, either the Grantor, or the City of Huntington Beach may perform the necessary maintenance and Grantee shall pay such costs as are reasonably incurred for such maintenance. 4. Prior to recordation of a Certificate of Completion issued by the Grantor for the improvements to be constructed on the Site: (a) The Grantee shall net make any sale, transfer, conveyance, or assignment of the Site or any part thereof or any interest therein, without the prior written consent of the Grantor except as permitted by Section 108 of the OPA. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site. (b) The 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 acquisition of the Site, the construction of improvements on the Site, and any other expenditures necessary and appropriate to develop the Site. The Grantee shall not enter into any such conveyance for financing without prior written approval of Grantor. 5. The Grantee agrees for itself and any successor in interest not to discriminate upon the basis of race, color, creed or national origin in the sale, lease, or rental or in the use or occupancy of the Property hereby conveyed or any part thereof. Grantee 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, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the Grantee itself or any person 05/10/91 ATTACH147-11T NO. 8 5127u/2460/009 Page 2 of 4 claiming under or through it, establish or permit any such practice or practices of discrimination or segregation -with reference to the selection, location, number, use or occupancy of tenants, lessees, sub -tenants, sublessees, or vendees in the Property. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: X. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, ache, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, w 05/10/91 ATTACHMENT NO. 8 5127u/2450/009 Page 3 of 4 ti 6 religion, sex, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." b. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by paragraph 4(b) of this Grant Deed; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 7. All covenants contained in this Grant Deed shall be covenants running with the land. The covenants contained in the OPA referenced in paragraph 1, in paragraph 4, and Grantee's obligation to develop the improvements on the Property provided in paragraph 3(a) of this Grant Deed shall terminate and shall become null and void upon recordation of a Certificate of Completion issued by Grantor for the Site. Grantee's obligation to maintain and use the improvements constructed as provided in paragraphs 2 and 3(b) shall terminate on (the expiration date of the Redevelopment Plan). Every covenant contained in this Grant Deed against discrimination contained in paragraph 5 of this Grant Deed shall remain in perpetuity. 8. All covenants without regard to technical classification or designation shall be binding for the benefit of the Grantor, and such covenants shall run 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. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. 05/10/91 ATTACHMENT NO. 8 5127u/2460/009 Page 4 of 4 9. Both before and after recordation of a Certificate of Completion, both Grantor, its successors and assigns, bnd Grantee and the successors and assigns of Grantee in and to all or any part of the fee title to the Property shall have the right 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, licenses, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. 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 amendments to the Redevelopment Plan which change the uses or development permitted on the Property, or otherwise change any of the restrictions or controls that apply to the Property, shall require the written consent of Grantee or the successors and assigns of Grantee in and to all or any part of the fee title to the Property, but any such amendment shall not require 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 Property. 10. The covenants contained in this Grant Deed shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized, this day of 1991. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 32 ATTEST: Secretary The Grantee agrees to be bound by the covenants set forth above. ABDCLMUTI DEVELOPMENT COMPANY AHMAD ABDELMUTI, General Partner 05/10/91 ATTACHMENT NO. 8 5127u/2460/009 Page 5 of 4 STATE OF CALIFORNIA ) } ss. COUNTY OF ORANGE } On this day of , 19 before me, the undersigned, a Notary Public in and for said State, personally appeared , known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed this instrument as the (insert title of the officer) of the Redevelopment Agency of the City of Huntington Beach and acknowledged to me that the Redevelopment Agency of the City of Huntington Beach executed it. Signature of Notary Public Name typed or printed 05/10/91 ATTACHMENT NO. 8 5127u/2460/009 EXHIBIT "A" LEGAL DESCRIPTION OF THE PROPERTY (To Be Inserted] 05/10/91 ATTACHMENT NO. B 5127u/2460/009 EXHIBIT A ATTACHMENT NO. 9 Recording Requested by } and When Recorded Return to ) and Mail Tax Statements to: ) } Space above this line for recorder's use CERTIFICATE OF COMPLETION FOR CONSTRUCTION AND DEVELOPMENT WHEREAS, the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic, hereinafter referred to as "Agency", and Abdelmuti Development Company, hereinafter referred to as "Participant", entered into that certain Owner Participation. Agreement dated , 1991 (the "Agreement") with reference to that certain real property situated in the City of Huntington Beach, California described on Exhibit "1" attached hereto and made a part hereof by this reference (the "Site"); and WHEREAS, as referenced in Section 309 of said Agreement, the Agency shall furnish the Participant with a Certificate of Completion upon completion of construction and development, which certificate shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County; and WHEREAS, such certificate shall be conclusive determination of satisfactory ccmpletion of the construction and development required by the kgreement on the Site; and WHEREAS, the Agency has conclusively determined that the construction and development on the Site required by the Agreement on the Site has been satisfactorily completed; NOW THEREFORE, 1. As provided in said Agreement, the Agency does hereby certify that the construction and development on the Site has been fully performed and completed. Any requirements for operation pursuant to the Agreement which is on file with the Agency as a public record and incorporated herein by reference, shall remain enforceable according to their terms. 2. Nothing contained in this instrument shall modify in any other way any other provisions of said Agreement. 05/13/91 ATTACHMENT NO. 9 5127u/2460/009 Page 1 of 3 IN WITNESS WHEREOF, the Agency has executed this certificate this day of , 19_ REDEVELOPMENT AGENCY OF THE CITY OF HUNTI14GTON BEACH By: ATTEST: 05/13/91 ATTACHMENT NO. 9 5127u/2460/009 Page 2 of 3 EXHIBIT "1" (To Be Inserted) 05/13/91 ATTACHMENT NO. 9 5127u/2460/009 Page 3 of 3 ATTACHMENT NO. 10 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, California 91016 [Space above for recorder.] This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Its: Dated: DECLARATION OF CONDITIONS COVENANTS AND RESTRICTIONS 1991 THIS DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS is made this day of by ABDELMUTI DEVELOPMENT COMPANY, a California partnership, as declarant (the "Participant"), to the following: 1991, general with reference A. The Participant is fee owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A" (the "Property"), which is comprised of (_) parcels ("Parcels"). The Property comprises the Site which is the subject of an agreement, further described herein, for the development, operation and maintenance of the Property for commercial and/or residential uses. B. The Redevelopment Agency of the City of Huntington Beach ("Agency") and the Participant have entered into an Owner 05/13/91 5127u/2460/009 ATTACHMENT NO. 10 Page 1 of 8 Participation Agreement dated as of concerning the development and use of the Property (the 'OPA ) which OPA is on file with the Agency as a public record and is incorporated herein by reference and which OPA provides for the execution and recordation of this document. C. Participant deems it desirable to impose a general plan for the use and maintenance of the Property, and to adopt and establish covenants, conditions and restrictions upon the Property for the purpose of enforcing and protecting the value, desirability and attractiveness thereof. NOW, THEREFORE, the Participant hereby covenants, agrees and declares that all of the Property shall be held, sold, conveyed, hypothecated, encumbered, used, occupied and improved, subject to the following covenants, conditions, restrictions and easements which are hereby declared to be for the benefit of the whole Property. These covenants, conditions, restrictions and easements shall run with the Property and shall be binding on all parties having or acquiring any right, title or interest in the Property or any part thereof (including each Parcel) and shall inure to the benefit of each owner thereof and their successors and assigns, and are imposed upon the Property and every part thereof (including each Parcel) as a servitude in favor of each and every Parcel as the dominant tenement or tenements. NOW, THEREFORE, THE PARTICIPANT AGREES AND COVENANTS AS FOLLOWS: 1. Use Restrictions. a. The Property shall be devoted to the uses specified in the Redevelopment Plan and the OPA (in conformity with the Agency's right to require a change of use for the second and third stories pursuant to Section 201 of the OPA and with the limitations of the Scope of Development attached thereto as Attachment No. 4). b. The Participant shall maintain the improvements on the Site and shall keep the Property free from any accumulation of debris or waste materials. The Participant shall also maintain the required landscaping on the Site in a healthy condition. If, at any time, Participant fails to maintain said landscaping, and said condition is not corrected after expiration of thirty (30) days from the date of written notice from the Agency, either the Agency or the City may perform the necessary landscape maintenance and Participant shall pay such costs as are reasonably incurred for such maintenance. 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 2 of 8 Issuance of a Certificate of Completion or a Partial Certificate of Completion by the Agency shall not affect Participant's obligations under this section. 2. Non -Discrimination. The Participant covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Participant itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. The Participant shall refrain from restricting the rental, sale or lease of the Property or any portion of the Property on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or.herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 3 of 8 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color; creed, religion, sex, marital status, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 3. City's Right of Review and Enforcement. The City of Huntington Beach ("City") and the Agency shall be made a party to this Declaration for the limited purpose as specified herein as follows: a. Changes or amendments to this Declaration must be submitted for City/Agency review and approval. b. In the event of inaction by Participant, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the exterior areas of the Project, for which the City and/or Agency shall be reimbursed by Participant for all costs related thereto. 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 4 of 8 C. The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City of Huntington Beach on the Property, including structures and private parking areas within the Property. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. d. This Declaration shall not be amended to remove, or to result in the effective removal, of the restrictions on the Property set forth in Sections 1, 2 and 3 hereof. As to all other types of amendments, the City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendment(s) shall be deemed disapproved, unless that time period is extended by mutual agreement of all parties. 5. Miscellaneous Provisions. a. If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. b. This Declaration shall be construed in accordance with the laws of the State of California. C. This Declaration shall be binding upon and inure to the benefit of the successors and assigns of the Participant. d. In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party i:s such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. 6. The covenants and agreements established in this Declaration shall, without regard to technical classification and designation, be binding on each Owner and any successor in 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 5 of 8 J interest to the Property, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigps, and the City of Huntington Beach, and shall remain in effect until January 1, 2017, and at that time shall terminate and be of no further force or effect, except for the covenants contained in No. 2 hereof regarding non-discrimination which shall continue in effect in perpetuity. IN WITNESS WHEREOF, Participant has executed this instrument the day and year first hereinabove written. Dated: ABDELMUTI DEVELOPMENT COMPANY AHMAD ABDELMUTI, General Partner 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 6 of 8 "PARTICIPANT" K- STATE OF CALIFORNIA COUNTY OF ORANGE On before me, the undersigned, a Notary Public in and for said State, personally appeared AHMAD ABDELMUTI, personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument, personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument. WITNESS my hand and official seal. (SEAL) 05/13/91 ATTACHMENT NO. 10 5127u/2460/009 Page 7 of 8 EXHIBIT "A" LEGAL DESCRIPTION (To Be Inserted) 05/13/91 ATTACHMENT N0. 10 5127u/2460/009 Page 8 of 8 ATTACHMENT NO. 11 REMAINDER PARCEL GRANT DEED RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Huntington Beach, CA GRANT DEED The undersigned declares that the documentary transfer tax is $ and is computed on the full value of the interest or property conveyed, or is computed on the full value less the value of liens or encumbrances remaining thereon at the time of sale. The land, tenements or realty is located in unincorporated area /�/ city of and FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, GRANTOR: [Participant), a California general partnership, duly organized under the laws of the State of California hereby GRANT(S) to THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, the following described real property in the City of Huntington Beach, County of Orange, State of California: See Exhibit "A" attached hereto and made a part hereof. 05/13/91 5127u/2460/009 a California By: Its: ATTACHMENT NO. 11 _ r a EXHIBIT "A" LEGAL DESCRIPTION OF PARTICIPANT'S PARCEL (To Be Insertedl O5/13/91 ATTACHMENT NO. 11 5127u/2460/009 ATTACIDIENT NO. 12 APPRAISAL PROCEDURE In the event that a value must be determined for the Guaranteed Rental Rate under Section 201, paragraph 8 of the Agreement, then the Guaranteed Rental Rate shall be determined by appraisal conducted within the times, and in the manner, set forth below: (i) Agency and Participant shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the American Institute of Real Estate Appraisers or any successor thereto or the Society of Real Estate Appraisers, or any successor thereto (or in the event the American Institute or Society of Real Estate Appraisers or any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise commercial real estate set forth immediately below), with at least ten (10) years professional experience in Southern California in appraising commercial properties. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to any of the parties hereto, or their successors. The cost of the services performed by such appraiser shall, be borne solely by Agency. The single appraiser jointly appointed by the parties shall determine the Guaranteed Rental Rate in the manner herein specified and shall render his or her appraisal within sixty (60) days after said appraiser has been selected. (ii) Failing the joint action of Agency and Participant, each shall, within fifteen (15) days, separately at its own cost designate an appraiser meeting the qualifications stated in subparagraph (i) above. If two appraisers are appointed and they concur on the Guaranteed Rental Rate in the manner hereinabove specified, the values determined by them shall be the Guaranteed Rental Rate for purposes of determining the payments pursuant to the formula set forth in Section 201 of the Agreement. If the appraisers do not concur, and the difference between the respective higher and lower determinations of the Guaranteed Rental Rate an amount less than ten percent (10%) of the amount of the higher determination of the Guaranteed Rental Rate, the mean average of the two Agency Initials 05/20/91 5127u/2460/009 ATTACHMENT NO. 12 Page 1 of 3 Developer Initials r determinations shall be the Guaranteed Rental Rate of the Premises for purposes of determining the payments pursuant to the formula set forth in Section 201 of the Agreement. The two appraisers shall render their respective appraisals within sixty (60) days after they have been selected. If the difference between the two determinations exceeds the amount specified above, the two appraisers shall jointly select a third appraiser meeting the qualifications set forth in subparagraph (i) above, and if they are unable to agree on a third appraiser, either of the parties to this Agreement, by giving fifteen (15) days notice to the other party, may apply to the presiding judge of the Superior Court of Orange County to select a third appraiser who meets the qualifications set forth in subparagraph (i) above. Within fifteen (15) days from the date of the selection of the third appraiser, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions. The third appraiser shall review all such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of the Guaranteed Rental Rate are the most reasonable determinations under the criteria set forth above. The third appraiser shall not be permitted to make any other independent determination of the Guaranteed Rental Rate. The appraiser's determinations found by the third appraiser to be the most reasonable determinations shall be the Guaranteed Rental Rate for purposes of determining the payment pursuant to the formula set forth in Section 201 of the Agreement. The third appraiser's conclusions shall be reached within thirty (30) days from the selection of the third appraiser. The expenses related to the selection and services of the third appraiser shall be borne solely by the Agency. (iii) In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to subparagraphs (i) or (ii) above. (iv) In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to subparagraphs (i) or (ii) above, such Guaranteed Rental Rate shall remain in effect for a period of three (3) years. At the conclusion of such three (3) year period, the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by Agency Initials 05/20/91 5127u/2460/009 ATTACHMENT NO. 12 Page 2 of 3 Developer Initials t the appraisal method set forth in this Attachment No. 12 if so elected by Agency, in the manner set forth in Section 201, paragraph 8 of the Agreement. (v) The Guaranteed Rental Rate established herein and under Section 201 of the Agreement shall be binding and conclusive on the parties for purposes of determining the payments pursuant to the formula set forth in Section 201 of the Agreement. If for any reason the Guaranteed Rental Rate is not established under Section 201 of the Agreement, no party may avail itself of the Guaranteed Rental Rate more favorable to such party than the value determined by the appraiser appointed by such party. (vi) Each appraiser shall certify that he or she has personally inspected all properties used as comparisons, that he or she has no past, present or contemplated future interest in the premises, the improvements or the "Site" (as defined in the OPA), or any part thereof, that the compensation to be received by him or her from any source for making the appraisal is solely in accordance with the Agreement, that he or she has followed the instructions as set forth in Section 614 of the Agreement for determining the Guaranteed Rental Rate as of the applicable date, that neither his or her employment to make the appraisal nor his or her compensation therefor is contingent upon reporting a predetermined value or values, or a value or values within a predetermined range of values, that he or she has had at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the premises, that he or she is a member of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers or respective successors thereto and that his or her appraisal was prepared in conformity with the standards of professional practice of the Institute or Society or successor thereto. (vii) The determination of Guaranteed Rental Rate shall be determined by reference to like kind property rentals. Notwithstanding the foregoing, the parties acknowledge that as of the date the Agreement is executed, the market for office space in the vicinity of the Site is uncertain and that there is minimal comparable rental information available for new office developments. The intent of the parties is that Participant Shall receive a fair market rental rate for the upper story office space. Agency Initials 05/20/91 5127u/2460/009 ATTACHMENT NO. 12 Page 3 of 3 Developer Initials REQUEST FOR CITY COUNCIL/ . REDEVELOPMENT AGENCY ACTION ED 92-39 August 31, 1992 Honorable Mayor/Chairman & City CounciftWdevelopment Agency Members Submitted to: Michael T. Uberuaga, City Administrator/Executive Director Submitted by: Barbara A. Kaiser, Deputy City Administrator/Economic Development ? Prepared by: Second Amendment to Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Subject: Huntington Beach/Main-Pier Redevelopment Project Area Consistent with Council Policy? [ ] 'Ves i ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: HWAVAU"AA • 1 L Transmitted to the City Council/Redevelopment Agency for consideration is a Second Amendment to the Abdelmuti Development Company Owner Participation Agreement. This Amendment provides for a $500,000-Increase in their construction Ioan and for assistance in relocating to a 3,616 square foot retail space located at 200 Main Street. MUNCii /AGENCY RECOMMEND&TiON: 1) Conduct a joint public/hearing on the Second Amendment to the Owner Participation Agreement. 2) Adopt City Council. Resolution No. and Agency Resolution No. authorizing the execution and implementation of the Second Amendment to the Owner Participation Agreement. • 3) Approve the reallocation of $620,000 from redevelopment funds previously allocated to cover business losses for this project. The balance of $940,000 will revert to the Main -Pier -fund balance. 4) Authorize the Chairman and Clerk of the Agency to execute the attached lease with Robert Koury Properties and the lease with Abdelmuti Development. ANALYSIS: On May 28, 1991, the City/Agency entered into an Owner Participation Agreement (OPA) providing for the Agency to assist Abdelmuti Development Company (Developer) in the development of a new three-story building, consisting of approximately 18,000 square feet of new commerciaUretail on the ground floor, and approximately 24,000 square feet of office use on the second and third floors. The location of this proposed project is the northeast corner of Main street and Pacific Coast Highway. On November 4, 1991, the City/Agency approved an amendment to the Abdelmuti OPA providing for a four-story building consisting of 17,140 square feet of new commercial/retail on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fourAh boors - for a total of 48,060 square feet. The participant is now requesting a Second Amendment to the OPA. The purpose of the proposed Second Amendment is to increase the loan amount by approximately $500,000 from the previous maximum of $3.5 million, or $110/square foot, whichever is lesser. Additionally, the participant is requesting relocation assistance at a cost to the Agency not to exceed $120,000. This relocation assistance will be provided as follows: 1) The Agency will lease 3,616 square feet of retail space from Robert Koury Properties located at 200 Main Street (northeast corner of Main Street and Walnut Avenue) which in turn the Participant subleases from the Agency for a term of 13 months for $1.00 (one month is to allow tenant improvement work to be completed). N=: The participant must start construction by January 1, 1993, or costs of the lease must be paid for by Mr. Abdelmuti for the entire -13 months. 2) If the participant should lease additional retail space for relocation purposes. the Agency will reimburse the participant the difference of $120,000, less the cost of the Koury space for orie year. For example: Total relocation budget $ 120,000 Koury lease for one year 98.000 Available to apply to additional relocation space rent $ 21.500 In order to secure a lease with Koury Properties, the Agency will be required to enter Into a five-year lease. In today's financial market, lenders are requiring that income property be at a minimum 90% leased with long-term leases (at least five-year leases) to be eligible for take-out financing. Therefore, the Agency is required to enter into a five-year agreement to secure the proposed lease. The Agency's potential exposure (very unlike]) for the additional four years of the lease If the space were to remain vacant would be $445,770. 1n exchange for the above described loan increase and relocation assistance, the participant is waiving its right to the $1,560,000 in potential business interruption losses previously agreed to in the OPA. Therefore, the Agency has effectively reduced its net financial exposure by $494,230. In addition, the Second Amendment to the OPA provides for the Participant to hire a construction manager, at his cost, for the project, and to use the former Terry Buick site as a construction staging area in conjunction with other property owners on the block. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector Investments in redevelopment project areas. The proposed Owner Participation Agreement Second Amendment obligates the Agency to be responsible for the following: 2 Age-ncy"s _R esnon,5bil i tks: The Agency is responsible and shall commit the following to the project as it relates to this Second Amendment: a) Provide a loan at a maximum amount of $4 million or equal to $110 per square foot of building area, whichever is lesser, less $1.3 million participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7%. b) Compensate the participant for legitimate temporary relocation costs for a 13-month period. The Agency;shall lease, on behalf of the participant. 3,616 square feet of ground floor retail space at 200 Main Street in the Koury building. The participant will, in turn, sublease the 3,616 square foot retail space from the Agency at a rental of $1.00. In the event the participant leases additional temporary business space in addition to the Koury building, the Agency shall reimburse the participant . the rent paid on the additional temporary business location in a total not to exceed $120,000, less the rent paid by the Agency to the Koury building. In addition to the Agency costs detailed above, as a part of the Agreement, the Agency accepts a ontingent liability to lease 3,616 square feet of space for an additional four year term. The maximum potential cost to the Agency, which would be incurred in the event the space cannot be subleased during the four year period, is $445,770 in nominal dollars ($340,170 in net present value terms). This reflects the base rent rate of $2.00 per square foot per month, plus $ .27 per square foot per month triple net charges, escalated at 5% annually over the four year term. MIDINQ SORCii: On May 23, 1991. funds totaling $4,910,000, were originally allocated for this project - $1,560,000 of that was for potential business Interruption losses. The funds needed as it relates to this Second Amendment are a maximum of $500,000 for an increase of the construction loan and a maximum of $120,000 for relocation for a total of $620,000. The $620,000 required for this second amendment is to be reallocated from the $1,560,000 previously allocated as stated above. The balance of $940,000 will revert to the Main -Pier fund balance. �I,TERNATIVE I1C'['iONS: 1) Continue action on the Owner Participation Agreement and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer: ATTn11MENTS: I) Health and Safety Code Report 33433 2) Second Amendment to the Owner Participation Agreement 3) Redevelopment Agency Resolutions ' 4) City Council Resolutions 5) Koury Lease 6) Abdelmuti Lease MTU/BAK/KBB:jar 1226r 3 REQUEST FOR CITY COUNCIL/ ~' REDEVELOPMENT AGENCY ACTION RH91-75 November 4, 1991 Date r Submitted to: Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted by: Michael T-iiberuaga, City Administrator/Chief Executive Officer Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development Fiat Amendment to the Owner Participation Agreement between Abdelmuti Subject- Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area Consistent with Council Policy? Yes [ I New Policy or Exception oZ! $ Statement of Issue, Recommendation, Analysis, Funding Source, Alterr�ai - 2 tNCiL 1 SUIENTM OF ISSUE: Transmitted for City Council/Redevelopment Agency consideration is tFE"�Eiril' -- Amendment to the Owner Participation Agreement with Abdelmuti Development Company previously approved on May 28, 1991. The original Agreement provides for -the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 19,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The proposed Amendment calls for the development of a four-story building consisting of 17,140 square feet of new commercial/retail on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fourth floors - for a total of 48,060 square feet. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the First Amendment to the Owner Participation Agreement; and 2) Adopt City Council Resolution No. dl.217 and Agency Resolution No. authorizing the execution and implementation of the First Amendment to the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development Company. - On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company ("Participant") for the development of a new three—story building, consisting of approximately 19,000 sf of new commercial/retail on the ground floor, and a total of approximately 24,000 sf of office use on the second and third floors. r ,� On July 12, 1991, the Participant submitted plans illustrating a proposed four-story building, totaling 49,433 sf. Staff and Agency members expressed concerns about the following items: * The addition of a fourth floor and the resulting height; * The size and ration of the plaza at the corner of Main Street and Pacific Coast Highway; * The use of the 10' dedications at either side of the building; * Responsibility for providing required parking in excess of 42,000 sf; and * The Iayout of access corridors for the upper stories. During a Redevelopment study session on September 30, 1991, the Agency gave staff Informal direction as to the issues outlined above. Staff and the Agency Special Counsel have drafted the attached First Amendment to the OPA, incorporating language that accurately reflects the agreed upon design changes. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types 'of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The salient points of the Agreement are outlined in the attached 33433 Report prepared by the Agency's economic consultant, Keyser Marston Associates, Inc. A summary of the changes incorporated into the First Amendment to the OPA are listed below: a) The Participant agrees to construct grouZd floor retail space of approximately 17,140 sf, and second, third & fourth floor office space totaling approximately 30,920 sf, for a total building area of approximately 48,060 square feet. b) The Participant will remove all (5) proposed parking spaces onsite and provide upgraded site improvements from the back of the building to the property line. c) Participant shall pay 50% of the offsite parking in lieu fee of Twelve Thousand ($12,000) per space for all square footage in excess of 42,000 sf per code. As proposed, the Participant will be required to pay in -lieu fees for the additional 6,000 sf of office being constructed at a rate of four spaces per 1,000 sf, equaling 24 spaces at $6,000 per space, totaling $144,000. d) Participant shall not provide any parking onsite for the project. e) Participant shall construct a plaza at the corner of Main Street and Pacific Coast Highway of no less than 1,000 sf in size. f) Participant shall not encroach into 10' dedication on Pacific Coast Highway for the purpose of constructing pedestrian or upper story access, but rather to be preserved for future development, therefore, any stairways in this vicinity will need to be Internalized. •r Q. 4 On October 24, 1991, the Design Review Board (DRB) reviewed Abdelmuti's site plans, elevations, colors, materials, and a scaled -down model of the proposed project. The DRB stated that the roof line, as illustrated in the submitted plans, encroached into the 10' dedication and would need to be either eliminated or redesigned so there would be no encroachment into the 10' dedication. g) Participant shall provide internal corridor circulation for upper story office uses. On October 10, 1991, the Redevelopment Committee reviewed and supported these changes to the First Amendment to the OPA as outlined above. There is no significant fiscal impact as a result of the recommended action. ALTERNATIVE ACTIQ ]jam: 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. 1) Health & Safety Code Report 33433 2) First Amendment to OPA 3) Redevelopment Agency Resolutions 4) Staff Report dated May 28, 1991. 5) City Council Resolutions d) Site Map MTU/BAK/KBB.Is 9771r REQUEST FOR CITY COUNCIL/ REDEVELOPMENT AGENCY ACTION ED 94-53 Date November 21, 1994 Submitted to: Honorable Mayor/Chairman and Council/Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Executive Director-52kJ Prepared by: Barbara A. Kaiser, Deputy City Administrator/Ec� co omc Development Subject: Third Amendment to the Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area Consistent with Council Policy? [XI Yes [ ] New Policy or Exception Statement of Issue, Recommendation, //171* 4%Z4 aeW off- -:& // Statement of Issues , Funding Source, Alternative Actions, Attachments: Transmitted to the Council/Agency for consideration is a Third Amendment to the Abdelmuti Development Company Owner Participation Agreement. This Amendment provides for a few minor modifications to the existing agreement. Council/Agency Recommendation: Motion to continue the public hearing open to the meeting of November 21, 1994. Analysis: The amended documents were not finalized by the agenda deadline. MTU/BAK/KBB:ls I 11-04-1994 17:31 213 622 5204 KEYSER MARSTON ASSOC. P.02 BQ300 y R=PQ'RT moats TO SZMXOX 33433 of the CZLI702NIA 2— Law on a TEM 3 Inlimetsso 3ut own TUTICZ MON by and between the it WBVAJUWPN303T Remy OY Tn C17T OF ZUTINW= 3 lux and BRD TI DIV CO3" T This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Third Amendment to the owner Participation Agreement (*Third Amendment*) between the Agency and Abdelauti Development Company ("Participant") related to a 47,030 square foot commercial development. The development is located at the corner or Bain Street and Pacific Coast Highway in the wain Pier Redevelopment project ]Iran in the City of Huntington beach. This report deooribes and epecitisss 1. The Agency costs associated with the financial modifications embodied in the proposed Third Amendment to the Omer Participation Agreement; 2. The estimated value of the interests conveyed to the Participant, determined at the highest use permitted under the Redevelopment Planj 3. The purchase price paid by the Participant and the reasons for any difference from the fair market value determined for the highest use allowed by the Redevelopment plan; and 4. The wanner in which the proposed project meets the Agency -to established goals for eliminating blight within the redevelopment project area. This report and the proposed Third Amendment to the Owner Participation Agreement are to be made available for public inspection prior to the approval of the Third Amendment. h. 53aI= NOI>ri'B of '!= The Agency executed an Owner Participation Agreement with Ahmad Abdelmmuti on May Ze, 1991, which required the development of a four story retail/otfice complex totaling 47,O50 square loot of gross buildinq area. on November 41 1991 and August 31, 1992 the Agency and the Participant entered into First and Second Amendments to the Owner participation Agreament. On November 16, 1992 the ' �/c �cu>>�,l/�a men-1 /�nul YII� 11-04-1994 17:33 213 622 S204 KEVSER MARSTON ASSOC. p•03 Participant executed the Promissory Note for the Construction Loan to Abdelmuti Development Company in accordance with the terms of the Owner Participation Agreement. The original Owner Participation Agreement, the two Amendments to the Agreement and the Promissory Lott will be collectively referred to as the RAgrsement" for the purposes of this report. At this time, the Agency and the Participant are proposing to modify the financial terms of the Agreement in the form of a Third Amendment to the Agreement. The focus of this report is to identify the financial ramifications of the proposed modifications. • I. In accordance with the terms of the Agreement, the participant has completed the following activities: a. Demolished the existing buildings on the subject site and conveyed sufficient property to the Agency to meat the set -back requirements for the construction of a "Public Plaza". b. Constructed 47,050 square fast of commercial space at the corner of Wain Street and Pacific Coast Highway. c. Contributed a minim of $1.3 million to the construction of the improvements. The Agreement allowed the Participant to borrow $3,960,000 from the Agency for construction financing. As of the effective date of the proposed Third Amendment, the Participant has borrowed $2,9740671. As of January 1, 1994, $113,382 in interest charges had accrued on the Agency loan, and $31,046 in debt service payments had been made by the Participant. The proposed Third Amendment calls for the forgiveness of interest that would have otherwise been accrued during 1994. Thus, the outstanding principal balance of the Agency loan will be $3,037,007 as of January 1, 1995. The Participant has completed project construction with the exception of tenant improvements for tho as yet unleased space. Within the parameters of the Agreement, the participant has the right to borrow additional funds, up to a maximum total of $3,990,000, to complete the tenant improvements construction. The Agency loan Faust be fully amortized over a fifteen year term co=mencinq on January 1, 1995. The monthly debt service payments will be based on a 74 interest rate, which equates to a 10.79; mortgage constant. Based on the $3,037,007 outstanding balance as of January i, 1993, the monthly debt service payments total $27,397, which equates to $327,370 P 11-04-1994 17:35 213 622 5204 KEYSER MARSTON ASSOC. P.04 annually. The debt service amount will increase commensurately with any additional loan disbursements to complete the construction of tenant improvemente. _. in accordanos with the terms of the Agreement, the Agency has completed the following aetivitiest a. Conveyed a portion of an Agency -owned parcel in exchange for the Participant's conveyance of the parcel used for the Public Pla:a. 'b. rinanced $230,000 in off -site improvement costs. c. Cvmpenrated the participant for $120,Ooo in temporary relocation costa incurred over a twelve month period. d. Provided a construction loan to the project that will be fully amortized over fifteen years, at an interest rats of 7%. The outstanding principal balance as of January t, 1995 is $3,037,007. The maximum potential loan anount is $30980,000. The executed Agreement also requirex the Agency to accept the following responsibilities in the future: a. Compensate the Participant for the difference between the base rent for office space of $1.55 per square foot and the actual rent achieved by 20, 30o square feet of office space on the second and third floors of the buildinq. The bass rant will increase annually at an amount equal to the percentage increase in the Consumers Price imax. b. If required, the Agency must construct a parking garage adjacent the site, providing 141 parking spaces to serve the Project. The Third Amendment includes the following financial modifications to the Aqrsement terns: a. The rental subsidy payments will not commence. until January 1, 1995. These payments will continue through December 31, 2018. Under the executed Agreement terms, the rental subsidy payments would have commenced on January 1, 1998 and continued through December 31, 2017. b. The Agency must pay $.25 per square foot per month in triple net charges to the Participant. These charges will commence on January 1, 1995 and terminate on December 31, 2019. The chime will remain fixed at $.25 over the entire term of the Agreement. 3 11-04-1994 17:36 213 622 S204 KEV5ER MARSTON ASSOC. p.05 31. COAT O! 'PS= To "M AGMI .As detailed in the Summary Report submitted for the Second Amendment to the Agreement, the not Agency costs associated vith the executed Agreement are $4,962,000. The financial impacts or the modifications proposed in the Third 1lmandaant are: Got znoreasms Foregone Interest Payments $3,037,007 for 12 months $ 7% interest Triple Not Charges 200300 of $ $,25/month for 24 years Total Cost Increases agat_D.n Rent Subsidy Deferral Savings in 1994 (Less) pV subsidy in sole Not Subsidy Deferral Savings Decrease its Projected Rent Subsidy Total Cost Savings Total Cost Increase $2191300 347.200 _ - $766,700 $330,+30/0�� ( 194 $3140300 94161190 $730,$00 $ 35,900 As can be seen above, the financial modifications embodied in the Third Amendment result in a projected increase in Agency costs of $35,900, This amount represents a loss than 1% increase in the Agency costs projected to be incurred for the implementation of the executed Agreement, which oan be considered a nominal increase. C, RBTI71iTSD VAMP OP TU 13ITIAlaTS TO D! C=V W2>D TO 'M VTICzn" DlTEsMN= AT M RIMM d/S PESYITM VX= TWX >tsDsPlLDVMT PLAN The euchange. of participant and Agency owned properties that occurred in accordance with the executed Agreesent has been deemed an equal axchange. The Third Amendment to the Agreement in no way modifies the terms of the conveyance. D. PuacELss men 3 7= sy Tu mucYnsT An Rnmo n T+OR an Dir>rmumeX DR N Tea rAn 3MAM VALUE as't 7M Tm ===T Vds =WsA "M mv=APXM 3%= The Participant granted an equal amount of Sand to the project as van received from the Agency. The Agency and participant properties embody similar attributes, and have essentially equivalent market values. Thus, there is no difference between the purchase price paid by the participant and the fair market value determined at the highest use permitted under the Redevelopment Plan. 4 11-04-1994 17:38 213 622 S204 KEVSU rTON ASSOC. P.06 ZNTMssam aces :ore szXNno►rnra DT11=2 WXTazx TU MMMOMMUT ?1oJ= am Ths sub act site represents a key parcel in the revitalization activities planned for the Main pier Redevelopment Project Area. The existing improvemants on the site rare physically unsound and created a health and safety hazard. In addition, the existing project represented an underutilization of the property, which was rectified by the development of a nev four story retail and office mixed -use project. The mixed -use project fulfills the AWcy goal■ of attracting both daytime and nighttime uses to the doxntaim. 5 RESOLUTION NO. 6654 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ' ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Abdelmuti Development Company (the "Participant") entered into a certain Owner Participation Agreement, dated as of May 28, 1991 (the "OPA7) for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a officelcommercial use building and other public improvements; and The City Council amended the Agreement on November 4, 1991, and again on August 31, 1992; and The Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and The Participant and the Agency desire to approve a Third Amendment to the OPA (in the form attached hereto as Attachment W and incorporated herein) which constitutes the *Amendment" to supplement the terms of the OPA; and The Agency and the City Council of the City of Huntington Beach (the "City Council") have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with California Health & Safety Code Sections 33431 and 33433; and r 5labdelOPA/11110194 The staff report pertaining to the Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the Califomia Health & Safely Code contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the City Council does resolve as follows: Section 1: The City Council finds and determines that EIR 82-2, certified and approved, including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. Section 2: ' The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelopment Plan, but that such lesser consideration is necessary to secure the commitment of Participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues and providing for high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the OPA. Section 3: The City Council finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington 2 5labdelOPA11119194 of �. Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. Section 4: The City Council approves the Amendment in the form of Attachment'A" and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the OPA as now amended. PASSED AND ADOPTED by the . City of Huntington Beach at an adjourned regular meeting thereof held on this list day of _November , 1994. ATTEST: City Clerk REVIEWED AND APPROVED: Mayor APPROVED AS TO FORM: jtr�t�pr�ey�� INITIATED AND APPROVED: '4itiyy Administrator Director of Economic Development 3 51abdelOPA11119194 Res. No. 6654 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 21st of November ,1994 the following vote: AYES: Councilmembers: Silva, Bauer, Robitaille, Moulton -Patterson, Winchell, Leipzig, NOES: Councilmembers: Sullivan ABSENT: Councilmembers: None 4;� 04$ia City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California RESOLUTION NO. • 263 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING A THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the 'Agency") and Abdelmuti Development Company (the `Participant") entered into a certain Owner Participation Agreement, dated as of May 28, 1991 (the "OPA') for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a officelcommercial use building and other public improvements; and The Agency amended the Agreement on November 4, 1991, and again on August 31,1992; and The Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and The Participant and the Agency desire to approve a Third Amendment to the OPA (in the form attached hereto as Attachment "A" and incorporated herein) which constitutes the "Amendment" to supplement the terms of the OPA; and The Agency and the City Council of the City of Huntington Beach (the 'City Council') have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with Califomia Health & Safety Code Sections 33431 and 33433; and 5/abdelOPA111 /10/94 The staff report pertaining to the Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health & Safety Code contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the Agency does resolve as follows: Section 1: The Agency finds and determines that EIR 82-2, certified and approved, including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. Section 2: The Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelopment Plan, but that such lesser consideration is necessary to secure the commitment of Participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues and providing for high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the OPA. Section 3: The Agency finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. IA 51abdelOPAl1119194 Section 4: The Agency approves the Amendment in the form of Attachment "A' and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the OPA as now amended. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at an adjourned regular meeting thereof held on this 21st day of Ngycmbeg , 1994. ATTEST: 41-00� Agency Clerk REVIEWED AND APPROVED: Executive Dire Chairman APPROVED AS TO FORM: Aen y Counsel f 11-�a •5 � INITIATED AND APPROVED: Director of Economic Development 3 5labdelOPA11119194 Res. No. 263 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 21st day of November, 1994, and that it was do adopted by the following vote: AYES: Members: Silva, Bauer,Robitaille, Moulton -Patterson, Winchell, Leipzig, NOES: Members: Sullivan ABSENT: Members: None Clerk of the Redevelopment Agency of the City of Huntington Beach, Ca. RESOLUTION NO. 6329 A RESOLUTION OF THE CITY OF HUNTINGTON BEACH APPROVING THE ❑ISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a First Amended Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential use building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Health and_Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health and Spfpty Code, - I - contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential use building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The City Council has reviewed the EIR for this project which was previously certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 16, 1983. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1. The City Council finds and determines that EIR 82-2; as previously certified and approved including the finding of overriding considerations, is adequate for this project. Section 2. The City Council finds and determines, based upon the testimony and information presented during the public - 2 - hearing with respect to the Agreement that the consideration for the real property to be transferred to the Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The City Council hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this 4th day of Noverber , 1991. Mayor ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator APPROVED AS TO FORM: City Attorney INITIATED AND APPROVED: c..-u..._. CL_ Ee� . Director of Economic Development - 3 - f Res. No. 6329 STATE OF CALIFORNIA COUNTY OF ORANGE ss: ' CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, 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 resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 4th day of November 19 91 , by the following vote: AYES: Councilmembers: MacAllister Silva, KellXp Robitaille NOES: Councilmembers: Windhell, Green ABSENT: Councilmembers: Moulton —Patterson 1 1 y er an ex-o roc er of the City Council of the City of Huntington Beach, California "STATE OF CAUFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of Cafifomia, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: October 17, 24, 1991 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 24, '1991— at Costa Mesa, California Signature PUBLIC NOTICE, NOTICE OF JOINT PUBLIC HEARING OF THE CITY COUNCIL/ REDEVELOPMENT AGENCY MAIN -PIER REDEVELOPMENT PROJECT AREA OWNER PARTICIPATION /DISPOSITION AND DEVELOPMENT ACREEiiNER1T On Monday, November 4, at 7:00 PM, or as soon PUBLIC AfOMES thereafter as the matter may be heard, in the City Council Chambers, Hun- tington Beach City Hall lo- cated at 2000 Main Street, Huntington Beach, Califor- nia, the City Council of the City of Huntington Beach and the Redevelopment Agency ("Agency") of the City of Huntington Beach, will hold a joint public hear- ing to consider a First Amended Owner Participa- Gon/Disposition & Develop- ment Agreement to be en- tered Into between the Re development Agency of thel City .of Huntington Beach and Abdelmuti Develol$- ment Company, conveying property located within the Main -Pier Redevelopment Project Area on 'the east side of Pacific Coast High- way, between Fifth and Main Streets, (Leda] De- scription on file in the City Clerk's office). The pro- posed Agreement and fi- nancial report required Ly California Health & Safety Code Section 33433 are available for public Inspec- tion at the office of the City: Clerk at 2000 Main Street, Huntington Beach, Califor- nia. Further Information concerning this matter may also be obtained by con- tacting Keith Bohr, Project Manager, at (714) 374- 1529. By: Connie Brockway, Cosy Cler@t/RG. development Agency Clerft, City of Mun. tington Beach Published Huntington Beach Independent Octo- ber 17, 24, 1991 103-753 q� �5 PROOF OF PUBLICATION � , y J�Q7,i-J��Aci�� c D v -4 rely ,-1e., }' CITY OF HUNTINGTON BEACH COUNCIL - ADMINISTRATOR COMMUNICATION nutirivc.�ur at+cri To Honorable Mayor and From Michael T. Uberuaga City Council Members City Administrator Subject MAIN -PIER PHASE IYABDELMUTI Date September 9, 1991 DEVELOPMENT ENTITLEMENT STATUS UPDATE On May 29, 1991, the Redevelopment Agency entered into an Owner Participation Agreement with Abdelmuti Development Company to construct an approximately S0,000 square foot retail/commercial/office building at the corner of Pacific Coast Highway and Main Street. On July 12, 1991, Abdelmuti Development submitted their application for Conditional Use Permit No. 91-34 and Coastal Development Permit No. 91-21 for 101 Main Street. Attached for the Council/Agency's reference is a letter dated August 12, 1991, from Herb Fauland, Assistant Planner providing a preliminary response to Abdelmuti's application. The tentative schedule for the processing of said entitlements is as follows: v' w Expected Action: Recommendation to Planning Commission to approve architecture and design as submitted. nni Expected Action: Certification of Environmental Impact Report 89-6; Approval of Conditional Use Permit 91-34/Special Permits and Variance; Approval of Coastal Development Permit 91-21; and Approval of Tentative Parcel Map 91-235. MTU/BAK/KBB:ls 9548r Attachment: Letter dated August 12, 1991 . rX. lie Building Division 536-5241 Planning Division 536-5271 August 12, 1991 City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF COh9MUNITY DEVELOPMENT Mr. David Lang Lang Lampert Architects 199 Technology Drive, Suite 110 Irvine, California 92718 SUBJECT: CONDITIONAL USE PERMIT NO, 91-34/COASTAL DEVELOPMENT PERMIT NO. 91-21 / 101 MAIN STREET Dear Mr. Lang: The Planning Division has reviewed your request to construct a 49,853 square foot four (4) story retail/office building at 101 Main Street. In order to continue the processing of your request, the following application submittal requirements, information and/or corrections are requested: 1. A conditional exception (variance) application is required for parking (see enclosure). The exception is required based upon the following preliminary gross floor area calculations: o Proposed Parking Required - 235 spaces o Provided Parking - 5 spaces o Credit/Prior retail square footage - 86 spaces o Temporary Parking - 65 spaces 77 space deficit (142) space deficit discounting temporary parking 2. A special permit is requested as part of the written narrative for three (3) deviations from the development standards of the Downtown Specific Plan District No. 3. The written narrative shall address the special permits and how the requests improve the overall design of the project. The special permit requests are for: A. Section 4.5.05 Site -Coverage, allows a maximum 60% site coverage for projects fronting Main Street. Preliminary calculations indicate a maximum site coverage of 8A. DRUG USE is AB B. Section 4.5.09 Upper StoryEetbacK, requires an upper story setback in the following manner: (1) Projects located along Main Street require an upper story setback of 45 feet from the build to line for any portion of the structure greater than 25 feet in height. Staff's plan check indicates non-compliance. (2) Projects with an interior property line require an upper story setback of 10 feet for any portion of the structure greater than 35 feet in height. Staff's plan check indicates non-compliance. 3. Planning staff has determined in the preliminary environmental assessment review to utilize Draft EIR 140. 89-6 in processing the proposed project. The Environmental Impact Report was originally drafted to assess the environmental affects of the entire Main -Pier Phase II proposal. To adequately analyze the applicant's proposal, Planning Staff requests the following information: A. A revised EIR project description which incorporates the variance and special permit request. B. A revised EIR project description for the remaining portions of the Main -Pier Phase II proposal. C C. A revised commercial/office gross floor area total, residential unit count and parking table which addresses the project's ability to provide parking. 4. Tentative Parcel Map No. 91-235 shall be revised to reflect the following corrections and/or comments: A. The General Notes section shall be amended to reflect correct information (i.e., assessor parcel number, existing use, general plan, etc.). B. Lot 1 shall be Parcel Z and indicate net and gross acreage. C. Dash all underlying property lines or parcel lines. D. Indicate Parcel 1 as a continuous parcel. E. Indicate all offsite improvements. F. The ten (10) foot wide alley dedication for stairways shall be revised to be a 10' wide public access easement. The easement shall be part of the net lot area and shall be maintained by the property owner. G. Plot exterior border of the proposed building. 5. A massing model of the final building product will be required for Design Review Board and Planning Commission presentation. 6. The Planning Division notes the following design and architectural concerns of the project as submitted: A. Plaza area at Main Street and Pacific Coast Highway B. Tower Height C. Office Space Layout D. Access to Office Space E. ,Setbacks along Main Street and Pacific Coast Highway F. Pedestrian Circulation G. Access from Rear (alley) H. Architectural Detailing I. Rear Elevations J. Building Design Integration with the Remaining Main Pier Phase XI The Planning Division recommends that the aforementioned design concerns be addressed to properly conform to the policy direction of the Planning Commission and City Council with regards to the Pier node area of the Downtown Specific Plan. Please submit the aforementioned information and/or corrections as soon as possible in order for the Planning Division to continue the review process of your request. Please note, additional comments and concerns may be generated upon receipt of your requested information. Also, completion of the corrections and or the submittal of the additional information does not presume approval of the entitlement requested. If you should have any questions regarding the aforementioned or the processing of your application, please feel free to contact me at (714) 536-5271. Sin erely, 4 Herb Fauland Assistant Planner HF:ss xc: Mike Adams, Director Community Development Howard Zelefsky, Planning Director Barbara Kaiser, Deputy City Administrator, Economic Development Keith Bohr, Redevelopment Specialist Ray Silver, Deputy City Administrator - Mike Abdelmuti (0460d) REQUEST FOR CITY COUNCIL/ _ ' REDEVELOPMENT AGENCY ACTION RH91-7s November 4, 1991 Date Submitted to: Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Chief Executive Officer`~Z-_C_^11' Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic Development First Amendment to the Owner Participation Agreement between Abdelmuti Subject: Development Company and the Redevelopment Agency of the City of Huntington Beach/Maim-Pier Redevelopment Pro3ect Area )Q,pA � A 3,2 Q Consistent with Council Policy? Yes [ ] New Policy or Exception a2J Statement of Issue, Recommendation, Analysis, Funding Source, Alterr}a erg, •y:�.CtL STATEMENT -OF ISSUE: ACZ�7Q= Transmitted for City Council/Redevelopment Agency consideration is tff !Firs[" r Amendment to the Owner Participation Agreement with Abdelmuti Development Company previously approved on May 29, 1991. The original Agreement provides for the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The proposed Amendment calls for the development of a four-story building consisting of 17,140 square feet of new commercial/retail on the ground floor, and a total of 30,920 square feet of office use on 'the second, third, and fourth floors - for a total of 48,060 square feet. �; • Staff recommends the following actions be taken: 1) Conduct a joint •public hearing on the First Amendment to the Owner Participation Agreement; and 2) Adopt City Council Resolution No. L.0 and -Agency Resolution No. - Z/_J' .-, authorizing the execution and implementation of the First Amendment to the Owner Participation Agreement between the - Redevelopment Agency and Abdelmuti Development Company. ANALYSIS: On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company ("Participant") for the development of a new three-story building, consisting of approximately 18,000 sf of new commercial/retail on the ground floor, and a total of approximately 24,000 sf of office use on the second and third floors. lE, !If V 1 . Y 1} U P1D 4184 + On July 12, 1991, the Participant submitted plans illustrating a proposed four-story building, totaling 48,433 sf. Staff and Agency members expressed concerns about the following items: * The addition of a fourth floor and the resulting height; * The size and location of the plaza at the corner of Main Street and Pacific Coast Highway; * The use of the 10' dedications at either side of the building; * Responsibility for providing required parking in excess of 42,000 sf; and * The layout of access corridors for the upper stories. During a Redevelopment study session on September 30, 1991, the Agency gave staff Informal direction as to the issues outlined above. Staff and the Agency Special Counsel have drafted the attached First Amendment to the OPA, incorporating language that accurately reflects the agreed upon design changes. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The salient points of the Agreement are outlined in the attached 33433 Report prepared by the Agency's economic consultant, Keyser Marston Associates, Inc. A summary of the changes incorporated into the First Amendment to the OPA are listed below: a) The Participant agrees to construct ground floor retail space of approximately 17,140 sf, and second, third & fourth floor office space totaling approximately 30,920 sf, for a total building area of approximately 48,060 square feet. b) The Participant will remove all (5) proposed parking spaces onsite and provide upgraded site improvements from the back of the building to the property line. c) Participant shall pay 50% of the offsite parking in -lieu fee of Twelve Thousand ($12,000) per space for all square footage in excess of 42,000 sf per code. As proposed, the Participant will be required to pay in -lieu fees for the additional 6,000 sf of office being constructed at a rate of four spaces per 1,000 sf, equaling 24 spaces at $6,000 per space, totaling $144,000. d) Participant shall not provide any parking onsite for the project. e) Participant shall construct a plaza at the corner of Main Street and Pacific Coast Highway of no less than 1,000 sf in size. f) Participant shall not encroach into 10' dedication an Pacific Coast Highway for the purpose of constructing pedestrian or upper story access, but rather to be preserved for future development, therefore, any stairways in this vicinity will need to be internalized. On October 24, 1991, the Design Review Board (DRB) reviewed Abdelmuti's site plans, elevations, colors, materials, and a scaled —down model of the proposed project. The DRB stated that the roof line, as illustrated in the submitted plans, encroached into the 10' dedication and would need to be either eliminated or redesigned so there would be no encroachment into the 10' dedication. g) Participant shall provide internal corridor circulation for upper story office uses. On October 10, 1991, the Redevelopment Committee reviewed and supported these changes to the First Amendment to the OPA as outlined above. FUNDING SOURCE: There is no significant fiscal impact as a result of the recommended action. LTERNATIVE ACTIONS: 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. _A_TTACHN NTS: 1) Health & Safety Code Report 33433 2) First Amendment to OPA 3) Redevelopment Agency Resolutions 4) Staff Report dated May 28, 1991 5) City Council Resolutions 6) Site Map MTU/BAK/KBB:Is 9771r CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION XUNTINGTON UACN 0K* Michael T. Uberuaga From Barbara A. Kaiser To City Administrator Deputy City Administrator Main -Pier Phase II - September 30, 1991 Subject Abdelmuti Development Co. Date On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with the Abdelmuti Development Company for development of a retail/commercial office building at 101 Main Street. At the Agency's redevelopment study session on September 9, 1991, they had requested to have a preliminary review of the Abdelmutf Development Company plans prior to their going before the Planning Commission for approval of entitlements. As a result of entering into an OPA with Abdelmutf Development, and acting as the lender for this project (loan capped at $3.5 million), the Agency reserves the right to review and approve all plans. The building has been designed by the architectural firm of Lang Lampert and many meetings have been held between the architect, Mike Abdelmuti, and city staff. The architect has designed a building that reflects the current mediterranean style of downtown buildings and which will complete the gateway entrance to the downtown. As described in the Village Concept Report submitted to the City Council on May 20, 1991, "the Master Plan identifies the pier head and the area immediately across Pacific Coast Highway from the pier as the focus for the greatest intensity of future activity and development. The interdependence of public and private development activities can create this major activity node at the pier head. It is important to emphasize the development of this node and encourage this activity to extend up Main Street inland from the ocean, and to encourage pedestrian movement along the street. By expanding this activity from the pier, the commercial core along Main Street can become a lively shopping thoroughfare, oriented to pedestrians and offering opportunities to shop, dine, or browse in an ocean -related atmosphere." The difficulty in developing the Abdelmutf Development Company's building plans is specifically the integration of private purpose and public use. The building must not only serve as the new home for Jack's Surf Shop and other retail uses, but must meet public needs for plaza space, access to Main Street and Pacific Coast Highway, visitor -serving uses, and be compatible with future, adjacent buildings. While Redevelopment staff acknowledges the excellence of the development of the ground floor retail space, concern remains regarding the plaza area, 10' dedications for public access and upper floor design and pedestrian circulation. Staff comments are mainly based on documents relating to downtown development including the Downtown Specific Plan, Village Concept and Downtown Parking Master Plan RCA dated May 20, 1991, Downtown Design Guidelines, Leasing, Marketing and Management Strategy prepared by Halcyon Ltd., Design Report for Downtown Public Spaces, and a Plan for Orientation, Interpretation and Circulation along Huntington Beach's Waterfront. Sections of these reports are available in the Appendix attached to the RCA. f ' On July _12, 1991, Abdelmuti Development Company submitted their application for Conditional Use Permit No. 91-34 and Coastal Development Permit No. 91-21. The plans submitted as a part of the permit application differ in certain areas from what was specifically agreed upon in the OPA. Redevelopment staff believes that some of these deviations are positive and that others are detrimental to the overall design of the project. I would suggest that the Agency review the proposed changes to the OPA, as outlined below, and direct staff accordingly to bring back acceptable changes for formal ratification by the Agency. Said changes are specifically described below, along with recommendations. 1) Building Height arcFQgtage - OPA _Reguires: Attachment No. 4, Scope of Development Section II Participant's Responsibilities, states: "The Participant shall develop the Site with a 1]ree-StorY building totaling i1pprox1mgtely 42,000 square feet. The ground floor shall consist of i1pproxiMately 18,000 square feet f 1 and approximately 24,000 total square feet of office on the second and third floors......." participant's Submittal: Plans, as submitted, call for a four-story, 89-foot tall building with a total of 49,437 gross square feet. The fourth story totals 3,541 square feet. Staff Recommendation_ One of the long-standing design goals for the downtown has been to create a focal point gateway to the downtown at Main Street and Pacific Coast Highway. The proposed building height and tower element, along with the Pierside Pavilion across the street, seem to provide the balance needed to simulate a gateway at this intersection. The proposed revision to District 3 of the Downtown Specific Plan calls for a reduction of the maximum height from eight stories to four stories, therefore, four stories would be in conformance as proposed. Staff concurs that any square footage in excess of 42,000 square feet should be the participant's responsibility as it relates to parking. Mr. Abdelmuti advised staff that he will be responsible for the cost of parking the fourth floor. An in -lieu parking fee may need to be negotiated since parking for the project is planned on Agency -owned property. 2) plaza (corner of Main Street do-PCH? - OPA R=ires: Attachment No. 4 Scope of Development Section I Architectural Design, reads as follows: "The improvements to be constructed on the site shall be of high architectural quality, shall be well landscaped, and shall be effectively and astheticglly designed in accordance with 1he city design guidelines. :[be sha=. scale of volume. exterior compatible to, physically related to. and an enhancement to the eject area. The Participant's plans, drawings, and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Participant Improvements. 0 Y f The open spaces where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity with the Amended Redevelopment Plan for the Main -Pier Redevelopment Project Area, Downtown Specific Plan, city's Design Guidelines, ind sublect to Agencyrevle~w. All of the improvements required to be constructed by the Participant pursuant to this Attachment No. 4 collectively constitute the "Participant's Improvements." Participant's SubmiThe -plans, as submitted, consist of a four-story mediterranean structure with a combination of decks and varied setbacks creating a layered wedding -cake -like effect. At the ground level, the plans illustrate a re-ctangular plaza with dimensions o-57!-c _1-6.'_total ng 2=uare feet. Staff R=mmeDdaLign: Realizing that this is not technically a full -block project, but the first phase of at least a two-phase, multi -block project, staff has not pursued many of the amenities required as outlined below. Redevelopment staff feels strongly, however, that the main purpose of negotiating for new construction, as opposed to rehabilitation at this site, and the significant Agency financial contribution, was to receive the right-of-way dedications, setbacks, and a significant plaza area to complement the one across the street at Pierside Pavilion. The plaza area, as proposed, faces primarily onto Pacific Coast Highway and does not "open up" the corner at Main Street. Redevelopment staff recommends adding or shifting the plaza area more onto Main Street to provide symmetry to the Pierside Pavilion plaza. This could be accomplished by providing either a 450 angle cut to the proposed building, or by providing a saw tooth, or zig-zag corner cut. For Agency review, staff will present site plans to illustrate these alternative design solutions. Backgmund - The city's design guidelines, dictated by the Downtown Specific Plan, District 3, Open Space, reads as follows: Full -block developments on Main Street require public plazas at the corner of PCH & Main Street. These street -level public plazas shall be incorporated into the design of the development and approved by the director. Such plazas shall have the following characteristics: * Location - street level corner; one side must face Main Street. * Area - not less than one -thousand (1.000) square feet. * Landscaping -- not less than thirty percent (30%) of the plaza area should be planted. * Paving - all paved areas shall be textured. * Visual Feature - plazas must include a sculpture; fountain, information kiosk, pond, display, or similar visual amenity. * PubIic Seating - shall be provided. * Open Air Commercial - not more than fifty percent (50%) of the plaza area may be used for open air commercial uses. 3 L� The Downtown Specific Plan identifies the Main Street Plaza as a critical element in designing downtown. It states " The Main Street plaza should be a focal point inland from Pacific Coast Highway. Strong landscape elements such as color and texture should be incorporated into this area. Examples of this would be large paving areas with bollards, raised planters, eye-catching graphics, and banners. The outdoor aspects emphasized to include street furnishings, dining areas, kiosks, and seating areas. The possible development of a theme structure may also be appropriate. A water feature could also provide a strong link to the ocean. Pedestrian activity is critical in this area. The area should develop as the destination node on Pacific Coast Highway." 9W VA 1 ;,. gqrrl I OPA R=Ires: The OPA by means of the site plan only calls for those 10' dedications to be owned by the City/Agency as illustrated on the site plan, Attachment 1 of the OPA. It was not specifically stated as to what these access ways should be used for. Participant'sSubmittal: The plans, as submitted, illustrate a 10' public access easement on either side of the development site containing stairways which access the upper floors of the building. m : These 10' dedications were originally negotiated for two different purposes. The 10' dedication on Main Street was to be preserved in case the Lane's at 127 Main Street decided to tear down and build new and were required to dedicate 10' of their property along Walnut Avenue. It should be noted, however, that the adopted ultimate right-of-way for Walnut Avenue between Main and 6th Streets Is 60', and therefore, would not currently require the Lane's to dedicate any footage. on Walnut Avenue. The 10' dedication on PCH was to be preserved so the adjacent property owner Eldon Bagstad could move southwardly 10', thereby the Agency's 40' wide parcel on the corner of Sth Street and PCH, would become 50' wide, providing a relocation site for Frank Cracchiolo who is currently on Block IOS. If this 10' is not reserved for this proposed relocation the remaining alternative would be to encroach 10' into the existing 80' right-of-way on Sth Street to widen the Agency's lot to 50'. The participant's plans call for both of these I0' dedications to be utilized for stairwells for access to the upper stories of his building, as well as, for the proposed Coultrup development on either side of the participant. Staff suggests that a stair and walkway access be provided only at Main Street with the 10' dedication on Pacific Coast Highway being preserved for future development. In this scenario both proposed developments on Pacific Coast Highway would be required to provide upper story access internally. This Main Street accessway should be redesigned to allow upper story access to developments on either side of the 10' dedication from both Main Street and the back alley side of the building, as well as, direct grade pedestrian access from the proposed Agency parking structure to Main Street. 4) Parkin - OPA _Requires: Section 201, paragraph 6 Erce$s Parking Costs and Provision of Parking-Spacgs of the OPA states "Agency stall pay any costs necessary to provide offsite parking for the project in excess of the proposed twelve surface onsite spaces...." However, in the staff report dated May 28, 1991, under the Participant's Rts onsibilities it was stated that "the Participant will provide approximately seven (7) parking spaces onsite." 4 V ' t r participant's _Submittal: Plans, as submitted, call for five parking spaces to be provided onsite. Staff RecomMendation: Parking requirements for the project include the following: - Proposed parking required - 235 spaces - Provided Parking - 5 spaces - Credit/prior retail sq.ft. - 86 spaces - Temporary parking (Agency site) - __U spaces Deficit 79 spaces Removing the required on site spaces by absorbing them into the Agency lot/structure will enhance the rear of the proposed building where many of its patrons will be accessing the building as they walk from the parking lot/structure. Relocating these parking spaces would also allow for the replacement of square footage lost by setting back more than required on Main Street. (It should be noted that the proposed Amendment to the Downtown Specific Plan as submitted to the City Council on May 20, 1991, recommends allowing office use above the first level without additional parking requirements.) OPA R uires: Section 201, paragraph 3, Project Design of the OPA states "the Participant shall, at his cost, design and construct the project pursuant to the Scope of Development (Attachment No. 4) as a three-story building totaling approximately 42,000 square feet with approximately 18,000 square foot commercial/retail ground floor area and with hi h-0uality commerrial offjces on the second and third stories." F.articipant'g-Submittal: Plans as submitted call for office uses only on the second and third floors, an interior circulation corridor and no exterior signage. Redevelopment staff recommends that an exterior corridor and a signage program be developed for the second floor which includes 14,844 square feet of area to allow retail uses at this level. The third floor of 12,809 square feet, may be developed strictly for office uses with an interior corridor and no exterior signage. This provides for more flexibility in leasing the second and third floors for which the Agency has guaranteed Backg or and - According to the Downtown Specific Plan, District Three, (which Includes this project,) "is proposed to be the hub of the Downtown Core, containing higher intensity visitor --serving uses such as hotels, restaurants, and museums, along with specialty shops and beach -related commercial uses... This District is a prime visitor -serving commercial location directly across from the municipal pier and beach, on either side of Main Street." Examples of uses encouraged within District Three include art gallery, beauty shops, book stores, clothing stores, drug stores, florists, jewelry stores, novelties, photographic studios, sporting goods, and travel agency. Staff has spoken with real estate brokers regarding the development of office space on the second and third floors of the building. The office market is extremely weak, especially in this location, due to poor traffic access and current economic conditions. They have advised us to allow for as much flexibility as possible in designing the upper floor uses. Downtown Specific Plan January, 1989 Village Concept and Downtown Parking Master Plan May 20, 1991 Downtown Design Guidelines Leasing, Marketing, & Management Strategy for Main -Pier Redevelopment Area Downtown Public Spaces - Main Street HB - Making the Connection - A Plan for Orientation, Interpretation, and Circulation along Huntington Beach's Waterfront January, 1989 August, 1989 September 4, 1999 April, 1990 7'•6' DEDICATION yt- ►L'•O• F7MLJt E ACCESS EASEME �I+l TRA F, I:F i . oo11Mr-R-I- I-•— + 4 4LN�•n+ v.r ORIGINAL PROPERTY DIMENSION _ 196O• NEW PRC)PFR _ DIMENSION r--- 4'.0• SI-TBAZ;K 7'•0• SETBACK % 106 •0• (--I'' ELECTRIC pM )12) NFW ALPNOPpSETRASkk ENllLOCATIONi` 31 w41� S T I f • /t. JiLrd [)ING AkiC)Vt 1 25�0•—_� f--1]_C 12.0•�_ 1 ! in A 1 r I I r 1 `'•' � Ati " J.. � , f l f l I Y Fis { +�, •:J `r :rr +• IN10i'O'.1.1) I I A';[ SF+A;.-1 t(A]II �IUF ROPOSED 4-S• )RY BUILDING T n Y (RETAIL / FFICE) { E'IiOf`O'f[� ^ LEASE rinArl 11f"TALAU, I +LL! Jo • r; }��w' Y }H ylt- �- —� .�r� —y �-+!•7 Y• -- • i f it " •l /•. •� ;�1, I� /� /4 I: •� [:y IIlik T t. i i,''` ti y.� c.• I l• Ppf IF',1 ;E I, WASI 11WO N-A 1 Plr!1rU�l.h 13, c•.., ,! ►u, (UNl.lq FI Y: +•r 1 . �• ; 11+1f1),.,A I'A;M I141I AIIA{III 1151': 1'!•.v TpFE`. (oNim.1 l'+'••:: Al t.F S -3 CASF, ME NE / J --_- -- i PACIFIC COAST HIGHWAY W CC 117'-6' T• 7'-6' DEDICATION 10'-0' P;JBL.1C I . ACCESS EAS.EME TAAII, MER- ��— LANTER- T ii 1 i I r i HCP. L ti Io 30.0- NEW AL EY + o PROPOSED (2) , !� = 3 TRASH ENCLO LOCATIONS RE 131 >~ - E 41 W 'Q T_ K I ' 40 •0' Y ` z IN ORKiINAL• PROPERTY DIMENSION 106'-0• NEW PROPERTY D'J.IENSK)N 4'.0- SETBACK 7'-0• SETBACK H III IV I I!171 106-.0' !- - ELECTRIC RM 6 ,0. 74'-0' DASHED LM OF BULDWG ABOVE TYP a o o 'ROPOSM LEASE SPACE u _ L EL14TOR ELEVATOR d T = EOUn' I in v o b z O c C c ;n %J PLANTER 1 PROPOSED 4-S RY BUILDING z A (RETAIL 1 FFICE) b O O a = PROPOSED I PROPOSED _ LEASE SPACE ! RESTAURANT 14 1 1. PROPOSED WASI#NC.TONiA ROBUSTA PALM TREE ACCENT PAvFR 10'.0' PUBLIC ACCESS EASEMENT 79'•0' 2 1r•o• i O O �U O .n4 iAr .:off J z� O ' m W m a O a v 3 w w 2 z xLU f Q gyp, r a a W w W InW OQ ` M c~n z a v QNQ V 4f ¢n J %I - PROPOSED (31 PmOEM)k "I —I-- CONCRtTE wilco CANARIENStS PALL► TREES CONTROL JOINTS . f 7'-0• SETBACK 50' 0' SETBACK PACIFIC COAST HIGHWAY rI Zt. car't�r1: 3r: t - �E ci-r•.- -�� .-ira, -'.•,: }ti i;'.,4:. , -vL'. r r� • _.vyl'h •±yy�� •- :, ri :-;r�,a��� i, j'3 }`�," �.n._.�s . �ti,-. .. _-,�.--ti••.. 1*.,:..3'-�. 01 w • . N x.-J6 4 g w�-;Ai,W1A.� XG-) 84 A6 a . S NGTON;BBACH: 0 L-4-i L-JL-j L--j U L----i W.. LA... > Qw ,Downt- :i S Ic i f pe f ot .the Afl mplement.ao'h:1 of "the 9 ' E16 . -Huntington Beach: Coastal. X-. ADOPTED ]NOVEMBER T9 78- RFVTqVn 'TA?LT"AI?V 10 Ab'f,t -.I- q n HUNTI t:HUN ftffiCH U4LW PLANN#4'DW" '7 - The design concept identifies the pier -head and the area immediately across_' Pacific Coast Highway as the focus for the_greatest intensity o_ f de� velopment. These new developments should be scaled down and buffered with .intensified landscaping and. compatible uses as the development approaches the existing residential neighborhoods. The interdependence of _ public and private development activities will create a major activity nQd� . at the pier-head�� An important emphasis of the design concept is to extend Main Street hand from the oceanand_encourage pedestrian movement along_the street. By expanding this activity_from the pier, the commercial core along Main Street can become a ll�vel shop�_thoroffhfare oriented to pedestrians a`� afferirig opportun ties to shho ,dine or Drowse in an ocean -related atmosphere.. A second major activity node Is proposed for the area bounded by 6th Street, Palm Avenue, Lake Street and Orange Avenue. A variety of activities could occur within this "super -block." The activities in this area should be of a year-round variety, providing the convenience of neighborhood shopping and the clustering of public and private services, along with new opportunities for living within walking distance of the ocean. The prospect of two major activity nodes within walking distance of each other on opposite ends of the Main Street commercial corridor will tend to encourage reinvestment and revitalization of the important connecting link. The intensities in the Downtown core area are intended to be compatible with the adjacent transitional areas and the surrounding residential neighborhoods. Outside of the Downtown core, in the Townlot section of the Downtown Specific Plan. (between Goldenwest and 6th Street), the design concept is for residential and visitor -serving commercial developments, which are intended to be not only compatible with the existing residential area immediately adjacent, but to enhance and reinforce the primarily residential character of the area. The establishment of a secure private residential community adjacent to, but adequately buffered from, the public areas Is one of the objectives of the plan. The area southeast of the Downtown core (between Lake Street and beach Boulevard) is intended to provide additional opportunities for residential and visitor -serving commercial uses. The comercial uses In this area are Intended to primarily service the seasonal trade and not compete with the Downtown commercial area. The large consolidated parcels In this area allow for greater intensities and densities while still providing substantial opportunities for buffering and design controls. Public space._and_recreattonal amenitiehQel ire _an pro ecopen integral .part of any arge q. ; The intent of the design concept is. to incorporate -into the study area a strong, recognizable physical image .and' identity.:,The design concept is accomplished by coordinating several.related elements into an overall ocean • design theme, Including the following: - Orienting intensive land uses away from established residential neighborhoods. : • 1 IsZjct Tree is proposed t higher Intensity visitor -sere Along with s2ecialty shops • 'i hree Includes annrox mate node described in t serving commerc a beach, on eltFir sTd Will Qrovide vacs t uses such as hotels, restaurants and museums and beach-relateacommercial uses: istnct y 15 g•oss acres _an -s_part •o _ t e •pier -head n concept. This District is a prime visitor - directly across from the municipal pier and Main Street. This location, if properly eve ope , rest ents with numerous onportun t es to view the ment; therefore, large minimum arcel sizes should be established. Hotel, Feta_ l;_restaurant and other commercial uses with structure par mg which could also service the pier and Main Street would be appropriate uses_for 1hFS t`rrt._ Development in District Three could be consolidated Into multi -block parcels providing for greater design flexibility; however, view . corridors should be maintained along the existing right-of-ways. Restaurant and retail space should be developed at the street level on Main Street and FacTflc Coast__1iig way. Large areas devoted to public open sace should be pprovided-`for within` ed v� ment pro a ,ts similar to that described for �3lstricts Five and Six­.__Th'e_ vitality and magnetism associated with such areas will be crit ca to the reinforcement and continuation of commercial developments throughout the Downtown core. Additional inducements may be necessary to attract the type of viable development which will support and Improve the entire area; therefore, office and high_ density_residential uses should be permitted, however, only as part of a mixed -use project and on y a ,e the pe estt ar rev- el which should remain commercial. lc�pa[ing hlg_intensIty momentn thir District requires —that additional design considerations be addressed; upper story setbacks, staggered building envelopes, preservation of view light and air corridors sfiould a1T`6eTncTu a to :my pro�eci rev ew_in order to assure that the area maintain a pleasant pedestrian environment. The design concept calls for ari emphasis an pedestrian level amenities and controlled transition in build g_Ahe _1 is and uses etween the commercial core and the adjacent residential uses. This concentration of new development across from the public use areas of District Ten (the pier) will provide an economic base for the type of renovation essential to the pier and beach front. This new economic vitality Is Intended to establish a greater year-round market for the City to help support the overall revitalization effort. The Man anticipates that District Three can support 40MOO hotel rooms and associated commercial facilities. This District would also be an appropriate location for a performing arts center or multl-purpose facility which could be used by the hotels and the ocean -oriented museum/aquarium use Identified in District Ten. This District may also provide an opportunity for new -residential units. Time=sharing .residential units may also be a desired ,use In ;conjunction with.pedestrian level commercial. In all, approximately 100,000 square footage of commercial/office uses including hotels and time-sharing residential, along with 200•-400 new residential units could be accommodated in this District. 34 "—.— . � ____ _ 'S.-!....-.ii-`•'.'.Yi:f..iTl ili!'!Ts:r -ice +.� '. �Y .-. � - - - _ ... .. _ t °.+° ;L=w�`� Main Street near Acacia Avenue, and should replace Fifth Street which is d�� :r presently designated as a secondary.. The remaining local streets form a ;�', grid pattern through the Townlot and Downtown areas, and should continue - _ to serve primar[ly local needs. x` f: Main Street is a more significant local route which runs _through•the center } off' -Downtown coreagd-Js in direcJJine--yiZh the municipaL.pier. Its relationship the pier and the Downtown core make Main Street the most, Imp2rtant vlsual_%pedestrian corridor in the _ wntow areafdain Street's f role as an automobile carrier within the Downtown should be de-emphasized with primary concern focused on pedestrian circulation. Main Street should continue Inland from the Downtown core as a local street with one lane of ti travel In each direction. Consideration should be given to connecting Iridjaa)05 Avenue, designated as a secondary arterial, with Main Street .V414 and the Downtown area. The intersection of Main Street and Sixth Street with a possible interconnection to Indianapolis Avenue via Lake Street needs A. additional study, also provides a logical transportation corridor, with a connection at Main Street. Modes other than automobiles should be considered. The Southern Pacific Railroad maintains an operable line along this corridor, (north of Garfield Avenue) connecting to the Pacific Electric right-of-way which runs parallel to Lake Street (south of Garfield Avenue) into the Downtown. These rc :'es may be critical to the efficient movement of people through the City in the future. A Y(alnut Avenue extension, could serve as another inland route to connect Beach Boulevard and Lake Street. If possible, this route should be designed to tie into any future extension of Hamilton Avenue west to Beach Boulevard, Right-of-way dedication for this purpose should be required in . new developments In this area. This street could provide safe and convenient access to the commercial areas east of Lake Street and an alternative to PCH. Total right-of-way width for this service road should be 100 feet (primary arterial) to accommodate four traffic lanes,- a landscaped median, landscaped parkway, sidewalks and bike lanes. j]elawarg Street should also serve as an inland route from PCH and should remain as a secondary arterial highway. Delaware Street should convert with Huntington Street and ultimately with PCH at the present intersection of Huntington Street and PCH. Long range 'development In the Downtown area may require vacation of streets to accommodate multi -block developments. Some possible locations for abandonments • would be the first block of Fifth, Second and Third Streets. In the area bounded by Orange, Palm, Lake,and Sixth a "super block" development concept is being considered. This would require vacation of nearly all streets within District 6. Proposed improvements to the circulation system can be provided by utilizing a -combination of funding sources. Some projects, such as the - PCH re -striping project,' qualify to.be at least partially funded by State and Federal highway 'monles. `-Other improvements, such as cul-de-sacs and the proposed Walnut Avenue extension, could be financed through tax increment .43 • :r- •� -�1? -tom.- MW LEGEND OPIER/ BROAUKALY © MAN ST. PLAZA OTCJWtQ SQUARE/ SUPER BIB ® PEDESTRIAN ORIEK= AREAS GATEWAYS 0~66M DaVIOWN -EDGE TRF.A'LI`' WF LANDSC ING O C E ♦ H HUNTINGTON BEACH. �ILIFORMN Open Space Conce, PLANNING DIVISION FIGURE 3.4 Additional information is- needed on which to base recommendations for installing and maintaining landscape improvements. These will be developed' �j with the Design Guidelines Document. A. Pier/Boardwalk - This area, located at the pier and Pacific Coast Highway, should emphasize the ocean view -oriented experience. This area should include fast food stands and novelty shops, eating areas, umbrellas and overhead porticos are recommended. Banners, graphics, color scheme, and "pier boardwalk" signage will create a festive atmosphere and further complete the transition from this area to the Main Street plaza. Lighting will also be extremely important in promoting a day and night activity area. Other possible uses in this area are a museum and new dining establishments in a multi -level area, and the necessary parking to support these functions. Pedestrian movement, strolling, window shopping and eating should be the primary focus of this area. B. MainStreet Plaza - The Main Street plaza should be a focal point inland_ Trom pacc—Coast Highway. Strong landscape elements such as color and texture should be incorporated into this area. Examples of this would be_ large paving areas with bollards, raised planters, eye-catching graphics, and banners_. The out oor aspects emphasised to include street urnishings, _ dining_ areas, kiosks, and seating areas. The possible development of a theme structure may also be appropriate. A water. Teature could also Qrov e a strong i to the ocean. Pedestrian activity is critical in this area. The area should develop as the destination node on Pacific_Coast Highway. C. Town uare/Super Block - The Town Square is envisioned as a gathering spot; a resting oaisis with neighborhood shopping plaza containing terraced walks, retail stores, and patio dining. It will serve as the terminus of new deleelopment and mark the beginning of the transition to the established neighborhoods. Beacuse of its relationship to the Main Street pedestrian area, this plaza should incorporate kiosks, street furniture, transit shelters and possibly a water feature to emphasize the human .scale. Landscaping in this area should consist of grove and specimen vegetation. Equally important to landscaping and architecture within the actual Districts is the treatment of entryways. and transitional areas between the Downtown Districts and existing neighborhoods. The _ma_ in entry__wa.ys are seen as the "front doors" to the community. They_ must rovide entry experience and, physical definition. They will also definc the edge of the City in relationship to adjacent beach communitites. Possible elements which could be incorporated into these are the Huntington Beach logo, District graphics, and vertical pylons with up -lighting. Landscaping should include the "theme" palms to establish a concept which will be carried out through the corridors and Districts. Other important landscape areas are.nodes at crosswalks and main entry portals to the Plan area. The following - discussions highlight some recommedend improvements. •c---'y�T :._.. cvei=c..�_�.:a:v: ,-. +^ti: n ::--?;�:—r =•Y'�':: W.�.. — _ _._airs ._:'_u�a:=<i===i�.;�c_:iea�. �' .x.� t'TT-...w�..w:.1.C�f.�4`-3^"r"_"'.-• — ___ r � 4.5 DISTRICT 0: V15 ,TOR-�SERVIHC_CQMMERCIAL ; fie. This District is limited to the five blocks fronting on Pacific Coast Highway across from the City pier. The visitor -serving category is broad enough to include many commercial activities which will also serve the needs of the surrounding community, providing an off-season clientele for the District. The plan also allows residenrlal and office uses in this District so long as the required visitor -serving _ commercial' is provided. Large amounts of ground level open- space are encouraged n t s stir ct'to rurt er romote iR—e Feeling of openness an�ic to provide additional view opportunities. Boundaries. District #3 includes the area between PCH and Walnut, from 6th to Lake Streets. A. it '\M .��.1 II�f�f�ff.;_'l. L�1l111 4 r• 95 4.5 01 45 F r; Permitted Uses = (a) New construction and establishment of the following uses in District- 3 shall a permitted subject to the approval of a Conditional Use Permit. Change of the use shall be subject to the approval of the Director. A Antique stores Art gallery B Bakeries (no more than seven (7) employees) Banks and savings and loans branch offices (no drive -up windows; not to exceed five thousand (5,000) square feet) Barber, beauty, manicure shoos Beach, swimming and surfing equipment Bicycle sales, rental and repair Boat and marine supplies Bookstores C. Clothing stores Coin, stamp and art dealers Confectioners Curio shops D. Delicatessens Drug stores F Florists Fruit and vegetable stores G Game Stores Gifts and party shops_ I. Ice cream parlors J Jewelry stores L. Laundromats within hotels or motels M Marine insurance N Newspaper and magazine stores Newstands Novelties P Photographic studios Photographic equipment sales Photographic processing (no more than one (1) developing machine) S. Shoe stores Sporting goods I T. Y. Tourist related public and semi—public buildings, services and facilities Travel agency Yacht brokers (no storage) (b) New construction, establishment, or a change to the following uses In District #3 may be permitted subject to approval of a Conditional Use Permit: A. Arcades Auditoriums C. Cabarets Convention facilltiesf D. Dance halls and discos Dancing and/or live entertainment as a primary or accessory use H. Health and sports clubs Hotels and motels L. Liquor stores M. Museums P. Permanent Parking lots and parking structures R. Reducing salon Restaurants Residential uses Retail sales, outdoor T. Taverns Theaters *Note: This use is prohibited on the ground floor or street level fronting on Main Street. Note: The ground floor or street level of all buildings in this District shall be devoted to visitor —serving commercial activities. (c) Visitor —serving commercial uses must be a part of all development _proposed in this District with a minimum requirement that the entire street level,- or at least one—third (1/3) of the.total floor area be devoted to visitor —serving commercial uses. (d) Residential uses shall only be permitted northwest of Main Street, unless the development includes consolidation of one block area; however, no residential units shall be located within one hundred and twenty—five (125) feet of Main Street. Note: Residential uses are allowed only in conjunction with visitor -serving commercial uses. Up to one-third (1/3) of the floor area of projects on parcels smaller than a full block may be. devoted to residential Uses; projects on full block or larger parcels, up to one-half (1/2) of the floor area may be devoted to residential uses. (e) Residential uses are allowed only in conjunction with visitor -serving commercial uses. The required visitor -serving commercial portion of any initial construction shall be provided prior to or at the same time as any residential' portion. No residential unit shall be occupied until the required commercial portion is complete. (f) In the event of a consolidation of a minimum one block area, non -priority uses may be located in separate structures or on separate portions of the parcel in the context of a planned development, Qrovided_ no, less than one-third of the total floor area permitted is devoted to visiter-servin uses, and provided that substan - pub c open space and pedestrian cress znenitles�re provided to maintain a predominantly visitor -serving orientation. 4.5.02 Minimum Parcel Size. The minimum parcel size for development shall be ten thousand (10,000) square feet of net site area and one hundred (100) feet of frontage. 4.5.03 Maximum Density/Intensity. The maximum intensity of development shall be calculated by floor area ratios (FAR) for this District. The floor area ratio shall apply to the entire project area. Floor area ratios shall be calculated on gross acreage, except that the resulting floor area may not exceed by more than fifteen (15) percent, the permitted floor area calculated by net site area. (a) The maximum floor area for developments in this District shall be calculated with the following multiples: Lot Si - less than half block half block up to but less than a full block full block multi -block 113 2.0 2.5 3.25 3.5 (b) The iraximum allowable number of residential dwelling units (du) shall increase as parcel size increases according to the following: 100' up to but less than a half block half block up to but less than a full block full block Maximum Allowable Density .1 du/1,700 sq. ft. of net lot area 1 du/1,350 sq. ft. of net lot area 35 units per gross acre 98 I oubmitted to Submitted by Prepared by REQU,ESillj FORCITY C®UNUL `/1 C II QON �., May 2b, 1991 Date Honorable Mayor and City Council Members Michael T. Uberuaga, City Administr or ram. C: Michael Adams, Director of Community Developm -" X Subject VILLAGE CONCEPT Consisient with Council Policy? �of Yes AND DOWNTOWN PARKING MASTER PLAN ; rs, W r-��� I -c c� m O V ^' o r o �m ( ) New Policy or Exception — -ri ,� Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments STATEMENT OF ISSUE: Attached for the City Council's review is the material comprising the Villaoe Concept. Included as attachments are; a strike out version of the Downtown Specific Plan, the Village Concept Report and the Downtown Parking Master Plan. RECOMMENDATION. Motion to: "Direct staff to initiate a zone change code amendment to the Downtown Specific Plan for the development of standards consistent with the Village Concept. ANALYSIS: The Staff has conducted a series of study sessions with the City Council and Planning Commission in an effort to create a consensus and understanding of the Village Concept. The staff is now prepared to commence with the public hearing process to formerly amend the Downtown Specific Plan. FUNDING SOURCE: Not Applicable. ALTERNATIVE ACTION. 1. Motion to: "Continue action to allow for further discussion of the village concept". ATTACHMENTS: 1. Downtown Specific Plan 2. Village Concept -3. Downtown Parking Master MTU:MA. HZ:k]1 Strike Out Version Plan 0 pin C/GC (9517d) /9, • i„`. � ?1,^.iV a"C. �`)1-fil:=�?ff�' :J����1�i?°=�!;'rli ..iM .'.�� ;'� :Y;9; f�l`. i '�`i.��.kT 4 5 DISTRICT #3. VISITOR -SERVING COMMERCIAL a Purpose This Distnct is limited to the five blocks fronting on Pacific Coast A -AD J� Highway across from the City pier VIS(Cfl���N The visitor -serving category is broad enough to include many commercial activities which will also serve the needs of the surrounding Community, /t'j"j tyi et1 t providing an off-season clientele for the District The plan also allows residential and office uses in this District so long as the ® � 5!� required visitor -serving commercial is provided U-ge amounts of ground A7 CG evel open space are encouraged in this District to further promote the feeling of openness and to provide additional view opportunities ,1 3 Boundaries District #3 includes the area between PCH and Walnut, from ( Of 6th to Lake Streets =1�` �T Q10CIEEM1O PiII-----JC]C- mC0�mC�M I 95 k 1� 1 T. Tourist related publid'and semi-public buildings, services and facilities Travel agency Y. Yacht brokers (no storage) (b) New construction, establishment, or a change to the following uses in District #3 may be permitted subject to approval of a Conditional Use Permit: A. Arcades Auditoriums C. Cabarets Convention facilities` D. Dance halls and discos Dancing and/or live entertainment as a primary or accessory Ibi^.1 use H. Health and sports clubs G� v / Hotc;s and motels R 6. L. Liquor stores -C ✓Z� ��� �� M. Museums ')Dl I7bW/-f P. Permanent Parking lots and parking structures . � R. Reducing salon Restaurants Residential uses Retail sales, outdoor T. Taverns Theaters *Note: This use is prohibited on the ground floor or street level fronting on Main Street. Note: The ground floor or street level of all buildings in this District shall be devoted to ­:Sitor-serving commercial activities. (c) Visitor -serving commercial uses must be a part of all development proposed in this District with a minimum requirement that the entire street level, or at least one-third (1/3) of the total floor area be devoted to visitor -serving commercial uses. (d) Residential uses shall only be permitted northwest of Main Street,' unless the development includes consolidation of one block area; however, no residential units shall be located within one hundred and twenty-five (125) feet of Main Street. 97 4.5.04.. .. r Maximum. Building Height Kt (l JC� .:ice . rtto k IM All M v+N ,4 4.5.05 4.5.06 4.5.07 The maxi mum: building -height; shall be as follows: Heiahi , . less than half block 3 stories half block up to but less than a full block 4 stories full block (northwest of Main St.) 6 stories full block (southeast of Main St.) 8 stories multi -block (northwest of Main St.) 8 stories multi -block (southeast of Main St.) 8 stories Maximum Site Coverage. The maximum site coverage shall be fifty (50) percent of the net site area. Exception: Parcels fronting on Main Street shall have a maximum site coverage of sixty (60) percent of the net site area. Setback (Front Yard). The minimum front yard setback for all structures exceeding forty-two (42) inches in height shall be fifteen (15) feet. Exception: Parcels fronting on Fifth and Third Streets may be reduced to five (5) feet. Parcels fronting on Main Street must develop to a build -to -line* five (5) feet from the property line. *Note: The build -to requirement can be satisfied by extending any of the following to five (5) feet of the property line; 1) the facade of the ground floor level; 2) a plaza or patio used for open-air commercial activity; 3) a low -wall or fence (not exceeding forty-two (42) inches in height), planters or other architectural features, which extend along at least fifty (50) percent of the frontage along the lot line; 4) two (2) side walls and second story facade. Note: The following may be permitted in the front yard setback on 5th Street, 3rd Street, Main Street and PCH: benches, bicyJe racks, transparent wind screens and open-air commercial facilities. Note: An additional ROW dedication will be required for parcels fronting on PCH of five (5) feet, for additional parkway and sidewalk; and ten (10) feet for parcels fronting on Sixth Street. Setback (Side Yard). The minimum aggregate side yard requirements shall be as follows: (a) Parcels fronting on Sixth, Second and Lake Streets require twenty (20) percent of lot frontage, with not less than seven (7) feet for an interior yard and not less than fifteen (15) feet for an exterior yard, from a public ROW. (b) Parcels fronting on Fifth, Main and Third Streets and Pacific Coast Highway require zero for an interior yard. Exterior side yard requirements shall equal the front yard setback for the respective street. DOWNTOWN HUNTINGTON BEACH LAND USE MASTER PLAN (The Village Concept) The Downtown Master Plan emphasizes the ocean, ocean activities, forms, shapes and colors. The Downtown_Master design concept must concentrate on the City pier, realizing that all other areas within the_Downtow_n_are_ linked either directly or indirectly to the pier. The level of energy and excitement y gnerated—at_the_pier-head area - needs to be capitalized upon and_spread through the Downtown _core. _The pier area_ has the potential to accommoddte_a__great deal of activity__b_y_offeriqg a variety of uses and services. However, developments at the pier should also be scaled to a pedestrian level with passive activities given equal consideration with more vigorous activities. Pedestrian boardwalks on various levels and the vier itself will offer views_ of the ocean and ocean activities. The overall form _an_d shape of all development_-in_Downtown Huntington Beach should_allow people to see the ocean_ from as many_ places as _ possible. _The pier area will continue to serve as the major attraction in the City and should become the major activi_t_y node for the Downtown area. The .Master Plan identifies the pier -head and the area immediately across Pacific Coast Highway from the pier as the focus for the - - - -- greatest intensity of future activity and d_ev-elopment-. The interdependence of public and private development activities can _ create this major activity node at the pier -head. I_t_i_s important -to emphasis the development of- this_ node and._____ _ encourage this activity -to extend up Main Street inland from the ocean and to enc_ourag e pedestrian movement along the street. By expanding — this_a_ctivity from the pier,_ the commercial core along_ Main Street can become a lively shopping thoroughfare oriented to pedestrians and offering opportunities to shop, dine or browse'.in an. ocean -related atmosphere. N't en OFFICE The most critical and problematic element of creating an active daytime populaton.for -_the downtown rests with the amount of office r space_povided. Offices support restaurants, shops, personal and business services, hotels, and the surrounding residential. However, economically office space moves a project fromblackto red ink due to the current weak demand. As a_result, the development - - - - a — commu-nity is hesistent to provide office space in a mixed use _p-ro7ect. In order for office use to be considered viable development incentives and/or subsidizing may be necessary, for the_ short term. As additional development occurs, and the downtown becomes more active, we believe there will be a greater desire to lease office space. Office space in the commercial areas should be prohibited from the street level unless it can be demonstrated that they are pedestrian oriented. Pedestrian oriented office uses could be used to occupy a small percentage of a the overall frontage. This concept will accomadate approximately 70,000 square feet of office space based on existing, proposed and anticipated projects. RESIDENTIAL Currently residential development drives the economic decisions for downtown development. Projects "pencil" based on the number of residential units proposed in mixed use projects. The location of residential units is very imnportant to this plan. Staff believes that residential uses should be prohibited at the street level within the commercial areas. Resistance to the development of residential at street level will help to maintain the integrity of the pedestrian atmosphere which has to be created for successful revitalization. Residential uses should be distributed in varying densities around the Main Street core. It would also be appropriate for residential units to be constructed above the second level of the street facade if setback far enough so; as not to detract from the pedestrian character of Main`Street. This project will accomadate approximately 500 new residential units in the downtown core with an additional 500-700 units in the :surrounding area, based on existing, proposed and anticipated projects. C' Signage, landscaping, -and lighting should be used to create the visual character of the area. - Graphic elements should be bright colors to contrast with the background architecture. Landscaping should be used as an identify element to provide interest and character to specific locations. This concept will provide a logical, coherent, unified network of land uses, activities and circulation systems. - Landscaping materials for Downtown should be scaled and clustered to establish a visual identity and extensively used for buffering in transitional areas. The height limits for all new development should be limited to a maximum of three__ (_3L and_four_ (4)_ stories with the Ma_in._Street frontage limited to one �1_) and two_(2) stories, except at the intersect of Main and Pacific Coast _H�hway where a large _building bulk could be accomodated. The Pavilion project and Third Block West development should _bethe upper limits for height in t_he_downtown._ Ideally, Townsquare should anchor the northern part of the Downtown Core. These developments should serve as the cornerstones of the downtown and attempt to plan within their dictates. However, creating a village is not achieved soley by regulating the height of the buildings that line the street. Rather, the more critical relationship is the one formed between the pedestrian and the street level building facade. The street level must be designed to engage our attention. There should not be block walls to the street but rather windows, displays, doorways, alcoves and outdoor cafes. The Possibility__of__interaction between inside and outside is extended also to upper_floors-by providing balconies. These design considerations are of primary importance to the street life created. -12- ', A IA i M y. it DOWNTOWN DESIGN GUIDELINES for public & private improvements A A 'w n� ���� err �+if �r j�6i� fl Rl Ii P .-lily 151 11 - � ��;+,{nl}liil�tl111�llizi�,glllli��cl�nq� �. , Ill11flli'IIII{Ii'Ii11111{llflflilllllllx x � x Y x a >� ,1 R R 11.11 ( F . .lii'i 111 I�Y •.I��I Ii w � � x City of Huntington Beach Plazas PLAZAS Plazas are a vital cor.:ponent_of the Downtown,area an_d__pedestrianactivity_ is critical to the success of plazas. A fresh air environment in which to meet friends, eat lunch, or spend time reading or watching people will add life and activity to the Downtown. • . A visual feature shall be provided in plazas. This can be a sculpture, a fo ntain or a display pond. water features provide a strong link to the ocean and -are -very attractive to pedestrians. FOUNTAINS The us'e of fountains within the downtown area is especiallya Fountains can become a gathering spot for people and offer seating and a cool respite from bustling downtown activities. PAVING • Any decorative paving used in the private 'plaza areas should complement the paving pattern and color of the pavers used in the public right-of-way. • -outdoor paved surfaces shall not be waxed or glazed. .i FURNITURE • Furniture and fixtures Used in n_1szZs should complement those in the uc r igh t—o f -way. • Furniture should be selected with maintenance considerations in mind. Certain woods and metals do not stand up well in the damp, salt -laden air of Huntington Beach's coastal climate. • Tree grates are required in plazas. SEATING AREAS ,I • Ample seating shall be_provided. Types f of seating shall range from single 1� benches to groups of seats or benches. Steps, low walls, and planters can also provide seating. 0 Both shaded and sunny seating should be provided.' • Some seating should be provided'that offers a view of the action and other seating should be located in a quiet place. ,� 20 Focal Elements : r r GATEWAYS GatewaLs are visual elements which a�s`erise _p en_._Ey _. Gateways can range in scale. They may ide.n to ., the downtown, or, on a smaller scale, y �h they ,may mark 'the entrance to a ,rr development or a single building. AA fr TOWERS, SPIRES AND DOMES Towers, spires and domes are often viewed �• from a distance. They become landmarks and serve to provide orientation for ceo e within the downtown area. A clock as atower, for examp e, can be usedtheme for a particular development. An arched gateway attracts pedestrians. r� 7 An impressive tower can become a landmark. . C" 50 Intersection Enhancement Selected intersections within the Downtown project area, as -shown on Figure 4, have been identified as "enhanced intersections." Although the designs of intersection types 1 through 4 may vary they should be made similar by the use of common materials. • All such intersections identified shall be enhanced through the use of decorative block pavers (see section on paving) and concrete bands. INTERSECTION TYPE Z This should be a showcase intersection, setting the tone for active pedestrian use up Main Street and thoughout the downtown. Main Street and Pacific Coast Highwa • .As_req!ALreq_ y the Downtown Specific , P1'-an, full block develo ments in this Tocation must inc_u a a_pu lic_plaza of at least 1,000 square feet in siZp t die corner or main_ re_et and Pacific Coast Highway. INTERSECTION TYPE 2 These intersections along Main Street are important components of the pedestrian -scaled link between the development at the pier area and Town Square. Main Street and Walnut street Main Street and Orange Street Main Street and Olive Street Special. paving and concrete bands enhance an intersection. NEXT PAGE BEST AVAILABLE IMAGE au,_ r > 'fit •: - . ■1 xatcyon Ltd. Rcat Est'tc Advisors Dcvdoprnent Counselors t'micct & Asset Managcrs ' Tenant Mix/LeasinL, Guidelines In developing a downtown retail program, certain guidelines should be followed in order to achieve the goals of the districting concept. The following points are critical issues in leasing Main Street Huntington Beach as a unified area: • Specific merchandise categories are excluded in the tenant mix or are strategically located (buried) within the downtown. For example, tenants that are not recommended for improving the . image of The District are: - Amusement Arcades - Adult Bookstore and Video Arcades - Thrift and Liquidator Stores - Pawn shops, Check Cashing Shops l - Religious Centers - Second-hand Shops = Also to be given secondary exposure are retail offices such as: - Insurance Offices - Dentist or Other Doctors' Offices Law Offices - Finance Offices Smaller scale retail shops and restaurants typically pay higher rents and increase the Downtown's merchandise variety. However, without identifiable anchor uses, the risk of their failure -is significant.' /rp6371 b/6371 Page 16 Halcyon Ltd. Rol Estate Advisom • , Devc1opment Counselors; t Proica & Assct Managers I r • When larger spaces are leased they should be positioned when possible to act as a draw to anchor a specific cluster. However, too many larger retail shops reduce merchandise variety and the overall tenant offering. • As previously described, clustering of similar uses strengthens each merchant, reinforcing its destinational nature by creating a visible and cohesive statement. • Prime locations and heavily trafficked space are reserved or held for merchants who require volume to produce higher sales or to tenants whose merchandise appeals to a wider market. • Leasing to quality "mom & pop" operations brings unique lines of merchandise, excitement, imagination and personal service to The District. 'These entrepreneurs are often mole attuned to new designs and merchandise trends and are capable of experimenting with flew concepts. • Targeting the merchandising, marketing and promotional events around the downtown's central theme or image will reach out to a wider market, attract greater volumes of traffic and subsequently produce greater sales per square foot. • Tenant allowance can be used as a leasini2 tool to attract the desired _quality level of tenants and set the tone of the area by brin ing_;a regional tenant with '-a readily identifiable name to the area. A tenant_ allowance will also financially assist in construction costs _which may help a hesitant retailer decide to come to downtown. , /rp6371 b/6371 0 Page 17 90 i . . I V. Proposed Tenant Mix There are essentially three different commercial sub -districts in- the Main Street area, the following sub -sections outline the most appropriate tenant types for each. Subdistrict 1 - Regional Oriented Retail District This district roughly encompasses the first two blocks of Main Street between Pacific Coast Highway and Olive. Based on street orientation, ownership and currently scheduled uses, there are three distinct sub -areas in this district which are described in the following paragraphs. PCH Frontage - Direct exposure to the noise and dirt associated with PCH, strong afternoon winds and its single loaded configuration combine to restrict many potential retail uses. However, direct visual exposure to the beach and Pier area and Pacific Coast Highway constitute substantial potential for fast food uses, tourist oriented merchandise as well as surfwear/surfboard shops. • Main Street - Two sided street -front retail and high pedestrian traffic counts create significant opportunities for manv retail uses. • California Resorts/Main-Pier Phase I - Single owner creates opportunity for comprehensive marketing-strategy/tenant mix which is amplified by the planned 6-plex theaters and defined /rp6371 b/6371 �aw,.,�'•, yam•` .. � ... " 4.sy a: ter, 'Y•. ., '!ifi.,.,�"�'(�e• '^`3� `.�• ,��`,'��T,'". �ira'1•33,�.**yy''(� r'.�^y: -,=: .. � ' ...._ � 47�i:LtS .F.�•: .... .,'y�q•,^..e Y.�i :'1'•`..2 _ 73.�,.4c...� S' .... Page 18 Halcyon Ltd. Real Estate Advisors Development Counselors Project & Asset Ni inagers by its off-street pedestrian orientation. However, the ability of ownership to diversify the user group through the project's spine between PCH and Walnut will be a critical factor impacting its success. ` Recommended Tenant Types: • Quick Service Food - Surprisingly the quick service food component of the food service classification is underrepresented in this subdistrict. There is strong potential for quick service food along PCH and in the California Resorts project (due to the theaters). To only a slightly lesser degree, it is also a potential use along Main Street. Frozen yogurt shops and sandwich shops are already well represented downtown. The best selling quick service food selections that would be most appropriate for this sub -district are: Burger/Shakes Broiled and Fried Chicken Mexican Pizza Cheeses teaks/Grinders Fish & Chips (probably most appropriate on pier) /rp6371 b/6371 Page 19 I Halcyon Ltd.: Rcal Estate Advisor+ Dcvclopment Coum,clors Pmiect & A - met Managers Given the proper sizing, location and operator, virtually all of these classifications could be represented in Subdistrict 1 once the development of pier parking garages and redevelopment of the pier is complete. There are_rrtany quick snack food classifications that are strong_ morning and lunch destinations. which could also be included in Subdistrict 1 such as: T Coffee/1~spresso Cookies Ice Create Donuts/Muffins Bagels/Croissants Popcorn (Summer only) Fresh Roasted Chestnuts (Winter) Plot Pretzels (Summer only) In street front locations, these smaller uses often work well in tandem such as Coffee/Espresso with Donuts & Muffins. The Pierside_Phase I project's single_ owner management structure and expansive public spaces also create the opportunity to employ kiosks and seasonal push carts for many of these additional uses thus adding a festive feel to an area of the district. Snoring Goals S portswear/A p6areI - Deachwear represents the majority of the apparel offered in Subdistrict I and in, general it is offered in stores that also sell surf equipment such as Jack's and Beachcombers. Missing from the mix are retailers selling a wider variety of clothing, as well as other types of athletic/outdoor clothing. Tenants such as the Athletic /rp637 I b/6371 Page 20 33 a A --- rialcyu» JLA". Itcal (state Advisors Devc1opmettt Counsclom Proicct & Asset Managers Shoe Factoa, Great Para onia, Canterbury of New Zealand, Latitudes, The Gap, Cherokee and Body Options are all potential tenants who have outlets on streets in other parts of California. Casual apparel retailers such as Units, Cotton Comfort, Koala Blue, .Au Coton, La Sweaterie and Benetton are also appropriate. More formal fashions probably have less potential in the subdistrict due to its locational context (near the beach, lots of people walking around ir. swimming suits). • Restaurants - Full service restaurants are currently in short supply in Subdistrict I and have strong potential for development. However, it is important to recognize the following critical issues: ! 1. The City's intent to develop an additional 20AX) to ` 30,000 square feet of additional restaurant space on the ocean side of PC1I in the next one to three year period. 2. Second level restaurant space with ocean views is currently under construction in the Main -Pier Phase I Development and is planned in the Main -Pier Phase 11 Development. Both developments may also have quick service food components. 3. A restaurant is planned for the end of the new pier. 4. All else being equal, people prefer to have a view when they eat. /rp6371 b/6371 Page 21 I Halcyon Ltd. • Real Estatc Advisors Dcvetopmcm Counselors ; Mt'roicct & Assct Nl inabcrs , 5. Tenant improvement costs for a restaurant generally are 3 to 4 times higher than they are for a -standard tenant. The combination of the five factors outlined above requires a cautious approach be taken reeardinL, restaurant solicitation in the remainder of District 1 as well as the rest of the study area. I' There is a finite level of •rlernand for any one product type in any proiect or district. We recommend that property owners in the district investigate_a number of alternative tenant types ' before deciding o pursue a_restaurant use. • Additional Tenant Types - S_cbdistrict 1 has a trQng Qtential for additional uses such as: 1. Cards/Stationery - Along Main Street in the second block or Main -Pier Phase I. 2. Books - Second block of Main arid/or the Main - Pier Phase I interior space. 3. Gifts/Jewelry/Accessories - Main -Pier Phase I 4. Automatic Teller Machines - The parking lot block 4 development's "Mall" area. 5. One -Hour Film Dcveloping 6. Man icure/Nails/Make-overs/Cosmetics 7. Children's Gifts and Apparel ` /rp6371 b/6371 Page 22 3 halcyon .LJtci. Real Estate Advisors DeveloPmcnr Counselors ' Project & Assct Manager", 8. Art Galleries ' ). Tapes/Discs/Records Subdistrict 2 - Community/Neighborhood. Oriented District This district encompasses the blocks along Main Street between Olive and 6th and overlaps with Subdistrict 1 between Olive and Walnut. Anchor Uses Halcyon is currently working with the Redevelopment Agency to formalize a strategy to bring a grocery store (with full service meat department, wide selection of produce, large deli and adequate liquor and other dry goods) to this area of The District. A pharmacy is also �! being considered. These two uses will constitute the backbone of a rejuvenated neighborhood -serving retail subdistrict. Other tenant types Halcyon believes will be appropriate for this subdistrict include: Florists' 1,000 to 1,500 s.f. Bakery"" 1,500 to 2,000 s.f. Video Rental' 1,200 s.f. Banks' 2,0(>0 to 3,(l00 s.f. Dry Cleaners 1,000 to 2,000 s.f. Laundry 1,500 to 3,000 s.f. Health Food Store' 1,500 to 2,000 s.f. Barber Shop/1-lair Stylist 500 to 1,000 s.f. I . Jrp6371b/6371 Page 23 1`3t NEXT PAGE BEST AVAILABLE IMAGE c' �er t�Ut 1 Vil 1 i:(73rr1'. �() i; �•• _. _ it It1 1: ti v �,' IL £a,(n associaiion w�tfF� !?� I�ssociat J S . L'andsca � - ^f- :' r,--•fit+ l i of Photo: 18'-I" ti 1rchitects...: l� Q S H� d O U U _u- U nE K'a,, — WASHINGTONIA ROBUSTA Elp"T l LANDSCAPE AIICIIfTEC'R1AE Mw� c��nw♦ MAIN STREET IMPROVEMENTS. CITY OF HUNTINGTON BEACH :PRELIMINARY SITE DEVELOPMENT. PLAN SCALE 1'-20'0' 3� J L. TOM M•A':14VNro THE CONKr=CorIaM to ��• to ! ice• • • � • . �.'•' • • • • • • ' - -' ` '• • • • � .� .-••`•r:�.�'� •'� �: `' •''a `irk•`,,;�•1 •�. • � err,•. •• .. .• , • . - . � • . � • - •.. ' �-• • �' 3 �.. .t, •.��` .'.-+�,�:w A PLAN FOR ORIENTATION, INTERP RETATIDN • AND CIRCULA77ON ALONG 111]NTIIVGTON BEACH'S ATERFRONT The City of Huntington Beach - Coastal Planning Workshop 5_7 April 1990 �' LVAA&4 1 CJIiML■Llms -AL-q _UndscaM • Establish various landscape zones along Pacific Coast Highway. • Provide colorful planting within the median in specified areas. • Use landscape to screen parking in beach areas, service areas and petro-chemical operations. • Eliminate visual intrusions including landscape, utility poles, etc. (to the extent possible) where views to the ocean from the road are prominent. Sienage • Establish a hierarchy and consistency of signage. • Utilize signage and graphics to provide continuity throughout the Citv's beachfront areas. • Integrate the signage program with a program for interpretation and education. • L•se'signage to identify bicycle routes, pedestrian walkways and L-IX111 ei • Provide pedestrian lighting in heavily used pedestrian areas. • Provide landscape lighting, including the uplighting of palm trees along Pacific Coast Highway • Consider a specialized decorative light fixture along Pacific Coast Highway. Cal ways- • Consider creating gateways. • Utilize the proposed pedestrian overpasses as opportunities for environmental sculpture not just as functional elements. Beach Amenities • Provide new restroom facilities and changing rooms for beach goers. • Provide an integrated and coordinated system of benches, trash receptacles, drinking fountains, picnic tables that would help to visually integrate the various areas of the beach. • Establish a comprehensive and integrated interpretive program. • Create a series of educational/interpretive facilities that explain and highlight the wide range of beach resources. • Provide a public transportation system linking the various proposed interpretive facilities. • Establish a signage program that combines locational information with educational/interpretive information. • Expand existing brochure to include the interpretive/educational facilities offering visitors to Huntington Beach. • Establish an "interpretive walk" combining educational opportunities with the existing extensive pedestrian trail system. The Elements The Elements of Orientation/Image, Interpretation / Education and'Circulation/ - Transportation are key when discussing strategies and options for improvements to Huntington Beach's waterfront. What the image of the beachfront is and how people are oriented to it and to its facilities contribute to one's enjoyment of. the . beach as both a regional as well as a local resource. This enjoyment can in turn be enhanced through a program of interpretation and education, helping to make people aware of the unique attributes of the waterfront, its beaches, its history, its ecology. Finally the methods and systems for circulation and transportation are integral to the useability and functionality of the beach, establishing a system that first time visitor, the repeat allows people to circulate visitor, the local resident or efficiently and safely the regular beach goer. In all throughout the various cases the sense of areas of the waterfront orientation, knowing where wether it be by private you are within the region, automobile, bicycle, public within the City and within a transit or by foot. project is extremely important. Orientationllmage Equally important is the Issues: quality or the image that the The orientation and image City presents. The City of of a city is often viewed on Huntington Beach, and in several levels; a regional particular its beachfront,. level, a local level and a suffers from a lack of project level. For orientation and overall Huntington Beach it is image and identity. This is viewed on a regional level, evidenced through: arriving from Brookhurst, Beach, Golden West or Entrance. Little or no Warner Boulevards; on a sense of entrance or gateway local level traveling along into the City either as one Pacific Coast Highway and at arrives along Pacific Coast a project level, having Highway from Sunset Beach arrived at an identified place or from Newport Beach; or or destination. Similarly, arrival at the coast from one the City is often viewedr of the major boulevards differently by the several such as Warner, Beach, different types of users; the Golden West or Brookhurst. Huntington Beach Coast:! Planning tVorkshop -^~ r - — Page 9 I 7 PO"& W*A UN MM' "-" " %"Co. : MM" VILLAG6., n�. ntMtC `l4%V.AAt9 N WA=rj 0 tVMk&4k% go" ovemim 6004kj banol %om 4F 0X*W*_ r-mok 4 10� roo^* F% tz =. 3 "11.q C.-Vel 4 00=m -e ne -Yi1lage ne-MlIamlDistrict lies between 7th and Lake �treetsLand encompasses the Main Street retail Continuity - The landscaping here is fonnal and helps articulate the separation of,. pedestrians and cam The median strip is: planted with flowering shrubs and flowef.beds. 2 Each street intersection receives special., landscape treatment Paving patterns and &iib cuts should be part of an overall scheme. Ziio lot Unedevelopment shotdd be maintaingsL­ other than for courtyards and plazas. Str6et-;.,_ level retail is featured, with as much outdoor : p se hai2i . . tc ttdng and merc sing as rn2�ible., W, Lighting should combine both large area'and accent illumination to help make th6 Villa*j hub of nighttime activity. Ch,culation and Parking - circulation should be featured, wherever! 'A', _possible. Consider making Main Street PCH and Orange Avenue one way going west: ', This will maintain the existing on -street parking spaces and enable the expansion of sidewalk activities such as outdoor eating and":,", retail displays. Parking entrances should be located on 6th and Lake Streets, withpaved'_ pedestrian crossings on each cross street Drop off to the Surfing Museum and restaurants should be • separated from the general parking- drculation. corridor. This district has the most urban i ; r.haraqter,Mntainin& the greatest pedestrian L. traffic ands ,jope tj _pyLthe slowest traffic� speedsHuntington in Huntinon Beach. Page 22 "STATE OF CALIFORNIA County of Orange Im I am a Citlzen' of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: July 30, 1992 August 6, 1992 I declare, under penalty of perjury, that the foregoing is true and correct. Executed art August 6 ,199 = at Costa Mesa, Califomia. Signature PUBLIC NOTICE NOTICE OF PUBLIC HEARING CITY COUNCIL/ REDEVELOPMENT AGENCY ABDELMUTI DEVELOPMENT COMPANY OWNER PARTICIPATION AGREEMENT MAIN -PIER REDEVELOPMENT PROJECT AREA I On Monday, August 17, 1992 at 7:00 PM, or as soon thereafter as the mat- ter may be heard, at the City Council Chambers to -I. cated at 2000 Main Street, Huntington Beach, Califor- nia, the City Council of the City of Huntington Beach and the Redevelopment Agency of the City of Hun- tington Beach will hold a joint hearing to consider approval of a second Amended Owner Participa- tion Agreement (the Agree- ment) by and among the Redevelopment Agency of the City of Huntington Beach (the Agency), Abdel- muti Development Com- pany. The proposed sec. and Amended Agreement I and a staff report including a summary of the Agree. ment is available for public inspection at the Office of the City Clerk, 2000 Main I Street, Huntington Beach, California. Should you de- sire further information concerning this matter, call Keith Bohr at (714) 374- 1 1529.. CITY CLERK/ AGENCY, City Council/ CCity of Huntington iBeach, Redevelopment Agency, City of Hun- tington Beach. Published Huntington jBeach Independent July :30, August 6, 1992 075-003 PROOF OF PUBLICATION r Fel. Je CITY OF tiuwriNGTON BEACH INTER -DEPARTMENT COMMUNICATION rn,�rnwctOa re,.c� X TO: MICHAEL ADAMS, Director of Community Development FROM: MICHAEL T. UBERUAGA, City Administrator SUBJECT: ABDE 2=1 DEVELOPMENT COMPANY CONSTRUCTION DATE: October 1, 1992 By authority.granted at the City Council -meeting of October 5, 1992, the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach have no objection to Abdelmuti Development Company proceeding with construction pursuant to that certain owner participation agreement which was approved by the City Council by virtue of Resolution No. 6288 and by the Agency by virtue of Resolution No. 213. MICHAEL T. UBERUAGA City Administrator Authwizad to Publish Ad eftei aw>ts ad al kinds inducting public n>atin by Game ad the Superior Cam at Orange Counq. Cat mils. Nkmibw A 214 September 29. 1951, and A-2401 June 11.19M STATE OF CALIFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid: I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal c+srk of the OFLANGE COAST DAILY 011_OT, a newspaper of general circulation, printed and published in the City of Costa Mesa, County of Orange, State of Califomia, and that attached Notice is a true and complete copy as was printed and published in the Costa Mesa, Newport Beach, Huntington Beach, Fountain Valley. Irvine, the South Coast communities and Laguna Beach issues of said newspaper to wit the issue(s) of: May 13, 20, 1.991 I declare, under penalty of perjury, that the foregoing is tnie and correct. Executed on e, 20 .199- at Costa Mesa. California. Signature PUBLIC NOTICE NOTICE OF JOINT PUBLIC HEARING OF THE CITY COUNCIL/ REDEVELOPMENT AGENCY MAIN -PIER REDEVELOPMENT PROJECT AREA OWNER PARTICIPATION/ DISPOSITION AND DEVELOPMENT AGREEMENT On Tuesday, May 28, 1991 at 7:00 PM, or as soon thereafter as the mat- ter may be heard, in the City Council Chambers, Huntington Beach City Hall located at 2000 Main Street, Huntington Beach, California, the City council, of the City of Huntington Beach and the Redevelop - the City of Huntington Beach, will hold a joint public hearing to consider an Owner Participation/Dis- position & Development Agreement to be entered into between the Redevel- opment Agency of the City of Huntington Beach and Ahmad H. Abdelmuti con veying property located within the Main -Pier Rede velopment Project Area on the east side of Pacific Coast Highway, between Fifth and Main Streets; (Legal Description on file in the City Clerk's office). The proposed Agreement and financial report required by California Health & Safety Code Section 33433 are available for public inspect tion at the office of the City Clerk at 2000 Main Street Huntington Beach, Califorf nia. Further information concerning this matter may, also be obtained by con-1 tatting Keith Bohr, Rede-, velopment Specialist, at (714) 374-1529. By: Connie Brockway, City Clerk/Redevelop- ment Agency Clerk, City of Huntington 'Beach Published Orange Coast Daily, Pilot May 13, 20, 1991 , ._�] PROOF OF PUSUCATION "STATE OF CAUFORNIA County of Orange I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is'a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of, said newspaper to wit the issue(s) of: August 13, 20, 1992 I declare, under penalty of perjury, that the foregoing is true and correcL Executed on August 20 '1992 at Costa Mesa, California I _0",aet: l Signature PUBLIC NOTICE NOTICE OF PUBLIC HEARING CITY COUNCIL/ REDEVELOPMENT AGENCY ABDELMUTI J DEVELOPMENT' } COMPANY SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT MAIN -PIER REDEVELOPMENT I PROJECT AREA + On Monday, August 31; 1992, at 5:30 PM or as soon thereafter as the mat-; ter may be heard, at the; City Council Chambers lo4 cited at 2000 Main Street,I Huntington Beach, Califor-1 nia, the City Council of the City of Huntington Beach and the Redevelopment Agency of the City of Hun- tington Beach will hold a joint public hearing to con- sider approval of a Second Amended Owner. Participa- tion Agreement ("the Agreement") by and among the Redevelopment Agency of the City of Hun- tington Beach (the "Agency"),.. and Abdelmuti Development Company. The proposed Second Amended Agreement and. a staff report including a summary of the Agreement is available for public -An- spection at the Office, the City Clerk, 200Q Main Street, Huntington Beach, ). -California. Should you de sire further information`; concerning this matter, call Keith Bohr at (714) 374-1 i 1529. CITY CLERK/ AGENCY, City Council/ City of Huntington Beach, Redevelopment Agency, City of Hun- tington Beach. Published Huntington Beach -Fountain Valley In - .dependent August 13, 20, 1992. 082-091 PROOF OF PUBLICATION 3q,6s G NOTICE OF PUBLIC HEARING CITY COUNCIIJREDEVELOPMENT AGENCY ABDELMUTI DEVELOPMENT COMPANY SECOND AMENDMENT TO OWNER PARTICIPATION AGREEMENT MAIN —PIER REDEVELOPMENT PROJECT AREA On Monday, August 31, 1992, at 5:30 PM. or as soon thereafter as the matter may be heard, at the City Council Chambers located at 2000 Main Street, Huntington Beach, California, the City Council of the City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach will hold a joint public hearing to consider approval of a Second Amended Owner Participation Agreement (the "Agreement") by and among the Redevelopment Agency of the City of Huntington Beach (the "Agency"), and Abdelmutl Development Company. The proposed Second Amended Agreement and a staff report including a summary of the Agreement is available for public inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach, California. Should you desire further information concerning this matter, call Keith Bohr at (714) 374-1529. CITY CLERK/AGENCY, City Council/City of Huntington Beach, Redevelopment Agency, City of Huntington Beach. Published August 13, and August 20, 1992 �2�o w (D '-NivC N OJ co C ) cD t�V rn Cl) V t PUBLIC OPTICE NOTICE OF PUBLIC HEARING r THIRD AMENDMENT' TO THE OWNER " PARTICIPATION y - AGREEMENT WITH f ABDELMUTI DEVELOPMENT COMPANY On Monday, November 1994, at 6:30 PM, or as soon as thereafter pos-" sibte, in the City Council ..Chamber at 2000 Main Street„ Huntington Beach, California,, 92648, the . City Council and the Redevel- opment Agency of the City of Huntington Beach will conduct a public hearing on the Third Amendment to the .Owner Participation Agreement By and Be- tween the Redevelopment Agency of the City of Hun- tington Beach and Abdel- muti Development" Com- pany, A copy of the, Third Amendment has been pre- pared and is available at the Office of the City Clerk. Said property is located at Main Street and Pacific Coast Highway. A copy of the S.33433 of the State - of Health & -Safety,-Code Report which analyses:the fiscal impacts of the proposed amended " agreement is on file in the Office of the City Clerk for public review. iv t For more information,. contact the Department of ((pp Economic Development. Civic. Center, 2000 Main (1. Street -;.Huntington Beach, C California 92648 at (714) 536-5582. Connie Brockway, City Clerk, 2000 Main U�1 Street, Huntington Beach, CA 92648 (714) 536.5227.. Published Huntington Beach -Fountain Valley In- dependent November 3, 10, 1994. �q 111-280 (D m tiz. m Q r (D z m : , � � " Fri tit p � O �h O O ((�D (� U7 --1 r°n O M N N c 0 (n n m In S! H) p +� '`Q Q (j (D In F' rt a O O 0 � b � n ~ ( 1 O O 4!? (n W (D rd w (D H to (D (D ft' ~ hfi tri- {� t(D t1 (t t•i It (D t--h N n (D n� IN 1 � - O; PROOF OF PUBLICATION STATE OF CALIFORNIA) ) SS. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: October 13, 20, 1994 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 20 1 199 4 at Costa Mesa, California. 0 Signature PUBLIC NOTICE NOTICE OF PUBLIC HEARING THIRD AMENDMENT TO OWNER PARTICIPATION AGREEMENT WITH ASDELMUTI DEVELOPMENT, COMPANY On Monday, November 7, 1994, at 6:30 PM, or as soon as thereafter pos- sible, In the City Council Street, Huntington Beach, California, 92648, the Cittyy Council and the Redevel- opment Agency of the City of Huntington Beach will conduct a public hearing on the Third Amendment to the Owner Participation Agreement By and Be- tween the Redevelopment Agency of the City of Hun. tington Beach and Abdel. muti Development Com- pany, a copy of the Third Amendment has been pre- pared and is available at the Office of the City Clerk. For more information, contact the Department of Economic Development Civic Center, 2000 Main Street, Huntington Beach, California 92648 at (714; 536-5582. Connie Brockway, City Clerk, 2000 Main Street, Huntington Beach, CA 92648, (714) 536-5227. Published Huntington Beach -Fountain Valley In. dependent October 13, 20, 1994. 102-149 I (� -;/, Z D_ / — " f �' -, e e-l' . 12, �'- / " - - " PROOF OF PUBLICATION STATE OF CALIFORNIA) ) SS. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter, I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: November 3, 10, 1994 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on November 10 , 199 4 at Costa Mesa, California. Signature PUBLIC NOTICE i NOTICE OF PUBLIC HEARING THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT WITH ABDELMUTI DEVELOPMENT COMPANY On Monday, November 21, 1994, at 6:30 PM, or as soon as thereafter pos- sible, in the City .Council Chamber at 2000 Main Street, Huntington Beach, California, 92648, the City Council and the Redevel- opment Agency of the City of Huntington Beach will conduct a public hearing on the Third Amendment to the Owner Participation Agreement By and Be- tween the Redevelopment tington Beach and Abdel- muti Development Com- pany, A copy of the Third Amendment has been pre- pared and Is available at the Office of the City Clerk. Said property is located at Main Street and Pacific Coast Highway. A copy of the S.33433 of the State of Health &, Safety Code Report which analyses the fiscal Impacts of the proposed amended agreement is on file In the Office of the City Clerk for public review. For more information, contact the Department of Economic Development Civic Center, 2000 Main Street Huntington Beach, California 92648 at (714) 536.5582. Connie Brockway, City Clerk, 2000 Main Street, Huntington Beach, CA 92648 (714) 536.5227. Published Huntington Beach -Fountain Valley In- dependent November 3, 10, 1994. 111-280 a p�b1�s� 10 13 NOTICE 10 -Lo OF PUBLIC HEARING U THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT WITH ABDELMUTI DEVELOPMENT COMPANY On Monday, November 7, 1994, at 6:30 PM, or as soon as thereafter possible, in the City Council Chamber at 2000 Main Street, Huntington Beach, California, 92648, the City Council and the Redevelopment Agency of the City of Huntington Beach will conduct a public hearing on the Third Amendment to the Owner Participation Agreement By and Between the Redevelopment Agency of the City of Huntington Beach and Abdelmuti Development Company. A copy of the Third Amendment has been prepared and is available at the Office of the City Clerk. For more information, contact the Department of Economic Development, Civic Center, 2000 Main Street Huntington Beach, California 92648 at (714)536- 5582. Publish twice no later than: October 20,1994 October 27, 1994 Connie Brockway, City Clerk 2000 Main Street Huntington Beach, CA 92648 (714) 536-5227 i TK , 1- • 'PU�LT OTICES �"' NOTICE OF. Civic Center, PUBLIC HEARING 2000 Main i California i I Street, Huntington Beach, /O THIRD AMENDMENT 92648 6t (714) TO OWNER PARTICIPATION 536-5582. Con Con Brockway, AGREEMENT WITH City Cleik, 2000 Main ' ABDELMUTI Street, Huntington DEVELOPMENT Beach, CA 92848, COMPANY (714) 536.5227. - On Monday, November 7, Published Huntington -OT 1994, at 6:30 PM, or as Beach -Fountain Valley In - soon as thereafter pos- dependent October 13, 20, sible, in the City Council 1994. Chamber at 2000 Main Street, Huntington Beach, 102-149 California, 92648, the Cityy Council and the Redevel- opment Agency of the City - of Huntington Beach will conduct a public hearing on the Third Amendment to the Owner Participation ff Agreement By and . Be- Client Reference # tween the Redevelopment Agency of the City of Hun- / / tJngton Beach and Abdel- muti Development Com- #lev _ / Independent Reference / y pany, a copy of the Third Amendment has been pre- i pared and is available at the Office of the City Clerk. For more information, contact the Department of Economic Development. Dear Advertisers: Enclosed please find clip inL-Y f your ad from the first publication, beginning l% If you need any changes or corrections, please call rae at your earliest convenience. The cost of this publication will be $ v/ Thanks for your cooperation and patronage. 330 West Bay Street, Costa Mesa, CA 92627 (714) 642-4321 FAX (714) 631-5902 Sincerely, Judy ' tting Manager .Legal Advertising Manager NOTICE OF PUBLIC HEARING THIRD AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT WITH ABDELMUTI DEVELOPMENT COMPANY On Monday, November -,1994, at 6:30 PM, or as soon as thereafter possible, In the City Council Chamber at 2000 Main Street, Huntington Beach, California, 92648, the City Council and the Redevelopment Agency of the City of Huntington Beach will conduct a public hearing on the Third Amendment to the Owner Participation Agreement By and Between the Redevelopment Agency of the City of Huntington Beach and Abdelmuti Development Company. A copy of the Third Amendment has been prepared and is available at the Office of the City Clerk. Sa r'dr"04 is jotate4 a`t' /iatn 5trc&v4 6C4;t C04 + jj1j ► f ,1 For more information, contact the Department of Economic Development, Civic Center, 2000 Main Street Huntington Beach, California 92648 at (714)536- 5582. Publish twice no later than: Octobef-29,1994 8e4eha�27, 1994 ' Nov, �p Connie Brockway, City Clerk 2000 Main Street Huntington Beach, CA 92646 (714) 536-5227 A Coel a -P 41-,Q, S. 33 4 3 3AVerf%+- wti.i.�, a�,,ly s-es �tsca{ 0;- `I. -�wt�OFe-b CAh1diJ-{N C y,tintt• 1 J. r UMWG,oa lt^cn To: From: Date: CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION BARBARA KAISER, Director of Economic Development ARTHUR DELALOZA, Deputy City Attorney November 1,1994 Subject: ABDELMUTI DEVELOPMENT COMPANY "ADC" THIRD AMENDMENT TO THE OPA This will confirm our telephone conversation regarding Mr. Uberuaga's request to you, through me, that you secure a Health & Safety Code § 33433 report for lodging with the City Clerk by Monday, November 7, 1994. This will be needed to meet the requirements of such code section, attached hereto for your convenience. Thank au fo r7r your anticipated cooperation. ARTHUR DFLALOZA Deputy City Attorney cc: Gail Hutton, City Attorney Michael Uberuaga, City Administrator Ray Silver, Assistant City Administrator Connie Brockway, City Clerk 33421 HEALTH AND SAFETY CODE HEALTH AND SAFETY CODE f Section or lease shall first be approved by the 1 33427. (Operative until July 1, 1999) Authority of agency; Application of section hearing. Notice of the time and plact 33427.1. (Operative until July 1, 1999) Repeal date newspaper of general circulation to tl at least two successive weeks, as spec. § 33427. (Operative until July 1, 1999) Authority of agency; Application of Code, prior to the hearing. { The agency shall make available, section cost not to exceed the cost of duplic, (a) In addition to any other authority granted under this part, an agency may, ublicarion of the first notice of the within a project area, for the purposes of redevelopment, assist public agencies report shall contain both of the folloi or private nonprofit corporations to establish and maintain a small business (A) A copy of the proposed sale or It incubator. (B) A summary which describes and (b) In addition to any other authority granted under this part, an agency may, (i) The cost of the agreement to the for the purposes of redevelopment, provide loan guarantees for small busi- clearance costs, relocation costs, the c nesses located within a project area. by the agency, plus the expected inter (c) For the purposes of this section, "small business" shall have the same agreements. meaning as defined in Section 1 I342 of the Government Code. (ii) The estimated value of the intere (d) This section shall apply only to a project area that is located within the at the highest and best uses permitter City of Healdsburg, the City of Long Beach, the City of Los Angeles, the City (iii) The estimated value of the intere. of Oakland, or the City of Signal Hill. Any agency operating within one of the use and with the conditions, core. those cities which uses the authority granted by this section shall separately the sale or lease. The purchase price identif}• those Pctions in the annual report to its legislative body prepared lessor will be required to make durir pursuant to Section 33080.1. or total rental amount is Iess than it (e) No agency may amend a redevelopment plan to increase the tax increment conveyed or leased, determined at the revenue limit pursuant to Section 33333.2 or 33333.4 for the purpose of redevelopment plan, ther. the agency implemenung this section. explanation of the reasons for the di: Added Scats 1593 ch 1225 § 2 (AB 1813), operative until July 1. 1999. (ir) An explanation of why the sale Farmer Sect'o= * elimination of blight, with referenc Former § 33427. similar to Pub Con C § 20688.4, was added Stats 1963 ch 1812 § 3, amended Stats 1975 relied upon in snaking this explanati ch 679 _C. and re,.ealed Stxis 1984 ch 1128 § 2.7. (r) The report shall be made arailab publication of the first notice of the, § 33427,1. (Operative until July 1, 1999) Repeal date (b) • «' The resolution approving This article shall remain in effect only until July 1, 1999, and as of that date majority vote unless the legislative b( is repealed, unless a later enacted statute, which is enacted before July 1, 1999, thirds vote for that purpose and'shall or lease of the property will assist in deletes or extends that date. However, loan guarantees made pursuant to this article sh311 remain in effect for the duration of the loan guarantee as if this contain one of the following finding. article Were still in effect. (1) The consideration is not less that Added Sm 3 i993 ch 1225 12 JAB 1813). operative until July 1, 1999. best use in accordance with the plan. (2) The consideration is not less that Me covenants and conditions and do ARTICLE 11 lease. Property Disposition, Rehabilitation and Development (c) (1) At the election of the legislati Collateral Rcfereaees: apply to the sale or lease of a sma 1nfrastruc-ure Finance: Cernficates of Panicipation. 1 Land Use Forum 185 (CEB, spring 1992)• 33013. If the legislative body so elec' hearing in conformity with the requ § 33433. Approval by legislative body as to sale or lease of property acquired i report the sale or lease to the legisl. end of the agency's fiscal year duri- with tax increments; Hearing; Application to sale or lease of small housing report shall disclose the name of t project address of the property, the date c (a) (1) Except as provided in subdivision (c), before any property of the agency which the property was sold or lea acquired in whole or in part, directly or indirectly, with tax increment moneys and the date on which the agency h is sold or leased for development pursuant to the redevelopment plan, the sale pursuant to Section 33431. Beginning in 1492. 100 italki indicate changes or additions. ' • • indicate omissions. 110 M i S Cl Besi 110 M j S el italics indicate change HEALTH AND SAFETY Co1Jg HEALTH AND SAFETY CODE § 33433 ty of agency; Application of section or lease shall first be approved by the legislative body by resolution after public Notice of the time and place of the hearing shall be published in a date hearing. newspaper of general circulation to the community at least once per week for at least tw.o successi►•e weeks, as specified in Section 6066 of the Government tority of agency; Application of Code, prior to the hearing. (2) The agency shall make available, for public inspection and copying at a under this part, an agency may, cost not to exceed the cost of duplication, a report no later than the time of of the first notice of the !tearing mandated by this section. This velopment, assist public a encies publication report shall contain both of the following: 1 and maintain a small business (A) A copy of the proposed sale or lease. t under this part, an agency may, (B) A summary which describes and specifies all of the following: (t) The cost of the agreement to the agency, including land acquisition costs, loan guarantees for small busi- Clearance costs, relocation costs, the costs of an ' im rovements to be rovided by the agency, plus the expected interest on any loans or bonds to finance the l business" shall have the same agreements. government Code, (ii) The estimated value of the interest to be conveyed or leased, determined st area that is located within the at the highest and best uses permitted under the plan. the City of Los Angeles, the City (iii) The estimated value of the interest to be conveyed or leased, determined at agency operating within one of d by this section shall separately the use and with the conditions, covenants, and development costs required by the sale or lease. The purchase price or sum of the lease payments which the to its legislative body prepared lessor will be required to make during the term of the tease. if the sale price or total rental amount is less than the fair market value of the interest to be plan to increase the tax increment conveyed or leased, determined at the highest and best use consistent with the or 33333.4 for the purpose of redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference. by I. 1999. (ir) An explanation of why the sale or lease of the property will assist it, the elimination of blight, with reference to all supporting facts and materials A Stais 1963 th I 12 § 3, amended Stais t973 relied upon in waking this explanation. (r) The report shall be trade crailable to the public rio later than the time of. publication of the first notice of the hearing mandated by this section. .epeal date (b) * * * The resolution approving the lease or sale shall be adopted by a 1 July 1, 1999, and as of that date majority mote unless the legislative body has provided by ordinance for a two. hich is enacted before July 1, 1999, thirds vote for that purpose and shall contain findings to the effect that the safe i guarantees made pursuant to this or lease of the property will assist in the elimination of blight and shall also on of the loan guarantee as if this contain one of the folloµ•ing findings: (1) The consideration is not less than the fair marker ralue at its highest and tuly 1, 1999. best use irn accordance with the plan. (2) The consideration is not less than tilt fair reuse value at the use and with the covenants and conditions and drrelopnment costs authorized by the sale or 11 lease. .lion and Development (c) (1) At the election of the legislative body, subdivisions (a) and (b) shall not apply to the sale or lease of a small housing project, as defined by Section I Use Forum 185 (CEB, serfng 1992). 33013. if the legislative body so elects, the agency shall, instead, hold a public hearing in conformity with the requirements of subdivision (a) and shall also sale or lease of property acquired report the sale or lease to the legislative body on or before 30 days after the end of the agency's fiscal Sear during which the sale or lease occurred. The to sale or- lease of small housing report shall disclose the nacre of the buyer, the legal description or street address of the property, Elie date of the sale or lease, the consideration for before any property of the agency which the property was sold or leased by the agency to the buyer or lessee, rectly, with tax increment moneys and the date on which the agency held its public hearing for the sale or lease the redevelopment plan, the sale pursuant to Section 33431. ' • indicate omissions, (to M a S el aeginning in 199:. 114 ay 8 S ci iraties indicate changes or additions. • • • indicate omissions. t i FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY THIS FIRST AMENDMENT ("First Amendment") is entered into this 4th day of Nov. , 1991, by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ABDELMUTI DEVELOPMENT COMPANY (the "Participant"). R E C I I A L a WHEREAS, the Agency and the Participant entered into an Owner Participation Agreement, dated May 28, 1991 (the "OPA"), a copy of which is on file as_a public record with the City Clerk of the City of'Huntington Beach and which is incorporated herein by reference; and WHEREAS, the Agency and the Participant agree that it is in their mutual best interest that the proposed project be expanded; NOW, THEREFORE, the Agency and the Participant do hereby agree to amend the OPA as follows: Section 1. Amend Section 201(3), Project Design; Design and Construction Costs, to read as follows: 3. Participant shall at his cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a four-story building totaling a maximum of 48,437 square feet with an approximately 18,000 square foot commercial/retail ground floor area and with high quality office/commercial on the second, third and fourth stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second, third and fourth stories from office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that is no closer in familial relationship than that of the third degree as that term would be defined under the California Probate Code, to a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require a change from office/commercial use, the Agency will pay those additional construction costs needed to convert the second, third or fourth floors to a residential or restaurant use. Section2. Amend Section 201(6), Excess Parking Costs and Provision of Parking Spaces, to read as follows: 6. There shall be no on -site parking for the Project. Participant shall pay fifty percent (50%) of the offsite parking in -lieu fee of Twelve Thousand Dollars ($12,000) or Six Thousand Dollars ($6,000) per space necessary due to the increase in size of the proposed Project from 42,000 square feet to 48,000 square feet. The additional 6,000 square feet of office space requires four (4) parking spaces per 1,000 square feet, pursuant to the Huntington Beach Municipal Code, for a total of twenty-four (24) spaces at Six Thousand Dollars ($6,000) per space which equals One Hundred Forty -Four Thousand Dollars ($144,000) to be paid on or before issuance of a certificate of occupancy. In exchange for this, the Participant will provide upgraded site improvements from back of the building to the property line at the same quality as the plaza area located at the corner of Main Street and Pacific Coast Highway (i.e., pavers rather than asphalt). Agency shall pay any additional costs necessary to provide offsite parking for the Project ("Excess Parking Costs"). The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City. In the event, however, that Agency authorizes upper -story residential uses on the Site, Agency shall be responsible for providing full code -required parking for all residential units on the Site, with the parking spaces to be located off of the Site and within the block bounded by Main Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue, Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site. Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens the parcel(s) on which the parking is to be located. Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to 10/17/91 7788u/2460/009 -2- Participant shall not exceed the reasonable cost of maintaining and repairing at -grade surface parking spaces. Section I. Amend Section 201(8), Differential Rent Payment, to read as follows: 8. Differential Rent Payment. In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements and/or vacant units for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price index or "CPI" as defined herein (the "Differential Rent Payment"). In determining the third floor Differential Rent Payment pursuant to the approved rental agreements and/or vacant units for the third floor, all rents, including nonapproved rental agreement rents which exceed One Dollar and Fifty -Five Cents ($1.55) per square foot, shall be averaged and the Agency shall pay the Differential Rent Payment based on the amount necessary to insure that one-half of the total average per square foot amount is brought up to the Guaranteed Rental Rate. CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and clerical Workers, Los Angeles -Anaheim - Riverside Average, Sub -Group, "All Items" (1982/84o100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8. The Differential Rent Payment term shall commence with the issuance of the Certificate of Occupancy for the second and third floor space and terminate on 10/17/91 7788u/2460/009 -3- January 1, 2017. The City/Agency shall have the option of leasing any vacant second or third floor office space at the Guaranteed Rental Rate. Any business affiliated with the Participant (including, but not limited to, Abdelmuti Development Company and/or Jack's Surf & Sport) must pay a minimum of One Dollar and Fifty -Five Cents ($1.55) per square foot. Agency shall have the right to approve all leases of second and third story space. Failure to obtain Agency written approval of a lease for the second or third floor shall result in a loss of the right to obtain the Differential Rent Payment as described in this Paragraph 8 of Section 201 for the space subject to the nonapproved lease. Section A. Amend Section II of Attachment No. 4 (Scope of Development), Participant's Responsibilities, to read as follows: V •• The Participant shall develop the Site with a four-story building totaling approximately 48,437 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 30,000 total square feet of office on the second, third and fourth floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the same may be amended from time to time. Section S. This First Amendment and the provisions of the OPA which remain in effect collectively constitute the "Amended OPA." The Amended OPA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. Section 6. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. 10/17/91 77BBu/2460/009 -4- i ?J The effective date of this First Amendment shall be the date of execution by the Agency. November 4. 19-21 REDEVE NT AGENCY OF THE CITY OF HU TINGTO BEACH By: h a"T�r man ATTEST: Secretary PROVED AS TO,EORM: St dar ling, Yocca,(&arlson & Rauth, Special Counsel to the Agen 'A �>V Agency Counsel ABDELMUTI DEVELOPMEN;,�rANY, California gengral,0iA By: ti; ,/Wneral Partner Participant" 10/17/91 7788u/2460/009 -5- RESOLUTION ]NO. 218 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a First Amended Owner Participation. Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at.the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California ealth and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health _and_Eafe y Code, - I -- contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The Agency has reviewed the EIR for this project which was certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983. NOW, THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1. The Redevelopment Agency finds and determines that EIR 82-2, certified and approved including the finding of overriding considerations by the City Council in its -position as the•lead agency, is adequate for this project. Section 2. The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the - 2 - Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are of benefit to the Project Area and are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The Redevelopment Agency hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the.Agreement. PASSED AND ADOPTED this 4th of Nave7ber199Z::^ Chairman ATTEST: • Agency Clerk REVIEWED AND APPROVED: i *xecurtiv*'ebirector APPROVED AS TO FORM: G p►L. �}�_T_0� Y �4� Agency Cou o, Special Counsel INITIATED AND APPROVED: Ct ci<�� Director of Economic Development 3 - Res. No. 218 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 4th day of November 19 91, and that it was so adopted. by the following vote: AYES: Members: MacAllister, Silva, Kelly, Robitaille NOES: Members.: Winchell, Green f:ABSENT: Members: Moulton -Patterson 4w;.. Clerk of the RedevelopmentAgency of the City. of Huntington Beach, Ca. CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK CONME BROCKWAY CITY CLERK 'ro December 2ef, 1994 Mike Abdelmuti 101 Main Street Huntington Beach, CA 92648 Dear Mr. Abdelmuti: CALIFORNIA 92648 The City Council of the City of Huntington Beach at their meeting held November 21,1994 approved as amended, the Third Amendment to Owner Participation Agreement By and Between the Redevelopment Agency of the City of Huntington Beach and Abdelmuti Development Company. Enclosed is a copy of the executed agreement for your records. If you have any questions regarding this matter please call the Office of the City Clerk (714) 536-5227. Connie Brockway City Clerk 4411111X-le� Evelyn Schubert Deputy City Clerk cc: Barbara Kaiser, Economic Development Director p:ccWbdekU IT@WPtw w: 7146364M) J�4 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION fWNi1NG70N KACH TO: CONNIE BROCKWAY FROM: BARBARA A. KAISER RE: THIRD AMENDMENT FOR ABDELMUTI DATE: DECEMBER 12, 1994 Please provide me with a copy of the executed Third Amendment to the OPA between the Agency and Abdelmuti. it was approved by the City Council on November 21, 1994. Thank you. CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION HUNTINGTCIN ;EACH To: CONNIE BROCKWAY, City Clerk From: ARTHUR DELALOZA, Deputy City Attorney Date: December 9,1994 Subject: THIRD AMENDMENT TO ABDELMUTI OPA Attached is the corrected page 3 of the Abdeimuti OPA. Thanks. (Dictated but not read) ARTHUR DELALOZA Deputy City Attorney xc: Keith Bohr, Assistant Project Manager Barbara Kaiser, Director of Economic Development ��� -�• � �- Commencement Date Date referred to therein. Interest shall - accrue from the time of disbursement at an interest rate of seven percent (74) per annum; provided, however, that no interest shall accrue during the period commencin January 1, 1994, and ending December 31, 1994, on aKy funds previously advanced or on any funds adeyed between the date of this Third Amendment and Decemb1, 1994. The Existing Note, as modified by the Endo sement, is secured by a first trust deed on the Site he "Deed of Trust") which was recorded as Document No. 3-0105327 on February 19, 1993, in the Official Rec rds of the Orange County Recorder's Office. All refe ences to the Deed of Trust in the Existing Agreement, s modified by this Third Amendment, shall be deemed t refer to said recorded document, which shall supersed the form deed of trust set forth as Attachment No. 6. 2. Section 201.8 of the Exist ng Agreement, entitled "Differential Rent Payment," is hereby amended to read in its entirety as follows: 8. p}fferrential.Rent gam. On the first day of each month of the "Differential Rent Payment Period," Agency shall pay to Part'cipant, in advance, the "Differential Rent Payment" for the "Differential Rent Payment Building Area." As used herein, theterm. "Differential Rent Payment _Period" shall mean the eriod commencing on January 1, 1995, and terminating on December 31, 2018. Notwith- standing the foregoi g, in the event that, prior to December 31, 2018, he City and Agency determine to require a chang of use of the upper -floor office/commercial pace within the building on the Site to residential us , the Differential Rent Payment Period shall terminate n such earlier date that is the latest of the follow' g: (i) the date Agency has fully performed its bligations under Section 201.3 (payment for costs of nversion); (ii) the date Agency has fully performed it obligations under 201.6 (provision of code - required pa ing for residential units); and (iii) the date on wh' h a final Certificate of Occupancy is issued by City ith respect to the converted upper -floor (residen ial) space. A used herein, the term "Differential Rent Payment Build' g Area" shall mean the total rentable floor area (exc ding elevator shafts, stairways, and exterior bal onies) of the second floor and one-half of the third fl r in the building located on the Site. Agency and P ticipant agree that the total rentable floor area on t e second floor of the building is 14,318 square feet, F=11=14820.000312103245.4 31►11/94 -3- -.oN o ct U � vs -%'%7 0BY :Rlr1'a-N g 'n'C ER. Cif :I1- 3-94 ;iI:55k.1� RLrfaN 714 375 5487:# 2 RECEIVED CITY CAE;". CITY VF HUNTNGTCh C'_'P. THIRD AMENDMM4T TO OWNER PARTICIPATION AGREE- MENT BY AND BETWEEN THE REDEVELOPMENT ]NIFNOY 10 33 OF THE CITY OF HUNTINGTON BRAC11 AND ABDELMUTI DEVELOPMENT COMPANY This Third Amendment to Owner Participation Agreement (the "Third Amendment") is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and ABDBLMUTI DEVELOPMENT COMPANY, a California general partnership ("Participant"). A. On or about May 28, 1991, Agency and Participant entered into an Owner Participation Agreement (the "Original OPA") for the development of a commercial building and related improvements (the "Project") on certain real property (the "Site") located at the corner of Main Street and Pacific Coast Highway within Agency's 14ain Pier Redevelopment Project Area. On or about November 4, 1991, Agency and Participant entered into a First Amendment to Owner Participation Agreement (the "First Amendment") relating to the Project. On or about August 31, 1992, Agency and Participant entered into a Second Amendment to Owner Participation Agreement (the "Second Amendment") relating to the Project. The Original OPA, the First Amendment, and the Second Amendment are collectively referred to herein as the "Existing Agreement." B. On or about November 16, 3.992, Participant executed that certain "Promissory Note For Construction Loan To Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Existing Note") in favor of Agency. C. Agency and Participant desire to amend the Existing Agreement and to have Participant execute and deliver to Agency an endorsement to the Existing Note, all on the terms and conditions set forth herein. Ic Q v E 11 A N.T a - Based upon the foregoing Recitals and for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both parties, Agency,and Participant hereby agree as follows: 1. Section 201.4 of the "Construction Costs; Construction in its entirety as follows: n -2NI17 10204 M21013as.3 IM3194 Existing Agreement, entitled Loan," is hereby amended to read. D-9 kw BY:RLrra\ & TLaER, 0,1. :11- 3_0.1 :11:55:1.1; : RLrTa\ & TL1CXEit_ 71i ) 375 5087;: 3 4. Constrscti3On C!pEte;_ Construction boan. In addition to those design, engineering, and construction costs for which Agency may be responsible under subpara- graph 3 above, Agency shall provide Agency Assistance in the form of a loan, as evidenced by the Existing Note and modified by that certain "Endorsement To Promissory Note For Construction Loan to Abdelmuti Development Company Pursuant To Owner Participation Agreement" (the "Endorse- ment") in the form attached hereto Exhibit "A." Partici- pant shall execute the Endorsement and deliver the came to Agency concurrently with the execution and delivery of this Third Amendment. It is understood that the Existing Note, as modified by the Endorsement, supersedes the Construction Loan form set forth as Attachment No. 5 to the Existing Agreement. The principal amount of the Existing Note, as modified by the Endorsement, is THREE MILLION NINE HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00). As of the date of this Third Amendment, Agency has disbursed to Participant the sum of TWO MILLION NINE HUNDRED SEVENTY- FOUR THOUSAND SIX HUNDRED SEVENTY-ONE ($2,974,671.00) pursuant to the Existing Note (exclusive of sums disbursed by Agency for public improvements for which Agency is financially responsible under the Existing Agreement), Participant has repaid to Agency the sum of FIFTY-ONE THOUSAND FORTY-SIX DOLLARS ($51,046.00), the outstanding principal under the Existing Note, as modified by the Endorsement, is TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-FIVE DOLLARS ($2,923,625.00), and the total accrued and unpaid interest under the Existing Note, as modified by the Endorsement, is ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). Agency and Participant agree that as of the date of this Third Amendment, Participant has satisfactorily completed its obligations under the Existing Agreement for development of the Project on the Site and that no further loan disbursements are needed by Participant with respect thereto, with the exception, however, that Participant shall be entitled to disbursements of additional loan funds (in an amount which, when combined with the disbursements previously made, does not exceed the total principal amount of the Existing dote, as modified by the Endorsement) for the construction and installation of tenant improvement items on the second and third floors of the building. Participant shall repay the loan to Agency in accordance with the terms and conditions of the Existing Note, as modified by the Endorsement. Generally, the Existing Note, as modified by the Endorsement, shall be payable in monthly installments fully amortized over fifteen (15) years commencing upon the Initial Repayment FSZ%111M)14JiAX)L %?103245.3 11103.93 - 2 - LNI ISY-KUTA\ & ILLhLX. L.M. :11- J-Jl :11 "JUAM , nL1 A W iLO.nu\ r{-2 .,.v •�.,.,. •r a Commencement. Date referred to therein. Interest shall accrue from the time of disbursement at an interest rate of seven percent (71) per annum; provided, however, that no interest shall accrue during the period commencing January 1, 1994, and ending December 31, 1994, on any funds previously advanced or on any funds advanced between the date of this Third Amendment and December 31, 1994. .The Existing Note, as modified by the Endorsement, is secured by a first trust deed on the Site (the "Deed of Trust") which was recorded as Document No. 93-0105327 on February 19•, 1993, in the Official Records of the Orange County Recorder's Office. All references to the Deed of Trust in the Existing Agreement, as modified by this Third Amendment, shall be deemed to refer_to said recorded document, which shall supersede the form deed of trust act forth as Attachment No. 6. 2. section 201.8 of the Existing Agreement, 'entitled "Differential Rent Payment," is hereby amended to read in its entirety as follows: a. Differential ant Pa=ent . On the first day of each month of. the "Differential Rent Payment Period," Agency shall, pay to Participant, in advance, the "Differential Rent Payment" -for the "Differential Rent Payment Building Area." As used herein, the term "Differential Rent Payment Period" shall mean the period cormiencing on January 1, 1995, and terminating on December 31, 2018. Notwith- standing .the foregoing, in the event that, prior to December 31, 2018, the City and Agency determine to require -a change of use of the upper -floor office/commercial space within the building on the Site to residential uses, the Differential Rent Payment Period shall terminate on such earlier date that is the latest of the following: (i) the date Agency has fully performed its obligations under Section 201.3 (payment for costs of conversion); (ii) the date Agency has fully performed its obligations under 201.6 (provision of code - required parking for residential units)l and (iii) the date on which a final Certificate of occupancy is issued by City with respect to the converted upper -floor (residential) space. As used herein, the term "Differential Rent Payment Building Area" shall mean the total rentable floor area (excluding elevator shafts, stairways, and exterior balconies) of the second floor and one-half of the third floor in the building located on the Site. Agency and Participant agree that the total rentable floor area on the second floor of the building is 14,318 square feet, M112OW-204MM103215.3 IMM4 -3 - SE17 BY: RLrf!LN & TUBER. 01. 11- 3-51 :11: 56 M RLR'a\ & Tua(ER, 714 373 50674 that the total rentable floor area on the third floor is 11,964 square feet and, accordingly, that the total Differential Rent Payment Building Area on which the Differential Rent Payment provided for -in this Section 201.8 is to be calculated is 20,300 square feet (14,318 square feet plus [11,964 square feet x .501 = 20,300 square feet). As used herein, the term "Differential Rent Payment" shall mean the remainder, if any, derived during each month of the Differential Rent Payment Period (on a non- cumulative basis) by'subtracting the "Contract Rent" for such period from the "Guaranteed Rent" for such period. in no event shall the Differential Rent Payment calculated pursuant to this Section 201.8 be less than zero. As used herein, :the term "Contract Rent" shall mean the total rent payable by all tenants leasing space within the Differential Rent Payment Building Area. In calculating the Contract Rent, the following rules shall apply: (1) Rent from tenants shall include the following: (i):all charges by the landlord tc the tenant for occupancy of space in the building (including exterior balcony areas) on the Site, whether fixed, percentage, or otherwise; .and (ii) any "Triple Net Costs" payable by -the tenant pursuant to its lease. As used herein, the term "Triple Net Costs" shall include all of the following items, but only if and to the extent payable by a tenant pursuant to its lease for the period in question: (x) any "Taxer." levied and assessed upon the Site and the underlying realty; (y) the cost of any insurance that Participant elects to maintain on the Site or the improvements thereon, including, but not limited to, public liability and property damage insurance and fire and extended coverage and/or "All Risks" insurance, with such endorsements and/or additional coverages as Participant may deem appropriate; and W "Common Area Expenses." As used herein, the term "Taxes" shall include amounts payable by tenants for any form of real estate tax or assessment, general, special, ordinary, or extraordinary, and any improvement bond or bonds, imposed or levied at any time by any governmental authority, as against any legal or equitable interest of Participant or the tenant, or both, in the premises or in the underlying realty. As used herein, the term PS:1112 014F.'(WOM107243.3 111n31% -4 - SENT BY:Rlrfa.\ & WCKU. CAS. ;11- 3-94 ;11:57,11f ; RU AIN & TUCKER- 71i )t 375 5087;: 6 "Cotton Area Expenses" shall mean all sums payable by tenants for the repair, maintenance, and replacement of any equipment, facilities, and structures of the common areas on the Site (but not within the spaces exclusively leased to the tenants), including Without limitation: general maintenance and repairs, replacement, painting, cleaning, sweeping, and janitorial services; maintenance, repair, and replacement` of toilets, floors, walls, ceilinge, roofs, skylights, windows, sidewalks, curbs, signs, sprinkler systems, planting and landscaping, lighting, and other utilities, directional signs and other markers and bumpers; .main- tenance, repair, and replacement of fire protection systems, lighting systems, storm drainage systems and other utility system,; personnel to implement any such services including, if Participant deems necessary, the cost of security guards; on -site costs and personnel expenses in managing the property, costs and expense pertaining to any security alarm systems and any amount payable by tenants for Participant's actual cost for the accounting, bookkeeping, and collection of the Common Area Expenses. (2) Rent from tenants shall exclude the following: (i) late charges, penalties, and interest payable by tenants pursuant to their leases; (ii) security or cleaning deposits during the period any such amounts are held by Participant as Security for the tenant's performance of its obligations under its lease (including without limitation cleaning of the premises upon vacation thereof); and (iii) Participant's - income Uf any) from telephones and vending machines located on the Site. (3) Contract Rent shall be calculated based upon the leases and rental agreements in effect from time to time, regardless of whether or not Participant actually receives the rent provided for therein. Example P1 1: Participant leases space within the Differential 'Rent Payment Building Area to Tenant A for the period of January 1, 1995 - December 31, 1995. Tenant A'fails to pay the rent for the month of FSlU M0148MA103121o32a3.3 31103/94 - 5 - SETT BY:RLTAN & T OER. CIL ;11- 3-91 ;11:58 M RLTAN & TLCKER- 714 373 5087;x 7 December 1995 and vacates the premises on December 31, 1995. The Contract Rent calculated pursuant to this Section 201.8 includes the December 1995 rent attributable to Tenant A's lease notwithstanding that Participant did not receive the rent. ;xamnl Participant leases space within the Differential Rent Payment Building Area to Tenant B for the period of January 1, 1995 - December 31, 1995. Tenant B defaults on its obligation to pay rent commencing in March 1995. Participant terminates Tenant B's lease and is required to" file an unlawful detainer action against Tenant B to remove Tenant B from the premises. Participant recovers possession of the premises on July 1, 1995. The Contract Rent includes the rent attributable to Tenant B's lease for the period from January .1, 199S - June 30, 1995, notwithstanding that Participant did not receive the rent from March 1995 - -June 19951 the Contract Rent does not include the rent attributable to Tenant B'a leave after July 1, 1995, since Tenant WE lease has been terminated and the premises are available for occupancy by another tenant after that date. (a) Tn. the event Participant itself occupies space on the second or third floors of the building or leases Such space to any person or entity affiliated with Participant (including without limitation Jack's surf and Sport or Ahmad Abdelmuti), the portion of the Contract Rent attributable to such occupancy or lease shall be deemed to be the greater of the actual rental payable pursuant to the lease or the pro rats portion of the Guaranteed Rent attributable to Such space. a,. Mill a Participant leases 6,000 square feet of the net rentable area (excluding elevator shafts, stairwells, and exterior balconies) on the second floor of the building to Jack' s - Surf and Sport for the period of January 1, 1995 - December 31, M%112101462fr4OX2103245.? 21•=94 -�' SENT EY : RLrf a\ & TUCKER. Gd. :11- 3-34 :11:58.V RUTAN & TLIMER-+ 714� 375 5087 : �- 8 1995, at a total rent (including Triple Net Costs) of $1.60 per square foot. The Guaranteed Rental Rate for the Differential Rent Payment Building Area for such period is $1.00 per square foot ($1:55 per square foot plus Triple Net Costs of 25 cents per square foot). The portion of the Contract Rent attributable to the Jack's Surf and Sport lease on the cocond floor for such period is Ten Thousand Eight hundred Dollars ($10,800.00) per month ($1.80 per square foot x 6,000 square feet - $10,800.00). (5) From the effective date of this Third Amendment through the entire Differential Rent Payment Period, Participant shall submit to Agency for approval all leases of space on the second and third floors of the building to the extent Such leases provide for payment of rent (including Triple Net Costs) at less than that space's pro rata portion of the Guaranteed Rent. Agency shall approve or disapprove such submittals within ten (10) business days after receipt of (i) a copy of the proposed lease and (ii) Participant's written request for approval. Agency's role in reviewing and approving leases shall be limited to: M determining whether the proposed use is a permitted use of the premises under City's and Agency's ordinances and regulations and (ii) determining whether the business terms of the lease are reasonable from the landlord's standpoint in order to minimize the risk to Agency of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder. Approval of such request(s) shall not be unreasonably denied. In the event Agency disapproves a lease on the ground that the rent provided for in the lease is less than fair rental value (and thereby subjects Agency to an unacceptable risk of having to pay an unnecessarily high Differential Rent Payment to Participant hereunder), Agency shall notify Participant in writing at the time of such disapproval of Agency's opinion regarding the fair rental value for the premises in question and the minimum acceptable rental amount required to obtain Agency's approval. In the event Participant leases space on the cecond or third floors of the building at a rental rate loco than the pro rata portion of the Guaranteed Rent after Agency has disapproved FS2i112w14820"312103245.3 MUM -7- SC17 BY:RU'r 4.\ & TLUER, 01. ;11- 3-94 ;11:53AM RULAN & TUCKER- 714 375 5087: w- 9 such lease or prior to the date Agency approves the same, nothing herein is intended to render such lease invalid or unenforceable, and, if Participant has simply' failed to obtain Agency's approval in advance, nothing herein shall prohibit Participant from seeking Agency's approval after the fact or limit or restrict Agency's obligation not to unreasonably deny such approval; provided, however, that if Agency reasonably disapproves any such lease, the portion of the Contract Rent attributable to such lease shall be deemed to be the greater of the .actual rent payable pursuant to the lease or such greater amount of rent that Agency has reasonably determined is the fair rental value for the premises at such time (but not to exceed such tenant's pro rata portion of the Guaranteed Rent) , based upon the other approved leases in the building on the Site and prevailing market rents in the vicinity for commercial/office space similar to the space leased by such tenant. Notwithstanding any other provision in this Agreement, Participant shall -not be required to seek Agency's approval 'of any minor amendments or modifications 'to leaves or. the second or third floors of the building which amendments or modifications -do not impact the rent payable by the tenant or the term of the lease. (6) The portion of the Contract Rent attributable to the second and third floors of the building shall be zero for the following spaces: M vacant space (i.e., unleaced and unoccupied) and (ii) space that is leased but for which no rent is payable (e.g., with respect to new leases prior to the rent commencement date, subject - to Agency's approval rights set forth in subparagraph (5) above) . (7) In determining the portion of the Contract Rent derived from the third floor space in the building, all third floor rents shall be accumulated and then divided by two in order to obtain an average contract rental amount for said floor without regard to the particular location of tenants on that floor. z41- • For the month of 'January 1995, 3,000 square feet of net rentable area on the F.,�2ti1121U14S2O-OW312103'245.3 L11031" - 8 - SETT BY:RLrTA.N & TUCKER. 01. :11- 3-91 :12:00R%1 RLrrA.N & TUCKER- 714 375 5087:00 third floor is unleased and unoccupied; 1,000 square feet of net rentable area on the third floor is leased but no rental is yet due and payable; 3, 000 • square feet of net rentable area on the third floor is leased at a rate of $1.40 per square foot -gross rent (including Triple Net Costs); and the remaining 4,964 square feet 'of net rentable area on the third floor is leased at a rent of $2.25 per square foot (including Triple Net Costs) . The 'portion of the • Contract Rent attributable to the third floor in the building for the month of January 1995 is $7,684.50, calculated an follows: (3,000 sq. ft. x $1.40 per sq. ft.) + 4 6.4_SQ. ft. x $2.25 per ag. ft. $7,684.50 As used herein, the term "Guaranteed Rent" shall mean the product derived by multiplying the Differential Rent Payment Building Area (i.e., 20,300 square feet) by the "Guaranteed Rental Rate" in effect from time to time during the Differential Rent Payment Period. As used herein, the term -"Guaranteed Rental Rate" shall mean -for each month during the Differential Rent Payment Period the sum of (i) ONE DOLLAR AND FIFTY-FIVE CENTS ($1.55) per square foot of net rentable area within the Differential Rent Payment Building Area,, with such amount adjusted periodically by the "CPI Adjustment" or "Fair Rental Value Adjustment" calculated as provided hereinbelow, plus (ii) FIVE THOUSAND SEVEIM-FIVE DOLLARS ($5,075.00) (an assumed and fixed rate'of $0.25 per square -foot allocable to "Triple Net Costs" multiplied by the 20,300 square feet of space located within the Differential. Rent Payment Building Area). The portion of the Guaranteed Rental Rate determined pursuant to clause (i) of the preceding sentence shall be recalculated commencing January 1, 1996 (the first "Adjustment Date") and on January 1. of each calendar year thereafter during the Differential Rent Payment Period (the subsequent "Adjustment Dates") by multiplying the portion of the Guaranteed Rental Rate determined pursuant to clause (i) of the preceding sentence for the preceding calendar year (the "Base Year Guaranteed Rental Rate") by a fraction in which the numerator 'is the CPI for the third month prior to each such Adjustment Date and the denominator is the CPI for the 15th month prior to each such Adjustment Date. As used herein, the term "CPI" .shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index For Urban Wage Earners And Clerical Workers, Los Angeles-Anaheiri-Riverside average, sub -group, "All. Items" (1982-84 100) . In the event said CPI index is discontinued 'or is not available for purposes of calculating the CPI Adjustment, the parties shall use a MMM► OXWW"10320.3 IV03144 . -9- SETT BY:RUTAN & TUCKER. CM. :11- 3-94 :12:00PM : RUT,*V1 & TL KER- 714 375 5087:411 comparable index in determining the CPI Adjustment. As an alternative to the CPI Adjustment, at the sole discretion of Agency, Agency may require that the Base Year Guaranteed Rental Rate be adjusted on an Adjustment Date by utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Base Year Guaranteed Rental Rate be adjusted by such appraisal process to an amount below the Base Year Guaranteed Rental Rate then in effect. In the event that the adjustment to the Base Year Guaranteed Rental Rate'is established by an appraisal or appraisals conducted pursuant to Attachment No. 12. such adjusted portion of the Guaranteed Rental Rate shall remain in effect for a period of three (3) years, and said portion of the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI Adjustment, or by the appraisal method net forth in Attachment No. 12 if so elected by Agency. Agency shall have the option of leasing any vacant space on the second or third floors of the building at the Guaranteed Rental Rate and on the terms otherwise contained within Participant's standard form lease. 3. Agency hereby acknowledges that Participant has fully performed its obligations under Article III of the Existing Agreement to construct the Project on the Site. Pursuant to Section 309 of the Existing Agreement, Agency agrees to furnish Participant with a Certificate of Completion for the Project within thirty (30) days after Agency's approval of this Third Amendment. 4. This Third Amendment (including the Endorsement modifying the Existing Note) and the provisions of the Exi s t ing 'Agreement which remain ,in effect integrate all of the terms and conditions of the agreement between the parties, and supersede all negotiations or previous attempts between the parties with respect to the subject matter hereof. 5. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this Third Amendment, that all authorizations and approvals required to make this Third Amendment binding upon such party have been obtained, and that the person or persons executing this Third Amendment an behalf of such parties have been fully authorized to do so. PST.11''M14KZkM%M}31I103345.3 11A3194 -10 - 407 BY: RUTA1' & TRICKER, 01. ;11- 3 -84 ;12:O 1 P1i RUM & TUCKER- 714 375 5087 ; :12 The effective date of this Third Amendment shall be the date of execution by the Agency. REDEVSLOP = AGENCY OF THE CITY OF HUNTINGTON BEACH 1994 By: Chairperson ATTEST:' Secretary APPROVED AS TO FORM: Agency Counsel 1994 ABDELMUTI.DEVELOPMENT COMPANY, a.Caiifornia general partnership By: Ahmad H. Abdelmuti General Partner FSrJ I2%014tW "3%21037AS.3 11103M -11- SENT BY:RLTAN & TLI KER. 01. ;11- 3- 4 ;12:01P11 RLTAN & TLKCKER- 714 375 5087;-W13 EXHIBIT "A" ENDORSEMENT TO PROMISSORY NOTE FOR CONSTRUCTION LOAN TO ABDELMUTI DEVELOPMENT COMPANY PURSUANT TO OWNER PARTICIPATION AGREEMENT THIS ENDORSEMENT TO PROMISSORY NOTE FOR CONSTRUCTION LOAN TO ABDELbMTI DEVELOPMENT COMPANY PURSUAN1 TO OWNER PARTICIPATION AGREEMENT (this "Endorsement") is affixed to and forms a part of that certain Promissory Vate for Construction Loan to Abdelmuti Development Company pursuant to Owner Participation Agreement dated November 3-6, 1992, in the original principal amount' of THREE MILLION NINE HUNDRED EIGHTY THOUSAND DOLLARS ($3,980,000.00) ("Note") made by Abdelmuti Development Company, a California general partnership ("Borrower„), in favor of the Redevelopment Agency of the City of Huntington Beach,a public body, corporate and politic ("Agency"). All capitalized terms not otherwise defined in this Endorse- ment shall have the meaning ascribed to ouch terms in the Note. The Note is hereby endorsed and modified as follows: 1. Interest Rate. Section 2 of the Note is hereby deleted in its entirety and replaced with the following: "Interest shall be charged by the Agency on the aggregate of all sums advanced hereunder remaining unpaid, from the date funds are' advanced, at the rate of .seven percent (7%). per annum. Notwithstanding the foregoing, no interest shall accrue on _any funds advanced. hereunder during the period commencing January 1, 1994 and ending December 31, 1994." 2. Initial_ Repgym_ent _Calculation Date. The Initial Repayment Calculation Date, as such term is used in the Note, shall hereinafter mean LTanuary 1, 1995. 3. Outstanding Principal and Accrued Interest. Borrower and Agency hereby agree that as of the date this Endorsement was executed, the total outstanding principal under the Note is -equal to TWO MILLION NINE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED TWENTY-PIVE DOLLARS ($2,.923,67S.00) and the total accrued and unpaid interest is equal to ONE HUNDRED THIRTEEN THOUSAND THREE HUNDRED EIGHTY-TWO DOLLARS ($113,382.00). 4. Full Force and -Effect. Except as expressly modified by this Endorsement, the Notd shall remain unmodified and in full force and effect. ]Exhibit "A" F:r2•,tt2Noi,L!6dC{13VIO324s.3 71143/M Page 1 of 2 SENTBYRUTAN & TUCKER, CM .11- 3-94 ,12 02PM . RUTAN & TUCKER- 714 375 5087 414 IN WITNESS WHEREOF, this Endorsement was executed as of this day of _ , 1994. ABDELMUTI DEVELOPMENT COMPANY, a California general partnership By: Ahmad H. Abdelmuti General Partner "Borrower" ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF HMTINGTON BEACH, a public body, corporate and politic BY: Agency Clerk BY: Chairman "Agency" Exhibit t' PnaP 2 of 2 REQUEST FOR CITY COUNCIL/ . REDEVELOPMFENT AGENCY ACTION RH91-29 e19r (� may 28, 1991 Date Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted to: Michael T. Uberuaga, City Administrator/Chief Executive Of ' / Submitted by: Barbara A. Kaiser, Deputy City Adminisk.tor/Economic Development Prepared by: Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Subject: Redevelopment Project Area ?,,) ;,*- z13 Consistent with Council Policy? cy DQ Yes [ ]New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: �3rA"bi-VIUAa• �►�i�9 Transmitted for City Council/Redevelopment Agency consideration is an Owner Participation Agreement with Abdelmuti Development Company. This agreement provides for the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The property is located at Main Street and Pacific Coast Highway. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the Owner Participation Agreement; 2) Adopt City Council Resolution No. `z 8 8 and Agency Resolution No. •z / 3 , authorizing the execution and implementation of the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development Company; and 3) Approve the allocation of $4,810,000 from redevelopment funds to cover project costs. Since late 1984, the Agency has been attempting to put together an Owner Part! cipa tion/Dispos ition & Development Agreement with the remaining property owners and various developers for the Main -Pier Phase 11 project. This proposed mixed -use project consists of the two blocks bordered by Main and Sixth Streets, Pacific Coast Highway and Walnut Avenue. On September 17, 1990, the Agency authorized staff to prepare a Request for Proposals (RFPs) which was issued in October of 1990. Staff is presently negotiating with Coultrup Development and the Main Street Property Owners for development of the remainder of Block 104, excluding the Abdelmuti site and all of Block 105, excluding the Worthy site (site map attached). Mr. Abdelmuti did not respond formally under the RFP, but initiated negotiations with staff upon the closure of his building. MOM P10 4/84 On December 11, 1990, the city's Community Development Department determined that the existing building at I01 Main Street was "unsafe to occupy" due to the loosening and falling of bricks from the facade, and was therefore, vacated and closed. At that time, the property owner revived old plans that called for the rehabilitation of the existing two-story structure. Allowing the property owner to proceed with rehabilitation would ensure that the City/Agency would not receive the street and plaza dedications and setbacks as already provided across the street on the Pierside Pavilion project. Further, the owner would be permitted to retain the existing non -conforming second story apartment uses. Therefore, the Agency directed staff to negotiate an agreement with the property owner that would enable the Agency to achieve its goals of the Main -Pier Redevelopment Plan, and yet be an economically viable plan for the participant to develop. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The proposed OPA obligates the respective parties to be responsible for the following: Party iflant�s e$2Qnsibilities: a) The Participant agrees to construct ground floor retail space of approximately 18,000 square feet, and second and third floor office space totaling approximately 24,000 square feet for a total building area of approximately 42,000 square feet. b) The Participant will provide approximately seven (7) parking spaces onsite. c) The three-story development will comply with the City's design standards. The Agency may, at its discretion, determine to change the use of the second and third stories to residential use at some point in the future should the office market never materialize. d) The Agency retains the option to convert the office to a restaurant should the Participant transfer the property to non -family ownership. e) The Participant must contribute $I million to the construction of the improvements. The Participant will borrow the remaining funds required to complete construction from the Agency on the basis of a 15-year promissory note at 7% interest. This amount is estimated at $3 million for a total building and tenant improvement cost of $4 million. f) The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property to allow for the construction of a "Public Plaza," the widening of Main Street, and will also provide required setbacks. encv Responsibilities: The Agency is responsible for and shall commit the following to the project: a) Convey approximately 75% of the Agency -owned parcel on Pacific Coast Highway {"Agency Parcel"), or the portion necessary to accommodate 18,000 square feet of building area on the ground floor of the project. b) Finance offsite improvement costs estimated at $250,000. c) Construct parking adjacent to the site, providing 121 parking spaces to serve the project or the number of spaces required by the City/Agency. d) Provide a loan (estimated at $3 million) at a maximum amount equal to $110 per square foot of building area, less the $1 million Participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen (15) years, at an interest rate of 7.0%. e) Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot, and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to ensure that a reasonable rental rate is being assessed. f) Compensate the Participant for legitimate relocation and business interruption costs, (as determined by actual IRS statements) during the close -down period from December 11, 1990, until open for business, in an amount not to exceed $1,560,000. Income from insurance proceeds and other retail sales will be deducted from this amount. The Agency will also provide temporary trailers in an attempt to reduce business losses. MDING SOURCE: Funds of $4,810,000 will be needed to cover the building construction loan ($3 million), potential business interruption losses ($1,560,000) and offsite improvements ($250,000). Sources of funds for the $4,910,000 include Main -Pier Unencumbered funds of $1,530,000, bond proceeds of $2,045,000, and payment by R. Koury as land sales proceeds $1,235,000. ALTERNATIVE ACTIONS: 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. 1) Health & Safety Code Report 33433 2) OPA 3) Redevelopment Agency Resolutions 4) City Council Resolutions 5) Site Map 6) Fiscal Impact Statement MTU/BAK/KBB:ls 9020r CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION u,KnhcroN �e.eK , To MICHAEL T. USERUAGA From ROBERT J. FRANZ City Administrator Deputy City Administrator Subject REQUEST FOR APPROPRIATION Date MAY 15, 1991 TO ACCOMMODATE MAIN PIER OWNER PARTICIPATION PROJECT FIS 91-14 As required under the authority of Resolution'4832. a Fiscal Impact Statement has been prepared and submitted relative to the proposed funding for the development of a three-story commercial/retail office building at Hain Street and Pacific Coast highway. Anticipations are that an appropriation of $4,810.000 would be adequate for this project. Upon approval of the City Council, the balance of the City's undesignated Main Pier Redevelopment Project Area Fund would be reduced by $2,765,000 to $3.180.000, while the remaining balance of the City's currently reserved Tax Allocation Bond Proceeds. currently at $2,045,000, would)n reduced to zero, R08ERT J`WN1 Deputy CityLAdminlstrator RJF:skd as WPAOSERT:310 SITE MAP ADJACENT PROPERTY =U 10' DEDICATION - x = ALLEY to [-7-5" DEDICATION 1 _ i f ADJACENT PROPERTY i • . �. 117.5' ADJACENT PROPERTY LU �� J Q `-- 7.5' DEDICATION 4' DEDICATION 10: DEDICATIC ,•Es.n+k+„In}nn•b,rdl'•:UNQ�biti••Niltlj,..411:+1�11 y}111G•' f? +!4Npn1•NN}IH' l+':I:Iln yne•Tlw..,lrl,P,A.•W••1.!•wF,y li1#UHI :+• �a!:1 2�Irtu1N+Ip{..r11N''1r1#I+1n111111r1.lallryl+nVr7+11 :1`lmll1�1" S' BUILD�N ,•••••'• 14+1.Imn'•1'4y,ut11i4!'41i41+11NdW•14[ �i1Hlr•/G SETE3l+ .pl Inwn L}}.'Ig11}IrruN;.r.,rrlt1U:11}ulllllrwlrl+lolr 'lu•n•Ny.l[ul.I Itil I+�• 1•W}I}'S.t.IFhi,Tlk•'I,IrE.hNil:fhi r„✓N •N.11Nn In�flilf'IN[',IIF•I.111 N U'LP14'!I W }W'l; IN'p 1111 INIdl4q•U�14rri...II.IKI'u({;4*11%Il;It IlItll•N,Ali1,11rF ,ICntl II,NN.V.}:I A1Wi}SI)1i111IN1+ }}II+I lh•{I Ir11411j1H1h1t11111 • w'1•»;,4:}111111+11!IIt�1;1:1• Ip4!d•Ir1'irl'ra•e1. 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Ilyllllj+lllV 1lkill:)),Il!IrI+I!r1l.lryllil If!1111iN{�.+LIl�ljf!'rl �1�:11 iRpl,r'Itl1)Li,plrrll•)N•IU 111l1•,'ti•111I1HII�N,1Nl1,IP!IIR�r, ,r� �'}r. �'�•`r/.A:�(%,ir..11rn.IHhrrl:iil+[111 a1 q1+.II IrNl ni 1!r 1:nu;It+ulLlrly,lu•r•+:N.,!r:p: ' 11•u!!.en'k,;iryrq�xll.+p Irll,•ulpq•/!:w.41 •:IL.: E. .. I.•.• .. .•E.La L.:-.tl:ll R- M r?ntlaMCM1�.{N 4:ft..,.:.:•.rr..� '•"'••'�r7•+I ,,,�:1. 199 TdChA0.00y ]IIS� S" 'R �(Ilf•!rl!ti a gfl�l. .• a: rf...l• LnNL._.,.n � .' 'l ll r 1' I ! 1 1r 3r18 !IH1 i. 1 I 1:: , c i I Sidi 116 ll�il�llf,!•1 dl ii:l l!Ir111f1 hJ'r... pl:r d ...I u.., ! 1 . �tl:t-w...:f-.•iiM4lir}3Q'rili���nl,';Cf:Iull ).111e�1tidll'7f11ilJeiil .. ....... PACIFIC COAST HIGHWAY PACIFIC COAST HIGHWAY AND MAIN STREET (s) NORTH SCALE 1"=401.0. MAY 20 1 as 1 Irv.n;, C4 9 i 11 d Tel 114 733 01 Urwaz�_t_s NO. [ BASIC LEASE PROVISION The foregoing Basic Lease Provisions are presented here and represent the agreement of•the parties hereto, subject to further definition and elaboration in the Additional Lease -Provisions and elsewhere in this Lease. In the event of any conflict between any Basic Lease Provision and the balance of this Lease, the latter shall control. 1. Tenant's Name: CLEARVIEW CAPITAL CORPORATION, a California corporation 2. Premises, including Floor, Suite No. and Rentable Area: Third Floor, Suite 3A, 6,765 rentable square feet. 3. Estimated Corrmencement Date: August 1, 1994. 4. Lease Term: Five (5) years and one five (5) year option. S. Basis Annual Rent-: $125,629.00 payable at $10,485.75 per month. 6. Base Year Operating'Expense: 1994. 7. Space Plan Approval Date: May 16, 1994. 8. Security Deposit: $10,485.75; payable on execution of Lease. 9. Prepaid Rent: $10,485.75; payable on execution of Lease. 10. Broker(s): None 11. Address for Payments and Notices: To Landlord: Abdelmuti Development Company c/o Jack's Surf & Sport 113 Main Street Huntington Beach, CA 92648 Attn: Mike Abdelmuti Tel.: (714) 536-6567 To Tenant: Clearview Capital Corporation Attn: Harold Bakkebo Tel.: 12. Minimum Coverage for Comprehensive General Liability Policy: $2,000,000.00 combined single limit. 13. Addendum: An Addendum consisting of __ N.ne (if no Addendum is attached, insert the word none) numbered paragraphs is attached to and forms a part of this Lease. - 14. Lease Execution: In witness whereof the parties hereto have executed this Lease, consisting of the foregoing provisions REQUEST FOR -REDEVELOPMENT AGENCY ACTION ED 94-19 Date: May 16, 1994 EROVED BY CITY Cot Submitted to: Honorable Chairman and Redevelopment Agency MembeSubmitted by: Michael T. Uberuaga, Executive Director I(� Prepared by: Barbara A. Kaiser, Redevelopment Director'�'u'� crnr Subject: APPROVAL OF LEASE BEIMTEN CLEARVIEW CAPITAL CORPORATION AND ABDELMUTI DEVELOPMENT COMPANY FOR OFFICE SPACE IN OCEAN47EW PROMENADE (MAIN -PIER PROJECT AREA) Consistent with Council Policy? bj Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OFISS ,- The Owner Participation Agreement with the Abdelmuti Development Company requires the Agency to subsidize the difference, if any, between the Guaranteed Rental Rate and what is achieved for the office space of the second floor and one half of the third floor of the Oceanview Promenade located at Main Street and Pacific Coast Highway. Agency written approval is required for all leases. RE ',WMENDED A EN Y A TI N, : 1. Approve the lease between Clearview Capital Corporation and Abdelmuti Development Company as summarized in the Basic Lease Provisions (Attachment No. 1); and 2. Authorize Agency Official�to execute all necessary documents, if any, as they relate to this action; and 3. Authorize encumbrances of sufficient funds to meet Agency contractual obligations over the' term of the Clearview Capital Corporation Lease. ANALYSIS; On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company (Participant) for the development of a three story 42,000 square foot mixed use development. On November 4, 1991, the Agency approved the First Amendment (Attachment No. 2) to the original OPA calling for the addition of a 6,000 square foot fourth story as well as providing for a Guaranteed Rental Rate for a portion of the - office space. RAA ED 94-19 May 16, 1994 Page two L On December 11, 1990, the city's Community Development Department determined that the existing building at 101 Main Street was "unsafe to occupy" due to the loosening and falling of bricks from the facade, and was therefore, vacated and closed. At that time, the property owner revived old puns that called for the rehabilitation of the existing two-story structure. Allowing the property owner to proceed with rehabilitation would prevent the City/Agency from receiving the street and plaza dedications and setbacks as already provided across the street on the Pierside Pavilion project. Further, the owner would be permitted to retain the existing non- conforming second story apartment uses. Therefore, the Agency directed staff to negotiate an agreement with the property owner that would provide for construction of a new building, eliminate the residential use on the upper floors, provide ground floor retail uses, and yet be an economically viable plan for the Participant to develop. The Council/Agency and staffs first preference was to have commercial on at least the second story. Many were hopeful that one or more oceanvicw restaurants could be lured to this prime location. However, the Participant's beliefs would not allow an establishment that would serve alcohol. Having ruled out residential and commercial uses on the upper stories, the City Council settled upon office as a compromise use. Powntown_Offi_cc lase Analysis: The development of office space in the downtown is critical to redevelopment's long term goals of creating a balance of uses that will complement each other and prove to be economically viable on a year around basis. The development of visitor -serving commercial (e.g., shops, dining, entertainment, theaters, hotels) has been the primary goal of downtown redevelopment. If Huntington Beach's climate were warm and summer like all twelve months of the year, these uses would likely survive on their own just by means of the city's great beaches drawing millions of people year round. In reality, six to nine months of the year the weather is less than ideal and many of the businesses that thrive in the summer months find it difficult to survive in the off season months. Developing a mix of complimentary uses such as office and multi -family residential provides a population base to patronize these commercial uses on a year round basis. The office population that will patronize the restaurants and shops at Iunch time during the week is key to the economical survival for many businesses in the off season. The residential base provides a year round population that will primarily patronize the downtown in the evenings and on the weekends. In the case of the subject lease Clearview Capital will be employing approximately twelve people, with more to be hired, all bound to patronize the downtown at lunch and after work. RAA ED 94-19 k1.00 May 16, 1994 Page three `� Office marketing studies in 1991 and to somewhat of a lesser extent today, conclude that Orange County, in general, has simply been over saturated with office space (especially in the vicinity of the airport). Most studies, prior and current, concluded that downtown Huntington Beach is not a convenient location for office uses due to its distance from the freeway. However, we are hoping to be a draw for those business owners that live in, or near, Huntington Beach or prefer our coastal village environment. With the ever increasing advances in technology (computers and facsimile machines connected by modem through the telephone lines), many businesses do not rely on personally calling on clients on a day to day basis. Huntington Beach could serve this niche in the market. Should we prove to be wrong on all accounts there is an escape clause in the OPA which allows the Agency to convert the office space to residential after which time the Agency would no longer be required to subsidize the office space. In that case, the Agency is required to pay those additional construction costs needed to convert the second and third floors to a residential use. Guaranteed Rental Rate: In exchange for developing office instead of residential the following financial assistance was negotiated: Section 201(8) of the OPA reads as follows: "Differential Rent Payment: In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CPI". The triple net charges are the prorated costs for property taxes, insurance and maintenance. The Agency is therefore obligated to guarantee a minimum lease rate of $1.55 for all of the square footage on the second floor and one half of the third floor: 2nd floor 14,518 SF 1/2 of 3rd floor _ Otz, 82 SF Total 201600 SF In this case the proposed tenant, CIearview Capital Corporation, has agreed to rent 6,765 square feet located on the third floor at $1.55 per square foot. The Agency therefore is not obligated to pay any subsidy towards the minimum base rate. We are obligated to pay CPI increases beyond the first year for the five year initial term of the lease. This amount is estimated at $39,000. 1 RAA ED 94-19 May 16, 1994 Page four It remains unclear and subject to further legal clarification as to the Agency's obligation related to triple net charges. The Agency may be obligated to pick up the triple net charges which are estimated to be .30 cents per square foot. The Agency subsidy for triple net charges may amount to approximately: 6,765 SF x .30 cents = $2,029.50 per month or $2,029.50 x 12 months = $24,354 per year (plus CPI adjustments) or $24,354 x 5 years = $121,770 for the first 5 Year Lease Term (plus CPI Adjustments) i_g: *This figure assumes an annual CPI adjustment estimated on the average of 3 % per year citylAggncy Benefits: The City and Redevelopment Agency in return have collected fees for building permits, traffic impact fees and parking in -lieu fees in excess of $117,000 (plus $13,000 in school fees). Once the parcel has been totally reassessed it is anticipated the value will have increased by more than 3 million dollars creating an increase of the Agency's tax increment by $44,000 per year. The total construction cost for the project was approximately 4.3 million dollars. The participant paid the first 1.3 million dollars with the Agency loaning the balance of 3.0 million at an interest rate of 7% fully amortized over 15 years. In addition to repayment of the principal loan of $3 million, the Agency will be paid $1.85 million in interest payments (see Attachment No. 3 for details of City/Agency benefits). Additionally, the Oceanview Promenade project with its award winning traditional Mediterranean design, wide sidewalks and plaza areas complements the Pierside Pavilion project, while completing the gateway to the downtown. Clearview Capital Corporation, a subsidiary of Prime Financial Corporation, is engaged in originating, purchasing, marketing and servicing mortgage loans and real estate improvement loans insured by the Federal Housing Administration pursuant to Title I, Section 2 of the National Housing Act . The Company's main office employees approximately forty people and is located at 16390 Pacific Coast Highway (Peter's Landing) in Huntington Beach. Clearview Corporation needs to expand their office space and the owner's at Peter's Landing are unwilling to pay for tenant improvements in their building. i 'DIN • Previously budgeted funds for the Main -Pier Project Area for FY 93/94. Additional funds as required will be budgeted in subsequent fiscal years. RAA ED 94-19 May 16, 1994 Page five ALMNAME ACTION: Deny approval of the Clearview Capital Corporation lcase and direct Abdelmuti Development Company to seek another tenant. ATTACiII%fEb : 1) Base Lease Provisions 2) First Amendment to OPA Dated November 4, 1991 MTU/BAK/KBB:jar 113% FECEIVED/AND MADE A V) CITY COUNCIL MEETING ART OF THE RECORD At MAY 16, 1994 ITEM NO. F-6 ITE A 140._"�-_�._„___ OFFICE OF THE CITY CLERK CONNIE BROCKWAY Agency Obligation for Clearview Capital Lease: Less Adjustment for Balcony Rental: 5,982 SF x .30 cents = $1,795 monthly $1,795 x 12 months = $21,540 or $21,540 x 5 years = $107,700 withl3 ro CPIIS years 37 Note: 3rd Floor Redevelopment Agency Exposure (with 30 cents triple net): 5,982 SF x $1.85 = $ 11,066.70 per month $132,800 annually 4 r KEYSER MR`'TON, SUMMARY REPORT PURSUANT TO BECTION 33433 of the CALIFORNIA COXXVNITY REDEVELOPMENT LAW all a OWNER PARTICIPATION AGREEXENT by and between the REDWMLOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and AMIAD ABDELXfJTI This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report seta forth certain details of the proposed owner Participation Agreement ("Agreement") between the Agency and Ahmad Abdelmuti (TMParticipant") for the develcpmrnt of 19,461 eq_,are feet of commercial space And 24,249 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Hun- tington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition coats, infrastructure costs, public parking costs, business interruption costs, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreements 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Flan; 1 , KEYSER MARSTON, 3. The purchase price to be paid by the participant for. the in- terests being conveyed. This report and the proposed Agreement ar6 to be made available for public inspection prior to the approval of the Agreement. A. SALIZXT POINTS OF TEM AGREEMENT .� .. .. 1144 Under the proposed Agreement, the Participant agrees to con- struct ground floor retail space of 18,061 square feet, and second and third floor office space totaling 24,390 square feet. The Participant will provide 7 parking spaces on -site. The three-story development will comply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second and third stories to either a residential or restaurant use at some point in the future. The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remain- ing funds required to complete construction from the Agency on the basis of a 15-year promissary note. The Participant Shall demolish the existing buildings on the subject site and dedicate sufficient property to most the set -back requirements for the construction of a "Public Plaza". The portion of the Participant Parcel to be conveyed to the Agency for the Plaza is defined as the t�Remainder Parcel". 2 ' KEYSER MAR5TOH, The Agency is responsible for and shall commit the following to the project: a. convey approximately 75% of the Agency -owned parcel ("Agency Parcel"),, or the portion necessary to accoia- modate 18,000 square feet of building area on the ground floor of the Project. b. Finance off -site improvement costs estimated at $250,000. at construct a parking garage adjacent to the site, provid- ing 121 parking spaces to serve the Project. d. provide a loan at a maximum amount equal to $110 per square foot of building area, lose the $1 million Par- ticipant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7.0%. as Compensate the Participant for the difference between the defined fair market rent for office apace of $1.55 per square foot and the actual rental achieved by the office component of the project, with the exception of 50% of the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective of- fice leases to insure that a reasonable rental rate is being assessed. f. compensate the Participant for legitirate-relccation and business interruption coats, including temporary trailers, during the close -down period. This period is estimated at 24 months. 3 8. COST 4F AGREEHENT TO AGENCY The estimated costs of the agreement to the Agency are as fol- lows: Agency Acquisition of Gooney Parcel $ 776,000 (1) Off -site Costs 250,000 Parking Structure - 121 spaces @ $13,750 1,664,000 PV of interest gap for Agency loan 3631000 (2) Differential rent payment for office 1,264,000 (3) Business Interruption and Temporary Trailers 1,646,400 (4) -w---rr -w Total Costs to Agency $ 5,963,400 (Less) Property Tax Increment Revenues (1980000) (Less) Capitalized Value of Parking Revenues (430,000) r -wwwww ww - Net Costs to Agency $ 5,335,400 (1) 75% of Gooney parcel, which was acquired for $1,035,000. (2) opportunity cost of issuing a 7.0% loan versus earning 6.3% interest on invested funds. (3) Based on achievable rent of $1.00 per square foot from CIA market analysis, and defined fair market rent of $1.55 per square foot. (4) Business loosen estimated at $65,000 per month for 24 months. Three temporary trailers provided at $1,200 per month for 24 months. C. E8TIKATED VALUE OF THE INTERESTS To BE CONVEYED TO THE PAR- TICIPANT DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVSLOPENT PLAN The Agency will convey the necessary portion of the Agency Parcel to accommodate 18,000 square feat of building area on the ground floor of the project. In return, the Participant will grant to the project a portion of the Remainder Parcel required for the construction of the Public Plaza. The trans- fer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this 4 ZY5ER M nTON, agreement, are considered an equal exchange. D. P RCMLSH PRICK PAID BY PARTICIVIST AND REASONS TOR DIrFERENCE IN FAIR id KZT VALVE FOR THE HIGHEST UBE UNDER TIM RZDEVELOP- MHNT PLAN The Participant is granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant parcels embody similar attributes, and have essentially equivalent market values. The Participant's purchase price for the Agency Parcel shall be the sum of one Dollar ($1.00), payable in cash at the close of escrow. The Agency purchase price for the Remainder Parcel shall be the sum of One Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. 9iza0.RTB 14066.0001 5 Lots 8, 12, 13, 14, 15, 19, & 20 in Block 104 of Huntington Beach Tract in the City of Huntington Beach, County of Orange, State of California, as shown on a map recorded In Book 3, page 36 of Miscellaneous Maps in the office of county recorder of said county. N _� a_a -- --WL t'Atit�,24-ley .� l�,r,,rrlL!•' I fig,ytSJ4l�L..tCt'1�t,�C,�,•,r�G�_J L:�w..� !.____-__J 1.._ k W�cNur 14 - 24 —SJ ~ 1 ~ ~ , •' ' 26 5 i 4 F f ! P , WIG, .} r 8 W X 4 ti PC 7 --' !9 18 Ap. 3 Mr. 17 ^ 8 7 7 r /"•/00• _, u! 9 3 /4 6 5 4 J 2/ b 9 8 65 4 J" 1_ ? B 4 i f ,r7 9 B 7 6 5 J 2! f as !! r - r s` coAsr HWr - P, M. 0 - V - P, At. Q. J 9 107 16l AC At. x • MARCH 1949 —l�drl • dry£ 'SAC/F�c [ I� i ��:rSrfsL iS •[iS,€�: iyt�ti�:�ti j •� {',.,.`i ;C !�;� :P�;1Y^•r'�t�a.� r.•��! 'yell. 0 S. 49AC JS•!J � titi•�• 00 /4 t 1 vCrON B£.ACH MA 3-36 Q 26 PIER NOrE • ASSESSOR'S IN-OCK8 ASSESSOR'S MAP PARCEL NUMBERS 800K 24 PAGC 15 ' OC CAN SHOWN /N CIRCLES COUNrr OF OJ?.4NGF' SUMMARY REPORT PURSUANT TO SPCTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a SECOND AMENDMENT TO AN OWNER PARTICIPATION AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and AHMAD ABDELMUTI This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Owner Participation Agreement ("Agreement") between the Agency and Ahmad Abdelmuti ("Participant") for the development -of 18,061 square feet of commercial space and 28,989 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition costs, infrastructure costs, public parking costs, temporary relocation costs, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; and 3. The purchase price to be paid by the Participant for the interests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT 1. Participant Responsibilities Under, the proposed Agreement, the Participant agrees to construct ground floor retail space of 18,061 square feet, and second,third and fo-zrth floor office space totaling 28,989 square feet. The four-story development will comply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second and third stories to either a residential or restaurant use at some point in the future. 1 a The.Participant must contribute $1.3 million to the construc- tion of the improvements. The Participant will borrow the remaining funds required to complete construction from the Agency on the basis of a 15-year promissory note. The -Participant shall demolish the existing buildings on the subject site and dedicate sufficient property to meet the set- i?ack requirements for the construction of a "Public Plaza". The portion of the Participant Parcel to be conveyed to the Agency for the Plaza is defined as the "Remainder Parcel". 2. agency Responsibilities The Agency is responsible for and shall commit the following to the project: a, convey approximately 75% of the Agency -owned parcel {"Agency Parcel"), or the portion necessary to accommo- date 18,061 square feet of building area on the ground floor of the Project. b. Finance off -site improvement costs estimated at $250,000. c. If required, construct a parking garage adjacent to the site, providing 121 parking spaces to serve the Project. d. Provide a loan at a maximum amount of $4 million, or $110 per square foot of building area less the $1.3 million Participant contribution to the Project. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7%. e. Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor and loot of the fourth floor, which will be leased by the Participant.- The Agency will have the right to approve prospective office leases to insure that a reasonable rental rate is being assessed. f. Compensate the Participant for legitimate temporary relocation costs for a twelve month period. on behalf of the Participant, the Agency shall lease 3,616 square feet of ground floor retail space at 200 Main Street. The Participant will sublease the 3,616 square foot retail space from the Agency for 1 year for $1.00. In the event the Participant leases temporary business space in excess of the 3,616 square feet, the Agency shall reim- burse the Participant for the rent paid on the additional temporary business location. The total amount of rent to be paid by the Agency cannot exceed $120,000. F B. COST OF AGREEMENT TO AGENCY The estimated costs of the Agreement to the Agency are as follows: Agency Land Acquisition Off -site Costs Parking Structure - 121 Spaces @ $13,750 PV of Interest Gap for Agency Loan Differential Rent Payment for Office Temporary Relocation Costs (Koury Building) Temporary Relocation Costs (Additional Bldg) Total Costs to Agency (Less) Property Tax Increment Revenues (Less) Capitalized Value of Parking Revenues Net Costs to Agency $1,1940,000"' 250,000 1,664000 915:000c) 1,264,0000' 94, 000(A 26,000« $5,407,000 (220,000) (430,000) $4,757,000 l')75% of Gosney parcel, which was acquired for $1,035,000; 23% of Terry Buick parcel, which was acquired for $1,800,000. %pportunity cost of issuing a $3.87 million loan at 7.0% interest versus earning 8.3% interest on invested funds. fBased on achievable rent of $1.00 per square foot from KMA market analysis, and defined fair market rent of $1.55 per square foot. {`)Twelve month rent expense on 3,916 square feet of space at rent of $2.00 per square foot per month. Participant pays maintenance and utilities expenses. OReimbursement to Participant for rent paid on the additional temporary business location, equal to $120,000 less the rent paid by the Agency on the Koury building. In addition to the Agency costs detailed above, as a part of the Agreement, the Agency accepts a contingent liability to lease 3,616 square feet of space for an additional four year term. The maximum potential cost to the Agency, which will be incurred in the event the space cannot be sub -leased during the four year period, is $445,770 in nominal dollars ($340,170 in net present value terms) . This reflects the base rent rate of $2.00 per square foot per month, plus $.27 per square foot per month triple net charges, escalated at 5% annually over the four year term. C. ESTIMATED VALVE OF THE INTERESTS TO BE CONVEYED TO THE 3 PARTICIPANT DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The Agency will convey the necessary portion of the Agency parcel to accommodate 18,061 square feet of building area on the ground floor of the project. In return, the Participant will grant to the Project a portion of the Remainder Parcel required for the construction of the Public Plaza. The transfer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for the purposes of this Agreement, are considered an equal exchange. D. PURCHASE PRICE PAID BY PARTICIPANT AND REASONS FOR DIFFERENCE IN FAIR MARXET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOP- MENT PLAN The Participant is granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant Parcels embody similar attributes, and have essentially equivalent market values. The ParticipantFs purchase price for the Agency Parcel shall be the sum of one Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even exchange. SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW or. a OWNER PARTICIPATION AGREEMENT by and between the PEDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and ABDELMUTI DEVELOPMENT COMPANY This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed owner Participation Agreement ("Agreement") between the Agency and Abdelmuti Development Company ("Participant") for the development of approximately 18,000 square feet of commercial space and approximately 30,000 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition costs, infrastructure costs, public parking costs, business interruption costs, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; 1 3. The purchase price to be paid by the Participant for the in- terests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT MEWO ..1.., Under the proposed Agreement, the Participant agrees to con- struct ground floor retail space of approximately 18,000 square feet, and second, third and fourth floor office space totaling approximately 30,000 square feet. The Participant will not be required to provide any parking on site. The four-story development will comply with the Agency's design standards, and the Agency may at their discretion determine to change the use of the second, third and fourth st-3ries to either a residential use at some point in the future. The Agency also retains the right to convert to restaurant should the Participant sell the property, except if sold within the immediate family. The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remain- ing funds required (up to a maximum of $3.5 million) to com- plete construction from the Agency on the basis of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property for the con- struction of a "Public Plaza" and for the widening of Main Street. The Participant will also provide all required set- backs. E } 2. Ag2ncy Responsibilitieg The Agency is responsible for and shall commit the following to the project: a. Convey approximately 75-1 of the Agency -owned parcel ("Agency Parcel"), or the portion necessary to accom- modate 18,000 square feet of building area on the ground floor of the Project. b. Finance off -site improvement costs estimated at $250,000. c. Provide 121 parking spaces to serve the Project. d. Provide the developer with a loan at a maximum amount equal to $3.5 million. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7.0%. e. Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rental achieved by the office component of the project, with the exception of 50% of the third floor and 100% of the fourth floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to insure that a reasonable rental rate is being assessed. f. Compensate the Participant for legitimate relocation and business interruption costs, including temporary trailers, during the close -down period. Said compensa- tion will not exceed 24 months. 3 8. COST OF AGREEMENT TO AGENCY The estimated costs of the agreement to the Agency are as fol- lows: Agency Acquisition of Gosney Parcel $ 776,000 (1) Off -site Costs 250,000 Parking.Structure - 121 spaces @ $13,750 1,664,000 PV of interest gap for Agency loan 363,000 (2) Differential rent payment for office 10264,000 (3) Business Interruption and Temporary Trailers 1,646,400 (4) Total Costs to Agency $ 5,963,400 (Less) Property Tax Increment Revenues (198,000) (Less) Capitalized Value of Parking Revenues (430,000) Net Costs to Agency $ 5,335,400 (1) 75% of Gosney parcel, which was acquired for $1,035,000. (2) Opportunity cost of issuing a 7.0% loan versus earning 8.3% interest on invested funds. (3) For the 15,000 square feet of office on the second and third floors. Based on achievable rent of $1.00 per square foot from KMA market analysis, and defined fair market rent of $1.55 per square foot. (4) Business losses estimated at $65,000 per month for a maximum of 24 months. Three temporary trailers provided at $1,200 per month for a maximum of 24 months. C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED TO THE PAR- TICIPANT DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The Agency will convey the necessary portion of the Agency Parcel to accommodate 18,000 square feet of building area on the ground floor of the project. In return, the Participant will grant to the project a portion of the Remainder Parcel required for future dedication and the widening of Walnut Avenue. The transfer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this agreement, are considered an equal exchange. 4 s D. PURCHASE PRICE PAID BY PARTICIPANT AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOP- MENT PLAN The Participant is granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant parcels embody similar attributes, and have essentially equivalent market values. The Participant's purchase price for the Agency Parcel shall be the sum of one Dollar ($1.00), payable in cash at the close of escrow. The Agency purchase price for the Remainder Parcel shall be the sum of One Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. 5 REQUEST FOR CITY COUNCIL/ REDEVELOPM N�Tp AGENCY ACTION PH 91-29 QN J ��� f i May 28, 1991 / / Date Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted to: Michael T. Uberuaga, City Administrator/Chief Executive Of ' �7� Submitted by: Barbara A. Kaiser, Deputy City Adminis a o`r/—Economic Development Prepared by: Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Subject: Redevelopment Project Area ?,�,) W A-13 Consistent with. Council Policy? N yes [ ] New Policy or Exception Statement of Issue, Recommendation. Analysis, Funding Source, Alternative Actions, Attachments: Transmitted for City Council/Redevelopment Agency consideration is an Owner Participation Agreement with Abdelmuti Development Company. This agreement provides for the Agency to assist Abdelmutt Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The property is located at Main Street and Pacific Coast Highway. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the Owner Participation Agreement; 2) Adopt City Council Resolution No. L288 and Agency Resolution No. authorizing the execution and implementation of the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development Company; and 3) Approve the allocation of $4,810,000 from redevelopment funds to cover project costs. ANALYSIS: Since late 1984, the Agency has been attempting to put together an Owner Participation/Disposition & Development Agreement with the remaining property owners and various developers for the Main -Pier Phase II project. This proposed mixed -use project consists of the two blocks bordered by Main and Sixth Streets, Pacific Coast Highway and Walnut Avenue. On September 17, 1990, the Agency authorized staff to prepare a Request for Proposals (RFPs) which was issued in October of 1990. Staff is presently negotiating with Coultrup Development and the Main Street Property Owners for development of the remainder of Block 104, excluding the Abdelmuti site and all of Block 105, excluding the Worthy site (site map attached). Mr. Abdelmuti did not respond formally under the RFP, but initiated negotiations with staff upon the closure of his building. PIO 4/84 On December 11, 1990, the city's Community Development Department determined that the existing building at 101 Main Street was "unsafe to occupy" due to the loosening and falling of bricks from the facade, and was therefore, vacated and closed. At that time, the property owner revived old plans that called for the rehabilitation of the existing two-story structure. Allowing the property owner to proceed with rehabilitation would ensure that the City/Agency would not receive the street and plaza dedications and setbacks as already provided across the street on the Pierside Pavilion project. Further, the owner would be permitted to retain the existing non -conforming second story apartment uses. Therefore, the Agency directed staff to negotiate an agreement with the property owner that would enable the Agency to achieve its goals of the Main -Pier Redevelopment Plan, and yet be an economically viable plan for the participant to develop. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The proposed OPA obligates the respective parties to be responsible for the following: Participant's Resp2nsibilities: a) The Participant agrees to construct ground floor retail space of approximately 19,000 square feet, and second and third floor office space totaling approximately 24,000 square feet for a total building area of approximately 42,000 square feet. b) The Participant will provide approximately seven (7) parking spaces onsite. c) The three-story development will comply with the City's design standards. The Agency may, at its discretion, determine to change the use of the second and third stories to residential use at some point in the future should the office market never materialize. d) The Agency retains the option to convert the office to a restaurant should the Participant transfer the property to non -family ownership. e) The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remaining funds required to complete construction from the Agency on the basis of a 15-year promissory note at 7% interest. This amount is estimated at $3 million for a total building and tenant improvement cost of $4 million. f) The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property to allow for the construction of a "Public Plaza," the widening of Main Street, and will also provide required setbacks. Agenncy_Responsibili ties: The Agency is responsible for and shall commit the following to the project: a) Convey approximately 7S% of the Agency -owned parcel on Pacific Coast Highway ("Agency Parcel"), or the portion necessary to accommodate 18,000 square feet of building area on the ground floor of the project. b) Finance offsite improvement costs estimated at $250,000. c) Construct parking adjacent to the site, providing 121 parking spaces to serve the project or the number of spaces required by the City/Agency. d) Provide a loan (estimated at $3 million) at a maximum amount equal to $110 per square foot of building area, less the $1 million Participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen (15) years, at an interest rate of 7.0%. e) Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot, and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to ensure that a reasonable rental rate is being assessed. f) Compensate the Participant for legitimate relocation and business interruption costs, (as determined by actual IRS statements) during the close -down period from December 11, 1990, until open for business, in an amount not to exceed $1,560,000. Income from insurance proceeds and other retail sales will be deducted from this amount. The Agency will also provide temporary trailers in an attempt to reduce business losses. FUNDING SOUR E: Funds of $4,910,000 will be needed to cover the building construction loan ($3 million), potential business interruption losses ($1,560,000) and offsite improvements ($250,000). Sources of funds for the $4,810,000 include Main -Pier Unencumbered funds of $1,530,000, bond proceeds of $2,045,000, and payment by R. Koury as land sales proceeds $1,235,000. ALTERNATIVE ACTIONS: 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. ATTACHMENTS: 1) Health & Safety Code Report 33433 2) OPA 3) Redevelopment Agency Resolutions 4) City Council Resolutions 5) Site Map 6) Fiscal Impact Statement MTU/BAK/KBB:ls 9020r 9 CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION "UK%V T0h To MICHAEL T. UBERUAGA From ROBERT .J. FRANZ City Administrator Deputy City Administrator Subject REQUEST FOR APPROPRIATION Date MAY 16, 1991 TO ACCOMMODATE MAIN PIER OWNER PARTICIPATION PROJECT FIS 91-14 As required under the authority of Resolution'4832, a Fiscal Impact Statement has been prepared and submitted relative to the proposed funding for the development of a three—story conmerciallretail office building at Main Street and Pacific Coast Highway. Anticipations are that an appropriation of $4,810,000 would be adequate for this project. Upon approval of the City Council, the balance of the City's undesignated Main Pier Redevelopment Project Area Fund would be reduced by $2,765,000 to $3,180,000. while the remaining balance of the City's currently reserved Tax Allocation Bond Proceeds, currently at $2,045,000, would,4-t reduced to zero. ROBERT J . NI " Deputy CityUdministrator RJF:skd WPADSERT:310 L0 Jj CITY OF HUNTINGTON BEACH V INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Barbara Kaiser, Economic Development Director FROM: Connie Brockway, City Clerk CD SUBJECT: A 3DELMUTI DOCUMENTS DATE: November 24, 1992 Please respond to the following concerns I have regarding your department's request for the City Clerk to execute the Abdelmuti documents on behalf of the city. 1,e"n the past when the original recorded document is returned to the developer, the escrow company has not asked the recorder to make a conformed copy for the City Clerk. Please change the upper right hand corner of each document to require the recorded documents to be mailed to the City Clerk. There are stickers available in our office to make this change. If the City Clerk is signing the exemption under Government Code Section 6103 it / is proper that the original be returned to the city. 2' Mr. Abdelmuti should sign Y g signing n before the city signs, so I will withhold si nin until he Etcruc-/, does so w Please change each attest portion from secretary to Agency Clerk and insert.&Ae,_ ° Chairman in the section where Jim Silva has signed. S I- C- v4. The past agreement between our departments has been that the escrow company p,s-(- T4- will pick up the document at the City Clerk's Office so that the original document R0+C_ will not be in hands other than a Deputy City Clerk where changes could possibly be made. 5. Also, the Temporary Construction Permit has not been executed and the City Clerk's Office has,been advised that it cannot be executed by the city. RECF.1VEo WN 2 1v- T 0f DEpACTDE �`OpMENY, E�ONOM� 1362K DATE Producer THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY A.kO CONFERS NO RIGHTS UPOY THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMMEND, Champlin Insurance Sxv. Inc. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 25431 Cabot Rd. Ste 113 Laguna Hills, CA 92653 COMPANIES AFFORDING COVERAGES (714) 951-1291 LetterY A NATIONWIDE INSURANCE COMPANY Company Insured JACKSOI Letter B JACK'S SURF & SPORT Company FAWZ I ABDELFATTAH Letter C ABDELMUTI DEVELOPMENT CO. 211A MAIN STREET Company HUNTINGTON BEACH, CA 92648 Letter D Company Letter E THIS IS TO CERTIFY THAT THE POLICIES OF 1NSU.RAHCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PER- IOD INDICATED, NOTWITHSTANDING A.9Y REQUIREMENTS. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN 1S SUBJECT TO ALL THE TER,'�S. EXCLUSION AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO TYPE OF INSURANCE POLICY NUMBER POLICY EFF DATE POLICY EXP DATE LIMITS LTR (mn/dd/yy) (mh/dd/yy) GENERAL LIABILITY General Aggregate $1, 000, 000 Prod-Comp/Ops Agg S11000, 000 A .r. (VI Co�ercial General Liab. 73PR041078-5007 02/08192 02/08/93 Pers b Adv Injury I1,000,000 [ ]Claims Made [1i ]Occur Each Occurrence $1, 0 0 0 , 0 0 0 Owner's 5 Contractors Fire Damage S 50,000 Protective (Any one fire) Medical Paynents S 51000 (Any one person) AUT040BILE LIABILITY Combined $ 500,000 Single Limit A Any Auto 73BA001078--0001 02/08/92 02/08/93 Bodily Injur S V All Owned Autos Scheduled Autos APPROVED 0 FORM: (Per Person 1% Hired Autos 01IL EiJTT I City Atto eg 1% Hon -Owned Autos Garage Liability By; peput 'ty �.tt0 � Bodily Injury (Per Accident) S q p T ,- Property Damage S EXCESS LIABILITY " "r Each Occurrence S 2,000,000 A 1% Umbrella farm 73CU00107$-0008 2 O$ 92 02/08/93 Aggregate S 000 2 0 0 0"' j Other Than Umbrella Farm WORKER'S COMPENSATION Statuto , A AND 73WC001078-0010 02/08/92 02/08/93 Each Accidentry W EMPLOYER'S LIABILITY Disease-Pol Limit $ 500,000 Disease -Each Empl S 100,000 OTHER Description Of Operations/Locations/Vehicles/Special Item Should any of the above described policies be cancelled before the CITY OF HUNTINGTON BEACH expiration date tkereof, the issuing coapany will 2000 MAIN STREET mail 30 days written notice to the certificate holder named to the HUNTINGTON BEACH CA 92648 left ATTN: BARBARA RISER Authorized Representative . w. w-.i`..•�,fyl�- _ ..` _ /.f ` ::wC6: - ::.s'.1[�f ••• nri::.. �...:.. �n :.::...... TY,.`i. .... .� _ _ _ ___________ __ _: .....tea.[ I POLICY NUMBER: 73 PR 001078 5007 NAMED INSURED: JACK'S SURF & SPORT THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED -OWNERS, LESSEES OR CONTRACTORS (FORM B) This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: CITY OF HUNTINGTON BEACH, REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, ITS OFFICERS, AGENTS AND EMPLOYEES 2000 MAIN STREET HUNTINGTON BEACH, CA 92648 WHO IS AN INSURED (Section II) is amended to include as an insured the Person or Organiza- tion in the Schedule, but this insurance with respect to such Person or Organization applies only to the extent that such Person or Organization is held liable for your acts or omissions arising out of and in the course of operations performed for such Person or Organization by you or your sub- contractor. PRIMARY INSURANCE COVERAGE PROVIDED TO THE ADDITIONAL INSURED UNDER THIS ENDORSEMENT IS PRIMARY, BUT ONLY WITH RESPECT TO ACTS OR OMMISSIONS OF THE NAMED INSURED. ANY -OTHER INSURANCE MAINTAINED BY THE ADDITIONAL INSURED AND IS DEEMED TO BE EXCESS AND NON-CONTRIBUTORY WITH THE INSURED PROVIDED HEREWITH. THIS ENDORSEMENT EXPIRES ON 02/08/93 Cas. 4190. PLEASE COMPLETE THIS INFORMATION RECORDING REQUESTED BY: Continental Lawyers Title Company Ds" AND WHEN RECORDED MAIL TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street 1untington Beach, CA 92648 DDC P 93-0105324 19—FED-1993 08:00 Ali Pecordlrd ir. Cfficiai Rrcer�� of GrME ft'.'n{ya Calif -.-Pia Lee A, Fraxi'lp Cnr.ty f.ecerder h3a 1 of 10 Feas: # 0 flo D Continental Lawyers Company ers Title Corn an Or; Subsidiary of LauyersTlde Insurance Corporation THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee appliel) p 11/92 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO AND MAIL TAX STATEMENTS TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 This Deed is recorded and acknowledged by the Property and is exempt from the payment of a recording pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 1 i 1 GRANT DEED For a valuable consideration receipt of which is hereby acknowledged, The REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, of the State of California, herein called "Grantor" acting to carry out the Main Pier Redevelopment Plan, herein called "Redevelopment Plan" for the Main Pier Redevelopment Project, herein called "Project", under the Community Redevelopment Law of California, hereby grants to ABDELMUTI DEVELOPMENT COMPANY, a California general partnership as its sole and separate property, herein called "Grantee", the real property hereinafter referred to as "Property", described in Exhibit "A" attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants or record described therein. 1. Said Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 2578, as amended by Ordinance No. 2634 of the City Council of the City of Huntington Beach, and an Owner Participation Agreement entered into between Grantor and Grantee dated May 13, 1991 (the "OPA"), a copy of which is on file with the Grantor at its offices as a public record and which is incorporated herein by reference. Page 1 of 7 2. The Grantee hereby covenants and agrees, for itself and its successors and assigns, that during construction and thereafter, the Grantee shall not use the Property for other than commercial and/or residential use without the prior written approval of the Agency (which the Agency may grant or deny at its sole discretion). 3. The Property is conveyed to grantee for the consideration set forth in the OPA, the sufficiency of which is hereby acknowledged. Therefore, Grantee hereby covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Property that the Grantee, such successors and such assigns, shall develop, maintain, and use the Property only as follows: (a) Grantee shall develop the Property and certain adjacent property owned by Grantee (collectively, the "Site") as required by the OPA. (b) Grantee shall maintain the improvements on the Site and shall keep the Site free from any accumulation of debris or waste materials. Grantee shall also maintain the required landscaping in a healthy condition. If, at any time, Grantee fails to maintain the said, landscaping, and said condition is not corrected after expiration of five (5) days from the date of written notice from the Grantor, either the Grantor, or the City of Huntington Beach may perform the necessary maintenance and Grantee shall pay such costs as are reasonably incurred for such maintenance. 4. Prior to recordation of a Certificate of Completion issued by the Grantor for the improvements to be constructed on the Site: (a) The Grantee shall not make any sale, transfer, conveyance, or assignment of the Site or any part thereof or any interest therein, without the prior written consent of the Grantor except as permitted by Section 108 of the OPA. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site. (b) The 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 acquisition of the Site, the construction of improvements on the Site, and any other expenditures necessary and appropriate to develop the Site. The Grantee shall not enter into any such conveyance for financing without prior written approval of Grantor. 5. The Grantee agrees for itself and any successor in interest not to discriminate upon the basis of race, color, Page 2 of 7 -i creed or national origin in the sale, lease, or rental or in the use or occupancy of the Property hereby conveyed or any part thereof. Grantee 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, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor shall the Grantee itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub -tenants, sublessees, or vendees in the Property. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sea, marital status, handicap, age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any Page 3 of 7 person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." 6. No violation or breach of the covenants, conditions,. restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by paragraph 4(b) of this Grant Deed; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 7. All covenants contained in this Grant Deed shall be covenants running with the land. The covenants contained in the 4PA referenced in paragraph 1, in paragraph 4, and Grantee's obligation to develop the improvements on the Property provided in paragraph 3(a) of this Grant Deed shall terminate and shall become null and void upon recordation of a Certificate of Completion issued by Grantor for the Site. Grantee's obligation to maintain and use the improvements constructed as provided in paragraphs 2 and 3(b) shall terminate on September 6, 2018 (the expiration date of the Redevelopment Plan). Every covenant contained in this Grant Deed against discrimination contained in paragraph 5 of this Grant Deed shall remain in perpetuity. 8. All covenants without regard to technical classification or designation shall be binding for the benefit of the Grantor, and such covenants shall run in favor of the Grantor for the entire period during which such covenants shall Page 4 of 7 4 . 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. The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any actions at law or suits in equity'or other proper proceedings to enforce the curing of such breach. 9. Both before and after recordation of a Certificate of Completion, 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 Property shall have the right 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, licenses, mortgagee, trustee, beneficiary under a deed of trust or any other person or entity having any interest less than a fee in the Property. 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 amendments to the Redevelopment Plan which change the uses or development permitted on the Property, or otherwise change any of the restrictions or controls that apply to the Property, shall require the written consent of Grantee or the successors and assigns of Grantee in and to all or any part of the fee title to the Property, but any such amendment shall not require 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 Property. 10. The covenants contained in this Grant Deed shall be construed as covenants running with the land and not as conditions which might result in forfeiture of title. IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their re sp ctive officers hereunto duly authorized, this IS day of , 1992. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: ATTEST: Chairnfan ® APPROVED AS TO FORM: Agency Clerk 6--t W Ag®ncy Counsel Page 5 of 7 The Grantee agrees to be bound by the covenants set forth above. Page 6 of 7 STATE OF CALIFORNIA ss. COUNTY OF ORANGE On this 23A� day of 19 -92,_ before me, the undersigned, Notary Public in and for said State, personally appeared , known to me (or -proved- %,# rn i s-o f--s at--E-actory-e%-i4er:c0 to be the person who executed this instrument as the (� n[.+t� (insert title of the officer) of the Redevelopment Agency of the City of Huntington Beach and acknowledged to me that the Redevelopment Agency of the City of Huntington Beach executed it. OFFICIAL SEAL Sidytfture of Notary Public MAYBRaCE L ETCHESON o NOTAIZY PUBLIC - CALIFORNIA i ' DMICE COMY ky comet. avIre3 MAY I!, I993 ?AyB,PreE 4. �22#rS6 /_ Name typed or printed STATE OF CALIFORNIA } ss. COUNTY OF On kf!P'f',L-w 7$. I4-fZ before me, the undersigned, a Notary Public in and for said State, personally appeared _ „a fry►dn fY�DFc�v 4TL- _ _ , personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as «X1 r of the partners of the partnership that executed the within instrument, and acknowledged to me that such partnership executed the same. WITNESS my hand and official seal. ( SEAL ) CMUL Sx .� KAREN S. RMMER rp NOTARY PUeMCA FM;A a' RItidEFSICE CCLMtY I11y Corsmissim ExOn "UST 8. IM Page 7 of 7 Acknowledgement State of California, County of Orange. On A2zdxk4 /y i99A , , before me, a notary public of the State of California, personally appeared personally known to me e-basis-c satisfaetory- rMdenco to be the person{f} whose name(&) isAane-• subscribed to the within instrument and acknowledged to me that-Wshe4he)- executed the same in hWherA4,4r authorized capacity(ies), and that by 4"her/thei-r signature(-&) on the instrument the person(a), or the entity upon behalf of which the person(-} acted, executed the instrument. WITNESS my hand and official seal. Signature t OFFICIAL SEAL MAYBA'CE L ETCNES_ C.C.P. §1189. a7�: . r-•' My Comm. tv'J" MY 11. IM OFFICIAL SEAL tAAYBMCE L ETCHESON a f,;0'rA SY PUBLIC - CALIFORNIA �J Vq tomm. 44� m MAY It. 1993 GOVERNMENT CODE 27361.7 1 certify under penalty of perjury that the notary seal on the document to which this statement is attached reads as follows: Name of Notary 2�_G�,�_a-r,>✓ Date Commission Expires County where bond is filed _. ka-pt-ce cam. Plac of Execution Date TURF Continental land Tide Compary EXIIIBIT "A" LEGAL DESCRIPTION OF THE PRQEERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: The land lying within Parcel Map No. 91-235, as shown on a map filed in Book z%, Pages Ljof Parcel Maps, in the office of the County Recorder of said county. EXCEPTING THEREFROM the most Westerly Northwesterly ten (10) feet of said land, the Northwesterly line of said ten (10) foot strip being that course shown as having a bearing and distance of North 40 degrees 30' 20" East, 110.04 feet on said Parcel Map. EXHIBIT "A" PLEASE COMPLETE THIS INFORMATION RECORDING REOUESTED BY: 2ntlnental Lawyers Title Company AND WHEN RECORDED MAIL TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 19—FEB-1993 08:00 AM r•��er��, i�, C'f.cial 4:Crds _hy if:iiity Fr3;zr psgs 1 G3 4 Fe:5: T ;:: 1 0.0 SPACE FOR RECQR_DEWS USE ONLY Continental Lawyers Tale Company Subsidiary of Lau)yersTidelnsurdnceCorporation THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECOROI1iG 114FORMATION (Addllional recording 1ae applies) 00 1 V92 REMAINDER PARCEL GRANT DEED RECORDING REQUESTED BY } AND WHEN RECORDED MAIL TO: } Connie Brockway, City Clerk } Office of the City Clerk City of Huntington Beach 2000 Main Street } Huntington Beach, CA 92648 } This Deed is recorded on the request and for the benefit of the Agency and is exempt for the payment of a recording fee pursuant to Government Code Section 6103. J REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: }9 Its: U 9 Dated: i GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, GRANTOR: ABDELMUTI DEVELOPMENT COMPANY, a California general partnership, duly organized under the laws of the State of California hereby GRANT(S) to THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic, the following described real property in the City of Huntington Beach, County of Orange, State of California: See Exhibit "A" attached hereto and made a part hereof. APPROVED AS TO FORM: A��J'4 J.tr . Agency Counsel .✓ ABDELMUTI DEVELOP T OMPANY, a California rtne hip By: H. DEL TI Gener Partrrer Page 1 of 2 STATE OF CALIFORNIA ss. COUNTY OF+' ) On hLe.V %, before me, the undersigned, a Notar Public in and for said State, personally appeared _ apel M of - =psrsofra��—k proved to me on the basis of satisfactory evidence to",,Pe the Verson who executed the within instrument as Ar4ruf of the partners of the partnership that executed the within instrument, and acknowledged to me that such partnership executed the same. WITNESS my hand and official seal. (SEAL) o C4AL SEALFe KAREN S. REIMERBiJG NOW PUERCJkFOfbi1A RIYMCOLIM * ComniWm ExOm AUGUST$,1995 Page 2 of 2 EXMBIT "A" 1,EGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of Huntington Beach, County or Orange, State of California, described as follows: The most Easterly Northeasterly ten (10) feet of Parcel Map No. 91-235, as shown on a map filed in Book Z7-i*" Pages /- -F of Parcel Maps, records of Orange County, California, the Northeasterly line of said ten (10) foot strip being the course shown as having a bearing and distance of North 49 degrees 29' 47" West, 117.47 feet on said Parcel Map. PLEASE COMPLETE THIS INFORMATION RECORDING REOUESTED BY: Continental Lawyers Title Company AND WHEN RECORDED MAIL TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 DOC 1 93410532-7 19--FEb-199 08:00 AM Re.:ordrd ir, 6fficial Peczrds of Cransp Ccjr.*y, CaIifcrria Lee A. Frarcti, Ccmty Fec-order Faye I of IS Fees: S 0.00 Tax: S 0.01 Continental Lawyers Title Company � { Subsidiary of LauversTideInsUrdnceCorporation THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (AddlHonal recording bf applies) -+ 11122 a RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Li This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH - By: Its: Dated: DEED OF TRUST (Orange County) 195L TH S DEED OF RUST AND ASSIGNMENT OF RENTS is made as of the day of , 1992, by and among ABDELMUTI DEVELOPMENT COMPANY, a California general partnership (the "Trustor"), whose address is 113 Main Street, Huntington Beach, California 92648, CONTINENTAL LAWYERS TITLE COMPANY, a California corporation, (the "Trustee"), whose address is 1015 N. Main Street, Santa Ana, California 92701, and the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Beneficiary"), whose address is 2000 Main Street, Huntington Beach, California 92648. FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the property located in the County of Orange, State of California, that is described in Exhibit A, attached hereto and by this reference incorporated herein (the "Property"). TOGETHER WITH all rents, issues, profits, royalties, income and other benefits derived from the Property (collectively, the "rents"), provided that so long as Trustor is not in default hereunder, it shall be permitted to collect rents and operate the "Project," as hereinafter defined; Page 1 of 16 TOGETHER WITH all interests, estates or other claims, both in law and in equity which Trustor now has or may hereafter acquire in the Property and the rents; TOGETHER WITH all easements, rights--of-way and rights used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all tenements, hereditaments and appurtenances thereof and thereto; TOGETHER WITH any and all buildings and improvements now or hereafter erected thereon, and all property of the Trustor now or hereafter affixed to or placed upon the Property, including, without limitation, all fixtures, attachments, appliances, furnishings, equipment and machinery (whether fixed or movable) and other articles (including, in each instance, improvements, restorations, replacements, repairs, additions, accessions or substitutions thereto or therefor); TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all leases or subleases covering the Property or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder, including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature; TOGETHER WITH all right, title and interest of Trustor in , and to all options to purchase or lease the Property or any portion thereof or interest therein, and any greater estate in the Site owned or hereafter acquired; TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Property, and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Property; TOGETHER WITH all the estate, interest, right, title, other claim or demand, of every nature, in and to such property, including the Property, both in law and in equity, including, but not limited to, all deposits made with or other security given by Trustor to utility companies, the proceeds from any or all of such property, including the Property, claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire, any and all awards made for the taking by eminent domain or by any proceeding or purchase in lieu thereof of the whole or any part of such property, including without limitation, any awards resulting from a change of grade of streets and awards for severance damages; Page 2 of 16 All of the foregoing, together with the Property, is herein referred to as the "Security". FOR THE PURPOSE OF SECURING: (a) Payment of the "Note Amount" according to Section 201.4 of the Agreement and the "Construction Loan" as defined in Section 201.4 and Attachment No. 5 of the Agreement; (b) Payment of any sums advanced by Beneficiary to protect the Security pursuant to the terms and provisions of this Deed of Trust following a breach of Trustor's obligation to advance said sums and the expiration of any applicable cure period and upon five (5) business days notice to the Trustor, with interest thereon as provided herein; and (c) Payment of such additional sums and interest thereon which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, when evidenced by a promissory note or notes or other documents reciting that they are secured by this Deed of Trust. ARTICLE I DEFINITIONS 1. "Agreement" means that Owner Participation Agreement entered into by and among the Trustor and the Beneficiary hereof, dated May 13, 1991; said Agreement (a copy of which is on file with the Beneficiary at the address stated above, and including all of its attachments) is incorporated herein by reference. 2. The term "Expiration Date" means the date upon which the principal amount of the Construction Loan (the "Note Amount") together with all interest accrued therein has been paid in full, and all other obligations the performance of which is secured by this Deed of Trust have been satisfied. 3. "Mortgage" means any permanent or long-term loan (other than a loan by an entity related to or controlled by the Trustor), or any other financing device (including without limitation deeds of trust) the proceeds of which are used in the construction of the Project, which loan is secured by a security financing interest in the Trustor's interest in the Project; 4. "Project" means all improvements existing on the Property from time to time. 5. "Property" is defined in the second paragraph hereof. The Property is also defined herein as the "Security". Page 3 of 16 6. "Standards" means those standards of construction and operation characteristic of commercial/retail developments similar to the Project which have been constructed within Orange County with the five (5) years preceding the execution of the Agreement. T. ."Trustor" means Abdelmuti Development Company, and his successors in interest. Where an obligation is created herein binding upon Trustor, the obligation shall be joint and several and shall also apply to and bind any successors in interest. Notwithstanding the above obligation secured by this trust deed is accelerated and immediately due and payable upon any transfer of title in the Property and/or the Project as provided in paragraph 13 of the Construction Loan. Unless the context clearly otherwise requires, any capitalized term used herein and not defined herein shall have the meaning given to it under the Agreement (and any amendments thereto). ARTICLE II MAINTENANCE AND MODIFICATION OF THE PROJECT AND SECURITY; RELEASE UPON PAYMENT Section 2.1 Maintenance. and Modification of the Project, 12y—Trustor. The Trustor agrees that at all times prior to the Expiration Date, the Trustor will, at the Trustor's own expense, maintain, preserve and keep the Project or cause the Project to be maintained, preserved and kept in a condition conforming to the Standards. The Trustor will from time to time make or cause to be made all repairs, replacements and renewals deemed proper and necessary by it. The Beneficiary shall have no responsibility in any of these matters or for the making of improvements or additions to the Project. Trustor agrees to pay fully and discharge (or cause to be paid fully and discharged) all claims for labor done and for material and services furnished in connection with the Security, diligently to file or procure the filing of a valid notice of completion upon completion of construction of any part of the Security, diligently file or procure the filing of a notice of cessation upon the event of a cessation of labor on the work or construction on the Security for a continuous period of thirty (30) days or more, and to take all other reasonable steps to forestall the assertion of claims of lien against the Security or any part thereof. Section 2.2 Release of band and Improvements. Upon its receipt of the entire Note Amount and all amounts secured by this Deed of Trust, the Beneficiary shall, upon the request of the Trustor, deliver to the Trustor such instruments as are Page 4 of 16 reasonably necessary to confirm the release of the Security from the lien of this Deed of Trust. 5ection2_.3 Granting of Easements. Trustor may grant easements, licenses, rights -of -way or other similar rights or privileges in the nature of easements with respect to any property.or rights included in the Security without the prior written approval of the Beneficiary. In the event such rights are granted, the Trustor shall promptly so advise the Beneficiary in writing. ARTICLE III TAXES AND INSURANCE; ADVANCES 5estion.3.1 Taxes, Other Governmental Charges_and Utility Cbarges. Trustor shall pay, or cause to be paid, at least fifteen (15) days prior to delinquency, all taxes, assessments, charges and levies imposed by any public authority or utility company which are or may become a lien affecting the Security or any part thereof; provided, however, that Trustor shall not be required to pay and discharge any such tax, assessment, charge or levy so long as (a) the legality thereof shall be promptly and actively contested in good faith and by appropriate proceedings, and (b) Trustor maintains reserves adequate to pay any liabilities contested pursuant to this Section 3.1 in accordance with generally accepted accounting principles. With respect to special assessments or other similar governmental charges, Trustor shall pay such amount in full prior to the attachment of any lien therefor on any part of the Security unless the Trustor has secured the prior written approval of the Beneficiary to pay such amounts in installments over a period of years. In the event that Trustor shall fail to pay any of the foregoing items required by this Section to be paid by Trustor, Beneficiary may (but shall be under no obligation to) pay the same, after the Beneficiary has notified the Trustor of such failure to pay and the Trustor fails to fully pay any such item within seven (7) business days of the earlier of the receipt or mailing of such notice. Any amount so advanced therefor by Beneficiary, together with interest thereon from the date of such advance at the maximum rate permitted under Section 1(2) of Article XV of the California Constitution, shall become an additional obligation of Trustor to the Beneficiary and shall be secured hereby, and Trustor hereby agrees to pay all such amounts. - .l I M-04 4 V71 4ralm- (a) Trustor agrees to provide insurance covering one hundred percent (100%) of the replacement cost of all insurable Page 5 of 16 items within the Project during the course of construction and following completion in the event of fire, lightning, debris removal, windstorm, flood, vandalism, malicious mischief, theft, mysterious disappearance and hazards, casualties and contingencies, excluding earthquake, as are normally and usually covered by all-risk policies in effect in the locality where the Project is situated. (b) Trustor agrees to carry or cause to be carried: (i) comprehensive general liability insurance with respect to the Project with limits of not less than $500,000 per individual and $2,000,000 for each occurrence for personal injury (including without limitation bodily injury) and $500,000 with respect to property damage. Coverages thereunder shall include contractual liability, personal injury, owners' and contractors' protection, products and completed operations coverage; and (ii) workers' compensation insurance as required by law. (c) All such insurance policies and coverages (i) shall be maintained at Trustor's sole cost and expense so long as any part of the amounts secured by its Deed of Trust have not been paid, (ii) shall be with insurers of recognized responsibility, and in form and substance satisfactory to the Beneficiary, (iii) shall name Beneficiary as additional insured, and (iv) shall contain a provision to the effect that the insurer shall not cancel the policy or modify it materially and adversely to the interests of Beneficiary without first giving at least thirty (30) days' prior written notice thereof. Certificates of insurance for all of the above insurance policies, showing the same to be in full force and effect, shall be delivered to the Beneficiary upon demand therefor at any time prior to the Expiration Date. Section 3.3 Advances. In the event the Trustor shall fail to maintain the full insurance coverage required by this Deed of Trust or shall fail to keep the Project in good repair and operating condition, the Beneficiary may (but shall be under no obligation to) take out the required policies of insurance and pay the premium on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and, provided that the Beneficiary provides five (5) business days' notice to the Trustor all amounts so advanced therefor by the Beneficiary shall become an additional obligation of the Trustor to the Beneficiary (together with interest as set forth below) and shall be secured hereby, which amounts the Trustor agrees to pay on demand of the Beneficiary, and if not so paid, shall bear interest from the date of the advance at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. Page 6 of 16 ARTICLE IV DAMAGE, DESTRUCTION OR CONDEMNATION ,ection 4.1 . If, prior to the Expiration Date, the Project or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty, -the Trustor shall (a) cause any insurance proceeds arising from insurance referred to in Section 3.2 hereof and any other coverage acquired by the Trustor to be used to promptly rebuild and replace the Project, and (b) repair and replace the Project as necessary to bring the Project into conformity with the Standards; provided that such covenants shall be subordinated to the provisions of all senior obligations to which this Deed of Trust is subordinate. There shall be no abatement in, and Trustor shall be obligated to continue to pay, the amounts payable under the Construction Loan and this Deed of Trust. Section 4.2 Condgmnation. Subject to the provisions of senior obligations to which this Deed of Trust is subordinate, if title to or any interest in or the temporary use of the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, including any proceeding or purchase in lieu thereof, the proceeds as a result of such taking shall be paid as provided by the law of the State of California. ARTICLE V REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE TRUSTOR Section 5.1 pgfease_gf-tbe„litle. The Trustor covenants that it is lawfully seised and possessed of title in fee simple to the Property, that it has good right to sell, convey or otherwise transfer or encumber the same, and that the Trustor, for itself and its successors and assigns, warrants and will forever defend the right and title to the foregoing described and conveyed property unto the Beneficiary, its successors and assigns, against the claims of all persons whomsoever, excepting only encumbrances approved by the Beneficiary. 5ection,5.2 Jnspection of the Psoiect. The Trustor covenants and agrees that at any and all reasonable times and upon reasonable notice, the Beneficiary and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right, without payment of charges or fees, to inspect the Property. Page 7 of 16 ARTICLE VI FURTHER ASSURANCES; PAYMENT OF THE NOTE AMOUNT Section 6.1 ENrther�Assuranges:--„After_Acquired Property. At any time, and from time to time, upon request by the Beneficiary, the Trustor shall make, execute and deliver, or cause to be made, executed and delivered, to the Beneficiary and, where appropriate, cause to be recorded and/or filed, and from time to time thereafter to be recorded and/or filed, and from time to time thereafter to be re -recorded and/or refiled, at such time and in such offices and places as shall be deemed desirable by the Beneficiary, any and all such other and further deeds of trust, security agreements, financing statements respecting personal property, instruments of further assurance, certificates and other documents as may, in the opinion of the Beneficiary, be necessary or desirable in order to effectuate, complete or perfect, or to continue and preserve, (a) the obligations of the Trustor under this Deed of Trust, and (b) the lien of this Deed of Trust as a lien prior to all liens. Upon any failure by the Trustor to do so, the Beneficiary may make, execute, record, file re-record and/or refile any and all such deeds of trust, security agreements, instruments, certificates and documents for and in the name of the Trustor, and the Trustor hereby irrevocably appoints the Beneficiary the agent and attorney -in -fact of the Trustor to do so. The lien hereof shall automatically attach, without further act, to all after -acquired property deemed to be part of the Security as defined herein. ECction 6.2 Agreement to Pay Attorney's Fees and Expenses. In the event of an Event of Default hereunder, and if the Beneficiary should employ attorneys or incur other expenses for the collection of amounts due or the enforcement of performance or observance of an obligation or agreement on the part of the Trustor in this Deed of Trust, the Trustor agrees that it will, on demand therefor, pay to the Beneficiary the reasonable fees of such attorneys and such other reasonable expenses so incurred by the Beneficiary; and any such amounts paid by the Beneficiary shall be added to the indebtedness secured by the lien of this Deed of Trust, and shall bear interest from the date such expenses are incurred at the maximum rate permitted by Section 1(2) of Article XV of the California Constitution. payment_gf the_Pxojst Conk ctipn Costs. The Trustor shall pay to the Beneficiary the Note Amount of the Construction Loan in the amount and by the time set out in the Construction Loan Attachment No. 5 to the Agreement. Section 6.4 Subroaatjon:_Payment gf Claims. Provided that the Beneficiary gives notice of at least five (5) business days to the Trustor, the Beneficiary shall be subrogated to the Page 8 of 16 claims and liens of all parties whose claims or liens are discharged or paid by the Beneficiary pursuant to the provisions hereof. If permitted in the Mortgage, the Beneficiary shall have the right to pay and discharge the obligations secured by the Mortgage. Section 6.5 The Trustor agrees and covenants to operate the Property (and, in case of a transfer of a portion of the Property, the transferee shall operate such portion of the Property in full compliance with the Agreement and the Covenants. Transfer. No sale, transfer, lease, pledge, encumbrance, creation of a security interest in or other hypothecation of the Security shall relieve or release the Trustor from primary liability under this Deed of Trust. ARTICLE VII EVENTS OF DEFAULT AND REMEDIES aectign 7.1 Event_g of Defag;lt_Defined. The occurrence of any failure of the Trustor to perform under this Deed of Trust, and the continuation of said failure for a period of thirty (30) business days as to monetary obligations and sixty (60) business days as to non -monetary obligations, after written notice specifying such failure and requesting that it be remedied shall have been given to Trustor from the Beneficiary, shall be an Event of Default under this Deed of Trust. Section 7.2 Acceleration of Maturity. If an Event of Default shall have occurred and be continuing, then the entire indebtedness secured hereby shall, at the option of the Beneficiary, immediately become due and payable without notice or demand which are hereby expressly waived, and no omission on the part of the Beneficiary to exercise such option when entitled to do so shall be construed as a waiver of such right. SeCtiQn_7.3 The Beneficig.Ev'yS Right to Enter and Take Possesgion. If an Event of Default shall have occurred and be continuing, the Beneficiary may: (a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Property and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value, marketability or rentability of the Property, or part thereof or interest therein, increase the income therefrom or protect the Security Page 9 of 16 hereof and, with or without taking possession of the Property, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering.upon and taking possession of the Property, the collection of such rents, issues and profits and the application thereof, as aforesaid, shall not cure or waive any Default or notice of Default hereunder or invalidate any act done in response to such Default or pursuant to such notice of Default and, notwithstanding the continuance in possession of the Property or the collection, receipt and application of rents, issues or profits, Beneficiary shall be entitled to exercise every right provided for in this Deed of Trust, the Agreement or by law upon occurrence of any Event of Default, including the right to exercise the power of sale. Trustor requests that a copy of any Notice of Default and a copy of any Notice of Sale hereunder be mailed to him at his address given herein; (b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the property to be sold, which notice Trustee or Beneficiary shall cause to be duly fixed for record in the Official Records of the County in which the Property is located; or (d) Exercise all other rights and remedies provided herein, in the instruments by which the Trustor acquires title to the Property, including any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law. Section 7.4 Forcclgaure-RY-Egwer of Sale. Should the Beneficiary elect to foreclose by exercise of the power of sale herein contained, the Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust which is secured hereby (and the deposit of which shall be deemed to constitute evidence that the Note Amount is immediately due and payable), and such receipts and evidence of any expenditures made that are additionally secured hereby as Trustee may require. (a) Upon receipt of such notice from the Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then Page 10 of 16 be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Property, at the time and place of sale fixed by it in said Notice of Sale, either as a whole or in separate lots or parcels or items as Trustee shall deem expedient and in such order as it may determine, at public auction to the highest bidder, for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale, and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers. (b) After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of title in connection with such sale, Trustee shall apply the proceeds of sale to payment of: (i) the accrued interest and unpaid principal under the Construction Loan; (ii) all other sums then secured hereby; and (iii) the remainder, if any, to the person or persons legally entitled thereto. (c) Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale; and from time to time thereafter, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale. ,Section 7.5 Receiver. If an Event of Default shall have occurred and be continuing, Beneficiary, as a matter of right and without further notice to Trustor or anyone claiming under Security, and without regard to the then value of the Property or the interest of Trustor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers of the Security (or a part thereof), and Trustor hereby irrevocably consents to such appointment and waives further notice of any application therefor. Any such receiver or receivers shall have all the powers and duties of receivers in like or similar cases, and all the powers and duties of Beneficiary in case of entry as provided herein, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Property, unless such receivership is sooner terminated. Section 7.6 Remedies Cumulative. No right, power or remedy conferred upon or reserved to the Beneficiary by this Deed of Trust is 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 given hereunder or now or hereafter existing at law or in equity. Page 11 of 16 Section 7.7 NQ Waiver. (a) No delay or omission of the Beneficiary to exercise any right, power or remedy accruing upon any Default shall exhaust or impair any such right, power or remedy, or shall be construed to be a waiver of any such Default or acquiescence therein;.and every right, power and remedy given by this Deed of Trust to the Beneficiary may be exercised from time to time and as often as may be deemed expeditious by the Beneficiary. No consent or waiver, expressed or implied, by the Beneficiary to or of any breach by the Trustor in the performance of the obligations hereunder shall be deemed or construed to be a consent to or waiver of obligations of the Trustor hereunder. Failure on the part of the Beneficiary to complain of any act or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Beneficiary of its right hereunder or impair any rights powers or remedies consequent on any breach or Default by the Trustor. (b) If the Beneficiary (i) grants forbearance or an extension of time for the payment of any sums secured hereby, (ii) takes other or additional security or the payment of any sums secured hereby, (iii) waives or does not exercise any right granted herein, (iv) releases any part of the Security from the lien of this Deed of Trust, or otherwise changes any of the terms, covenants, conditions or agreements of this Deed. of Trust, (v) consents to the filing of any map, plat or replat affecting the Security, (vi) consents to the granting of any easement or other right affecting the Security, or (vii) makes or consents to any agreement subordinating the lien hereof, any such act or omission shall not release, discharge, modify, change or affect the original liability under this Deed of Trust, or any other obligation of the Trustor or any subsequent purchaser of the Security or any part thereof, or any maker, co-signer, endorser, surety or guarantor (unless expressly released); nor shall any such act or omission preclude the Beneficiary from exercising any right, power or privilege herein granted or intended to be granted in the event of any Default then made or of any subsequent Default, nor, except as otherwise expressly provided in an instrument or instruments executed by the Beneficiary shall the lien of this Deed of Trust be altered thereby. In the event of the sale or transfer by operation of law or otherwise of all or any part of the Site, the Beneficiary, without notice, is hereby authorized and empowered to deal with any such vendee or transferee with reference to the Security (or a part thereof) or the indebtedness secured hereby, or with reference to any of the terms, covenants, conditions or agreements hereof, as fully and to the same extent as it might deal with the Trustor and without in any way releasing or discharging any liabilities, obligations or undertakings of the Trustor. Page 12 of 16 agction 7.8 Euits_ to, 2rotegt_the -Security. The Beneficiary shall have power (upon ninety (90) days notice to the Trustor) to (a) institute and maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Security (and the rights of the Beneficiary as secured by this Deed of Trust) by any acts which may be unlawful or any violation of this Deed of Trust, (b) preserve or protect its interest (as described in this Deed of Trust) in the Security and in the rents, issues, profits and revenues arising therefrom, and (c) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid, if the enforcement for compliance with such enactment, rule or order would impair the security thereunder or be prejudicial to the interests of the Beneficiary. Section 7.9 Trustee May File Proofs gf Claim. In the case of any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting the Trustor, its creditors or its property, the Beneficiary, to the extent permitted by law, shall be entitled to file such proofs of claim and other documents as may be necessary or advisable in order to have the claims of the Beneficiary allowed in such proceedings for the entire amount due and payable by the Trustor under this Deed of Trust at the date of the institution of such proceedings and for any additional amount which may become due and payable by the Trustor hereunder after such date. ARTICLE VIII MISCELLANEOUS Section 8.1 Amendments. This instrument cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought. Section. _.2 Trustor_ Waivelof_,giahts. Trustor hereby acknowledges that it is aware of and has the advice of counsel of its choice with respect to its rights under the Constitution of the United States, including, but not limited to, its rights arising under the Fourth, Fifth, Sixth and Fourteenth Amendments thereto, and the Constitution of the State of California. Trustor agrees that Beneficiary may exercise its rights hereunder in accordance with the provisions hereof, including, but not limited to, the exercise of the power of sale pursuant to Section 7.4 hereof, and Trustor hereby expressly waives and releases its rights under such Constitutions with respect thereto, including, but not limited to, its rights, if any, to notice and a hearing upon the Page 13 of 16 occurrence of an Event of Default hereunder; provided, however, nothing contained herein shall be deemed to be a waiver of Trustoe's rights to reinstate or redeem this Deed of Trust in accordance with applicable law. Trustor further waives to the extent permitted by law, (a) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Security, (b) all rights of valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created, and (c) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties. Section 8.3 Reconveyance ty Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's reasonable fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Property then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or person legally entitled thereto." Section 8.4 Notices. Whenever Beneficiary, Trustor or Trustee shall desire to give or serve any notice, demand, request or other communication with respect to this Deed of Trust, each such notice, demand, request, or other communication shall be in writing and shall be effective only if the same is delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipts requested, or by telegram, addressed to the address set forth in the first paragraph of this Deed of Trust. Any party may at any time change its address for such notices by delivering or mailing to the other parties hereto, as aforesaid, a notice of such change. Sects 8.5 ACcentance by Irustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. Captigns. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a part of this Deed of Trust. Section 8.7 Invalidity of Certain Provizions. Every provision of this Deed of Trust is intended to be severable. In the event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not Page 14 of 16 a affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Security, the unsecured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid on and applied to the full payment of that portion of the debt which is not secured or partially secured by the lien of this Deed of Trust. Section 8.8 No Merger. If title to the Property shall become vested in the Beneficiary, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger and, in such event, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary under this Deed of Trust. In addition, upon foreclosure under this Deed of Trust pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Security shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at any such foreclosure shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any lease or sublease unless Beneficiary or such purchaser shall give written notice of termination to such tenant or subtenant. Sec -tip I8,9 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California. BeCtion 8,10 Gender-AnaJiumber. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires. IN WITNESS WHEREOF, Trustor has executed this Deed Of Trust as of the day and year first above written. APPROVED AS TO FORM: Agency Counsel 'Cl ti r Page 15 of 16 STATE OF CALIFORNIA ) ss. COUNTY OF } .On _k��b*rr 7-'0, 012- _ before me, the undersigned. a No$ary_Public in andforsaid State, personally appeared HqMn► r proved to me on the basis of satisfactory evidence to be the &&erson who executed the within instrument as (' �Ia( W*rey , of the partners of the partnership that executed the within instrument, and acknowledged to ire that such partnership executed the same. WITNESS my hand and official seal. =I M (SEAL) STATE OF CALIFORNIA ) } ss. COUNTY OF ORANGE ) ~" KAREN S. REIMER NOTARY PJMC-CA1.MA PAVISICE COUNTY MY Commrssow Fxpim AUGUST 8,1995 On before me, the undersigned, a Notary Public in and for said State, personally auceared personally known to me or proved to me satisfactory evidence to be the person within instrument as (SEAL) on the basis of who executed the WITNESS my hand and official seal. Page 16 of 16 EXHIBIT "A" j,EGAL DUCRIPTION OE THE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1 of Parcel Map No. 91-235, as shown on a map filed in Book Z7 , Pages JL,3_ of Parcel Maps, records of Orange County, California. EXCEPTING THEREFROM the most Easterly Northeasterly ten (10) feet of said Parcel Map, the Northeasterly line of said ten (10) foot strip being the course shown as having a bearing and distance of North 49 degrees 29' 47" West, 117.47 feet on said Parcel Map. Said parcel of land contains 0.517 acres, more or less, in lieu of net acreage of 0.541' acres as shown on said Parcel Map. EXHIEr- ;. "All PLEASE COMPLETE THIS INFORMATION . .. RECORDING REQUESTED BY: Continental Lawyers Title Company AND WHEN RECORDED MAIL TO: Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 DOC P 93-010596 i0—FEB-1g03 G'9:G►4 Am Peccryrd in Cfficia:�ccr�; Of Or3^Me Co,Unty: California Lee A. Prand,, C:unty Fprorsdar Pale 1 of 9 Fe_s: 3 Q.C� Continental Lawyers Title Company 7M Subsidiary of lauyersTide Insurance (o'jporation THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Addlilonsl nuording its applies) a 11-12 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO Connie Brockway, City Clerk Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 [Space above for recorder.] This Agreement is recorded at the request and for the benefit of the Agency and is exempt from the payment of a recording fee f� pursuant to Government Code \ Section 6103. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON.BEACH' y, Its: Dated: 1992 DECLARATION OF CONDITIONS, COVENANTS$ AND RESTRICTIONS THIS DECLARATION OF CONDITIONS, COVE NTS AND 1f RESTRICTIONS is made this /4day off , 1992, by ABDELMUTI DEVELOPMENT COMPANY, a California general partnership, as declarant (the "Participant"), with reference to the following: A. The Participant is fee owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit "A" (the "Property"), which is comprised of a portion of one (1) parcel ("Parcel"). The Property comprises the Site which is the subject of an agreement, further described herein, for the development, operation and maintenance of the Property for commercial and/or residential uses. B. The Redevelopment Agency of the City of Huntington Beach ("Agency") and the Participant have entered into an Owner Participation Agreement dated as of May 13, 1991 concerning the development and use of the Property (the "OPA") which OPA is on Page 1 of 7 file with the Agency as a public record and is incorporated herein by reference and which OPA provides for the execution and recordation of this document. C. Participant deems it desirable to impose a general plan for -the use and maintenance of the Property, and to adopt and establish covenants, conditions and restrictions upon the Property for the purpose of enforcing and protecting the value, desirability and attractiveness thereof. NOW, THEREFORE, the Participant hereby covenants, agrees and declares that all of the Property shall be held, sold, conveyed, hypothecated, encumbered, used, occupied and improved, subject to the following covenants, conditions, restrictions and easements which are hereby declared to be for the benefit of the whole Property. These covenants, conditions, restrictions and easements shall run with the Property and shall be binding on all parties having or acquiring any right, title or interest in the Property or any part thereof and shall inure to the benefit of each owner thereof and their successors and assigns, and are imposed upon the Property and every part thereof as a servitude in favor of Parcel as the dominant tenement or tenements. NOW, THEREFORE, THE PARTICIPANT AGREES AND COVENANTS AS FOLLOWS: 1. use Restrictions. a. The Property shall be devoted to the uses specified in the Redevelopment Plan and the OPA (in conformity with the Agency's right to require a change of use for the second and third stories pursuant to Section 201 of the OPA and with the limitations of the Scope of Development attached thereto as Attachment No. 4). b. The Participant shall maintain the improvements on the Site and shall keep the Property free from any accumulation of debris or waste materials. The Participant shall also maintain the required landscaping on the Site in a healthy condition. If, at any time, Participant fails to maintain said landscaping, and said condition is not corrected after expiration of thirty (30) days from the date of written notice from the Agency, either the Agency or the City may perform the necessary landscape maintenance and Participant shall pay such costs as are reasonably incurred for such maintenance. Issuance of a Certificate of Completion or a Partial Certificate of Completion by the Agency shall not affect Participant's obligations under this section. Page 2 of 7 The Participant covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sea, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Participant itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. The Participant shall refrain from restricting the rental, sale or lease of the Property or any portion of the Property on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, -creed, religion, sex, marital status, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, Page 3 of 7 a marital status, handicap,.age, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." 3. In contracts: "There shall be no discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sea, marital status, age, handicap, ancestry or national origin, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or verdees of the premises." •�M • - -Te•.M M• -u'0 OF The City of Huntington Beach ("City") and the Agency shall be made a party to this Declaration for the limited purpose as specified herein as follows: a. Changes or amendments to this Declaration must be submitted for City/Agency review and approval. b. In the event of inaction by Participant, the City and Agency are hereby granted expedient power to enforce all provisions of this Declaration including, but not limited to, the maintenance of the exterior areas of the Project, for which the City and/or Agency shall be reimbursed by Participant for all costs related thereto. C. The City and Agency are hereby granted the express power to enforce all laws and ordinances of the State of California and/or the City of Huntington Beach on the Property, including structures and private parking areas within the Property. Nothing within this Declaration, however, shall be construed as imposing an obligation or requiring the City or Agency to enforce any provision thereof. Page 4 of 7 d. This Declaration shall not be amended to remove, or to result in the effective removal, of the restrictions on the Property set forth in Sections 1, 2 and 3 hereof. As to all other types of amendments, the City and the Agency shall be given prior written notice of any proposed amendment to this Declaration. Such notice shall be given by mailing a copy of the precise language of the proposed amendment to the City of Huntington Beach, c/o City Clerk, together with a letter of transmittal explaining the proposed change in general terms. The City and the Agency shall have an opportunity to review and comment upon the proposed amendment for a period of not less than forty-five (45) days prior to the effective date of any such proposed amendment. If the City or Agency fail to respond within forty-five (45) days, the proposed change(s) and amendment(s) shall be deemed disapproved, unless that time period is extended by mutual agreement of all parties. y - .. - • • • a. If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the' consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. b. This Declaration shall be construed in accordance with the laws of the State of California. C. This Declaration shall be binding upon and inure to the benefit of the successors and assigns of the Participant. d. In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney's fees and costs. 6. The covenants and agreements established in this Declaration shall, without regard to technical classification and designation, be binding on each Owner and any successor in interest to the Property, or any part thereof, for the benefit of and in favor of the Agency, its successor and assigns, and the City of Huntington Beach, and shall remain in effect until January 1, 2017, and at that time shall terminate and be of no further force or effect, except for the covenants contained in No. 2 hereof regarding non-discrimination which shall continue in effect in perpetuity. Page 5 of 7 IN WITNESS WHEREOF, Participant has executed this instrument the day and year first hereinabove written. Dated: AA, BDE NT !ANY BDEL , fierai Partner APPROVED AS TO FORM: Agency Counsel "PARTICIPANT" 0 Page 6 of 7 STATE OF CALIFORNIA COUNTY OF d ? ss. On I�AX'-n[VY' Z-5-, III Z- before me, the undersigned, a Notary Pu lic in and for said State, personally appeared R't-fW+ b Mb!LMIAII personally known to me or proved to me on the basis of satisfactory evidence to be the pe son who executed the within instrument as 6ptwy.J�L flf4r of the partners of the partnership that executed the within instrument, and acknowledged to me that such partnership executed the same. WITNESS my hand and official seal. (SEAL) '- k oFF�sAt KAREN S. REIMER NOTARY KSUC-;ALFMA RKMME COWIM 6y C�ommistian ExOvs AUGUST 8.1995 Page 7 of 7 EXTUDIT "A" LEGAL DESCRIPTION OF TIIE PROPERTY That certain real property located in the City of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1 of Parcel Map No. 91-235, as shown on a snap filed in Book Z %Pages /-3 of Parcel Maps, records of Orange County, California. EXCEPTING THEREFROM the most Easterly Northeasterly ten (10) feet of said Parcel Map, the Northeasterly line of said ten (10) foot strip being the course shown as having a bearing and distance of North 49 degrees 29' 47" West, 117.47 feet on said Parcel Map. Said parcel of land contains 0.517 acres, more or less, in lieu of net acreage of 0.541' acres as shown on said Parcel Map. EXTITBIT "A" CITY OF HUNTINGTON BEACH p INTER -DEPARTMENT COMMUNICATION HUNTINGTON BEACH TO: Connie Brockway, City Clerk FROM: Barbara A. Kaiser, Deputy City Administrator DATE: February 23, 1993 SUBJECT: Promissory Note - Abdelmuti Construction Loan Connie, for your files and records, I have, attached the original Promissory Note for Abdelmuti Company's construction loan. If you have any questions, call me on extension 5582. BAK:ls Attachment 273 PRQA+ISSQRY NOTE_ FOR _C0N$TRUC1JON LOAN T(LABPLMSiTI EVEI,OPMENT COMPANY PURSUANT TO OWNER, PARTICIPATION AGREEMENT $3,980,000.00 Huntington Beach, California November��At -1Sz� 1992 1. Promise -Pay. Abdelmuti Development Company, a California general partnership ("Borrower," also referred to as "Participant"), promises to pay the Redevelopment Agency of the City of Huntington Beach, a public body, corporate and politic ("Agency") and/or its assigns, at the office of the Agency in Huntington Beach, California, or at such other place as the holder hereof may designate in writing, the principal sum of Three Million Nine Hundred Eighty Thousand Dollars ($3,980,000.00) or such lesser amount which shall from time to tire be owing hereunder on account of unpaid principal advances by Agency or a construction management trustee designated by Agency to or for the benefit of Borrower (the "Note Amount"). The principal sum hereof shall be disbursed pursuant to the terms and conditions set forth in that certain Owner Participation Agreement dated May 13, 1991, between the Borrower and the Agency, as amended from time to time (the "OPA"). 2. Interest Ratg. Interest shall be charged by the Agency on the aggregate of all sums advanced hereunder remaining unpaid, from the date funds are advanced, at the rate of seven percent M) per annum. 3. Principal —and Interest_—ayments. The payment of principal and interest shall be payable in one hundred eighty (180) monthly installments commencing upon the earlier of (i) the date a certificate of occupancy was issued for the ground floor commercial/retail portion of the Project as defined in the OPA; or (ii) the date of completion in the Schedule of Performance of the OPA, as that date may be amended by agreement of the parties ("Initial Repayment Calculation Date"). On the Initial Repayment Calculation Date the monthly installments shall be calculated by fully amortizing the then total unpaid principal advances and accrued and unpaid interest outstanding over one hundred eighty (180) months at seven percent 0%) per annum. The first payment shall be due and payable thirty (30) days after the Initial Repayment Calculation Date ("Initial Repayment Commencement Date"). It is acknowledged by Borrower and Agency that certain additional improvements, such as tenant improvements, may be constructed after the Initial Repayment Calculation Date and, therefore, additional principal disbursements may occur after the Initial Repayment Calculation Date. In such event, the monthly payments shall be recalculated at such time as no funds remain to be disbursed pursuant to the OPA ("Final Repayment Calculation Date"). On the Final Repayment Calculation Date the monthly installments shall be FS I U831014820-00DI120020.3 IUD I4M IV recalculated by fully amortizing the then total unpaid principal advances and accrued and unpaid interest outstanding over one hundred eighty (180) months less the total number of months between the Initial Repayment Calculation Date and the Final Repayment Calculation Date at seven percent M-) per annum. The first recalculated payment shall be due and payable thirty (30) days after the Final Repayment Calculation Date ("Repayment Commencement Date"). Within thirty (30) days after the initial Repayment Calculation Date and the Final Repayment Calculation Date, if any, the parties shall indorse this Promissory Note with a statement setting forth the then total unpaid principal disbursed, the then total accrued and unpaid interest and the then monthly payments to be paid by Borrower; provided that, however, the failure of either party to so endorse this promissory note shall not be deemed to be a default under this Note by either party nor shall it affect the validity of this Note. 4. Application of P en s. Any sums received hereunder may, at the option of holder hereof, be applied in any order to the payment of costs, interest or principal due hereunder. S. grepaymgnt. Privilege is reserved to make prepayments of principal on this Note without penalty or fee. 6. Non -Waiver. Failure to have or be entitled to, in the shall not constitute a waiver of the event of subsequent default. exercise any right the holder may event of any default hereunder, such right or any other right in 7. waiver of Presentment. etc. The Borrower hereby waives presentment for payment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Note. All of the terms, covenants, provisions, and conditions herein contained are made on behalf of, and shall apply to and bind, the undersigned and its successors and assigns, jointly and severally. S. Collection Costs. If any attorney is engaged by the Agency to enforce or construe any provision of this Note or the Deed of Trust securing same, or as a consequence of any default or event of default hereunder, with or without the filing of any legal action or proceeding, then Borrower shall immediately pay upon demand all attorney's fees and all other costs incurred by Agency, together with interest thereon from the date of such demand until paid at the rate of interest applicable to the principal owing hereunder as if such unpaid attorney's fees and costs have been added to the principal. 9. Security_ of Note. This Note is secured by a Deed of Trust (Attachment No. 6 to the OPA) executed by Borrower covering property located in Orange County, State of California, together with the buildings and improvements now or hereafter erected thereon. FSIMM14820-0001120020.3 10114M -2- ' 10. Iaximnm Jnterest. No provision of this Note or any instrument securing payment hereof or otherwise relating to the debt evidenced hereby shall require the payment or permit the collection of interest in excess of the maximum permitted by applicable law. If any excess of interest in such respect is herein or in such other instrument provided for, or shall be adjudicated to be so provided for herein or in any such instrument, the provisions of this paragraph shall govern, and neither Borrower or any endorsers of this Note nor their respective heirs, personal representatives, successors or assigns shall be obligated to pay the amount of such interest to the extent it is in excess of the amount permitted by applicable law. 11. egg. Any demand or notice to be made or given under the terms hereof or any instrument now or hereafter securing this Note by the holder hereof to Borrower shall be effective when mailed or delivered in the manner specified in the Deed of Trust. 12, Pefalilt. in the event that there is a default in payment as scheduled herein or a default under the terms of the Deed of Trust securing this Note, or a default in any other instrument executed by Borrower in favor of the Agency, the Agency may, at its election and without further notice, declare all amounts of the outstanding principal and accrued interest thereon immediately due and payable. In the event that the Agency elects to declare default as stated herein this Note shall bear interest after default at the same rate prevailing under the terms of this Note, immediately prior to default and take such action under the law or under the security document securing this Note as Agency may determine necessary to enforce its rights hereunder. 13. Acgelerat on. The whole of the Note Amount plus accrued interest and all other payments due hereunder shall become due and be immediately payable to the Holder by the Participant when Participant sells or otherwise transfers title to the property described in the Deed of Trust (except as permitted by the Agency) . IN WITNESS WHEREOF, this instrument has been executed as of the date set forth on the first page hereof. DATED: 6'c1t(AJ61- Zg_, 1992. December ABDELMUTI DEVELOPMENT COMPANY, a California general partnership eneral Partner "BORROWER" PSI%3831014E20.0001120020.3 10/34M - 3 - APPROVED AS TO FORM: A envy Counsel /� •it -,,i Z- Lf Stradling, Yocca, Carlson & Rauth Special Counsel to the Agency FSIWA0148204 001120020.1 1011 M - i - �I PS For, 3800. June 1990 za 3 N ro S c 0 o, moms- c {� opd a Y diCD In 4. a a� . N: t.`wtran addiborw MrV10a/ we i lfad. and co W-sts itarrra Put your sddrass In the " AMAN TO" Space on ft reverse side. FaMura to do We wM prwnt leis card tram burg ntumad to jis A recslar teeyriti ar0vld� �tr_ths sf tt+a ca�af 2 R FOr a� uonsi Is" VW t000wYV serY�M! av ' . Gon"t paem"tar or u an c ox for ad0daml service(s) requenW. 1. 8how m whom � d�srod addrissas's address. 2. _] Restricted `1 Wery 3. ArtWo Addrssaad to: a. Article Number Jerome Same P '874 903 145 Attorney at Law r * or o.: 10055 Slater Ave. Suite 250 A-08tered ❑ I.rsd Fountain Valley CA 92708 p certoied ❑ n°° Exprsas ❑ A1ws��{tsin eipnstas, Ot addnsass or sjaK OW PATE DELIVERED. 6. Sir -- Addren >!. AddrasaWs Address (ONLY (j e. n.nrra ei . Mar. IM + LL QP_0- WSS-212-8-89 nouram IegTIIRM Mr�1pr t.-EC 02 '92 15:37,-ROLERT MAYER CORP P.1/1 - - - : �tt ..a : : ur a ✓.� a r l.• Y SIC TfA�VSJIITAL:;_ } a ra THE ROBERT MAYER CORPORATION THE WATERFRONT. INC. 660 NEWPORT CENTER DRIVE SUCTE 1050. P.O. BOX 8680 NEWPORT REACH, CA 92658-8680 , (714) 75"W1 Fax (714) 720-1017 o s m v TO. Connie Brockway, City Clerk r r� N -n COMPANY: City of Huntington Beach x J. Fax #: FROM: Shawn M;Ilbern, The Robert Mayer Corporation t FAX SENT BY: DATE: December 2, 1992 TOTAL PAGES: i (Including Cover Page) NOTES: I AM ADVISED BY FIRST AMERICAN TITLE COMPANY THAT THE FIRST AMENDMENT TO MEMORANDUM LEASE REGARDING THE THIRD AMENDED AND RESTATE LEASE (THE WATERFRONT SITE) WAS RECORDED ON NOVEMBER 30.1992 AS DOCUMENT NO. 92-818329. A CONFORMED COPY IS IN THE MAIL TO YOU. 41 to 1 t l� �� i:3:;C,I F , [SOU XEMANS E0 between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a Public Body, Corporate and Politic in the State of California as SUBLESSOR and ABDELMUTI DEVELOPMENT CORPORATION as SUBLESSEE 1. PARTIES 2. PREMISES 3. USE 4. RENT 4.1 Payment and Amount of Minimum Rent 5. TERM 6. FLOOR AREA 7. USES PROHIBITED 8. COMPLIANCE WITH LAW 9. ALTERATIONS AND ADDITIONS 10. REPAIRS 10.1 Sublessee's Obligations 10.2 Sublessor's Obligations 11. LIENS 12. ASSIGNMENT AND SUBLETTING 12.1 Sublessor's Consent Required 13. HOLD HARMLESS 14. SUBROGATION 15. INSURANCE 15.1 Liability Insurance 15.2 Property Insurance 15.3 Food Preparation 15.4 Insurance Policies 16. UTILITIES 17. PERSONAL PROPERTY TAXES 18. SUBLEASE SUBJECT TO DECLARATION, ARTICLES, BYLAWS AND ASSOCIATION RULES OF MAIN PROMENADE, INC 19. HOLDING OVER 20. ENTRY BY SUBLESSOR 21. SUBLESSEES: DEFAULT 22. REMEDIES IN DEFAULT 23. DEFAULT BY SUBLESSOR (i) n 1 1 1 1 1 1 1 2 2 3 3 3 4 4 4 4 4 5 s 5 5 6 6 6 6 7 7 7 8 8 9 24. CURE OF SUBLESSEeS DEFAULTS 10 25. RECONSTRUCTION 10 26. SUBLESSEE'S STATEMENT 11 27. PARKING 11 28. COMMON AREAS 12 29. SIGNS 13 30. DISPLAYS - LIGHTS 13 31. AUCTIONS 14 32. HOURS OF BUSINESS 14 33. COMPETITION 14 34. TRADE FIXTURES 14 35. NONREPRESENTATION AS TO BUILDING SITE 15 36. RELATIONSHIP OF PARTIES 15 37. CHANGE IN SUBLESSORS INTEREST 15 38. GENERAL PROVISIONS 16 38.1 Plats and Riders 16 38.2 Waiver 16 38.3 Joint Obligation 16 38.4 Marginal Headings 16 38.5 Time 16 38.6 Successors and Assigns 16 38.7 Recordation 16 38.8 Ouiet Possession 16 38.9 Brokers 16 38.10 Prior Agreements 16 38.11 Inability to Perform 16 38.12 Partial Invalidity 17 38.13 Cumulative Remedies 17 38.14 Choice of Law 17 38.15 Attorneys' Fees 17 38.16 Subordination Attornment 17 38.17 Hazardous Waste and Materials 17 38.18 Notices 18 38.19 Authority of Sublessee 18 38.20 Nondiscrimination 19 38.21 Consents, Approvals, and Agreements of Sublessor 19 Exhibit "A-1" Floor Plan Exhibit "A-2" Legal Description of the Commercial Portion of `The Main Promenade" Structure Exhibit V Site Plan of the Commercial Portion of "The Main Promenade" Exhibit "C" Sublessee Improvements Exhibit "D" Confirmation of Term Exhibit "E" Sublessee's Certificate SUBLEASE Commercial Portion of 'The Main Promenad e' �1 2 DES. This Sublease (`Sublease') bated as of this day of _AvevT r___ _ 1992. is made by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (herein called "Sublessor') and AHDELMUTI DEVELOPMENT CORP. (herein called "Sublessee"). 2. EBEMI ES. Sublessor does hereby sublet to Sublessee and Sublessee hereby sublets from Sublessor for the term, at the rental and upon the covenants and conditions herein set forth that certain space (herein called "Premises'), containing approximately Three Thousand Six Hundred And Sixteen (3,616) square feet of floor area. The location and dimensions of said Premises are delineated on Exhibit "A -I" attached hereto and incorporated by reference herein. Said Premises are located in Unit #101 at 200 Main Street in the City of Huntington Beach, County of Orange. State of California, and are situated in a commercial and office development currently under construction and legally described in Exhibit "A-2" attached hereto and made a part hereof (Commercial Portion of "The Main Promenade" Structure). A site plan of the Commercial Portion of 'The Main Promenade" Structure showing the location or proposed location of the building, facilities and related improvements is attached hereto as Exhibit "B". 3. IME. Sublessee sha!1 use the Premises for the retail sale of surf and sport wear and related items under the trade name JACK'S SURFBOARDS or other retail or commercial use(s), as mutually agreed to between the parties during the term of this Sublease. 4. $EW. 3 4.1 For the twelve (42} month period commencing October 1, 1992 and ending September 30, 1993, Sublessee agrees to pay to Sublessor as rent, without notice, demand, or offset, the sum of One Dollar ($1.00), In advance. 5. IERM. The term of the Sublease shall be One+-yreaf,O commencing October 1. 1992 and ending September 30, 1993. The parties acknowledge that certain obligations under various Articles hereof may commence prior to the Commencement Date, i.e. construction, hold harmless, liability Insurance, etc.; and the parties agree to be bound by these Articles prior to the Commencement Date. Within thirty (30) days following the Commencement Date, the parties shall execute a supplement to this Sublease in form attached hereto as Exhibit 'D', stating the Commencement Date and expiration date of the term of this Sublease. 6. FLOOR AREA, The term "floor area" as used herein means separately with respect to the Premises the actual number of square feet of floor space within the Premises as measured from the exterior of exterior walls and the center line of common walls, and, with respect to -11- the balance of the Commercial Portion of "The Main Promenade" Structure the actual number of square feet of floor space (exclusive of any space on mezzanines, in basements or on exterior balconies unless used for commercial and/or office purposes or the sale or display of merchandise) within the exterior faces of building wails and measured from the center of common walls, but excluding any such space (i) not intended by Sublessor for the exclusive occupancy by lessees, (ii) outside sales areas whether or not roofed and.'or enclosed, (iii) truck ramps and/or docks, trash storage and compaction areas, box and bottle yards, whether or not roofed and/or enclosed, and (iv) space within any kiosk building. For the purpose of making any proration or allocation to be made under this Article 6, Sublessor may cocclusively assume that the floor area of the Premises is the estimated floor area specified in Article 2. above. Sublessor reserves the right to reduce the floor area computation to reflect any concessions in the payment of Adjustments given to a sublessee by reducing the floor area attributable to such sublessee's premises by ten percent (10%) or less. 7. USES,PFtQH161TFt]_ Sublessee shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which is not within the permitted use of the Premises as set forth in Article 3, above, or which will in any way increase the existing rate of or affect any fire or other insurance upon the Building, the Commercial Portion of "The Main Promenade" Structure or the contents of either. or cause a cancellation of any insurance policy covering the Building, the Commercial Portion of 'The Main Promenade" Structure or any part thereof or the contents of either, and the amount of such increase, if any. shall be paid by Sublessee to Sublessor upon demand. Sublessee shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or the Commercial Portion of "The Main Promenade" Structure or injure or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose; nor shall Sublessee cause, maintain or permit any nuisance in, on or about the Premises or the parking and common areas of the Commercial Portion of "The Main Promenade" Structure. Sublessee shall not commit or allow to be committed any waste in or upon the Premises. Sublessee may not display, sell merchandise, allow carts, portable signs, devices or aay other objects to be stored or to remain outside the defined exterior walls or roof and permanent doorways of the Premises or in hallways. No aerial or antenna shall be erected on the roof or exterior walls of the Premises. In addition, Sublessee will not solicit in any manner in or from any of the common areas of the Commercial Portion of "The Main Promenade" Structure. 8. COMPLIANCE WITH LAW. Sublessee shall not use the Premises, or permit anything t3 be done in or about the Premises, which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Sublessee shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements new in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the .2- condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Sublessee's improvements, use of the Premises or acts. The judgment of any court of competent jurisdiction or the admission of Sublessee in any action against Sublessee, whether Sublessor be a party thereto or not, that Sublessee has violated any law, statute, ordinance or governmental rule, regulation or requirement shall be conclusive of that fact as between Sublessor and Sublessee. 9. ALTERATIONS AND ADDITIONS_ Sublessee shall not make or allow to be made any alterations, additions or improvements to or of the Premises or any part thereof, without first receiving Sublessors prior written consent. Any alterations, additions or improvements to or of said Premises, including, but not limited to, wail covering, paneling and built- in -cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to Sublessor and shall be surrendered with the Premises. In the event Sublessor consents to the making of any alterations, additions or improvements to the Premises by Sublessee, the same shall be made by Sublessee at Sublessee's sole cost and expense. Upon the expiration or sooner termination of the term hereof, Sublessee shall, upon written demand by Sublessor, given at least thirty (30) days prior to the end of the term, at Sublessee's sole cost and expense, forthwith and with all due diligence, remove any alterations, additions, or improvements made by Sublessee, designated by Sublessor to be removed, and Sublessee shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the Premises caused by such removal. Sublessor reserves the right to remodel and/or otherwise alter the canopy, roof and.'or exterior of the Building and the sidewalks • and landscaped areas, if any, adjacent to the Building in connection with any remodeling and/or expansion of the Building. In any such event, Sublessor further reserves the right to require that Sublessee replace its • .. building sign with a new building sign complying with Sublessoes then standard sign criteria for comparable tenancies within the Commercial , Portion of "The Main Promenade" Structure. 10. REPAIRS. ' 10.1 Stb)essee's_Obliaations By entry hereunder, Sublessee shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. Sublessee shall, at Sublessee's sole cost and expense, keep the Premises and every part thereof in good condition and repair (except as hereinafter provided with respect to Sublessoes obligations), including, without limitation, the maintenance, replacement and repair of any storefront, plateglass, doors, window casements, glazing, heating and air conditioning system (when there is an air conditioning system. Sublessee shall obtain a service contract for repairs and maintenance of said system, said maintenance contract to conform to the requirements under the warranty, if any, on said system), plumbing, pipes, electrical wiring and conduits. Sublessee shall, upon the expiration or sooner termination of this Sublease, surrender the Premises to the Sublessor in good condition, broom clean, ordinary wear and tear and damage from causes beyond the reasonable control of Sublessee excepted. •. Any damage to adjacent premises caused by Sublessee's use of the Premises shalt be repaired at the sole cost and expense of Sublessee. -3- 10.2 Sublessoe's Obligations Notwithstanding the provisions of Section 10.1, hereinabcve, Sublessor shall repair and maintain the V. structural portions of the Building, including the exterior walls and roof, unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault or omission of any duty by Sublessee, its agents, servants, employees, invitees, or any damage caused by breaking and entering, in which case Sublessee shall pay to Sublessor the actual cost of such maintenance and repair. Sublessor shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Sublessor by Sublessee. Except as provided in Article 25 hereof, there shall be no abatement of rent and no liability of Sublessor by reason of any injury to or interference with Sublessee's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Sublessee waives the right to make repairs at Sublessoes expense under any law, statute or ordinance now or hereafter in effect. 11. LIENS. Sublessee shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any work performed, materials furnished or obligations incurred by or on behalf of or alleged to have been incurred by or on behalf of Sublessee. Sublessor may require, at Sublessors sole option, that Sublessee shall provide to Sublessor, at Sublessee's sole cost and expense, a lien and completion bond, in a form and from a surety satisfactory to Sublessor, in an amount equal to one hundred fifty percent (150%) of the estimated cost of any improvements, additions, or alterations in the Premises which Sublessee desires to make, to insure Sublessor against any liability for mechanic's and materialmon's liens and to insure completion of the work. Sublessee shall give Sublessor not less than twenty (20) days prior written notice before commencing construction of any kind upon the Premises so that Sublessor may post and maintain such notices of nonresponsibility or other notices on the Premises as Sublessor deems necessary to protect Sublessor from such liens. 12.1 SublessgCS Consent equired_ Sublessee shall not, either voluntarily or by operation of taw, assign, sell, encumber, pledge or otherwise transfer all or any part of Sublessee's leasehold estate hereunder, or permit the Premises to be occupied by anyone other than Sublessee or Sublessee's employees or sublet the Premises or any portion thereof 13. HQ Q HARMLESS. Sublessee shalt indemnify and hold harmless Sublessor against and from any and all claims, demands, liabilities and/or obligations arising from Sublessee's use of the Premises or from the conduct of its business or from any activity, work. or other things done, permitted or suffered by the Sublessee in or about the Premises, and shall further indemnify and hold harmless Sublessor against and from any and all claims, demands, liabilities and/or obligations arising from any breach or default in the performance of any obligation on Sublessee's part to be performed under the terms of this Sublease, or arising from any act or negligence of the Sublessee. or any .4- officer, agent, employee, guest or invites of Sublessee, and from all costs, attorneys' fees, and liabilit;es incurred in or about the defense of any such claim or any action or proceeding brought thereon and in case any action or proceeding be brought against Sublessor by reason of such claim. Sublessee upon notice from Sublessor shall defend the same at Sublessee's expense by counsel reasonably satisfactory to Sublessor. Sublessee, as a material part of the consideration to Sublessor, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than Sublessors affirmative or gross negligence; and Sublessee hereby waives all claims in respect thereof against Sublessor. Sublessee shall give prompt notice to Sublessor In case of casualty or accidents in the Premises. Sublessor or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling piaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from tie pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the affirmative or gross negligence of Sublessor, its agents, servants or employees. Sublessor or its agents shall not be liable for interference with the light, air, or for any latent defect in the Premises. 14. ABROGATION. As long as their respective insurers so permit. Sublessor and Sublessee hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies carried by the respective parties. Each party shall apply to their insurers to obtain said waivers. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. i t-�I�6-i11:TR al -I 15.1 I_labili y Insl rai nce. Sublessee shall, at Sublessee's expense, obtain and keep in force during the term of this Sublease a policy of comprehensive public liability insurance insuring jointly Sublessor and Sublessee against any liability arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall have combined single limits of $2,000,000 for bodily injury or death. Such insurance shall further insure Sublessor and Sublessee against liability for property damage with limits of at least $1,000,000. The limit of any such insurance shall not, however, limit the liability of the Sublessee hereunder. All such policies shall be written as primary policies not contributing with and not in excess of coverage which Sublessor may carry and shall provide for payment of loss to Sublessor notwithstanding any act or negligence of Sublessee which might otherwise result in forfeiture of said insurance. Sublessor may require an increase in the amounts of public liability and property damage insurance coverage required by this Section as such amounts are reasonably determined by Sublessor or Sublessor's lender to provide for increases in cost -of -living or liability experience. 15.2 Eroperty Insurance, Sublessee agrees to procure and maintain fire and extended coverage insurance in an amount equal to one hundred percent (100%) of the replacement cost of Sublessee's fixtures, -5- • signs, equipment and personal property located in, on or about the Premises and shall provide plate glass coverage. Sublessee shall procure an appropriate clause in or an endorsement on any such policy of insurance pursuant to which the insurance company waives subrogation or consents to a waiver of the right of recovery against Sublessor, and Sublessee does hereby agree that it shall not make any claim against or seek to recover from Sublessor any loss or damage to its property or the property of others, resulting from any hazard insured against by such policy. Sublessee shall also carry Wcrkees Compensation Insurance as required by law. A Certificate evidencing such insurance shall be delivered to Sublessor. 15.3 Food Prey 'on. No food preparation by Sublessee shall be allowed on site. 15.4 Insurance Palicies. All insurance to be obtained by Sublessee pursuant to this Article 15 shall be provided by Companies rated A-15 or better in 'Best's Insurance Guide', or in the event Best's Insurance Guide is no longer published, any comparable rating in any similar guide selected by Sublessor. Sublessee shall deliver to Sublessor copies of the insurance policies required by this Article or certificates evidencing the existence and amount of such insurance with loss payable clauses satisfactory to Sublessor. No policy shall be cancellable or subject to reduction of coverage without thirty (30) days' prior notice to Sublessor, and each such certificate shall so provide. On or before ten (10) days prior to the expiration of any such insurance policy, Sublessee will deliver to Sublessor written notification in the form of a receipt or other similar document from the applicable insurance company that said policy has been renewed, or deliver certificates of coverage or the policies from another insurance company to evidence such coverage. 16. LITILITIFE. Sublessee shall pay, as additional rent, for all water, gas, heat, light, power, sewer charges, telephone service and all other services and utilities supplied to the Premises, together with any taxes thereon. If any such services are not separately metered to Sublessee, Sublessee shall pay a reasonable proportion to be determined by Sublessor of all charges jointly metered with other premises. Sublessee shall also pay for trash removal services provided to the Premises, unless such services are provided to the Commercial Portion of "The Main Promenade" Structure as a whole and the cost of such service included as an Adjustment. Sublessor shall not be liable for any failure or interruption of any utility service. 17. EERSONAt_ PROEERTY TAXES_ Sublessee shall pay, or cause to be paid, before delinquency any and all taxes levied or assessed and which become payable during the term hereof upon all Sublessee's leasehold improvements, equipment, furniture, fixtures, and any other personal property located In the Premises. In the event any or all of Sublessee's leasehold Improvements, equipment, furniture, fixtures and other personal property shall be assessed and taxed with the real property. Sublessee shall pay to Sublessor its share of such taxes within ten (10) days after delivery to Sublessee by Sublessor of a statement in writing setting forth the amount of such taxes applicable to Sublessee's property. 18. SUBLEASESUWr=QJ Q DECtAEWIQN.ARUCLES_ BYLAWS ANlO ASSOCIATION RULES OF MAIN PROMENAQE. INC_ The terms of this Subleasd shall be subject in all respects to the provisions of the Declaration Of Covenants, Conditions And Restrictions, Articles Of Incorporation, Bylaws and Association Rules of MAIN PROMENADE, INC., a non-profit corporation of the State of California, now or to be in existence or as subsequently modified, relating to the use and operation of 'The Main Promenade' Structure and/or any adjacent properties which Sublessor may from time to time make available for use by Sublessee and/or the protection of the improvements upon such properties. Any failure by Sublessee to comply with the terms of the aforementioned documents shall be a default under the Sublease. Sublessor shall not be responsible to Sublessee for the non- performance by any other tenants or occupants. 19. HOLDING OVER_ If Sublessee remains in possession of the Premises or any part thereof after the expiration of the term hereof with the express written consent of Sublessor, such occupancy snail be a tenancy from month to month at a rental in the amount of Seven Thousand Five Hundred Ninety -Four ($7,594.00), plus the triple net Additional Rent and other charges charged by Sublessors Landlord to Sublessor which shall be passed through to Subtenant. and, in addition, any other charges payable hereunder, and upon all the terms hereof applicable to a month -to - month tenancy. Should Sublessee hold over the Premises without the express written consent of Sublessor. Sublessee shall indemnify and hold Sublessor harmless from loss or liability resulting from such holding over, including, without limitation, any claims made by any succeeding tenant. 20. ENTRY _BY�SUBL.ESSOR. Sublessor reserves, and shall at any and all times have. the right for itself and its designees to enter the Premises to inspect the same, to submit said Premises to prospective tenants, to post notices of non -responsibility, to repair the Premises and any portion of the Building that Sublessor may deem necessary or desirable, and/or to alter or remodel the exterior of the Premises, without abatement of rent. and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be unreasonably blocked thereby, and further providing that the business of the Sublessee shall not be interfered with unreasonably. Sublessee hereby waives any claim for damages or for any injury or inconvenience to or interference with Sublessee's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the aforesaid purposes, Sublessor shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Sublessee's vaults, safes and files, and Sublessor shall have the right to use any and all means which Sublessor may deem proper to open said doors in an emergency, in order to obtain entry to the Premises without liability to Sublessee except for any failure to exercise due care for Sublessee's property and any entry to the Premises obtained by Sublessor by any of said means, or otherwise, shall not under any circumstances t:e construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an eviction of Sublessee from the Premises or any portion thereof. .7- 21. SUBLESSEES _DEI=AULT. The occurrence of any one or more of the following events shall constitute a default and breach of this Sublease by Sublessee: (a) The vacating or abandonment of the Premises by Sublessee. (b) The failure by Sublessee to make any payment of rent or any other payment required to be made by Sublessee hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof by Sublessor to Sublessee; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 et seq. (c) The failure by Sublessee to observe or perform any of the covenants, conditions or provisions of the Sublease to be observed or • . ' performed by Sublessee, other than described in (a) or (b) above, where such failure shall continue for a period of ten (10) days after written notice hereof by Sublessor to Sublessee; provided. however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 et seq.; provided, further, that if the nature of Sublessee's default is such that more than ten (10) days are reasonably required for its cure, then Sublessee shall not be deemed to be in default if Sublessee commences such cure within said ten (10) day period and thereafter diligently prosecutes such cure to completion. (d) The making by Sublessee of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Sublessee of a petition to have Sublessee adjudged a bankrupt, or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Sublessee, the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Sublessee's assets located at the Premises or of Sublessee's interest in this Sublease, where possession is not restored to Sublessee within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Sublessee's assets located at the Premises or of Sublessee's interest in this Sublease, where such seizure is not discharged in thirty (30) days. 22. REMEDIES -IN 1?E,EAULL In the event of any such default or breach by Sublessee, Sublessor may at any time thereafter, with or without notice or demand and without limiting Sublessor in the exercise of any right or remedy which Sublessor may have by reason of such default or breach: (a) Immediately terminate Sublessee's right to possession of the Premises, and repossess the same by summary proceedings or other appropriate action, and Sublessor shall thereupon be entitled to receive from Sublessee all damages specified in California Civil Code Section 1951.2(a), including (1) the worth at the time of award of the unpaid rent which had been earned at the time of termination; -8- (2) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until ' the time of award exceeds the amount of such rental loss that Sublessee proves could have been reasonably avoided; (3) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Sublessee proves could be reasonably avoided; and (4) any other amount necessary to compensate Sublessor for all the detriment proximately caused by the Sublessee's failure to perform its obligations under this Sublease or which in the ordinary course of things would be likely to result therefrom. As used in subclause (1) and (2) above, the 'worth at the time of award' shall be computed by allowing interest at three percent (3%) over the prime rate then being charged by Bank of America, N.A. but in no event greater than the maximum rate then permitted by law. As used in subclause (3) above the "worth at the time of award' shall be computed by discounting such amount at the discount rate of the Federal Reserve Board of San Francisco at the time of the award plus one percent (M), but not in excess of ten percent (10%) per annum; or (b) Continue this Sublease in effect without terminating Sublessee's right to possession even though Sublessee has breached this Sublease and abandoned the Premises and to enforce all of Sublessoe's fights and remedies under this Sublease, including the right to recover the rent as it becomes due under this Sublease. provided, however, that Sublessor may at any time thereafter elect to terminate this Sublease for such previous breach by notifying A Sublessee in writing that Sublessee's right to possession of the Premises has been terminated; or (c) Pursue any other remedy now or hereafter available to Sublessor under the laves or judicial decisions of the State of California. Sublessor's failure to take advantage of any default or breach of covenant on the part of Sublessee shall not be or be construed to be a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this Sublease be construed to waive or to lessen the right of Sublessor to insist upon the performance by Sublessee of any term, covenant or condition hereof, or to exercise any rights given him on account of any such default. A waiver of a particular breach, or default, shall not be deemed to be a waiver of the same or any subsequent breach or default The acceptance of rent hereunder shall not be, or be construed to be. a waiver of any term, covenant or condition of this Sublease or breach thereof whether or not such breach is then known to Sublessor. 23. DEFAULT By %3B1-E,$SOR. Sublessor shall not be in default unless Sublessor fails to perform obligations required of Sublessor within a reasonable time, but in no event later than thirty (30) days after written notice by Sublessee to Sublessor and to the holder of any first mortgage or deed of trust covering the Premises If the name and address of the holder of any first mortgage or deed of trust shall have theretofore been furnished to Sublessee in writing, specifying wherein Sublessor has failed -9- to perform such obligation; provided, however, that if the nature of Sublessor's obligation is such that more than thirty (30) days are required for performance then Sublessor shall not be in default if Sublessor commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Sublessee have the right to terminate this Sublease as a result of Sublessors default and Sublessee's remedies shall be limited to damages and/or an -. injunction. 24. Should Sublessee fail to pay, when due and payable, any premium or other charge in connection with any insurance policy or policies which Sublessee is obligated to pay, or to evidence its procurement of any insurance to be maintained by Sublessee or to pay any lien or claim for labor or materials employed or used in the repair, alteration, maintenance and use of the premises, or should Sublessee fail to make or commence any repairs required to be made by it under this Sublease or to perform any other act to be performed by Sublessee hereunder within twenty (20) days after notice from Sublessor so to do, then Sublessor may, at its option (but this provision shall not be deemed to create any obligation upon Sublessor so to do, nor in any manner affect the obligation of Sublessee) pay any such tax, assessment, claim, insurance premium or charge, or settle and discharge any such lien or claim or action therefor or satisfy any judgment thereon or enter upon the Premises and perform such work of repair or other act to be performed by Sublessee, and all costs and expenses incurred or paid by Sublessor in connection therewith, together with interest at the maximum rate permitted by law per annum (but not in excess of 18% per annum) on such costs and expenses from the date paid by Sublessor, shall be deemed to be additional rent hereunder and shall be paid by Sublessee to Sublessor upon demand and any default therein shall constitute a breach of the covenants ' and conditions of this Sublease. 25. $F_CQNSIBUCTIQN. In the event the Premises are damaged by fire or other perils covered by extended coverage insurance, Sublessor agrees to forthwith repair same, and this Sublease shalt remain in full force and effect. In the event the Premises are damaged as a result of any casualty other than the perils covered by fire and extended coverage insurance, then Sublessor shall forthwith repair the same (other than damage to glass, which shall be the responsibility of Sublessee), provided the extent of the destruction be less than ten percent (10%) of the then full replacement cost of the Premises. In the event the destruction of the Premises is to an extent of ten percent (10%) or more of the full replacement cost then Sublessor shall have the Option: (1) to repair or restore such damage, this Sublease continuing in full force and effect; or (2) to give notice to Sublessee at any time within ninety (90) days after such damage, terminating this Sublease as of the date specified in such notice, which date shall be no more than thirty (30) days after giving of such notice. In the event of giving such notice, this Sublease shall expire and all interest of Sublessee in the Premises shall terminate on the date so specified in such notice. Notwithstanding anything to the contrary contained in this Article. Sublessor shall not have any obligation whatsoever to repair, -10- reconstruct or restore the Premises when the damage resulting from any casualty covered under this Article occurs during the last twenty-four (24) months of the term of this Sublease. Sublessor shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or other personal property of Sublessee. During the pericd of any restoration and repair of casualty damage by Sublessor pursuant to this Article 25, Sublessee agrees to continue the operation of its business in the Premises to the extent • reasonably practical and to forthwith replace or fully repair all exterior signs. trade fixtures, equipment display cases or other installations originally installed by Sublessee. Sublessee hereby waives the provisions of California Civil Code Section 1932, subdivision 2, and Section 1933, subdivision 4, with respect to any damage or destruction contemplated by this Sublease. If by reason of fire or casualty damage to any portion of the Commercial Portion of 'The Main Promenade" Structure, (i) the lessees or other occupants occupying in the aggregate or (R) any individual lessee or other occupant occupying more than twenty-five percent (25%) of the floor area of the Commercial Portion of "The Main Promenade" Structure terminate(s) their(its) lease or abandon(s) their(its) premises, then Sublessor may terminate this Sublease by giving written notice to Sublessee within sixty (60) days after the last said lessee(s) or occupant(s) occupying more than the above -noted floor area terminate(s) their(its) lease or abandons their(its) premises. 26. SUBLESSFE'S , TAT MENL Sublessee shall at any time and from time to time upon not less than three (3) days' prior written notice from Sublessor execute, acknowledge and deliver to Sublessor a statement in writing, (a) certifying that this Sublease is unmodified and in full force • and effect (or, if modified, stating the nature of such modification and certifying that this Sublease as so modified is in full force and effect), and the date to which the rental and other charges are paid in advance, if any, and (b) acknowledging that there are not any uncured defaults on the part of Sublessor hereunder, or specifying such defaults if any are claimed, and (c) setting forth the date of commencement of rents and expiration of the term hereof. Any such statement may be relied upon by :. any prospective purchaser or encumbrancer of all or any portion of the real property or leasehold estate of which the Premises are a part. At Sublessor's option, any such statement shall be in the form of the certification attached hereto as Exhibit "E" and hereby incorporated herein by reference. 27. PARKING. Sublessee acknowledges that the parking area provided to Sublessee, as we'I as to the other tenants in the Commercial Portion of "The Main Promenade" Structure, is in the same structure and • adjacent to the Commercial Portion of "The Main Promenade" Structure r and Is deemed to be public parking facilities and, as such, will be accessible to the general public, in addition to Sublessee and all other tenants in the Commercial Portion of "The Main Promenade" Structure. Sublessee agrees to abide by all rules and regulations, and to pay any and all charges promulgated by Sublessor and the City of Huntington Beach or -11- the Huntington Beach Redevelopment Agency that are to apply to Sublessee. 28. GQMMQN_A9FA5_ Sublessee, for the use and benefit of Sublessee, its agents, employees, customers, licensees and subtenants, shall have the nonexclusive right in common with Sublessor and others authorized by Sublessor to use the portion of the Commercial Portion of "The Main Promenade' Structure from time to time established by Sublessor as common areas during the term of this Sublease; provided that the condemnation or other taking, restriction or regulation by any public authority, or sale in lieu of condemnation, of any or all of such common areas shall not constitute a violation of this covenant. Sublessor reserves the right to change boundaries and locations of such common area or areas from that shown on the attached Exhibit "B' and to redesignate such common areas as building area or the building areas shown on said Exhibit "B' as common areas. Sublessor shall not be liable for any interference with Sublessee's business resulting from Sublessor's maintenance, repair, alteration and/or reconstruction of the common areas. During the entire term hereof, Sublessor shall keep or cause to be kept the common areas as same are established and completed by Sublessor in a good, neat, clean and orderly condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof. It is understood and agreed that the phrase "expenses in connection with the common areas' as used herein shall be construed to include but not be limited to, all sums expended by Sublessor in connection with said common areas for all general maintenance, repairs, and replacements; resurfacing, painting, cleaning, sweeping and janitorial services; planting and landscaping; lighting and other utilities; reasonable reserves to accomplish any replacements of the common area improvements, based upon Sublessorr's estimate as to when replacement of such improvements will be necessary; personnel to implement such services and to police the common areas (but Sublessor shall have no liability for the adequacy or performance of any police or security system); required fees or charges levied pursuant to any government requirements; public liability and property damage insurance on the common areas, which shall be carried and maintained by Sublessor, with limits as determined by Sublessor; and Sublessoes fees for supervision and management of said common areas. Sublessee, in the use of said common areas, agrees to comply with such reasonable rules and regulations as Sublessor may adopt from time to time for the orderly and proper operation of said common area. Such rules may include, but shall not be limited to the following: (1) The strict regulation of the removal, storage and disposal of Sublessee's refuse and other rubbish, including limitations on the times and manner associated therewith; (2) the access routes and hours for delivery to the Premises by trucks and trailers; and (3) the restriction of designated areas for drive -through banking, savings, restaurant or other drive - through facilities, promotional and/or seasonal sales activities and/or loading, trash and other storage areas, whether or not such storage areas are roofed and/or enclosed. All common areas shall be subject to the exclusive control and management of Sublessor or such other persons or nominees as Sublessor may designate to exercise such management or control, in whole or in part, in Sublessor's place and stead. -12- Sublessor shalt have the tight to close, if necessary, all or any portion of the common areas to such extent as may in the opinion of ' Sublessor, or Sublessoes counsel, be legally necessary to prevent a dedication thereof or the accrual of any rights of any person or of the public therein; to close temporarily all or any portion of the common areas to' discourage noncustomer use; to use portions of the common areas while engaged in making improvements or repairs or alterations to the Commercial Portion of 'The Main Promenade" Structure, and to do and perform such other acts in, to, and with respect to, the common areas as in the use of good business judgment Sublessor shall determine to be appropriate for the Commercial Portion of 'The Main Promenade" Structure. ' Sublessee shall not cause or permit distribution in or at approaches to common areas of handbills, circulars, advertisements or papers, or other matters which if discarded would tend to litter such areas, and Sublessee shall not discard same in the common areas but will dispose of the same in refuse cans or other appropriate containers. in no event shall Sublessee park or permit to be parked within the common areas or the streets adjacent to the Commercial Portion of "The Main " Promenade' Structure, cars, trucks or other vehicles for advertising purposes which display or employ advertising devices. In the event that any party other than Sublessor is required to maintain the common areas within the Commercial Portion of 'The Main Promenade" Structure, or any portion thereof, pursuant to any written agreement or instrument, Sublessor shall not be deemed to be in default hereunder and Sublessee shall not be permitted to pursue any remedy under this Sublease or at law or in equity for any failure of such party to maintain the common areas within the Commercial Portion of "The Main Promenade" Structure, or any portion thereof, required to be maintained by such party, provided that Sublessor agrees to take reasonable action to enforce its remedies under any such agreement or instrument to perform or to require that such maintenance be performed within any reasonable period of time after Sublessor shall receive written notification from Sublessee that such maintenance is not being performed. 29. SIGNS. Sublessee shall obtain necessary permits and install an exterior building sign on the Premises satisfying Sublessor's requirements at a location designated by Sublessor prior to the commencement of the term of this Sublease. Except for said sign, Sublessee shall not affix or maintain upon the exterior of the Premises, Including glass panes and supports of show windows and doors, any signs, advertising plackets, names, insignias, trademarks, descriptive material or any other such like item or items except such as shall have first received the written approval of Sublessor as to size, type, color, location, copy, nature and display qualities. Anything to the contrary in this Sublease notwithstanding, Sublessee shall not affix any sign to or otherwise use or penetrate the root of the Premises nor install any exterior plumbing fixtures, shade or awning, nor make any exterior decoration or painting or change to the store front of the Premises. 30. DISPLAYS _ LIGHTS. Sublessee may not display or sell merchandise or allow grocery carts, vending machines, or other similar devices within the control of Sublessee to be stored or to remain outside -13- the defined exterior walls and permanent doorways of the Premises. Sublessee further agrees not to install any exterior lighting, amplifiers or similar devices or use in or about the Premises any advertising medium which may be heard or soen outside the Premises, such as flashing lights, searchlights, loudspeakers, phonographs or radio broadcasts. Sublessee shall maintain all show windows in the Premises in a neat, clean and sightly condition and shall keep Sublessee's windows and exterior marquee lights on during such nighttime hours as Sublessor may from time to time designate. 31. ANIONS. Sublessee shall not conduct or permit to be conducted any sale by auction in, upon or from the Premises, whether said auction be voluntary, involuntary, pursuant to any assignment for the . payment of creditors or pursuant to any bankruptcy or other insolvency proceeding. 32. HQuFJ_QFBUSINESS. Subject to the provisions of Article 25 hereof, Sublessee shall continuously during the entire term hereof conduct and carry on Sublessee's business in the Premises and shall keep the Premises open for business and cause Sublessee's business to be conducted therein during the usual business hours of each and every business day as is customary for businesses of like character in the county in which the Premises are located to be open for business; provided, however, that this provision shall not apply if the Premises should be closed and the business of Sublessee temporarily discontinued therein on account of strikes, lockouts or similar causes beyond the reasonable control of Sublessee or closed for not more than three (3) bays out of respect to the memcry of any deceased officer or employee of Sublessee, or the relative of any such officer or employee. Sublessor shall have the right to require different hours of operation if, in Sublessors judgment, such different hours are in the best interests of the Commercial Portion of "The Chain Promenade" Structure. Sublessee shall keep the Premises adequately stocked with merchandise, and with sufficient sales personnel to care for the patronage, and to conduct said business in accordance with sound business practice. No deliveries to Sublessee's premises or trash disposal pick- up from the Commercial Port;on of "The Main Promenade" Structure shall be permitted during the hours of 10:00 a.m. to 2.30 p.m. and 4:00 p.m. to 6:30 p.m., to provide the customers of the Commercial Portion of "The Main Promenade" Structure the best access to its business. Sublessor may modify these restricted delivery hours at any time if required by law or if, in Sublessors judgment, such modified hours are in the best interests of the Commercial Portion of 'The Main Promenade" Structure. 33. COMPETITION. (Not Applicable) 34. F All trade fixtures and equipment installed by Sublessee in the Premises shall be in good condition. So long as Sublessee shall not be in default hereunder, all trade fixtures and equipment installed by Sublessee in the Premises, shall remain the personal property of Sublessee and may be removable by Sublessee at any time prior to the termination cf this Sublease. On the expiration of the term of this Sublease or upon any earlier termination hereof, Sublessee shall remove at its own expense all trade fixtures, equipment and personal -14- property upon the Premises, provided that if Sublessee is in default, Sublessor may prohibit such removal by notice in writing to Sublessee. If, at the end of the lease term or earlier termination as is herein provided. Sublessee has left any merchandise, furniture, equipment, trade fixtures or other personal property in or about the Premises, Subtessor may give Sublessee written notice to remove such property. In the event such property is not removed within ten (10) days of the sending of said notice, Sublessor may dispose of said property in any manner whatsoever and Sublessee hereby waives any claim or right to said property or any proceeds derived from the sale thereof. Any damage to the Premises resulting from the installation or removal of any of said trade fixtures or equipment shall be repaired by or at the cost of Sublessee. 35. NONREPRESENTATION AS TO BUILDING SITE- The designation of any type of use or tenancy with respect to any building site on the attached plot plan of the Commercial Portion of "The Main Promenade" Structure is not intended as a covenant or representation that said building site shall be constructed or devoted to such a use or tenancy nor shall Sublessor be responsible or liable to Sublessee should any other tenant or lessee fail to open or to continue to be open for business during the term of this Sublease. 36. The relationship of the parties hereto Is that of Sublessor and Sublessee, and it is expressly understood and agreed that Sublessor does not In any way or for any purpose become a partner of Sublessee in the conduct of Sublessee's business or otherwise. or a joint venturer with Sublessee, and that the provisions of this Sublease and the agreements relating to rent payable hereunder are included solely for the purpose of providing a method whereby rental payments are to be measured and ascertained. 37. QHANQE IN St19LF,SSOR'S INTEREST_ Sublessee acknowledges that Sublessor may not in the future control all of the Commercial Portion of "She Main Promenade" Structure and agrees that Sublessor shall not be deemed to be in default hereunder and that Sublessee may not pursue any remedies under this Sublease or at law or in equity for any violation of this Sublease occurring by virtue of any act or omission on or with respect to any portion of the Commercial Portion of `The plain Promenade" Structure, other than the Premises, not controlled by Sublessor; provided that Sublessor agrees, promptly upon receipt of written notice from Sublessee of the occurrence of any act or omission, to promptly perform all acts reasonably required in order to cure such default. In the event of any sale or exchange of the premises by Sublessor and the assignment by Sublessor of this Sublease, or in the event Sublessor's interest in the Premises is otherwise terminated and this Sublease continues in effect, Sublessor shall be and is hereby entirely freed and relieved of all obligations under any and a'I of its covenants and obligations contained in or derived from this Sublease and arising out of any act, occurrence or omission relating to the Premises or this Sublease occurring after the consummation of such sale or exchange and assignment or other termination of such interest. .15- 38. GENERAL PROVISIONS" 38.1 Plats and.Riders. Clauses, plats, riders and addendums, if any, affixed to this Sublease are a part hereof. 38.2 YVaiveE. The waiver by Sublessor of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. 38.3 If there be more than one Sublessee the obligations hereunder imposed shall be joint and several. 38.4 Marginal Headings" The marginal headings and article titles to the articles of this Sublease are not a part of the Sublease and shall have no effect upon the construction or interpretation of any part hereof. - 38.5 EM. Time is of the essence of this Sublease and each and all of its provisions in which performance is a factor. i.' 38.6 SucCeSsors -and Assians. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto. ' 38.7 Recordation. Neither Sublessor nor Sublessee shall record this Sublease, but a short form memorandum hereof may be recorded at the request of Sublessor. 38.8 Quiet_ Possession. Upon Sublessee paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on Sublessees part to be observed and performed hereunder, Sublessee shall have quiet possession 'of the Premises for the entire term hereof, subject to all the provisions of this - Sublease. 38.9 Brokers. Sublessee warrants that it has had no dealings with any real estate broker or agents in connection with the negotiation of this Sublease. t 38.10 pfior---A0=ments. This Sublease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Sublease, and is consistent with the Second Amendment to the Owner Participation Agreement approved by Sublessee on August 31, 1992. No provision of this Sublease may be amended or added to except by an agreement in writing signed by the parties hereto or their _ respective successors in interest. This Sublease shall not be effective or binding on any party until fully executed by both parties hereto. 38.11 ill This Sublease and the obligations of Sublessee hereunder shall not be affected or impaired because Sublessor is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of .16- y., strike, labor troubles, acts of God, or any other cause beyond the reasonable control of Sublessor. 38.12 Partial Invalidity. Any provision of this Sublease which shall prove to be invalid, void, or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision • shall remain in full force and effect. 38.13 Cumulative Rg edies. No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies at law or in equity. 38.14 Choice of Law, This Sublease shall be governed by the laws of the State of California. 38.15 Attorneys', Fees_ In the event of any actio �— proceeding brought by either party against the other ublease ' the prevailing party shall be entitled to r or the fees of its attorneys in such action or proc including costs of appeal, if any, in such amount as the cou y adjudge reasonable as attorneys' fees. In addition, should i necessary for Sublessor to employ legal counsel to enforce an a provisions herein contained, Sublessee agrees to pay all • attorn fees and court costs reasonably incurred. 38.16 SubordiMttioAttornment. Upon request of Sublessor, Sublessee will in writing subordinate its rights hereunder to the lien of R any first mortgage or first deed of trust, to any bank, insurance company or other lending institution, also requesting such subordination now or hereafter in force against the Premises, and to all advances made or hereafter to be made upon the security thereof. In the event any proceedings are brought for foreclosure, or in the event of the exerciso of the power of sale under any Mortgage or deed of trust made by Sublessor's Landlord covering the Premises, Sublessee shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Sublessor under this Sublease. 38.17 Hazardous,Nla�tejind Materials, Sublessee shall not engage in any activity on or about the Premises or the Commercial Portion of `The Main Promenade" Structure that violates any Environmental Law, and shall promptly, at Sublessees sole cost and expense, take all investigatory andfor remedial action required or ordered by any governmental agency or Environmental Law for clean-up and removal of any contamination involving any Hazardous Material created or caused directly or Indirectly by Sublessee. The term 'Environmental taw" shall mean any federal, state or local law, statute, ordinance or regulation • pertaining to health, industrial hygiene or the environmental conditions on, under or about the Premises, including, without limitation. (i) the Comprehensive Environmental Response, Compensation and Liability Act of i9$0 ('CERCLA"), 42 U.S.C. Sections 8601 Et=.; (5) the Resource Conservation and Recovery Act of 1976 ( 'RCRA'), 42 U.S.C. Sections 6901 (iii) California Heath and Safety Code Sections 25100 at l= (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 fI S=; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 gY =—; (vi) S California Water Code Section 1300 pd k=: and (vii) California Civil Code ' Section 3479 p,1=L as such laws are amended and the regulations and ' : administrative codes appl;cable thereto. The term 'Hazardous Material" • includes, without limitation, any material or substance which is (i) defined or listed as a "hazardous waste", 'extremely hazardous waste`, 'restrictive hazardous waste' or 'hazardous substance' or considered a waste, condition of pollution or nuisance under the Environmental Laws; (ii) petroleum or a petroleum product or fraction thereof; (M) asbestos; and/or (iv) substances known by the State of California to cause cancer and/or reproductive toxicity. It is the intent of the parties hereto to construe the term `Hazardous Materials" and 'Environmental Laws' in its broadest sense. Sublessee shall provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Sec•.ion 25249.5 pdS.eSi•. Sublessee shall provide prompt written notice to Sublessor of the existence of Hazardous Substances on the Premises and all notices of violation of the Environmental Laws received by Sublessee. Sublessee's obligations : pursuant to this Section 42.18 shall be referred to in this Sublease as "Environmental Compliance'. 38.18 Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder shall be in writing and shall be sent by United States Mail, Certified or Registered, with Return Receipt Requested, postage prepaid, or by Federal Express or other overnight courier, addressed to Sublessee at the Premises, and to the address hereinbelow, or to such other place as Sublessee or Sublessor may from time to time designate in a notice to the other party. Either party may from time to time by written notice to the other, served in the manner herein provided, designate a different address. If any notice or other document is sent by mail as aforesaid, the same shall be deemed served or delivered forty-eight (48) hours after the mailing thereof or twenty-four (24) hours in the case of overnight courier. If more than one tenant is named under this Sublease, service of any notice upon any one of said tenants shall be deemed as service upon all of ' them. . To Sublessor at: REDEVELORIENT AGENCY OF THE .. CITY OP HUNTINGTON BEACH Go Director of Economic Development 2000 Main Street :. Huntington Beach, CA 92648 ' .. Tele: (714)536-5582 To Sublessee at: A13DELMUTI DEVELOPMENT CORP. 200 Main Street, Unit 101 Huntington Beach, CA 92648 Attn: Michael Abdelmuti Tele: (714) 38.19 AuthQdly Qf &utl2sse%,If Sublessee is a corporation, ` each Individual executing this Sublease on behalf of said corporation ' represents and warrants that he is duly authorized to execute and deliver this Sublease an behalf of said corporation, in accordance with the bylaws -18- of said corporation, and that this Sublease is binding upon said corporation. 38.20 Nondiscrimination. Sublessee herein covenants by and for itself, its heirs, executors, administrators and assigns and all persons claiming under or through it, and this Sublease 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, sex, marital status, color, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises herein leased, nor shall the Sublessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises. 38.21 Consents. Approvals. and Agreements of Sublessor. All consents and approvals to be given by Sublessor, unless specifically stated herein to the contrary, shall be at Sublessor's sole and absolute discretion and no covenants are to be implied in relation thereto, either in fact or in law. The agreements and obligations of Sublessor are specifically stated in this Sublease, and no further agreements, covenants, promises, or obligations are to be implied, and Sublessee expressly waives any such implied agreements, covenants, promises or obligations. IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day and year first above written. THIS SUBLEASE SHALL NOT BECOME EFFECTIVE UNTIL EXECUTED BY SUBLESSOR AND DELIVERED TO SUBLESSEE AND THE SUBMISSION OF THIS FORM OF SUBLEASE TO SUBLESSEE BY SUBLESSOR, OR SUBLESSOR'S AGENT, DOES NOT CONSTITUTE AN OFFER TO SUBLEASE. NO EMPLOYEE OR AGENT OF SUBLESSOR OR ANY PERSON WITH WHOM SUBLESSEE MAY HAVE NEGOTIATED THIS SUBLEASE HAS ANY AUTHORITY TO MODIFY THE TERMS HEREOF OR TO MAKE ANY AGREEMENTS, REPRESENTATIONS, OR PROMISES UNLESS THE SAME ARE CONTAINED HEREIN OR ADDED HERETO IN WRITING. APPROVED BY: ZIP,1'Y COUNSEL s -19- REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By:� HAIRMAN ATTEST: "Sublessor" (Print Name) 9Z 41-1 (Title) "Sublessee" G1 erk, .. • EXHIBIT "D" The undersigned as the Sublessor and Sublessee under that certain Sublease dated , 19 , for space within the Commercial Portion of "The Main Promenade" Structure, Huntington Beach, California, hereby confirm that the term of said Sublease has commenced ,19 , and that the expiration date of the term of said Sublease is 19 REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CHAIRMAN "Sublessor" ABDELMUTi DEVELOPMENT EXHIBIT "D" TO SUBLEASE (Signapfe) "Sublessee" r•. LEASE between ROBERTJ.KOURY as LANDLORD and REDEVELOPMENT AGENCY OF THE CRY OF HUNTINGTON BEACH, a Public Body, Corporato and Politic in the State of California as TENANT (JMB 8.25.92/3) Commercial Portion of "The Main Promenade" HUNTINGTON BEACH, CALIFORNIA a TAME OF CONTENTS 1. PARTIES 1 2. PREMISES 1 3. USE 1 4. REM• 1 .:. 4.1 Payment and Amount of Minimum Rent 1 4.2 Adjustment of Amount 2 4.3 Restriction on Rental Increase 2 4.4 Payment of Rent 2 5. TERM 2 6. SECURITY DEPOSIT 2 7. ADDITIONAL RENT 3 ' 7.1 Percentage Rent 3 7.2 Real Property Taxes 3 7.3 Insurance 4 7.4 Exterior Building Maintenance 5 7.5 Common Area Maintenance 5 7.6 Payment of Additional Charges 5 7.7 Additional Charges as Additional Rent 6 7.8 Floor Area 6 7.9 Exclusions 6 . 7.10 Total Additional Rent for the 12-Month Period of October 1, 1992 to September 30, 1992 6 S. USES PROHIBITED 6 9. COMPLIANCE WITH LAVA 7 10. ALTERATIONS AND ADDITIONS 7 - : 11. REPAIRS 8 11.1 Tenants Obligations 8 ' 11.2 Landlord's Obligations 8 12. LIENS 8 13. ASSIGNMENT AND SUBLETTING 9 • -, . 13.1 Landlord's Consent Required 9 13.2 Request for Consent 9 13.3 Landlord's Rights 10 13.4 No Release 10 13.5 Payments by Tenant 10 13.6 Sublease Rentals 10 14. HOLD HARMLESS 11 •. _ 15. SUBROGATION ail 11 16. INSURANCE 12 16.1 Liability Insurance 12 16.2 Property Insurance 12 16.3 Food Preparation 12 16.4 - Insurance Policies 12 17. UTILITIES 13 18. PERSONAL PROPERTY TAXES 13 19. LEASE SUBJECT TO DECLARATION. ARTICLES, BYLAWS AND ASSOCIATION RULES OF MAIN PROMENADE, INC 13 20. HOLDING OVER 13 21. ENTRY BY LANDLORD 13 22. TENANTS DEFAULT 14 23. REMEDIES IN DEFAULT 15 24. INTEREST ON TENANTS OBLIGATIONS: LATE PAYMENTS 16 25. DEFAULT BY LANDLORD 17 26. CURE OF TENANTS DEFAULTS 17 27. RECONSTRUCTION 17 28. EMINENT DOMAIN 19 29. TENANTS STATEMENT 19 30. PARKING 19 31. COMMONAREAS 20 32. SIGNS 21 33. DISPLAYS - LIGHTS 21 34. AUCTIONS 22 35. HOURS OF BUSINESS 22 36. COMPETITION 22 37. TRADE FIXTURES 23 38. NONREPRESENTATION AS TO BUILDING SITE 23 39. PARKING SURCHARGE 23 40. RELATIONSHIP OF PARTIES 23 41. CHANGE IN LANDLORD'S INTEREST 24 42. GENERAL PROVISIONS 24 42.1 Plats and Riders 24 42.2 Waiver 24 42.3 Joint Obligation 24 42.4 Marginal Headings 24 42.5 Time 24 42.6 Successors and Assigns 24 42.7 Recordation 24 ' 42.8 Ouiet Possession 24 42.9 Brokers 25 42.10 Prior Agreements 25 42.11 Inability to Perform 25 42.12 Partial Invalidity 25 42.13 Cumulative Remedies 25 : 42.14 Choice of Law 25 ' 42.15 Attorneys' Fees 25 '•. •� 42.16 Financial Statements 25 42.17 Subordination Attomment 25 42.18 Food Operations 26 _ 42.18(a) Grease Interceptor(s) 26 42.19 Hazardous Waste and Materials 26 42.20 Notices 27 42.21 Authority of Tenant 28 42.22 Nondiscrimination 28 42.23 Consents, Approvals, and Agreements of Landlord 28 Exhibit "A-1" Floor Plan E Exhibit "A-2" Legal Description of the Commercial Portion of "The Main Promenade" Structure Exhibit "B" Site Plan of the Commercial Portion of `The Main Promenade" Exhibit "C" Tenant Improvements ' Exhibit "D" Confirmation of Term Exhibit "E" Tenant's Certificate ' p I) LEASE Commercial Portion of 'The Main Promenade" 1, PARES. This Lease ("Lease") dated as of this day of lli�,—u-51 19a1-. is made by and between ROBERT J. KOURY (herein called *Landlord") and REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic in the State of California (herein called 'Tenant'). 2. PRFmISES. Landlord does hereby lease to Tenant and Tenant hereby leases from Landlord for the term, at the rental and upon the covenants and conditions herein set forth that certain space (herein called "Premises'), containing approximately Three Thousand Six Hundred And Sixteen (3,616) square feet of floor area. The location and dimensions of said Premises are delineated on Exhibit "A-1" attached hereto and incorporated by reference herein. Said Premises are located in Unit #101 at 20D Main Street in the City of Huntington Beach, County of Orange. State of California, and are situated in a commercial and office development currently under construction and legally described in Exhibit "A-2" attached hereto and made a part hereof (Commercial Portion of 'The Main Promenade" Structure). A site plan of the Commercial Portion of "The Main Promenade" Structure showing the location or proposed location of the building. facilities and related improvements is attached hereto as Exhibit 'B". 3. lLSE. Tenant shall use the Premises for the retail sale of surf and sport wear and related items under the trade name JACK'S SURFBOARDS or other retail or commercial use(s), as mutually agreed to between the parties during the term of this Lease. 4. BENI. +L'.Pfun 13 4.1 P-ay and A gilt of Mmum Rent. For the twely month period commencing October 1, 1992 and ending September 30, 1993, Tenant agrees to pay to Landlord as minimum rent {'Minimum Rent'}, without notice, demand, or offset, the monthly sum of Seven Thousand Two Hundred And Thirty -Two Dollars ($7,232.00), in advance, on or before the first day of each and every successive calendar month during that 12- month period. The first installment of Rent shall be paid to Landlord concurrently with the execution of this Lease. The Minimum Rent stated herein, for the first 12-month period. is determined on the basis of Two Dollars ($2.00) per square foot of floor area of the Premises per month as set forth in Section 2, above. Therefore, notwithstanding the sum stated as being the Minimum Rent. above, the precise Minimum Rent shall be Two Dollars ($2.00) per square foot, and determined by multiplying the sum of $2.00 by the actual square footage of the Premises when the precise Premises has been determined by Landlord. Prior to the Commencement Date (as defined below) and from time to time thereafter, at Landlord's option, Landlord's architect shall determine and certify in writing to Tenant and Landlord the actual floor area of the Premises, which determination and Certification shall be binding upon Tenant. Tenant shall -1- immediately pay to Landlord the amount of any deficiencies in Minimum Rent or any other expenses determined by the floor area of the Premises if the actual floor area is greater than set forth In Section 2, above. landlord shall Immediately reimburse Tenant in the same manner, if the actual ftoor area is less than set forth in Section 2, above. 4.2 Minimum Rent as set forth in 4.1, above, shall be increased in future years in amounts as follows: ' October 1, 1993 to and Including September 30, 1994: $7,594.00 October 1. 1994 to and Inducing September 30, 1995: $7,974.00 October 1, 1995 to and including September 30. 1996: $8,373.00 • October 1, 1996 to and Including September 30, 1997: $8,792.00 Tenant agrees to pay all such rent to Landlord, without notice, demand, or offset, in advance. on or before the first day of each and every such successive calendar month throughout the term of said Lease. 4.3 Subject to the rental provisions set forth in Section 4.1 and 4.2, above, in the event that at any f time during the term of this Lease, any governmental law, rule or regulation prohibits or postpones, in whole or in part, any Increase in the . Minimum Rent or other sums payable by Tenant hereunder to be made pursuant to this Lease, then, and in either of such events, such increase shall be made to the maximum extent permissible by law at the time provided in this Lease, and'or at any time or times thereafter such increase, or any portion thereof, may lawfully be made and any such increase In the Minimum Rent, or any portion thereof, or other sums payable hereunder, or portions thereof, the payment of which has been so prohibited or postponed, shall thereafter become due and payable to the maximum extent and at the earliest time or times permitted by law. 4A Paymenj of Bent- Minimum Rent for any period which is less than one (1) month shall be a prorated portion of the monthly installment herein based upon a thirty (30) day month. Minimum Rent and all other sums payable by Tenant to Landlord pursuant to this Lease shall be paid to Landlord without deduction or offset, in lawful money of the United States of America and at such place as Landlord may from time to time designate In writing. 5. TEEM. The term of the Lease shall be Five (5) years, commencing October 1, 1992. The parties acknowledge that certain obligations under various Articles hereof may commence prior to the Commencement Date, i.e. construction, hold harmless, liability insurance, etc.; and the parties agree to be bound by these Articles prior to the Commencement Date. Within thirty (30) days following the Commencement Date, the parties shalt execute a supplement to this Lease in form attached hereto as Exhibit 'D', stating the Commencement Date and expiration date of the term of this Lease. 6. SECURITY DEPOSIT. Prior to Tenant taking possession of the Premises, or by October 1, 1992, whichever shall first occur, Tenant shall ' deposit with Landlord a sum equivalent to the first months' Minimum Rent. Said sum shall be held by Landlord as security for the faithful •2- performance by Tenant of all the terms, covenants, and conditions of this Lease to be kept and performed by Tenant during the term hereof. tf Tenant defaults with respect to any provision of this Lease, including, but not limited to the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this security deposit for the payment of any rent and any other sum in default, or for the payment of any amount which Landlord may spend or become obligated to spend by reason of Tenant's default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenants default. If any portion of said deposit is so used or applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore the security deposit to its original amount and Tenant's failure to do so shall be a default under this Lease. Landlord shall not be required to keep this security deposit separate from its general funds. and Tenant shall not be entitled to interest on such deposit. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) within thirty (30) • days following the expiration of the lease term; provided that Landlord may retain the security deposit until such time as any account due from Tenant in accordance with any provision hereof has been determined and paid in full. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer said deposit to Landlord's successor in interest. Each time the Minimum Rent is increased pursuant to Section 4.2 above, Tenant shall deposit additional funds with Landlord sufficient to increase the security deposit to an amount which bears the same relationship to the adjusted Minimum Rent as the initial security deposit bore to the initial Minimum Rent. 7.1 Percentages Rent. (Not Applicable) 7.2 Real Propgrt Taxes. Tenant agrees to pay, as additional rent, all general and special real property taxes and ..' assessments levied or assessed upon the Premises and the underlying real property and all improvements thereon during the term hereof. Any tax or assessment relating to a fiscal period, a part of which is not included within the term of this Lease, shall be prorated so Tenant shall pay only that portion thereof which relates to the tax period included within the term of this Lease. In the event that said real property taxes and assessments are not separately levied or assessed against the Premises and the underlying land, Landlord shall prorate the real property taxes and assessments levied or assessed against either the Commercial Portion of "The Main Promenade" Structure. or any smaller tax parcel in which the Premises are situated, at Landlord's sole discretion, to the Premises in any reasonable manner. An allocation based upon a proration or informat;on obtained from the County Assessor. or upon construction costs, or an allocation based upon the ratio that the total floor area within the Premises bears to the total floor area within the relevant tax parcel or parcels, as to that portion of such tax or assessment allocable to building improvements, and based on the ratio between the number of square feet of floor area within the premises to the number of square feet of land area covered by the relevant tax statement or statements, as to -3- that portion of such tax or assessment allocable to land, exclusive of building improvements, or any combination thereof, shall be deemed to be a reasonable allocation for the purposes of this Section. In the event that the Commercial Portion of "The Main Promenade" Structure now or hereafter is divided into certain parcels upon which building areas are situated and a parcel containing common and parking areas and in the further event that such parcels are separately assessed, Landlord may require Tenant to pay its pro rata share of the general and special real property taxes and assessments levied or assessed against the parcel upon which the Premises are situated based upon the floor area in the Premises to the total floor of all buildings from time to time constructed upon such parcel, in lieu of paying real property taxes and assessments upon the Premises and the underlying real property pursuant to this Section 7.2, together with a pro rata share of the real property taxes and assessments levied or assessed upon such common area parcel based upon the floor area in the Premises to the total floor area from time to time constructed within the Commercial Portion of "The Main Promenade" Structure. The term "real property taxes and assessments" shall include any increases in any such tax or assessment imposed by reason of this transaction or a transfer, either partial or total, of Landlord's interests in and to the Premises or the underlying realty and/or any imposition added to any such tax or assessment by reason of any such transfer. Tenant agrees to pay, as additional rent, any tax or excise on rent or other tax, however described, that is levied or assessed by the United States of America, the State of California, the County of Orange, the City of Huntington Beach, or any political subdivision thereof, against Landlord on account of or measured by the rentals and/or other charges payable to Landlord hereunder. If this Lease is a sublease, Tenant further agrees to pay, as additional rent, Tenant's pro rata share of any such tax or excise on rent or other tax paid by Landlord based on the rental and other charges payable by Landlord, based on the ratio between the floor area in the Premises to the floor area in the Commercial Portion of "The Main Promenade" Structure, or the portion thereof demised to Landlord. If, under the laws of the State of California, or any political subdivision thereof, at any time during the term hereof, the methods of taxation shall be altered so as to impose in lieu of current methods for the assessment and taxation of real property, in whole or in part, taxes based on other standards, or in lieu of any increase therein, such tax shall be deemed to be a real property tax and assessment levied or assessed upon the Premises and the underlying real property for the purposes of this Lease. Nothing contained in this Section shall obligate Tenant to pay any net income, inheritance, estate, or gift tax which may be assessed or levied against Landlord. Tenant shall make the payments required by this Section directly to Landlord pursuant to Section 7.6 below. 7.3 Insurance. Tenant agrees to pay, as additional rent, Tenant's pro rata share of all insurance premiums paid by Landlord for or with respect to the building and improvements with which the Premises are insured. Said insurance shall include all insurance premiums for public liability and property damage insurance and for fire and extended coverage insurance (which shall include, if available from Landlord's insurer, a waiver of subrogation in favor of Tenant) and rental loss and vandalism and malicious mischief endorsements and any other insurance or endorsements that Landlord deems necessary on or with respect to the use -4- and occupancy of the Premises and such other buildings for Landlord's benefit. Said Insurance premiums for the purposes of this Section shall be reasonably apportioned to the Premises In accordance with the total floor area of the Premises as it relates to the total floor area of the building or buildings with which the Premises are insured. Tenant shall make the payments required by this Section directly to Landlord pursuant to Section 7.6 below. 7.4 Enterior E!UIIQioa MaintVnanc%Tenant agrees to pay, as additional rent, Tenant's pro rata portion of all costs incurred by Landlord pursuant to Section 11.2 below for painting and maintaining the exterior portion of the building owned by Landlord or for which Landlord is ' responsible within which the Premises are situated (the 'Building'), including roof repairs. based on the ratio that the floor area within the Premises bears to the total floor area of the Building. Tenant shall make the payments required by this Section directly to Landlord pursuant to Section 7.6 below. 7.5 Qgmmon Area Maintenance. Tenant agrees to pay, as additional rent, Tenant's pro rata portion of all costs incurred by Landlord pursuant to Article 31 below for maintenance of the parking and common areas of the Commercial Portion of "The Main Promenade' Structure, based on the ratio that the floor area within the Premises bears to the total floor area of the Commercial Portion of 'The Main Promenade' Structure. Tenant shall make the payments required by this Section directly to Landlord pursuant to Section 7.6 below. 7.6 Payment Additions Charges. Upon the : Commencement Date, Landlord shall submit to Tenant a statement of the anticipated charges described in Sections 7.2 through 7.5 above (hereinafter collectively referred to as 'Adjustments') and of Tenant's pro rata share thereof for the period between such commencement and the following .January and Tenant shall pay such charges, based upon such estimate. monthly in advance, in equal monthly payments, concurrently with the payment of Minimum Rent. Tenant shall continue to make said monthly payments until notified by Landlord of a change thereof. Landlord may, at any time, increase or decrease such estimated monthly payments in the event that Landlord reasonably determines that such estimated payments are incorrect or the percentage to be allocated to Tenant is adjusted. By March i of each year. Landlord shalt endeavor to give Tenant a statement showing the total Adjustments for the prior calendar year and Tenant's allocable share thereof, prorated from the Commencement Date or to the expiration dale in the event the Lease shall have commenced or terminated during such prior calendar year. In the event the total of the monthly payments which Tenant has made for the prior calendar year be less than Tenant's actual share of such Adjustments, then Tenant shall pay the difference in a lump sum within ten (10) days after receipt of such statement from Landlord. Any • overpayment by Tenant shall be credited towards the monthly Adjustments next coming due. Even though the term has expired and Tenant has vacated the Premises. when the final determination Is made of Tenant's share of said Adjustments for the year in which this Lease terminates, Tenant shall within ten (10) days after receipt of such statement pay any increase due over the estimated Adjustments • previously paid and. conversely, any overpayment made shall be rebated by Landlord to Tenant. 7.7 Additional -Charaes_as-1d ' Iona ent, to addition to the Minimum Rent provided for In Article 4, above, Tenant shall pay to Landlords as additional rental the Adjustments and all other sums, money or charges of whatsoever nature required to be paid by Tenant to Landlord pursuant to this Lease, whether or not the same Is designated as additional rental. 7.8 Floor Area. The term 'floor area" as used herein means separately with respect to the Premises the actual number of square feet of floor space within the Premises as measured from the exterior of exterior wails and the center line of common wails, and, with respect to the balance of the Commercial Portion of "The Main Promenade" Structure, the actual number of square feet of floor space (exclusive of any space on mezzanines. in basements or on exterior balconies unless used for commercial and/or office purposes or the sale or display of merchandise) within the exterior faces of building walls and measured from the center of common walls, but excluding any such space (i) not intended by Landlord for the exclusive occupancy by lessees, (ii) outside sales areas whether or not roofed and/or enclosed, (iii) truck ramps and/or docks, trash storage and compaction areas, box and bottle yards, whether or not roofed and/or enclosed, and (iv) space within any kiosk building. For the purpose of making any proration or allocation to be made under this Article 7. Landlord may conclusively assume that the floor area of the Premises is the estimated floor area specified in Article 2 above. Landlord reserves the right to reduce the floor area computation to reflect any concessions In the payment of Adjustments given to a lessee by reducing the floor area attributable to such lessee's premises by ten percent (10%) or less. 7.9 Exclusions. In the event and to the extent that any lessee in the Commercial Portion of "The Main Promenade" Structure or any owner of any portion of the Commercial Portion of `The Main Promenade" Structure pays any Adjustment with respect to that portion of the Commercial Portion of "The Main Promenade" Structure leased or owned by such party, rather than an allocable share of any Adjustment. Landlord may. in such event and to such extent, exclude the square footage of floor area leased or owned by such party for the purposes of computing Adjustments pursuant to this Article 7. 7.10 Total Additional Rent jfor the 12-Month Period of October 1. 1222 to _Sept mber 30. 1992. The predicted Additional Rent for those Items Indicated in 7.2-7.9, above, for the 12-month period of October 1. 1992 to September 30. 1993 will be Twenty -Seven Cents ($.27) per square foot, being Nine Hundred Seventy -Six Dollars And Thirty -Two Cents ($976.32) (calculated at 3,616 square feet times $.27) per month. There Is no prediction as to what the Additional Rent will be for any period following September 30, 1993. B. USES PROHIBITED. Tenant shall not do or permit anything to - be done in or about the Premises nor bring or keep anything therein which is not within the permitted use of the Premises as set forth in Article 3 above or which will in any way increase the existing rate of or affect any g fire or other insurance upon the Building, the Commercial Portion of "The Main Promenade" Structure or the contents of either, or cause a cancellation of any insurance policy covering the Building, the Commercial Portion of "The Main Promenade" Structure or any part thereof or the contents of either, and the amount of such increase, it any, shall be paid by Tenant to Landlord upon demand. Tenant shall not do or permit anything : to be done in or about the Premises which will in any way obstruct or Interfere with the rights of other tenants or occupants of the Building or the Commercial Portion of "The Main Promenade" Structure or injure or annoy them or use or allow the Premises to be used for any Improper. Immoral, unlawful or objectionable purpose; nor shall Tenant cause, ' maintain or permit any nuisance in, on or about the Premises or the parking and common areas of the Commercial Portion of 'The Main Promenade" Structure. Tenant shall not commit or allow to be committed any waste in or upon the Premises. Tenant may not display, sell merchandise, allow carts, portable signs, devices or any other objects to be stored or to remain outside the defined exterior walls or roof and permanent doorways of the Premises or in hallways. No aerial or antenna shall be erected on the roof or exterior walls of the Premises. In addition, Tenant will not solicit in any manner In or from any of the common areas of the Commercial Portion of 'The Main Promenade" Structure. 9. COMPj IANCL WITH LAW. Tenant shall not use the Premises, or permit anything to be done in or about the Premises, which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now In force or which may hereafter be enacted or promulgated. • Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant's improvements, use of the Premises or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant : has violated any law, statute, ordinance or governmental rule, regulation or requirement shall be conclusive of that fact as between Landlord and Tenant. 10. ALTERATIONS AND ADDITIONS. Tenant shall not make or allow to be made any alterations, additions or improvements to or of the Premises or any part thereof, without first receiving Landlord's prior written consent. Any alterations, additions or improvements to or of said Premises, including, but not limited to, wall covering, paneling and built- in -cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to Landlord and shall be surrendered with the Premises. In the event Landlord consents to the making of any alterations, additions or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant's sole cost and expense. Upon the expiration or sooner termination of the term hereof. Tenant shall, upon written demand by Landlord, given at least thirty (30) days prior to the end of the term, at Tenants sole cost and expense, forthwith and with all due diligence. remove any alterations, additions. or -7- improvements made by Tenant, designated by Landlord to be removed, and Tenant shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the Premises caused by such removal. Landlord reserves the right to remodel and/or otherwise alter the canopy, roof and/or exterior of the Building and the sidewalks and landscaped areas, if any, adjacent to the Building in connection with any remodeling and/or expansion of the Building, In any such event, Landlord further reserves the right to require that Tenant replace its building sign with a new building sign complying with Landlord's then standard sign criteria for comparable tenancies within the Commercial Portion of 'The Main Promenade" Structure. 11. $EPAIR. 11.1 Tenant's Obligations, By entry hereunder, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order. condition and repair. Tenant shall, at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair (except as hereinafter provided with respect to Landlord's obligations), including, without limitation, the maintenance, replacement and repair of any storefront, plateglass, doors, window casements, glazing, heating and air conditioning system (when there is an air conditioning system, Tenant shall obtain a service contract for repairs and maintenance of said system, said maintenance contract to conform to the requirements under the warranty, if any, on said system), plumbing, pipes, electrical wiring and conduits. Tenant shall, upon the expiration or sooner termination of this Lease, surrender the Premises to the Landlord in good condition, broom clean, ordinary wear and tear and damage from causes beyond the ' reasonable control of Tenant excepted. Any damage to adjacent premises caused by Tenant's use of the Premises shall be repaired at the sole cost and expense of Tenant. 11.2 Landlord's Obligations Notwithstanding the provisions of Section 11.1 hereinabove, Landlord shall repair and maintain the structural portions of the Building, including the exterior walls and roof (subject, however, to reimbursement of certain costs under Section 7.4 above), unless such maintenance and repairs are caused in part or in whole by the act, neglect, fault cr omission of any duty by Tenant, its agents, servants, employees, invitees, or any damage caused by breaking and entering, in which case Tenant shall pay to Landlord the actual cost of such maintenance and repair. Landlord shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance Is given to Landlord by Tenant. Except as provided in Article 27 hereof, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements In or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Tenant waives the right to make repairs at Landlord's expense under any law, statute or ordinance now or hereafter in effect. 12, LIENS. Tenant shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any �; work performed, materials furnished or obligations incurred by or on behalf of or alleged to have been incurred by or on behalf of Tenant. Landlord may require, at Landlord's sole option, that Tenant shall provide to Landlord, at Tenant's sole cost and expense. a Gen and completion bond, in a form and from a surety satisfactory to Landlord, In an amount equal to one hundred fifty percent (150%) of the estimated cost of any improvements, additions, or alterations in the Premises which Tenant desires to make, to insure Landlord against any liability for mechanic`s and materialmen's liens and to insure completion of the work. Tenant shall give Landlord not less than twenty (20) days prior written notice before commencing construction of any kind upon the Premises so that Landlord may post and maintain such notices of nonresponsibility or other notices on the Premises as Landlord deems necessary to protect Landlord from such liens. 13.1 Landlord's Consent Renuired_ Tenant shall not, either voluntarily or by operation of law, assign, sell, encumber, pledge or otherwise transfer all or any part of Tenant's leasehold estate hereunder, or permit the Premises to be occupied by anyone other than Tenant or Tenant's employees or sublet the Premises or any portion thereof, without Landlord's prior written consent in each instance. Consent by Landlord to one or more assignments of this Lease or to one or more sublettings of the Premises shall not operate to exhaust Landlord's rights under this Article 13. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation hereof shall not work a merger and shall, at the option of Landlord, terminate all or any existing subleases or subtenancies or shall operate as an assignment to Landlord of such subleases or subtenancies. If Tenant Is a corporation which, under the then current guidelines published by the Commissioner of Corporations of the State of California, is not deemed a public corporation, or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate In excess of twenty-five percent (25°1o) shall be deemed an assignment within the meaning and provisions of this Article 13. Tenant agrees to reimburse Landlord for Landlord's reasonable accounting and attorneys' ' fees incurred in connection with the processing and documentation of any such requested assignment, subletting, transfer, change of ownership or hypothecation of this Lease or Tenant's interest in and to the Premises, which shall be no less than Two Hundred Fifty Dollars ($250.00). 13.2 Request for Consent_ If Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, it shall first notify Landlord of its desire to do so and shall submit in writing to Landlord (i) the name of the proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's business to be carried on in the Premises; (iii) the proposed sublease or assignment and all of the contracts, instruments and agreements relating to the proposed sublease or assignment; and (iv) such reasonable financial and other information as Landlord may request concerning the proposed subtenant or assignee, Including without limitation, recent per square foot sales figures and advertising budgets for the proposed subtenant or assignee's comparable business operations from other locations, all in such reasonable detail as Landlord may request. 13.3 Landlord's FliflM- At any time within thirty (30) days : after Landlord's receipt of the information specified in Section 13.2 above, Landlord may by written notice to Tenant elect to (i) consent to the subletting or assignment upon the terms and to the subtenant or assignee proposed; subject to any conditions deemed appropriate by Landlord, as determined in its reasonable discretion, or (H) in its reasonable discretion, refuse to give Its consent. Tenant agrees that Landlord may refuse to consent to any proposed assignment for any reason or reasons deemed reasonable by Landlord without regard to any objective standard of reasonableness and may consent to a proposed assignment subject to such conditions as Landlord, in its reasonable discretion, deems appropriate. including without limitation the requirement that the assignee assume in writing the obligations of Tenant under this Lease. If Landlord consents to such assignment or subletting, Tenant may, within ninety (90) days after the date of Landlord's consent, enter into a valid assignment or sublease of the Premises or portion thereof upon the terms and conditions described in the information required to be furnished by Tenant to Landlord pursuant to Section 13.1 above, or upon other terms not more favorable to Tenant; provided, however, that any material change in such terms shall be subject to Landlord's consent as provided in this Article 13. Failure of Landlord to exercise either option set forth in clauses (i) and (H) above within such thirty (30) day period shall be deemed refusal of Landlord to consent to the proposed subletting or assignment. No action or inaction by Landlord under this Section 13.3 shall entitle Tenant to recover damages from Landlord, it being understood and agreed that Tenant's sole remedy, in such event, shall be an action to require that Landlord specifically perform its obligations under this Lease, at law or in equity. 13.4 No Release. No subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its obligations to pay the rent and to perform all of the other obligations to be performed by Tenant hereunder. The acceptance by Landlord of any payment due hereunder from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any assignment or subletting. 13.5 Payments by Tenant. In the event that any assignment, sublease or other occupancy proposed by Tenant would result in the Commercial Portion of "The Main Promenade" Structure, or any portion thereof including the Premises, being reassessed by the County Assessor at a higher full cash value than would otherwise be permissible under Article XIII-A of the California Constitution, Landlord may also condition Its consent thereto upon Tenant and the proposed assignee, sublessee or ' occupant agreeing to pay that portion of the ad valorem tax levied or assessed against the Commercial Portion of "The Main Promenade" Structure and/or the Premises from and after and resulting from such reassessment and higher fu!1 cash value. 13.6 S&easg Rential%If a default under this Lease should occur while the Premises or any portion thereof are then subleased. Landlord, in addition to any other remedies provided herein or by law or in equity, may at Its option have a receiver appointed to collect, or itself collect, directly from the sublessee under such sublease all rent or other consideration then due or becoming due to Tenant from such sublessee and apply such rent or other consideration against any sums due to Landlord by -10- Tenant hereunder; and Tenant hereby authorizes and directs.any such sublessee to make such payments of rent or other consideration directly. to Landlord upon receipt of notice from Landlord. For. this purpose, Landlord is authorized and empowered, on behalf of Tenant, to endorse the name" of Tenant upon any check draft or other instrument payable to Tenant evidencing payment of such rent or other consideration and to receive and apply the proceeds therefrom in accordance with the terms hereof. No direct collection by Landlord from any such sublessee shall be construed to constitute a novation or a release of Tenant or any guarantor of Tenant from the further performance of its obligations under or in connection with this Lease. Landlord shall not be liable to Tenant for any failure or inability to collect such .rents or other charges from any such sublessee. 14. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against and from any and all claims, demands, liabilities and/or obligations arising from Tenant's use of the Premises or from the conduct of its business or from any activity, work, or other things done, permitted or suffered by the Tenant in or about the Premises, and shall further indemnify and hold harmless Landlord against and from any and all claims, demands, liabilities and/or obligations arising from any breach or default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or arising from any act or negligence of the Tenant, or any officer, agent, employee, guest or invitee of Tenant, and from all costs," attorneys' fees, and liabilities incurred in or about the defense of any such claim or any action or proceeding brought thereon and in case any action or proceeding be brought against Landlord by reason of such claim. Tenant upon notice from Landlord shall defend the same at Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than Landlord's affirmative or gross negligence; and Tenant hereby waives all claims in respect thereof against Landlord. Tenant shall give prompt notice to Landlord in case of casualty or accidents in the Premises. Landlord or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the Building or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the affirmative or gross negligence of Landlord, its agents, servants or employees. Landlord or its agents shall not be liable for interference with the light, air, or for any latent defect in the Premises. 15. SUBROGATION. As long as their respective insurers so permit, Landlord and Tenant hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies carried by the respective parties. Each party shall apply to their insurers to obtain said waivers. Each party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver. 16.1 Liability 1nsUnce_ Tenant shall, at Tenants expense. obtain and keep in force during the term of this Lease a policy of comprehensive public liability insurance insuring jointly Landlord and Tenant against any liability arising out of the ownership, use, occupancy : or maintenance of the Premises and all areas appurtenant thereto. Such Insurance shall have combined single limits of $2,000,000 for bodily injury or death. Such insurance shall further insure Landlord and Tenant against liability for property damage with limits of at least $1,000.000. The limit of any such insurance shall not, however, limit the liability of the Tenant hereunder. All such policies shall be written as primary policies not contributing with and not in excess of coverage which Landlord may carry and shall provide for payment of loss to Landlord notwithstanding any act or negligence of Tenant which might otherwise result in forfeiture of said insurance. Landlord may require an increase in the amounts of public liability and property damage insurance coverage required by this Section as such amounts are reasonably determined by Landlord or Landlord's tender to provide for increases in cost -of -living or liability experience. 16.2 Prmerty_Insurance_ Tenant agrees to procure and maintain fire and extended coverage insurance in an amount equal to one hundred percent (100%) of the replacement cost of Tenant's fixtures, signs, equipment and personal property located in, on or about the Premises and shall provide plate glass coverage. Tenant shall procure an appropriate clause in or an endorsement on any such policy of insurance pursuant to which the insurance company waives subrogation or consents to a waiver of the right of recovery against Landlord, and Tenant does hereby agree that it shall not make any claim against or seek to recover from Landlord any loss or damage to its property or the property of others, resulting from any hazard insured against by such policy. Tenant shall also carry Worker's Compensation Insurance as required by law. A Certificate evidencing such insurance shall be delivered to Landlord. 16.3 Food Preparation- Tenant, if involved in food preparation and sales as a cafe, restaurant, or similar use, and/or food takeout service, shall install at Tenant's expense any fire protective systems in grill, deep try, and cooking areas which are required by city, county and state fire ordinances, and such system when installed shall qualify for full fire protective credits allowed by the fire insurance rating and regulatory body in whose jurisdiction the Premises are located. 16.a InsUIanr,1Z Polif, All insurance to be obtained by Tenant pursuant to this Article 16 shall be provided by Companies rated A-15 or better in 'Best's Insurance Guide". or in the event Best's Insurance Guide Is no longer published, any comparable rating in any similar guide : selected by Landlord. Tenant shall deliver to Landlord copies of the Insurance policies required by this Article or certificates evidencing the existence and amount of such insurance with loss payable clauses : satisfactory to Landlord. No policy shall be cancellable or subject to reduction of coverage without thirty (30) days' prior notice to Landlord, and each such certificate shall so provide. On or before ten (10) days prior to the expiration of any such insurance policy. Tenant will deliver to Landlord written notification in the form of a receipt or other similar -12- document from the applicable insurance company that said policy has been renewed, or deliver certificates of coverage or the policies from another Insurance company to evidence such coverage. 17, UTILITIES.. Tenant shall pay, as additional rent, for all water, gas, heat, light, power, sewer charges, telephone service and all other services and utilities supplied to the Premises, together with any taxes thereon. It any such services are not separately metered to Tenant, Tenant shall pay a reasonable proportion to be determined by Landlord of all charges jointly metered with other premises. Tenant shall also pay for trash removal services provided to the Premises, unless such services are provided to the Commercial Portion of "The Main Promenade' Structure as ' . a whole and the cost of such service included as an Adjustment. Landlord shall not be liable for any failure or interruption of any utility service. 18. PERSONAL PROpER_TY TA_XFS_ Tenant shall pay, or cause to be paid, before delinquency any and all taxes levied or assessed and which become payable during the term hereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures, and any other personal property located in the Premises. in the event any or all of Tenant's leasehold improvements, equipment, furniture, fixtures and other personal property shall be assessed and taxed with the real property, Tenant shall pay to Landlord its share of such taxes within ten (10) days after delivery ' to Tenant by Landlord of a statement in writing setting forth the amount of such taxes applicable to Tenants property, 19. LEg$F,5UBJECT TO DEQLARATION_ ARTICLES, BYLAWS AND ASSOCIATIM RULES OF MAIN PROMENADE INC. The terms of this Lease shall be subject in all respects to the provisions of the Declaration Of Covenants, Conditions And Restrictions, Articles Of Incorporation, Bylaws and Association Rules of MAIN PROMENADE, INC., a non-profit corporation of the State of California, now or to be in existence or as subsequently modified, relating to the use and operation of 'The Main Promenade' Structure and/or any adjacent properties which Landlord may iron time to time make available for use by Tenant and/or the protection of the improvements upon such properties. Any failure by Tenant to comply with the terms of the aforementioned documents shall be a default under the Lease. Landlord shall not be responsible to Tenant for the non- performance by any other tenants or occupants. 20. 140LEIIG_O_ B- It Tenant remains in possession of the Premises or any part thereof after the expiration of the term hereof with the express written consent of Landlord, such occupancy shall be a tenancy from month to month at a rental in the amount of the last monthly Minimum Rent increased by twenty-five percent (25%), plus the percentage rent. Adjustments and all other charges payable hereunder, and : upon all the terms hereof applicable to a month -to -month tenancy. Should Tenant hold over the Premises without the express written consent of Landlord. Tenant shall indemnify and hold Landlord harmless from loss or liability resulting from such holding over, including, without limitation, : any claims made by any succeeding tenant. V 21. Landlord reserves, and shall at any and all times have, the right for itself and its designees to enter the Premises to inspect the same, to submit said Premises to prospective purchasers or tenants, to post notices of non responsibility. to repair the Premises and any portion of the Building that Landlord may deem necessary or desirable, and/or to alter or remodel the exterior of the Premises, without abatement of rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be unreasonably blocked thereby, and further providing that the business of the Tenant shall not be Interfered with unreasonably. Tenant hereby waives any claim for damages or for any injury or inconvenience to or interference with Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of the aforesaid purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant's vaults, safes and files, and Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency, in order to obtain entry to the Premises without liability to Tenant except for any failure to exercise due care for Tenant's property and any entry to the Premises obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Premises. or an eviction of Tenant from the Premises or any portion thereof. 22. TF_{VANTS DEFAULT. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant: (a) The vacating or abandonment of the Premises by Tenant. (b) The failure by Tenant to make any payment of rent or any other payment required to be made by Tenant hereunder, as and when due, where such failure shall continue for a period of three (3) days after written notice thereof by Landlord to Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to. any notice required under California Code of Civil Procedure Section 1161 et seq. (c) The failure by Tenant to observe or perform any of the covenants, conditions or provisions of the Lease to be observed or performed by Tenant, other than described In (a) or (b) above, where such failure shall continue for a period of ten (10) days after written notice hereof by Landlord to Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 et seq.; provided, further. that if the nature of Tenant's default is such that more than ten (10) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said ten (10) day period and thereafter diligently prosecutes such cure to completion. (d) The making by Tenant of any general assignment or general arrangement for the benefit of creditors; or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt. or a petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, -14- the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Tenant's assets located at the Premises or of Tenant's interest in this Lease, where such seizure is not discharged in thirty (30) days. 23. REMEDIES IN DEFAULT. In the event of any such default or breach by Tenant, Landlord may at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy which Landlord may have by reason of such default or breach: (a) Immediately terminate Tenant's right to possession of the Premises, and repossess the same by summary proceedings or other appropriate action, and Landlord shall thereupon be entitled to receive from Tenant alldamages specified in California Civil Code Section 1951.2(a), including (1) the worth at the time of award of the unpaid rent which had been earned at the time of termination; (2) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; (3) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided; and (4) any other amount necessary to compensate Landlord for all the detriment proximately caused by the Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom. As used in subclause (1) and (2) above, the "worth at the time of award" shall be computed by allowing interest at three percent (3%) over the prime rate then being charged by Bank of America, N.A. but in no event greater than the maximum rate then permitted by law. As used in subclause (3) above the "worth at the time of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Board of San Francisco at the time of the award plus one percent (M), but not in excess of ten percent (10%) per annum; or (b) Continue this Lease in effect without terminating Tenant's right to possession even though Tenant has breached this Lease and abandoned the Premises and to enforce all of Landlord's rights and remedies under this Lease, including the right to recover the rent as it becomes due under this Lease; provided, however, that Landlord may at any time thereafter elect to terminate this Lease for such previous breach by notifying Tenant in writing that Tenant's right to possession of the Premises has been terminated; or (c) Pursue any other remedy now or hereafter available to Landlord under the laws or judicial decisions of the State of California. -15- 0 Landlord's failure to take advantage of any default or breach of covenant on the part of Tenant shalt not be or be construed to be a waiver thereof, nor shall any custom or practice which may grow up between the ' parties in the course of administering this Lease be construed to waive or to lessen the right of Landlord to insist upon the performance by Tenant of • any term, covenant or condition hereof, or to exercise any rights given him on account of any such default. A waiver of a particular breach, or default, shall not be deemed to be a waiver of the same or any subsequent breach or default. The acceptance of rent hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease or breach thereof whether or not such breach is then known to Landlord. For the purposes of this Article 23 and of Article 24 below, : the term 'rent" shall be deemed to be the Minimum Rent and all other sums required to be paid by Tenant pursuant to the terms of this Lease, ` including, without limitation, percentage rent and Adjustments. In ' computing damages or rental due under this Lease, the value of percentage rent for any period subsequent to the termination of this Lease or of Tenants right of possession shall be an amount per year equal to one half (1/2) of the total percentage rent paid by Tenant for the last two (2) full lease years immediately preceding such termination and if less than two (2) full years have lapsed, such value shall be an amount per year equal to the average yearly percentage rent theretofore paid by Tenant. The voluntary or other surrender of this Lease by Tenant. or a . mutual cancellation of this Lease, shall, at Landlord's option, either not result in a merger and shall operate as an assignment to Landlord of any and all subleases made by Tenant, or shall terminate all such existing subleases. � ►��:1-�.�i]Ti ► : ►1 s : e�fi��P►F•�1:� • - �� d► >�� (a) Any installment of rent due under this Lease or any other sum not paid to Landlord when due (other than interest) shall bear interest at the maximum rate allowed by law from the date such payment is due until paid, provided, however, that the payment of such interest shall not excuse or cure the default. (b) Tenant hereby acknowledges that the late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to Incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs may include, but are not limited to, administrative, processing and account charges, and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee within five (5) days after the date due, then Tenant shall pay to Landlord, in addition to the interest provided above, a late charge in the amount of five percent (5%) of the delinquent installment of rent. The parties agree that such late charge represents a fair and reasonable estimate of the cost Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenants default with respect to -16- such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. (c) Following each second consecutive late payment of rent, Landlord shall have the option (1) to require that beginning with the first payment of rent next due, rent shall no longer be paid in : monthly installments but shall be payable quarterly three (3) months In advance and/or (ii) to require that Tenant increase the amount, if any, of the security deposit required under Article 3 by one hundred percent (1000/6) which additional security deposit shall be retained by Landlord, and may be applied by Landlord, in the manner provided In Article 3. 25. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a ' reasonable time, but In no event later than thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or deed of trust covering the Premises if the name and address of the holder of any first mortgage or deed of trust shall have theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance then Landlord shall not be in default if landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of Landlord's default and Tenant's remedies shall be limited to damages and/or an injunction. 26. CURE,QUENANTS12EFAULTS, Should Tenant fail to pay, when due and payable, any premium or other charge in connection with any insurance policy or policies which Tenant is obligated to pay, or to evidence its procurement of any Insurance to be maintained by Tenant or to pay any lien or claim for labor or materials employed or used in the repair, alteration, maintenance and use of the premises, or should Tenant fail to make or commence any repairs required to be made by it under this Lease or to perform any other act to be performed by Tenant hereunder within twenty (20) days after notice from Landlord so to do, then Landlord may, at its option (but this provision shall not be deemed to create any obligation upon Landlord so to do, nor in any manner affect the obligation of Tenant) pay any such tax, assessment, claim, insurance premium or charge, or settle and discharge any such lien or claim or action therefor or satisfy any judgment thereon or enter upon the Premises and perform such work of repair or other act to be performed by Tenant, and all costs and expenses incurred or paid by Landlord in connection therewith, together with interest at the maximum rate permitted by law per annum (but not in excess of 18% per annum) on such costs and expenses from the date paid by Landlord, shall be deemed to be additional rent hereunder and shall be paid by Tenant to Landlord upon demand and any default therein shall constitute a breach of the covenants and conditions of this Lease. 27. IEsONSTRUCTION. In the event the Premises are damaged by fire or other perils covered by extended coverage insurance, Landlord agrees to forthwith repair same, and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate reduction of the Minimum Rent from the date of damage and while such -i 7- ' S • • ' •' repairs are being made. such proportionate reduction to be based upon the extent to which the damage and making of such repairs shall reasonably - Interfere with the business carried on by Tenant in the Premises. if the damage is due to the fault or neglect of Tenant or its employees, there shall be no abatement of rent. _ In the event the Premises are damaged as a result of any casualty other than the perils covered by fire and extended coverage Insurance, then Landlord shall forthwith repair the same (other than damage to glass, which shall be the responsibility of Tenant), provided the extent of the destruction be less than ten percent (10%) of the then full replacement cost of the Premises. In the event the destruction of the Premises is to an extent of ten percent (10%) or more of the full replacement cost then Landlord shall have the option: (1) to repair or restore such damage, this Lease continuing in full force and effect, but the Minimum Rent to be proportionately reduced as hereinabove in this ` Article provided; or (2) to Hive notice to Tenant at any time within ninety (90) days after such damage, terminating this Lease as of the date specified In such notice, which date shall be no more than thirty (30) days after giving of such notice. In the event of giving such notice, this tease shall expire and all interest of Tenant In the Premises shall terminate on the date so specified in such notice and the Minimum Rent, reduced by a proportionate reduction, based upon the extent, if any, to which such damage interfered with the business carried on by Tenant in the Premises, shall be paid up to date of said such termination. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered under this Article occurs during the last twenty-four (24) months of the term of this Lease. Landlord shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold Improvements, fixtures, or other personal property of Tenant. During the period of any restoration and repair of casualty damage by Landlord pursuant to this Article 27. Tenant agrees to continue the operation of its business in the Premises to the extent reasonably practical and to forthwith replace or fully repair all exterior signs, trade fixtures, equipment display cases or other installations originally installed by Tenant. Tenant hereby waives the provisions of California Civil Code Section 1932. subdivision 2, and Section 1933, subdivision 4, with respect to any damage or destruction contemplated by this Lease. If by reason of fire or casualty damage to any portion of the Commercial Portion of "The Main Promenade" Structure, (i) the lessees or other occupants occupying in the aggregate or (ii) any individual lessee or other occupant occupying more than twenty-five percent (256/6) of the floor area of the Commercial Portion of "The Main Promenade' Structure terminate(s) their(its) lease or abandon(s) their(its) premises, then Landlord may terminate this Lease by giving written notice to Tenant within sixty (60) days after the last said lessee(s) or occupant(s) occupying more than the above -noted floor area terminate(s) their(its) lease or abandons their(its) premises. .18- 28. EMINENT DOMAIN_ If more than twenty-five percent (25°!a) of the Premises shall be taken or appropriated by any public or quasi -public Y ' authority under the power of eminent domain, either party hereto shall have the right, at its option, within sixty (60) days after said taking, to terminate this Lease upon thirty (30) days written notice. If this Lease is not terminated by reason of any taking or appropriation under the power of eminent domain, this Lease shall terminate as to the portion of the ' Premises taken or appropriated and Landlord, to the extent of any severance damages available to Landlord, shall repair and restore the remaining portions of the Premises and the Minimum Rent thereafter to be paid shall be equitably reduced following the completion of such restoration and repair by Landlord. If any part of the Commercial Portion of "The Main Promenade' Structure other than the Premises may be so taken or appropriated, Landlord shall within sixty (60) days of said taking have the right at its option to terminate this Lease upon written notice to Tenant. In the event of any taking or appropriation whatsoever, Landlord shall be entitled to any and all awards and/or settlements which may be given and Tenant shall have no claim against Landlord for any portion of the awards and/or settlements or for the value of any unexpired term of this Lease. Tenant shall, however, have the right to claim and recover, only from the condemning authority (but not from Landlord), any amounts, if any, allocated to the taking of or damage to Tenant's fixtures and equipment. 29. TEUA-rS_STATEMENT, Tenant shall at anytime and from time to time upon not less than three (3) days' prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing, (a) certifying that this Lease is unmodified and in full force and effect (or, If modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect), and the date to which the rental and other charges are paid in advance, if any, and (b) acknowledging that there are not any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth the date of commencement of rents and expiration of the term hereof. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the real property or leasehold estate of which the Premises are a part. At Landlord's option, any such statement shall be in the form of the certification attached hereto as Exhibit "E" and hereby incorporated herein by reference. 30. PARKING_ Tenant acknowledges that the parking area provided to Tenant, as well as to the other tenants In the Commercial Portion of "The Main Promenade` Structure, is in the same structure and adjacent to the Commercial Portion of 'The Main Promenade" Structure and Is deemed to be public parking facilities and, as such, will be accessible to the general public, in addition to Tenant and all other tenants in the Commercial Portion of "The Main Promenade' Structure. Tenant agrees to abide by all rules and regulations, and to pay any and all charges promulgated by Landlord and the City of Huntington Beach or the Huntington Beach Redevelopment Agency that are to apply to Tenant. -Z 9- • W. COMMON AREAS. Tenant, for the use and benefit of Tenant, its agents, employees, customers, licensees and subtenants, shall have the nonexclusive right In common with Landlord and others authorized by Landlord to use the portion of the Commercial Portion of "The Main Promenade" Structure from time to time established by Landlord as common areas during the term of this Lease; provided that the condemnation or other taking, restriction or regulation by any public authority, or safe in lieu of condemnation, of any or all of such common areas shall not constitute a violation of this covenant. Landlord reserves the right to change boundaries and locations of such common area or areas from that shown on the attached Exhibit 'B' and to redesignate such common areas as building area or the building areas shown on said Exhibit *B" as common areas. Landlord shall not be liable for any interference with Tenant's business resulting from Landlord's maintenance, repair, alteration and/or reconstruction of the common areas. During the entire term hereof. Landlord shall keep or cause to be kept the common areas as same are established and completed by Landlord in a good, neat, clean and orderly condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof, but all expenses in connection with said common areas sliall be charged and prorated In the manner set forth in Section 7.5 above. It is understood and agreed that the phrase "expenses in connection with the common areas' as used herein shall be construed to include but not be limited to, all sums expended by Landlord In connection with said common areas for all general maintenance, repairs, and replacements; resurfacing, painting, cleaning, sweeping and janitorial services; planting and landscaping; lighting and other utilities; reasonable reserves to accomplish any replacements of the common area improvements, based upon Landlord's estimate as to when replacement of such improvements will be necessary; personnel to implement such services and to police the common areas (but Landlord shall have no liability for the adequacy or performance of any police or security system); required fees or charges levied pursuant to any government requirements; public liability and property damage insurance on the common areas, which shall be carried and maintained by Landlord, with limits as determined by Landlord; and Landlord's fees for supervision and management of said common areas. Tenant, In the use of said common areas, agrees to comply with such reasonable rules and regulations as Landlord may adopt from time to time for the orderly and proper operation of said common area. Such rules may Include, but shall not be limited to the following; (1) The strict regulation of the removal, storage and disposal of Tenant's refuse and other rubbish, including limitations on the times and manner associated therewith; (2) the access routes and hours for delivery to the Premises by trucks and trailers; and (3) the restriction of designated areas for drive -through banking, savings, restaurant or other drive - through facilities, promotional and/or seasonal sales activities and/or loading, trash and other storage areas, whether or not such storage areas are roofed and/or enclosed. All common areas shall be subject to the exclusive control and management of landlord or such other persons or nominees as Landlord may designate to exercise such management or control, in whale or in part, in Landlord's place and stead. -20. ki Landlord shad have the right to close, if necessary, all or any portion of the common areas to such extent as may In the opinion of Landlord, or Landlord's counsel, be legally necessary to prevent a dedication thereof or the accrual of any rights of any person or of the public therein; to close temporarily all or any portion of the common areas to discourage noncustomer use; to use portions of the common areas while engaged in making improvements or repairs or alterations to the Commercial Portion of 'Tho Main Promenade" Structure, and to do and perform such other acts in, to, and with respect to, the common areas as in the use of good business judgment Landlord shall determine to be appropriate for the Commercial Portion of "The Main Promenade" Structure. Tenant shalt not cause or permit distribution in or at approaches to common areas of handbills, circulars, advertisements or papers, or other matters which if discarded would tend to litter such areas, and Tenant shalt not discard same in the common areas but will dispose of the same in refuse cans or other appropriate containers. In no event shall Tenant park or permit to be parked within the common areas or the streets adjacent to the Commercial Portion of "The Main Promenade" Structure, cars, trucks or other vehicles for advertising purposes which display or employ advertising devices. In the event that any party other than Landlord is required to maintain the common areas within the Commercial Portion of "The Main Promenade" Structure, or any portion thereof, pursuant to any written agreement or instrument, Landlord shall not be deemed to be in default hereunder and Tenant shall not be permitted to pursue any remedy under this Lease or at law or in equity for any failure of such party to maintain the common areas within the Commercial Portion of "The Main Promenade" Structure, or any portion thereof, required to be maintained by such party, provided that Landlord agrees to take reasonable action to enforce its remedies under any such agreement or instrument to perform or to require that such maintenance be performed within any reasonable period of time after Landlord shall receive written notification from Tenant that such maintenance is not being performed. 32. SIGNS. Tenant shall obtain necessary permits and install an exterior building sign on the Premises satisfying Landlord's requirements at a location designated by Landlord prior to the commencement of the term of this Lease. Except for said sign, Tenant shall not affix or maintain upon the exterior of the Premises, including glass panes and supports of show windows and doors, any signs. advertising plackets, names, Insignias, trademarks, descriptive material or any other such like item or Items except such as shall have first received the written approval of Landlord as to size, type, color. location, copy, nature and display ti qualities. Anything to the contrary In this Lease notwithstanding, Tenant shall not affix any sign to or otherwise use or penetrate the roof of the Premises nor install any exterior plumbing fixtures, shade or awning, not make any exterior decoration or painting or change to the store front of the Premises. 33. Tenant may not display or sell merchandise or allow grocery carts, vending machines, or other similar devices within the control of Tenant to be stored or to remain outside the -21- defined exterior walls and permanent doorways of the Premises. Tenant further agrees not to install any exterior lighting, amplifiers or similar devices or use in or about the Premises any advertising medium which may be heard or seen outside the Premises, such as flashing lights, searchlights, loudspeakers, phonographs or radio broadcasts. Tenant shall maintain all show windows in the Premises In a neat, clean and sightly condition and shall keep Tenant's windows and exterior marquee lights on during such nighttime hours as Landlord may from time to time designate. 34. AUCTIONS. Tenant shall not conduct or permit to be conducted any sale by auction in, upon or from the Premises, whether said auction be voluntary, involuntary, pursuant to any assignment for the payment of creditors or pursuant to any bankruptcy or other insolvency proceeding. 35. HOURS OF EUSiNESS. Subject to the provisions of Article 27 hereof, Tenant shall continuously during the entire term hereof conduct and carry on Tenant's business in the Premises and shall keep the Premises open for business and cause Tenant's business to be conducted therein during the usual business hours of each and every business day as Is customary for businesses of like character In the county in which the . Premises are located to be open for business; provided, however, that this provision shall not apply if the Premises should be closed and the business of Tenant temporarily discontinued therein on account of strikes, lockouts or similar causes beyond the reasonable control of Tenant or closed for not more than three (3) days out of respect to the memory of any deceased officer or employee of Tenant, or the relative of any such officer or employee. Landlord shall have the right to require different hours of operation if, in Landlord's judgment, such different hours are in the best interests of the Commercial Portion of 'The Main Promenade" Structure. Tenant shall keep the Premises adequately stocked with merchandise, and with sufficient sales personnel to care for the patronage, and to conduct said business in accordance with sound business practice. to the event of breach by Tenant of any of the conditions in this Article contained, Landlord shall have, in addition to any and all remedies herein provided, the right at Its option to collect not only the Minimum Rent herein provided, but additional rent at the rate of one - thirtieth (1130) of the Minimum Rent herein provided for each and every day that Tenant shall fail to conduct its business as herein provided; said additional rent shall be deemed to be in lieu of any percentage rent that might have been earned during such period of Tenants failure to conduct its business as herein provided. No deliveries to Tenant's premises or trash disposal pick-up from the Commercial Portion of "The Main Promenade Structure shall be _ permitted during the hours of 10:00 a.m, to 2:30 p.m, and 4:00 p.m. to 6:30 p.m., to provide the customers of the Commercial Portion of "The Main Promenade" Structure the best access to its business. Landlord may modify these restricted delivery hours at any time if required by law or If. In Landlord's judgment, such modified hours are in the best interests of the Commercial Portion of "The Main Promenade" Structure. 36. O•QMEETIT(ON. (Not Applicable) -22- ' 37. TRADE FIXTURES. All trade fixtures and equipment installed by Tenant in the Premises shall be In good condition. So long as Tenant ' shall not be in default hereunder, all trade fixtures and equipment Installed by Tenant in the Premises, shall remain the personal property of Tenant and may be removable by Tenant at any time prior to the termination of this Lease. On the expiration of the term of this Lease or upon any earlier termination hereof, Tenant shall remove at its own expense all trade fixtures, equipment and personal property upon the Premises, provided that if Tenant is in default. Landlord may prohibit such - removal by notice In writing to Tenant. If, at the end of the lease term or earlier termination as is herein provided, Tenant has left any merchandise, furniture, equipment, trade fixtures or other personal property in or about the Premises, Landlord may give Tenant written notice to remove such property. In the event such property is not removed within ten (10) days of the sending of said notice, Landlord may dispose of said property In any manner whatsoever and Tenant hereby waives any claim or right to said property or any proceeds derived from the sale thereof. Any damage to the Premises resulting from the installation or removal of any of said trade fixtures or equipment shall be repaired by or at the cost of Tenant. 38. NONREPRESENTATION A T� O BUILp SITE. The designation of any type of use or tenancy with respect to any building site on the attached plot plan of the Commercial Portion of 'The Main Promenade" Structure is not Intended as a covenant or representation that said building site shall be constructed or devoted to such a use or tenancy nor .: shall Landlord be responsible or liable to Tenant should any other tenant or lessee fail to open or to continue to be cpen for business during the term of this Lease. 39. PAj3KfbjQ SURCHARGE. In the event that a parking surcharge or regulatory fee, however designated, is imposed upon or levied or assessed against the Commercial Portion of "The Main Promenade" Structure or on, or on account of, the parking spaces thereon by any governmental agency or authority pursuant to the 'Clean Air Acto or any plan implemented pursuant to such Act, or any enactment amendatory or In substitution thereof, Tenant agrees that Landlord may, at Landlord's option, but Landlord shall not be obligated so to do, institute a system of pay parking. In addition to any parking charges charged by the City of Huntington Beach or the Huntington Beach Redevelopment Agency for the use of the parking facilities in the parking portion of the structure in which the Commercial Portion of `The Main Promenade" Structure is situated and, in such event. the proceeds of such system will be used to pay any such surcharge or fee and the cost of implementing and administering such system. 40. RELATIONSHIP OF PARTIES. The relationship of the parties hereto is that of Landlord and Tenant. and it is expressly understood and agreed that Landlord does not in any way or for any purpose become a • `, partner of Tenant in the conduct of Tenant's business or otherwise, or a joint venturer with Tenant, and that the provisions of this Lease and the agreements relating to rent payable hereunder are included solely for the purpose of providing a method whereby rental payments are to be measured and ascertained. 'R -23- 41. S;HANGE_IN LANDLQAQWKTERPST. Tenant acknowledges that Landlord may not In the future own or control all of the Commercial Portion of "The Main Promenade" Structure and agrees that landlord shall not be deemed to be in default hereunder and that Tenant may not pursue any remedies under this lease or at law or in equity for any violation of this Lease occurring by virtue of any act or omission on or with respect to any portion of the Commercial Portion of `The Main Promenade" Structure, other than the Premises, not owned or controlled by Landlord; provided that Landlord agrees, promptly upon receipt of written notice from Tenant of the occurrence of any act or omission, to promptly perform all acts reasonably required In order to cure such default. In the event of any sale or exchange of the Promises by Landlord and the assignment by Landlord of this Lease, or in the event Landlord's Interest in the Premises Is otherwise terminated and this Lease continues in effect, Landlord shall be and Is hereby entirely freed and relieved of all obligations under any and all of its covenants and obligations contained in or derived from this Lease and arising out of any act, occurrence or omission relating to the Premises or this Lease occurring after the consummation of such saie or exchange and assignment or other termination of such interest. 42. 42.1 Plats and Riders. Clauses, plats, riders and addendums, it any, affixed to this Lease are a part hereof. 42.2 Mfaiyer. The waiver by Landlord of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein contained. 42.3 Joint Obligation. If there be more than one Tenant the obligations hereunder Imposed shalt be joint and several. 42.4 Marginal H2adil3as. The marginal headings and article titles to the articles of this Lease are not a part of the Lease and shall have no effect upon the construction or interpretation of any part hereof. 4 2. 5 IiM. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor. 42.6 Successors and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto. 42.7 Recordation. Neither Landlord nor Tenant shall record this Lease, but a short form memorandum hereof may be recorded at the request of Landlord. . 42.8 Quiet_ Possession. Upon Tenant paying the rent reserved hereunder and observing and performing all of the covenants. conditions and provisions on Tenant's part to be observed and performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof, subject to all the provisions of this Lease. -24- 3) 42.9 Brokers. Tenant warrants that it has had no dealings :,`•= with any real estate broker or agents In connection with the negotiation• a' of this Lease. 42.14 This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No `• provision of this Lease may be amended or added to except by an agreement In writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties hereto. 42.11 Inability to Perform_ This Lease and the obligations of Tenant hereunder shall not be affected or impaired because Landlord is unable to fulfill any of its obligations hereunder or is delayed In doing so, if such inability or delay is caused by reason of strike, labor troubles, _ acts of God, or any other cause beyond the reasonable control of Landlord. 42.12 partial lnvijUd ty. Any provision of this Lease which shall prove to be invalid, void, or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect. 42.13 QuEoLjfvgi No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies at law or in equity, 42.14 nice-gl law. This Lease shall be governed by the laws of the State of California. /1 42.15 Attatnevs'-EQes- In the event of an rr rs r proceeding brought by either party against the nder this Lease the prevailing party shall be entitled to re or the fees of its attorneys in such action or proceeding. in g costs of appeal, if any, in such amount as the court ma dge reasonable as attorneys' fees. In addition, should it ecessary for Landlord to employ legal counsel to enforce an a provisicns herein contained, Tenant agrees to pay all at r fees and court costs reasonably incurred. 42.16 Financial Statements, If Landlord desires to finance, refinance or sell the Commercial Portion of 'The Main Promenade" Structure, or any portion thereof. Tenant hereby agrees to deliver to any lender or purchaser designated by Landlord, such financial statements of Tenant as may be reasonably required by such lender or purchaser. All such financial statements shall be received by Landlord, such lender and/or purchaser in confidence and shall be used only for the purposes herein set forth. 42.17 Subordin3tlon Attornmen.L Upon request of Landlord. Tenant will in writing subordinate its rights hereunder to the lien of any first mortgage or first deed of trust, to any bank, insurance company or other lending institution, also requesting such subordination now or R hereafter in force against the Premises, 'and to all advances made or hereafter to be made upon the security thereof. -25. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any Mortgage or deed of trust made by Landlord covering the Premises, Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the landlord under this Lease. 42.18 Food Operations. If Tenant's operations involve the sale and/or preparation of food in any respect, then, In addition to the requirements set forth in 16.3, above, Tenant shall install grease traps on all sewer lines connected to any part of its kitchen which are sufficient to prevent the flow of grease into the sewers, unless the installation of grease traps is a Tenant Improvement required to be performed by Landlord and set forth as such on Exhibit "C," in which event such grease traps will then be installed by Landlord, rather than Tenant. Tenant further agrees to clean such grease traps on a regular basis, not less than one time per week. Landlord shall not be responsible for the maintenance of the sewer tine outside Tenant's premises if the sewer malfunction is caused by Tenant's failure to comply with the obligations set forth in this paragraph. Tenant further agrees to indemnify, defend and hold Landlord harmless from any cost, expense or liability incurred by Landlord as a result of Tenant's failure to comply with this paragraph. Additionally. : Tenant agrees to install high quality, high capacity ventilation and filtration systems in all kitchen areas, including but not limited to directly above each frying service and each deep frying area, to insure that, to the maximum feasible extent, all cooking odors created by Tenant's business operation are properly vented to the exterior of the building in which the Premises is located, away from front entrances. Nothwithstanding anything to the contrary set forth herein. Landlord may, at its option, perform any of the acts set forth herein on behalf of Tenant individually or on behalf cf all tenants in the Commercial Portion of "The Main Promenade" Structure, and any expenses incurred by Landlord with respect thereto shall be considered an adjustment payable by all tenants having kitchen operations on a basis to be reasonably determined by Landlord. 42.18(a) Grease Interce r(s). Tenant shall procure and continue to maintain throughout the term of Tenant's Lease. and any extension(s) thereof, at Tenant's sole cost and expense, a lease from a Grease Interceptor Company which will continually maintain and repair, if necessary, the grease Interceptor(s) at said Premises. Said lease shall continually be in full force and effect throughout the full term of this Lease, and any extension(s) thereof. Tenant shall provide Landlord with a copy of the lease with the Grease Interceptor Company within Thirty (30) days of Tenant's occupancy of said Premises. 42.19 Hazardous Wntft and Materials.Tenant shall not engage in any activity on or about the Premises or the Commercial Portion of `The Main Promenade" Structure that violates any Environmental Law. and shall promptly, at Tenant's sole cost and expense. take all Investigatory and/or remedial action required or ordered by any governmental agency or Environmental Law for clean-up and removal of any contamination involving any Hazardous Material created or caused directly or Indirectly by Tenant. The term 'Environmental Law" shall mean any federal, state or local law, statute, ordinance or regulation pertaining -26- to .health, industrial hygiene or the environmental conditions on, under or about the Premises, including, without limitation, (i) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Sections 9601 gt=.; (ii) the Resource Conservation and Recovery Act of 1976 ( 'RCRW), 42 U.S.C. Sections 6901 21 iii ) • California Health and Safety Code Sections 25100 Ei sea.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 gt sea, (v) the Federal Water Pollution Control Act. 33 U.S.C. Sections 1317 SS=.; (vi) California Water Code Section 1300 gt A.; and (vii) California Civil Code Section 3479 gt SZL, as such laws are amended and the regulations and administrative codes applicable thereto. The term 'Hazardous Material" includes, without limitation, any material or substance which Is (i) defined or listed as a 'hazardous waste", "extremely hazardous waste", 'restrictive hazardous waste" or 'hazardous substance" or considered a waste, condition of pollution or nuisance under the Environmental Laws; (ii) petroleum or a petroleum product or fraction thereof; (iii) asbestos; and/or (iv) substances known by the State of California to cause cancer and/or reproductive toxicity. It is the intent of the parties hereto to construe the • term 'Hazardous Materials" and "Environmental Laws' in its broadest sense. Tenant shall provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 gt =. Tenant shall provide prompt written notice to Landlord of the existence of Hazardous Substances on the Premises and all notices of violation of the Environmental Laws received : by Tenant. Tenanrs obligations pursuant to this Section 42.18 shalt be referred to in this Lease as 'Environmental Compliance'. 42.20 Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder shall be In writing and shall be sent by United States Mail, Certified or - Registered, with Return Receipt Requested, postage prepaid, or by Federal Express or other overnight courier, addressed to Tenant at the Premises. and to the address hereinbefow, or to such other place as Tenant or Landlord may from time to time designate in a notice to the other party. Either party may from time to time by written notice to the other, served in the manner herein provided, designate a different address. If any notice or other document is sent by mail as aforesaid, the same shall be deemed served or delivered forty-eight (48) hours after the mailing thereof or " twenty-four (24) hours in the case of overnight courier. If more than one tenant is named under this Lease, service of any notice upon any one of said tenants shall be deemed as service upon all of them. To Landlord at: Robert J. Koury _ 200 Main Street, Suite 206 • Huntington Beach, CA 92648 ' Tel.: (714)960-5495 ' To Tenant at: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach. CA 92648 Attn: Barbara A. Kaiser .. Deputy City Administrator Tel.: (714)536-5470 - -27. 42.21 Authority of Tenant. If Tenant is a corporation, each individual executing this Lease on behalf of said corporation represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of said corporation, in accordance with the bylaws of said corporation, and that this Lease is binding upon said corporation. 42.22 Nondiscrimination. Tenant herein covenants by and for itself, its heirs, executors, administrators and assigns and all persons claiming under or through it, 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, sex, marital status, color, creed, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises herein leased, nor shall the Tenant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the Premises. 42.23 Consents. Approvals. and Agreements of Landlord All consents and approvals to be given by Landlord, unless specifically stated herein to the contrary, shall be at Landlord's sole and absolute discretion and no covenants are to be implied in relation thereto, either in fact or in law. The agreements and obligations of Landlord are specifically stated in this Lease, and no further agreements, covenants, promises, or obligations are to be implied, and Tenant expressly waives any such implied agreements, covenants, promises or obligations. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. THIS LEASE SHALL NOT BECOME EFFECTIVE UNTIL EXECUTED BY LANDLORD AND DELIVERED TO TENANT AND THE SUBMISSION OF THIS FORM OF LEASE TO TENANT BY LANDLORD, OR LANDLORD'S AGENT, DOES NOT CONSTITUTE AN OFFER TO LEASE. NO EMPLOYEE OR AGENT OF LAND- LORD OR ANY PERSON WITH WHOM TENANT MAY HAVE NEGOTIATED THIS LEASE HAS ANY AUTHORITY TO MODIFY THE TERMS HEREOF OR TO MAKE ANY AGREEMENTS, REPRESENTATIONS, OR PROMISES UNLESS THE SAME ARE CONTAINED HEREIN OR ADDED HERETO IN WRITING. IME ROBE KOURY By: "Landlord" REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Signature) Jim Silva (Print Name) Chairman (Title) "Tenant" ATTEST:- g12/9-2 ZMU,13EL F .�L -29- z • + nc� 44 • - 'r: ,�r:. .. -]:�: �J'' rye :'� kr.��. Ar.,r� ` •.:;`�. •1A �•. .: i. _ •.ti �• _ .r .. .. 1._' ti• -,.. ...ems .-..r-•v;�• ryt • +��• ••. F.:. ,. •s'• - 't• :�SC� :r+it^1r' %�� r:w �':.+L.Z, :1 lr �x. �td�fr 'i} y-'.K •'. c!��y�y e•��i r •f• .�).•. -, ,- Y, -., r .�... .•9•+•..'.. .�"M3 �St i, a''{�_jei l- y`_ .�, 7df '..�F4.'1 r LXTL�LL OLEASE 0 EXHIBIT "A-2" ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF HUNTINGTON BEACH, DESCRIBED AS FOLLOWS: PARCELI: UNIT B, AS SHOWN ON THE CONDOMINIUM PLAN (THE "PLAN} RECORDED APRIL 10,1991 AS INSTRUMENT NO. 91-168227 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORtIfA PARCEL 2: AN UNDIVIDED FIFTY PERCENT (50 ,) INTEREST IN AND TO THAT PORTION OF LOT 1 OF TRACT NO.14133, AS SHOWN ON A MAP RECORDED IN BOOK 674, PAGES 46,47 AND 46 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA, DEFINED AS "COMMON AREA' IN THE PLAN AND IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR MAIN PIER PARKING FACILITY (-CC&R-S") RECORDED APRIL 10,1991 AS INSTRUMENT NO.91-16=6 OF OFFICIAL RECORDS OF ORANGE COUNTY, CAUFORNIA. PARCEL 3: (FOR UNIT B) THE EXCLUSIVE RIGHT TO USE THE APPURTENANT EXCLUSIVE USE COMMON AREA SET ASIDE AND ALLOCATED FOR THE EXCLUSIVE USE OF THE OWNER OF THE CONDOMINIUM DESCRIBED IN PARCEL 1 ABOVE, AS DESCRIBED IN THE CC&ITS AND AS SHOWN ON THE PLAN. EXHIBIT "A-2" TO LEASE a M I EXHIBIT ! 1■ ficy,i a rl 13 ►il 1: tolo 1 EXHIBIT'B'_ TO LEASE I EMBIT "Co IENANI RAPROVEMEM IfInant ,jimprayerrients To Se_eedormed By Landlord: Landlord shall provide the following Tenant Improvements for the Premises: One (1) Handicap Bathroom One (1) Electrical Panel One (1) HVAC System A Drop Ceiling Pyro Commercial System with Sprinklers Jenant lmgMyements�L& Pertormed_ey Tenani: All other Tenant Improvements required and/or desired by Tenant for the Premises shall be provided by Tenant. at Tenant's sole cost and expense. EXLEM OCR - TO LEASE EXHIBIT "D" The undersigned as the Landlord and Tenant under that certain Lease dated a-1''`1 1911 for space within the Commercial Portion of "The Main Promenade" Structure, Huntington Beach, California, hereby confirm that the term of said Lease has commenced 10 + ,19 q L and that the expiration date of the term of said Lease is a-2010 19 `1�, EXH18yT_"D" O LEASE "Landlord" "Tenant" e EXHIBIT "O Date: t9 Re: Address: For Premises in: Gentlemen: the undersigned, as the Tenant under that certain Lease (`Lease") for the Commercial Portion of that certain structure known as 'The Main Promenade," dated as of the day of 1990, made with ROBERT J. KOURY, as Landlord, hereby certify as follows: I. The undersigned is the Tenant under the Lease and has accepted and entered into occupancy of the Premises described in the Lease ("Premises"). 2. The Lease has been duly authorized, executed and delivered by the undersigned, is in full force and effect and has not been assigned, modified, supplemented or amended In any way. except: 3. The Lease has not been assigned, in whole or in part, and the undersigned has not entered into any sublease, concessionaire or license agreements with respect to any portion of the Premises. 4. The Lease represents the entire agreement between the parties as to the Premises. 5. The term of the Lease has commenced, and any applicable rent is presently accruing under the Lease. The Commencement Date under the Lease was ^ . 19, 6. The term of the Lease expires on . 19_ 7. All conditions and obligations of the Lease to be performed todate by Landlord, or necessary to the enforceability of the Page 1 of 2 Pages EXHIBIT `E" TO LEASE EXHIBIT "D" The undersigned as the Landlord and Tenant under that certain Lease dated �'``�b~� ` a:1 `�'`, 19 �j for space within the Commercial Portion of "The Main Promenade" Structure, Huntington Beach, California, .hereby confirm that the term of said Lease has commenced I O 1 ,1 9 C� 1 ; and that the expiration date of the term of said - Lease is `�— 3r 19 , . ................. ROBERTJ. URY APPROVED) EXHIBIT "D" TO LEASE "Landlord" "Tenant" �� 1 Lease, have been satisfied. including, without limitation, all construction obligations of the Landlord. 8. There are no defaults by either Tenant or Landlord under the Lease, nor does any state of facts exist which, with the passage of time or the giving of notice, or both, would constitute a default thereunder. 9. No rents have been prepaid, other than as provided in the Lease. 10. The undersigned has no defense, offset, credit, rent abatement. charge, lien, claim, or termination right, which currently exists (or with the passage of time or the giving of notice, or both, would exist) under the Lease. 11. The current Annual Fixed Minimum rent is Dollars 12. The amount of the Security Deposit paid to Landlord is Dollars 13. - The undersigned and the person or persons executing this certificate on behalf of the undersigned have the power and authority to give this certificate. Executed this _ day of 19.___. By: By: Page 2 of 2 Pages EXHIBIT "E- TO LEASE t 1, CONNIE BROCKWAY, City Clerk for the City of Huntington Beach. State of California. do hereby certify that the attached copy of the LEASE between ROBERT J. KOURY (as LANDLORD) and REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (as TENWn is a he. correct and exact Copy of the original of said Lease, including all Exhibits attached thereto. IN WITNESS WHEREOF, I hart: placed my hand and official seal on this�� day of 1992, at Huntington Beach, Californla. t CO!"EBROCKWAY City Clerk STATE OF CALIFORNIA ) COLNTYCFOPIME ) ss. On_e—?g22,(992 _ 4-992; before me, the undersigned. a Notary Public In and for said State, personally appeared CONNIE BROCKWAY known to me to be the City Clerk of the City of Huntington Beach. State of Cai:tomia, and the person whose namo Is subscribed to the within Instrument and acknowledged that she executed the same. 'jttr� Not Public In and for said State r•� OFFICIAL :SEAL(OffiCla! Seat} MAYSIMCE t. EESON1101&1.�Y pRr1�Aar OMM. r=T+u IL 3"J STATE OF CALIFORMA ) COLtMCFOR*M } ss. CONNIE BROCKWAY. City Clerk for the City of Huntington Beach. Slate of California, being duty sworn, deposes and says: That she Is the declarant In the foregoing Certification Of Lease: That she has read the above Certification, and that the statements contained in the above Certification are true of her own knowledge. COMIIG BROCKWAY SUBSCRIBED and SWORN before me lhisajj::�day of 1992. (Official Seal) 6 Not r� ublic In and for said State OFFICIAL SEAL MAYBRICE I. MiESON a NOINN PVem - CAW OANtA CRUMCOUIM ar carve. ewna MAY IL IM JE:ROME M. BAME ATTORNEY AT LAW 10055 SLATER AVENUE, SUITE 250 FOUNTAIN VALLEY, CAUFORNIA 92708 TELEPHONE (714) 960-4329 FAX 4714) 065-7816 Ms. Connie Brockway City Clerk CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Re: Certification Of Lease For Robert Koury Properties Dear Connie: December 16, 1992 Following your recent call to this office, we have revised the wording contained in the bottom portion of the Certification Of Lease form which we prepared for your certifying a copy of the Robert J. Koury Lease. The bottom portion of the Certification now reads In such a way that you are swearing that you have read the top portion of the Certification form and that the statements contained in the top portion of the Certification form are true of your own knowledge. Assuming that you find this revision to be acceptable, please proceed with the certification of the Lease. After the certification has been completed, please return the original Certification Of Lease, to which will be attached a copy of the Lease and all Exhibits, to this office. If you have any questions, please call me. Most cordially, M. BAME JMB:mgw Enclosures.2 c: Robert J. Koury, w%encl. (via fax) V.V40VA91.4v FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY THIS FIRST AMENDMENT ("First Amendment") is entered into this _ day of , 1991, by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ABDELMUTI DEVELOPMENT COMPANY (the "Participant") RECITALa WHEREAS, the Agency and the Participant entered into an Owner Participation Agreement, dated May 28, 1991 (the "OPA"), a copy of which is on file as a public record with the City Clerk of the City of Huntington Beach and which is incorporated herein by reference; and WHEREAS, tho Agency and the Participant agree that it is in their mutual best interest that the proposed project be expanded; NOW, THEREFORE, the Agency and the Participant do hereby agree to amend the OPA as follows: Sectign_1. Amend Section 201(3), Project Design; Design and Construction Costs, to read as follows: 3 ' gn--and CQnmtruction Costa, Participant shall at his cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a four-story building totaling a maximum of 46,437 square feet with an approximately 18,000 square foot commercial/retail ground floor area and with high quality office/commercial on the second, third and fourth stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second, third and fourth stories from office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that is no closer in familial relationship than that of the third degree as that term would be defined under the California Probate Code, to a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require a change from office/commercial use, the D4r )____ .,. Agency will pay those additional construction costs needed to convert the second, third or fourth floors to a residential or restaurant use. SaCtlon:a. Amend Section 201(6), Excess Parking Costs and Provision of Parking Spaces, to read as follows: 6. Excess PAXkina Cots and Rrovision of Parking SpLm. There shall be no on -site parking for the Project. Participant shall pay fifty percent (50%) of the offsite parking in -lieu fee of Twelve Thousand Dollars ($12,000) or Six Thousand Dollars ($5,000) per space necessary due to the increase in size of the proposed Project from 42,000 square feet to 48,000 square feet. The additional 6,000 square feet of office space requires four (4) parking spaces per 1,000 square feet, pursuant to the Huntington Beach Municipal Code, for a total of twenty-four (24) spaces at Six Thousand Dollars ($6,000) per space which equals One Hundred Forty -Four Thousand Dollars (6144,000) to be paid on or before issuance of a certificate of occupancy. In exchange for this, the Participant will provide upgraded site improvements from back of the building to the property line at the some quality as the plaza area located at the corner of Main Street and Pacific Coast Highway (i.e., pavera rather than asphalt). Agency shall pay any additional coats necessary to provide offsite parking for the Project ("Excess Parking Costs"). The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City. in the event, however, that Agency authorizes upper -story residential uses on the Site, Agency shall be responsible for providing full code -required parking for all residential units on the Site, with the parking spaces to be located off of the site and within the block bounded by Main .Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue. Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site. Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens -the parcel(s) on which the parking is to be located. Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to 7788u/2460/009 -2- Participant shall not exceed the reasonable cost of maintaining and repairing at -grade surface parking spaces. Sectien'1. Amend Section 201(8), Differential Rent Payment, to read as follows: 8. Differential ]Rent! Pa=ent. In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as one Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or 11CP1" as defined herein (the "Differential Rent Payment"). In determining the third floor Differential Rent Payment pursuant to the approved rental agreements for the third floor, all rents shall be averaged and the Agency shall pay the Differential Rent Payment based on the amount necessary to insure that one-half of the total average per square foot amount is brought up to the Guaranteed Rental Rate. CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index For Urban Wage Earners -and clerical Workers, Los Angeles -Anaheim- Riverside Average, Sub -Group, "All Items" (1982/84■100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8, The Differential Rent Payment term shall commence with the issuance of the Certificate of Occupancy for the second and third floor space and terminate on January 1, 2017. The City/Agency shall have the option of leasing any vacant second or third floor office space at the Guaranteed Rental Rate. Subject to the Agency's right to change the use pursuant to subparagraph 3 above, Participant shall lease the 7788u/246U/009 -3- fourth floor office space for an amount equal to the Guaranteed Rental Rate. Any business affiliated with the Participant (including, but not limited to, Abdelmuti Development Company and/or Jack's Surf & Sport) must pay a minimum of $1.55 per square foot. Agency shall have the right to approve all leases of second and third story'space. Failure to obtain Agency written approval of a lease for the second or third floor shall result in a loss of the right to obtain the Differential Rent Payment as described in this Paragraph 8 0£ Section 301. Section 4. Amend section 11 of Attachment No. 4 (Scope of Development), Participant's Responsibilities, to read as ;follows: The Participant shall develop the Site with a four-story building totaling approximately 48,437 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 30,000 total square feet of office on the second, third and fourth floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the some may be amended from time to time. fiection 5. This First Amendment and the provisions of the OPA which :remain in effect collectively constitute the "Amended OPA." The Amended OPA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. Section fi. Each of the parties hereto"warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. 7788u/2450/009 -4- The effective date of this first Amendment shall be the date of execution by the Agency. - , 19— ATTEST: Secretary APPROVED AS TO FORM: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Chairman Stradling, Yocca, Carlson & Routh, Special Counsel to the Agency Agency Counsel ABDELMUTI DEVELOPMENT COMPANY, a California general partnership By• Ahmad Abdelmuti, General Partner "Participant" 778Bu/2460/009 -5- RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING A FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Abdelmuti Development Company (the "Participant") entered into a certain Owner Participation Agreement, dated as of May 28, 1991 (the 110PA") for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a office/commercial use building and other public improvements; and WHEREAS, the Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and WHEREAS, the Participant and the Agency desire to approve a First Amendment to the OPA (in the form attached hereto as Attachment "A" and incorporated herein) which constitutes the "Amendment" to supplement the terms of the OPA; and WHEREAS, the Agency and the City Council of the City of Huntington Beach (the "City Council") have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with California Health and Safety Code Sections 33431 and 33433; and WHEREAS, the staff report pertaining to the Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health and Safety Code, contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the City Council of the City of Huntington Beach does resolve as follows: fi%�t�31_J: The City Council finds and determines that EiR 82-21 a9 previously certified and approved, including the finding of overriding considerations, is adequate for this project. SgCtion : The City Council finds and determines, based upon the testimony and information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant"by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelopment Plan, but that such lesser consideration is necessary to secure the commitment of Participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues, and providing for high -quality development activities to stimulate the economic enhancement of the Project Area in accordance with the OPA. The City Council finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. Section 4: The City Council approves the Amendment in the form of Attachment "A" and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the OPA as now amended, PASSED, APPROVED, and ADOPTED this day o£ , 1991 by the following vote: AXES: NOES: ABSENT: ABSTAIN: 09/14/92 7793u/2460/009 -2- RESOLUTION MO. RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING A FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") and Abdelmuti Development Company (the "Participant") entered into a certain Owner Participation Agreement, dated as of May 281 1991 (the "OPA") for the acquisition and imposition of certain portions of the Project Area for the purpose of constructing a office/commercial use building and other public improvements; and WHEREAS, the Participant and the Agency are proceeding to perform their respective obligations pursuant to the OPA; and WHEREAS, the Participant and the Agency desire to approve a First Amendment to the OPA (in the form attached hereto as Attachment "A" and incorporated herein) which Constitutes the "Amendment" to supplement the terms of the OPA; and WHEREAS, the Agency and the City Council of the City of Huntington Beach (the "City Council") have conducted a duly noticed joint public hearing regarding the proposed acquisition and disposition of real property in accordance with California Health and Safety Code Sections 33431 and 33433; and WHEREAS, the staff report pertaining to the_ Amendment, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health and safety Code, contains a detailed description of the provisions of the Amendment; NOW, THEREFORE, the Agency does resolve as follows; Section is The Agency finds and determines that EIR 82-�2, Certified and approved, including the finding of overriding considerations by the City Council in its position as the lead agency, is adequate for this project. CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH By DATED; ATTEST: City Clerk APPROVED AS TO LEGAL CONTENT AND FORM: City Attorney 09/14/91 7793u/2460/009 -3- Section 22: The Agency finds and determines, based upon the testimony End information presented during the public hearing with respect to the Amendment, that the consideration for the real property to be transferred to the Participant by deed is less than the fair market value thereof determined at the highest use permitted under the Redevelopment Plan, but that such lesser consideration is necessary to secure the commitment of participant to execute the Amendment, which Amendment will significantly benefit the Agency and the community by alleviating blighting conditions, generating revenues, and providing for high -quality development activities to stimulate the economic enhancement of the project Area in accordance with the OPA. Eection_3: The Wncy finds and determines that: (a) the approval of the Amendment will promote the objectives of the Redevelopment Plan and promote the health, safety and welfare of the citizens of the City of Huntington Beach; and (b) the Amendment is consistent with the orderly development of the improvements to be provided by the Participant pursuant to the OPA. section 4: The Agency approves the Amendment in the form of Attachment "A" and authorizes and directs the Chairman and Secretary of the Agency to execute that Amendment and such other documents as may be determined by the City Attorney to be necessary or appropriate to effectuate the OPA as now amended. PASSED, APPROVED, and ADOPTED this day of _, 1991 by the following vote: AYES: NOES: ABSENT: ABSTAIN: 7792u/2460/009 -2- REDEVELOPMENT AGENCY OF THE CITY OF THE CITY OF HUNTINGTON BEACH By Chairman DATED: ATTEST: ` Secretary APPROVED AS TO LEGAL CONTENT AND FORM: City Attorney 7792u/2960/009 -3- ld is-1991 15:05 213 822 5204 KEYSER MARSTON ASSOC. P.02 #VfOMY REPORT PURSUANT TO E$CTIOR 33433 of the Cu17ORNIA COXHUXITY AZDEVELOUIXT LAW on a OWNZR PARTICIPATION AGRNZXZ [T by and between the REDZVZLVPXZNT AGZNCY 07 TIN CITY 07 HU TINGTON DIACS and AHDELMUTI DRVELOPXZNT COMPANY This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the california Health and safety code. This report sets forth certain details of the proposed Owner Participation Agreement ("Agreement") between the Agency and Abdalmuti Development Company ("Participant") for the development of approximately 18,000 square feet of commercial space and approximately 30,000 square feet of office space. The proposed commercial development is located at the corner of Main street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition coats, infrastructure costs, public parking costa, business interruption costs, subsidized rent costs, plus the expected interest on loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; 1 -. --- . --- r. 3. The purchase price to be paid by the Participant for the in- terests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. A. SALIEbT POINTS or THE AGRZZXM ��� - 0� X-TT-T. Mf. 44916%;; Under the proposed Agreement, the Participant agrees to con- struct ground floor retail space or approximately 18,000 square toot, and second, third and fourth floor office space totaling approximately 30,000 square feet. The Participant will not be required to provide any parking on site. The four-story development will comply with the Agencyfs deoign standards, and the Agency may at their discretion determine to change the use of the second, third and fourth stories to either a residential use at some point in the future. The Agency also retains the right to convert to restaurant should the Participant sell the property, except if sold within the immediate family. The Participant must contribute $1 million to the construction of the improvements. The Participant•will borrow the remain- ing funds required (up to a maximum of $3.5 million) to com- plete construction from the Agency on the basis of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property for the con- struction of a "Public Plaza" and for the widening of Main Street. The Participant will also provide all required set- backs. 2 -- -�..� _� ..... tea.. UCC JCv'i--r��YSCf( IH 7 V N.7�VU. Y• Y PJ�TFI • • ' 4441 The Agency is responsible for And shall commit the following to the project; Re convey approximately 75% of the Agency -owned parcel ("Agency Parcel"), or the portion necessary to accom- modate 18,000 square feet of building area on the ground floor of the Project. b. rinance off --site improvement coats estimated at $25o,Q00. c. Provide 121 parking spaces to serve the Project. d. provide the developer with a loan at a maximum amount equal to $3.5 million. The Agency loan will be, payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7.01. at Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rental achieved by the office component of the project, with the exception of 50t of the third floor And loot of the fourth floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to insure that a reasonable rental rate is being assessed. f. Compensate the Participant for Legitimate relocation and business interruption costs, including temporary trailers, during the close -down period. Said compensa- tion will not exceed 24 months. 3 D. COST OF AGRZZXrXT To AGENCY The estimated costs of the agreement to the Agency are as fol- lows: Agency Acquisition of Cosney Parcel Off -site Costs Parking Structure - 121 spaces 1 $13,750 Pv of interest gap for agency loan Diffarential rent payment for office Business Interruption and Temporary Trailers 1 Total Costs to Agency (Less) Property Tax Increment Revenues (Less) Capitalized Value of Parking Revenues Not Costs to Agency $ 776,000 (1) 250,000 1,664,000 3630000 (2) 102640000 (3) 11646, 400 (4) r wYFwwwrwi $ 5,963,400 (198,000) (4301000) rr-rwr�w $ 5,335,400 (1) 75% of Gooney parcel, which was acquired for $1,035,000. (2) Opportunity cost of issuing a 7.0% loam versus earning 6.3% interest on invested funds. (3) For the 15,000 square feet of office on the second and third floors. Based on achievable rent of $1.00 per square foot from KMA market analysis, and defined fair market rent of $1.55 per square foot. (4) Business losses estimated at $65,000 per month for a maximum of 24 months. Three temporary trailers provided at $1,200 per month for a maximum of 24 months. C. SBTIXATED VALVE n? TER IMTEREBTS TO 01 CONVEYED TO TEX VAR- TIOIPANT DITERXXVID AT THS EXORIST URN PERXITTED MMIR TIN INDRVELOPMUT PLAN The Agency will convey the necessary portion of the Agency Parcel to accommodate 18,000 square feet of building area on the ground floor of the project. In return, the Participant will grant to the project a portion of the Remainder Parcel required for future dedication and the widening of Walnut Avenue. The transfer of the Agency Parcel to -the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this agreement, are considered an equal exchange. 4 D. VURCHABE PRICE PXXD BY PhATICIPINT AND REANONO roA DirrxRz cz XX MR XARRET VALUE rOR THE 11GRZST U82 VNDKA THE AZDZVRLOP- XM PUN The Participant is granting an equal amount of land to the projeat as in being received from the Agency. It has been deemed that the Agency and Participant parcels embody similar attributes, and have essentially equivalent market values. The Participants purchase price for the Agency Parcel shall be the sum of one Dollar ($I.00), payable in cash at the close or escrow. The Agency purchase price for the Remainder Parcel shall be the suss of One Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. 5 INVESTORS TIIRIFT 333 City Blvd, West Suite 600 Orange, CA 92668 (714) 937-1222 October 21, 1992 Lessee: Redevelopment Agency of the City of Huntington Beach (Jack's Surfboards) Attention: Jim Silva Re: Robert J. Koury 200 Main Street, Suite 101 Huntington Beach, CA Dear Mr. Silva: The above named lessor has applied for real estate financing with Investors Thrift. Enclosed you will find an Estoppel Certificate. Please fill out completely, initial where indicated, sign in front of a notary public, attach acknowledgement, and return the enclosed original Estoppel Certificate and return to Investors Thrift. If you have any questions or need further clarification regarding this matter, please do not hesitate to contact me at (714) 937-1222 ext. 410. Thank you for your prompt attention to this matter. Sincerely, mcliz� Marian Susskind Major Loan Department /attachment ESTOPPEL CERTIFICATE RE: Redevelopment Agency of the City of Huntington Beach (Jack's Surfboards) .200 Main Street, Suite 101 . Huntington Beach, California (Leased Premises) Robert J. Koury (Borrower) TO: INVESTORS THRIFT (Lender) ATTN: Marian Susskind Sir/Madam: RECITALS 1. Borrower is either Lessor or the successor -in -interest to Lessor and has obtained or is about to obtain a loan (the "Loan") from Lender. 2. The Loan is or will be secured by, among other things, the Lease Agreement (the "Lease") referenced herein. 3. The undersigned (hereinafter called "Lessee") is the Lessee of the above -referenced property under the following lease agreement: 3.1 Date of Lease: % O ' l- 3.2 Name of Original Lessor: CEDE ✓E LOP/ ENT �C.fiC a �— Gc C� ii,Uc�fD� t�f= 3.3 Name of Original Lessee: ,4 13o /) �/ 3.4 Expiration date of existing Term: 9 16 3.5 Number and length of options: (if none, write none) 3.6 Description of All Assignments, Amendments, Addendums, Modifications, Extensions and/or Options: (if none, write none) /l/c W 4. Said lease agreement, together with the assignments, amendments, addendums, modifications, extensions and/or options described above (collectively called the "Lease") constitute the entire agreement between Lessee and Lessor with respect to the Leased Premises. 4.1 There are no other lease provisions, options, rights, or contracts existing with respect to the .Leased Premises between Lessor and Lessee except as set forth above. S. As of this date the Lease is in full force an effect. 5.1 Lessee is the actual occupant and is in possession of the Leased_ Premises. "K 'r' J, C_ C T 1 ►-tom p j v r i �1 -[ �� C cG 1 J 12 F a On� JS 5.2 Lessee has not assigned, transferred or hypothecated its' interest under the Lease. 5.3 All construction and installation of tenant improvements required to be performed by or paid by Borrower under the Lease has been completed and the Leased Property has been accepted by Lessee. All expenditures have been made and costs paid that are required of the lessee under the lease. 6. As of this date, no breach exists on the part of Lessee under the Lease. 7. To the best knowledge of Lessee, as of this date, no breach exists on the part of Lessor under the Lease, other than: (if none, write none)._ 1 Acknowledgement State of California, County of Orange. On `� , before me, a notary public of the State of California, personally appeared I.Xx'(� J a P — personally known to me o me ' a�idenee3 to be the Person(s) whose name(-) Were subscribed to the within instrument and acknowledged to me that he thty executed the same in his htir authorized capacity4es3, and that by his heir signatures on the instrument the person{s}, or the entity upon behalf of which the person( acted, executed the instrument. WITNESS my hand and official seal. = Signature OFFICIALSEALMAYMUCF 1 ETCHMN C.C.P. § I I89. 140TACY PUn-LtC - CALIFORNIA DRASCE CCLWrY QDNy WWI SV:res MAY 11, 1993 Iss. . STATE OF CALIFORNIA COUNTY OF 91 On befor me, i J! personally appeared ' c personalty own to me {or-Prev� / subscribed to the within }to be the person whose name their instrument and acknowledged to me th61shelhey executed the same in �s authorized capac44aG*— ! and that by hislherAheir signature on the instrument the perso '' �- ` CWFKA ►L SEAL r person(s) acted, executed the instrument. UHM SUE SURACI COLMY CaVorNa = SS hnd official seal. WTNEan o ORAE II� L* I i�r�ptaa 21. y S9gnat e I/JC�� ��to: (Mis uea for olfidal notanat seaO • -). , I- J-R r► 8. The fixed monthly rent is currently S Do not include expense reimbursement or reimbursement for tenant improvements. 8.1 No rent has been or will be prepaid more than thirty (30) days in advance of its' due date. 8.2 Lessee has no offsets or credits against rentals payable. 8.3 Lessee has no claim against Lessor for any security or other deposits other than the sum of S . which was paid pursuant to the terms of the Lease. 9. The term "Hazardous Substance' or condition thereof as used in this agreement shall mean any produce, substance, chemical, material or waste whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, spill, transportation, release or effect, either by itself or in combination with other materials expected to be on the Premises, is either (i) potentially injurious to the public health, safety or welfare, the environment or the Premises (ii) regulated or monitored by any governmental authority, or (iii) a basis for liability of Lessor to any governmental agency or third party under any applicable stature or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum, gasofine, crude oil or any products, by-products or fractions thereof. - Hazardous Substance as used in this agreement shall also include the meaning as defined in California Health and Safety Cole Section 25280 et seq_ and of "waste' as defined in California Water Code Section r 13050 as such laws are effective )anuary 1, 1991 as subsequently amended. 9.1 Lessee has not engaged in and shall not engage in any activity in, on or about the Leased Property which constitutes or causes a Hazardous Substance Condition and Lessee agrees that engaging in any such activity shall cause a default of the Lease and Lessee's liability for damages, including characterization and remediation caused thereby. 9.2 Lessee does not know of nor has any reasonable cause to believe that a Hazardous Substance, or a condition involving or resulting from the same, has come to be located in, or, under or about the Leased Property. Lessee shall immediately give Lessor and Lender written notice of such fact and or any documents received from any governmental authority or other private party concerning any Hazardous Substance or condition thereof. 9.3 Lessor and Lender shall have the right to enter the Leased Property at any time, in the case of emergency, and otherwise at reasonable times, for the purpose of investigating, inspecting abating and remediating environmental conditions regarding potential or actual Hazardous Substances and to employ experts or consultants in connection therewith and Lessee shall cooperate therewith. Ile costs and expenses due of any of the above actions shall be paid by the party requesting same, except that Lessee shall be responsible for any such costs and expenses due to L&ssee's Default or Breach of this Lease, violation of Law, or a Hazardous Substance condition, caused or materially contributed to by Lessee, which is found to exist or be imminent. 10: Except as may be specifically set forth in the Lease, Lessee does not have any right to renew or extend the term �1 of the Lease nor any option or preferential right to purchase all or any part of the Leased Premises or all or any part of the building and premises of which the Leased Premises are a part, nor any right, title or interest with respect to the Leased Premises other than as Lessee under the Lease. I1. Lessee acknowledges that the Lease has been or will be assigned to Lender and agrees that no assignment, amendment, addendum, modification, extension, option, adjustment, revision, or cancellation of the lease shall be effective unless Lender consents to the same in advance, in writing. • 12. Lessee understands that Lender may make a loan secured by the Leased Premises and that if it does so. its' action will be in material reliance on this certificate. ATTACH ACIMWLEDCEMENT Dated: , 19 c", Authorized Signature 'Artir'nma n Title or Position The undersigned Lessor under the above -described Lease hereby certifies that the information contained in the foregoing certificate is true and correct and that the party to whom this statement is addressed may rely upon said information. Dated: S ,19 u on Title or Position MPROVED AS TO Z`ORIfr � 0-7 GAIL 1=I•s.021, City Attorney I!J:i i7evuty.. City Attorttoy r HWO CITY OFHUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION ON BEACH To Barbara Kaiser From Connie Brockway Economic Development Director City Clerk RECEIVED DEPT. OF PUBLIC WORKS SEP 21992 WATER DIVISION "UNJINGSON BEACH, CA Subject ABDFLMUTI OWNER PARTICIPATION AGREEMENT Date September 1, 1992 We are in the process of doing the follow up for the agenda item regarding Abdelmuti Owner Participation Agreement. We are unable to execute the agreements until you have provided the necessary insurance. Also please inform us as -to which of the agreements should be sent to the assessor's office for 7 F,...�. possessory interest. Thanks. CB:bt } r4t s EP 031992 - �Ep �°N0M c arl, OF 7 1G:4J NR71(NA411)L iN5 „i POLICY NUMBER: 73 PR 001078 5007 NAMED INSURED: .TACK'S SURF & SVORT THIS ENDORSEMENT CHANGES THE POLICY. PLEASE RI-,1D IT CAREFULLY. ADDITIONAL INSURED —OWNERS, LESSEES OR CONTRACTORS (FORM B) L-: This endorsement modifies insurance provided under the foll.mIng: COAIAIERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: CITY OF HUNTINGTON BEACH, REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, ITS OFFICERS, AGENTS ANT EMPLOYEES 2000 MAIN STREET HU:ITIINGTON BEACH, CA 9264$ WHO IS AN INSURED (Section III is amended to Include as an insured the Person or Organiza• tion in the Schedule, but this insurance with respect to such Person or Organization applies only to the extent that such. Person or Organizawon is held liable for your acts or omissions arising out of and in the course of operations performed for such Person or Organization by you or your sub. contractor. PRIMARY INSURANCE COVERAGE PROVIDED TO THE ADDITIONAL INSURED UNDER THIS ENDORSEMENT IS PRIMARY, BUT ONLY WITH RESPECT TO ACTS OR ONNISSXONS OF THE NA.'ED INSURED. ANY OTHER INSURANCE MAINTAINED BY THE ADDITIONAL INSURED AND IS DEEMM TO BE EXCESS AND NON-CONTRIBUTORY WITH THE INSURED PROVIDED HEREWITH. THIS ENDORSEMENT EXPIRES ON 02/08/93 Cas. 4190 FaxTransmittal Memo 7672 ho"°w_`°'./�-9,�` FromTo �p�/ �� .:_�fao�x Fos -3 -7wwvurr��C tr►b`8� ' twy�e, Fix S88-OGyy ~Y"W»• 9s F-!Z 9l � C�. ❑Des7ur ❑Nr,�. �Ca'ape.:P >•x.tJLt Lo ✓T.�.t� �.Ti� ��j� o.�,,,,C, .e�� Ge it,t,4.tc.e.. � d is n 0"_ awt. c.�•►� Cp.rer.�_o �4. s .0 + CA4 iroaucar H411�� CO' A MATTERPIN�UIAIIGAINWO CALT AaD CONFERS NO RlGBTS IIPON THE CERTIFICATE HOLUX. THIS CERTIFICATE DOES 1101 AMEND, Ctzamplin Insttrance Sz1v. Inc. LxTEW M ALTER THE COyEriA6C AFFOR^£0 BY THE PCtIClES BitOW. Laguia ri l a,�CA 265 3 COMPANIES "FORDING COVERAGES (714) 951-1291 Coffoa� Letter A NATIOINIDE INSURANCE COMPANY Company Insured JACCSO1 Letter B JACK'SURF S SPORT S Coroany FARZ t ABT)=?ATTAH Letter C. DEVEW11HENT CO. V21DECc?EUTI 1A ?FAIN STREET coma MY UUh'TINGTON BEACH, CA 92648 Letter D EiitnarE IRIS IS 10 CERTIFY THAT THE POLICI I L L i mAvF ftEh ISSuITEO I TML !a ?L0 MAP'.E7 Mbm FOR 1! PtkICT PER- IOD INDICATED. NOTVITVSTAMING ANY REOUIRRENTS. TERM CR CONDITION OF kv CONTRACT OR OTHER OOCMENT WITH RESPECT TO VHICH INIS CERTIFICATE PAT BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDEO BY THE POLICIES DESCRIBED HEREIN 1S SUUCT TO ALL TH_ TEM. EXCLUSION AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Cn TYPE OF 1XStMCE POLICY IUR'.dER POLICY EFF DATE POLICY EXP DATE LIMITS LTA (--Iddlyy) (Wdd/yy) GENERAL LIABILITY General Aggregate Si,000,000 Prod-Caxp/Ops An s1,000,000 A [J} Camxrcial General tiab. 73PIt001078-5007 02/0$/92 02/08/93 Pars A Adv Injury $1,000,000 [[ ]Claus Made (d)Cccur Each Occurrence $1,0QQQQ�p¢QQQQ Orrer's i Contractors Fire rA=ge S 90,000 Protective (Any one fire) MOW Payments $ 5,000 (Any one pers3n) AUTOIiGBILE LIABILITY Caabined $ 500,000 A Any Auto 73BA001078-0001 02/08/92 02/08/93 single Limit Bodily Injury 1 lr All Owned Autos Sp?ROvrD TO FOf'.11: Scheduled Autos li Mired Autos IaAILTi1TTT: Cltr Atto= OF (Per Person) Bodily Injury $ 4, Non - Owned Autos 17: Doput sty Attorne r Garage Liability q • Y�yf (Per Accident) Damage S I ^_^'-'r~• r>.+rProperty A EXCESS LIABILITY [tif] uareIU Form 73CU001078-000 02/08/92 02/08/93 Each Occwrence S 2,000,000 AlVegite s 2 000 000 I [ ] Other Than ftrella Fora I i ' UORRER'S CWEMTIO.'C 1 �/j Statutory A AND 73RC001078-0010 02/08/92 02/08/93 Each ACeidert S , EMPLOYER'S LIABILITY Oisease.Pol Limit S 5 IS 01sease-Each EMI 1Q0;000 OTHEx i 3escription Of Operations/LouticnsNe..1cTei/Spaclal Items ioula any of the above described poiscies be cancelled before the ; OF HUNTINGTON BEACH expiration date thereof, the Issuing cwr&ny will SITY 000 MAIN STREFT ss1) 30 eAys rr itten notice to V.e certificate holder vase¢ to the tlutrllel7.6U's0 it wrc AZN: CW AER Authorised Representative r CITY OF HUNTINGTON BEACH le INTER -DEPARTMENT COMMUNICATION HUNTTNGTON SUCH TO: Connie Brockway, City Clerk FROM: Keith B. Bohr, Assistant Project Manage . SUBJECT: Robert Koury Lease DATE: September 29, 1992 Connie, please review the attached letter from Jerry Bame, dated September 15,1992, requesting the city to fully execute the attached two leases. The reason for this request is he believes it is necessary for complete protection of his client, Robert Koury, that they have originally executed leases as opposed to certified copies. Please process for the appropriate signatures and return to me for transmittal to Mr. Bame. If you have any questions please call me at ext. 1529. Thank you for your assistance. KBB jar 71j SE E 43S �llY7'-::1r3`: H'.iIJkllHfiK �C 1.1i^• N-1313 A113 (13A�373a 1 JEROME M. BAME ATTORNEY AT LAW 7006E SLATER AVENUE. SUITE 250 FOUNTAIN VALLEY, CALI1'0RNIA 9270ak TELEPHONE 1764I 960-4329 FAIL 47,41 96S-7ale September 25, 1992 Mr. Keith B. Bohr, Redevelopment Specialist Ms. Barbara A. Kaiser, Deputy City Administrator Housing 81 Redevelopment CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Re: Lease with Robert J. Koury Suite 101 at The Main Promenade 200 Main Street, Huntington Beach Dear Keith and Barbara: In an attempt to get Mr. Koury a fully -executed duplicate original of the recently negotiated Lease between Robert J. Koury (as Landlord) and the Huntington Beach Redevelopment Agency (as Tenant), we are enclosing with this letter two (2) complete Leases, both of which are signed by Mr. Koury. After the appropriate City/Agency representatives have properly executed this Lease, please return one fully -executed duplicate original copy to this office for Mr. Koury. If you have any questions, please call me. JMB:mgw Enclosures.2 c: Mr. Robert J. Koury Very truly yours, 94e';z ' ;/,/ JEROME M. BAME 1001, FOB HuNm4clom .EACH CITY OF HUNTINGTON ,BEACH INTER -DEPARTMENT COMMUNICATION To Barbara Kaiser From Economic Development Director Subject ABDEtMUTI OWNER PARTICIPATION AGREEMENT Date Connie Brockway City Clerk September 1, 1992 We are in the process of doing the follow up for the agenda item regarding Abdelmuti Owner Participation Agreement. We are unable to execute the agreements until you have provided the necessary insurance. Also please inform us as -to which of the agreements should be sent to the assessor's office for possessory interest. Thanks. CB:bt "STATE OF CAUFORNIA County of Orange im I am a Citizen of the United States and a resident of the County aforesaid; 1 am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and pubrshed in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: July 30, 1992 August 6, 1992 I declare, under penalty of perjury, that the foregoing is true and correct. Executed an August 6 ,199 . at Costa Mesa, California Signature f PUBLIC NOTICE NOTICE OF PUBLIC HEARING CITY COUNCIL/ REDEVELOPMENT AGENCY ABDELMUTI DEVELOPMENT COMPANY OWNER PARTICIPATION AGREEMENT MAIN -PIER REDEVELOPMENT PROJECT AREA, On Monday, August 17, 1992 at 7:00 PM, or as'', soon thereafter as the mat- ter may be heard, at they, City Council Chambers lo- cated at 2000. Main Street, Huntington Beach, Califor-i nia, the City Council of the City of Huntington Beach, and the Redevelopment{ Agency of the City of Hun- tington Beach will hold a joint hearing to consider) approval of a second Amended Owner Participa- tion Agreement (the Agree- ment) by and among the Redevelopment Agency of the City of Huntington Beach (the Agency), Abdel- muti Development Com- pany. The proposed sec- ond AmendedAgreementl and a staff report including a summary of the Agree-i ment is available for publicl inspection at the Office of the City Clerk, 2000 Main, Street, Huntington Beach, California. Should you de-, sire further information concerning this matter, calls Keith Bohr at (714) 374-i 1529. CITY CLERK/ AGENCY, City Council/ City of Huntington Beach, Redevelopment Agency, City of Hun- tington Beach. Published Huntington Beach Independent July 30, August 6, 1992 PROOF OF PUBLICATION