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HomeMy WebLinkAboutHUNTINGTON PACIFICA DEVELOPMENT GROUP MAIN-PIER SUBAREA - STANLEY M. BLOOM - PIERSIDE VILLAGE PROJECT - 1986-01-23V SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a LEASE AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and STANLEY M. BLOOM, AN INDIVIDUAL I. INTRODUCTION The California Health and Safety Code, Section 33433, provides that if a redevelopment agency wishes to sell or lease property to which it holds title and if that property was acquired in whole or in part with tax increment funds, the agency must first secure ap- proval of the proposed sale or lease agreement from its local legislative body (City Council) after a public hearing. A copy of the proposed sale or lease agreement and a summary report that describes and contains specific financing elements of the proposed transaction shall be available for public inspection prior to the public hearing. As contained in the Code, the following informa- tion shall be included in the summary report: 1. The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency, plus the expected interest on any loans or bonds to finance the agreements; 2. The estimated value of the interest to be conveyed or leased, determined at the highest uses permitted under the plan; and 3. The purchase price or sum of the lease payments which the lessee will be required to make during the term of the lease. If the sale pricy: or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consis- tent with the redevelopment plan, then the agency shall provide as part of the summary an explanation of the reasons for the difference. This report outlines the salient parts of the Pierside Lease Agree- ment (the "Agreement") which provides for the leasing of property owned by the Redevelopment Agency of the City of Huntington Beach ("Agency") to Stanley M. Bloom ("Developer") for the purpose of constructing a restaurant development. is T This report is based upon information contained in a proposed Lease Agreement and is organized into the following four sections: 1. Description of the Proposed -Agreement - This section in- cludes a description of the site and interests to be leased, the proposed development and the major respon- sibilities of the Agency and the Developer. 2. Cost of the Agreement to the ASency - This section out- lines the cost of the Agreement to the Agency. In addi- tion, it discusses the ground lease payments to be paid by the Developer to the Agency, provides a projection of tax increment revenues resulting from the new development and sets forth the net cost of the Agreement to the Agency. The net cost to the Agency equals Agency expen- ditures minus the present value of the lease payments and the value of the tax increment generated by the new development, plus any other resources pledged to the pay- ment of related expenses. 3. Estimated Value of the interests to be Leased - This section summarizes the Agency appraisal of the value of the parcel to be leased to the Developer. 4. Purchase Price and Reasons Therefore - This section describes the purchase price, which is equal to the present value of the anticipated lease payments, to be paid by the Developer to the Agency. It also contains a comparison of the purchase price (lease value) and the fair market value at the highest and best use consistent with the Downtown Specific Plan 10 for the interests con- veyed. 11. DESCRIPTION OF THE PROPOSED AGREEMENT A. Site and Interest to be Lease The site consists of 3.5 acres of land immediately south of the Huntington Beach Pier, on the ocean side of the Pacific Coast High- way. Currently, the site is improved with a 17,800 square foot commercial structure with miscellaneous retail on the first level, "Maxwell's" Restaurant on the second level, a freestanding struc- ture containing "Dwight's" hamburger stand, and a public parking lot. B. The Proposed Develonment The proposed development for the site is a 48,522 square foot res- taurant complex. The restaurants will be built on an elevated deck with up to 611 structured parking spaces provided. Public access to the beach will be provided by two central staircases leading to the beach level. C. Agency Responsibilities The Agency responsibilities can be summarized as follows: 1. Lease the subject site from the City for a period of 55 years. 2. Pay a maximum of $1.0 million for relocation, site work, and remediation expenses. 3. Provide the site in a reasonable time period free and clear of all recorded encumbrances, assessments, leases/ subleases, possesory rights, franchises, licenses and taxes, except as set forth in the Agreement. 4. Reimburse to the developer the total construction costs of up to 250 parking spaces being built to replace the existing public parking. 5. Finance the difference in construction costs between the structured parking and surface parking for the remaining 361 parking spaces. The Agency will amortize the cost differential in 30 annual payments. D. Dgyg oper's Respond_ ,hies The developer's responsibilities are as follows: 1. Ground lease the site from the Agency for an original term of 55 years. 2. Finance all off -site costs, except as specifically set forth in the Agreement. 3. Construct a 48,522 square foot restaurant complex on a raised deck at the quality level implied in the eleva- tions and developer pro forma. 4. Develop a maximum of 611 on -•site structured parking spaces. 5. In recognition of the revenue generated by the public parking spaces, provide the Agency with a $1.25 million credit against the cost of constructing the public park- ing spaces. 6. Provide public beach access from the project. III. COST OF THE AGREEMENT TO THE AGENCY The total cost of the Lease Agreement to the Agency, and the net costs of the project after consideration of project revenues are 3 r presented herein. Both the total and net costs of the Lease Agree- ment are presented in terms of absolute dollar amounts generated over the 55-year lease and in terms of the present value (PV) of expenditures and receipts resulting from implementation of the Lease Agreement. The PV of expenditures and receipts has been com- puted using an assumed discount rate of 10%. The difference be- tween the PV of expenditures and the PV of receipts constitutes the net present value cost of the Lease Agreement to the Agency. This net cost can be either an actual cost (where expenditures exceed receipts) or a net gain (where revenues created by implementation of the Lease Agreement exceed expenditures). A. Total Costs to the Agency Table 1 contains a listing of the Agency's estimated expenditures, by major category, relating to its obligations under the Lease Agreement. Per Table 1, total implementation expenditures by the Agency over the 55 year original term of the lease are estimated at approximately $101.1 million, which equates to $14.25 million in present value terms. The basis of this estimate is presented below. 1. Site Acquisition Costs The Agency must lease the subject parcel from the City of Huntington Beach at a lease rate based on the current fair market value at the highest and best use allowed by the zoning codes and general plan of the City, as well as the Downtown Specific Plan District 10. The value of this property is estimated at $5.29 million. The Agency will make annual payments to the City until such time as the $5.29 million plus interest accrued at 10% is received. 2. Site Preparation/Relocation Expense In order to prepare the site for the proposed develop- ment, the existing tenants must be relocated at the ex- pense of the Agency, there are potential legal expenses associated with these transactions, the Agency is respon- sible for $50,000 of toxic clean-up costs and the Agency must ensure adequate utilities are available to the site. These costs have been capped in the Lease Agreement at $1.0 million. 3. Parking Costs The Agency parking costs consist of two components: a. An up -front payment of $4.0 million to cover the to- tal construction cost for the 250 replacement public parking spaces. 4 �4wj b. Thirty annual payments of $435,500 to amortize the difference in construction costs between structured parking and surface parking for the 361 spaces serv- ing the private development. The rationale for this payment is that in a typical ground lease where the lessor is receiving 2.00% to 3.75% of gross sales as rent, the lessor has provided enough land to allow for the building improvements and surface parking. In the proposed Lease Agreement the Agency has not provided enough land to develop a sufficient amount of surface parking and, thus, must make up the dif- ference in parking costs to justify the lease terms. These parking payments total nearly $13.07 million, with a present value of $3.96 million. B. Age0cy Revenues Table 1 also shows the nominal and present values of the Agency revenues created as a result of implementation of the lease. 1. Ground Lease Payments The Pierside Lease Agreement is structured so that the amount of ground rent paid is directly related to the projectes performance. The ground rent schedule is as follows: Gross Restaurant Sales Percent of Total Sales (In Million of Dollars) Applied to Ground Lease Less than $30 2.00% Less than $40 2.50% Less than $50 3.00% Less than $65 3.50% $65 and above 3.75% During the first five years, the maximum applicable per- centage rent is 2.00%. Thereafter, in no event can the percentage of gross sales applied to the ground lease payment decrease from year to year. Over the original term, Keyser Marston Associates, Inc. has estimated that the lease will generate nearly $139 million in revenues, with a present value of $8.00 million when discounted at 10% annually. In addition, the property will revert to the Agency at the termination of the lease. The revers- ionary value is projected at over $123 million. This equates to $653,000 in present value terms. 2. Guaranteed Parking Payment Currently, the City is receiving net parking revenues 5 after expenses of $110,000 from the site annually. As compensation for foregoing this annual revenue, the developer will provide the Agency with a $1.25 million credit against the cost of constructing the public park- ing spaces. 3. Tax Increment Revenue It is currently estimated that the proposed project will have an assessed value of $14.28 million upon completion. When this is reduced by the current assessed value of $1.06 million, the incremental value is approximately $13.22 million. Assuming a first year tax rate of 1.077% and set -asides equal to 20%, this results in property tax increment of +$114,000 in the first full year of operation. Assuming the assessed value increases at 2% annually, and the project area ends in 2018, the project should produce tax increment revenue of approximately $3.88 million over the remaining life of the project area. The present value of the tax increments generated by the project is $1.09 million. A summary of anticipated revenues is shown in Table 1. C. Comparison of Expenditures_ and Revenues A comparison of the present value of the expenditures and revenues discussed above results in the following tabulation: Total Agency Revenues Less: Agency Costs Net Gain (loss) The analysis above indicates that the Lease, the Agency can expect period of almost $170 million in value basis, project costs exceed $3.26 million. Total Dollars Over a 55-year Lease -------------- $267,838,000 (101,103,000) $166,735,000 Present Value Over a 55-year Lease ----------- $20,994,000 (14,253,000) ($3,259,000) as a result of implementation of to realize a gain over the lease nominal dollars. on a present project revenues by approximately IV. ESTIMATED VALUE OF INTEREST TO BE LEASED The value of the highest and best Plan of the City, 10. Under these estimated that th e 6 r k"01 Agency, less the present value of the amortized parking costs, is the estimated value of the site. The amortized parking payments are subtracted to reflect the extraordinary site costs that must be borne by the lessor in order to make the site developable at the proposed intensity. The present value of the ground lease and parking revenues has been estimated to be $9.25 million and the present value of the amortized parking costs is $3.96 million, therefore, the estimated value of the site is $5.29 million. V. LEASE PAYMENTS AND REASONS THEREFOR Based upon an analysis of the ground lease payments to be received by the Agency conducted by Keyser Marston Associates, the present value of the developer's ground lease payments is $5.29 million. This amount is estimated to be the market value of the property and, thus, the Agency is receiving the fair market value for the site. 14066.000 190498.HTB 7 wl TABLE 1 ESTIMATED NET AGENCY COSTS PIERSIDE RESTAURANT COMPLEX LEASE AGREEMENT HUNTINGTON BEACH, CALIFORNIA TOTAL PRESENT DOLLARS VALUE AGENCY COSTS SITE PREPARATION S1,000,000 S1,000,000 PARKING COSTS UPFRONT COSTS (REPLACEMENT SPACES) S4,000,000 S'.,000,000 AMCRT12ED COSTS $13,065,000 $3,959,000 LAND PAYMENT TO CITY S83,038,000 $5,294,000 TOTAL AGENCY COSTS $101,103,000 S14,253,000 AGENCY REVENUES GROUND LEASE PAYMENTS $139,227,000 $8,003,000 REVERSIONARY VALUE OF LAND $123,479,000 S653,000 UPFRCNT PARKING PAYMENT $1.250.000 $1,250.000 TAX INCREMENT $3,882,000 $1,088,000 TOTAL AGENCY REVENUE S267,838,000 S10,994,000 saaasaaassaaa sssssssassaa NET AGENCY REVENUES / (COSTS) $166,735,000 (53,259,000) J J CITY OF HUNTINGTON BEACH CA# 87-104 ACOUNCIL - ADMINISTRATOR COMMUNICATION HUNTINGTON BEACH To Honorable Mayor and From Charles W. Thompso I City Council Members City Administrator Subject PIERSIDE VILLAGE PROJECT — Date August 21, 1987 STATUS REPORT S',d y4 7 At the City Council/Agency meeting of August 17, 1987, discussion occured regarding the status of Pierside Village. This matter was scheduled for August 24, 1987, review by the City Council/Agency to clarify the status of Pierside Village in terms of approved and pending entitlements as well as site design. This report is intended to provide summary background information. In order to place the current project status in proper perspective, a review of the downtown revitalization effort would be appropriate. The city began to formally recognize the need for downtown revitalization and redevelopment in the late 1950s. In 1958, they hired a firm of Hahn Wise and Barber to prepare a parking plan. This study was followed by a more comprehensive look at the downtown area by the Urban Land Institute in 1965. In the late 1970s, the Top of the Pier plan was proposed and was followed in 1975, by the VTN plan. Although these plans proposed various uses and intensities in the downtown area none of them were carried through to implementation. In 1980, the downtown improvement plan, calling for minor cosmetic alterations to the Main Street street scape was implemented and achieved limited success. That project was a culmination of twenty years of downtown redevelopment revitalization efforts. In the 1980s, the city began its Local Coastal Planning process. The Coastal Element was adopted in January, 1981, this was followed by the formation of the M—P Redevelopment Survey Area, and then the adoption of the Main —Pier Redevelopment Plan, and Plan amendments in September, 1982, and 1983, respectively. In October of 1983, the city adopted the Downtown Specific Plan as a means of implementing the city's Local Coastal Program within the Main —Pier Redevelopment Project Area. The Downtown Specific Plan was certified by the California Coastal Commission in March of 1985. "The purpose of the Downtown Specific Plan is to encourage the revitalization of this important area of Huntington Beach. The Plan promotes a mix of commercial, residential, and recreational uses which will be able to take advantage of the area's proximity to the ocean. Many sections of the downtown project a negative image of Huntington Beach. The effect of these existing conditions is to discourage new investments, which in turn, perpetuates the unsightly and unproductive environment. The principal goal of the Downtown Specific Plan is to change the overall negative image which has evolved through the years, and establish a framework for the physical improvements, both public and private, which will create an attractive, unique, vibrant, and viable community that will make people want to live, work, and play in Huntington Beach." . ,�F • �"� fir' As a means to implement the concept development of the Downtown Specific Plan, the Redevelopment Agency solicited Request for Proposals in the Main —Pier Redevelopment Project Area. The Agency received a number of responses to their request, and selected Huntington Pacifica Development Group as the developer for the first project in the downtown area. On August 20, 1984, Huntington Pacifica Development Group entered Into a Planning and Negotiating Agreement fcr the master planning of the area and development of selected portions . Over the course of approximately one year, the project concept and scope evolved into a development proposal. On August 19, 1985, the Agency authorized the execution of a Disposition and Development Agreement for the development of two distinct projects. A first quality hotel with a minimum of 300 rooms on the inland side of Pacific Coast Highway, south of Main Street, and a Pierside Village specialty retail project with a minimum of 75,000 sq.ft., including a parking structure with not less than 500 spaces. Through the negotiation of this agreement, it became apparent that the original project scope would need to be modified. One of the proposed modifications was to allow the project to be constructed in phases, allowing the specialty commercial (Pierside) to proceed ahead of the hotel project development. On August 12, 1986, the Agency gave conceptual approval to the modified project design and implementation phasing. The next step was to formally file for a Conditional Use Permit and Coastal Development Permit. Following public hearings on these matters, the Planning Commission approved project entitlements on September 16, 1986. Their action was subsequently appealed to the City Council and they voted to uphold the Planning Commission's action of September 16. The plan, approved by both legislative bodies, called for a project of 76,000 sq.ft. of new specialty retail, in conjunction with an existing 11,500 sq.ft. (Maxwells Restaurant), related support facilities, and 696 parking spaces. The plan was approved with 41 conditions of approval, including 13 recommended site plan changes. This approval was then appealed to the Coastal Commission and on December 10, 1986, they upheld the city's actions. The Coastal Commission did recommend amending two of the conditions of approval, one of which stated that the plan shall assure that prior to the issuance of any building permits all parking requirements for Pierside Village be met, and that the hours of operation for the parking structure are consistent with the existing beach parking lot hours. The second condition stated that no portion of the proposed development shall extend beyond district 10 boundaries. In order to comply with the various conditions of approval, the developer and his architects worked with city staff in modifying the plan. The amended site plan was presented to the City Council on June 15, 1987, for presentation and review, and was approved. This plan addressed each of the thirteen site plan amendment areas identified In the conditions of approval. This action was followed by a formal review of developer submittals in response to thirteen other conditions of approval on July 20. 1987. The submittals were approved as presented with additional information being requested on the following six conditions: onsite circulation plan, traffic impact analysis, parking management plan, Covenants, Conditions, and Restrictions for the Village, and maintenance agreements for onsite, public, and private areas. As the Pierside Village plans evolve through the final design and development phases, any proposed modifications will be brought back to the Agency for review and authorization before the issuance of any building permits. This will assure the Agency and the community that all of the issues identified in the public hearings including adequate parking, view corridors, building heights are in compliance. In addition to local reviews and approval, the Coastal Commission may determine that the proposed Pierside plan modifications are significant enough to warrant formal Commission review. It is important to note that the Pierside Village project is a stand alone proposal and it is proposed for the south side of the pier. All development proposed for the north side of the pier is part of the Bolsa Chica State Beach master plan, presently being prepared by city staff and Barrett Construction. The city has proposed to construct a parking structure on the north side of the pier, and this parking should not be construed as required parking for the south side improvements. The south side project would stand entirely on its own in terms of required parking. The north side parking structure would provide replacement beach parking as well as additional beach parking. The Coastal Commission approved of this concept on December 8, 1996, when they approved the Pierside Village on appeal. Although the south side parking structure could be constructed with some difficulty, separate from the north side parking structure, the staff and developer feel that is is desirable to construct the two structures concurrently as one structure. This will provide for optimum vehicular circulation patterns in the structure, will be less costly, less disruptive to the beach area, and will provide replacement parking immediately. The city is pursuing a parking structure for the north side of the pier as part of an overall Bolsa Chica State Beach master plan, therefore, other processing procedures must be accomplished concurrently. Again, these additional procedures in no way involve Pierside Village apart from the fact that the City would like to construct the north side parking structure concurrently with the south side. The City's lease agreement with the State for beach area north of the pier requires that a State Beach General Plan for the area be approved by the State Parks Commission before any improvements can be made. On June 1, 1987, the City Council authorized the selection of Barrett Consulting Group to assist staff in preparation of the General Plan and environmental documents. A public hearing was held before the Planning Commission on August 4, 1987, to solicit public comments on the plan. Staff will request Planning Commission approval by resolution on September 15, 1987, and City Council by resolution on September 28, 1987. State Parks Commission action is scheduled for October 9, 1987. Assuming State Parks Commission approval is granted the only additional entitlement necessary for the parking structure will be a Coastal Development permit and Conditional Use Permit. It must be noted that the Coastal Commission has already granted conceptual approval of the City's Local Coastal Plan and implementing ordinances which featured a parking structure at that location. It is staff's intent to have all of the approvals necessary to construct Pierside Village on the south side of the pier and the parking structure on the north side of the pier, by the end of October, 1987. In order to meet this schedule, the developer for Pierside will have to submit responses to the remaining six conditions of approval within the next eight weeks. The Planning Commission and City Council will also need to agree that the parking structure on the north side of the pier is a desirable component of the State Beach General Plan. Staff and representatives of Bryant L. Morris Development will be available at the City Council/Agency meeting of August 24, 1987, to review further the status of the Pierside Village project and to answer questions the City Council/Agency may have. 3304h _ 4��� •'"' EQUEST F0- REDEVELOPMENT � �ENCY AC Q N &n P13 J? -2 1�� -7/0 V121? 7 Date August 3, 1997 Submitted to: Honorable Chairman and Redevelopment Agency Members � -&--, Charles W. Thompson, City Administrator/Chief ExecutiveAOff!c'Submitted by:Doug LaBelle, Director, Deputy City Administrator/ Prepared by• Community Development DirectoAUTHORIZATION FOR REQUEST FOR QUALIFICATIONOSALS Subject: FOR PIERSIDE PHASE I & II PROJECT CONSTRUCTIONNT CONSULTING 5gRVICE Consistent with Council Policy? X Yes ( j New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: ICJ TAT MENT QF ISSUE: The Agency has authorized negotiations with Bryant L. Morris Development Company for the design and development of the parking structure for Phase II. This will occur in conjunction with the design of Pierside Village and the parking structure for Phase I. The scope, magnitude and complexity of this project will require the services of a consulting firm having the expertise and staff capacity to ensure that construction of the Pierside Village and parking structures on the south and north side of the Pier take place in a coordinated manner; that the interest of the City and Agency is protected; and, that the completion of the Pierside Village and parking for Phase I & 11 development is assured in timely fashion. RECOMMENDATION: Authorize the Department of Community Development to prepare a Request for Qualifications and Proposals (RFQ&P) and seek Frposals from qualified construction management firms to provide construction management service and represent the City/Agency in all project construction related matters for the Pierside development. ANALYSIS: The City/Redevelopment Agency is currently undertaking several projects in the downtown and pierside area. Pierside Village Phase I & 1I is one such project scheduled to break ground shortly. The complexity, importance and joint venture aspect of this project will require the services of a construction management firm agreeable to both the Agency and the developer. The role of the firm would be to protect the interests of the agency and the developer and to coordinate all architectural specifications, plans, related documents and construction activities between the Agency and other entities involved in the construction process. The separate efforts of the Agency, other agencies and the developer must be identified and coordinated in order to ensure that the construction of the project will produce the least amount of disruption to the public and result in a smoothly -run construction effort. The consulting firm would use its expertise during construction to arbitrate problems and expedite construction. By helping anticipate problems and assisting the prime contractor and various sub -contractors, the consulting firm would make certain that scheduled construction milestones are met and that budget commitments are not exceeded. PIo/1185 % j One element of the RFQ&P will be that of developing with Community Development staff a system of control, a critical path analysis, itemization of critical documents and periodic graphical and written reports to ensure that City decision makers and staff are kept appraised of all aspects of the project as it proceeds from conception to completion. Each phase or milestone point of the project will be evaluated for costs versus stage of construction and a written report prepared for City/Agency information. DINSOURCE: Project costs will be estimated as part of the consultant and contractor selection process. Funding for the Agency's portion of the project may be provided by the proceeds of Certificate of Participation Civic Center Improvement Corporation which were sold in August, 1986. The bond sale provided the city with approximately $20,000,000 of which approximately $7,000,000 was used to retire the existing debt on the security (the Civic Center). Therefore, the net proceeds are approximately $12,000,000 with the removal of the former debt and cost of sale amounts subtracted. A portion of the net proceeds have been previously appropriated by the City Council for parking structure land acquisition in the second and third blocks of Main Street. Do not authorize preparation of RFQ&P in which case the agency will depend upon the developer and his contractors and the city staff to provide this service. DLB:GKG:jr RCA - -2- (8564d) IIFROM: FACSIMILE TRANSMISSION COVER SHEET july 17, 1987 M Ai ke Adams - RedevelcPnent Off ice - Scott Morris - Bryant Morris Development PAGES TO FOLLOW (EXCLUDING COVER SHEET) _ *** SPECIAL INSTRUCTIONS FF YOU DO NOT RECEIVE ALL OF THE PAGES, PLEASE CALL AS S" AS POSSIBLE, FELEPHOtdE (714) 592-8181 K FOR EC OP I ER TELEPHONE NUMBER: (714 ) HUNTINGTON BEACH 592-1457 OEVELOPMENt SER'VI— JUI P.O. Huntingto'n Beach, GA 92648 F- 3 (e) Response To Canditians 4 and 24 The enclosed Tenant Lease specifically addresses both the Plwved Sign Program (condition narber 4) and the CC s R's (caxli tiro nurser 24) . - "' It sicOd be noted that the peveloper's Tenant Sob -Lease for this project has not been finalized to date. B74ever, all of the terms, ow&tions and exhibits set forth in the subject learns will be Included in the Developer's Tenant Stab -Lease for the pro jest . It should also be rated that this lease has been used successfully in trust of the denloper's projects. Condition 14 ' Plarrgd Sign Ptogc m' Exhibit 'C• of the Tenant 9ub>-Lease pedf ically addresses tb? Planned Sign Program for the Village. Coition #24 Cvvenants Conditions and Restrictions The CC a R's are set forth through--'ut the Tenant -Lease. Files of s 7to i of the C~ a R 1 s which are included in the sub -lease are: 1. C=Can area maintenanc-e _ 2. Deliveries and &livety boours ]. Sbop R3invenance, cleaning and up -keep 4.- EWloyee unifocmm and dress code... HUNTiNGTON BEACH DEVELOPMENT SERVICES JUL 1?1981 P.O. Box 190 �iuntin8ton Beach, CA 92648 i ! t_ REQUEST FO' REDEVELOPMENT j.'�ENCY ACTION RH 87-32 duly 13, 087 - - - Lw•s,�.,t�..t�,l .&ew As 0,4 b�r o /iu 4a/- Submitted to: Honorable Chairman a d edevelopment gency ]Members Charles W. Thompson, City Administrator/Chief Executive Officer '��; Submitted by: P � Y Prepared by: Douglas N. La Belle, Deputy City Administrator/Community Developmen Subject: PIERSIDE VILLAGE PHASE I REVIEW AND APPROVAL OF THE RESPONSES TO THE CONDITIONS OF APPROVAL Consistent with Council Policy? K Yes [ j New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATE LENT OF ISSUE: Transmittal for Agency consideration is the developer's response to the list of Conditions of Approval to Conditional Use Permit No. 86-43 for the development of the Pierside Village project. RECOMMENDATION: 1. Staff recommends approval of the developer's submittals in response to the Pierside Village development project's Conditions of Approval (CUP 86-43). ANALYSIS: At the Redevelopment Agency meeting of 3une 15, 1987, the Agency approved the amended Pierside Village site plan, submitted by the project developer. The review and approval was required as one of the Conditions of Approval on the project's entitlement. The Agency also recommended, at that time, that a study session be scheduled to review the remaining project's Conditions of Approval. On September 16, 1986, the Planning Commission, approved the project with forty-one conditions. The project was then reviewed and approved on appeal to the City Council at the October 13, 1986, meeting, with modifications to the original list of conditions and requesting that fourteen items be sent back to the Redevelopment Agency for final review and approval (Attachment #2, Exhibit 3). The project was then appealed to the California Coastal Commission, which also approved the project with the conditions as modified and further modified two of those conditions and added their standard list of conditions (Attachment If2, Exhibit 2) on December 10, 1986.. Pto/1/65 �1 Since the date of final public review in December, the staff has been working with the developer, Bryant L. Morris Development Company and his architects, in order to address each of the concerns expressed at the various hearings as well as preparing submittals in response to the Conditions of Approval. The following is a list of items conditioned for further Agency review and approval: I _ 1. Detailed materials pallet 0 2. 7 Planned sign program 3. 4. Public areas detail plan, including lighting, furniture, & fixtures Detailed landscape do irrigation plan !i� Rooftop mechanical equipment plan 6. List of proposed uses within village 7. Onsite circulation plan 8. Traffic impact analysis report 9. Parking management plan 10. Covenants, Conditions, & Restrictions for village 11. agreemente maintenance ity '1'rg� 12. 13 Non -village il age a ea maintena ce agreement with city Beach division headquarters K�� plans FUNDING SOURCE: Not applicable to the request. ALTERNATIVE ACTION: As an alternative action, staff recommends that after review and discussion on the information submitted by the developer in response to each of the remaining thirteen Conditions of Approval requiring Agency approval, that one of the following actions be taken on each item: Approve with additional modifications Approve submittals as an interim measure in order to permit the project to proceed, but request an additional staff review prior to issuance of building permits and/or Certificates of Occupancy Continue to a subsequent meeting with a request for additional Information ATTACHMENTS: 1. Council/Administrator communication dated May 18, 1987. Pierside Village update with Conditions of Approval and modified site plan. 2. Developer submittal to each of the Conditions of Approval to be presented at study session. CWT/DLB/M A:lp 3236h JJ CITY OF HUNTINGTON BEACH •t. COUNCIL - ADMINISTRATOR COMMUNICATION CA 87-76 HUNTINCTON BEACH To From Honorable Mayor and Charles W. Th s City Council Members City Administra Subject Date PIERSIDE VILLAGE: MAIN- tilay 18, 1987 PIER REDEVELOPMENT PROJECT AREA UPDATE Ar the request of the City's Redevelopment Review Committee, a progress report study session has been scheduled prior to your meeting of Wednesday, May 2.0, 1987. Bryant Morris, project developer, along with the project's architects, will be present to provide r;e Agency with a project update. The plans, as approved by the Planning Comr-nission, City Council, and Coastal Commission, had a number of conditions imposed. The plans are currently being modified to address these issues, many of which will be discussed at the meeting. The final modification and/or amendments to the project will require formal review by the Agency and may need to be reviewed by the Planning Commission and Coastal Conservancy. No action is being requested by the Agency at the May 20, 1987, meeting. C`J'T/:MA:lp Planning Commissioners ,\ttachments: 1. City Conditions of Approval 2. Coastal Commission Conditions of Approval 3. List of Items Requiring Further Agency Approval 4. Site Plan of Approved Project S. Site Plan of Proposed Modifications 3215h • • PaGp 4 - Statement of�. tion of the City Council water utilities are existing in the area and are sufficient to handle the proposed development. Findings for Approval: (COUDITIONAL USE PERMIT NO. 86-43) 1. The proposed development of a specialty retail village will have a bene- ficial effect upon the general health welfare, safety, and convenience of persons residing or working in the area due to the type, variety, and quality of the activities proposed, and will contrite to an increase in the value of the property and improvements in the neillyNrh od. 2. The propose! "rierside Village" is designed to be in corfor«a.,ce with the city's adopted General, Plan (including the state certified Coastal Ele- ment), the Downtown Specific Plan, and the Downtown Design Guidelines. 3. The proposed "Pierside Village" is coapatible with existing or other pro -- posed or anticipated rises in the area. The project will directly c asect with. o ber developr.�re.^ts on the inland side of Pacific Cyst Hig-hn.3y an; will be responsiale for the rehabilitation and/or relocation of existing st r-.:ctui-es in the project area. Y. The propesad location, site layout, and design will prc- rly adapt the proposed structures to streets, drivvegs, ana other adjacan: structures to streets, driveways, and -other a jacent struct.ires and uses in a :'.c1r- r.oious manner. 5. :ne 1:ro_o7se axsA cation and relatitvishi. of *uses = one anoner or the size axe -1 : roper-Y integrated. The rr„ncsed pra!ec t will _ =v ;e _ +ea_e+ •::.tee a..nc variety A .e:.�-tip.}...• c_r�_ tw..t: _•• P..3r_j,• the,_,. Saach and p area and related ocean activities. 6. e propose! a cess to and pz.:kinq for the, •.ciers:dc Vii'_aye' will increase tta'_fic a.r4 circulation concerns- however, can=zllin_ vo-.:ywl_r access to the project, sepz:ating vehicular Sad pedestrian access, w:wd relocating traffic signals alai Pacific Coast Hi7laway will is=ove the c= ert -circulation system. conditions of Ancroval: 1. The site a_nd section .plans dated Septere 11, 1986, a_nc aucMiez_ed site plar. sheet 2, dated September 12, 1%36, shall be rndified to i.clu a the chances autlined below. Following, the various departmental and ot.1te: reviews the kedeeloent Agency will have final reviek and a_cpro<.•al o:: the sOcittals.. : (a) All habitake building areas s1hall 'We liNted to two stories. Exceptions to this will only be permitted as part of an interior loft or mezzanine winch is; vx stly open to the shop below. In no case may habit- able building area exceed 25' in height or two stories above the eleva- tion, of the pier. (b) Building heights shall be limited south of ttie centerline of Lake Street. No structure rtiay, be highear than the elevation of Pacific Coast Hioiway. Page 5 - Statement of` t-..an of the City Council `• do (c) The freestanding concession stwxl as proposed on the beach in front of the major. access point to the village shall be relocated to back within the village. The shop shall have direct access on to the - beach access road and serve the convenie.xe of the beach user. (d) Improvements on the north side of the pier shall provide a nurser of public amenities.such as a major beach access way adjacent to the parking structure. The detail design of this proposal shall be subject to review -and approval by the Design Review Boa d in conjunction with the depart- ments of Developent Services, C=r.=ity Services, and Public Works. (e) The light wells adjacent to �axwell's balcony shall be increased in size . to provide additional nat•,:ral light penetration tmider the pier. other light penetratiors or alternative methods of illumination i:ncludina the alternate decking designs shall be required to achieve an adea-zate level of comfort and security for the area under the pier. (f) The project shall include a pedestrian overcrossinc of Pacific Coast Highway linking . the Pierside Village with the irland side of Pacific Coast Highway. _The design shall be com:-atible with -the Village arud the Downtown Design Guidelines. This structure shall be construcre•.i conc:L- re_nt with the "Pierside Village." (g) The parking, control mer,,ha:.isxs - depicted or. the plars shall be relocated to a location within the parking structure. The acc�ssw•ay to the=itzol stations should provi-e f-ir a mininum. stack.ing area to modate 24 c —s. •_la.s 5:.a 1 1 ..tI7' ._ IzStIOCz i:JCa ixi5 i.. a-.zntities~and areas tc ada7uate agate the village pa`..:cns. ( i ) No S`-uct.:res shall tee developed of the .Titan, °]i-.: tide line established on .*.he r=zh side of the pier (405' south of the pacific Coast Higway ri'i.t-of-way). - " (j) . The project s~ 11 be approved in twc presses. - The first phase is proposed for the south side of the pier or. the area controlled by the city of Huntingtbn Beach. The se•aond phase is proposed for r-he north side of the pier. The city is presently negotiating with the sate fcr control of that portion of Bolsa Mica State Beach.' A plan shall be s•..b- mitted which indicates the phasing and associated development with each phase. This enntitler.y--nt application shall be limited to the proposal for P1.ase I. ( k ) The fees ris wheel sha,-i on the plot plan s:o Lall be reved. (1) Retail square footage or. the new pier•deeking shall be 90% devoted to major sit down rests rants of unique &nd • Nigh-q,:ality, s:�ject to definition in the operator's lease ag`ee.•Tent. (m) Parking- layout shall include bicycle parking facilities in suffi- cient quantities to acc rmcdate village patrons. 2. Floor plans and elevations for each counercial suite and restaurant shall -be.prepared and sL* itted to the director of Develoanent Services for review and approval prior to issuance of any builaing permits. All _ .Page 6 - Statement of i on of .the City C' x=il .`) structures onsite shall reflect a compatible architectural theme which is consistent with the city's Downzta Design Guidelines. Following the various departmental and other reviaiws . the Redevelopment Agency will have �.1 final review and approval. 3. A detailed materials pallet snail be prepared depicting all proposed exterior materials and colors and submitted to the Design Review Board for recacma-dation and approval. Following the various de❑artkrn al a.-xr other reviews tie Ftedevelcpnent Agency will 1-ave finial review and appro- val. 4. A p1s.m-Ad sign proy-ra i for the entire village shall be prepared pursuant - to U%e Downtown Design Guidelines and submitted to the Design Review Board for review and approval prior to the iss•,mme of any sign permits. Following the various departmental and other reviews the Redevelopment Agency will have final review arxi approval. S. The develoce; shall submit a plan- which shall include the parking struc- ture and area under the pier, lighting, public plaza, a:e street furni- vure plan which is in eoraliance with the Downtown Design Guidelines sub- ject to review =4 approval of the Design P•eview Board. Following the various departmental a-4 other reviews the Redevelopment Agency will have final review and approval. 6. A derailed la.�scane and irrigation plan shall be a-aomi=ted to the city and aaproved by t!w De_oa.rtiezt of Development Services and the Departre.^t of ?=lic Works prior to 4.he iss::azce of building permi:5. Such a Plan narking 1 include /�yall they l�3a.�.:�sca.- f tearea(�s apn�d �lightirg wit-ii.�n the pe biic ,.1 azd ca rectio n to to w:e:. .he assti-riaticr. shall Mai.-nt3? : al1 land sc3pe-d areas w th.i.n. t: e project. Ml existing, spal-, gees crsite shall re+:aln within t.`tie project, ha -aver, they may be relocated from their pre - se -it location. Perimeter la:-Olscaping, with a minim= of ten fee; in width, shall be provided along the parkway area, adjacent to P.C.H. Fol- lowing the various den=tm -ital arnd other reviews the Redevelcomment Agency will have final review and approval. 7. A roof top meth ni; al equipment plan shall be submitted to the Depaztme..nt of. Develcpmp-nt Services, which indiciates screening of all equipnent and delineates the type o! za_erial proposed prior to the issuance of Build- ing permits. Such projected equip zit shall not exceed the maximum heights depicted in the Building Code or Downtowm Specific Plan. Follow- ing the various departmental ar4 other reviews the Redevelopment Agency will have final review and approval. , S. A detailed sails analysis shall be prepared by a registered soils engi- neer. This analysis shall include orsite sampling a -Ad laboratory testing of materials to provide detailed recax-me.,dations regarding grading, che-m- ical and fuel properties, fou-4atians, retaining wa.I1s, streets a-d util- ities, etc. 9. The developer -shall submit a list o: all proposed uses within the village arxi their respective square footages to the Develoixaent Services Depart - merit for approval to determi.-je ccopliance with all zoning codes and rede- .� velcpraent policies prior to the issuance of building permits. Any expa.-r- sion or major change of uses, or increase in intensity of uses, will be Page 7 - statement of ition of the City Coil subject to an additional Canditianal Use Permit. Minor modifications not .proposing expahsI shall also be submitted to Development services and Padevelopment Office for review and approval (e.g. exterior tenant modi- fications, public plaza configuration, structure layout, etc.). Follow- ing the various departmental and other reviews the Redevelopment Agency will have final review a -A approval. 10. All parking space design and size shall be in conformance with the ington'Beach ordinance Code. 11. Onsite circulation rha.11 be revised in accordance with Public Works Department requirements. Specifically, the control system at the Lake Street e_ntra:nce to the parking garage needs to be raved into the garage to allow stacking distance for 12 vehicles without overflow onto Pacific Coast Highway. No addition or deletion of vehicular access points shall be made without approval of the Public Works Department. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 12. The developer shall verify the staffs traffic i.:Y.act a.-�zlysis for the proposed development to confirm Ulet- the traffic projections fall within the parameters of those analyzed in E.I.R. 82-2. This report shall be colleted prior to the issuance of building, permits and sl ould include an analysis of the traffic impacts at various times of the day and year. Following the various departmental a.-d other reviews the Redevelopment Agency will have final review and approval. 13. The developer shall prepare a parking mr agerm nt and c r.trol plan for review by the Development Services Zep artre_nt, P•,:blic Forks Depa t�•�ezt, pa ity Services Dertz�n, and all other e:fec;.e:? µe�e cart-zts pricy to the issuance of any building permits. This plan shoal address valet services, shuttle prxra s, and methods of controlling ve dcular inl,. and e_ress. In aiditicr. the plan shall identify mitigation rethods for. the Phase I parking shortfall (e.g. reciprocal and. joint use parking, renote parkin' ar4 shuttle, limiting the issuance of certificate of oc--LL panty to the extent that parking is made available). Following the vari- ous depa_-tme-ntal and other reviews the Redevelopment Agency will have final review and approval. 14...:`he project will be responsible for - construction of the new decking areas : adjacent to the city pier and the reconstruction of the existing pier within the 'project areas.' This effort should be coordinated with the Department of Public works a.•d other city departments. .15. A review of the use shall be conducted within one year of the issuance .of the first Certificate of Occupancy to verify compliance with allcondi- tions of approval and applicable Articles Of the Huntington Beach Or•?i- r Ace code. If, at that time, there is a violation of these corditiors no additional. Certificates of occupancy will be issaed until the viola- tion is corrected. 16. Offsite irprovements (e.g. streets, sidewalks, gutters, etc.) shall be constructed in accordance with Public Works Department standards and/or Caltrans standards. All sidewalks on Pacific Coast Highway shall be a minimum of 8 feet. ' =.Page 8 -".Statement of k..,Lien of the City Caancil 17. No parking shall be allowed adjacent to the project on Pacific Coast Highway. The removal of these 14 parking spaces shall be offset by an equal nt=ber of spaces in the project. Acing construction of the pco- ject, the developer, in conjunction with the city, shall provide a nutbo-r of parking spaces within a reasonable distance to aceommdate beach and pier access. 18. Sewer, water a.-d fire flow, a.� drainage i rove�nts shall be con- structed in acxrdance with Public Works Departmmt standards. The apPlicaz_ wall sabMit to the DeaartzrMt. of Public Ubrks a water network and distribution analysis prior to issuance of grading permits. A11 necessary improvements as determined by the analysis shall be constructed. 19. The project shall.be responsible for the construction of full median improvements on Pacific Coast Highway adjacent to the site in a.-c-orjance with Public Works Department and Caltrans' standards, 20. Energy efficient lighting, such as high pressure sodium van,.- la--:p.-, s'zall be used in parking lots to prevent spillage onto adjacent areas .and for energy ccnserva _ion. 21. All approved drives designated as fire lanes shall be signed as to the approval of the HLritington Beach Fire Department. All fire a_=azatus access roadways shall be designated no parking. 22. Afire sci=kler sfst°m shall be desigrLed and i^.stallec in those s-�u� tees See --ad necessary by the H•untirrr tor. Beach Fire De`aartwi-ri_. A.. auto•- iratic system s:-► ll. be required cc, all carking levels and pe estr ia: wa'•s. •✓ 23. Entry gates or ot^,e: ax:Kol devices !or he parking s=.;ct=e -c cse, at the entrance sha?'_ be reviewed and a=- ved by the ievelzpmez_ Se: - vices Depa.rtm---it, P',:clic Works Zo:=.artmzzt, Fire Depa t-o-rit, : ✓_:ce Department, ar4 all other appropriate depar merits. 24. The Covenants, Conditions, and FAs-sictio-ls shall be s oject to review and approval by the City Attorney's office. and =ntain a provision, that w'11 prohibit storage of vehicles, trailers, and o:he_- materials or. site, unless an area that is specifically designated for suc-'n storage is pro- vided for in the project. Following the various departmental a-rc other reviews the Redevelopmnt Agency will have final review arm approval. 25. The developer, Agency, and the city shall eater into a maintenance agree- ment for the public parking area, mmicipal pier, and all la.-r-'-scaai_-ig. The perimeter walkway, Lighting, etc.. &all be x►aintai:Led i�.1 the anFro` ject's association. Following the various departrental d other reviews the Redevelopment Agency will have final review and approval. 20. The developer, Agent', and the city ..hall execute a landscape s`aintera agreeme-nt requiring the developer to maintain all landscaping an site• including setbacks, public right of ways, and along the street f_rort- ages. Following the various depar tyro-ntal and other reviews the. Fec:evel- cpment Agency will have final review and approval. J 27. All fire access roads are to be a mini== 24 feet. Page 9 - statement o1%..ctian of the City Council 28. All canopies or roof structures over roadways are to provide a mini== overhead clearance of 13 feet 6 inches in height from the road area to • the lowest point of the canopy within the 24 foot road clearance. 29. All cornrer turns of fire lanes are to be a -minimum of 17 feet inside and 45 feet outside radius. 30. The beach access roadway on the south must be a minimum 24 feet and must loop with the beach access road on the north side of the pier. This roadway must also be a minimum 24 feet. The overhead clearance under the pier must be a mfniau.:. 13 foot 6 inches in height. The roadway must be designed to facilitate beach se_ -vice vehicles, bicycles, ax3 pedestrian access, subject to city review and approval. 31. The roadway and access nays designated as fire lanes on the pie; and oven the subterranean parking area are to be reinforced to sustain the weight of fire apparatus. 32.Another stairway shall be located or. the north side of the pier, subject to review and approval of the Fire Department and Development Services Department. 33. • Fire hydrants sha'_1 be izst311ed or, fire access roadways and the pier to -provide fire apparatus with an access travel distance of 150 feet or less froc all structures. 34. An-autoratic supervis-ed fire ala_z system shall be installed to provide the following: (a) Audible alarm. (b) Water flow signal. (c) Valve tamper signal. (d) Trouble siarsal. (e) Manual pull station. (f) Graphically displayed in strategic location(s). 35. An engineering geologist stall be engaged to submit a report indicati:r3 the ground surface acceleration from earth movement for the subject pro- - perty. All structures within this developcient shall be =xIstructed in compliance with the G-fact=s as indicated by the geologist's report. Calculations for fittings and structural members to withstand anticipated G-factors, shall be sucitted to the city for review pricy to the iss;r- ance of building perrits. 36. A plan for silt contro! for all storm runoff from the property doing construction and during initial operation of the facilities shall be s b. mitted to the Department of Public Works for review. 37. The developer shall provide the city with a detailed description of the cci: project's proposed seity syste= for review acid approval by all affected departments. 38. Natural gas shall be sobbed in at the locations of -cocking facilities, water heaters, and central heating units. This requirement may be waived provided that the applicant will install a more energy efficient alterna- tive subject to the review and approval of the Development Services. Department. ..Page 10 -- Statement of t.Lon of the City Cotncil J kw'.r 39. All building spoils, such as unused prober, wire, pipe, and other surplus or unusable materials, shall be disposed of at an offsite facility equip- ped to bardle their. 40. During construction, the developer shall make adequate provisions for continued pier access. The construction of the super structure of the prvposed expanded deck areas on the pier shall be limited to the non -sum- mer months. 41. The project shall be responsible for the removal and relocation of the Beach Division headquarters and Junior Lifeguard fa=ilities. Following the various departmental and other reviews the Redeveloix-e-at Agency will have final review and approval. The motion carried, by the following roll call vote: AYES: Kelly, MacAllister, Finley, Manxiic, Bailey, Green, 7haras NOES: None ASSLN T : None Recess - Reconvene .The Mayor called a recess of Counil at 11:55 P.I. The meeting was reconvened at 12:o5 P.M. Mayor Mandic requested a reconsideration of the motic^ to approve the Pierside Village as he wanted to modify Conditicn No. l(i) to require a 50' setback :: ac the mean, tide line as requested by Thomas Pratte, rerresentinr the Surf- riders Fo.�rdation, during the public testizcny porticn of the public hearing. A :cation was zee by Mandic, seconded by Green, to recoriside-- the motion: race by MacAllister, seconded by Kelly, to approve CaIdditiorLal Use Permit tb. 66-:3 and Coastal Develocrye-zt Permit No. 86-27, The motior to reconsi^e= carried by the following roll call vote: AYES: Finley, Mandic, Bailey, Green NOES: Kelly, MacAllister, Thomas AB,SE:VT: Nome Following discussion, a ration was made by mandic, seconded 17y Kelly to codify Condition l(i) by changing the words "...con the north side of the pier (405' south of the Pacific Coast Highway right-of-way...)" to read "...on the north side of the pier (355' south of the Pacific Coast Highway right-of-way...)". The notion failed by the following roll call straw vote: AYES: Finley, Mandic, Green lz=*. Kelly, MacAllister, Bailey, 'Thomas ABSLTT; Ncxze The motion originally made by MacAllister, seconded by Kelly, to acprove Con- ditional Use Permit No. 86- 43 and Coastal Development Permit No. 86-27 based on findings and ccanditiorzs as approved by the Planning .Coc;missicn at their September 16, 1986 >+meting and further codified by Cotxzcil carried by the fol- lowing roll call vote: AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: Now AB=ZT: Now A-5-HNB-86-853 sxxrarT 2 , Page 7 STAFF RECOMMENDATION ON THE COASTAL PERMI Staff recommends that the Commission adopt the following resolution: L. APPROVAL WITH CONDITIONS The Commission hereby grants. subject to the conditions below, a permit for the proposed development on the grounds that. as conditioned, the proposed development conforms with the City of Huntington Beach cectified in geographic part Local Coastal Program and the access and recreation policies of the Coastal Act and that development will not have any adverse impacts on the environment within the meaning of the California Environmental Quality Act. U. CONDITIONS A. STANDARD CONDITIONS: See Attachment X B. SPECIAL CONDITIONS: The proposed development is subject to all special conditions of the City of Huntington Beaca Coastal Development Permit No. 86-27 excep as modified below (additions are underlined/deletions struck thCouah) : ' �►-o-turn-as-ts53 Page a JP 2. Condition 13 shall be modified as follows: ' r 13. The developer shall prepare a parking management 14� and control plan for review by the Development Services Department. Public Works Department.- Community5ervices Department and all other effected departments prior to -the issuance of any building permits. This plan should address valet services, shuttle programs. and methods of controlling vehicular ingress and egress. ZA sddiYieK/rxel�ian/ari�ii/iderititylniti�atiee meLxedalter/xxe/Phase/i/patkingl�xdtLisii/(elgl ter3pteeii♦and/�einz/tile/parlcirsglltt�aere patkinq/and/ ari�ai tIElI23nitin�I rhdlisd�aa�e�let eetritifa.ze/etleer�pancyIre/xxe/dxrenr/�riar ptrkiheilisl�lddet,�YtiZ�iSle)l The tan shall assure that prior to the issuance of any building permits_, all parking requirements of the Phase I development have been met. Com2liance with the parking requirements of the Huntington Beach ordinance Code_ shall not be delayed to a second base of the project. The -Elan shall also assure that the hours of operation of the parking, structure are ccnsistent vita the hours of ooeration of the existing beach larking lots adjacent to tt:e pier. Following the various departmental and other reviews the Redevelopment Agency Will have final review and approval. 3. Condition 14 shall be modified as follows: 14. The proposed proiect_shall not include any new development (new decking areas} o_n_or_over• existing sandv beach areas bevond 125 feet soutneast of the munici ai Pier. No portion of the proposed development shall extend beyond tn•e boundaries of District #10 as defined in the Downtown Specific Plan. The project will be responsible for construction of the new decking area adjacent to the city pier and the reconstruction of the existing pier within the project areas. This effort should be coordinated with the Department of Public Works and other city departments. �„J I. Attachment X D 1987 y ry �hG AN° To: Permit Applicants °''EL°PMEIV From: California Coastal Commission Subject: Standard Conditions The following standard conditions are imposed on all permits issued by the California Coastal Commission. STANDARD CONDITIONS 1. Notice of Receipt and Acknowledgement. The permit is not valid and development shall not commence until a copy of the permit, signed by the permittee or authorized agent, acknowledging receipt of the permit and acceptance of the terms and conditions, is returned to the Commission office. 2. Expiration. If development has not commenced, the permit will expire two years from the date on which the Commission voted on the application. Development shall be pursued in a diligent manner and completed in a reasonable period of time. Application for extension of the permit must be made prior to the expiration date. 3. Compliance. All development must occur in strict compliance with the proposal as set forth in the application for permit, subject to any special conditions set forth below. Any deviation from the approved plans must be re -viewed and approved by the staff and may require CommissicT approval. 4. Interpretation. Any questions of intent or interpretation of any condz ion will be resolved by the Executive Director or the Commission. S. Inspections. The Commission staff shall be allowed to inspect the site and the development during construction, subject t^ 24-hour advance notice. 6. Assi nment. The permit may be assigned to any qualified person, prove a assignee files with the Commission an affidavit accepting all terms and conditions of the permit. 7. Terms and Conditions Run with the Land. These terms and conditions shal a perpetual, and it is the intention of the Commission and the permittee to bind all future owners and possessors of the subject property to the terms and conditions. U FjIBIT 3 `J 4 LIST OF ITEMS WHICH WILL REQUIRE AGENCY REVIEW AND APPROVAL PRIOR TO PIERSIDE VILLAGE CONSTRUCTION 1. Modifications to the Site Plan 2. Detailed Materials Pallet 3. Planned Sign Program 4. Public Areas Detail Plan, Including Lighting, Furniture & Fixtures 3. Detailed Landscape & Irrigation Plan . 6. Rooftop Mechanical Equipment Plan 7. List of Proposed Uses within Village 8. Onsite Circulation Plan 9. Traffic Impact Analysis Report 10. Parking Management Plan 11. Covenants, Conditions, & Restrictions for Village 12. Village Maintenance Agreement with City 13. Non -Village Area Maintenance Agreement with City 14. Beach Division Headquarters Plans rr� • • gets• f a4 •f wl ff IF T 17=7M IIT=TTTTMTr= rmm=lMMMlTlTj M.Tmrt� 4. � '��'R ;err *T 1 , �f' ^ � •• ` ' • • ` `' ( T�•Y.""" •i�}�}, frfr.f rHrl•rlr 1' r j(i�•.j �u 11 Noe* *' wo•• �S • r J .� tie N� fCUN TAMFLATIONS ORM LAND AREA 227.3T2 30 FT fouw f � of �..f r p rr.•M uM•W• Mw•I.•• .w• r.�� n•NMr1 GROSS LAND COVERAGE 70,513 SO FT OPEN SPACE (150.559 30 FTT 08% FoAftiC WALKWATS TOTAL NET LEASEAULE • 1l:�ly fv.y �r��a.f •nf•pf Ml1•f Memo M of r.i • tI N M NMMfrf% • NMrN Mtl y�wr rf r•f N r1 5T•500 SOFT • I7rf f!rfY MdhWA moo 1• •1.•if r1r4w..1ir N rr PARK"O 600 SPACES 280.562 50 FT �..w M 40• 96 r.f • O fff«N /r wr•�MNfM Ir I�IM rr SITE PLAN H M f M •M � t I EXHIBIT 3 •. p ,. -IT I I..... - I � ffFF /I I I 1; 4 I-li i--If-r-ii-Il4 W+ } i t Wu r r i r r�-wu�r-�I-E I r F� I I! 1 I l 11 4 Flil r / loll .' .mow• /� I ••.w w..w ,•� Yr. r• • r C D E F kl w � .� w•r.• .r r . N w_•r- _.•w•r• _ r,••+• PF/A Y- r.r Y. Yw„+��. •• •_ � • • ••••.n • —•r n_� __--�r•r+__r w—_rti w.. _.•� PARKING TABULATIONS i.rr y Yrr.otrr. r.e. W_ti�•+__ wart r•..• •I.ti•/i/ Ha./ N IrurtKr /gY•/ N Ng� M toga •• 04 •r• Mwg/ SITE PLAN +� too r t • � •i-•-sgr� EXHIBIT 7 � r •M • � ..ram—_ .___.• • • • Z - -..�.- ..- ..,—�_� ... •.' .• f•. . • -- •'={ f ■ . • . ram•. • . •�� � •r. «�.. - _ .- _ _.. ti — .. r � .wl�� .. 11. .. - . ._ _ , +Pr %w� �. � —. �. - - ... . �y� _., ... •�� �� ' �+ � �Q �•�± i'� a•YCLS1'i� j.. �1 . 1 ! } w 4��r'+ • •�.�'E.�_ • ��� *�.r .+wi' ��T [� ~ . � rY i'��. fib 7�*.j`:. • Tel � i `� • i i. [ \\ _.� u' �!�J}����SL'` �`. .w AMPA*0 SITY PLAN 4�+ TWA �p PIER SIM DEVEtOPW-NT 1llf T04TOW MACK CM/drA orvf, ona WANT ! MORRIS LJfVL1Cft*NT 0—w"A rfAWF G •-Me's A.c..,lc,Y 4 efww 54VTR i moo) R7f "WOOKS rww�• �w •�f• "A~ w3wty8r W. (AMU c REQUEST FO"FQ T �rrRovED B 19-0 A ENCY ACTION CLBRIC Date RH 87-52 June 15, 1987 Submitted to: Honorable Chairman and Redevelopment Agency Members Submitted by: Charles W. Thompson, City Administrator/Chief Executive Offic Prepared by: Douglas N. LaBelle, Deputy City Administrator/Community Developmen PIERSIDE VILLAGE PHASE I REVIEW AND APPROVAL OF THE RESPONSES Subject: TO THE CONDITIONS OF APPROVAL Consistent with Council Policy? K Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmittal for Agency consideration is the developer's response to the list of conditions of approval to Conditional Use Permit No. 86-43 for the development of the Pierside Village project. RECOMMENDATION: 1. Agency Staff recommends approval of the design and layout of the modified Pierside Village development project. 2. S aff recommends that the Agency schedule a study session to review and discuss information submitted by the developer in response to the remaining thirteen conditions of approval as indicated in the "Analysis" section of this report. ANALYSIS: At the direction of the Agency, the Pierside Village development project was submitted for public review and comments as the first project in the Main -Pier Phase I Redevelopment Area. On September 16, 1986, the Planning Commission, approved the project with forty-one conditions. The project was then reviewed and approved on appeal to the City Council at the October 13, 1986, meeting, with modifications to the original list of conditions requesting and that fourteen items be sent back to the Redevelopment Agency for final review and approval (Attachment #2, Exhibit 3). The project was then appealed to the California Coastal Commission, which also approved the project with the conditions as modified and further modified two of those conditions and added their standard list of conditions (Attachment #2, Exhibit 2) on December 10, 1986. F' PI O/1 /85 Since the date of final public review in December, the staff has been working with the developer, Bryant L. Morris Development Company and his architects, in order to address each of the concerns expressed at the various hearings as well as preparing modification to the project design in response to the conditions of approval. The result of these discussions has proposed amendments to the project plan. The original plan called for a project consisting of approximately fifty-five retail shops, twelve fast food outlets, and two new restaurants, and the existing Maxwell's restaurant will remain as part of the project for a total of 87,500 square feet; 76,000 square feet of which being new construction. The project proposed development only on the south side of the pier. The project design team, working with city staff, began to explore other options in response to the conditions imposed, and started to look for alternative design solutions to the expressed concerns. The concept evolved to shift the project focus to the head of the pier area. This change in concept will require consideration for development on the north side of the pier as well as the south side. The concept of development on the north side of the pier has been contemplated for some time, however, only recently has the site been within the city's control. This change now allows the city to design a total project on the oceanfront between 7th Street and Lake Street. This expanded area will provide the city with an opportunity to plan and construct a project which will respond to all the expressed concerns. The first step toward this goal is to review and approve the modification to the Pierside Village approved plans for the south side of the pier. However, in order for the developer to successfully implement this project, consideration must be given for a portion of the development to extend to the north side of the pier. The developer is proposing to limit retail square footage on the north side to a structure on the pier of equal scale and size to one proposed on the south side and a structure on the state beach parking lot of equivalent size and configuration to Maxwell's Restaurant. The overall project's square footage (both sides of the pier) is approximately the same as in the original project approval. Staff recommends that in a subsequent action to the requested action of this report, the Agency consider authorizing the staff to negotiate with Bryant L. Morris for concurrent development of the north side of the pier as Pierside Village Phase II. The following list of items require further Agency- review and approval. These items need to be discussed with the Agency at a study session prior to final Agency approval. It is anticpated that a study session would need to be scheduled during the early part of July. 1. Detailed materials pallet 2. Planned sign program 3. Public areas detail plan, including lighting, furniture, & fixtures 4. Detailed landscape & irrigation plan 5. Rooftop mechanical equipment plan 6. List of proposed uses within village 7. Onsite circulation plan S. Traffic impact analysis report 9. Parking management plan 10. Covenants, Conditions, & Restrictions for village 11. Village maintenance agreement with city 12. Non -village area maintenance agreement with city 13. Beach division headquarters plans FUNDING SOURCE: Not applicable to the request. ALTERNATIVE ACTION: 1. Continue item for further consideration to a subsequent Agency meeting. 2. Request additional modification of the proposed plan. 3. Refer proposed modified plan to the Planning Commission for review and recommendation prior to final Agency action. ATTACHMENTS: 1. Site plan with proposed modification dated June 12, 1987. 2. Council/Administrator communication dated May 18, 1987. Pierside Village update with conditions of approval and modified site plan. CWT/DLB/MA raj 323bh CITY OF HUNTINGTON BEACH COUNCIL. - ADMINISTRATOR COMMUNICATION CA 87-76 HUNTINGTON REACH To From Honorable Mayor and Charles W. Th s City Council Members City Administra Subject Date PIERSIDE VILLAGE: MAIN- May 18, 1987 PIER REDEVELOPMENT PROJECT AREA UPDATE At the request of the City's Redevelopment Review Committee, a progress report study session has been scheduled prior to your meeting of Wednesday, May 20, 1987. Bryant Morris, project developer, along with the project's architects, will be present to provide the Agency with a project update. The plans, as approved by the Planning Commission, City Council, and Coastal Commission, had a number of conditions imposed. The plans are currently being modified to address these issues, many of which will be discussed at the meeting. The final modification and/or amendments to the project will require formal review by the Agency and may need to be reviewed by the Planning Commission and Coastal Conservancy. No action is being requested by the Agency at the May 20, 1987, meeting. CWT/ tMA:lp Ac: Planning Commissioners Attachments: 1. City Conditions of Approval 2. Coastal Commission Conditions of Approval 3. List of Items Requiring Further Agency Approval 4. Site Plan of Approved Project 5. Site Plan of Proposed Modifications 3215h EXHIBIT 1 • • r Page 4 - Statement of A.Kan of the City Council rater utilities are existing in the area and are'sufficient to dandle the proposed development. Findings for Approval: (COUDITIOUAL, USE PERMIT 90. 86-43) 1. We proposed development of a specialty retail village will have a bene- ficial effect upon: the general health welfare, safety, and convenience of persons residing or working in the area due to the type, vIriety, and quality of the activities proposed, and will contribute to a: increase in the value of the property and improvements in the neighborhood. 2. The proposed "Pierside Village" is designed to be ir. con!orwa.nce with t.e city's adopted Ge-neral Plan (including the state! ee:tifiel Cxstal Ele- ment), the Downtown Specific Plan, and the Downtcw:i Design Guidelines. 3. The proposed "Pierside Village" is ccopatible with existing c..: other pry posed or antici atel LSes in the area. 71-.e project will directly connect with other developments cxi the inland side of Pacific Coast Fi hway and will be resnorsicle for the rehabilitation andlor relocation of existin structures in the project area. ;. Tne preoesed location, site layDut, and design will properly adapt the pr-rpcse d structures to streets, driveways, and other adjacent structures to streets dzivewa s and •ru t. a _.. � streets, .�.,.. i , 04.he= d]3Ge^` s_ G 1r�S a... uS�S 3 ..cZ- mot' i ous manner. 5. Tne i-rJpo-se-1 and relationship W :uses to one nox or an he site are rcce:ly integrated. The pra?asK project w_1l przvide '.^dater .^.`:'her and variety of peca a ?:..: croortunity tz enjgf he city :deach and pie_ area and related ocea: ac_ivi _:es . 6. he coposd Z', =ess to and aa=ki:k f :._`' r':e Wiszs_in Village" will increase traffic and circulatior co^.cerns: However, , crx:zro:.ltng vehicular access to the project, separating vehicular and pedestrian a- —ss, a -In= relocating traffic signals along Pacific Coast Hid :way will imp cve the current circulation system. C in itirns of Ancroval: 1. The site and section plans dated Septeeber 11, 1986, and a:x v--nted site plan sheet 2, dated Septemce+r 12, 1936, shall be modified t.o Lhclude the chances a alined- 'below. Following the various departmental and oche reviews the Pedel�lo nt Agericy will have final review and a_=-urc.•al on the s baittals. (a) ;11 habitalle building areas shall be limited to two stories. Exceptions to this will only be permitted as part of an interior loft or mezzanine which is mostly open to the shop below. In no case .:ay !a'--it- able building area exceed 25' in height or two stories above the eleva- tion of the pier. (b) Building hei;fnts shall be limited south of tine ce•hterline of Lake Street. NO structure ray be higher Clan the elevation of Pacific Coast Hi fs ay. *-- Page 5 - Statement of -I ,n of the City Comcil (c) The freestanding concession stand as proposed on U%e beach in front of the rajor access point to the village shall be relocated to back within the village. The slho s'zall have direct access on to the beach access road and serve the convenience of the beach user. (d) Improveme.-tts on the north side of the pier shall provide a n=::oe_r of public amenities such as a major beach access way adja-.,nt to t`te parking sl-uctu e. 'The detail design of this proposal shall be subject to review a:O api:roval by the Desig^. Review Baird i^ c^..nj,,:nctior. with the depart- ments of Development Services, Cor mity Services, and Public Irb."'Ks. (e) The light wells adjacent to Mxw-_ll's balcony shall be increased i:: size to provide additional natal light penetration tzrydler the pier. other light penetrations of alternative methods of illt=.ination including the alternate decking desiT'Ls shall be regsired to achieve an ader.;ate level of comfort arx-I sec.:-ity for the area under the Pie_-. (f) The project s:-tall include a peestrian overcrossinc of Pacific Coast Highway linki.-g ;the Pie. -side Village with the ir. a.-t.1 side of Pacific Coast Hicthway. 'Ihe design shall be ccc7-atible with the village and the Downtok±t Desi= Guidelines. This sr:ucrure shall be =ns=uctei concur- rent with the "Pierside Village." (g) The parking control me=Mr-Mrdepicted on the plans small be relocate to a location within the aa±k?n5 structure. The accesswav to the contzol stations s1hicul : provi-de for a rdnil7= stacking area to a_c rx) a:e 2Y c---s. (::) nhe plants snail ide=ify u:: 1_ resr.:cC.» ior_-at,.Ws in su-fflcie n_ gn^.tities shad areas tc ade=atel_ acco=o a_e the village Pa:x=s. (i) Nc structures shall be develop cGsa.63_d of the Mear, hi-. tide line established or, the rat': side c: ;:.e ei>_- (4'15' sue::. of 1-1e raci— Coast Highway ric'r._-of-way) . (j) The proje .- shall be a=roved in two prases. The first p asa is prgoosed for the - south side of the pier or. tre area controlled by the • city of Y.untingtbn Beach. The seco 2 phase is proposed for the north side of the pier. The city is presently negotiating with the state fcr control of that portion of Bolsa O-Ac_ State Beach. A plan shall to s•:�- sitted which indicates the phasing and associated develoanent with each phase. Phis entitlerm-rit application _ball be limited to the proposal for Phase I. (k) The ferris wheel sh),.-z on the plat plan s:Lall be res-oved. (1) Retail square footage on the new pier • decking shall be 90% devoted to major sit down. restaurants of t-rAque and high q.;ality, s bject to definition in the operator's lease ag-r-enment. (m) Parking layout shall include bi;.vcle pazking facilities -In S-Iffi- cient quantities to ac^-.-r.x)date village patrors. 2. Floor plans and elevations for ead co=ercial suite arm resta;;-art shall be prepared and st bitted to the director of Develotcve.= Services for review and approval prior to issu-Irce of any buildi.-) Pefl-a:rs. All Page 6 - Statement of ),,,.ion of the City Council structures onsite shall reflect a cnc:patible architectural Lhe_-�e which is consistent with the city's Downtown Design Guidelines. Following the various departmental and other reviews the Pedevelcc=vwe.nt Agency will have final review and approval. 3. A detailed materials pallet snall be prepared depicting all proposed exterior materials arsO colors and submitted to the Des_ ien Review Board For rec cmendation and approval. Following the va: i�us epartr nral a.-x� other reviews the Redevelo,azt Age,^.cy will have final review and appro- val. 4. A planned sign p...ror-ram for the entire: village shell be prepared pursuant to the Dantown Design Guidelines and si.•SUAted to the Design. Review Board far review and approval prior to the iss,nnce of any sign permits. Following the various depar trent,al and other reviews the Redevelopmr.t Agency will have final review and approval. S. The developer shall s :limit a plan which stall include the parkins st_-uo- tore and area under the pier, lighting, public plaza, anid street furni- ture plan Vic: is in compliance with the `downtown Design Guidelines sLub- je=t to review and approval of the Design Review 33a_d. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. b. A ;retailed landscape and irrigation Inn an s.`.all be S=mitted to the City and apprOled by the •.e ar t.ment or Levelopment Services and the Department .^.f Rmlic Loris n. icr to the issu once of uiL!inq Permits. S.]G1 a per.: s..a11 include all the landszap-__ a...e_-_s and. 1_c :__rc within the public pazk n_ lot, me -Mans, and 5e %ai y ay system, t:-I..? o-oj.Uct P-ixeter an= csnnecticn to the pier. a2S.70a har. s:•78 l Mom_.._.._.. ..-i 13^.. s_ape+ areas wit:i:: =. * prcje_t. All existing p.--_O. _zees c.site shall re.:ain within the prolesm, ho4eve., they may be relocated from their yre- s-3..: location.. Ferlete= landsca in , with a -d ni=L_--_ o_ tan feet it witch, shall be provided along the pa say area, adjacent to P.C.H. Fol- lowing the various departmental and other revier+s the Pedeveloome:t Agency will have final review and approval. 7. A rooi top mechanical equipoent plain shall be WORM to the Department of Development Services, vNich indicates screening of all equirr#-en: and delineates the type of material proposed prior to the issuance of Build- ing permits. SON projected equipcae.nt shall not exceed the maxim = heights depicted in the Building Code or Downtown Specific Plan. Follow- ing the various departmental and other reviews the Fadevelopment A_e.~icy will have final review and approval. , S. A detailed soils .analysis stall be prepareded by a registered soils engi- neer. This analysis shall include orsite s3mp li:x; mad laboratory testinr, of vete_-ials to provide detailed reccamendations regarding goading, c.herr- ical and fuel properties, foundations, retaining wails, streets and util- ities, etc. 9. The developer • shall s: bc:.it a list of all proposed uses within the village a.nd their respective s -ia a footages to the Develc neon nt Services Depart- ment for approval to determine coppliance with all zoning codes and rede- velopment policies prior to the issuance of building permits. A.^y expan- sion or major c'1a'tge of uses, or increase in intensity of uses, will be Page 7 - Statement of 'ion of the City Ccx=il subject to a.n additiocal Conditional Use Permit. Minor andifications not proposing expansion shall also be submitted to Develop. amt Services and Redeve1g3ne_nt office for review and approval (e.g. exterior tenant modi- fications, public plaza configuration, structure layout, etc.). Follow- ing the various departmental a.nd other reviews the Redevelopment Agency will 'Have final review and approval. 10. All parking space design and size shall be in conforrance with the HR.Mt- ington Beach Ordinance Code. 11. cnsite circulation shall be revise:? in acc-or ance with Public Works Department requirements. Saecifical:y, the control syste= at &,e Lake S _. eet entrance to the parking ga-race. needs to be rnved into the aa_ ape to allow stacking distance for 12 vehicles without overflow onto Pacific Coast Hiq way. No addition or deletion cf vehicular access points shall be jrade without approval of the Public Works Departmeant. Following the various departmental and other reviews the Recevel .nt Agency will have final review and approval. 12. The developer shall verify the staffs traffic iz- act analysis r the provcsed develom-ent to cor.firm that ,he traffic projectiors fall w:t^.ir the parameters of t.hcse analyzed in E.I.R. 82-2. Aliis repast small be completed prior to the issuance of buildirz permits and sha ld i clI ace an analysis of the traffic irmcts at various times of the day a -id yea:. Following the various dena.rtzy ntal and other reviews the Redevelo=nent Agency will have final review and approval. 13. The developer shall --re-pare a parking ra acement a-4 control plr. for rev'-- a. he Develocn Services ..epa_r::.ent, Public Works De:r `tee :t, Services : e _r tment and all otzez e: fec,ed deoa`•tr.ts icr to tre :s3.;=^.ce or any b ilAting per—ts. minis plan 6=ulc axazss Lalle_ se,vi-s, shuttle progra.n, and nee:hor-s of co-rt_rolli.^.g v&dcula: i.^._.ess aac ezress. In a5ditian the plan shall identify r:iti_a_icn rethods f- the P`.ase I parking shertfai.i (e.g. reciprocal and joint use parkinc, re.-Ote parking a. -A shuttle, limiting the iss:aance of certificate o_` occLL panty to the extent that parking is imade available) . rollowi:= the va_ri- cus departmental arid other reviews the Redevelopme-nt Age-ncy will have final review and approval. 14. -The project will be resx:ssiole fc construction of the new decking areas adjacent to the city pier and the reconstruction of the existing pier within the project areas. This effort should be coordinated with the Depar`.e—nt of Public Works ard other city dexrt:ients. 1�. A'review of the use shall be conducted within one year of the iss�-=_-L;a of the first Certificate o! Occupancy to verily compliance with all li- tions of approval and applicable A~titles bf the ITmtington Feat Ordi- nance Code. If, at that time, there is a violation of these x3itia^.s no a-ir-41tional Certificates of Occupancy will be issuer until the viola- tion is corrected. 16. Orfsite irprovements (e.g. streets, sidewalks, gutters, etc.) s'. all be c nstmcted in accordance with Public Works Department standards and/or Caltra.-zs standards. All sidewalks on Pacific Coast Highway shall be a minirL= of 8 feet. Page S - Stater. --it of i..wion of the City Coemcil . 17. No parking shall be all 4 adjacent to the project on Pacific Coast Highway. The removal o! these 14 parking spaces shall be offset by an equal number of spaces in U%e project. Dearing construction of the pro- ject, the developer, in conjunction with the city, shall provide a nu=be- of parking spaces within a reasoraDle distance to aceourvor ate beach aad pier access. lc. sewer, water a_r4 fire flow, and drainage improve.�•�ts stall be ccn- st+-acted in aceprdance with Public ti,�cr Cs Department standards. 7.ze applicant snall subr.it to the Departs"—nt of Public Wbrks a water ne:wc-,-k and distribution analysis prior to issuance of rra:!ing ne:rits. All necessary inprover.�e.nts as determined by the analysis sIM11 be oonstructe-?. 19. The project shall be responsible for the construction, of full median improvements on Pacific Coast Highway adjacent to ,.he site in armor!ante with Public Works Departnp-nt and Caltra-ns' sta.^dards. 23. Energy efficient lighting, such as high pressure sodie.n vapor la.,-z, shall be used in parkinS lots to prevent spillage onto adjace= areas and f= energy c cr se_rva tion. 21. All a;proved drives desi_nated as fire lanes shall 'be si-ned as s--,ch tc the approval of the Huntington Beam Fire Depart.••Pent. All fire anon atus access roadways sha.11 be desi=aced no packing. 22. A fire sprinkler system shall be designed and installed hose s�•u� tt»es derma necessary by ;.hn Beach Fire zr. euto- ratic system stall be re ;-:Area or. all rarkina levels a.-0- pe-4es;r i a^..,a-.•s. 23. Bnt,ry gates or o he_r c---.--a devices f= _he � -4: st_�-.:ct::r= at the e-a-zance s. a-1 1 be r e ie-ve ' and ant oved ib�,. -he Leve =Me_n t Ser- vices LEp3rt"en�, Public wwrAs Pnr r nt, Fire �+ �.1���.'.�.IC�i4• De. ar tint, arZ z11 other ap: ropria 4e cenar ..-P-%.s . 24. The Covenants, Conditions, a:O F—as`.r ictions &hall be s-doject to review and amroval by the City Attorney's office and. contain a provisicr. t:.at will prohibit storage of vehicles, trailers, azd other raterials on site, unless an area that is specifically designated for such storage is pro- vided for in the project. Following the various depar tnent.al arx+ then reviews the Fedevelopmnt A e-ncy will have fir -al review and approval. 25. The developer, Agency, and the city shall enter into a main: era -ice a=r ee- ment for the public parking area, municipal pier, ar4 all la.-4sca_p "Ic.. ;"tie perimeter walkway, lighting, etc., s`,all be mk:intained by she pry ject's association. . Following tr:e various de—~tmental and other reviews the Re'evel--v. cY nt Agency will have final review a.-d approval. 26. :"he developer, Agency, aid the city shall execute a larlscape rainterance ag ee--k--7t requiring the developer to maintain all la-4scaping an site, including setbacks, public right of ways, and along the street front- ages. Following Lie various depa=t.••xrttal and other reviews the Fzdevel- o. mnt Age.•rcy'will have final review arr4 approval. 27. All fire access roads are to be a mini3rsa 24 feet. Page 9 - S tatei�-it of L don of the City CoL=il 23. All canopies or roof structures over roadways are to provide a miaim= overhead clearance of 13 feet 6 inches in height frm the road area to • the lowest point of the canopy within the 24 foot road clearance. 29. All corner turns of fire lanes are to be a minim= of 17-feet inside and 45 feet outside radius. 30. he beach a-ess roadway on the south ac:st be a mini.mtr: 24 feet and =:st loop with the beach access road cn the north side of the pier. This roadway must also be a minimzn 24 feet. The overhead clea:a.-kce tr-dp: the pier mast be a ttinimt:.^: 13 foot 6 inches in height. ne roaa.ay must be designed to facilitate beach service vehicles, bicycles, and pedestrian access, subject to city review any approval. 31. V.e rcadway and access ways designated' as fire lanes on the pie_ and over the subterranean parking area are to be reinforced to sustain the ~,-eight of fire ap pa. -a tus . 32.. Another stairway sna.11 be located on the north side of the pier, subject to review a.nd approval of the Fire Department any° Devel9ment Services Dew tr�aht. 33. Fire hydrants shall be installed on fire access road -ways a.nd the pier to -provide Fire a:;xratus w;th a_^ ac—cess travel distance of 150 feet or less from all structures. 34. An •a toratic sL•p-___I:sed fire alazz system shall be installed to tTovide the .o1? oww:nc: (a) Audible alarm. (b) Water flow sic ual. (c) Valve tam si=,.=z. (d) Trouble sic...a,I. (e) !''. nual pull stati::n- (f) Graphically displayed ir. strategic loca_ion(s). 35. An e.-rineering geologist stall be engaged to s.1x�.it a report indicating the ground surfac acceleration frog. earth move.memnt for the subject p<o- perty. All structures witnin this develaxnent shall be constructed in cormliance with the G-fact rs as im!ic:ted by the geologist's report. Calculations for fittings arZ structural merbers to withstare_ anticipated G--factors, shall be subc4tted to the city for review prior to the issu- ance of building pe.=.its. 36. A plan for silt control for all storm runoff from the property doing eocstruction and during initial operation of the facilities shall be s•.:b mitted to the Department of Public Vbrks for review. 37. The developer &.hail provide the city with a detailed des=iption of the projects proposed security syste:s for review a.-d kmproval by all af:ected departments. 38. Natural gas shall be stubbed in at the locations of coding facilities, water heaters, and central -eating mats. This recrai.resent may be waived provided that the applicant will instal a more energy efficient alterna- tive subject to the review and approval of the Development Services De;a rtnent. Page 10 - Statement of Lon of the City Council 39. All building spoils, such as unused lumber, wire, pipe, and others surplus or unusable materials, shall be disposed of at an offsite facility equip- ped to bandle theca. 40. During construction, the developer &%all make adequate provisions for continued pier access. The ccnstruc ion of the super structure of the proposed expanded deck areas on the pier shall be limited to the non-s=- merr moms. 41. The project shall be responsible for the removal aid relocation of the Beach Division Headquarters and Junior Lifeg•.ard facilities. Following the va= ious depar tx--ntal and other reviews the Redevelo!�nt ae_ncy will have final review and approval. 'the motion carrried by the followingg roll call vote: AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, "was .1c£5: Crone ABSENT : *.'pane Recess - Reccnvene The Mayor called a recess of Council at 11:55 P.M. The meeting was reconvened at 12:05 P.M. Mayer Mandic recuested a recorsideration of tine moti—. t--, approve the Pie=side Villace as he wanted to modify Corditiw No. 1(i) to require a 50, setback r�cx" the mean tide Lire as rec^sestec: b1 Thomas Pratte, re-esenting the Su f- riders FOl.n3ztlon, during the pzblic teStiz- r part_cn. of the public heari.=. A notion was made by Mandic, seconded by Green, tz reco^5i e_r Lhe rbLior. Lade MacAllister, seconded by Kelly, to ate. c e C=-0-itiora; 'se Part No. 85-43 and Coastal revel---xieant Pe -.:it No. 86-27. The motion to re,_ ­onside= cs:rier by the following roll call vote: AYES: Finley, Mandic, Bailey, Green DOES: Kelly, MacAllister, Thomas P.B=: None Following discussion, a motion was made by Ma:dic, seconded by Kelly to modify CoMition 1(i) by changing the words "...cn the north side of the pier (405' south of. the Pacific Coast Highway right-of-way...)" to read ..on the north side of the pier (355' south of the Pacific Coast Highway right -of -ray... )" . The motion failed by the following, toll call straw vote: _ AYES: Finley, Mandic, Green NOES: Kelly, uacAllister, Bailey, Thomas AESFti'T : None The motion originally made by markilister, , seconded try Kelly, to approve Con- ditional Use Permit No. 86-43 and Coastal Developme-nt Permit No. E6--27 based on findings and ccnditions as approve;3 by the Planning Co=issicn at their September 16, 1986 meeting and farther modified by Council carried by the fol- lowing roll call vote: AVM: Kelly, M,acUlister, Finley, Mandic, Bailey, Green, Thacas IMS : Ncne ABSP_T: None **:rt:tt###t*:•tttttff*•ram:.tt*:tttt�e**yet*re**.*�#**,r��e,r#�*t�tt��*tftt*.**t:*►*: xS .EXHIBIT 2Page 7 TAIPF RECOMMENDATION ON THE COASTAL PERMITt afff recommends that the Commission adopt the following resolution: I. APPPOVAL__HITH__CONDITIONS The Commission hereby grants. subject to the conditions below, a permit for the proposed development on the grounds that, as conditioned, the proposed development conforms with the City of Huntington Beach certified in geographic part Local Coastal Program and the access and recreation policies of the Coastal Act and that development will not have any adverse impacts on the environment within the meaning of the California Environmental Quality Act. U . CONDITIONS A. STANDARD CONDITIONS: See Attachment X E. SPECIAL CONDITIONS: The proposed development is subject to all special conditions of the City of F.untington Beaca Coastal Development Permit No. 86-27 except as modified below (additions are underlined/deletions struck throuchl: A-5-HNB-86-853 Page 8 2. Condition 13 shall be modified as follows: 13. The developer shall prepare a parking management and control plan for review by the Development Services Department, Public Works Department, CommunityServices Department and all other effected departments prior to, the issuance of any building permits. This plan should address valet services, shuttle programs, and methods of controlling vehicular ingress and egress. ZA a�airtdh/zxe/piari/axail/identity/mizi�azidn �ezxd�s/idr/zxetPxagE/Z/parkiri�/sxarzfali/(e/�l rt�lptdta2/aril/�diriz/xge/patlfiriQl/te�adze patkin�/and/gxrizzItl/ti�Izrri�/zxe/iss�arie¢/df eerzitieaze/dt/dee�paney/zd/zx¢/¢xrtriz/zxat Parkin4/i81MJAt/araiiabZtJI The plan shall assure that prior to the issuance of any buildinc permits, all parking requirements of the Phase I development have been met. Compliance with the parking requirements of the Huntington Beach Ordinance Code shall not be delayed to a second phase of the project. The plan shall also assure that the hours of operation of the parking structure are consistent with the hours of operation of the existing beach parking lots adjacent to the pier. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 3. Condition 14 shall be modified as follows: 14. The proposed project shall not include any new development (new decking areas) on or over existing sandy beach areas beyond 125 feet southeast of the Municipal Pier. No portion of the proposed development shall extend beyond the boundaries of District 010 as defined in the Downtown Specific Plan. The project will be responsible for construction of the new decking area adjacent to the city pier and the reconstruction of the existing pier within the project areas. This effort should be coordinated with the Department of Public Works and other city departments. I Attachment X To: Permit Applicants From: California Coastal Commission Subject: Standard Conditions 1987 aflv,Ty�0O'FLOpMEkT. The following standard conditions are imposed on all permits issued by the California Coastal Comnission. STA14DARD CONDITIONS 1. Notice of Receipt and Acknowledgement. The permit is not valid and development shall not co=ence until a copy of the permit, signed by t:e pe rr.ittee or authorized agent, acknowledging receipt of the permit and acceptance of the terms and conditions, is returned to the Commission office. 2. Exo_iration. If development has not commenced, the permit will expire two years from the date on which the Commission voted on the application. Development shall be pursued in a diligent manner and completed in a reasonable period of time. Application for extension of the permit must be made prior to the expiration date. 3. Comuiiar.ce. All development must occur in strict compliance with the proposal as set forth in the application for permit, subject to any special conditions set forth below. Any deviation from the approved plans must be reviewed and approved by the staff and may require Commission - approval. 4. Interpretation. Any questions of intent or interpretation of any condition will he resolved by the Executive Director or the Commission. 5. Inspections. The Commission staff shall be allowed to inspect the site and the development during construction, subject tc 24-hour advance notice. 6. Assignment. The permit may be assigned to any qualified person. provide assignee gnee files with the Commission an affidavit accepting all terms and conditions of the permit. 7. Terms and Conditions Run with the Land. These terms and conditions shall be perpetual. and it is the intention of the Commission and the permittee to bind all future owners and possessors of the —subject property to the terms and conditions. EY 'BIT 3 \110� LIST OF ITEMS WHICH WILL REQUIRE AGENCY REVIEW AND APPROVAL PRIOR TO PIERSIDE VILLAGE CONSTRUCTION 1. :Modifications to the Site Plan 2. DetailedMaterials Pallet 3. Planned Sign Program 4. Public Areas Detail Plan, Including Lighting, Furniture & Fixtures S. Detailed Landscape & Irrigation Plan . b. Rooftop Mechanical Equipment Plan 7. List of Proposed Uses within Village S. Onsite Circulation Plan 4. Traffic Impact Analysis Report 10. Parking Management Plan 11. Covenants, Conditions, & Restrictions for Village 12. Village Maintenance Agreement with City 13. Non -Village Area Maintenance Agreement with City 14. Beach Division Headquarters Plans • 0as1//s a a 0 0 w1 s.... wy •w r ��i`�t:'%� �/r:�' .. �, r +;. • •_ '•i'!. ii��!••.:• '� rya'. a.. •a `aa/iw 'tr"•• + .li•�'r f�. a•a••s wf as p' tea• ' :S � .�� • nr a r.u. on ,•1 1 ruw � w�. raN +ei/ } { saes■ , . TABULATIONS GROSS LAID AREA 427,3T; SOFT kluaN aw.M la a.rrY . � MYwa .rn...w •a• •. Y/ N/M M /1 r GROSS tANO COVERAGE 7E,1113 SOFT OKM SPACE (160,559SOFT) as% R)ILIC*A&KWAV* TOTAL NET LEASEADLE M1•aa a•aM as /t tV alal a/aN MYYO.• • a•.alaM ralwar/ .M W /1 a%r6 UO 'QFT . • alquaa 11 //a M 1/ PARKFA 604 SPACE? 200.502 SOFT .w•c. s so p" SITE PLAN ft#w o f mea Iff�c+.�y+7 ' 1 a M v EXHIBIT 3 M Fb E r ! 1111 1 I i1• t-I-ll-i-II-11-� I-I.1• F 1 i 111 ` 1-S I.F= 4 44 1111 ,11-1-11-I-11-' It 11-4 441 l 1111 11 wTq 1 L � 4,,,.... _..... •Y. ii � — r.M / /M. • � — � t � �- i y i • wrN r � • . y��•r�-.r_� .•may ' •r �.• -•r •Y , .� 1 •J - ti A S c O @ s ' .+r. � ••.•.ems � w ■ • ' PAAKIN* TAOUILATHN45 � e�rre.nr— w+wruw« W ri .. .�.n►.A..r�y M Y•rrr. � ' wM•GM •1 Ma/ N /0.6 M . } r • r.wr uw r.rwr •/• fear •w•y w_ 04r4/ 1 SITE PLAN ` ad 1 EXHIBIT 7 r SUMMARY COMPARISON REPORT MAIN -PIER PHASE I PROJECT Com n�sor�G'al`- 0�` 1 MVOlNGgo% u+c n C.,,, V OF H!lN'1 INGTON `,;eACH ' COUNCIL. - ADMINISTRATOR COMMUNICATION CA 86-113 To Honorable Mayor and City Council Members Subject PROPOSED AMENDMENTS MAIN -PIER D.D.A. Charles W. Thompson From City Administrator 'Ll) xi�� V-i 11Y W As a result of the Council Committee's review of the Amended hialn-Pier D.D.A. on Friday, October 24, 1986 staff has prepared and would recommend several revisions to c/o Attachme o. 7 the Sco a of Deveio meet, for the proiect. Additionally, we have 6dfied the Summary Comparison Report to reflect those Shan es, that document is attar 4�i �[S: And s aTIy, staifT—s prepared and- uld recommend a further clarification to the method of financing which is Attachment No. 8 and an additional clause has been added for the Agency's consideration. Date October 270 1986 Staff will be prepared to answer any questions you may have regarding the proposed modifications at your public hearing this evening. Respectful] submitted, • rT�'� C rles hompson City Administrator CW T:sar Attachment u 0405r Developer Responsibilities (Pier Side Village) Developer Proposal Inland side of PCH) l.J AMENDED SUMMARY COMPARISON REPORT MAIN -PIER PHASE I PROJECT D.D.A 1995 Min. 7 5, 000 sq. ft. Speciality commercial complex w/min. 500 parking spaces. Approx. 25,000 sq. ft. expanded pier decking and pier rehab. w/min. cost of $2,500,000. Emergency vehicle access ramp to pier from Beach Safety Facility. D.D.A 1985 &tin. 300 room first rate w/min. 205,000 sq. ft. including retail shops, meeting rooms, banquet facilities and at least one first-class restaurant w/a min. of 300 parking spaces. M in. 15, 000 sq.f t. commercial building. Approx. 20,000 sq.ft. public plaza with pedestrian overcrossing at PCH. Pier Side Lease 1996 &tin. 75,000 sq. ft. Speciality commercial complex w/min. 600 parking spaces. Approx. 25,000 sq. ft. expanded pier decking. Relocation cost for Beach Division Headquarters up to $500,000. Pedestrian overcrossing of PCH up to $250,000. Emergency vehicle access to pier from Beach Safety Facility. Amended D.D.A. 1996 Approx. 280 rm. first rate hotel wlapprox. 205,000 sq. ft. including retail shops, meeting room, banquet facilities and at least one high quality full service restaurant wlapprox. 450 parking spaces. Min. 0,000 sq. It. commercial building. Approx. 2 0, 000 sq. ft. public plaza with pedestrian overcrossing at PCH. 10/27/96 ' SUMMARY COMPARISON REPORT ' MAIN -PIER PHASE I PROJECT Agency _Responsibility (Pier Side and Inland Side) 2888h D.D.A 1995 Water line improvements ($1,000,000 max.) Relocation costs ($1, 000, 000 max.) Underground utilities ($350,000 max.) • Transient Occupancy Tax Pledge back for 10 years. . Tax Increment Pledge back for up to 15 years. Sale of "City Parcel" for a min. of $1,512,500 or a reuse appraisal value. Amended D.D.A. 1986 Water line improvements (Same) • Relocation costs ($1,000,000 max.) • Undergrounding utilities. (Same) • The construction of 200 parking spaces adjacent. . Transient Occupancy Tax Pledge back for up to 10 years. Tax Increment Pledge back for 3 years. Sale of "City Parcel" for $I. FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT RECOMMENDED AMENDMENT SHEET ATTACHMENT. NO. 7_ (page 2 of 7): A retail commercial building with a minimum gross leaseable area of 15,000 square feet, to be located at the Main Street and Pacific Coast Highway intersection. In addition, the Developer shall use its best efforts to develop a theater complex consisting of approximately a six-plex theater complex. ATTACHMENT NO. 7 (page 2 of 7): A Public Plaza of approximately 20,000 square feet which would include open passive rest and landscaped areas (of which approximately 5,000 square feet shall be exclusive of any commercial activities, and which approximately 5,000 square toot area may hereafter be dedicated to the City upon the mutual consent of the City and the Developer). It is understood that Agency cr City shall grant to the Developer an encroachment permit (without charge therefor) allowing the Developer to exclusive commercial use of 15,000 square feet of such City Public Plaza in a manner not inconsistent with public use of such City Public Plaza. ATTACHMENT NO. S _ (page 3 of 7): In the fifth line before the clause beginning "the proviso.......," please add: and in accordance with the Downtown Design Guidelines and Downtown Specific Plan.... �.j SUMMARY COMPARISON REPORT MAIN -PIER PHASE I PRO3ECT D.D.A 1985 Developer Min. 75,000 sq. ft. Responsibilities Speciality commercial complex (Pier Side Village) w/min. 500 parking spaces. Approx. 25,000 sq. It. expanded pier decking and pier rehab. w/min. cost of $2,500,000. Emergency vehicle access ramp to pier from Beach Safety Facility. D.D.A 1985 Pier Side Lease 1986 Min. 75,000 sq. ft. Speciality commercial complex w/min. 600 parking spaces. Approx. 25,000 sq. ft. expanded pier decking. Relocation cost for Beach Division Headquarters up to $500,000. Pedestrian overcrossing of PCH up to $250,000. Emergency vehicle access to pier from Beach Safety Facility. Amended D.D.A. 1986 Develo er Pro oral Min. 300 room first rate Approx. 280 rm. first rate hotel Inland side of PCH) w/min. 205,000 sq. ft. w/approx. 205,000 sq. ft. including retail shops, including retail shops, meeting meeting rooms, banquet room, banquet facilities and at facilities and at least least one high quality full one first-class restaurant service restaurant w/approx. w/a min. of 300 parking 450 parking spaces. spaces. . hi in. 15,000 sq. ft. Approx. 47,000 sq. ft. commercial building. commercial/office building. . Approx. 20,000 sq. ft. Approx. 25,000 sq. ft. public plaza with theatre. pedestrian overcrossing at PCH. Approx. 5,000 sq. It. public plaza w/pedestrian overcrossing at PCH. ... ►SUMMARY COMPARISON PORT r ' MAIN -PIER PHASE 1 PROJECT Agency Res onsibilit Pier Side and Inland Side) 2888h D.D.A 1995 Water line improvements ($1,000,000 max.) Relocation costs ($1,000,000 max.) Underground utilities ($350,000 max.) Transient Occupancy Tax Pledge back for 10 years. Tax Increment Pledge back for up to t 5 years. Sale of "City Parcel" for a min. of $1,512,50G or a reuse appraisal value. �bj Amended D.D.A. 1986 . Water line improvements Relocation costs ($19000,000 max.) Undergrounding utilities. . The construction of 200 parking spaces adjacent. • Transient Occupancy Tax Pledge back for up to 10 years. • Tax Increment Pledge back for 3 years. • Sale of "City Parcel" for $1. PIER SIDE LEASE BETWEEN HUNTINGTON BEACH REDEVELOPMENT AGENCY AND PIER SIDE DEVELOPMENT 10/20/86 ,1 TABLE OF CONTENTS Pacte 1. RECITALS ....................................... 1 2. PREMISES ....................................... 2 3. INGRESS AND EGRESS ............................. 2 4. TERM ........................................... 2 5. REQUIRED SERVICES AND USES - LIMITATION ON USE . 2 6. DEVELOPMENT OF THE PREMISES .................... 3 a. Scope of Development and Cost of Construction ........................... 3 b. Construction Schedule ..................... 3 C. Certificate of Completion ................. 3 7. RENT ........................................... 4 a. Minimum Annual Rent ....................... 4 b. Percentage Rental ......................... 6 C. Parking Replacement Rental ................ 6 d. Contingent Rent In Lieu of Property Tax ... 7 e. Subordination ............................. 8 8. SECURITY DEPOSIT ............................... 8 9. REPAYMENT OF LOAN .............................. 8 10. CONDITION OF TITLE; COVENANT OF QUIET ENJOYMENT. 10 11. NOTICES ......................................... 11 12. THIRD PARTY BENEFICIARY ........................ 11 13. EXHIBITS - INCORPORATION INTO LEASE ............ 11 (i) PIER SIDE LEASE This LEASE (the "Lease") is entered into this day of , 1986 (the "Effective Date"), by and between the HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corporate and politic ("LESSOP."), and PIER SIDE DEVELOPMENT, a California general partnership ("LESSEE"), who agree as follows: 1. RECITALS: This Lease is made with reference to the following facts and objectives: a. On or about August 19, 1985, LESSOR, HUNTINGTON PACIFICA DEVELOPMENT GROUP, and the City of Huntington Beach, a municipal corporation (the "City") entered into a Disposition and Development Agreement, which agreement was modified on or about February 18, 1986 (the "Original DDA"). LESSOR and LESSEE agree that the Original DDA is of no further force and effect including, without limitation, the Guarantees set forth as Attachments 7-10 thereto. Henceforth, all of the rights and obligations of the parties (and the Guarantors to be covered by Exhibits "F", "G", and "H" hereto) with respect to the "Pier Side Portion," as that term was defined in Section 103 of the Original DDA, shall be as set forth in this Lease, and all of the rights and obligations of the parties and Guarantors with respect to the "Walnut -Main Portion," as that term was defined by Section 103 of the Original DDA, shall be as set forth in the separate First Amended Disposition and Development Agreement ("Amended DDA") which is being entered into by and between LESSOR, and HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP (the "Developer") concurrently herewith. In no event shall a default by LESSEE hereunder be deemed to constitute a default by the Developer under the Amended DDA, and in no event shall a default by the Developer under the Amended DDA be deemed to constitute a default by LESSEE hereunder. Similarly, in no event shall a default by LESSOR hereunder be deemed to constitute a default by LESSOR under the Amended DDA or vice versa. -1- k./ k"'Wo b. The City is currently the owner of. that parcel of real property located in the City of Huntington Beach, State of California, described in Exhibit "A" hereto and incorporated herein by this reference (the "Premises"). Subject to the satisfaction or waiver of all of the "Conditions to Commencement" (Exhibit "C" hereto), LESSOR shall acquire the Premises from the City on or before the "Commencement Date" of the Lease term, as that date is defined in paragraph 4 below. c. On , 1985, by Resolution No. , LESSOR approved and authorized its Chairman to execute this Lease. d. This Lease is entered into for the redevelopment of property consistent with the public purposes of the Main -Pier Rede- velopment Plan, as previously adopted by the City Council of the City, and not for the purpose of speculation in unimproved land. 2. PREMISES: LESSOR agrees to lease to LESSEE and LESSEE agrees to lease from LESSOR the Premises upon the terms and conditions expressed herein. 3. INGRESS AND EGRESS: LESSEE shall have the full and unimpaired access to the Premises at all times. 4.TERM: The term of this Lease shall be fifty-five (55) years, commencing on the date (herein the "Commencement Date") that all of the conditions to the commencement of the Lease term described in Exhibit "C" hereto ("CONDITIONS TO COMMENCEMENT") are satisfied or their performance is waived. Upon the Commencement Date, LESSOR and LESSEE each agree, upon the request of the other party, to execute an appropriate memorandum in recordable form certifying the actual Commencement Date. 5. REQUIRED SERVI_CES AND USES - LIMITATION ON USE: LESSOR's primary purposes for entering into this Lease is to provide for the development of facilities and services needed by the public as well as to promote the implementation of the Redevelopment Plan for the Main -Pier Redevelopment Project (the "Redevelopment Plan"). In furtherance of that purpose, LESSEE shall during the Lease term use the Premises for the purpose of constructing and operating thereon a visitor - oriented specialty shopping center in accordance with the Scope of Development (Exhibit "D") and the approved plans for the project referenced therein, as such matters may be -2- amended or changed as provided herein. LESSEE shall not use or suffer the Premises to be used for any other purpose without the prior written consent of LESSOR. 6. PEYELOPMENT, OF THE PREMISES: a. Scope of Development and Cost -of Construc ion: LESSEE shall construct or cause to be constructed at no expense to LESSOR the "Pier Side Improvements" on the Premises as set forth in Section I of the Scope of Development (Exhibit "D"). b. Construction_ Schedule: LESSEE shall begin and complete all construction required of it within the times specified in the Schedule of Performance (Exhibit "E"). c. Cer&fficate of Completion: Promptly after LESSEE's completion of construction of all the Pier Side Improvements, but excluding normal and customary tenant improvement items, LESSOR shall furnish LESSEE with a Certificate of Completion upon written request therefor by LESSEE. LESSOR shall also furnish partial Certificates of Completion for individual buildings on the Premises. LESSOR shall not unreasonably withhold any such Certificate of Completion, Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Lease and the Certificate of Completion shall so state. After recordation of such Certificate of Completions any party then owning or thereafter purchasing the improvements, leasing the Premises, or otherwise acquiring any interest in the Premises or improvements covered by the Certificate of Completion shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Lease with respect to LESSEE's initial construction obligations hereunder. Each Certificate of Completion of construction shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. -3- If LESSOR refuses or fails to furnish a Certificate of Completion after written request from LESSEE, LESSOR shall, within thirty (30) days of written request therefor, provide LESSEE with a written statement of the reasons LESSOR refused or failed to furnish a Certificate of Completion. The statement shall also contain LESSOR's opinion of the actions LESSEE must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific iteris of materials for landscaping, LESSOR will issue its Certificate of Completion upon the posting of a bond by LESSEE with LESSOR in an amount representing a fair value of the work not yet completed. If LESSOR shall have failed to provide such written statement within said thirty (30) day period, LESSEE shall be conclusively deemed entitled to the Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of LESSEE to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. 7. R ENT: Subject to all of the terms and conditions set forth herein and in Paragraphs 7-9 of Exhibit "B", LESSEE shall pay to LESSOR rent in the form of "Minimum Annual Rent", "Percentage Rent", "Parking Replacement Rent", and, if applicable, "Contingent Rent in Lieu of Property Tax." a. Minimum Annual Rent: Beginning with the Commencement Date and continuing through the date which is the earlier of (i) the third anniversary of the City's issuance of its final Certificate of Occupancy for tenants occupying seventy-five percent (75%) of the gross leaseable area of the Pier Side Improvements or (ii) the fifth anniversary of the Commencement Date, LESSEE shall pay to LESSOR a Minimum Annual Rent equal to the total rent payable by Dwight's under its existing lease with the City for the last full calendar year period preceding the -4- Commencement Date. LESSOR hereby assigns and covenants to cause the City to assign to LESSEE all of the City's and LESSOR's rights to receive rent under the Dwight's lease from and after the Commencement Date. Beginning with the date which is the earlier of (i) the third anniversary of the City's issuance of its final Certificate of Occu- pancy for tenants occupying seventy-five percent (75%) of the.gross leaseable area of the Pier Side Improvements, or (ii) the fifth anniversary of the Commencement Date, and continuing thereafter through the date which is the sixth anniversary of the Commencement Date, the Minimum Annual Rent shall be adjusted to an amount equal to Four Dollars ($4.00) per square foot of gross leaseable area of improvements on the Premises. For the purposes of this Para- graph, the term "gross leasable area of improvements" shall mean all area located within the exterior walls of structures to be leased as stores, restaurants, and other businesses, excluding common restrooms, hallways, common area storage space (unless leased), stairwells, utility and trash enclosures, and similar spaces not typically included within the definition of the term "gross leaseable area." Beginning with the sixth anniversary of the Commencement Date, and continuing thereafter during the remainder of the Lease term, the Minimum Annual Rent shall be adjusted on each anniversary date of the Commencement Date (the "Annual Adjustment Date") using the following formula: R+ (R x (C/I x .75)) = A in which "R" represents the Minimum Annual Rent immediately prior to such Annual Adjustment Date, "C" represents the Consumer Price Index for all urban wage earners for the Los Angeles -Long Beach -Anaheim Metro- politan Area (the "Index") as it exists on such Annual Adjustment Date, "I" represents the Index for the previous Annual Adjustment Date (or, in the case of the first adjust- ment to the Minimum Annual Rent, the date one year previous to such Annual Adjustment -5- Date), and "A" represents the adjusted Minimum Annual Rent. Notwithstanding the above, no such annual adjustment shall exceed six percent (6%). The Minimum Annual Rent payable for a partial accounting year shall equal the amount that would be payable for a full accounting year multiplied by a fraction in which the numerator equals the number of days in the partial accounting year. and the denominator equals 365. b. Percentage Rental: Beginning with the date which is the third anniversary of the Commencement Date, and continuing thereafter until the earlier of (i) the date on which the accumulated "Gross Rental Receipts" (as that term is defined in Paragraph 7 of Exhibit "B") reach Six Million Dollars ($6,000,000) or (ii) the date which is the sixth anniversary of the Commencement Date, LESSEE shall pay to LESSOR Percentage Rent in an amount equal to (x) twelve percent (12%) of the Gross Rental Receipts received by LESSEE during each calendar quarter or partial calendar quarter during such period, less (y) the Minimum Annual Rent payable with respect to such period. Beginning with the earlier of (i) the date on which the accumulated Gross Rental Receipts reach $6,000,000 or (ii) the date which is the sixth anniversary of the Commencement Date, and continuing thereafter during the remainder of the Lease term, the Percentage Rent shall be adjusted to an amount equal to (x) fifteen percent (15%) of the Gross Rental Receipts received by Lessee during each calendar quarter or partial calendar quarter during said period, less (y) the Minimum Annual Rent payable with respect to such period. c. Parking Replacement Rental: Beginning with the Commencement Date and continuing thereafter during the entire Lease term, LESSEE shall pay to LESSOR (in addition to the Minimum Annual Rent and the Percentage Rent, and for the purpose of providing adequate rental to LESSOR for LESSEE's use and occupancy of the Premises) an amount -6- k ) �Wj equal to One Hundred Thousand Dollars ($100,000) per year, subject to annual inflationary increases as hereinafter set forth. Beginning with the third anniversary of the Commencement Date, the Parking Replacement Rent shall be adjusted on each anniversary date of the Commencement Date Lease term (the "Annual Adjustment Date") by multiply- ing the Parking Replacement Rent immediately prior to such Annual Adjustment Date by a fraction in which the numerator represents the Index as it exists immediately prior to such Annual Adjustment Date and the denomi- nator represents the Index for the prior Annual Adjustment Date (or, in the case of the first adjustment to the Parking Replace- ment Rent, the date one year previous to such Annual Adjustment Date); provided that no such annual adjustment shall exceed six percent (6%). The Parking Replacement Rent payable for a partial accounting year shall equal the amount that would be payable for a full accounting year multiplied by a fraction, in which the numerator equals the number of days in the partial accounting year and the denominator equals 365. d. Contingent _.Rent In Lieu --of Property Tax: If, commencing with the date which is thirty-six (36) months after the Commencement Date, or such later date that the Premises are next reassessed by the Orange County Assessor's Office, the "Gross Property Tax Increment from the Premises" (as that term is defined in Paragraph 9(i) below) for any accounting year (or the prorated amount for any partial accounting year) accrues at a rate which is less than one percent (It) of the product derived by multiplying the "gross leaseable area" of the Pier Side Improvements (as that term is defined in paragraph 7(a) above) times the sum of One Hundred Dollars ($100) per square foot, then, beginning at such time and continuing for each accounting year and partial accounting year until the beginning of the period for which the Gross Property Tax Increment accruing from the Premises -7- first commences to exceed such amount, LESSEE shall pay to LESSOR the difference. e. $ubgrdination: LESSOR agrees to execute appropriate documents required to subordinate its right to receive rent pursuant to this Lease to financing approved (or deemed approved) by LESSOR in accordance with Paragraph 16.A of Exhibit "B." 8. SECURTTY-DEPOE T,: Within ten (10) days after the Effective Date, LESSEE shall deposit with LESSOR the sum of Fifty Thousand Dollars ($50,000) (in the form of a certificate of deposit in the name of LESSOR, or an irrevocable and unconditional letter of credit, which shall be sight draft, of a term, in a form, and by a bank all acceptable to LESSOR and its counsel in its reasonable discretion) as a security deposit for the performance by LESSEE of the provisions of this Lease required to be performed by LESSEE prior to LESSOR's issuance of its final Certificate of Completion for the Pier Side Improvements. During the period that LESSOR is entitled to hold the Securi- ty Deposit, if LESSEE is in default, and such default is not cured and is not being cured in accordance with paragraph 18 of Exhibit "B," LESSOR can use the security deposit, or any portion of it, to cure the default or compensate LESSOR for all damages sustained by LESSOR resulting from LESSEE's default and LESSEE shall immediately on demand pay to LESSOR a sum equal to the portion of the security deposit expended or applied by LESSOR as provided in this paragraph so as to maintain the security deposit in the sum initially deposited with LESSOR. The security deposit (or such remaining portion thereof that has not been used by LESSOR to cure LESSEE's default or to compensate LESSOR for damages sustained by LESSOR resulting from LESSEE's default) shall be refunded promptly after the earlier of the following: (i) the date upon which LESSEE .has completed the Pier Side Improvements (excluding tenant improvements) and LESSOR is obligated to issue its final Certificate of Completion, or (ii) the expiration or termination of this Lease. LESSOR's obligations with respect to the security deposit are those of a debtor and not a trustee. LESSOR can maintain the security deposit separate and apart from LESSOR's other funds or can co -mingle the security deposit with LESSOR's funds. LESSOR shall not be required to pay LESSEE interest on the security deposit prior to the date on which LESSOR is obligated to refund same. 9. REPAYMENT, QF LOAN: Subject to subparagraph (iv) below, the sum of One Million Dollars ($1,000,000) (which for purposes of this Lease shall be deemed to be allocated to- a portion of LESSEE's costs for demolishing and clearing -6- k ./ existing improvements on the Premises, relocation of the lifeguard facility, preparing the Premises for development, and installing those off -Premises public improvements which are LESSEE's responsibility pursuant to Section I of the Scope of Development (Exhibit "D")) shall constitute an indebtedness of LESSOR to LESSEE. The unpaid principal shall bear interest at the rate of seven percent (7%) per annum, compounded annually, commencing on the date the final Certificate of Completion is issued for the Pier Side Improvements pursuant to paragraph 6(c) above and continuing until principal and interest are paid in full or the unpaid balance is forgiven and discharged as provided below. Payments shall be credited first to interest due'and then to reduce any unpaid principal. Said indebtedness will be repaid in the manner, and subject to the terms and condi- tions, set forth below. (i) The amount of each installment payment to be made by LESSOR to LESSEE hereunder shall equal One Hundred Percent (100%) of the "Net Property Tax Increment from the Premises", as that tern: is defined below, generated from the Premises and allocated to and received by LESSOR.with respect to the three (3) year period following the issuance of the final -Certificate of Completion for the Pier Side Improvements (with such amounts determined on an accrual basis); provided, however, that fifty percent (50%) of the Net Property Tax Increment from the Premises in and for the third such year shall be paid on the payment dates in such year and the remaining fifty percent (50%) shall be paid on the payment dates in the next succeeding year. The "Net Property Tax Increment from the Premises" shall mean those amounts determined as follows:.. from (i) the property or possessory interest tax revenue received by LESSOR pursuant to California Health and Safety Code Section 33670(b) equal to that paid or caused to be paid with respect to the Premises (the "Gross Property Tax Increment from the Premises") deduct (ii) twenty percent (20%) of the Gross Property Tax Increment from the Premises (consistent with Section 33334.2 of the California Health & Safety Code) , ( iii ) all funds payable to affected taxing agencies pursuant to agreements heretofore entered into by LESSOR and such taxing agencies (consistent with Sections 33401 and 33445 of the California Health and Safety Code), and -9- further deduct (iv) an amount equal to three percent (3%) of the Gross Property Tax Increment (which LESSOR shall be entitled to retain for its administrative and overhead expenses). (ii) The sole source of payment of the indebted- ness referenced in this paragraph 9 shall be property tax revenues allocated and paid to LESSOR from the Premises. (iii) Except as specifically set forth in subparagraph (i) above, installment payments shall .be made on the fifteenth (15th) day following the end of each calendar quarter of each year during the period that the obligation remains in effect, based upon the amount of revenues received by LESSOR during such preceding calendar quarter. (iv) Provided that LESSOR shall have timely made each of the installment payments in the full amount set forth in subparagraph (i), any unpaid principal and interest on the indebtedness referenced in this paragraph 9 shall be forgiven, discharged, and deemed to have been donated by LESSEE to LESSOR. 10. ONDITI N OF TITLE• _COVENANT —OF ourET ENJOYMENT. Subject to the satisfaction or waiver of all of the Conditions to Commencement (Exhibit "C" hereto), LESSOR covenants to convey to LESSEE the leasehold estate to the Premises in the "Approved Title Condition" referenced therein. LESSOR further covenants that, at the Commencement Date, LESSOR shall cause First American Title Insurance Company, or such other.. title company as may be mutually approved by LESSOR and LESSEE, (the "Title Company"), to deliver to LESSEE an ALTA Survey and ALTA Extended Coverage (Form S) policy or policies of title insurance issued by the Title Company insuring that the leasehold estate is vested in LESSEE in such condition. The Title Company shall provide LESSOR with a copy of the title policy. The total amount of title insurance coverage for the Premises shall be the sum of Four Million Dollars ($4,000,000). _ LESSOR shall pay that portion of the cost and expenses of the premium for the title policy which is equal to what the premium would have been if the title policy were a CLTA policy, and LESSEE shall pay the balance of such premium. LESSEE shall pay the cost of any new survey required in order -10- to obtain the title policy. LESSEE shall pay the cost for any additional coverage or endorsements that it may request. LESSOR covenants that LESSEE, upon payment of the rent and performing the covenants in the Lease required to be performed by LESSEE, may quietly have, hold, and enjoy the Premises during the term of this Lease without hindrance or interruption by LESSOR or any party claiming by, through, or under LESSOR. 11. NOTICES: Any notice, denand, request, consent, approval or communication that either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid first class mail to the other party at the address set forth below: TO: LESSOR TO: LESSEE Huntington Beach Redevelopment Agency Attention: Executive Director/City Administrator 2000 Main Street Huntington Beach, CA 92648 Huntington Pacifica Develop- ment Group 2905 East 50th Street Vernon, CA 90058 Attention: General Partner and Don Lowry, Esq. 9595 Wilshire Blvd., Ste. 801 Beverly Hills, CA 90212 Either party may change its address by notifying the other party of the change of address. Notice shall be deemed communicated within three (3) business days from the time of the mailing, if mailed as provided in this paragraph. 12. THIRD_ PARTYBENEFICIARY: The City (but no other person or entity) shall be deemed a third party beneficiary of this Lease. 13. EXHIBITS -- INCORPORATION INTO LEASE: The follow- ing exhibits referred to in this Lease are attached hereto and by this reference incorporated herein: Exhibit "A" - Exhibit "B" - Legal Description of Premises GENERAL CONDITIONS -11- �wl Exhibit "C" - CONDITIONS TO COMMENCEMENT Exhibit "D" - Scope of Development Exhibit "E" - Schedule of Performance Exhibit "F" - Form of Guaranty of Stanley M. Bloom Exhibit "G" - Form of Guaranty of Uri E. Gati Exhibit "H" - Form of Guaranty of Bryant L. Morris HUNTINGTON BEACH REDEVELOPMENT AGENCY, a public body, corpo- rate and politic .�+ 1986 By Chairman ATTEST: a!Z;—ge2Secretary APPROVED AS TO FORM: Age cy Special C n 1 REVIEWED AND APPROVED AS TO FORM: I - 4��_ 1-1* Agency Attorney INITIATED AND APPROVED AS TO APPROVED: -12- 4/087/011323-0001/06 PIER SIDE DEVELOPMENT, a California general partnership By: PIER SIDE, INC., a California corporation (general partner) 1986 By: -- Its By: HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP, a Cali- fornia limited partnership (general partner) By: AVIV GROUP LIMITED, a California limited partnership By: AVIV DEVELOPMENT CORPORATION, a California Corporation i 1986 By: A C Its 1986 By: Its By: PACIFIC HERITAGE CORPORATION, a California Corporatio 1986 By. Its LESSEE -13- 1 , 1986 e) , 1986 1986 1986 4/087/011333-0'001/06 PIER SIDE DEVELOPMENT, a California general partnership By: PIER SIDE, INC., a California corporation (general partner) By• Its By: HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP, a Cali- fornia limited partnership (general partner) By: "IV GROUP LIMITED, a California limited partnership By:• AVIV DEVELOPMENT CORPORATION, a California Corporation B Y: Its t . By: Its By: PACIFIC HERITAGE CORPORATION, a California Corporation By• Its LESSEE -13- PIER SIDE LEASE Correct Address for... Brvant L. Dorris Development 6992 El Camino Real Suite 104-448 CARLSBAD, CA. 92008 EXHIBIT "A" LEGAL DESCRIPTION That portion 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 the County recorder of said county described as follows: Beginning at the centerline intersection of Pacific Coast Highway and Lake Street shown as Ocean Avenue and First Street respectively on said mentioned map; thence along the centerline of Pacific Coast Highway south 48° 21' 42" east 37.50 feet to the intersection with the southwesterly extension of the southeast right of way line of Lake Street; thence south 410 38' 18" west 50.00 feet to the true point of beginning; thence north 480 21' 42" west 1050.00 feet; thence south 410 38' 18" west 450.00 feet; thence south 480 21' 42" east 230.00 feet; thence north 410 38'18" east 250.00 feet; thence north 480 21' 42" east 820.00 feet; thence north 41° 38' 18" east 200.00 feet to the true point of beginning. Exclusive of the parcel of land the boundary being described as follows: Beginning at the centerline of intersection of Pacific Coast Highway and Main Street thence southerwesterly along the centerline of Pacific Coast Highway south 4812 21' 42" east 37.50 feet; thence south 410 38' 18" west 141.00 feet to the true point of beginning; thence south 480 21' 42" east 136.00 feet; thence south 410 38' 18" west 100.00 feet; thence north 480 21' 42" west 136.00 feet; thence north 410 38' 18" east 100.00 feet to the true point of beginning. EXHIBIT "B" GENERAL CONDITIONS TABLE O^ CONTENTS Paragraph Caption 1. Charge for Late Payment 2. Utilities 3. Construction of Improvements by Lessee 4. Signs S. Destruction 6. Maintenance 7. Gross Rental Receipts 8. Rent Payment Procedure and Accounting 9. Records, Books of Account, Accounting Statements and Audits 10. Insurance 11. Indemnity 12. Taxes and Assessments 13. Unlawful Use 14. Abandoned Personal Property 15. Holding Over 16. Assigning, Subletting and Encumbering 17. Successors in Interest 18. Lessee's Default 19. Lessor's Remedies 20. Lessor's Default 21. Quitclaim of Lessee's Interest Upon Termination 22. Total Taking 23. Partial Taking 24. Eminent Domain Award 25. Amendments 26. Captions 27. California Law 28. Waiver 29. Nondiscrimination 30. Force Majeure 31. Arbitration 32. Time -2- WA EXHIBIT "B" GENERAL CONDITIONS 1. CHARGE FOR LATE PAYMENT: Rent not paid when due shall accrue interest at the rate of twelve percent (12%) per annum commencing five days from the date due until paid. 2. UTILITIES: LESSOR agrees to provide, at no expense to LESSEE, all utilities (water, sewer, gas, electrical, and telephone) required for the development, use and maintenance of the Pier Side Improvements, with sufficient capacities to adequately service the Premises, with such utilities to be located on the Premises or in the public street adjacent thereto. LESSEE agrees to extend all utilities from said locations and to be responsible for tie- ins and metering. LESSEE shall make all arrangements for and pay for all utility services furnished to or used by it, including without limitation gas, electricity, water, telephone service, trash collection, and utilities used or consumed at public restrooms to be constructed by Lessee on the Premises. 3. CONSTRUCTION OF IMPROVEMENTS BY LESSEE: a. Statement of Construction _Costs and "As Build" -Plan,-; Within sixty ( 60 ) days following LESSOR's issuance of its final Certificate of Completion for the Pier Side Improvements described in the Scope of Development (Exhibit "D"), LESSEE shall furnish LESSOR a complete set of "As -Built" plans and an itemized statement of the actual construction cost of such improvements. The statement of cost shall be signed by LESSEE or its responsible agent and sworn to under penalty of perjury. . b. Alterations: Subject to obtaining all requisite governmental permits and authori- zations, LESSEE shall have the right to make non-structural alterations to the interior of any buildings located upon the Premises, provided that the same when complete are of a character so as not to adversely affect the value of the improvements and the rental value thereof immediately before such alteration. LESSEE shall not make or permit any structural or exterior alterations, additions or improvements to be made to or upon the Premises inconsistent with the approved plans referenced in the Scope of EXHIBIT "B" -1-- Development (Exhibit "0") without first obtaining the written approval of LESSOR, which approval shall not be unreasonably withheld. c. improvements to Become property of LESSOR Subject to subparagraph (d) below, all buildings, improvements and facilities, exclusive of trade fixtures, constructed or placed upon the Premises by LESSEE must, upon completion, be free and clear of -all liens, claims, or liability for labor and materials and all such property and improvements shall become the property of LESSOR at the expiration of this Lease or upon earlier termination hereof. d. Mechanic's Liens; LESSEE shall at all times indemnify and save LESSOR harmless from all claims for labor and materials in connection with construction, repair, alteration, and installation of structures, improvements, equipment, and facilities upon the Premises, and from the cost of defending against such claims, including attorney's fees. In the event of a lien imposed upon the Premises as a result of such construction, repair, alteration, or installation, LESSEE shall either: (1) Record a valid Release of Lien; or (2) Deposit with LESSOR cash in an amount equal to 125% of the amount of the lien and authorize payment to the extent of said deposit to any subsequent. final judgment holder that may arise as a matter of public record from litigation with regard to the lienholder's claim; or (3) Procure and record a bond, in accordance with Section 3143 of the California Civil Code, which frees the Premises from the claim of the lien and from any action brought to foreclose the tier.. Should LESSEE fail to accomplish one of the above within ninety (90) days after the filing of such a lien, but in no EXHIBIT "H" -2- event after final judgment is entered, such failure shall be a material default under this Lease. 4. IGNS: LESSEE, at its cost, shall have the right to place,. construct, and maintain exterior signs on the buildings and other improvements to be constructed by LESSEE on the Premises in accordance with the plans approved by LESSOR and the City. LESSEE shall not have the right to place, construct, or maintain on the Premises any other exterior sign, advertisement, awning, banner or decoration without LESSOR's consent, except as permitted under the Huntington Beach Ordinance Code. 5. DEaTRUCTION: a. p2gtruction Due to Risk Covered by Insurance: If, during the Lease term, the Pier Side Improvements are totally or partially destroyed from a risk covered by the insurance described in paragraph 10(c) of these GENERAL CONDITIONS, this Lease shall not terminate and LESSEE shall prompt- ly and diligently restore or cause to be restored the Pier Side Improvements to substantially the same condition as they were in immediately before such destruction, whether or not the insurance proceeds are sufficient to cover the actual cost of restoration. If existing laws do not permit the restoration, LESSEE may elect to termi- nate this Lease by giving notice to Lessor. In the event this Lease is terminated, LESSOR and LESSEE shall share any excess insurance proceeds on the basis of their respective interests in the. Pier Side Improvements after payment of any outstanding balance due any leasehold mortgagee. b. Destruction Due_ to Risk Not Covered by Insurances If, during the Lease term, the Pier Side Improvements are totally or partially destroyed from a risk not covered .by the insurance described in paragraph 10(c) of these GENERAL CONDITIONS, this Lease shall not terminate except as expressly provided herein, and LESSEE shall restore the Pier Side Improvements to substantially the same condition they were in immediately before destruction; provided, however, if such destruction occurs during the last 10 years of the term or the cost of EXHIBIT "B" Mc restoration exceeds twenty percent (20%) of the then replacement value of the Pier Side Improvements destroyed or if existing laws do not permit the restoration, then LESSEE may elect to terminate this Lease by giving notice to LESSOR. c. No Abatement of Rent: Provided that business interruption insurance is reasonably available to LESSEE in the insurance market (as referenced in paragraph 10(d) and (e) below, there shall be no abatement or reduction of rent in the event of a total or partial destruction of the Pier Side Improvements. If, however, LESSEE suffers such a casualty loss during a period for which business interruption insurance is not so available, the Minimum Annual Rent, and, if applicable, the Contingent Rent In Lieu of Property Tax (but not the Parking Replacement Rent) shall be reduced by a fraction, the numerator of which is the total gross leaseable area on the Premises from which business cannot be conducted during the period of the casualty loss and the denominator of which is the total gross leaseable area of the Pier Side Improvements immediately prior to the casualty loss. The period of the reduction shall run from the date of the casualty loss to the earlier of (i) the date on which LESSEE completes restoration of the Premises or (fi) the date on which LESSEE, exercising reasonable diligence, should complete restoration of the Premises. 5. MAINTENANCE: a. LESSEE's Obligation: LESSEE, at its cost, shall keep and maintain the Premises and all improvements of any kind which may be constructed, installed, or made thereon (including the public restrooms on the premises) in good condition and in substantial repair. LESSEE expressly agrees to maintain the Premises (including the public restrooms on the Premises) in a safe, clean, wholesome and sanitary condition and in compliance with all applicable laws. LESSEE further agrees to provide approved containers for trash and garbage and keep the Premises free and clear from EXHIBIT "B" -4- V Lj 7. accumulations of rubbish and litter. LESSOR shall have the right to enter upon and inspect the Premises at any time for cleanliness and safety. LESSEE shall designate in writing to LESSOR an onsite representative who shall be responsible for day-to-day operation. b. LESSOR's Right to _Repair: If LESSEE fails to maintain or make repairs or replacements as required herein, LESSOR may notify LESSEE in writing of said failure. Should LESSEE fail to correct the situation within a reasonable time thereafter, LESSOR may, but shall not be required to, make the necessary correction, and the reasonable cost thereof, including but not limited to the cost of labor, materials, and equipment and aftinis- tration, shall be deemed additional rent to be paid by LESSEE within ten (10) days of receipt of a statement of said cost from LESSOR. LESSOR may, at its option, choose other remedies available herein, or by law. ROSS RENTAL RECEIPTS: a. Except as specifically provided in subparagraph (b) below, the term "Gross Rental Receipts" as used herein shall mean the total of all amounts received by the LESSEE in connection with the Premises (or any portion thereof), including without limitation: (i) rent and all other consideration of any kind paid by sublessees, licensees, and concessionaires; (ii) all admission, entry and other fees of any nature or kind charged by LESSEE (other than revenues received for parking); and (iii) proceeds from business interruption insurance or other insurance of a similar kind. b. Gross Rental Receipts shall exclude: income of sublessees, licensees, and concession- aires; refundable deposits; parking revenues and common area maintenance ("CAM") charges to sublessees, licensees, and conces- sionaires (inclusive of an amount not to exceed fifteen percent (15%) of such charges to cover LESSEE's administrative and overhead expense) for items such as taxes, insurance, security, landscaping, repairs, EXHIBIT "B" -5- painting, lighting, depreciation of equipment, cooperative advertising. trash removal, pest control, and For purposes of determining Gross Rental Receipts, in the event of any sublease to a party in which LESSEE has an interest of more than 10% in profits or losses or in which LESSEE owns stock, unless the prior written approval to such sublease has been obtained, Gross Rental Receipts with respect to such sublease shall be deemed to be the greater of (i) the net rental amount (excluding refundable deposits and CAM's) actually paid by such tenant or (ii) an amount produc- ed by multiplying the total square feet of the demised premises so subleased by the highest net rental per square foot received experienced by the LESSEE in connection with any sublease of the Premises for the time period in question. 8. RENT PAYMENT PROCEDURE AND ACCOUNTING: a. Accounting Year: The phrase "accounting year" as used herein shall be a period of twelve (12) consecutive full calendar months commencing on January 1. Any payment period or period which is less than twelve full calendar months is a partial accounting year. b. Payment of Rentals: (1) Minimum Annual Rentand Contingent Rent In Lieu__o,f Property Tax: The Minimum Annual Rent and, if applicable, the Rent In Lieu of Property Tax shall be paid in twelve (12) equal installments (or in the case of a partial accounting year, in equal installments, one such installment ..for each full calendar month in the partial accounting year). Said payments shall be made in advance on the first day of each month during each accounting year or partial accounting year of the Lease term. (2) Percentage Rent: Within thirty (30) days after the end of each calendar quarter during the Lease Term, LESSEE shall pay to LESSOR an amount determined in accordance with Section 7(b) of the Lease for such period. At the end of each accounting year during the Lease term, promptly after LESSEE has submitted to LESSOR LESSEE's EXHIBIT "B" -6- financial statements, as provided in paragraph 9 below, any necessary adjustment to the Percentage Rent for such year shall be made by cash pay- ment. (3) Parking Replacement Rental; Concurrent- ly with the first monthly installment payment of Minimum Annual Rent with respect to each accounting year or partial accounting year during the entire Lease term, LESSEE shall pay to LESSOR an amount determined in accordance with Section 7.c. of the Lease as Parking Replacement Rent for such accounting year or partial accounting year. c. plage_of Payment and Filings, Rent payments shall be delivered to and accounting state- ments shall be filed with the Executive Director of LESSOR, 2000 Main Street, Huntington Beach, California 92648. The designated place of payment and filing may be changed at any time by LESSOR upon written notice to LESSEE. Rentals may be paid by check made payable to the Huntington Beach Redevelopment Agency. A duplicate copy of all statements and reports herein required shall also be filed with the Finance Director of the City of Huntington Beach. 9. RECORDS, BOOKS,OF__ACCOUNT. ACCOUNTING STATEMENTS, AND AUDITS: LESSEE shall keep or cause to be kept at the Premises, or at LESSEE's principal place of business in Southern California, in accordance with generally accepted accounting principles, full and accurate books of account, records, cash receipts and other pertinent data showing its Gross Rental Receipts. Such books of account, records, cash receipts and other pertinent data shall be kept for a period of four (4) years after the end of each accounting year and partial accounting year. The receipt by LESSOR of any statement, or any payment of percentage rent for any period, shall not bind LESSOR as to the correctness of the statement or the payment. LESSOR shall be entitled at any time within four (4) years after the end of an accounting year or partial accounting year, upon reasonable notice to LESSEE, to inspect and examine all LESSEE's books of account, records, cash receipts and other pertinent data relating to such accounting year or partial accounting year so LESSOR can ascertain the EXHIBIT "B" -7- amount of Percentage Rent due LESSOR. LESSEE shall cooperate fully with LESSOR in making the inspection. Within ninety (90) days after the end of each accounting year or partial accounting year, LESSEE shall at its own expense submit to LESSOR financial statements including a balance sheet and income statement prepared by an independent certified public accountant, which shall specifically include with respect to the preceding accounting year or partial accounting year: (i) the amount of Gross Rental Receipts for such year (separately delineating receipts from each of the businesses conducted in, on, or from the Premises); (ii) the total Minimum Annual Rent and total Percentage Rent, if any, paid by LESSEE in and for such year; and (iii) the amount, if any, by which the total Percentage Rent -for such year exceeds the Minimum Annual Rent paid during the same period. LESSOR shall also be entitled, no more than once for each accounting year, to audit LESSEE's books of account, records, cash receipts and other pertinent data to determine LESSEE's Gross Rentals Receipts. The audit shall be limited to the determination of Gross Rental Receipts and shall be conducted during usual business hours at the Premises or at the office at which LESSEE maintains its records. If the audit shows that there is a deficiency in the payment of Percentage Rent, the deficiency shall come iirmediately due and payable as additional rent. The cost of the audit shall be paid by LESSOR unless the audit shows that LESSEE understated Gross Rental Receipts by more than (5%), in which case LESSEE shall pay all LESSOR's cost of the audit. If within six (5) months after receiving the results of any audited financial state- ments by LESSEE's certified public accountant with respect to any accounting year or partial accounting year, LESSOR does not deliver a written notice to LESSEE disputing LESSEE's calculation or payment of Percentage Rent for said year, LESSOR shall be conclusively deemed to have accepted LESSEE's calculation or payment, and thereafter LESSOR shall neither reinspect or reaudit LESSEE's records nor demand payment of additional Percentage Rent for said year. If within thirty (30) days after receiving the results of its own audit with respect to any accounting year or partial accounting year, LESSOR does not deliver a written notice to LESSEE disputing LESSEE'S calculation or payment of Percentage Rent for said year, LESSOR shall be conclusively deemed to have accepted LESSEE's calculation or payment, and thereafter LESSOR shall neither reinspect or reaudit LESSEE'S records nor demand payment of additional Percentage Rent for said year. 10. INSURANCE: LESSEE, at its cost, shall maintain or cause to be maintained during the entire Lease term the following policies of insurance: EXHIBIT "B" -8- M a. Public liability and property damage insurance with combined single limits of at least $5,000,000, part of which may be provided in the form of umbrella coverage. LESSOR shall be named as an additional insured and the policy or policies shall contain cross -liability endorsements. Coverage shall be primary and not contributing with any coverage maintained by LESSOR. The policy shall contain a waiver of subrogation in favor of LESSOR. Not more frequently than each two (2) years, if, in the reasonable opinion of LESSOR or of an insurance broker retained by LESSOR, the amount of public liability and property damage insurance coverage at that time is not adequate, LESSEE shall increase the insurance coverage as required by either LESSOR or LESSOR's insurance broker; provid- ed, that the percentage increase in coverage shall not be required to exceed the per- centage increase in the Index since the last requested adjustment (or, in the case of the first requested adjustment, the percentage increase in the Index since the commencement of the Lease term). The insurance to be provided by LESSEE may provide for such deductibles or self -insured retention as shall be acceptable to the Executive Director or his designee. In the event such insurance does provide for deductibles or self -insured retention, LESSEE agrees that it will fully protect LESSOR, its boards, officers, and employees in the same manner as these interests would have been protected had the policy or policies not contained the deductible or retention provisions. b. LESSEE's indemnification obligations under paragraph 11 shall extend to damage result- ing from risks insurable by garagekeepers' legal liability insurance. The public liability insurance required in paragraph 10.a. above shall include garagekeepers' legal liability coverage. c. A policy of standard fire and extended coverage insurance to the extent of at least 90% of the replacement value of all of LESSEE's personal property, improvements and alterations on or about the Premises. Subject to paragraph 5 of these GENERAL EXHIBIT "B" -9- CONDITIONS, the proceeds from any such policy shall be used by LESSEE for the replacement of personal property and the restoration of LESSEE's improvements or alterations, d. Business interruption insurance insuring that the Minimum Annual Rent due LESSOR will be paid to LESSOR for a period of up to twelve (12) months if the Premises are destroyed or rendered inaccessible by a risk whether covered by insurance or not. e. Notwithstanding any other provision of this paragraph 10 to the contrary, LESSEE's obligations pursuant to parts a, b, c and d of this paragraph 10 shall be conditioned upon the reasonable availability of such coverages, terms, and conditions in the insurance market. The foregoing insurance policies shall contain endorsements requiring thirty (30) days written notice from the insurance company to both parties before cancellation or change in coverage, scope, or amount of any policy. Each policy or a certificate of the policy together with evidence of payment of premium shall be deposited with LESSOR at the commencement of the Lease term and on renewal of each policy not less than twenty (20) days before the expiration of the term of the policy. The procuring of such required policy or policies of insurance shall not be construed to limit LESSEE's liability hereunder nor to fulfill the indemnification provisions and requirements of paragraph 11. Notwithstanding said policy or policies of insurance, LESSEE shall be obligated for the full and total amount of any damage, injury or loss caused by LESSEE's negligence or that of its agents, sublessees, concessionaires, licensees, and their agents and employees in connection with this Lease or with the .use and occupancy of the Premises. 11. INDEMNITY: LESSEE shall indemnify, defend, and hold LESSOR harmless from all damages arising out of any damage to any person or property occurring in, on, about, or from the Premises proximately caused by any acts by or omissions of LESSEE or its agents, sublessees, concessionaires, licensees, and their agents and employees. 12. TAXES AND ASSESSMENTS: LESSEE recognizes and understands that this ^Lease may create a possessory interest subject to property taxation and that LESSEE may be subject EXHIBIT "B" -10- to the payment of property taxes levied on such interest. LESSEE shall pay or cause to be paid all taxes and assessments levied upon the Premises based on the assessed value of the entire property and not merely the assessed value of LESSEE's leasehold interest. LESSEE shall also pay or cause to be paid any taxes and assessments which may be levied upon any fixtures, equipment, or other property installed, constructed or located on the Premises. LESSEE may, at any time, in good faith and upon reasonable grounds, dispute or contest the validity of the whole or any part of any such taxes or assessments, and during the period of any such dispute shall not be deemed in default hereof so long as LESSEE does not subject the Premises to foreclosure or sale and promptly pays the amount finally determined to be due. 13. UNLAWFUL_USE: LESSEE agrees that no improvements shall be erected, placed upon, operated, nor maintained upon the Premises, nor any business conducted or carried on therein or therefrom, in violation of the terms of this Lease, or of any regulation, order, law, statute, or ordinance of a governmental agency having jurisdiction. 14. ABANDONED PERSONAL PROPERTY: If LESSEE abandons the Premises or is dispossessed thereof by process of law or otherwise, title to any personal property belonging to LESSEE and left on the Premises forty-five (45) days after such abandonment or dispossession shall be deemed to have been transferred to LESSOR. LESSOR shall have the right to remove and to dispose of such property without liability therefor to LESSEE or to any person claiming under LESSEE, and shall have no need to account therefor. LESSEE hereby designates LESSOR's Executive Director as its attorney -in -fact to execute and deliver such documents as may be reasonably required to dispose of such abandoned property and transfer title -thereto. 15. HOLDING AVER: In the event LESSEE shall continue in possession of the Premises after the expiration of the Lease term, such possession shall not be considered a renewal of this Lease but a tenancy from month to month and shall be governed by the conditions and covenants contained in this Lease. 16. ASSIGNING, SUBLETTING, AND ENCUMBERING: A. Assignments The qualifications and identity of LESSEE are of particular concern to LESSOR. It is because of those qualifications and identity that LESSOR has entered into this Lease with LESSEE. Accordingly, LESSEE shall not, except as permitted in this paragraph 16, assign all or any part of EXHIBIT "B" -11- this Lease or any of Lessee's rights hereunder without the prior written approval of LESSOR. LESSOR agrees that it will not unreasonably withhold such approval. In this regard, LESSOR agrees that in the event of a request by LESSEE to assign LESSEE's interest in the Lease or the Premises, LESSOR shall grant such approval provided (i) such assignment is made to a responsible third party who will undertake LESSEE's responsibilities under this Lease to use and develop the Premises, or portion thereof, in accordance with this Lease; (ii) such third party shall demonstrate sufficient development qualifications and experience to assure the development of the Pier Side Improvements and operation of Pier Side Village, or portion thereof, in accordance with this Lease; (iii) such third party shall demonstrate sufficient financial resources or commitments equal to or greater than those of Pier Side Development (and, if the Guarantors covered by Exhibits "F", "G", and "H" are proposed to be released, of such Guarantors as well) to assure development and/or operation of the project, or portion thereof, in accordance with this Lease; and (iv) the assignor agrees that it shall not, prior to LESSOR'S issuance of the final Certificate of Completion with respect to the Premises in accordance with Paragraph f(c) of the Lease, receive cash or equivalent consideration for the assignment in excess of the amount of its contribution to the planning, design, financing, acquisition, and development of the Premises prior to the effective date of the assignment (with the understanding that such restriction shall not apply to consideration which may be received by the assignor after issuance of said Certificate of Completion). LESSOR further agrees not to unreasonably disapprove an assignment to a financially responsible lender which assignment consists of a mortgage, deed of trust, sale and lease back, or other form of conveyance for financing, provided that prior to LESSOR's issuance of its final Certificate of Completion, LESSOR shall have no obligation to approve such an assignment unless LESSOR determines in its reasonable discretion that such assignment is for the purpose of securing loans of funds to be used solely for financing the direct and indirect costs, including without limitation financing costs, interest, and commissions, of planning, designing, constructing, developing, leasing, and operating the improvements to be constructed by LESSEE with respect to the Premises. Notwithstanding any other provision of this Lease to the contrary, LESSOR approval of an assignment of this Lease or any interest herein shall not be required in connection with any of the following: (i} Any transfer entities in combination of EXHIBIT "B" to any entity or which LESSEE or a Stanley M. Bloom, Uri -12- E. Gati, and Bryant L. Morris retain a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retain management control. (ii) Transfers resulting from the death or mental or physical incapacity of an individual. (iii) Transfers or assignments in trust for the benefit of a spouse, children, grandchildren, or other family members. (iv) A transfer of LESSEE'S interest in the Premises at foreclosure (or a conveyance thereof in lieu of a foreclosure) pursuant to a foreclosure thereof by a lender approved (or deemed approved) by LESSOR in accordance with this Paragraph 16.A Exhibit "B." (v) A sale or transfer of some or all of LESSEE'S interest in the Premises to a lender approved (or deemed approved) by LESSOR in accordance with this Paragraph 16.A of Exhibit uB " (vi) The conveyance or dedication of any portion of the Premises to the City or other appropriate governmental agency, or the granting of easements or permits to facilitate the development of the Premises. (vii) The leasing of any part or parts of a building or structure for occupancy, or entering into of any concession agreements, licenses, or other contracts for the operation of authorized businesses to be conducted on the Premises. (viii) A transfer of stock resulting from or in connection with a reorganization as contemplated by the provisions of the Internal Revenue Code of 1954, as amended or otherwise, in which the ownership interests of a corporation EXHIBIT "B" -13- are assigned directly or by operation of law to a person or persons, firm or corporation which acquires the control of the voting capital stock of such corporation or all or substantially all of the assets of such corporation. (ix) A transfer of stock in a publicly held corporation or the transfer of the beneficial interest in any publicly held partnership or real estate investment trust. LESSEE shall deliver written notice to LESSOR requesting approval of any assignment requiring LESSOR approval hereunder. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's development qualifications and experience and its financial commitments and resources to enable LESSOR to evaluate the proposed assignee pursuant to the criteria set forth under (ii) and (iii) of the first paragraph of this Paragraph 16.A. At the_same time, LESSEE shall submit to LESSOR LESSEE'S statement certifying (if such be the case) that it will not, prior to LESSOR'S issuance of the final Certificate of Completion with respect to the Premises, receive cash or equivalent consideration for the assignment in excess of its capital contribution, as set forth under (iv) of the first paragraph of this Paragraph 16.A. Within thirty (30) days after the receipt of LESSEE'S written notice requesting LESSOR approval of an assignment, LESSEE shall respond in writing by stating what further information, if any, LESSOR reasonably requires in order to determine whether or not to approve the requested assignment. Upon receipt of such a timely response, LESSEE shall promptly furnish to LESSOR such further information as may be reasonably requested. LESSEE'S request for approval of an assignment shall be deemed complete thirty (30) days after LESSOR'S receipt thereof, if no timely response requesting further information regarding the proposed assignee is delivered to LESSEE, or, if such a timely response requesting further information is received, on the date that LESSEE delivers such additional information to LESSOR. Once LESSEE'S request for approval of an assignment has been accepted as or is deemed complete, LESSOR shall not be entitled to demand additional information or to disapprove the assignment on the basis that LESSEE has not furnished adequate or complete information. EXHIBIT "B" -14- LESSOR shall approve or disapprove any requested assignment for financing purposes which requires LESSOR approval within fifteen (15) days after LESSEE'S request therefor is accepted as or is deemed complete. LESSOR shall approve or disapprove any other requested assignment requiring LESSOR approval within thirty (30) days after LESSEES request therefor is accepted as or is deemed complete. Any disapproval shall be in writing and shall specify the reasons for the disapproval and, if applicable, the conditions required to be satisfied by LESSEE in order to obtain approval. If LESSEE'S initial notice requesting approval of the assignment is accompanied by a letter to LESSOR'S Executive Director referencing this Paragraph 16.A of Exhibit "B" to the Lease, and stating that the requested assignment shall be deemed approved if not disapproved by LESSOR within the required time, LESSOR'S failure to timely disapprove a request for assignment shall be conclusively deemed to constitute an approval. LESSEE shall actual reasonable expenses overhead expenses) incurred assignee's qualifications as a compensate LESSOR for its (not including personnel or in investigating a proposed permitted assignee hereunder. No assignment of LESSEE'S obligations with respect to the Premises, whether or not LESSOR approval is required therefor (but specifically excluding assignments for financing purposes, and those types of assignments identified in subparagraphs (iv), (v), and (vi), (vii), and (ix)), shall be effective unless and until the proposed assignee executes and delivers to LESSOR an agreement in form reasonably satisfactory to LESSOR'S attorney assuming the obligations of LESSEE which have been assigned. Thereafter, the assignor shall remain responsible to LESSOR for performance of the obligations assumed by the assignee unless LESSOR releases the assignor in writing or unless LESSOR has approved the assignee on the basis of the criteria set forth under (i), (ii), and (iii) of the firs paragraph of this Paragraph 16.A, in either of which events the assignor shall be released only from those obligations arising prior to the effective date of the assignment. As of the execution of this Lease, Stanley M. Bloom owns a majority of the outstanding shares of Randall Foods, Inc. (the parent of Pacific Heritage Land and Holding Company, which in turn is the parent of Pacific Heritage Corporation), Uri E. Gati owns fifty percent (50%) of the outstanding shares of Aviv Development Corporation (the general partner in Aviv Group Limited) and Bryant L. Morris owns a majority of the outstanding shares of Pier Side, Inc. Unless and until LESSEE's interest in this Lease and the Premises is assigned, in accordance with the foregoing EXHIBIT "B" -15- limitations, to a person or entity in which Pacific Heritage Corporation, Aviv Development Corporation, and Pier Side, Inc., have no ownership or beneficial interest, Stanley M. Bloom, Uri E. Gati, and Bryant L. Morris shall retain their majority (or, in the case of Gati's interest in Aviv, half) ,interests in such entities unless the prior written approval of LESSOR is hereafter obtained, which approval shall not be unreasonably withheld. No consent or approval by LESSOR of any assignment requiring LESSOR's approval shall constitute a further waiver of the provisions of this paragraph. B. SublettiDS LESSEE shall include in all its subleases with tenants with respect to the use of the Premises (or any portion thereof) the following general types of requirements: (i) that, subject to temporary interruptions of business due to circumstances beyond the tenant's reasonable control, and occurrences such as casualty losses and periods of recon- struction and alteration of improvements, such tenants shall continuously use or cause to be used the Premises and por- tions thereof for the uses specified in Paragraph 5 of the Lease and continuously merchandise the Premises or portions thereof during all usual business hours and on all such days as comparable businesses of like nature in the area are open for business; (ii) if the improvements on the Premises are destroyed or partially condemned and such tenant's sublease remains in force, the tenant shall continue or cause to be continued operation of its business at the Premises to the extent reasonably practical from the standpoint of good business judgment during any period of reconstruction; (iii) the tenant shall exercise reasonable diligence to operate or cause to be operated its business conducted on the Premises or portion thereof .in a manner that will produce the highest volume of gross receipts reported to LESSEE consistent with competitive pricing and prudent business practices; (iv) with respect to each tenant who sells alcoholic beverages for on - Premises consumption, that such tenant shall maintain public liability and property damage insurance with dram shop coverage; (v) the non-discrimination provisions set forth in paragraph 29 below; and (vi) the tenant shall attorn to LESSOR in the event of any termination of this Lease, and attorn to any successor or assignee of LESSEE. LESSEE covenants to LESSOR to use reasonable diligence to enforce the provisions of subleases and other agreements as described in this paragraph 16.H. LESSEE further covenants to use reasonable diligence to sublease the Premises to tenants promptly and in such a manner as to maximize long-term Gross Rental Receipts, consistent with market conditions, the EXHIBIT "H" -16- mutual desire of LESSOR and LESSEE to encourage a proper tenant mix, and prudent business practices. LESSEE shall deliver to LESSOR a copy of each sublease, concession agreement, license, or other contract for the operation of businesses on the Premises within twenty (20) days from the date of execution thereof by LESSEE. C. Assignments for Financing: Lender Proteption LESSEE may transfer and assign this Lease and the leasehold interest created thereby ("Leasehold Estate") to a lender as security for the repayment of a loan, in accordance with paragraph 16.A above. The term "lender" as used herein shall mean the beneficiary, mortgagor, secured party, or other holder of a promissory note or other written obligation which is secured by any deed of trust, mortgage, or other written security agreement affecting the Leasehold Estate ("Leasehold Mortgage"). LESSEE may perform any and all acts and execute any and all instruments necessary or proper to consummate any such loan transaction and perfect the security therefore to be given the lender on the security of the Leasehold Estate. LESSEE shall deliver to LESSOR a copy of each note, deed of trust, or security agreement executed by LESSEE in connection with any Leasehold Mortgage within twenty (20) days from the date of execution thereof by LESSEE. With respect to any lender who shall have delivered to Landlord a written notice which shall state the name, address and a general description of the type of lien it holds on the Leasehold Estate, the following provisions shall apply: a.- LESSOR shall not agree to any mutual termi- nation nor accept any surrender of this .Lease, nor shall LESSOR consent to any amendment or modification of this Lease without the prior written consent of the lender. b. Notwithstanding any default by LESSEE in the performance or observance of any agreement, covenant or condition of this Lease on the part of LESSEE to be performed or observed, LESSOR shall have no right to terminate this Lease unless a default of this Lease shall have occurred and be continuing, LESSOR shall have given the lender written notice of such default, and the lender shall have failed to remedy such default or acquire LESSEE's estate created hereby or commence EXHIBIT "B" -17- �W1 foreclosure or other appropriate proceedings in the nature thereof, all as set forth in, and within the times specified by, this Paragraph. c. Lender shall have the right, but not the obligation, at any time prior to termination of this Lease and without payment of any penalty, to pay all of the rents due here- under, to effect any insurance, to pay any taxes and assessments, to make any repairs and improvements, to do any other act or thing required of LESSEE hereunder, and to do any act or thing which may be necessary and proper to be done in the performance and observance of the agreements, covenants and conditions hereof to prevent termination of this Lease. All payments so made and all things so done and performed by the Lender shall be as effective to prevent a termina- tion of this Lease as the same would have been if made, done and performed by LESSEE instead of the Lender. d. Should any default under this Lease occur, the lender shall have sixty (60) days after receipt of notice from LESSOR setting forth the nature of such default, and, if the default is such that possession to the Premises may be reasonably necessary to remedy the default, a reasonable time after the expiration of such sixty (60) day period within which to remedy such default, provid- ed that (A) the lender shall have fully cured any default in the payment of any monetary obligations of LESSEE under this Lease within such sixty (60) day period and shall continue to pay currently such monetary obligations as and when the same are due and (B) the lender shall have acquired LESSEE's estate in the Premises created hereby or commenced foreclosure or other appropriate proceedings in the nature thereof within such period, or prior there- to, and is diligently prosecuting any such proceedings. All rights of LESSOR to terminate this Lease as the result of the occurrence of any such default shall be subject to, and conditioned upon, LESSOR having first given the lender written notice of such default and the lender having failed to remedy such default or acquire LESSEE's EXHIBIT "B" -ls- estate in the Premises created hereby or commence foreclosure or other appropriate proceedings in the nature thereof as set forth in and within the times specified by this subparagraph (d). e. Any default under this Lease which in the nature thereof cannot be remedied by the lender shall be deemed to be remedied if (A) within sixty (60) days after receiving written notice from LESSOR setting forth the nature of such default,or prior thereto, the lender shall have acquired LESSEE's estate in the Premises created hereby or shall have commenced foreclosure or other appropriate proceedings in the nature thereof to acquire said estate, (B) the lender shall diligently prosecute any such proceedings to completion, (C) the lender shall have fully cured any default in the payment of any monetary obligations of LESSEE hereunder which do not require possession of the Premises within such sixty (60) day period and shall thereafter continue to faithfully perform all such monetary obligations which do not require possession of the Premises, and (D) after gaining possession of the Premises the lender performs all other obligations of LESSEE hereunder as and when the same are due. In addition to the rights set forth in this subparagraph (e), the lender shall have the option to be exercised by written notice to LESSOR given within the aforesaid sixty (60) day period, to obtain a new lease of the Premises upon the following terms and conditions: (i) Such new Lease shall be effective as of the date of the termi- nation of this Lease and shall be for the remainder of the term of this Lease at the same rental and with the same terms, covenants and conditions as are set forth herein. (ii) In addition to paying all current rent under the new Lease, the lender shall pay all unpaid rental (net of any income LESSOR may have received from the Premises during such period) EXHIBIT "B" -19- due pursuant to Paragraph 8 of these GENERAL CONDITIONS which accrued on or after the date which is thirty (30) days prior to the date on which the lender first received written notification of the default by LESSOR and the lender cures all defaults under this Lease that reasonably can be cured by the lender. In lieu of executing a new lease in its own name, the lender shall have the right to designate a nominee which shall become a lessee under the new lease so long as such assignee or nominee is consistent with the requirements of this Paragraph. f. If the lender is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving LESSEE from commencing or prosecuting foreclosure or other appro- priate proceedings in the nature thereof, the times specified in subparagraphs (d) and (e) above for commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of such prohibition plus an additional period of sixty (60) days thereafter; provided that the lender shall have fully cured any default in the payment of any monetary obligations of LESSEE under this Lease and shall continue to pay currently such monetary obligations as and when the same fall due. g. LESSOR shall mail or deliver to the lender duplicate copy of any and all notices which LESSOR may from time to time give to or serve upon LESSEE pursuant to the provisions of this Lease, and such copy shall be mailed or delivered to the lender simultaneously with the mailing or delivery of the same to LESSEE. No notice by LESSOR to LESSEE hereunder shall be deemed to have been given insofar as the lender's rights under this Paragraph are concerned unless and until a copy thereof shall have been mailed or delivered to the lender as herein set forth. h. Foreclosure of a Leasehold Mortgage, or any sale thereunder,whether by judicial proceed - EXHIBIT "B" -20- ings or by virtue of any power contained in the Leasehold Mortgage, or any conveyance of the estate in the Premises created hereby from LESSEE to the lender through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof,shall not require the consent of LESSOR or constitute a breach of any provision of or a default under this Lease, and upon such foreclosure, sale or conveyance LESSOR shall recognize the lender,or any other foreclosure sale purchaser, as lessee hereunder. In the event lender becomes lessee under this Lease, lender shall assume the obligations of LESSEE under this Lease or such new lease only for the period of time that lender remains lessee thereunder, and LESSEE shall be released from any liability therefor, provided prior defaults by LESSEE have either been cured or waived. The lender shall be subject only to those restrictions applicable to LESSEE as set forth in this Paragraph. In the event that, consistent with this Paragraph, the lender subsequently assigns or transfers its interest under this Lease after acquiring the same by foreclosure or deed in lieu of foreclosure, and in connection with any such assignment or transfer the lender takes back a mortgage or deed of trust encumbering such leasehold interest to secure a portion of the purchase price given to the lender for such assignment or transfer, then such mortgage or deed of trust shall be considered a Leasehold Mortgage as contemplated under this Paragraph and the lender shall be entitled to receive the benefit of and enforce the provisions of this Paragraph and any other provisions of this Lease intended for the benefit of the holder of a Leasehold Mortgage. In the event the Lender requires any modifications to the provisions of this Paragraph in order to secure its loan, LESSOR agrees not to unreasonably withhold consent to such modifications so long as such modifications do not reduce the amount of rent or other sums payable to LESSOR hereunder, or do not otherwise have a materially adverse impact on any of LESSOR's interests, rights and remedies hereunder. 17. SUCCESSORS IN INTEREST: Unless otherwise provided in this Lease, the terms, covenants and conditions contained EXHIBIT "B" -21- M �t herein shall apply to and bind the heirs, successors, executors, administrators, and assigns of all the parties hereto. 18. LESSEE!E DEFAULT. The occurrence of any of the following shall constitute a default by LESSEE: a. Failure to pay rent when due, if the failure continues for fifteen (15) days after written notice has been delivered to LESSEE. LESSEE shall, not be excused from its obligation to pay rent by reason of the inability for any reason to obtain the full and prompt payment to LESSEE of all payments due LESSEE by any sublessees or concessionaires. b. Failure to perform any of the provisions of this Lease required to be performed by LESSEE, if the failure to perform is not cured within thirty (30) days after written notice has been given to LESSEE. If the default cannot reasonably be cured within said thirty (30) days, LESSEE shall not be deemed to be in default of this Lease if LESSEE commences to cure the default within the thirty (30) day period and diligently, and in good faith, continues to cure the default. Notices given under this paragraph shall specify the alleged default and the applicable Lease provision, and shall demand that LESSEE perform the provisions of the Lease or pay the rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this .Lease unless LESSOR so elects in the notice. 19. LESSOR'S REMEDIES: LESSOR shall have the follow- ing remedies if LESSEE commits a default. These remedies are not exclusive; they are cumulative in addition to any remedies now or later allowed by law. LESSOR can continue this Lease in full force and effect, and the Lease will continue in effect as long as LESSOR does not terminate LESSEE's right to possession, and LESSOR shall have the right to collect rent when due. During the period LESSEE is in default, LESSOR can enter the Premises and relet them, or any part of them, to third parties for LESSEE's account. LESSEE shall be liable immediately to LESSOR for all costs LESSOR incurs in reletting the Premises, including, without limitation, broker's commissions, expenses of EXHIBIT "B" -22- remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining term of this Lease. LESSEE shall pay to LESSOR the rent due under this Lease on the dates the rent is due, less the rent LESSOR receives from any reletting. No act by LESSOR allowed by this paragraph shall terminate this Lease unless LESSOR notifies LESSEE that LESSOR elects to terminate this Lease. After LESSEE's default, and for as long as LESSOR does not terminate LESSEE's right to possession of the Premises, if LESSEE obtains LESSOR's consent, LESSEE shall have the right to assign or sublet its interests in this Lease, but LESSEE shall not be released from liability for said default. No act by LESSOR other than giving notice. of such termination to LESSEE shall terminate this Lease. Acts of maintenance, efforts to relet the Premises, or the appointment of a receiver on LESSOR's initiative to protect LESSOR's interests under this Lease shall not constitute a termination of LESSEE's right to possession. On termination, LESSOR has the right to recover from LESSEE: a. The worth, at the time of the award, of the unpaid rent that had been earned at the time of the termination of this Lease; b. The worth, at the time of the award, of the amount by which the unpaid rent that would have been earned after the date of termina- tion of this Lease until the time of award exceeds the amount of the loss of rent that LESSEE proves could have been reasonably avoided; c. The worth, at the time of the award of the amount by which the unpaid rent- for the balance of the term after the time of the award exceeds the amount of the loss of rent that LESSEE proves could have been reason- ably avoided; and d. Any other amount and court costs, necessary to compensate LESSOR for all detriments proximately caused by LESSEE's default. "The worth, at the time of the award," as used in subparagraphs (a) and (b) above is to be computed by allowing interest at the rate of 101 per annum. "The worth, at the time of the award," as referred to in subparagraph (c) above is to be computed by discounting the amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus 1%. EXHIBIT "B" -23- If LESSEE is in default of this Lease, LESSOR shall have the right to have a receiver appointed to collect and conduct LESSEE's business. Neither the filing of a petition for the appointment of a receiver nor the appointment itself shall constitute an election by LESSOR to terminate this Lease. LESSOR, at any time after LESSEE commits a default, can cure the default at LESSEE's cost. If LESSOR at any time, by reason of LESSEE's default pays any sum or does any act that requires the payment of any sum, the sum paid by LESSOR shall be immediately due from LESSEE to LESSOR at the time the sum is paid, and if paid at a later date shall bear interest at the rate of 10% per annum from the date the sum is paid by LESSOR until LESSOR is reimbursed by LESSEE. The sum, together with the interest on it, shall be deemed additional rent. 20. LEESOR'SDEFAULT: LESSOR shall be in default of this Lease if it fails or refuses to perform any provision of this Lease that it is obligated to perform if the failure to perform is not cured within thirty (30) days after written notice of the default has been given by LESSEE to LESSOR. If the default cannot be reasonably cured within thirty (30) days, LESSOR shall not be in default of this Lease if LESSOR commences to cure the default within the thirty (30) day period and diligently and in good faith continues to cure the default. 21. QVITCLAIM OF LESSEE'S INTERESTS _UE N_ TERMINATION= Upon termination of this Lease for any reason, including but not limited to termination because of default by LESSEE, LESSEE shall execute, acknowledge and deliver to LESSOR within thirty (30) days after receipt of written demand therefor a good and sufficient deed whereby all right, title and interests of LESSEE in the Premises is quitclaimed to LESSOR. 22. TOTAL TAKING: If the whole of the Premises, or other improvements to be made by LESSEE shall be taken by right of eminent domain or otherwise for any public or quasi -public use; then, when possession shall be taken thereunder by the condemnor, or the LESSEE is deprived of its practical use of the Premises, and other improvements, whichever date is earlier, this Lease and all rights of LESSOR and LESSEE hereunder, shall terminate and any rent and all other payments required of LESSEE shall be apportioned between the parties. In the event of a partial taking, as a result of which the remaining portion of the Premises, or any other improvements on the Prenises cannot be restored to an economically operable facility of a comparable kind and quality to the facility existing prior to the taking with condemnation awards received by LESSEE, then this Lease at EXHIBIT "B" -24- LESSEE's option shall terminate as of the time when posses- sion of the Premises shall be taken by the condemnor or LESSEE is deprived of its practical use thereof, whichever date is earlier. 23. PARTIAL TAKING: If a portion of the Premises or any other improvements shall be taken by right of eminent domain or otherwise for any public or quasi -public use and the remaining portion of the Premises and improvements can be restored by LESSEE to an economically operable facility of comparable kind and quality.to the facility existing prior to the taking, then this Lease shall not be affected and LESSEE shall retain the remaining portion of the Premises; provided, however, the Minimum Annual Rent, the Parking Replacement Rent, and, if applicable, the Contingent Additional Rent and the Contingent Rent In Lieu of Property Tax shall each be reduced by an amount that is in the same ratio to such amounts of rent immediately prior to the taking as the total number of square feet in the Premises taken bears to the total number of square feet in the Premises immediately prior to the taking. 24. EMINENT DOMAIN AWARD: If there is a taking by right of eminent domain, the rights and obligations of the parties with reference to the award and the distribution thereof shall be determined in accordance with the provisions of this Paragraph. The award shall belong to and be paid to LESSOR, except that LESSEE shall receive from the award the following: a. A sum attributable to the value of LESSEE's leasehold estate including improvements, which sum shall be first applied toward any outstanding balance due LESSEE's lender; b. A sum attributable to severance damages to be used solely for the restoration of the other improvements upon the Premises; and c. An award (if any) specifically made with respect to loss of goodwill. 25. AMENDMENTS: This .Lease, including the Exhibits thereto, set forth all of the agreements and understandings of the parties and any modification must be in writing executed by both parties. 26. CAPTIONS: The captions and the table of contents of this Lease shall have no effect on its interpretation. EXHIBIT "B" -25- 27. CALIFORNIA LAW: This Lease shall be construed and interpreted in accordance with the laws of the State of California. 28. LAIVER: No delay or omission in the exercise of any right or remedy of LESSOR on any default by LESSEE shall impair such a right or remedy or be construed as a waiver. The receipt and acceptance by LESSOR of delinquent rent shall not constitute a waiver of any other defaults; it shall constitute only a waiver of timely payment for the rent payment involved. LESSOR's consent to or approval of any act by LESSEE requiring LESSOR's consent or approval shall not be deemed to waive or render unnecessary LESSOR's consent to or approval of any subsequent act by LESSEE. Any waiver by LESSOR of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Lease. 29. NDI RIMINATI N• LESSEE convenants for itself, its heirs, executors, administrators, and assigns, and all persons claiming under or through it, that this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, martial status, age, national origin or ancestry in the subleasing of the Premises herein leased, nor Shall the LESSEE establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of lessees of the Premises. LESSEE shall make its accommodations and services available to the public on fair and reasonable terms. In the event LESSEE enters into contracts, subleases, or assignments with respect to any of its interest herein, LESSEE shall include in such arrangements a nondiscrimination clause substantially conforming to the following: a. 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, that this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, EXHIBIT "B" -26- national origin or ancestry in the subleas- ing, 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 lessees of the premises." b. In contracts: "There shall be no discrimi- nation against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, age, national origin or ancestry in the 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 the land." 30. FORCE MA3EURE: In any case where either party hereto is required to do any act, delays caused by or result- ing from acts of God, war, civil commotion, fire, flood, earthquake or other casualty, strikes or other extraordinary labor difficulties, shortages of labor or materials or equipment in the ordinary course of trade, government regula- tions or other causes not reasonably within such party's control and not due to the fault or neglect of such party shall not be counted in determining the time during which such act shall be completed, whether such time be designated by a fixed date, a fixed time or "a reasonable time", and such time shall be deemed to be extended by the period of such delay. Financial inability of either party shall not be considered to be a circumstance or cause beyond the reason- able control of that party. 31. ARBITRATION: In the event that LESSOR and LESSEE are unable to agree upon the amount of rent payable by LESSEE to LESSOR hereunder, either party may, by written notice to the other, elect to have the dispute resolved by arbitration. The arbitration shall be conducted in accordance with the following terms and conditions and otherwise as may be set forth in any then -existing California statutory law governing the conduct of arbitration proceedings, provided that such statutory law is not inconsistent with the procedures specified herein: EXHIBIT "H" -27- (a) Within fifteen (15) days after the effective date of the notice initiating the arbitration, LESSOR and LESSEE shall each appoint an independent certified public accountant with a minimum of five (5) years' experience, and LESSOR and LESSEE shall each notify the other of the identity of their respective appraisers. (b) Within fifteen (15) days after their appointment, the two appraisers selected by the parties shall meet and appoint a third appraiser, and so notify the parties. The third appraiser shall have the same minimum qualifications as the first two, and shall be required to state in writing that he or -she has not previously been employed or retained by either LESSOR or LESSEE. (c) The third appraiser shall determine the dispute within sixty (60) days after he or she is appointed. Either LESSOR or LESSEE may submit any information to assist the third appraiser in making his or her determination, provided copies of such information are delivered at the same time to the other party. The third appraiser's determination shall be final and conclusive. (d) LESSOR and LESSEE shall each bear its own expenses in respect to the appointment of its own appraiser, and shall evenly split the cost of the third appraiser. (e) In the event that either party or any of the arbitrators fails to timely perform any of its duties under this Paragraph 31 of Exhibit "B," the other party- may seek appropriate judicial relief to compel the appointment of an arbitrator of the non -defaulting party's choosing, or otherwise. 32. TTME: Time is of the essence of this Lease, and of each and every covenant, term, condition, and provision hereof. EXHIBIT "B" -28- EXHIBIT "C" CONDITIONS T4 COMMENCEMENT 1. Plan Submittals and Reviews. Within the time set forth therefor in the Schedule of Performance (Exhibit "E"), LESSEE shall prepare and submit to the City final building plans with respect to all of the Pier Side Improvements, in sufficient detail to obtain a building permit or permits, and the City, shall approve such plans. LESSEE's submittal shall be consistent with the previously approved plans. LESSOR shall have the right to review the final building plans for consistency with the terms of the Scope of Development (Exhibit "D"), CUP 86-43, and Coastal Development Permit 86-27. During the preparation of all drawings and plans, staff of LESSOR and LESSEE shall hold regular progress meetings as needed to coordinate the preparation and review of LESSEE's final building plans. The staff of LESSOR and LESSEE shall communicate and consult informally as frequently as is necessary to ensure that the formal submittal of any documents to the City can receive prompt and speedy consideration. 2. Submittal of Evidence of Financina Commitments. Within the time set forth in the Schedule of Performance (Exhibit "E"), LESSEE shall exercise reasonable diligence to obtain and, if successful, shall submit to LESSOR's Executive Director, evidence reasonably satisfactory to LESSOR's Executive Director that LESSEE has obtained the financing necessary for the development of the Premises in accordance with this Lease. Such evidence of financing shall include the following: (a) A copy of the commitment or commitments obtained by LESSEE for the mortgage loan or loans (both for interim construction financing and take out financing) to assist in financing the construction of the Pier Side Improvements, certified by LESSEE to be a true and correct copy or copies thereof. The commit- ments for financing shall be in such form and content acceptable to LESSOR's Executive Director as reasonably evidences a firm and enforceable commitment, with only those conditions which are standard or typical for the lender(s) involved for similar projects; (b) Sufficient information (e.g., an annual report) regarding the construction and permanent lenders to enable LESSOR's Executive Director to determine EXHIBIT "C" -1- k..W/ whether or not such lender(s) has (have) sufficient financial resources to fund the loan(s); and (c) A copy of the contract between LESSEE and the contractor(s) for the construction of such improvements, certified by LESSEE to be a true and correct copy thereof; and (d) A financial statement and/or other documen- tation satisfactory to LESSOR's Executive Director as evidence of other sources of capital sufficient to demonstrate LESSEE has adequate funds committed to cover the difference, if any, between construction and development cost minus financing authorized by mortgage loans. Within fifteen (15) days after receipt of request for approval of its evidence of financing, LESSOR's Executive Director shall respond in writing by stating what further information, if any, he or she reasonably requires in order to determine whether or not to approve such evidence of financing. Upon receipt of such a timely response, LESSEE shall promptly furnish to the Executive Director such further information as may be reasonably requested. LESSEE's request for approval of its evidence of financing shall be deemed ccmplete fifteen (15) days after Executive Director's receipt thereof, if no timely response requesting further information is delivered to LESSEE, or, if such a timely response requesting further information is received, on the date that LESSEE delivers such additional information to Executive Director. Once LESSEE's request for approval of its evidence of financing has been accepted as or is deemed complete, Executive Director shall not be entitled to demand additional information or to disapprove the request on the basis that LESSEE has not furnished adequate or complete information. The Executive Director LESSOR shall approve or disapprove LESSEE's evidence of financing within fifteen (15) days after LESSEE's request for such approval is accepted as or is deemed complete. If LESSEE's initial request for approval of its evidence of financing is accompanied by a letter to the Executive Director referencing this paragraph 2 of Exhibit "C" to the Lease, and stating that LESSEE's evidence of financing shall be deemed approved if not disapproved by the Executive Director within the required time, the failure of the Executive Director to approve or disapprove any such evidence of financing within such time shall be conclusively deemed an approval. If the Executive Director shall disapprove any such evidence of financing, it EXHIBIT "C" -2- shall do so by written notice to LESSEE stating the reasons for such disapproval. 3. Aprargvpd Condition of Title; Acauisitignofroperty ,In ergsts in the Premises To Place Title In Such Condition. LESSOR and LESSEE agree that in order for LESSEE to develop and operate the Pier Side Improvements on the Premises in accordance with this Lease, the leasehold estate in the Premises to be conveyed by LESSOR to LESSEE must be free and clear of all monetary liens and all recorded and unrecorded nonmonetary liens, encumbrances, easements, licenses, leases, and other defects of title inconsistent with LESSEE's approved development plans. LESSOR covenants that on or before the Commencement Date it shall acquire title to the Premises from the City. The purpose of this paragraph 3 of Exhibit "C" is to set forth the procedures for LESSEE's and LESSOR's acquisition of any property interests in the Premises currently held by any person or entity other than the City, which property interests must be acquired in order to place title to the Premises in the condition referenced in the preceding paragraph (the "Approved Title Condition"). LESSOR is currently engaged in eminent domain proceedings to acquire from the Huntington Beach Company and others an interest claimed by such third parties in the Premises. Subject to the other terms and conditions set forth in this Lease, LESSOR covenants that it will exercise reasonable diligence to pursue said eminent domain action to completion and obtain the claimed property interest; provided, that LESSOR's obligation herein shall terminate and be of no further force and effect if a final order of condemnation is entered which requires the Agency to pay for the claimed property interest more than has been offered to the Huntington Beach Company prior to the Effective Date hereof. Commencing on the Effective Date of this Lease, and continuing thereafter for a period of thirty (30) days (the "LESSEE Negotiation Period"), LESSEE shall exercise reasonable diligence in an effort to acquire any of the property interests in the Premises, including without limitation interests held by the lessees under the Dwight's lease and the Maxwell's lease, which interests must be acquired in order to place title to the Premises in the Approved Title Condition. With specific regard to the Dwight's Lease, LESSEE agrees to offer said lessee an opportunity to become a sublessee of a fast food operation in Pier Side Village in a EXHIBIT "C" MI: space to be mutually agreed upon and with a percentage rent no higher than the amount said lessee is currently paying to the City. If, after and despite its reasonable diligence to do so, LESSEE is unable during the LESSEE Negotiation Period to negotiate satisfactory agreements with Dwight's, Maxwells, and any other persons or entities whose actual or claimed interests must be acquired in order to place title to the Premises in the Approved Title Condition, LESSEE shall promptly so notify LESSOR. Thereafter, LESSOR shall prepare acquisition appraisals for the remaining property interests to be acquired and shall exercise reasonable diligence, based on said appraisals, for a period of ninety (90) days after the conclusion of the LESSEE Negotiation Period (the "LESSOR Negotiation Period") to acquire such remaining property interests. As of the Effective Date, no agreement has been reached by LESSOR and LESSEE on any payment by either for acquisition of the interests to be acquired in the Maxwell's lease. If, after and despite its reasonable diligence to do so, LESSOR is unable to negotiate the acquisition of such remaining unacquired property interests during the LESSOR Negotiation Period, LESSOR shall determine, in its sole discretion, whether to acquire the remaining unacquired property interests by exercise of its power of eminent domain. If LESSOR elects to exercise its power of eminent domain, such election shall be made and the eminent domain action(s) filed within thirty (30) days after the end of the LESSOR Negotiation Period; provided, that nothing in this Agreement shall be deemed to constitute a commitment by LESSOR to condemn property or a prejudgment of the matters required to be considered as part of any decision to condemn property. Upon LESSOR acquisition of any of the unacquired property interests, LESSOR and LESSEE agree that said property interests shall be terminated, and LESSOR and LESSEE shall cooperate and execute any documents required to remove said property interests of record. In the event that LESSOR exercises its power of eminent domain to acquire any of the unacquired property interests in the Premises, LESSOR shall, subject to delays outside LESSOR's control, exercise best efforts to complete the acquisition of (and terminate) such property interests as soon as possible after the commencement of eminent domain proceedings. In the event that LESSOR exercises its power of eminent domain to acquire any of the unacquired property interests in the Premises, LESSOR shall, upon LESSEE's written request, exercise its best efforts to obtain a judicial order or EXHIBIT "C" -4- � L1 orders (hereinafter "Order of Prejudgment Possession") authorizing LESSOR to take possession of the premises prior to the final order(s) of condemnation. Notwithstanding any other provision of this Lease to the contrary, if, at any time prior to LESSOR's acquisition and termination of any of the property interests to be acquired, LESSOR provides to LESSEE a copy of an Order of Prejudgment Possession, and; (i) LESSOR delivers possession of the premises; and (ii) LESSOR is diligently proceeding with the eminent domain action(s) seeking the rendering of, a final judgment, which judgment or judgments would authorize the taking, and LESSOR agrees to terminate the applicable property interest when LESSOR completes the acquisition thereof; and (iii) The right of possession conveyed by LESSOR to LESSEE is sufficient to enable LESSEE to obtain a title insurance policy as necessary to close its construction and permanent loans; then, assuming that all other conditions to commencement of the Lease term set forth in this Exhibit "C" have been satisfied or waived, LESSEE shall accept such right of possession and proceed with the development of the Premises, with the date of transfer of possession from LESSOR to LESSEE to constitute the Commencement Date. Upon the request of the title insurance company which is to provide LESSEE with title insurance for the Premises, as set forth in Paragraph 10 of -this Lease, LESSOR shall execute an indemnification agreement in form satisfactory to such title company and reasonably satisfactory to LESSOR by which LESSOR shall agree to indemnify the title company for any losses, damages and expenses incurred by the title company in the event of LESSOR's abandonment of the eminent domain proceedings (but not City's abandonment of the eminent domain proceedings currently pending to acquire the Huntington Beach Company's claimed interest in the Premises in the event of an "excess" award, as stated above). Nothing herein shall be deemed to obligate LESSEE to pay for any additional premium or other charge necessary for the issuance of said title policy. In the event that the title company declines to issue a title insurance policy under such circumstances, the Commencement Date shall not occur until the leasehold estate in the Premises can be transferred to LESSEE (upon the completion of the City's and LESSOR's eminent domain proceedings) in the Approved Title Condition. EXHIBIT "C" -5- 4. Delivery of Guarantees. On or before the Effective Date, LESSEE has caused to be delivered to LESSOR the executed and acknowledged Guarantees of Stanley M. Bloom, ❑ri E. Gati, and Bryant L. Morris in the form set forth in Exhibits "F", "G", and "H", to the Lease. 5. Delivery of Letter of Credit. Within the time set forth in the Schedule of Performance (Exhibit "E"),.LESSEE shall deliver to LESSOR an irrevocable direct -pay letter of credit in the amount of Five Hundred Thousand Dollars ($500,000), payable to the Agency, in a form subject to the reasonable approval of the Agency's counsel, drawn upon a bank authorized to do business in the State of California and which has been approved by the Chief of Administrative Services for the City (who shall act reasonably in making such determination). The letter of credit shall be conditioned for payment to the Agency (upon demand by its Executive Director or authorized designee) upon the failure by the "Developer" (i.e., Huntington Pacifica I or permitted assignee) to timely proceed with the planning, financing, and construction of the "Developer Improvements" on the "Site" referenced in the Amended DDA, in accordance with the Schedule of Performance (Attachment No. 3) to said Amended DDA; provided, however, that the condition for payment of the letter of credit shall not be deemed to have been satisfied and the letter of credit shall not be drawn upon if such failure by the Developer to timely proceed is extended pursuant to Section 703 of the Amended DDA, waived or extended by the Agency, excused by any Agency default under the Amended DDA, or excused by the failure or delay in satifaction of any of the following specific conditions in the Amended DDA: (i) the City Council's failure or refusal to timely approve the street/alley vacation (Section 202); (ii) the City's or Agency's failure or refusal to timely approve all discretionary land use permits for the Developer Improvements after and despite the Developer's submittal of the necessary applications therefor in conformity with Section 203 and the Scope of Development (Attachment No. 7) in the Amended DDA; (iii) the Agency's failure or refusal to timely elect to exercise its power of eminent domain as needed to acquire the remaining parcels/interests to be acquired in the Site (Section 201 of the Amended DDA); or (iv) the Agency's failure to timely obtain title or financeable possession of the remaining parcels/interests to be acquired in the Site (Section 201) of the Amended DDA). If for any reason this Lease is terminated after LESSEE delivers the letter of credit but prior to the Commencement EXHIBIT "C" -6- MW Date, LESSOR shall promptly return the letter of credit to LESSEE and the letter of credit shall be cancelled. 6. Failure of Conditions; Termination. In the event that, prior to the Commencement Date: (a) LESSEE is unable, after and despite its exercise of reasonable diligence, to timely obtain approval of its final building plans for the Pier Side Improvements from the City or LESSOR, in accordance with paragraph 1 of this Exhibit "C"; or (b) LESSEE is unable, after and despite its exercise of reasonable diligence, to timely obtain financing commitments for the development of the Premises or the Executive Director's approval thereof, in accordance with paragraph 2 of this Exhibit "C"; or (c) LESSEE and LESSOR fail to negotiate acquisition of all of the property interests in the Premises that must be acquired in order to place title in the condition referenced in the first paragraph of Paragraph 3 of this Exhibit "C", and LESSOR does not timely elect to exercise its power of eminent domain as needed to acquire the remaining property interests, as set forth therein; or (d) LESSOR fails to diligently prosecute any eminent domain action(s) to completion, in accordance with paragraph 3 of this Exhibit "C"; or (e) LESSOR fails to timely tender possession of the Premises, with the condition of title meeting the requirements set forth in the first paragraph of Paragraph 3 of this Exhibit "C"; or (f) As of the scheduled Commencement Date, LESSOR is in default of any of its other obligations under this Lease, and such failure or default is not cured and is not being cured in accordance with paragraph 20 of Exhibit "B" to the Lease; then this Lease shall, at the option of LESSEE, be terminated by written notice thereof to LESSOR, and thereupon neither LESSOR nor LESSEE shall have any further rights or obligations with respect to the Premises or this Lease; provided, that LESSEE's right to terminate in the event of a default by LESSOR shall not be deemed to prohibit LESSEE from pursuing any other remedy to which it may be entitled by law, EXHIBIT "C" -7- MW In the event that, prior to the Commencement Date: (a) LESSEE fails to timely submit its final building plans, as required by paragraph 1 of this Exhibit "C", and such failure or default is not cured in accordance with paragraph 18 of Exhibit "B" to the Lease; or (b) LESSEE and LESSOR fail to negotiate acquisition of all of the property interests in the Premises that must be acquired in order to place title in the condition referenced in the first paragraph of Paragraph 3 of this Exhibit "C", and LESSOR does not timely elect to exercise its power of eminent domain as needed to acquire the remaining property interests, as set forth therein; or (c) LESSEE fails to timely submit reasonably satisfactory proof that it has obtained financing commitments for construction and permanent financing, in accordance with paragraph 2 of this Exhibit "C", and such failure or default is not cured in accordance with paragraph l8 of Exhibit "B" to the Lease; or (d) LESSEE fails to timely submit the letter of credit, as required by paragraph 5 of this Exhibit "C"; or (e) As of the scheduled Commencement Date, LESSEE is in default of any of its other obligations under this Lease, and such failure or default is not cured and is not being cured in accordance with paragraph 18 of Exhibit "B" to the Lease; then this Lease shall, at the option of LESSOR, be terminated by written notice thereof to LESSEE, and thereupon neither LESSOR nor LESSEE shall have any further rights or obligations with respect to the Premises or this Lease; provided, that LESSOR's right to terminate in the event of a default by LESSEE shall not be deemed to prohibit LESSOR from pursuing any other remedy to which it may be entitled by law. 4/087/011323-0001/08 EXHIBIT "C" -8- V EXHIBIT "D" SCOPE OF DEVELOPMENT I. LESSEE'S RESPONSIBILITIES: Except as specifically set forth in Section II below, LESSEE shall be responsible for demolition and clearance from the Premises of all existing improvements and construction of new improvements (herein the "Pier Side Improvements") in accordance with Conditional Use Permit No. 86-43 and Coastal Development Permit No. 86-27 approved by the City Council on October 13, 1986. Such permits, as they now exist or may hereafter be amended, are hereby approved by LESSOR and incorporated herein by this reference. Additional classifications of LESSEE's responsibilities are set forth below: 1. The Pier Side Improvements shall consist of specialty commercial uses with a minimum gross leasable area of 75,000 square feet, plus a multiple -tiered parking structure with not less than 600 spaces. 2. The Pier Side Improvements on the Premises shall be constructed at a minimum "hard" cost of Seventy -Five Dollars ($75.00) per square foot of total floor area, including tenant improvements and furnishings, fixtures, and equipment, site preparation costs, parking, landscaping, driveways, and other "off -site" items. 3. Subject to the terms and conditions in this paragraph 3, LESSEE shall be responsible for construction of the pedestrian overcrossing of Pacific Coast Highway from the Premises to the hotel "Site" described in the Amended DDA. It is understood that development on the Premises will in all likelihood precede development on the hotel Site, and in such events construction of the pedestrian overcrossing will be deferred until the hotel is constructed. LESSOR shall provide LESSEE with the design guidelines for the pedestrian overcrossing sufficiently in advance of construction to enable LESSEE to prepare the plans and specifications for such work. LESSOR and the City shall have the right to review and approve LESSEE's plans and specifications for conformity with the City's Downtown Design Guidelines and engineering standards. LESSOR (or the City) shall act as the lead agency in obtaining any encroachment permits and other approvals for the pedestrian overcrossing which may be required by the California Department of Transportation (Cal Trans), with such assistance to be provided at no cost to LESSEE (except for the architectural and engineering expense related to preparing the plans and specifications themselves, which shall be entirely LESSEE's responsibility). LESSOR and EXHIBIT "D" -1- LESSEE shall consult and cooperate as necessary to obtain the foregoing approvals. If, due to circumstances beyond LESSEE's reasonable control, Cal Trans does not approve the pedestrian overcrossing, LESSEE shall be relieved of the requirement for its construction. Following satisfactory completion of the overcrossing, it shall be dedicated to LESSOR or the City, and thereafter LESSEE shall have no liability or responsibility for its maintenance or repair. LESSEE's maximum financial contribution to the cost of constructing the pedestrian overcrossing (exclusive of any developer's fee, overhead charge, or profit to LESSEE, but including reasonable architectural and engineering expenses) shall be the sum of Two Hundred Fifty Thousand Dollars ($250,000.00), as adjusted in accordance with increases (or decreases) after November 1, 1986, in the applicable construction cost index published in the Engineering News Record. If LESSEE's actual cost of con- structing the overcrossing exceeds such amount, following satisfactory completion of the overcrossing LESSOR shall pay the excess amount to LESSEE within fifteen (15) days after receipt of LESSEE's invoice and such supporting documentation as LESSOR may reasonably require substantiating the costs incurred. It is understood that the responsibilities of LESSEE with respect to the pedestrian overcrossing, including without limitation the maximum financial contribution, are shared jointly and severally with the Developer under the Amended DDA. The $250#000 figure is a total for both LESSEE and Developer together, not a separate figure for each. 4. Subject to the terms and conditions of this paragraph 4, LESSEE shall be responsible for demolishing the existing City lifeguard facility on the Premises and constructing a replacement building on a replacement site to be provided at no expense to LESSEE by LESSOR or the City. LESSOR shall be responsible for providing or causing the City to provide the replacement site prior to the Co..rnmencement Date so that the existing facility on the Premises can be demolished in accordance with LESSEE's construction schedule. LESSOR shall cause the City to cooperate and consult with LESSEE so that the replacement building can be designed by LESSEE in compliance with the City's reasonable requirements. It is understood that during the construction period, LESSEE shall be entitled to provide a temporary lifeguard facility in the form of a trailer or trailers. LESSEE shall be responsible for moving furnishings, fixtures, and equipment ("FF&E") from the existing facility to the replacement building, and for replacing FF&E that cannot be so noved. EXHIBIT "D" -2- Notwithstanding any other provision in this Paragraph 4, however, LESSEE's responsibilities with respect to the replacement building shall be limited as follows: (i) the total square footage of the replacement building shall not be required to exceed the square footage of the existing facility (or, if it does, LESSOR shall pay LESSEE for costs, including reasonable overhead, attributable to such larger facility; (ii) LESSEE shall not be responsible for extraordinary site preparation costs for items such as extending utility lines, rough grading, parking, or landscaping; (iii) replacement FF&E shall be comparable in type, quality, and quantity to the original and LESSEE shall have no responsibility for additions, improvements, or upgrades; and (iv) in no event shall LESSEE's obligation for such costs exceed the sum of Five Hundred Thousand Dollars ($500,000.00), as adjusted in accordance with increases (or decreases) after November 1,1986, in the applicable construction cost index published in the Engineering News Record. II. LESSOR'S RESPONSIBILITIES: 1. LESSOR warrants and represents that, at such time as the City's approval of CUP No. 86-43 and Coastal Development Permit No. 86-27 become "final" (as that term is defined below), neither the City nor Lessor shall prohibit, prevent, or delay development or use of the Premises, or impose any conditions, fees, or other requirements on LESSEE'S development or use of the Premises other than as specifically permitted in this Agreenent, in the conditions of such development approvals, and as may be customarily imposed by the City in connection with the issuance of building permits. It is understood that the foregoing warranty and representation does not apply to any statutes, ordinances, resolutions, or regulations of any governmental agency other than those of the City and LESSOR, nor to any actions taken by persons or entities other than City or LESSOR to prohibit, prevent, or delay development or use of the Premises. CUP 86-43 and Coastal Development Permit No. 86-27 shall be deemed "final" for purposes of this Paragraph 1 upon the last of the following three (3) dates: (i) the date on which LESSEE obtains LESSOR approval of the following items referenced in the conditions of approval for CUP No. 86-43: revised site plan (condition #1); restaurant floor plans and elevations (condition #2); building materials palate (condition #3); planned sign program (condition #4); public areas design plan (condition #5); landscaping and irrigation plan (condition #6); rooftop mechanical equipment plan (condition #7); list of proposed uses (condition #9); on -site circulation plan (condition #12); traffic impact analysis (condition #12); parking management plan (condition #13); CC&R's (condition #24); on -site maintenance agreements EXHIBIT "D" -3- L (condition Vs 25 and 26); and lifeguard facility (condition #41), (11) the date on which all applicable statutes of limitations for challenging such permits have expired without litigation being filed, or ( iii ) the date on which all such litigation is favorably and finally terminated, whether by judgment, dismissal, settlement agreement or otherwise. 2. LESSOR agrees to maintain, or cause to be main- tained, the existing City Pier in good and safe condition and open to public access. 3. LESSOR agrees to maintain the public beach adjacent to the Premises and all off -premises common areas in good, clean,.and safe condition. 4. Utilitigg. LESSOR agrees to provide, or cause to be provided, at no expense to LESSEE, within the time requir- ed in the Schedule of Performance, all utilities (water, sewer, gas, electrical, and telephone) required for the development, use, and maintenance of the improvements on the Premises, with sufficient capacities to adequately service the Premises, with such utilities to be located on the Premises or in the public street adjacent to the Premises. LESSEE shall be responsible for extending utilities from said location(s) to the improvements located on the Premises in accordance with Paragraph I above. 5. Easements and Permits. LESSOR agrees to cooperate with LESSEE in connection with the filing and processing of any and all applications for permits and other approvals required by the City or any other governmental agency in connection with the development of the Premises. EXHIBIT "D" -4- 1. 2. EXHIBIT "E" SCHEDULE OF PERFORMANCE Item of Performance LESSEE delivers Guarantees to LESSOR LESSEE delivers Security Deposit (Lease, 18) 3. LESSEE and LESSOR acquire remaining property interests to be acquired in the Premises as needed to place title in the "Approved Title Condition" (Exhibit "C", 13) a. LESSEE submits final building plans to City and LESSOR (Exhibit "C", 11) 5. LESSOR completes review of final building plans (Exhibit "C", 11) 6. LESSEE submits evidence of financing and letter of credit (Exhibit "C", 12 and 15) Time for Performance On or before Effective Date Within ten (10) days after Effective Date Within the times set forth in Exhibit "C", 13 Within eight (8) months after the later of: (i) the_date on which LESSEE and/or LESSOR acquire all remaining property interests to be acquired in the Premises as needed to place title in the "Approved Title Condition", and (ii) the date on which the City's (and, if applicable, the California Coastal Commission's) approval of CUP No. 86-43 and Coastal Development Permit No. 86-27 become "final", as that term is defined in Paragraph II.1 of Exhibit "D" Within thirty (30) days after submitted Within ninety (90) days after City and LESSOR approval of final building plans 7. LESSOR reviews and approves (or disapproves) evidence of financing (Exhibit "C", 12) 8. LESSEE delivers Guarantees and evidence of insurance; Lease term commences; LESSOR causes Title Company to deliver title policy to LESSEE; LESSEE obtains building permit(s) and construction loan records (Lease, Ss 4 and 10; Exhibit "B", 110; Exhibit "C", 14 9. LESSOR provides or causes City to provide to LESSEE a replacement site for the City lifeguard facility (Exhibit "D", 1I.3) 10. LESSEE commences construction of Pier Side Improvements (Lease, 16) 11. LESSOR provides utilities to the Premises (Exhibit "D" 14) 12. LESSEE completes construction of Pier Side Improvements (with possible exception of pedestrian overcrossing) and LESSOR issues Certificate of Completion (Lease, 16; Exhibit "D", VI.1 and 2) Within the times set forth in Exhibit "C", 12 Within thirty (30) days after LESSOR approval of evidence of financing (and satisfaction or waiver of all of the other Conditions to Commencement in Exhibit PIC" ) On or before the Commencement Date Within thirty (30) days after Commencement Date Prior to LESSEE's scheduled date for commencement of construction Within twenty-four (24) months after commence- ment of construction It is understood that . the foregoing Schedule of Performance is subject to all of the terms and conditions set forth in the text of this Lease. The summary of the items of performance in this Schedule of Performance is not intended to supersede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of this Lease, the text shall govern. EXHIBIT "F" GUARANTY AND AGREEMENT OF 5TANLEY M. BLOOM THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("LESSOR") and PIER SIDE DEVELOPMENT, a California general partnership ("LESSEE") have entered into that certain Pier Side Lease for the Main -Pier Project dated , 1986, (the "Lease"), which Lease provides (in paragraph 4 of Exhibit "C" thereto) that Stanley M. Bloom ("Guarantor") shall make and deliver a guaranty as provided therein. RE912ALE A. The Guarantor is a shareholder in Randall Foods, Inc. Pacific Heritage Corporation, one of the general partners of HUNTINGTON PACIFICA I, a general partnership doing business as HUNTINGTON PACIFICA DEVELOPMENT GROUP, which in turn is one of the general partners in LESSEE, is a wholly owned subsidiary of Pacific Heritage Land and Holding Company, which in turn is a wholly owned subsidiary of Randall Foods, Inc. The Guarantor will significantly benefit by the execution by LESSOR of the Lease. B. The execution by the Guarantor of this Guaranty is a condition but for which LESSOR would not have executed the Lease* in consideration of the other valuable consideration, acknowledged: execution of the Lease, and of receipt of which is hereby 1. Guarantor guarantees to LESSOR the full and timely performance by Lessee of all of LESSEE'S obligations under the Lease, which is incorporated herein by reference, including without limitation LESSEE's obligation to pay rent, within the same times and subject to the same terms and conditions as are set forth in the Lease for LESSEE. This Guaranty supersedes and is intended to replace the Guaranty executed by the Guarantor in favor of the City of Huntington Beach and LESSOR dated August 5, 1985, which earlier Guaranty is of no further force and effect. 2. Except as specifically set forth in paragraph 1, this Guaranty is unconditional and may be enforced directly against the undersigned in the same manner as the Lease can be enforced against LESSEE. No extensions, modifications or changes to the Lease shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. EXHIBIT "F" Page 1 of 4 3. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require LESSOR to proceed against LESSEE (or any guarantor other than the undersigned) or to pursue any other remedy in LESSOR's power before proceeding against the Guarantor, and (b) any duty on the part of LESSOR to disclose to Guarantor any facts LESSOR now or hereafter knows about the Premises, the lease, or LESSEE, regardless of whether LESSOR has reason to believe that any such facts materially increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that -Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Premises, the Lease, the obligations of LESSEE, the financial condition of LESSEE, and of all circumstances bearing on the risk of any obligation by LESSEE hereby guaranteed. 5. Guarantor shall have no right of subrogation and waives any right to enforce any remedy LESSOR now has or may hereafter have against LESSEE, and any benefit of, and any right to participate in any security now or hereafter held by LESSOR. 5. The obligations of Guarantor hereunder are independent of the obligations of LESSEE and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not LESSEE (or any other guarantor) is joined therein or a separate action or actions are brought against LESSEE. 7. In the event of any litigation between LESSOR and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder prior to the termination date specified in paragraph 10 below except by a writing duly executed by LESSOR. 9. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which ray be incurred by LESSOR in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. EXHIBIT "F" Page 2 of 4 10. This Guaranty shall remain in effect notwithstand- ing any bankruptcy, reorganization or insolvency of LESSEE or any successor or assignee thereof or any disaffirmance by a trustee of LESSEE. This Guaranty shall terminate and be of no further force and effect upon the earlier of the following: (i) LESSOR's issuance of the final Certificate of Completion for the Pier Side Improvements required to be constructed by LESSEE on the Premises, in accordance with paragraph 6(d) of,the Lease; or (ii) the assignment of LESSEE's interest in the Lease and the Premises to a person or entity approved by LESSOR on the basis of the criteria set forth under (i), (ii), and (iii) of the first paragraph of paragraph 16.A of the GENERAL CONDITIONS (Exhibit "B") to the Lease. Provided, however, that in the event LESSOR approves an assignment of LESSEE'S interest in the Premises, but LESSOR has not been able, after and despite reasonable diligence, to complete its evaluation of the assignee on the basis of the criteria set forth under (ii) or (iii) of the first paragraph of Paragraph 1.6.A of Exhibit "B" to the Lease, LESSOR shall so notify Guarantor and thereafter this Guaranty shall continue in effect for an additional reasonable period (not to exceed six (6) months total) to enable LESSOR to complete such evaluation; and if LESSOR determines (and so notifies Guarantor) within said period that the (approved) assignee does not satisfy said criteria, this Guaranty shall remain in full force and effect; otherwise, this Guaranty shall terminate. 11. This Guaranty shall inure to the benefit of and bind the successors and assigns of LESSOR and Guarantor. IN WITNESS WH R F, the undersigned has exeted this Guaranty this _ day of , _n cy� , 19 Z. GUARANTOR By 0021 f1�~ Stanley M. floom. EXHIBIT "F" Page 3 of 4 ACKNOWLEDGEMENT STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE } On 0 , A 3 , 198 6 , before me, the undersigned; a Nota y Public in a d for said State, personally appeared 'e-c , personally known to me or proved to me on the hasis of satisfactory evidence to be the person whose name subscribed to the within instrument and acknowledged that _,Lo executed the same. WITNESS my hand and official seal. (Seal) OFFICIAL SEAL BETTE BARILLA ` - Wary Pubic-Calilcrnia ORANGE COUNTY My Cmrn. bro. Jan. 8. 193�1 4/087/011323-0001/09 EXHIBIT "F" Page 4 of 4 EXHIBIT "G" FORM OF _GUARANTY AND AGREEMENT OF URI E. GATI THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("LESSOR") and PIER SIDE DEVELOPMENT, a California general partnership ("LESSEE") have entered into that certain Pier Side Lease for the Main -Pier Project dated , 19861 (the "Lease"), which Lease provides (in paragraph 4 of Exhibit "C" thereto) that Uri E. Gati ("Guarantor") shall crake and deliver a guaranty as provided therein. EESIZALk A. The Guarantor is a shareholder in Aviv Development Corporation, the general partner in Aviv Group Limited, which in turn is one of the general partners in HUNTINGTON PACIFICA I, a general partnership doing business as HUNTINGTON PACIFICA DEVELOPMENT GROUP, which in turn is a general partner in LESSEE. The Guarantor will significantly benefit by the execution by LESSOR of the Lease. B. The execution by the Guarantor of this Guaranty is a condition but for which LESSOR would not have executed the Lease. In consideration of the execution of the Lease, and of other valuable consideration, receipt of which is hereby acknowledged; 1. Guarantor guarantees to LESSOR the full and timely performance by LESSEE of all of LESSEE'S obligations under of all of the "Pier Side Improvements" (as defined in the Lease, which is incorporated herein by reference, including without limitation LESSEE's obligation to pay rent, within the same times and subject to the same terms and conditions as are set forth in the Lease for LESSEE. This Guaranty supersedes and is intended to replace the Guaranty executed by the Guarantor in favor of the City of Huntington Beach and Lessor dated August 5, 1985, which earlier Guaranty is of no further force and effect. 2. Except as specifically set forth in paragraph 1, this Guaranty is unconditional and may be enforced directly against the undersigned in the same manner as the Lease can be enforced against LESSEE. No extensions, modifications or changes to the Lease shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. EXHIBIT "G" Page 1 of 4 �r! 3. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require LESSOR to proceed against LESSEE (or any guarantor other than the undersigned) or to pursue any other remedy in LESSOR's power before proceeding against the Guarantor, and (b) any duty on the part of LESSOR to disclose to Guarantor any facts LESSOR now or hereafter knows about the Premises, the Lease; pr LESSEE, regardless of whether LESSOR has reason to believe that any such facts materially increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Premises, the Lease, the obligations of LESSEE, the financial condition of LESSEE, and of all circumstances bearing on the risk of any obligation by LESSEE hereby guaranteed. 5. Guarantor shall have no right of subrogation and waives any right to enforce any remedy LESSOR now has or may hereafter have against LESSEE, and any benefit of, and any right to participate in any security now or hereafter held by LESSOR. f. The obligations of Guarantor hereunder are independent of the obligations of LESSEE and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not LESSEE (or any other guarantor) is joined therein or a separate action or actions are brought against LESSEE. 7. In the event of any litigation between LESSOR and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder prior to the termination date specified in paragraph 10 below except by a writing duly executed by each of LESSOR. 9. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by LESSOR in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of LESSEE or any successor or assignee thereof or any disaffirmance by a trustee of EXHIBIT "G" Page 2 of 4 LESSEE. This Guaranty shall terminate and be of no further force and effect upon the earlier of the following: (i) LESSOR's issuance of the Final Certificate of Completion for the Pier Side Improvements required to be constructed by LESSEE on the Premises, in accordance with paragraph 6(c) of the Lease; or (ii) the assignment of LESSEE's interest in the Lease and the Premises to a person or entity approved by LESSOR on the basis of the criteria set forth under (i), (ii), and (iii) of the first paragraph of paragraph 16.A of the GENERAL CONDITIONS (Exhibit "B") to the Lease. Provided, however, that in the event LESSOR approves an assignment of LESSEE'S interest in the Premises, but LESSOR has not been able, after and despite reasonable diligence, to complete its evaluation of the assignee on the basis of the criteria set forth under (ii) or (iii) of the first paragraph of Paragraph 16.A of Exhibit "B" to the Lease, LESSOR shall so notify Guarantor and thereafter this Guaranty shall continue in effect for an additional reasonable period (not to exceed six (6) months total) to enable LESSOR to complete such evaluation; and if LESSOR determines (and so notifies Guarantor) within said period that the (approved) assignee does not satisfy said criteria, this Guaranty shall remain in full force and effect; otherwise, this Guaranty shall terminate. 11. This Guaranty shall inure to the benefit of and bind the successors and assigns of LESSOR and Guarantor. IN WITNESS WHEREOF, the undersigned has executed this Guaranty this _—, day of _ flLT_ ___ , 196,�. GUARANTOR By Uri E: Ga EXHIBIT "G" Page 3 of 4 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On 0 ;2? , 198� , before me, the undersigned, a Notary Public in and for said State, personally appeared _ 1Jtni , personally known to me or proved to me on the basis of satisfactory evidence to be the person_ whose name subscribed to the within instrument and acknowledged that _Lr executed the same. WITNESS my hand and official seal. (Seal) N, OFFICIAL SEAL BETTE BARILLA Notary PUM-CaN;ornla ORANGE COUNTY My Comm. W. Jan. 8. im 4/087/011323-0001/10 EXHIBIT "G" Page 4 of 4 • h ' EXHIBIT "H" FORM OF GUARANTY AND AGREEMENT OF_BRYANT L. MORRIS THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("LESSOR") and PIER SIDE DEVELOPMENT, a California general partnership ("LESSEE") have entered into that certain Pier Side Lease for the Main -Pier Project dated , 1986, (the "Lease"), which Lease provides (in paragraph 4 of Exhibit "C" thereto) that Bryant L. Morris ("Guarantor") shall make and deliver a guaranty as provided therein. R19ITAka A. The Guarantor is a shareholder in Pier Side, Inc., which in turn is a general partner in HUNTINGTON PACIFICA I, a general partnership doing business as HUNTINGTON PACIFICA DEVELOPMENT GROUP, which in turn is a general partner in LESSEE. The Guarantor will significantly benefit by the execution by LESSOR of the Lease. B. The execution by the Guarantor of this Guaranty is a condition but for which LESSOR would not have executed the Lease. In consideration of the execution of the Lease, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantor guarantees to LESSOR the full and timely performance by LESSEE of all of LESSEE'S obligations under of all of the "Pier Side Improvements" (as defined in the Lease, which is incorporated herein by reference, including without limitation LESSEE's obligation to pay rent, within the same times and subject to.•the same terms and conditions as are set forth in the Lease for LESSEE. 2. Except as specifically set forth in paragraph 1, this Guaranty is unconditional and may be enforced directly against the undersigned in the same manner as the Lease can be enforced against LESSEE. No extensions, modifications or changes to the Lease shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. 3. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. EXHIBIT "H" Page 1 of 4 4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require LESSOR to proceed against LESSEE (or any guarantor other than the undersigned) or to pursue any other remedy in LESSOR's power before proceeding against the Guarantor, and (b) any duty on the part of LESSOR to disclose to Guarantor any facts LESSOR now or hereafter knows about the Premises, the Lease, or LESSEE, regardless of whether LESSOR has reason to believe that any such facts materially increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Premises, the Lease, the obligations of LESSEE, the financial condition of LESSEE, and of all circumstances bearing on the risk of any obligation by LESSEE hereby guaranteed. 5. Guarantor shall have no right of subrogation and waives any right to enforce any remedy LESSOR now has or may hereafter have against LESSEE, and any benefit of, and any right to participate in any security now or hereafter held by LESSOR. 6. The obligations of Guarantor hereunder are independent of the obligations of LESSEE and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not LESSEE (or any other guarantor) is joined therein or a separate action or actions are brought against LESSEE. 7. In the event of any litigation between LESSOR and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder prior to the .termination date specified in paragraph 10 below except by a .writing duly executed by each of LESSOR. 9. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by LESSOR in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of LESSEE or any successor or assignee thereof or any disaffirmance by a trustee of LESSEE. This Guaranty shall terminate and be of no further force and effect upon the earlier of the following: (i) LESSOR's issuance of the Final Certificate of Completion for the Pier Side Improvements required to be EXHIBIT "H" Page 2 of 4 y constructed by LESSEE on the Premises, in accordance with paragraph 6(c) of the Lease; or (ii) the assignment of LESSEE's interest in the Lease and the Premises to a person or entity approved by LESSOR on the basis of the criteria set forth under (i), (ii), and (III) of the first paragraph of paragraph 16.A of the GENERAL CONDITIONS (Exhibit "B") to the Lease. Provided, however, that in the event LESSOR approves an assignment of LESSEE'S interest in the Premises, but LESSOR has not been able, after and despite reasonable diligence, to complete its evaluation of the assignee on the basis of the criteria set forth under (ii) or (III) of the first paragraph of Paragraph 16.A of Exhibit "B" to the Lease, LESSOR shall so notify Guarantor and thereafter this Guaranty shall continue in effect for an additional reasonable period (not to exceed six (6) months total) to enable LESSOR to complete such evaluation; and if LESSOR determines (and so notifies Guarantor) within said period that the (approved) assignee does not satisfy said criteria, this Guaranty shall remain in full force and effect; otherwise, this Guaranty shall terminate. 11. This Guaranty shall inure to the benefit of and bind the successors and assigns of LESSOR and Guarantor. IN WITNESS WHEREOF, the endWigned has executed this Guaranty this .2;3 — day of , 198, GUARANTOR By B ant L. Morris EXHIBIT "H" Page 3 of 4 ACKNOWLEDGMENT STATE OF CALIFORNIA ) Ss. COUNTY OF ORANGE ) On n r-It. by 198_C, , before me, the undersigned allotary ublic in and for said State, personally appeared n '. M n P- is , personally known to me or proved to me on the basis of satisfactory evidence to be the person_ whose name subscribed to the within instrument and acknowledged that V!:�:: executed the same. WITNESS my hand and official seal. (Seal) a 7FiC1A� SEAL BETTE $Af4lCLA Notary hVic-Callamla ORME COUNTY My Comm. Exp. Jan. 8. 1990 4/087/011323-0001/11 EXHIBIT "H" Page 4 of 4 RESOLUTION NO. 5720 A RESOLUTION OF THE CITY COUNCIL OF HUNTINGTON BEACH APPROVING THE CONVEY- ANCE BY MEANS OF SALE OF REAL PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND AMONG THE HUNTINGTON BEACH REDEVELOPMENT AGENCY, AND HUNTING - TON PACIFICA I DOING BUSINESS AS HUNTINGTON PACIFICA DEVELOPMENT GROUP WHEREAS, the Huntington Beach Redevelopment Agency (the "Agency") is authorized to conduct redevelopment activities u1thin the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition'and conveyance of real property for property development; and The Agency desires to enter into a First Amended Disposition and Development Agreement (the "Agreement") with Huntington Pacifica I doing business as Huntington Pacifica Development Group, a California general partnership (the "Developer"), which Agreement provides for the transfer by deed of certain portions of the Project .Area generally situated along Pacific Coast Highway at or near its intersection with Hain Street, and the provision of public improvements, as set forth in greater particularity in the Agreement; and The Agency and the City, by Huntington Beach City Council, have conducted a duly noticed joint public hearing regarding the proposed sale 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 Safety Code, contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of certain public improvements, 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 (collectively, the "Public Improvements") which Improvements are enumer- ated in the Redevelopment Plan and will be of benefit to the Project Area. NOW THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1: The acquisition and combination of parcels provided in the Agree- ment is necessary and appropriate to create an economically viable development unit. Section 2: 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 the fair market value thereof determined at the highest use permitted under the Redevelopment Plan for the Project Area based upon the convenants and restrictions 1. established by the Agreement. The City Council further finds that the provision of the Public Improvements as provided for in the Agreement is necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area and approves the pro- vision of such improvements by the Agency. Section 3: The City Council hereby approves the Agreement and all of its pro- visions including without limitation the attachments thereto and authorizes the Mayor and the City Administrator to execute all documents referenced in the Agreement, necessary to effectuate the provisions of the Agreement. PASSED and ADOPTED this 27 day of _ October 0 1986. ATTEST: op City Clerk REVIEW AND APPROVED: City Administrator 0333r 4. 4vo.I Mayor APPROVED AS TO FORM: City f ttorney ors 2. ITI ATED AND APPR ED: � • Aa Deputy City Administrator Redevelopment Res. .�o. 5720 .d STATE OF CALIFORNIA ) COUNTY OF ORANGE ) so: CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, 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 more than a majority of all the members of said City Council at a regular adjourned meeting thereof held on the 27th day of October , 19 86 , by the following vote: AYES: Councilmen: Kelly, macAllister, Finley, Mandic, Bailey, Green, Thomas NOES: Councilmen: None ABSENT: Councilmen: None City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California '1 RESOLUTION NO. 5721 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE LEASE OF REAL. PROPERTY PURSUANT TO A LEASE AGREEMENT BY AND AMONG THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND PIER SIDE DEVELOPMENT WHEREAS, the Huntington Beach Redevelopment Agency (the "Agency") is authorized to conduct redevelopment activities within the Alain -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for property development; and The Agency desires to enter into a Lease Agreement (the "Agreement") with Pier Side Development, a California general partnership (the "Developer"), which Agreement provides for the transfer by lease of certain portions of the Project Area generally situated along Pacific Coast Highway at or near its intersection with Alain Street, and the provision of public improvements, as set forth in greater particularity in the Agreement; and The Agency and the City, by its City Council, have conducted a duly noticed joint public hearing regarding the proposed sale 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 Safety Code, contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of certain public improvements, 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 pier improvements, ("Public Improvements") which Public Improvements are enumerated in the Redevelop- ment Plan and will be of benefit to the Project Area. NOW THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1: The acquisition and combination of real property interests provided in the Agreement is necessary and appropriate to create an economically viable development unit. Section 2: 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 lease, consti- tutes the fair market value thereof determined at the highest use permitted under the Redevelopment Plan for the Project Area based upon the convenants and restrictions established by the Agreement. The City Council further finds that the provision of the Public Improvements as provided for in the Agreement is necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area and approves the provision of such improvements by the Agency. Section 3: The City Council hereby approves the Agreement and all of its pro- visions including without limitation the attachments thereto and authorizes the !Mayor and the City Administrator to execute all documents referenced in the Agreement, necessary to effectuate the provisions of the Agreement. PASSED and ADOPTED this 27th day of October , 1986. ATTEST: 44-"q Va. W.—L�— L Mayor APPROVED AS TO FORM: City Clerk City t rney . EVIE%.ND .... • -7_V6'. - �`�� 0331r Res. .10. 5721 STATE OF CALIFORNIA ) COUNTY OF ORANGE CITY OF BUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, 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 more than a majority of all the members of said City Council at a regular adjourned meeting thereof held on the 27th day of October , 19 86 , by the following vote: AYES: Councilmen: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: Councilmen: None ABSENT: Councilmen: None City Clerk and ex-officio Clerk of the City Council of the Cite of Huntington Beach, California RESOLUTION NO. 133 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE LEASE OF REAL PROPERTY PURSUANT TO A PIER SIDE LEASE AGREEMENT BY AND AMONG THE HUNTINGTON BEACH REDEVELOPMENT AGENCY AND PIER SIDE DEVELOPMENT WHEREAS, the Huntington Beach Redevelopment Agency (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 Pier Side Lease Agreement (the "Agreement") with Pier Side Development ( the "Developer") which Agreement provides for the transfer by lease, of certain portions of the Project Area generally situated along Pacific Coast Highway at or near its intersection with Main Street, and the provision of a pedestrian overpass 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 lease 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 Safety Code, contains a detailed description of the provisions of the Agreement; and l The Agreement provides for the development of certain public improvements, 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 pier improvements, the ("Public Improvements") which Improvements are enumerated in the Redevelopment Plan and will be of benefit to the Project Area. NOW THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1: The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agree- ment, that the consideration for the real property to be transferred to the Developer by lease, constitutes the fair market value thereof determined at 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 is necessary to effectuate the purpose of the Redevelopment Plan applicable to the project Area and approves the provision of such improvements by the Agency. 1. Fd LIM Section 2. 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 Agree- ment, necessary to effectuate the provisions of the Agreement. PASSED and ADOPTED this 27th day of October f 1986. ATTEST: Chairman APPROVED AS TO FORM: Lty trerk Agency Counsel REVIEW s APPROVED: 0334r 2. Special Counsel TED AND APPROVED: irector of Redevelopment Rt... No. 133 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, ALICIA M. WENTWORTH, 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 adjourned' Huntington Beach at a/fneeting of said Redevelopment Agency held on the 27th day of October , 19 86, and that it was so adopted by the following vote: AYES: Members: Kelly, macAllister, Finley, Mandic, Bailey, Green, Thomas NOES: Members: None ABSENT: Members: None �ko�ft h Redevelopment Agency of the City of Huntington Beach, Ca. �J RESOLUTION NO. 134 A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE CONVEYANCE BY MEANS OF SALE OF REAL PROPERTY PURSUANT TO A DISPOSITION DEVELOPMENT AGREEMENT BY AND AMONG THE HUNTINGTON BEACH AGENCY AND HUNTINGTON PACIFICA I, DOING BUSINESS AS HUNTINGTON PACIFICA DEVELOPMENT GROUP WHEREAS, the Huntington Beach Redevelopment Agency (the "Agency") is authorized to conduct redevelopment activities w ithin 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 Disposition and Development Agreement (the "Agreement") with Huntington Pacifica I doing business as Huntington Pacifica Development Group, a California general partnership ( the "Developer") which Agreement provides for the transfer by lease, of certain portions of the Project Area generally situated along Pacific Coast Highway at or near its intersection with Main Street, and the provision of 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 Safety Code, contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of certain public improvements, 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 (collectively, the "Public Improvements") which Improvements are enumer- ated in the Redevelopment Plan and will be of benefit to the Project Area. NOV►' THEREFORE, the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: Section 1: The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agree- ment, 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 and approves the provision of such improvements by the Agency. I. Section 2: The Redevelopment Agency hereby approves the Agreement and all of its provisions, including without limitation, the attachment thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agree- ment and necessary to effectuate the provisions of the Agreement. PASSED and ADOPTED this 27th day of October , 1986. ATTEST: Agency Clerk REV] AND APP OVED: Chief Executive Officer 0332r ILL.7 t'� h'. - 4. 1 Chairman APPROVED AS TO FOR .h Agency Ate orney 12 r Special Counsel I TIATED AND APPROVED: Deputy Director of Redevelopment 2. kta. No. 134 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF HUNTINGTON BEACH) I, ALICIA M. WENTWORTH, 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 ad 'ourned ' Huntington Beach at a /meeting of said Redevelopment Agency held on the 27th day of October , 19 86, and that it was so adopted by the following vote: AYES: Members: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: Members: None ABSENT: Members: None Clerk of the Redevelopment Agency of the City of Huntington Beach, Ca. . REQ-tST� FQ Submitted to: +4anayor/ c�t�irr� Submitted by: Charles W. Thompson, City Prepared by: Douglas N. LaBelle, Deputy CITY COV- AIL/ AGENCY ACTION RH 86-81 Date October 10, 1986 ud�tity Council/Redevelopment Agenc e bers Administrator/Chief Executive O •ce City Administrator/Redevelopment FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT AND PIER Subject: SIDE LEASE BETWEEN HUNTINGTON PACIFICA I/PIER SIDE DEVELOPMENT AND THE HUNJINGTON BEACH REDEVELOPMENT AGENCY Consistent with Council Policy? pq Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmitted for the City Council/Redevelopment Agency's consideration is the First Amended Disposition and Development Agreement with Huntington Pacifica I, doing business as Huntington Pacifica Development Group and the Pier Side Lease with the Pier Side Development Corporation. Additionally are resolutions which, when adopted and implemented, will lead to the development of improvements in a portion of the Main -Pier subarea of the Main -Pier Redevelopment Project Area. RECOMMENDATION: Staff recommends that the following separate actions be taken: 1. Conduct a joint public hearing on the First Amended Disposition and Development Agreement and the Pier Side Lease; and 2. Adopt appropriate resolutions between the City Council/Agency and Huntington Pacifica I and Pier Side Development. ANALYSIS: On August 20, 1984, the Redevelopment Agency entered into an Exclusive Negotiating Agreement with Huntington Pacifica Development Group. This agreement was subsequently extended for a 180-day period on November 19, 1984, and additional 60-day periods on May 18, 1985 and July 15, 1985. On August 19, 1985, the original Disposition and Development Agreement was approved by the City and Agency and subsequently was modified by an implementation agreement on February 18, 1986. The above actions are intended to supersede the original Disposition and Development Agreement and the implementation agreement. The Huntington Pacifica I group is proposing to develop at least Thirty -Three Million Five Hundred Thousand Dollars ($33,500,000) in improvements exclusive of land value. The Pier Side Developer is proposing to develop at least Twenty -Five Million Dollars ($25,000,000) in improvements exclusive of land value. These developments will include: Pin AmA V. RH 86-91 October 10, 1986 Page Two 1. Hotel/Commercial A. A first rate, high quality hotel with a quality standard at least equivalent to the Irvine Marriot Hotel of not less than 280 rooms, with a minimum leasable floor area of 205,000 square feet, with associated retail shops, meeting rooms, banquet facilities and restaurant, including a minimum of 450 parking spaces beneath and adjacent to the hotel. B. A retail commercial and office building or buildings with a minimum gross leasable area of approximately 47,000 square feet, plus at the Developers option subject to the provision of required parking a theater complex of approximately 25,000 square feet near the intersection of Main Street and Pacific Coast Highway. The development will include a Public Plaza of approximately 5,000 square feet and an elevated connecting pedestrian walkway to Pier Side Village. It. Pier Side Village A. The Pier Side Village will consist of specialty commercial uses with a gross leasable area of a minimum of 75,000 square feet (excludes existing Maxwells), plus a multiple -tiered parking structure with not less than 600 spaces. Part of the minimum gross leasable area of 75,000 square feet shall occur as an expanded deck area adjacent to the existing pier; such added deck area shall approximate 25,000 square feet. All improvements shall be in conformity with Conditional Use No. 86-43 and Coastal Development Permit No. 86-27 as approved by the City or as may be subsequently amended. The described development is proposed over a 14-acre area bounded by walnut Avenue on the north; Second Street on the east; and over to Lake Street, south of Pacific Coast Highway; the city beach bike path on the south; and along the Pier inside of the surfline; and Main Street on the west side. 33433 Reports have been prepared and are attached as required by the California Health and Safety Code. These reports are required before any property of the Agency acquired directly or indirectly can be sold or leased for development pursuant to a redevelopment plan. ENVIRONMENTAL STATUS ' Pursuant to Section 15262 of the California Environmental Quality Act, the proposed agreement is considered a statutory exemption. The project area has been analyzes! in Environmental Impact Report 82.2 for the Dowrtown Specific Plan approved by the Planning Commission on February 15, 1983 and certified by City Council on July 18, 1983 in an Environmental Impact Report for the plain -Pier Redevelopment Plan approved by the Planning Commission on August 17, 1982 and certified by the Agency on September 7, 1982. `�• RH 86-81 October 10, 1986 Page Three FUNDING SOURCE: The proposed agreement provides that the Developer will acquire all parcels within the project area. The cost of any land acquisition by the Agency will be borne by the Developer. The agreement proposes that the City will have constructed improvements to the water delivery facilities in the downtown area and make all connections with the developers Improvements and pay actual costs the pro rata portion of which is estimated at $19000,000. The agreement also calls for the City to have constructed underground utility improvements in conjunction with the Developers Project and pay actual costs which are estimated at $350,000. Funding to come from Underground Utility District Funds. The agreement states that the Agency is to provide funding for the relocation of residents and businesses and oil interests within the Project Area up to $1,000,000. The income received by the Agency as rent for replacement parking will be used to partially finance the construction of new parking facilities within the downtown area. In addition, the agreement provides for the pass through of all available tax increment revenues generated for both the Hotel Project and the Pier Side Project to their respective projects for a period of 4 years. In the third and fourth years only 50% of the available tax increment revenue shall pass through to the Developer. In addition, all transient occupancy tax revenues generated by the hotel shall pass through to the hotel project for a period of up to 10 years. The agreement further provides for the developer to purchase from the Agency the "City Parcel" for the price of one dollar ($1). ALTERNATIVE ACTION: 1. Continue action on the First Amended DDA and Pier Side Lease and related documents to allow for additional review time. 2. Direct staff to further negotiate specific points of the agreements with the Developer. 3. ❑eny the approval of the agreements and/or related documents and continue with the provisions of the existing Disposition and Development Agreement. ATTACHMENTS: 1. Summary Comparison Report Main -Pier Phase f Project. 2. 33433 Reports. 3. October 3, 1996 Keyser Marston letter. 4. Keyser Marston Economic Analysis August, 1985. 5. Keyser Marston Cash Flow Analysis Comparison. 6. Redevelopment Agency Resolutions. 7. City Council Resolutions. g. First Amended Disposition and Development Agreement. 9. Pier Side Lease. CWT/DLB:sar 2874h FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT 11.0 s FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT by and between HUNTINGTON BEACH REDEVELOPMENT AGENCY, AGENCY, and MYNTINGTON PACIFICA I, doing business as HUNTINGTON PACIFICA DEVELOPMENT GROUP, 110 OP .S ' -, FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT THIS FIRST AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into this 2&i day of a _r , 1986 ( the "Effective Date") by and between the HUNTINGTON BEACH REDEVELOPMENT AGENCY (the "Agency") and HUNTINGTON PACIFICA I, a California general partnership doing business as Huntington Pacifica Development Group (the "Developer"). The Agency and the Developer hereby agree as follows: I. (§100] SUBJECT OF AGREEMENT A. (S101) Purpose„gf Agreement The purpose of this Agreement is to effectuate the Redevelopment Plan (as hereinafter defined) for the Main -Pier Redevelopment Project (the "Project") by providing for the disposition and development of certain property situated within the Project Area (the "Project Area") of the Project. That portion of the Project Area to be developed pursuant to this Agreement (the "Site") is depicted on the "Site Map" which is attached hereto as Attachment No. 1 and incorporated herein by this reference. 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 (the "City"), and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements under which the.Project has been undertaken. This Agreement is intended to supersede and replace the original Disposition and Development Agreement entered into by and among the Agency, the Developer, and the City on or about August 19, 1985, as modified on or about February 18, 1986 (collectively the "Original DDA"). The parties agree that the provisions of the Original DDA are of no further force and effect including, without limitation, the Guarantees set forth as Attachments 7-10 thereto. Henceforth, all of the rights and obligations of the parties (and the Guarantors covered by Attachments 5 and 6 hereto) with respect to the "Walnut -Main Portion," as that term was defined in Section 103 of the Original DDA, shall be as set forth herein, and all of the rights and obligations of the parties and Guarantors with respect to the "Pier Side Portion," as that term was defined in Section 103 of the Original DDA, shall be as set forth in the separate Pier Side Lease between the Agency and Pier Side Development (the "Pier Side Lease") which is being entered into concurrently -1- herewith. In no event shall a default by the Developer hereunder be deemed to constitute a default by the Lessee under the Pier Side Lease, and in no event shall a default by the Lessee under the Pier Side Lease be deemed to constitute a default by the Developer hereunder. Similarly, in no event shall a default by the Agency hereunder be deemed to constitute a default by Agency under the Pier Side Lease, or vice versa. B. [5102) The Redevelopment Plan The Redevelopment Plan was approved and adopted by Ordinance No. 2578 of the City Council of the City .of Huntington Beach and amended by Ordinance No. 2634; said •ordinances and the Redevelopment Plan (the "Redevelopment Plan") are incorporated herein by this reference. Notwithstanding any other provision of this Agreement to the contrary, any amendments to the Redevelopment Plan which change the uses or development permitted on the Site, or otherwise change any of the restrictions or controls that apply to the Site, shall require the written consent of the Developer. C. [5103] The Site The Site is that portion of the Project Area so designated on the Site Map (Attachment No. 1) and described in the "Legal Description" which is attached hereto as Attachment No. 2 and incorporated herein by this reference. The Site includes the "City Parcel" (which is that portion of the Site so designated on the Site Map [Attachment No. 11 and the Legal Description [Attachment No. 2)), and the "Remaining Portion" (which is that portion of the Site so designated on the Site Map and the Legal Description). Such portion of the Remaining Portion as may be acquired by the Developer pursuant to Section 201.3 below shall constitute the "Developer Parcel," and such portion of the Remaining Portion as may be acquired by the Agency pursuant to Section 201.4 and 201.5 below for conveyance to the Developer shall constitute the "Agency Sales Parcel." It is understood that, subject to the terms and conditions set forth herein, the Site may be subdivided, subject to the approval of the discretionary land use permits (excluding final building plans) referenced in Section 203 for the entire Site, between the portion thereof to be developed with a hotel and related uses (the "hotel Parcel") and the balance thereof to be developed with retail, commercial, and/or office uses (the "Retail Parcel"). Each individual legal parcel created pursuant to said subdivision -2- S i 4 process shall be classified as a "Separate Development Parcel" as that term is used in this Agreement. D. (5104] Parties to the Agreement 1. [S105]2:hg__Ag!RncY 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. The term "Agency," as used in this Agreement, includes the Huntington Beach Redevelopment Agency, and any assignee of or successor to its rights, powers and responsibilities. 2. [S106] The Developer The Developer is Huntington Pacifica I, a California general partnership doing business as Huntington Pacifica Development Group. The general partners in Huntington Pacific I are Pacific Heritage Corporation, a California corporation, and Gati Associates, Inc., a California corporation. Each partner and the Developer has represented to the Agency that the Developer has the experience and qualifications necessary to perform the Developer's obligations pursuant to this Agreement. The principal office and mailing address of the Developer for purposes of this Agreement is Huntington Pacifica Development Group, 2905 East 50th Street, Vernon, California 90058. By executing this Agreement, each person signing on behalf of the Developer or one of its constituent entities warrants and represents to the Agency that it has the full power and authority to enter into this Agreement, that all authorizations required to make this Agreement binding upon such party have been obtained, and that the person or persons executing this Agreement on behalf of such party has been fully authorized to do so. The term "Developer" as used in this Agreement, includes Huntington Pacifica I and any permitted assignee of or successor to any of its rights, powers, and responsibilities hereunder. 3. [S1073 Restrictions on the Developer's Rights to Assign The qualifications and identity of the -3- Developer are of particular ccncern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Accordingly, prior to the Agency's issuance of a Certificate of Completion with respect to the entire Site or, as to each Separate Development Parcel within the Site, prior to the Agency's issuance of a Certificate of Completion with respect to said parcel, all as provided in Section 415 below, Developer shall not, except as permitted in this Section 107, assign all or any part of this Agreement or any rights hereunder without the prior written approval of the Agency. The Agency agrees that it will not unreasonably withhold such approval. In this regard, the Agency agrees that it shall grant such approval provided: (i) such assignment is made in connection with the sale or lease for development of all or a portion of the Site to a responsible third party who will undertake the Developer's responsibilities under this Agreement to use and develop the Site, or Separate Development Parcel thereofj in accordance with this Agreement; (ii) such third party shall demonstrate development qualifications and experience to assure the development of the Site equal to or greater than the qualifications and experience of Huntington Pacifica I; (iii) such third party shall demonstrate financial commitments or resources equal to or greater than the commitments or resources of Huntington Pacifica I (and, if the Guarantors covered by Attachment Nos. 5 and 6 are proposed to be released, of such Guarantors as well) to assure development of the Site, or Separate Development Parcel thereof, in accordance with this Agreement; and (iv) the assignor agrees that it shall not, prior to the Agency's issuance of a Certificate of Completion with respect to the Site, or Separate Development Parcel thereof, receive cash or equivalent consideration for the assignment in excess of the amount of its capital contribution to the planning, design, financing, acquisition, and development of the Site, or Separate Development Parcel thereof prior to the effective date of the assignment (with the understanding that such restriction shall not apply to consideration which may be received by the assignor after issuance of said Certificate of Completion). Notwithstanding the foregoing, the Developer shall be entitled to make assignment which consists of a mortgage, deed of trust, sale and lease back, or other form of conveyance for financing, provided that the Agency determines in its reasonable discretion that such assignment is made to a lender approved -by the Agency pursuant to Section 204 below for the purpose of securing loans of funds to be used solely for financing the direct and indirect costs, including without limitation financing costs, interest, and commissions, of planning, financing, developing, constructing, and operating the improvements to be constructed by the Developer with respect to the Site or -4- '•: z 1 � Separate Development Parcel thereof. it is understood that the Developer's entering into and the performance under a management contract with a hotel operator shall not be classified as an assignment for purposes of this Agreement; the Agency's right to review and approve the hotel operator shall be as set forth in Section 205. Notwithstanding any other provision of this Agreement to the contrary, Agency approval of an assignment of this Agreement or any interest herein shall not be required in connection with any of the following: (i) Any transfers to any entity or entities in which the Developer retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management control. Transfers resulting from the death or mental or physical incapacity of an individual. (iii) Transfers or assignments in trust for the benefit of a spouse, children, grandchildren, or other family members. (iv) A sale of the Site or any Separate Development Parcel thereof at foreclosure (or a conveyance thereof in lieu of a foreclosure) pursuant to a foreclosure thereof by a lender approved (or deemed approved) by the Agency in accordance with this Section 108. (v) A sale or transfer of some or all of the Developer's interest in the Site or any Separate Development Parcel thereof to a lender approved (or deemed approved) by the Agency in accordance with this Section 108, upon the exercise by such lender of a right to acquire the Developer's interest. (vi) 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. (vii) The leasing of any part or parts of a building or structure for occupancy in the normal course of owning and operating MC the project (and excepting the hotel operator which must be approved in accordance with Section 205). (viii) A transfer of stock in a publicly held corporation or the transfer of the beneficial interest in any publicly held partnership or real estate investment trust. The Developer shall deliver written notice to the Agency requesting approval of any assignment requiring Agency approval hereunder. Such notice shall be accompanied by sufficient evidence regarding the proposed assignee's development qualifications and experience and its financial commitments and resources to enable the Agency to evaluate the proposed assignee pursuant to the criteria set forth under (ii) and (iii) of the first paragraph of this Section 107. At the same time, the Developer shall submit to the Agency the Developer's statement certifying (if such be the case) that it will not, prior to the Agency's issuance of a Certificate of Completion, receive cash or equivalent consideration for the assignment in excess of its capital contribution, as set forth under (iv) of the first paragraph of this Section 107. Within thirty (30) days after the receipt of the Developer's written notice requesting Agency approval of an assignment, the Agency shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine whether or not to approve the requested assignment. Upon receipt of such a timely response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of an assignment shall be deemed complete thirty (30) days after the Agency's receipt thereof if no timely response requesting further information regarding the proposed assignee is delivered to the Developer, or, if such a timely response requesting further information is received, on the date that the Developer delivers such additional information to the Agency. Once the Developer's request for approval of an assignment has been accepted as complete or is deemed complete, the Agency shall not be entitled to demand additional information or to disapprove the assignment on the basis that the Developer has not furnished adequate or complete information. The Agency shall approve or disapprove any requested assignment for financing purposes which Qz requires Agency approval within fifteen (15) days after the Developer's request therefor is accepted as complete or is deemed complete. The Agency shall approve or disapprove any other requested assignment requiring Agency approval within thirty (30) days after the Developer's request therefor is accepted as complete or is deemed complete. Any disapproval shall be in writing and shall specify the reasons for the disapproval and, if applicable, the conditions required to be satisfied by the Developer in order to obtain approval. If the Developer's initial notice requesting approval of the assignment compliQs with the requirements of Section 705 below, the Agency's failure to timely disapprove a request for assignment shall be conclusively deemed to constitute an approval. The Developer shall compensate the Agency for its actual expenses (not including personnel or overhead expenses) incurred in investigating a proposed assignee's qualifications as a permitted assignee hereunder. No assignment of the Developer's obligations with respect to the Site or a Separate Development Parcel thereof, whether or not Agency approval is required therefor (but specifically excluding the hotel management contract, assignments for financing purposes, and those types of assignments identified in subparagraphs (iv), (v), (vi), and (vii)), shall be effective unless and until the proposed assignee executes and delivers to the Agency an agreement in form reasonably satisfactory to the Agency's attorney assuming the obligations of the Developer which have been assigned. Thereafter, the assignor shall remain responsible to the Agency for performance of the obligations assumed by the assignee unless the Agency releases the assignor in writing or unless the Agency has approved the assignee on the basis of the criteria set forth under (i), (ii), and (iii) of the first paragraph of this Section 107, in either of which events the assignor shall be released only from those obligations arising prior to the effective date of the assignment. As of the execution of this Agreement, Stanley M. Bloom owns a majority of the outstanding shares of Randall Foods, Inc. (the parent of Pacific Heritage Land and Holding Company, which in turn is the parent of Pacific Heritage Corporation), and Uri E. Gati owns fifty percent (50%) of the outstanding shares of Aviv Development Corporation (the general partner in Aviv Group Limited). Unless and until Huntington Pacifica I's interest in the entire Site and this Agreement is assigned, in accordance with the foregoing limitations, to a person, or entity in which Pacific Heritage Corporation and Aviv Development Corporation, have no ownership or beneficial interest, -7- 1 Stanley M. Bloom shall retain his majority interest in Pacific Heritage Corporation, and Uri E. Gati shall retain his fifty percent (50%) interest in Aviv Development Corporation, unless the prior written approval of the Agency is hereafter obtained, which . approval shall not be unreasonably withheld. The restrictions of this Section 107 shall terminate upon issuance by the Agency of a Certificate of Completion for the entire redevelopment of the Site or, as to each Separate Development Parcel within the Site, upon issuance by the Agency of a Certificate of Completion with respect to said parcel. 11. (52001 ASSEMBLY OF THE SITE AND `TASKS_ TO BE {ACCOMPLISHED PRIQR TO DISPOSITION OF THE CITY PARCEL A. 152011 AcgMisition of thC Site 1. The Agency and Developer agree that in order for the Developer to develop and operate the Developer Improvements on the Site in accordance with this Agreement, the Developer must acquire fee simple merchantable title to the Site free and clear of all monetary liens and all recorded and unrecorded non -monetary liens, encumbrances, easements, licenses, leases, and other defects of title inconsistent with the Scope of Development (Attachment No. 7) and the Developer's plans to be approved in accordance with Section 203 below (hereinafter the "Approved Title Condition"). The Agency covenants that on or before the date specified in the Schedule of Performance (Attachment No. 3), the Agency shall acquire title to the City Parcel from the City consistent with the Approved Title Condition. Prior to the Effective date hereof,. the Developer has acquired certain of the parcels/property interests in the Remaining Portion of the Site, the precise identity of which interests/parcels has been disclosed to the Agency. The purpose of this Section 201 is to set forth the procedures for the Agency's and Developer's acquisition of the parcels and property interests in the Remaining Portion of the Site that remain to be acquired in order to place title in the Approved Title Condition. 2. Prior to the Effective Date of this Agreement, the Agency has caused to be prepared and delivered to the Developer updated acquisition appraisals for the parcels and property interests in the Remaining Portion of the Site that remain to be acquired. The Developer has approved such updated acquisition appraisals and represented r to the Agency that the Developer is prepared, subject to the terms and conditions set forth herein, to proceed to finance the acquisition of such parcels and property interests on the basis of such updated appraisals. 3. The Developer shall exercise reasonable diligence to acquire by negotiated purchase or option agreement all of the remaining property interests to be acquired in the Remaining Portion. The Developer's obligation to commence such efforts shall begin upon the occurrence of the last of the following events: (i) The City Councils_ conditional approval of the street vacation pursuant to Section 202 below; and (ii) City and Agency approval of all of the discretionary land use permits for the development of the Site (which shall be deemed to exclude final building plan approval) pursuant to Section 203 below (with all such approvals having become "final" within the meaning of the penultimate paragraph of Section 203). The Developer shall continue such negotiation efforts for a period of thirty (30) days (the "Developer Negotiation Period"). 4. If, after and despite its reasonable diligence to do so, the Developer has been unable to negotiate option or purchase agreements for acquisition of all of the remaining parcels and property interests to be acquired during the Developer Negotiation Period, the Developer shall promptly so notify the Agency of the status of the Developer's negotiation efforts and the identity of the parcels and property interests that still remain to be acquired. At such time, Developer shall deliver to the Agency an irrevocable direct -pay letter of credit payable to the Agency, in a form subject to the reasonable approval of the Agency's counsel, drawn upon a bank authorized to do business in the State of California and which has been approved by the Chief of Administrative Services for the City (who shall act reasonably in making such determination), in an amount equal to 1501 of the sum of the Agency's updated appraisals referenced above for the property interests remaining to be acquired, and conditioned for payment to the Agency (upon demand by its Executive Director or authorized designee) for the Agency's "Acquisition Costs" (as that term is defined below) of the parcels and property interests to be acquired. -9- J Thereafter, the Agency shall exercise reasonable diligence to acquire by negotiated purchase or option agreement the remaining parcels and property interests. The Agency shall have the right, but not the obligation, to commence efforts to acquire such parcels and property interests at any time. The Agency's obligation to commence such efforts shall begin upon the last of the following events: (i) Receipt of the notice from the Developer identifying the property interests Developer has been unable to acquire and the letter of credit to secure payment of the Agency's Acquisition Costs therefor, as set forth above; (ii) The City Council's conditional approval of the street vacation pursuant to Section 202 below; (iii) City and Agency approval of all discretionary approvals for the development of the Site (which shall be deemed to exclude final building plan approval) pursuant to Section 203 below; and (iv) The absence at the time of any material default under this Agreement by the Developer. The Agency shall continue its negotiation efforts for a period of sixty (60) days after the commencement of the period in which it is obligated to negotiate (the "Agency Negotiation Period"). 5. If, after and despite its reasonable diligence to do so, the Agency is unable to negotiate the acquisition and relocation of all of the remaining unacquired parcels and property interests in the Remaining Portion during the Agency Negotiation Period, the Agency shall determine, in its sole discretion, whether to acquire the remaining unacquired parcels and property interests by exercise of its power of eminent domain. If the Agency elects to exercise its power of eminent domain, such election shall be made and the eminent domain action(s) filed within sixty (60) days after the end of the Agency Negotiation Period; provided, that nothing in this Agreement shall be deemed to constitute a commitment by Agency to condemn property or a prejudgment of the matters required to be considered as part of any decision to condemn property. Upon Agency acquisition of any of the unacquired property -10- Interests in the Remaining Portion, the Agency and Developer agree that said property interests shall be terminated, and the Agency and Developer shall cooperate and execute any documents required to remove said property interests of record. In the event that the Agency exercises its power of eminent domain to acquire any of the unacquired parcels and property interests in the Remaining Portion, the Agency shall, subject to delays outside the Agency's control, exercise best efforts to complete the acquisition of (and terminate) such property interests as soon as possible after the commencement of eminent domain proceedings. In the event that the Agency exercises its power of eminent domain to acquire any or all of the unacquired parcels and property interests in the Remaining Portion, the Agency shall, upon the Developer's written request, exercise its best efforts to obtain a judicial order or orders (hereinafter "Order of Prejudgment Possession") authorizing the Agency to take possession of the premises prior to the final order(s) of condemnation. Upon such request, either the Developer shall deposit funds with the Agency or the Agency shall be entitled to draw upon the letter of credit referenced above in such amounts as have been determined by the Agency to be necessary to secure the Order of Prejudgment Possession, provided the Agency has received a commitment from the Title Company to issue a title insurance policy immediately following the entry of the Order of Prejudgment Possession which is sufficient to enable the Developer to obtain and close its construction and permanent loans for the development of the Site (as reasonably determined by the Developer). Notwithstanding any other provision of this Agreement to the contrary, if, at any time -prior to the Agency's acquisition and termination of any of the parcels and property interests to be acquired, the Agency provides to the Developer a copy of an Order of Prejudgment Possession, and: (i) Agency delivers possession of the premises; and (ii) Agency is diligently proceeding with the eminent domain action(s) seeking the rendering of a final judgment or judgments, which judgment or judgments would authorize the taking, and the Agency agrees to terminate the applicable property interest when Agency completes the acquisition thereof; and -11- (iii) The right of possession conveyed by the Agency to the Developer is sufficient to enable the Developer to obtain a title insurance policy as necessary to close its construction and permanent loans; then, subject to Agency's conveyance of the City Parcel and the balance of the Agency Sales parcel as provided in Article III below, the Developer shall accept such right of possession and proceed with the development of the Site, with the date of transfer of possession from the Agency to the Developer treated the same as the date of close of escrow for purposes of the Developer's obligation to proceed with and complete construction. Upon the request of the Title Company, the Agency shall execute an indemnification agreement in form satisfactory to such Title Company and reasonably satisfactory to the Agency by which the Agency shall agree to indemnify the Title. Company for any losses, damages and expenses incurred by the Title Company in the event of the Agency's abandonment of the eminent domain proceedings. Nothing herein shall be deemed to obligate the Agency to pay for any additional premium or other charge necessary for the issuance of said title policy. In the event that the Title Company declines to issue a title insurance policy under such circumstances, the Developer's obligation to commence and complete the construction shall not commence to run until title to the City Parcel and the entire Agency Sales Parcel is transferred to the Developer (upon the completion of Agency's eminent domain proceedings) in accordance with Article III. 6. Subject to partial reimbursement from the Agency in accordance with the "Method of- Financing" (Attachment No. 8), the Developer shall advance to the Agency all of the "Acquisition Costs," as defined below, .for the parcels and property interests in the Remaining Portion which the Agency acquires or assists in acquiring. Subject to the other terms and conditions of this Agreement, the Agency shall submit written invoices to the Developer as funds are required, together with such written documentation supporting such invoices as may be reasonably requested by the Developer. Invoices shall be due and payable within fifteen (15) days after receipt. If the Developer fails to timely pay an invoice (but not before), the Agency may make a direct demand on the letter. of credit required to be provided by the Developer in accordance with paragraph 4 above. In the event that the Agency reasonably determines at any time that the letter of credit is insufficient to cover the Agency's Acquisition Costs, the Developer shall, upon fifteen (15) days written notice from the Agency, increase the amount of -12- the letter of credit accordingly. The Developer shall renew or obtain a substituted letter of credit (meeting the same requirements for the initial letter of credit) within forty- five (45) days prior to expiration thereof or the Agency, upon fifteen (15) days written notice to the Developers shall be entitled to demand full payment under the existing letter of credit. In the event that the amount of the letter of credit at any time exceeds the remaining amount required to cover the Agency's Acquisition Costs, the Agency agrees, upon written request of the Developer, to act •reasonably to acknowledge such, if such be the case, and authorize an appropriate reduction in the amount thereof. The obligation of the Developer to maintain the letter of credit (in such adjusted principal amount) shall be terminated when all of the Agency's Acquisition Costs have been fully paid. The term Agency's "Acquisition Costs" as used herein shall mean all costs reasonably incurred by the Agency after the Effective Date of this Agreement for acquisition of any of the parcels and property interests in the Remaining Portion which the Agency acquires or assists in acquiring in order to place title in the Approved Title Condition, and all costs reasonably incurred by the Agency in demolishing and clearing all improvements therefrom incon- sistent with the Developer's approved plans. Notwithstanding any other provision of this Agreement to the contrary, the term Agency's "Acquisition Costs" shall exclude the following, all of which are an Agency responsibility under Paragraph 2(b) of the "Method of Financing" (Attachment No. 8)• (i) Agency administrative, overhead, and personnel expense; (ii) the first One Million Dollars ($1,000,000) of expenses incurred for the following limited purposes: (a) benefits and assistance to be provided to relocate occupants of the Site who may be entitled to such payments; (b) costs relating to the acquisition of rights of surface entry to drill into, through, and to use and occupy any part of the Site lying more than 500 feet below the surface thereof for any and all purposes incidental to the exploration for and production of oil, gas, hydrocarbon substances, or minerals; and (c) compensation for the acquisition of oil wells, oil drilling equipment, pipelines, tanks, and related property, together with benefits and assistance to be -13- provided to relocate any such property from the Site; (iii) expenses incurred to relocate and underground utilities (water, sewer, gas, electrical, and telephone) on the Site, including the public alleys to be abandoned; and (iv) Agency payments, prior to the final award of compens4tion in an eminent domain action, to the owner of a parcel or property interest being acquired, to the extent such payments exceed the amount of the approved updated acquisition appraisal for such parcel or property interest as referenced in paragraph 2 above, unless the Developer shall have agreed in writing to - pay such higher amount. Except as specifically limited hereinabove, the Agency's Acquisition Costs shall include, but not be limited to, costs for real estate purchases and option agreements, escrow fees and charges, title insurance, relocation expenses, court judgments, court costs, attorney's fees, appraisal fees, and expert witness fees. The Agency shall exercise all reasonable efforts to conserve funds so as to minimize its Acquisition Costs, consistent with its obligations under applicable laws. During the entire property acquisition process, the Agency and Developer shall informally consult with and inform one another regarding the status of the acquisitions and any matters which may significantly affect the timing and costs of the acquisition(s). Prior to the Effective Date of this Agreement, the Agency has informed the Developer that the Agency has retained the following contract consultants to assist the Agency in the acquisition process: John Cutler and Associates (acquisition consultants), Richard Metcalf (appraiser), Redwine and Sherrill and Justin McCarthy and Stradling, Yocca, Carlson and Rauth and Thomas P. Clark, Jr. (special legal counsel), and Pacific Relocation Consultants (relocation consultants). The Agency agrees that it shall not utilize any additional or different contract consultants, and shall not change its existing contractual arrangements with its existing contract consultants without the Developer's prior written approval, which shall not be unreasonably withheld. -14- B. IS202) Streg Vacation Provided that the Developer is not in default of its obligation under this Agreement, within the time set forth in the Schedule of Performance (Attachment No. 3), the Agency shall request the City to initiate proceedings and determine whether to vacate certain portions of city streets and alleys (the "Vacation Portions") as depicted on the Site Map (Attachment No. 1). It is understood that any resolution approving such street and alley vacations shall be conditioned and subject to the Agency and/or Developer owning or acquiring the adjacent parcels on both sides. C. (S203] Plan ubmittals and -Reviews The Developer recognizes that its right to develop the Site pursuant to this Agreement is subject to obtaining the following specific land use permits: (i) a conditional use permit and site plan for the entire development, (ii) a special permit for any deviations from normal development standards and requirements, (iii) a parcel or tract map for any consolidations/divisions of the existing parcels within the Site to acco=odate the proposed improvements and uses and to create the Separate Development Parcels, and (iv) final building plan/permit approval. The Developer further recognizes that the Agency shall have the right of architectural and planning review of all of the Developer's plans and Submittals, including any changes therein. Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall prepare and submit to the Agency and City an application for a conditional use permit, a parcel or tract map, and, if applicable, a special permit for the entire Site, together with all documents, plans, and drawings normally required by the City/Agency for such applications. The submittal shall be consistent with the Scope of Development (Attachment No. 7). During the preparation of all drawings and plans, staff of the Agency shall hold regular progress meetings as needed to coordinate the preparation and review of such items. The staff of the Agency and the Developer shall communicate and consult informally as frequently as is necessary to insure that the formal submittal of any documents to the City and Agency can receive prompt and speedy consideration. Provided that the submittals by the Developer are complete, the Agency shall approve or disapprove and shall request the City to approve or disapprove the -15- applications within the times established in the Schedule of Performance (Attachment No. 3). No item once approved by the Agency shall be subject to subsequent disapproval, and no plan or document shall be disapproved for reasons which are inconsistent with the terms of a previous plan or document approval. Any disapproval by the Agency shall state in writing the reasons for disapproval. The Developer, upon receipt of a disapproval based upon powers reserved by -the Agency hereunder, shall revise the disapproved portions of its plans or drawings and resubmit to the Agency as soon as possible after receipt of the notice of disapproval as provided in the Schedule of Performance. If the Developer desires to make any substantial changes in any of the plans after their approval by the City or Agency, whether before or after the close of the escrows referenced in Article III of this Agreement, the Developer shall submit the proposed change to the City and Agency for approval. The processing, review, and approval of any such revised submittal shall be subject to the same provisions as are set forth above for the initial submittal. At such time as the City and Agency have approved all of the foregoing specifically referenced discretionary land use permits (which shall be deemed to exclude final building plan/permit approval) and such approvals become "final", the Agency warrants and represents that neither the City nor the Agency shall thereafter prohibit or prevent development of the Site, or impose any conditions, fees, or other requirements on the Developer's development or use of the Site other than as permitted in the conditions of approval for such permits and this Agreement. It is understood that the foregoing representation and warranty does not apply to any statutes, ordinances, resolutions, or regulations of any governmental agency other than those of the City and Agency, nor to any actions taken by persons or entities other than the City or Agency to prohibit, prevent, or delay development or use of the Site. Accordingly, the Agency warranties and representations set forth herein shall be applicable only if and to the extent the City and/or Agency, subsequent to the granting of all of the foregoing specifically referenced discretionary land use permits, prohibits or prevents development of the Site or imposes any conditions, fees, or other requirements on the Developer's development other than as permitted in the conditions of approval and other than as is customarily imposed by the City in connection with the issuance of building permits. The discretionary land use permits shall be deemed "final" for purposes of this Section 203 upon the last of the following dates: (i) the date on which all conditions of approval requiring subsequent City or Agency discretionary actions have been satisfied; or (ii) the date -16- on which all applicable statutes of limitations for challenging such permits have expired without litigation being filed; or (iii) the date on which all such litigation is favorably and finally terminated, whether by judgment, dismissal, settlement agreement, or otherwise. Within the time set forth therefor in the Schedule of Performance (Attachment No. 3), the Developer shall prepare and submit to the City final building plans with respect to all of the Developer Improvements, in sufficient detail to obtain a building permit or permits. Said submittal shall be consistent with the previously approved plans. The staff of the Agency and Developer shall communicate and consult informally as frequently as is neces- sary to ensure that the formal submittal of any documents so the City can receive prompt consideration. D. ES2041 Submittal of Evidence, of Financing Commitments Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall exercise reasonable diligence to obtain and, if successful, shall submit to the Agency's Executive Director evidence reasonably satisfactory to the Executive Director that the Developer has obtained the financing necessary for the development of the Site in accordance with this Agreement. following: Such evidence of financing shall include the a. A copy of the commitment or commitments obtained by the Developer for the mortgage loan or loans (both for interim construction financing and take out financing) to assist in financing the construction of the "Developer Improvements" (as defined in the Scope of Development, Attachment No. 7), certified by the Developer to be a true and correct copy or copies thereof. The commitments for financing shall be in such form and content acceptable to the Executive Director as reasonably evidences a firm and enforceable commitment, with only those conditions which are standard or typical for the lender(s) involved for similar projects; and MiM b. Sufficient information (e.g., an annual report) regarding the con- struction and permanent lenders to enable the Executive Director to determine whether or not such lender(s) has (have) sufficient financial resources to fund the loan(s); and c, A financial statement and/or other documentatipn satisfactory to the Executive Director as evidence of other sources of capital sufficient to demonstrate the Developer has adequate funds cocrmitted to cover the difference, if any, between con- struction and development cost minus financing authorized by mortgage loans; and d. A copy of the contract between the Developer and the general contractor(s) for .the construction of the Developer Improvements, certified by the Developer to be a true and correct copy thereof. Within fifteen (15) days after receipt of the Developer's request for approval of its evidence of financing, the Executive Director shall respond in writing by stating what further information, if any, the Executive Director reasonably requires in order to determine whether or not to approve such evidence of financing. Upon receipt of such a timely response, the Developer shall promptly furnish to the Executive Director such further information as may be reasonably requested. The Developer's request for approval of its evidence of financing shall be deemed complete fifteen (15 ) days after the Executive Director's receipt thereof, if no timely response requesting further information is delivered to the Developer, or, if such a timely response requesting further information is received, on the date that the Developer delivers such additional information to the Executive Director. Once the Developer's request for approval of its evidence of financing has been accepted.as complete or is deemed complete, the Executive Director shall not be entitled to demand additional information or to disapprove the request on the basis that the Developer has not furnished adequate or complete information. -Is- The Executive Director shall approve or disapprove the Developer's evidence -of financing within fifteen (15) days after the Developer's request for such approval is accepted as complete or is deemed complete. If the Developer's initial request for approval of its evidence of financing complies with the requirements of Section 705 below, the failure of the Executive Director to approve or disapprove any such evidence of financing within Such time shall be conclusively deemed an approval. If the Executive Director shall disapprove any such evidence of financing, it shall do so by written notice to the Developer stating the reasons for such disapproval. E. [5205) Approval of -Hotel Qperator, Within the time set forth in the Schedule of Performance (Attachment No. 3), the Developer shall exercise reasonable diligence to obtain and, if successful, shall submit to the Agency evidence reasonably satisfactory to the Agency that the Developer has entered into a firm and enforceable agreement with a qualified operator to manage the hotel to be constructed on the Site for a period of not less than ten (10) years after the opening of the hotel for business. Within thirty (30) days after receipt of the Developer's request for approval of the hotel operator, the Agency shall respond in writing by stating what further information, if any, the Agency reasonably requires in order to determine whether or not to approve the hotel operator. Upon receipt of such a timely response, the Developer shall promptly furnish to the Agency such further information as may be reasonably requested. The Developer's request for approval of the hotel operator shall be deemed complete fifteen (15) days after the Agency's receipt thereof, if no timely response requesting further information is delivered to the Developer, of, if such a timely response requesting further information is received, on the date that the Developer delivers such additional information to the Agency. Once the Developer's requests for approval of the hotel operator has been accepted as complete or is deemed complete, the Agency shall not be entitled to demand additional information or to disapprove the request on the basis that the Developer has not furnished adequate or complete information. The Agency shall approve or disapprove the hotel operator within thirty (30) days after the Developer's request for such approval is accepted as complete or is deemed complete. Approval will not be unreasonably withheld and shall be given if the Developer demonstrates that the -19- proposed operator is a capable, competent, and experienced operator of hotels similar in qualityr size, and type as set forth in the Scope of Develcpment. if the Developer's initial request for approval of the hotel operator complies with the requirements of Section 705 below, the failure of the Agency to timely approve or disapprove the hotel operator shall be conclusively deemed an approval. If the Agency shall disapprove the hotel operator, it shall do so by written notice to Developer stating the reasons for such disapproval. F. (§2061 pelivery of Guarantees. On or before the Effective Date, the Developer has caused to be delivered to the Agency the executed and acknowledged Guarantees of Stanley M. Bloom and Uri E. Gati in the form set forth in Attachment Nos. 5 and 6 to this Agreement. III. 153001 DISPOSITION OF _ THE AGENCY SALES PARCEL AND THE CITY PARCEL A. IS3013 Disposition of the Agency Sales Parcel Subject to all of the other terms and conditions set forth in this Agreement, the Agency agrees to sell the Agency Sales Parcel to the Developer and the Developer agrees to purchase the.Agency Sales Parcel from the Agency. The Developer's purchase price for the Agency Sales Parcel shall be (i) the Agency's "Acquisition Costs" therefor, as that term is defined in Section 201.6 above, which shall be paid to the Agency outside of escrow in accordance with Section 201.4 and 201.6, less (ii) the partial reimbursement to be made by the Agency to the Developer as set forth in paragraphs 3 and 4 of the "Method of Financing" (Attachment No. 8). The Agency shall convey to the Developer title to each of the individual parcels comprising the Agency Sales Parcel concurrently with Agency acquisition thereof, conditioned only upon the Developer's having advanced or paid the Acquisition Costs therefor in accordance with Section 201 and the performance by Developer of its obligations under Section 302 below. It is understood that the Agency may convey to the Developer possession of some or all of the individual parcels or property interests comprising the Agency Sales Parcel at an earlier time, pursuant to an order or orders for prejudgment possession obtained pursuant to Section 201.5. -20- H. - [§3023 Disposition of the City Parcel Subject to all of the other terms and conditions set forth in this Agreement, the Agency covenants that it shall acquire the City Parcel from the City and sell such parcel to the Developer and the Developer agrees to purchase the City Parcel from the Agency. The Developer's purchase price for the City Parcel shall be the sum of One Dollar ($1.00), payable outside of the escrow to be established in accordance with Section 303. The Agency shall convey to the Developer title to the City Parcel within thirty (30) days after each of the following conditions precedent have been satisfied (or waived by the Agency): (1) The Developer and/or the Agency shall have acquired all of the remaining property interests to be acquired in the Remaining Portion (or the Agency has obtained an order or orders for prejudgment possession meeting the requirements of section 201.5 above for any remaining unacquired parcels); (ii) The City Council shall have adopted its resolution conditionally approving vacation of the Vacation Portions of the Site, as referenced in Section 202 above, with such vacation(s) to be effective at the time(s) set forth in Section 202; (iii) The Developer shall have obtained Agency and City approval of all plans (including final building plans) required to be approved pursuant to Section 203 above, and the City shall be prepared to issue building permits for the Developer Improvements at the close of escrow; (iv) The Agency shall have approved (or be deemed to have approved) the Developer's evidence of financing commitments pursuant to Section 204 above; (v) The Agency shall have approved (or be deemed to have approved) the hotel operator pursuant to Section 205 above; (vi) The Developer shall have caused the executed and acknowledged Guarantees (Attachment Nos. 5 and 6 to this -21- Agreement) to be delivered to the Agency pursuant to Section 206 above; (vii) The Developer is of any of its Agreement; and not in material default obligations under this (viii) The Developer shall have performed its obligations under Section 303 below. C. CS3031 Escrow The Agency agrees to open an escrow or escrows with the Title Company (hereinafter the "Escrow Agent") for the disposition to Developer of the City Parcel and the Agency Sales Parcel, respectively, in Orange County, California, within the times established therefor in the Schedule of Performance (Attachment No. 3). This Agreement constitutes the joint basic escrow instructions of the Agency and Developer. A duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of each escrow. The Agency and Developer 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 each escrow its acceptance of the provisions of this Section 303, in writing, delivered to the Agency and the Developer, shall carry out its duties as Escrow Agent hereunder. The Escrow Agent's responsibilities shall be limited to performing its duties under this Article III. Upon delivery of the deed(s) to the applicable parcel(s), pursuant to Section 307 of this Agreement, the Escrow Agent shall record the deed(s) when title can be delivered to the Developer in accordance with the terms and provisions of this Agreement. The Escrow Agent shall pay any applicable transfer tax. The consideration payable pursuant to this Agreement with respect to the City Parcel and the Agency Sales Parcel shall be handled outside of escrow, and is a matter with which the escrow need not be concerned. The Developer shall pay in escrow to the Escrow Agent all fees, charges and costs promptly after the Escrow Agent has notified the Developer 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. The Agency shall timely and properly execute, acknowledge and deliver the deed(s), in the form referenced -22- in Section (Attachment certifying necessary to be the fact. 305 and set forth in the "Form of Deed" No. 4), together with an estoppel certificate that the. Developer has completed all acts entitle the Developer to the conveyance, if such The Escrow Agent is authorized to: 1. Pay, and charge the Developer for any fees, charges and costs payable under this Section 303 of this Agreement. Before such payments or charges are made, the Escrow Agent shall notify the Developer of the fees, charges and costs necessary to clear title and close the escrow. 2. Disburse funds and deliver the deed(s), title insurance policy or policies, and other documents to the parties entitled thereto when the conditions of this escrow have been fulfilled by the Agency and the Developer. 3. Record any instruments delivered through this escrow, if necessary or proper, to deliver insurable fee title to the Developer 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 established therefor in Section 304 of this Agreement, either party who then shall have fully performed the acts to be performed before the scheduled close of escrow 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 -23- V period, in which event the Escrow Agent all money, papers and documents applicable parcel(s) until instructed of the Agency and Developer, or by jurisdiction. If no such demands are be closed as soon as possible. is authorized to hold with respect to the by a mutual agreement a court of competent made, the escrow shall 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 Developer or until the party entitled thereto. has been determined by a final decision of a court of competent jurisdiction. Any amendment to these Escrow Instructions shall be in writing and signed by both the City and Agency as applicable, and the Developer. 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 and the Developer shall be directed to the addresses and in the manner established in Section 601 of this Agreement for notices, demands and communications between Agency and the Developer. The Agency will and accommodation of the instructions (allocating costs forth) in the event requested Developer. cooperate with the preparation use of alternative escrow in the manner hereinabove set by a lender or lenders for the D. [S3041 Close of Escrow _and Transfer and Delivery of Possession Subject to any extensions of time mutually agreed upon between the Agency and the Developer, the close of escrow for the City Parcel and the individual parcels and property interests comprising the Agency Sales Parcel shall be completed on or prior to the date specified therefor in Sections 301 and 302, as applicable, and the Schedule of Performance (Attachment No. 3). The Developer shall, at its cost, perform all acts on its part to be performed necessary to the transfers in sufficient time for title to be delivered in accordance with the foregoing provisions. Possession shall be delivered to the Developer concurrently with the close of escrow, except as provided in Section 201.5. E. [S305] Form of Deed The Agency shall transfer to the Developer fee -24- 5 title to the grant deed i n F. IS3061 Condition --of Title The Agency shall convey title to the Agency Sales Parcel and the City Parcel consistent with the Approved Title Condition referenced in the first paragraph of Section 201.1. G. [S307) Time for and Place of Delivery of 299d Subject to any mutually agreed upon extensions of time, the Agency shall deliver the deed(s) on or before the date(s) established for the close of escrow. H. [S3081 Taxes and Assessments Ad valorem taxes and assessments, if any, on the City Parcel levied, assessed or imposed for any period commencing prior to the close of escrow shall be borne by the Agency (or City). Ad valorem taxes and assessments, if any, on the Agency Sales Parcel assessed or imposed for any period prior to the close of escrow shall be borne either by the current owner(s) thereof or by the Developer, and any of such taxes and assessments imposed after the close of escrow shall be borne by Developer. I. [S309) Recordation of Deed The Escrow Agent shall file each deed(s) for recordation among the land records in the office of the County Recorder for Orange County, and shall deliver to the Developer a title insurance policy in conformity with Section 310 of this Agreement. J. [S310) Title Insurance Concurrently with recordation of each deed, Ticor Title Insurance and Trust Company or such other title insurance company as may be mutually approved by the Agency and Developer (the "Title Company"), shall provide and deliver to the Developer an ATLA Survey and owner's and Lender's ALTA Extended Coverage (Form B) policy or policies of title insurance issued by the Title Company insuring that title is vested in the Developer in the condition required herein. The Title Company shall provide the Agency with a copy of each such title insurance policy. The amount of the policy and any special endorsements shall be as requested by -25- the Developer, if made available by the Title Company. The Developer shall pay the cost of obtaining said title policy. K. [S311] Occupants of the City Parcel and Agency Sales_ arcel Possession of the City Parcel and the Agency Sales Parcel shall be delivered to the Developer with no possessory rights or possession by others, except as may be consistent with the approved condition of title referenced in Section 306. L. [53121 Physical Condition _ of the Cif ar el and h Aqtncy Salgs Parcel The City Parcel and the Agency Sales Parcel shall be transferred to the Developer in an "as is" physical condition. The Developer shall, within sixty (60) days after the Effective Date of this Agreement; make its own independent investigation of all conditions and circumstances which it deems appropriate or necessary for the provision of the Developer Improvements. If the Developer determines in its sole discretion during such sixty (60) day period that the physical condition of the Site is not in all respects suitable for its proposed development, the Developer shall have the option (within said 60-day period, but not thereafter) to terminate this Agreement in accordance with Section 608. I€ the Developer does not so terminate, and subject only to paragraphs 2 and 3 of the Method of Financing (Attachment No. 8), it shall thereafter be responsible for all costs incurred in demolishing and clearly existing improvements from the Site inconsistent with the Developer's approved plans (including that portion of such costs attributable to work to be performed by the Agency under paragraph III.E of the Scope of Development [Attachment 71, and all costs incurred in preparing the Site for the provision of the Developer Improvements. IV. [S400] vel men fthe-Site _by thg Developer. A. (54011 Scone of Dev2102ment The Site shall be developed as provided in the Scope of Development (Attachment No. 7) and the plans and related documents to be approved by the City and Agency pursuant to Section 203. B. [S402] Cost of Construction All of the cost of demolishing and clearing existing improvements from the Site and developing and constructing all of the on -Site and off -Site improvements to -26- be provided pursuant to this Agreement shall be as set forth in the Method of Financing (Attachment No. 8). C. JS4033 Construction Schedule The Developer and Agency shall begin and complete all construction and development required of each of them within the times specified in the Schedule of Performance (Attachment No. 3). D. CS404 ] Podil,y, Injury and- Property D_ amaae Xnsurance The Developer shall defend, assume all responsibility for and hold the Agency and its officers and employees, harmless from all claims or suits for, and damages to, property and injuries to persons, including accidental death (including attorney's fees and costs), which may be caused by any of the Developer's activities under this Agreement, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. Prior to the commencement of construction, the Developer shall take out and maintain during the entire construction period (until issuance of a Certificate of Completion with respect to the entire Site or, with respect to each Separate Development Parcel within the Site, until issuance of a Certificate of Completion with respect to said Parcel, all in accordance with Section 415 below), an "occurrence (as opposed to "claims made") basis comprehensive liability policy in the amount of Five Million Dollars ($5,000,000.00) combined single limits (part of which coverage may be provided by umbrella policies), including contractual liability, as shall protect the Developer and Agency from claims for such damages. The Developer shall furnish a certificate of insurance in form acceptable to the Agency countersigned by an authorized agent of the insurance carrier on a form of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the Agency as an additional insured under the policy. The certificate by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify 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 Developer shall be primary insurance and'not contributing with any insurance maintained by the Agency, and the policy shall contain such an endorsement. The insurance policy or -27- the certificate of subrogation for the certificate shall be issuance of building insurance shall benefit of the furnished by the permits. contain a waiver of Agency. The required Developer prior to the Notwithstanding the foregoing, the Developer 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 Developer's obligations to obtain and maintain insurance shall be limited by what is commercially available in the insurance market. E. IS4051 �;itv and Other Governmental_ Aaengv rmi p Before commencement of construction or development of any buildings, structures or other works of improvement upon the Site or within the Project Area, the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City or any other governmental agency affected by such construction, development or work. The Agency shall provide all proper assistance to the Developer in securing such permits pertaining to the Developer Improvements. Notwithstanding the foregoing, this Section 405 is not intended to limit or qualify the Agency's warranty and representation set forth in the penultimate paragraph of Section 203. All application, permit, and inspection fees charged by -the City or Agency shall be in accordance with the City's uniform fee schedule. F. IS4061 Rights Qf Accg9,5 For the purpose of assuring compliance with this Agreement, representatives of the Agency shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the Developer Improvements, so long as they comply with all safety rules. Such representatives of the Agency shall be those who are so identified in writing by the Executive Director of the Agency. Each such representative of the Agency shall identify himself or herself at the job site office upon his/her entrance to the Site, and shall provide the Developer, or the construction superintendent or other person in charge on the Site, a reasonable opportunity -28- to have a representative accompany him/her during such inspection. The Agency, for itself and for the City and other public agencies, at their sole risk and expense, reserves the right to enter the Site or any part thereof at all reasonable times for the purpose of construction, reconstruction, maintenance, repair or service of any public improvements or public facilities located on the Site. Any such entry shall be made only after reasonable notice to the Developer; provided, however, that the City and the Agency (and their respective officers, agents, and employees) may enter upon the Site without necessity of prior notice to the Developer in the event of any emergency or similar situation in which it is not practicable to provide prior notice to the Developer. In addition to the foregoing, the Agency and the City shall at all times retain the unrestricted right of access to all publicly owned areas adjacent to the Site. The Developer and the Agency agree to cooperate in placing and maintaining on the Site one sign indicating the respective roles of the Developer and the Agency in the project. G. IS4071 Local. State and Federal 'Laws Subject to the Agency warranty and representation set forth in the penultimate paragraph of Section 203, the Developer agrees to carry out the construction of the Developer Improvements in conformity with all applicable laws. The Develcper acknowledges that certain funds made available by the Agency pursuant to paragraph 2(b) of the Method of Financing (Attachment No. 8) may be provided by or derived from the United States Department of Housing and Urban Development ("HUD") in connection with its Community Development Block Grant ("CDBG") program. The Developer assumes all responsibility for complying with all applicable requirements and/or limitations imposed by virtue of such program or source of funds, including without limitation anti -speculation and nondiscrimination provisions; the Agency agrees to promptly notify the Developer of any such requirements. H. ES4081 Ani§igcrimination D in ns r- tion The Developer, for itself and its successors and assigns, agrees that in the construction of the Developer Improvements provided for in this Agreement, the Developer 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. -29- I. [S409] Taxes, Assessments, Encumbrances and i n The Developer shall pay when due all real estate taxes and assessments on the Site levied subsequent to the transfer of title to Developer. Prior to the issuance of a Certificate of Completion with respect to each Separate Development Parcel within the Site, the Developer shall remove or have removed any levy or attachment made on such parcel, or assure the satisfaction thereof, within a reasonable time but in any event prior to a sale thereunder. Nothing herein contained shall be deemed to prohibit the Developer from contesting the validity or amounts of any tax assessment, encumbrance or lien, nor to limit the remedies available to the Developer in respect thereto. J. [5410] Holder Not Obligated to_ Construct lmprovementp The holder of any mortgage or deed of trust or other conveyance for financing authorized by this Agreement shall not be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion; nor shall any covenant or any other provision in the deed for the City Parcel or Agency Sales Parcel be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Site or any Separate Development Parcel thereof to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. K. [411] i e of D faul Mortgagee or eed of Trust Holders - Right to Cure With respect to any mortgage, deed of trust, or other conveyance for financing granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the improvements, the City or Agency, as applicable, shall at the same time deliver to each holder of record of any mortgage, deed of trust, or other conveyance for financing authorized by this Agreement a copy of such notice or demand provided that such holder has requested such notice by writing received by the City or Agency. No notice of default shall be effective as to the holder unless such notice if given. Each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default and to add the cost thereof to the mortgage debt and the lien of its -30- mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement meeting the requirements of Section 107. Any such holder properly completing such improvements shall be entitled, upon compliance with the requirements of Section 415 of this Agreement, to a Certificate of Completion (as therein defined). L. [S4121 Failure of Holder to ComplCte Improvement$ In any case where, sixty (60) days after default by the Developer in completion of construction of improvements under this Agreement, the holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction, the Agency may purchase the mortgage or deed of trust by payment to the holder of the amount of the unpaid mortgage or deed of trust debt, including principal and interest and all other sums secured by the mortgage or deed of trust. If the ownership of the Site or any part thereof has vested in the holder, the Agency, if it so desires, shall be entitled to a conveyance from the holder to the Agency upon payment to the holder of an amount equal to the sum of the following: a. The unpaid mortgage or deed of trust debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals` and other income received during foreclosure proceedings). b. All expenses with respect to foreclosure including reasonable attorney's fees; c. The net expense, if any, incurred by the holder as a direct result of the subsequent management of the Site or part thereof; d. The costs of any improvements made by such holder; and e. An amount equivalent to the interest that would have accrued on the aggregate of -31- such amounts had all such part of the mortgage or debt and such debt had existence to the date of Agency. amounts become deed of trust continued in payment by the The foregoing rights of the Agency as set forth in this Section 412 shall be in addition to and shall not diminish those rights of the Agency as fee owner of the affected portion of the Site. M. [S413] Right of the Agency to Cure Mor sage or Deed of Trust Default In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of the improvements on the Site or any part thereof and the holder of any mortgage or deed of trust has not exercised its option to construct, the Agency may cure the default. In such event, the Agency shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the Agency in curing such default. The Agency shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be subject to the existing financing mortgages or deeds of trust. N. IS4141 Right of the Agency to Satisfy Other Liens on the Site After Title Passes After the close of the escrows provided for in Section 343P and prior to the completion of construction, and after the Developer has had a reasonable time to challenge, cure or satisfy any liens or encumbrances on the Site, or portion thereof, the Agency shall have the right to satisfy any such liens or encumbrances, provided, however, that nothing in this Agreement shall require the Developer to pay or make provision for the payment of any tax, assessment, lien or charge, so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Site or portion thereof to forfeiture or sale. O. [54151 Certificate of Completion Promptly after completion of all construction and development required by this Agreement to be completed by the Developer upon the Site or each Separate Development Parcel thereof, together with all of the Developer Improvements off of said parcel which are required to be completed by the Developer prior to commencement of business -32- ' LJ on said parcel, but excluding normal and customary tenant improvement items, the Agency shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer. The Agency shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the applicable parcel and the Certificate of Completion shall so state. After recordation of such Certificate of Completion, any party then owning or thereafter purchasing, leasing or .otherwise acquiring any interest in the Site or parcel covered by the Certificate of Completion shall not (because of such ownership, purchase, lease or acquisition), incur any obligation or liability under this Agreement except that such party shall be bound by any covenants contained in the deed (Attachment No. 4). Each Certificate of Completion of construction shall be in such form as to permit it to be recorded in the Recorder's Office of Orange County. If the Agency refuses or fails to furnish a Certificate of Completion after written request from the Developer, the Agency shall, within thirty (30) days of written request therefor, provide the Developer with a written statement of the reasons the Agency refused or failed to furnish a Certificate of Completion. The statement shall also contain Agency's opinion of the actions the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined 'to the immediate availability of specific items of materials for landscaping, the Agency will issue its Certificate of Completion upon the posting of a bond by the Developer with the Agency in an amount representing a fair value of the work not yet completed. If the Agency shall have failed to provide such written statement within said thirty (30) day period, the Developer shall be conclusively deemed entitled to the Certificate of Completion. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. V. [S500] USE OF THE SITE A. [5501] Uses The Developer covenants and agrees for itself, -33- its successors, its assigns, and every successor in interest to the Site and any Separate Development Parcel thereof, that during construction and prior to the issuance of a Certificate of Completion with respect to the Site or said parcel in accordance with Section 415, the Developer, such successors and such assignees, shall not devote the Site or such parcel to any uses not specified in or permitted under the deed for the City Parcel and the Agency Sales Parcel, as applicable (Attachment No. 4), the discretionary land use permits referenced in Section 203 above, and the Redevelopment Plan, the City's General Plan, and Title 9 of the ordinances of the City of Huntington Beach, as such Redevelopment Plan, General Plan, and Title 9 exist as of the Effective Date. The foregoing covenant shall run with the land. The Developer covenants by and for itself and any successors in interest to the Site and any portion thereof 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 or portion thereof, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site or portion thereof. The foregoing covenants shall run with the land. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, 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 -34- r WALNUT -MAIN Isd1;TIONI. `... fy - . — -v i" : ^� s.»- • • _ • _ • ^� Isar �mr RA to �i wT� r�:rrt�r::.�L�TSaT:^ •---� . ap f! 'o • racrrc war ar _ 4+ 1 rt• O Mz O t✓ NER MAN - PtEM. RV HU"NGTON BEACH, CALIFORNIA I lr(IMIf3TON PACIFICA PEVELOM&NT Gf"p 1 M x a 0 r•+ t�wSr�4('rao l�wr+.ia1 wi`r j.i•.•.w, W WI +r Part] c ATTACHMENT NO. 2 LEGAL DESCRIPTION That portion of Huntington Beach, County of Orange, State of California as shown on a map recorded in Book.3, Page 36 of Miscellaneous baps in the office of the County Recorder of said county described as follows: Beginning at the centerline intersection of Pacific Coast Highway and Lake Street shown as Ocean Avenue and First Street respectively on said mentioned map; thence along the center line of Pacific Coast Highway south 480 211_42" east 37.50 feet to the intersection with the southwesterly extension of the southeast right of way line of Lake Street; thence north 410 38' 18" east 50.00 feet; thence north 480 21' 42" west 355.00 feet; to the true point of beginning; thence north 410 38' 18" east 410.00 feet; thence north 480 21' 42" west 465.00 feet; thence south 410 38' 18" east 235.00 feet; thence north 480 21' 42" west 200.00 feet; thence south 41° 38' 18" east 175.00 feet; thence south 480 21' 42" east 665.00 feet to the true point of beginning. 4/112/011323-0001/02 Attachment No. 2 Page 1 of 1 'S� ATTACHME14T NO. 3 SCHEDULE OF PERFORMANCE Item -of Performance Time for Performance 1. Developer delivers Guarantees On or before Effective to Agency (Section 206) Date 2. Developer determines suitabil- Within six (6) months ity of physical condition of after Effective Date Site for proposed development (Section 312) 3. Developer submits evidence Within ten (10) months regarding identity of hotel after Effective Date; operator (Section 205) provided, however, that if the Developer timely makes its initial submittal but the Agency later dis- approves the hotel operator and/or the Developer's applications for discre- tionary land use permits on the basis that the Developer (and such operator), after and despite the exercise of reasonable diligence, have concluded that the maximum number of hotel rooms that can feasibly be constructed in the first phase of is less than .development two hundred eighty (the minimum requirement in the Scope of Development -- Attachment No. 7), the Developer shall be entitled to an additional six (6) months after the date of such disapproval to resubmit such item(s) satisfying the minimum requirements in the Scope of Development 4. Agency approves or disapproves Within the time set forth hotel operator (Section 205) in Section 205 Attachment No. 3 Page 1 of 4 �, Item -of Performance Timg for Performance 5. Developer submits applications Within ten (10) months for discretionary land use after Effective Date; permits to City and Agency provided, however, that (Section 203) if the Developer timely makes its initial submittal but the Agency later dis- approves the hotel operator and/or the Developer's applications for discre- tionary land use permits on the basis that the Developer (and such operator), after and despite the exercise of reasonable diligence, have concluded that the maximum number of hotel rooms that can feasibly be constructed in the first phase of development is less than two hundred eighty (the minimum requirement in the Scope of Development -- Attachment No. 7), the Developer shall be entitled to an additional six (6) months after the date of such disapproval to resubmit such item(s) satisfying the minimum requirements in the Scope of Development 6. Agency reviews and approves, Within sixty (60) days conditionally approves,• after receipt of complete or disapproves discretionary application and submittal land use permits and requests City to do the same (Section 203) 7. Agency requests City to Sufficiently in advance of initiate street vacation pro- the scheduled date for com- ceedings (Section 202) pletion of such proceedings (Item #8) to enable the City to so complete the proceedings 8. Agency exercises reasonable Within fifteen (15) days diligence in effort to cause after City and Agency City to adopt street vaca- approval or condi- tion resolution (Section 202) tional approval of discre- tionary land use permits Attachment No. 3 Page 2 of 4 N1.1/ Item of -Performance 9. Developer and Agency acquire the parcels and property interests to be acquired in the Remaining Portion of the Site as needed to place title in the "Approved Title Condition" 10. Developer delivers letter of credit to Agency (Section 201.4(iv)) 11. Developer submits evidence of financing (Section 204) 12. Agency approves or disapproves Developer's evidence of financing (Section 204) 13. Developer submits final build- ing plans to City and Agency (Section 203) 14. Agency completes review of final building plans and exercises reasonable diligence in effort to cause city -to do the same (Section 203) 15'. Agency acquires City Parcel from City 16. Agency transfers City Parcel to Developer; Title Company delivers title policy for City Parcel to Developer; Developer obtains building permit(s) and construction loan records; Developer delivers evidence of insurance (Sections 201, 203, 204, 310, 404) Time for Performance - (Item M Within the times set forth in Sections 201.3 through 201.5 Prior to commencement of Agency Negotiation Period Within one hundred twenty (120) days after Agency and Developer complete the acquisition of the parcels and property interests in the Remaining Portion of the Site which are needed to place title in the "Approved Title Condition" Within the time set forth in Section 204 Within one hundred eighty (160) days after Item #12 accomplished Within thirty (30) days after submittal (first plan check) and, as to revi- sions, within fifteen (15) days after resubmittals Within ten (10) days after City and Agency approval of final building plans Within the time set forth in Section 302 Attachment No. 3 Page 3 of 4 17. Developer commences construc- tion of the Developer Improvements (Section 403) 18. Agency provides utilities to the Site and undergrounds/ relocates utilities from existing public alleys to be abandoned (Scope of Develop- ment, Attachment No. 7, Paragraphs II.H and C) 19. Agency completes construction of parking structure (Scope of Development, Attachment No. 7, Paragraph II.A) Within thirty (30) days after Item #16 completed As needed by Developer in coordination with Developer's construction schedule Prior to the scheduled date for the Developer's completion of the improvements on the Retail Parcel It is understood that the foregoing Schedule of Performance is subject to all of the terms and conditions set forth in the text of this Agreement. The summary of the items of performance in this Schedule of Performance is not intended to supercede or modify the more complete description in the text; in the event of any conflict or inconsistency between this Schedule of Performance and the text of this Agreement, the text shall govern. 4/112/011322-0001/03 Attachment No. 3 Page 4 of 4 ATTACHMENT NO. 4 Recording Requested by: When Recorded Return to and .Mail Tax Statements to: FOFLM OF DEED GRANT DEED For a valuable consideration receipt of which is hereby acknowledged, The HUNTINGTON BEACH REDEVE1 0FvrN1 AGENCY, a pub"ic body, corporate and politic, of the State of California, herein called "Grantor", acting to carry out the Redevelopment Plan, herein called "Redevelopment Plan" for the Redevelopment Project for the Main -Pier Project Area, herein called "Project", under the Community Redevelopment Law of California, hereby grants to HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFIC► DEVELOPMENT GROUP, a California general partnership, herein called "Grantee", the certain real property located in the City of Huntington Beach, County of Orange, hereinafter referred to as "Property", described in Exhibit A attached hereto and incorporated herein. 1. Said Property is conveyed in accordance with and subject to the Redevelopment Plan which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach and amended by Ordinance No. 2634, and a First Amended Disposition and Development Agreement entered into between Grantor and Grantee dated (the "Agreement"), a copy of whic:i is on file with the Grantor at its offices as a public record and which is incorporated herein by reference. Any amend.ments 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. 2. The Grantee shall devote the Property only to the development permitted and the uses specified in the applicable provisions of the Redevelopment Plan for the Project and this Grant Deed, whichever document is more restrictive. At such time as the discretionary land use permits issued by the City of Attachment No. 4 Page 1 of 8 Huntington Beach (the "City") and Grantor for the development of the Property become "final", as set forth in the penultimate paragraph of Section 203 of the Agreement, the Grantor warrants and represents that neither the City nor the Grantor shall prohibit or prevent development of the Property, or impose any conditions, fees, or other requirements on the Grantee's development of the Property, or impose any conditions, fees, or other requirements on the Grantee's development or use thereof other than as permitted in the conditions of approval for such permits and the Agreement. It is understood that the foregoing representation and warranty does not apply to any statutes, ordinances, resolutions, or regulations of any governmental agency other than those of the City and Grantor, nor to any actions taken by persons or entities other than the City or Grantor to.prohibit, prevent, or delay development or use of the Property. Accordingly, the -Grantor warranties and representations set forth herein shall be applicable only if and to the extent the City and/or Grantor, subsequent to the granting of all of such discretionary land use permits, prohibits or prevents development of the Property or imposes any conditions, fees, or other requirements on the Grantee's development other than as permitted in the conditions of approval and other than is customarily imposed by the City in connection with the issuance of building permits. Any amendments to any of the City's or Grantor's ordinances, resolutions, or regulations w;;ich 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. 3. The Property is conveyed to Grantee for consideration determined in accordance with the uses permitted. Therefore, Grantee hereby covenants and agrees far itsel�, 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 as required by the Agreement. (b) Grantee shall not use or suffer the Property to be used in violation of Conditional Use Permit No. and Coastal Development Permit No. as such permits now exist or may hereafter be amended. (c) Grantee shall maintain the improvements on the Property and shall keep the Property 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 fifteen (15) days from the date of written notice Attachment No. 4 Page 2 of 8 from the Grantor, either the Grantor, or necessary maintenance and Grantee shall reasonably incurred for such maintenance. the City may perform the pay such costs as are (d) For a minimum period of ten (10) years following the earlier of (i) Grantor's issuance of a Certificate of Completion for the hotel to be constructed by Grantee on the Property or (ii) the opening of said hotel for business, Grantee shall not use or permit the hotel to be used for any other purpose without the prior written consent of Grantor. Uses normally incidental to a hotel use, including without' limitation a restaurant, coffee shop, gift shop, magazine stand, barber or beauty shop, travel agency, airline ticket office, and automobile rental operation shall also be permitted, and shall not require Grantor's prior written consent hereunder. 4. Prior to recordaticn of a Certificate of Completion issued by the Grantor for the improvements to be constructed on the Property, in accordance with Section 415 of the Agreement, Grantee shall not make any sale, transfer, conveyance, or assignment of the Property or any part thereof or any interest therein except in accordance with Section 107 of the Agreement. In addition, prior to recordation of such Certificate of Completion, Grantor shall have the right, but not the obligation, to repurchase the Property from Grantee upon the terms, subject to the conditions, and upon payment of the consideration as set forth in Sections 611 (if applicable) and 612 of the Agreement. 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 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. The foregoing covenants shall run with the land. 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 of this Grant Deed and Section 107 of the Agreement; provided, however, that any subsequent owner of the Property shall be bound by such remaining covenants, conditions, restrictions, limitations and provisions, Attachment No. 4 Page 3 of 8 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 Agreement and in paragraph 4 herein and Grantee's obligation to develop the improvements on the Property as referenced 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 Property, as required in accordance with Section 415 of the Agreement. Grantor's warranties and representations in paragraph 2 and Grantee's covenants in paragraphs 2, 3(a), and 3(b) regarding the permitted uses and maintenance of landscaping on the Property shall remain in effect until December 31, 2118, and shall terminate and be of no further force or effect at the expiration of said period. Grantee's obligation not to use or permit to be used the hotel on the Property for other uses without Grantor's prior written consent, as provided in paragraph 3(d), shall continue in effect for a period of ter. (10) years following the earlier of (i) Grantor's issuance of a Certificate of Completion for the hotel or (ii) the opening of the hotel for business, and shall terminate and be of no further force or effect at the expiration of said ter. (10) year period. Every covenant against discrimination contained in paragraph 5 of this Grant Deed shall remain in effect in perpetuity. S. 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 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, 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. 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. Attachment No. 4 Page 4 of 8 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 198. HUNTINGTON BEACH REDEVELOPMENT AGENCY By ATTEST: Secretary The Grantee consents to the foregoing covenants which shall run with the land. HUNTINGTON PACIFICA I, dba HUNTINGTON PACIrICA DEVELOPMENT GROUP, a California general partnership By: PACIFIC HERITAGE CORPORATION, a California corporation (general partner) B � c �L fit y i t-s : �-z4 - Attachment No. 4 Page 5 of 8 By: AVIV GROUP LIMITED, a California limited partnership By: AVIV DEVELOPMENT CORPORATION, a California corporation r BY Its: �� r By Its: Attachment No. 4 Pace 6 of 8 `i STATE OF CALIFORNIA ) ss. COUNTY OF ) On this day of , in the year 198_, 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 SS (insert title of the officer) (name of public corporation, agency or political subdivison) and acknowledged to me that the (public corporation, agency executed it. or political subdivision) Signature of Notary Public Name typed or printed Attachment No. 4 Page 7 of 8 M EXHIBIT A LEGAL DESCRIPTICN OF TIM PRCPERTY Huntington Beach Tract, Block 102, Lots 1 thrs 10 inclusive, as recorded in Miscellaneous Tags. Book 3, Page 36, Records of Orange County, State of California. Attachment No. 4 Page 8 of 8 ATTACHMENT NO. 5 FQRM OF GUARANTY -AND AGREEMENT OF STANLEY M. HLOOM THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California general partnership (the "Developer") have entered into that certain First Amended Dispositigqnn��and Development Agreement for the Main -Pier Project dated A6It � _fin ; 1986, (the "Agreement"), which Agreement provides in part that Stanley M. Bloom ("Guarantor") shall make and deliver a guaranty as provided in said Agreement. a E 9 I T A L S A. The Guarantor is a shareholder in Randall Foods, Inc., the parent of Pacific Heritage Land and Holding Company, which in turn is the parent of Pacific Heritage Corporation, one of the general partners of the Developer. The Guarantor will signifi- cantly benefit by the execution of the Agreement by the Agency. B. The execution of this Guaranty by the Guarantor is a condition but for which the Agency and City would not have executed the Agreement. In consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantor guarantees to the Agency the full and timely performance by the Developer of all of the Developer's obligations under the Agreement (including, without limitation, any obligation of the Developer to pay liquidated damages pursuant to Section 611 thereof), which Agreement.is incorporated herein by reference, within the same times and subject to the same terms and conditions as are set forth in the Agreement for the Developer. This Guaranty supersedes and is intended to replace the Guaranty executed by the Guarantor in favor of the City and Agency dated August 5, 1985, which earlier Guaranty is of no further force and effect. 2. Except as specifically set forth in paragraph 1, this Guaranty is unconditional and may be enforced directly against the undersigned in the same manner as the Agreement can be enforced against the Developer. No extensions, modifications or changes to the Agreement shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. Attachment No. 5 Page 1 of 4 �,J 3. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer (or any guarantor other than the undersigned) or to pursue any other remedy in the Agency's power before proceeding against the Guarantor, and (b) any duty on the part of the Agency to disclose to Guarantor any facts the Agency now or hereafter know about the Property, the Agreement, or the Developer, regardless of whether the Agency has reason to believe that any such facts materially increase the risks beyond that which Guarantor intends to assume or has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Property, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participate in any security now or hereafter held by the Agency. 6. The obligations of Guarantor hereunder are independent of the obligations of the Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not the Developer (or any other guarantor) is joined therein or a separate action or actions are brought against the Developer. 7. In the event of any litigation between the Agency and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. 8. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder prior to the termination date specified in paragraph 10 below except by a writing duly executed by the Agency. 9. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by the Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. 10. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any Attachment No. 5 Page 2 of 4 successor or assignee thereof or any disaffirnance by a trustee of the Developer. This Guaranty shall terminate and be of no further force and effect upon the earlier of the following: (i). the Agency's issuance of Certificates of Completion for all of the Developer Improvements required to be constructed by the Developer on the Site, in accordance with Section 415 of the Agreement; or (ii) the assignment of the Developer's interest in the Agreement and the Site to a person or entity approved by the Agency on the basis of the criteria set forth under (i), (11), and (iii) of the first paragraph of Section 107 of the Agreement. In the event that the Agency so approves an assignment of the Developer's interest in only a portion of the Site, this Guaranty shall terminate only as to the portion so assigned. Provided, however, that in the event the Agency approves an assignment of the Developer's interest in the Site or a portion thereof, but Agency has not been able, after and despite reasonable diligence, to complete its evaluation on the basis of the criteria set forth under (ii) or (iii) of the first paragraph of Section 107, the Agency shall so notify Guarantor and thereafter this Guaranty shall continue in effect for an additional reasonable period (not to exceed six (6) months total) to enable the Agency to complete such evaluation; and if the Agency determines (and so notifies Guarantor) within said period that the (approved) assignee does not -satisfy said criteria, this Guaranty shall remain in full force and effect; otherwise, this Guaranty shall terminate. 11. This Guaranty shall inure to the benefit of and bind the successors and assigns of the Agency and Guarantor. IN WITNESS WHE EOF, the,d_e�signed has xecuted this Guaranty this day of w I , 198L. GUARANTOR By /Stanley M Bloom Attachment No, 5 Page 3 of 4 JIM4 .r...... ACKNOWLEDGMENT STATE OF CALIFORNIA } ] ss. COUNTY OF ORANGE ) On Q 3 , 1981—, before me, the undersigned, a No a y�bllij q and for said State, personally appeared - ] 41 personally known to me or proved to me on the basis of satisfactory evidence to be the person name subscribed to the within instrument and acknowledged that # P executed the same. WITNESS my hand and official seal. (Seal) a k OFFICIAL SEAL BETTE BARILLA Notary Public-Calltomla ORANGE COUNTY My Comm. Do. Jan. E. lemw 4/112/011323-0001/05 Attachment No. 5 Page 4 of 4 ti 1 • A ATTACHMENT NO. 6 FORM QF GUARANTY -AND AGREEMENT OF URI E. GATI THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and HUNTINGTON PACIFICA I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California general partnership (the "Developer") have entered into that certain First.Amended Dispositi and Demelopment Agreement for the Main -Pier Project dated O�y6te- 2.0 ,, 1966, ( the "Agreement") , which Agreement provides in part that Uri E. Gati ("Guarantor") shall make and deliver a guaranty as provided in said Agreement. E E C I T A L E A. The Guarantor is a shareholder in Aviv Development Corporation, which in turn is the general partner in Aviv Group Limited, one of the general partners in the Developer. The Guarantor will significantly benefit by the execution of the Agreement by the Agency. B. The execution of this Guaranty by the Guarantor is a condition but for which the Agency and City would not have executed the Agreement. In consideration of the execution of the Agreement, and of other valuable consideration, receipt of which is hereby acknowledged: 1. Guarantor guarantees to the Agency the full and timely performance by the Developer of all of the Developer's obligations under the Agreement (including, without limitation, any obligation of the Developer to pay liquidated damages pursuant to Section 611 thereof), which Agreement is incorporated herein by reference, within the same times and subject to the same terms and conditions as are set forth in the Agreement for the Developer. This Guaranty supersedes and is intended to replace the Guaranty executed by the Guarantor in favor of the City and Agency dated August 5, 1985, which earlier Guaranty is of no further force and effect. 2. Except as specifically set forth in paragraph 1, this Guaranty is unconditional and may be enforced directly against the undersigned in the same manner as the Agreement can be enforced against the Developer. No extensions, modifications or changes to the Agreement shall release the undersigned or affect this Guaranty in any way, and the undersigned waives notification thereof. Attachment No. 6 Page 1 of 4 3. The undersigned hereby waives all of the suretyship provisions of the California Civil Code Sections 2788 through 2855. 4. Guarantor hereby waives and agrees not to assert or take advantage of (a) any right to require the Agency to proceed against the Developer (or any guarantor other than the undersigned) or to pursue any other remedy in the Agency's power before proceeding against the Guarantor, and (b) any duty on the part of the Agency or City to disclose to Guarantor any facts the Agency now or hereafter know about the Property, the Agreement, or the Developer, regardless of whether the Agency have reason to believe that any such facts materially increase the risks beyond that which Guarantor intends to assume or.has reason to believe that such facts are unknown to Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that Guarantor is fully responsible for being and keeping informed of all circumstances regarding the Property, the Agreement, the obligations of the Developer, the financial condition of the Developer, and of all circumstances bearing on the risk of any obligation by Developer hereby guaranteed. 5. Guarantor shall have no right of subrogation and waives any right to enforce any remedy the Agency now has or may hereafter have against the Developer, and any benefit of, and any right to participate in any security now or hereafter held by the Agency. G. The obligations of Guarantor hereunder are independent of the obligations of the Developer and, in the event of default hereunder, a separate action or actions may be brought and prosecuted against Guarantor (or any other guarantor) whether or not the Developer (or any other guarantor) is joined therein or a separate action or actions are brought against the Developer. 7. In the event of any litigation between the Agency and Guarantor arising out of this Guaranty, the prevailing party shall be entitled to recover its reasonable costs and attorney's fees. B. No provisions of this Guaranty can be waived nor can Guarantor be released from the obligations hereunder prior to the termination date specified in paragraph 10 below except by a writing duly executed by the Agency and City. 9. Guarantor agrees to pay all reasonable attorney's fees and all other costs and expenses which may be incurred by the Agency in enforcing or attempting to enforce this Guaranty, whether the same shall be enforced by suit or otherwise. Attachment No. 5 Page 2 of 4 10. This Guaranty shall remain in effect notwithstanding any bankruptcy, reorganization or insolvency of the Developer or any successor or assignee thereof or any disaffirmance by a trustee of the Developer. This Guaranty shall terminate and be of no further force and effect upon the earlier of the following: (i) the Agency's issuance of Certificates of Completion for all of the Developer Improvements required to be constructed by the Developer on the Site, in accordance with Section 415 of the Agreement; or (ii) the assignment of the Developer's interest in the Agreement and the Site to a person or entity approved by the Agency on the basis of the criteria set forth under (i), (ii), and (iii) of the first paragraph of Section-107 of the Agreement. In the event that the Agency so approves an assignment of the Developer's interest in only a portion of the Site, this Guaranty shall terminate only as to the portion so assigned. Provided, however, that in the event the Agency approves an assignment of the Developer's interest in the Site or a portion thereof to a person or entity as to which the Agency has not been able, after and despite reasonable diligence, to complete its evaluation on the basis of the criteria set froth under (ii) or (iii) of the first paragraph of Section 107, the Agency shall so notify Guarantor and thereafter this Guaranty shall continue in effect for an additional reasonable period (not to exceed six (6) months total) to enable the Agency to complete such evaluation; and if the Agency determines (and so notifies Guarantor) within said period that the (approved) assignee does not satisfy said criteria, this Guaranty shall remain in full force and effect; otherwise, this Guaranty shall terminate. 11. This Guaranty shall inure to the benefit of and bind the successors and assigns of the Agency and Guarantor. IN WITNESS WHEREOF, the undersigned has executed this Guaranty this :ZS day of ".198-6-1. GUARANTO ok By Uri E. G ti Attachment No. 6 Page 3 of 4 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss. COUNTY OF ORANGE ) On _ Q r L1,g-A 'a3 , 198_k_, before met the undersigned, a Notary Public in and for said State, personally appeared Q,8 1 ' rA- -1 , personally known to me or proved to me on the basis of satisfactory evidence to be the person_ whose name subscribed to the within instrument and acknowledged that _ Nv executed.the same. WITNESS my hand and official seal. (Seal) OFFICIAL &EAL BETTE BARILLA a Notary Public-Calfornll 0RUGE COU1IiY My COMM. Exp. i2n. 8, tea 4/112/011323-0001/06 Attachment No. 6 Page 4 of 4 v ATTACHMENT NO. 7 SCOPE OF DEVELOPMENT I. ARCHITECTURAL AND DESIGN: The Site shall be designed and developed as an integrated complex in which the buildings will have architectural excellence, both individually, as well as in the context of a total complex. The submittals for land use approvals shall be in conformity with the City's Downtown Design Guidelines, land use regulations, and Downtown Specific Plan (District 3). Such submittals shall further be prepared only after giving due consideration to the concept and orientation depicted in the proposed model for the hotel prepared by the firm of 3D-International prior to the Effective Date. 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. The shape, scale of volume, exterior design, and exterior finish of each building, structure, and other improvement must be consonant with, visually related to, physically related to, and an enhancement to each other and, to the extent reasonably practicable, to adjacent improvements existing or planned within the Project Area. The Developer's plans, drawings, and proposals submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Developer Inprovements. The open spaces between buildings where they exist shall be designed, landscaped and developed with the same degree of excellence. The total development shall be in conformity with the Redevelopment Plan for the Project Area. The Developer Improvements shall not preclude the possible future construction of an underpass extending from Main Street beneath Pacific Coast Highway to the municipal pier; provided, that said underpass shall not be a responsibility of the Developer. II. DEVELOPER'S_ RESPQNSIBILITIES: A. DRveloper,Improvements. The Developer agrees to develop and construct, or cause the development and construction of the Developer Improvements defined below, at a development cost of approximately One Hundred Thousand Dollars ($100,000.00) per room for the hotel (including all direct and indirect development costs except interest during construction, working capital, and developer fees and overhead) and approximately Seventy - Five Dollars ($75.00) per square foot for the retail commercial and office development (including, in addition to the "hard" costs of the building shells Attachment No. 7 Page 1 of 7 themselves, costs for items such as site preparation, off -site improvements such as parking, landscaping, driveways, walkways, and public improvements, costs for tenant improvements and furnishings, fixtures and equipment, financing costs, architectural, engineering and planning fees, leasing commissions, legal fees, permit fees, and other typical "soft costs", with all such costs to be determined in 1985 constant dollars, as adjusted by changes in the construction cost as determined by reference to the index from time to time available in the Engineering News Record but excluding land costs). The Developer Improvements shall consist of the following: 1. A first-rate, high quality hotel of not less than 280 rooms with a quality standard at least equivalent to the Irvine Marriott Hotel and with: (i) "FF & E" (all furnishings, fixtures, and equipment but excluding telecommunications equipment, telephone systems, and equipment required or used in the processing of room reservations) of not less than $15,000 per room, (ii) width per room of approximately fifteen (15) feet measured from center to center (with length not less than such amount) and an area of approximately 420 square feet per room; (iii) cost of furnishings in rooms of not less than $4,750 per room, (iv) total gross building area (in square feet) divided by the number of hotel rooms equaling approximately 685; (v) gross leaseable floor area of approximately 205,000 square feet with associated retail shops, meeting rooms, banquet facilities, and at least one (1) high quality, full service restaurant. 2. A retail commercial building with a minimum gross leaseable area of 15,000 square feet, to be located at the Main Street and Pacific Coast Highway intersection. In addition, the Developer shall use its best efforts to develop a theater complex consisting of approximately a six-plex theater complex. 3. Surface and subterranean parking on the Site with a total of approximately 450 parking spaces. 4. A Public Plaza of approximately 20,000 square feet which would include open passive rest and landscaped areas (of which approximately 5,000 square feet shall be exclusive of any commercial activities, and which approximately 51000 square foot area may hereafter be dedicated to the City upon the mutual consent of the City and the Developer). It is understood that Agency or City Attachment No. 7 Page 2 of 7 shall grant to the Developer an encroachment permit (without charge therefor) allowing the Developer to exclusive commercial use of 15,000 square feet of such City Public Plaza in a manner not inconsistent with public use of such City Public Plaza. 5. All landscaping, driveways, open areas, and other incidental on -Site improvements required in accordance with the approved plans, and the following off -Site improvements, to be constructed in accordance with the City's Downtown Design Guidelines and Public Works standards: (i) an elevated pedestrian overcrossing from the Site to Pier Side Village, if incorporated into the approved plans (and the California Department of Transportation (Cal Trans] provides its approval). The Agency shall provide the Developer with the design guidelines for the pedestrian overcrossing sufficiently in advance of construction to enable the Developer to prepare the plans and specifications for such work. The Agency and the City shall have the right to review and approve the Developer's plans and specifications for conformity with the City's Downtown Design Guidelines and engineering standards. The Agency (or the City) shall act as the lead agency in obtaining any encroachment permits and other approvals for the pedestrian overcrossing which may be required by Cal Trans, with such assistance to be provided at no cost to the Developer (except for the architectural and engineering expense related to preparing the plans and specifications themselves, which shall be entirely the Developer's responsibility). The Agency and the Developer shall consult and cooperate as necessary to obtain the foregoing approvals. If due to circumstances beyond the Developer's reasonable control, Cal Trans does not approve the pedestrian overcrossing, the Developer shall be relieved of the requirement for its construction. Following satisfactory completion of the overcrossing, it shall be dedicated to the Agency or the City, and thereafter the Developer shall have no liability or responsibility for its maintenance or repair. The Developer's maximum financial contribution to the cost of constructing the pedestrian overcrossing (exclusive of any developer's fee, overhead charge, or profit to the Developer, but including reasonable architectural and engineering expenses) shall be the sum of Two Hundred Fifty Attachment No. 7 Page 3 of 7 Thousand Dollars ($250,000.00), as adjusted in accordance with increases (or decreases) after November 1, 1986, in the applicable construction cost index published in the Engineering News Record. fIf the Developer's actual cost of constructing the overcrossing exceeds such amount, following satisfactory completion of the overcrossing the Agency shall pay the excess amount to the Developer within fifteen (15) days after receipt of the Developer's invoice and such supporting documentation as the Agency may reasonably require substantiating the costs incurred. It is understood that the responsibilities of the Developer with respect to the pedestrian overcrossing, including without limitation the maximum financial contribution, are shared jointly and severally with the LESSEE under the Pier Side Lease. The $250,000 figure is a total for both the Developer and LESSEE together, not a separate figure for each. (ii) curbs, gutters, landscaping, sidewalks, and street lights (but not signals) around the perimeter of the Site, and; (iii) widening and reconstruction of the western half of Walnut Avenue adjacent to the Site. B. Building Setbacks. Mininum building and parking setbacks shall be in conformance with the Huntington Beach Municipal Code. C. Building Construction. Buildings shall be constructed in conformance with the Huntington Beach Municipal Code and in accordance with the approved final building plans. D. Signs. Signs shall be in conformance with the Huntington Beach Municipal Code and more specifically, the Downtown Specific Plan and design criteria. No signs shall be erected on the exterior of the improvements unless such signs and signing have been submitted to and approved by the City/Agency staff. Developer shall submit and implement a Planned Signing Program with respect to all signage on the Site. E. Screening. All outdoor storage of materials or equipment shall be enclosed or screened by walls, landscaping, or enclosure to the extent and in the manner reasonably required by the City/Agency staff and the provisions of the Huntington Beach Municipal Code. Attachment No. 7 Page 4 of 7 F. Landscaping. The Developer shall provide and maintain all landscaping on the Site, including the public rights -of -way within the Site and the setback areas, in accordance with the approved landscape plans. G. Utilities. The Developer agrees to extend all utilities required for the development, use and maintenance of the improvements on the Site from the nearest available location in the public street at the boundary of the Site. The Developer shall be responsible for the cost of the tie-in and metering for said utilities. All utilities on the Site shall be located underground. H. Vehicula_K_Accg s. The number and location of vehicular driveways and curb breaks shall be in accordance with the approved plans. I. Off -Site Parking Facilities. The Developer shall be entitled to submit to the City for consideration a parking study and parking management plan/joint use of parking proposal pursuant to Section 9791.11 of the City's Ordinance Code. The Agency shall provide reasonable assistance to the Developer in obtaining approval of such-plan/proposal to the extent the same is consistent with sound engineering practices and City actions on similar proposals in the past. At such time as the City has determined the number of off-street parking spaces required for the uses to be constructed on the Site in accordance with the Code (including any reductions due to an approved parking management plan/joint use proposal) and the deficiency, if any, between said number and the (lesser) number of off-street parking spaces actually to be provided by the Developer on the Site, the Agency shall cause the City to provide the Developer with "credits" for public parking spaces to.be provided in the parking structure referenced in Paragraph III.A below to make up the entire deficiency up to a maximum of two hundred (200) parking spaces. 1. The Agency and Developer recognize that the Developer's proposed theatre complex on the Site would be of substantial benefit to the economic and social revitalization of the Downtown area. The Agency and Developer further recognize, however, that the proposed theatre use, when combines with the other proposed uses on the Site, could generate a demand for off-street parking beyond the sum of what the Developer can accommodate on the Site and the 200 public parking spaces to be credited to the Site as provided herein. In such event, during the discretionary plan approval process the Agency and Attachment No. 7 Page 5 of 7 `J Developer agree to negotiate in good faith alternative means of financing additional off -site parking to be credited to the Site and/or mutually acceptable revisions to the development plans. J. Ggngral. Notwithstanding any other provision of this Agreement to the contrary, in the event that the Developer's costs for construction of off -site improvements, as such improvements are listed and described in Paragraphs II.A., II.A.5, and II.I of this Scope of Development, are increased by the City or Agency, through the plan approval process or otherwise, without the Developer's prior written consent, the Developer and Agency agree that paragraph 3(i)(B) of the "Method of Financing" shall be modified, as provided therein. In the event that the Developer determines in its reasonable discretion that the additional costs imposed on it will not be recovered (imputing interest at the rate of Developer's cost of funds) from the additional revenues to be made available under paragraph 3(i)(B) of the Method of Financing, the Developer shall have the option to terminate this Agreement pursuant to Section 608. In the event of any inconsistency between the approved plans and the description of the Developer Improvements in this Agreement, the approved plans shall govern. III. AGENCY'S RESPONSIBILITIES: A. ]2arking Structure. The Agency agrees to construct, at no expense to Developer, within the time required in the Schedule of Performance, a public parking structure with not less than five hundred fifty (550) parking spaces, to be located at the northwest corner of Walnut and .Third Streets. Up to 200 parking spaces in said parking structure shall, be utilized by the City and Agency to satisfy any deficiency between the number of off-street parking spaces which would otherwise be required for the Site pursuant to the City's normal requirements and the number of on -Site parking spaces to be provided by the Developer in accordance with Paragraph II.A.3 above, as set forth in Paragraph II.I above. B. Utiliti,g. The Agency agrees to provide, or cause to be provided, at no expense to Developer, within the time required in the Schedule of Performance, all utilities (water, sewer, gas, electrical: and telephone) required for the development, use, and maintenance of the improvements on the Site, with sufficient capacities to adequately service the Site, with such utilities to be located in the public street adjacent to the Site. The Developer shall be responsible for extending utilities Attachment No. 7 Page 6 of 7 from said location(s) to the improvements located on the Site in accordance with Paragraph II.G above. C. Underoroundina of Utilities: Relocation of Existin Utilities from Existing Public Alleys to be Abandoned. To the extent that utilities are located in the public rights -of -way on or adjacent to the Site, including without limitation any of the public alleys within the Site which are to be vacated and abandoned by the City in accordance with Section 202 of this Agreement, and said utilities are required to be undergrounded and/or relocated in order to accommodate the development of the Site, the Agency agrees to underground and/or relocate such utilities, or cause them to be undergrounded and/or relocated, at no expense to Developer, within the time required in the Schedule of Performance. D. Demolition and Clearance of Improvemgnts_from_the City Par el and the Aqpncy__Saleg Par el. Prior to the conveyance to the Developer of the City Parcel and the individual parcels comprising the Agency Sales Parcel, the Agency shall demolish and clear from the premises all existing improvements inconsistent with the Developer's approved plans. E. Easements and Permits. The Agency agrees to cooperate with the Developer in connection with the filing and processing of any and all applications for permits and other approvals required by the City or any other governmental agency in connection with the development of the Site. 4/112/011323-0001/07 Attachment No. 7 Page 7 of 7 V ATTACHMENT NO. 8 METHOD OF FINANCING 1. Except as otherwise expressly set forth in the Agreement, including Paragraphs 2 and 3 hereinbelow, all costs, expenses, and indebtedness related to the assemblage, disposition, and development of the Site pursuant to the Agreement shall be borne exclusively by the Developer. 2. Subject to Paragraph 4 below, the Agency shall be responsible for payment of the following costs and expenses relating to the development of the Site: (a) All funding required to perform the "Agency's Responsibilities" identified in Paragraph III A, S, and C. of the Scope of Development. (b) All funds required to pay for those items specifically excluded from the term Agency's "Acquisition Costs," as that term is defined in Section 201.6 of the Agreement. (c) If the Developer performs any of the tasks or advances any of the costs for items which are the Agency's responsibility hereunder, the Agency shall promptly reimburse the Developer within fifteen (15) days after the Developer provides the Agency with a written invoice and supporting documentation, in such detail as may be reasonably requested by the Agency, detailing the amounts expended for such eligible items. 3. Subject to Paragraph 4 below, the sum of Six Million Dollars ($6,000,000) (which for purposes of this Agreement shall be deemed to be allocated to a portion of the Developer's purchase price for the Agency Sales Parcel and its costs for demolishing and clearing existing improvements on the Site, preparing the Site for development, and installing those off -Site public improvements which are the Developer's responsibility hereunder) shall constitute an indebtedness of the Agency to the Developer. The unpaid principal shall bear interest at the rate of seven percent (7%) per annum, compounded annually, commencing on the date the Agency is required to issue the final Certificate of Completion for the Developer Improvements on the Site, and continuing until principal and interest are paid in full or the unpaid balance is forgiven and discharged as provided below. Payments shall be credited first to interest due and then to reduce any unpaid principal. The Agency shall pay the aforesaid indebtedness at the times, in the amounts, and subject to the other terns and conditions set forth below: Attachment No. 8 Page I of 7 Nt.) (i) The amount of each installment payment to be made by the Agency hereunder shall be calculated as the sum of the following revenues received by the City and Agency: (A) One Hundred Percent (100%) of the transient occupancy tax ("TOT") generated by the hotel on the Site and received by the City for the ten (10) year period following the opening of the hotel for business (with such amounts determined on an accrual basis);. provided, however, that if, after the conclusion of the fifth (5th) full year of operations of the hotel the Developer has received a cumulative sum of "Gross Room Revenues" (excluding such items as income from food and beverage service, parking charges, telephone charges, transient occupancy and other taxes, the rental of meeting or conference rooms, tips and gratuities received by employees, employee gifts and gratuities, and bad debts) for said five-year period in excess of One Hundred Eighty Thousand Dollars ($180,000.00), the portion of the Agency's obligation under this paragraph 3 that is calculated based upon TOT shall be terminated at such time. (B) One Hundred Percent (1001) of the "Net Property Tax Increment from the Site," as that term is defined below, generated by the Site and allocated to and received by the Agency with respect to the three (3) year period following the issuance of the final Certificate of Completion for the Developer Improvements on the Site (with such amounts determined on an accrual basis); provided, however, that fifty percent (50%) of the Net Property Tax Increment from the Site for the third such year shall be paid on the payment dates in such year and the remaining fifty percent (50%) shall be paid on the payment dates in the next succeeding year. Notwithstanding the foregoing, to the extent the Developer's costs for construction of off -site improvements are increased by the City or Agency through the plan approval process or otherwise, without the Developer's prior written Attachment No. 8 Page 2 of 7 consent, beyond what is specifically set forth as the Developer's responsibility in Paragraphs II.A.4, II.A.5 and II.I of the "Scope of Development" (Attachment No. 7) and in accordance with the Downtown Design Guidelines and Downtown Specific Plan, the proviso in the .last clause of the preceding sentence (which defers payment of the final 50% of the Net Property Tax Increment for the third such year) shall be eliminated and, in addition, the principal amount of the loan shall be increased by the amount of such additional costs and the payment to the Developer of the Net Property Tax Increment from the Site shall be extended for an -additional period as follows: (i) if the amount of such additional costs (including interest thereon imputed at the rate of the Developer's cost of funds) can be fully reimbursed out of one (1) additional year of Net Property Tax Increment from the Site, the principal amount of the loan shall be increased by the amount of such additional costs and the payment period shall automatically be extended for the period of time (not to exceed one year) sufficient to enable the Developer to recover such additional costs (including interest as stated above); and (ii) if the amount of such additional costs (including interest thereon imputed at the rate of the Developer's cost of funds) cannot be fully reimbursed out of one (1) additional year of Net Property Tax Increment from the Site, but such costs can be fully reimbursed out of ten additional (10) years of Net Property Tax Increment from the Site, the Agency shall have the right, but not the obligation, to agree that the principal amount of the loan shall be increased by the amount of such additional costs and the payment period shall be extended for the period of time (not to exceed ten additional years) sufficient to enable the Developer to recover such additional costs (including interest as stated above). The Developer and Agency each agree to cooperate and provide one another with such information as is reasonably Attachment No. 8 Page 3 cf 7 �1) available to each of them with respect to the amount of such additional costs, the imputed rate of interest, the anticipated Net Property Tax Increment from the Site, and other matters necessary to implement the foregoing provisions regarding extension of the payment period. In the event the Developer's costs for off -sites are increased beyond what the Agency is required to pay, agrees to pay, or is able to pay, as set forth hereinabove, the Developer may terminate this Agreement in accordance with Section 608(g). As used herein, the term "Net Property Tax Increment from the Site" shall mean those amounts determined as follows: from (i) the property tax revenue received by the Agency pursuant to California Health and Safety Code Section 33670(b) equal to that paid or caused to be paid with respect to the Site (the "Gross Site Tax Increment") deduct (ii) twenty percent (20%) of the Gross Site Tax increment (consistent with Section 33334.2 of the California Health & Safety Code), (iii) all funds payable to affected taxing agencies pursuant to agreements heretofore entered into by the Agency and such taxing agencies (consistent with Section 33401 of the California Health and Safety Code), and further deduct (iv) an amount equal to three percent (3%) of the Gross Site Tax Increment (which the Agency shall be entitled to retain for its administrative and overhead expenses). (ii) The source of payment of the indebtedness referenced in this paragraph 3 shall be property tax revenues allocated and paid to Agency from the Project Area and any other revenues lawfully available to the Agency which may be used for payment hereunder; provided, however, that the obligation hereunder shall be junior and subordinate to any bonded indebtedness secured by property tax revenues; and provided further that the Agency hereby covenants that in determining the size of any such bond issue it will set aside 100% of the amount due hereunder. The Attachment No. 8 Page 4 of 7 `.) indebtedness shall not be an indebtedness or obligation of the City. (iii) Except as specifically set forth in subparagraph (i)(B) above, installment payments shall be made on the first day of each calendar quarter of each year, with the amount of each payment equalling the amount of revenues received by the City and Agency under subparagraphs (i)(A) and (B) through the applicable payment date, until all such amounts have been paid. (iv) Within ninety (90) days after the conclusion of the fiscal year ending after the fifth (5th) full year of operations of the hotel., the Developer shall provide to the Agency a statement prepared by an accounting firm acceptable to the Agency in its reasonable discretion stating the amount of the Developer's "Gross Room Revenues" for said five-year period, in order to enable the Agency to verify whether that portion of the Agency's obligation that is calculated based upon TOT shall be terminated, as set forth in subparagraph (i)(A) above. During the period between the conclusion of the fifth full year of operations of the hotel and the Agency's receipt of the statement from the Developer's accounting firm the Agency shall continue to make the payments based upon the assumption that the obligation will not be so terminated; any excess amount paid to the Developer due to such circumstance shall be promptly repaid to the Agency with ten percent (10%) interest if it is later determined that payment was erroneously made. In addition, the Agency shall have the right, at its expense, one (1) time after receipt of the statement from the Developer's accounting firm and after reason- able notice to the Developer, to audit the Developer's books and records relating to the calculation of Gross Room Revenues for said five (5) year period, and the Developer agrees to cooperate by making available its books and records for such purpose either on the Site or at Developer's offices located in Southern California. (v) Provided that the Agency has timely made each of the installment payments in the full amount set forth in subparagraph (i), after the final Attachment No. 8 Page 5 of 7 u installment payment provided for in subparagraph (iii), any unpaid principal and interest on -the indebtedness referenced in this paragraph 3 of the Method of Financing shall be forgiven, discharged, and deemed to have been donated by the Developer to the Agency. 4. (a) Notwithstanding any other provision of the Agreement to the contrary, the Agency's obligation to pay the costs referenced in Paragraph 2(a) and (b) is conditioned and dependent upon the Developer's performance of its obligations under the Agreement, and the Agency shall be entitled to withhold any of said funds between the time the Agency notifies the Developer that the Developer has committed a material default (assuming such a default in fact has occurred), in accordance with Section 601 of the Agreement, and the time the Developer cures said default or commences and diligently proceeds to cure said default. Afterwards, however, assuming this Agreement has not been terminated, the Agency's obligation shall be reinstated and shall survive and any amounts withheld shall be paid, less any costs actually incurred by the Agency because of the default. (b) The obligations of the Agency to make available those funds described in paragraph 3 are conditioned and dependent upon the Developer's completion of construction of the Developer Improvements on the Site. In addition to whatever other remedies the Agency may have pursuant to Article VI (commencing with Section 600) of the Agreement in the event the Developer defaults under the Agreement by failing to timely complete construction of the Developer Improvements (subject to any extensions of the Developer's times of performance under Section 703 of the Agreement), that portion of the Agency's obligation that is calculated based upon TOT received by the City shall terminate after Developer has been paid all such sums accruing for the period between the actual opening date for the hotel and the tenth (loth) anniversary of the date by which the Developer should have opened the hotel for business had it not so defaulted, and that portion of the Agency's obligation that is calculated based upon Net Property Tax Increment from the Site received by the Agency shall terminate after Developer has been paid all such sums accruing for the period between the issuance of the final Certificate of Completion for the Developer Improvements and the third (3rd) anniversary of the date by which the Developer should have obtained the final Certificate of Completion had it not so defaulted. (c) To the extent this Paragraph 4 is construed as a liquidated damages clause, the Agency and the Developer each acknowledge and agree by the initials of its authorized representative below that the damages that would be suffered by Attachment No. 8 Page 6 of 7 the Agency due to the Developer's failure to timely complete the Developer Improvements would be difficult or impracticable to measure, and that the remedy provided herein is a reasonable approximation of the actual damages that would be suffered by the Agency due to factors such as the delay in implementation of the Agency's Redevelopment Plan and the loss of tax revenues. Agency Developer Notwithstanding an other provision of the Agreement to the contrary, the remedy provided in this Paragraph 4 shall be the exclusive remedy for the Agency with respect to withholding the funds otherwise required to be contributed pursuant to Paragraph 2 and 3. 5. In addition to the other provisions of this Method of Financing, the Agency agrees to use reasonable diligence to make available for the benefit of the Developer assessment district and other similar financing ("Bond Financing") for public improvements required to be constructed or paid for by the Developer under this Agreement, provided that (i) the Agency and the City do not hereby approve the issuance of any bond or similar obligation; (ii) neither the City nor the Agency shall be required to incur any obligation or responsibility for the discharge or satisfaction of any indebtedness incurred in connection with Bond Financing; (iii) the entire obligation for payments (debt service) in connection with Bond Financing shall be borne solely by the Developer (and any other private entities the consent of which is obtained by the Developer); (iv) no Bond Financing may proceed unless one of the three highest investment grades is assigned by Standard & Poor's or Moody's; and (v) all costs of issuance, including without limitation bond counsel fees, printing costs, staff costs and salaries, and reasonable issuer's fee (not to exceed 1 point) shall be borne by the Developer. The Developer for itself and its successors and assigns, irrevocably waives any right of protest in connection with the formation of any assessment district with respect to such improvements or bonds issued in relation thereto; provided, however, the Developer reserves the right to protest the amount of an assessment in connection therewith. 4/112/011323-0001/08 Attachment No. 8 Page 7 cf 7 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 persons on account of religion, sex, marita age, ancestry or nati leasing, subleasing, occupancy, tenure or premises herein lea! lessee himself or her claiming under or ti establish or permit a practices of d. segregation with i selection, location, person or group of race, color, creed, . status, handicap, onal origin in the transferring, use, enjoyment of the ed nor shall the -elf, or any person rough him or her, by such practice or scrimination or eference to the number, use or occupancy or tenants, :essees, 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 person 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, -35- subtenants, sublessees or vendees of the premises." The covenants contained in this Section 501 shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Agency, its successors and assigns, and any successor in interest to the Site or any part thereof. B. (55021 Effegt and Duration_of Covenants The Agency is deemed the beneficiary of the terms and provisions of this Article V and of the covenants set forth therein 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 said covenants running with the land have been provided. Such covenants are not for the benefit of, and may not be enforced by anyone except as provided herein; provided that the Agency assumes no responsibility for the efficacy of the foregoing part of this sentence. Such 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 such 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 said covenants may be entitled. This Section 502 shall not limit the rights and remedies of the Agency pursuant to the deeds to the City Parcel or the Agency Sales Parcel (Attachment No. 4). Notwithstanding any other provision of this Agreement to the contrary, the covenants contained in this Agreement (excepting only the continuing covenants contained in the Method of Financing, Attachment No. S, and such other provisions of this Agreement as shall be applicable to the Agency's and Developer's rights and obligations with respect to such matters) shall terminate and be of no further force or effect as to the Site, or each Separate Development Parcel thereof, upon the issuance of a Certificate of Completion therefor, and thereafter all rights, obligations, and covenants of the parties with respect to the Site or Separate Development Parcel shall be as set forth in the Method of Financing and the deed (Attachment No. 4). _35_ VI. [56001 DEFAULTS AND REMEDIES A. [S6011 Defaults --General Subject to the extensions of time set forth in section 703, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement; provided, however, that if the party who so fails or delays commences to cure, correct, or remedy such failure or delay within thirty (30) days -after receipt of a notice specifying such failure or delay, and shall diligently prosecute such cure, correction, or remedy to completion, then such party shall not be deemed to be in default. The injured party shall give written notice of default to the defaulting party, specifying the default complained of. Except as required to protect against further damage, the injured party shall not institute proceedings against the defaulting party until thirty (30) days after the delivery of the notice of default or during the period in which the defaulting party is diligently proceeding to cure, correct or remedy such default. Notwithstanding any other provision of this Agreement to the contrary, the failure of the Developer, after and despite reasonable diligence, to obtain City or Agency approval of any of Developer's plans (Section 203), to obtain financing cornitments or Agency approval thereof (Section 204), or to obtain a hotel operator or Agency approval thereof (Section 205), shall not constitute a default by Developer hereunder. B. [S6021 Le al Actions I. [S603) Institu&jon g L1aal 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 municipal court in that county, or in the Federal District Court in the Central District of California. 2• [S6041 Applicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement. -37- 3. ES6051 Agcentange of Service of Process In the event that any legal action is commenced by the Developer against the Agency, and service of process shall be made by personal service upon the Executive 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 Developer, service of process shall be made by personal service, whether made within or without the State of California, or in such other manner as may be provided by law. Without limitation as to other means of effecting service on the Developer, service upon Stanley M. Bloom, or Uri E. Gati shall be deemed to effect service on Huntington Pacifica I. C. (S606] 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. Not by way of limitation of the foregoing, the right of either party under Section 608 or 609 to terminate this Agreement due to a default by the other party shall not be deemed to prohibit the party entitled to termination to sue for specific performance, damages, or other appropriate relief. D. CS6071 Inaction Not A Waiver of Default Any failures or delays by a 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 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. (S608] Termination By -The Developer In the event that prior to the conveyance by the Agency to the Developer of the last of the parcels/property interests included within the Agency Sales Parcel and the City Parcel, as set forth in Article III: (a) the Developer timely disapproves the soils or other physical conditions _38- of the site, in accordance with Section 312; or (b) the Developer and Agency fail to negotiate acquisition of all of the parcels -and property interests to be acquired in the Remaining Portion and the Agency does not timely elect to exercise its power of eminent domain as needed to acquire the remaining parcels/interests, in accordance with Section 201.31 201.4, and 201.5; or (d) the Agency fails to diligently prosecute any eminent domain actions to completion, in accordance with Section 201.4 and 201.5; or (e) the City Council fails to timely adopt a resolution conditionally approving vacation of the Vacation Portions of the Site, in accordance with Section 202; or (f) the Developer is unable, after and despite its exercise of reasonable diligence, to timely obtain approval of its plans and permits for the Developer Improvements from the City, Agency, or any other governmental agency having jurisdiction over the project, in accordance with Section 203; or (g) the Developer's costs for construction of off -site improvements are increased by the City or Agency through the plan approval process or otherwise, without the Developer's prior written consent, beyond what is specifically set forth as the Developer's responsibility in Paragraphs 11.A.4, 11.A.5, and II.I of the "Scope of Development" (Attachment No. 7), and the Developer determines in its reasonable discretion that such additional costs will not be recovered (imputing interest at the rate of Developer's costs of funds) -39- from the additional revenues to be made available under paragraph 3(i)(B) of the "Method of Financing" (Attachment No. 6); or (h) the Developer is unable, after and despite its exercise of reasonable diligence, to timely obtain financing commitments for the development of the Site or Agency approval thereof, in accordance with Section 204; or (i) the Developer is unable, after and .despite its reasonable diligence, to timely enter into an agreement with a hotel operator or obtain Agency approval of such operator, in accordance with Section 205; or (j) the Agency fails or refuse to'convey to Developer the City Parcel or any of the individual parcels or interests comprising the Agency Sales Parcel in accordance with Article III; or (k) the Agency is in material default of any of its obligations under this Agreement and such default has not been and is not being cured in accordance with Section 601; then this Agreement shall, at the option of the Developer, be terminated by written notice thereof to the Agency, and thereupon neither the Agency, nor the Developer shall have any further rights or obligations with respect to this Agreement, the letter of credit required to be deposited by the Developer in accordance with Section 201.3, or the Guarantees (Attachment Nos. 5 and 6), except as set forth in Sections 606 and 610. F. (S609) Termination by the_Avenc In the event that, prior to the conveyance by the Agency to the Developer of the last of the parcels/property interests included within the Agency Sales Parcel and the City Parcel, as set forth in Article III: (a) The Developer (or any successor in interest) assigns this Agreement or any rights therein or in the Site in -40- violation of this Agreement and such failure or default is not cured in accordance with Section 601; or (b) There is a change in the ownership of the Developer contrary to the provisions of Section 107 hereof and such failure or default is not cured in accordance with Section 601; or (c) The Developer and Agency fail to negotiate acquisition of all of the parcels and property interests to be acquired in the Remaining Portion and the Agency does not timely elect to exercise its power of eminent domain as needed to acquire the remaining parcels/interests, in accordance with Sections 201.3, 201.4 and 201.5; or (d) The City Council fails to timely adopt a resolution conditionally approving Vacation Portions in accordance with Section 202; or (e) The Developer does not timely submit any of the plans, drawings, or related documents as required by Section 203 of this Agreement, and such failure or default is not cured in accordance with Section 601; or (f) The Developer fails to timely submit reasonably satisfactory proof that it has obtained financing commitments for construction and permanent financing, in accordance with Section 204, and such failure or default is not cured in accordance with section 601; or (g) The Developer fails to timely submit satisfactory proof that it has entered into an agreement with an acceptable hotel operator, in accordance with Section 205, and such failure or default is not cured in accordance with Section 601; or (h) The Developer fails to timely cause to be delivered to the Agency the executed and acknowledged Guarantees of Stanley M. Bloom and Uri. E. Gati, (assuming such -41- k Guarantees are required), in accordance with Section 206 of this Agreement; (i) The Developer fails or refuses to accept a conveyance of the City Parcel or any of the individual parcels or interests comprising the Agency Sales Parcel in accordance with Article III; or (j) The Developer is in material default of any of its other obligations under this Agreement, and such default has not been and is not being cured in accordance with Section 601; then this Agreement shall, at the option of the Agency, be terminated by the Agency by written notice thereof to Developer, and thereafter neither party shall have any rights or obligations with respect to this Agreement, the letter of credit required to be deposited by the Developer in accordance with Section 201.3, or the Guarantees (Attachment Nos, 5 and 6) except as set forth in Sections 606 and 610. G. [S610] Additional Reme es on Termination If this Agreement is terminated pursuant to Section 608 or 609, the Agency shall convey to the Developer, in accordance with Article III, any of the parcels or interests comprising the Agency Sales Parcel which the Agency has acquired, or entered into binding agreements to acquire, or for which the Agency has obtained an Order of Prejudgment Possession prior to the date of the termination, using funds advanced or paid by the Developer. In the case of parcels or property interests for which the Agency has obtained an Order of Prejudgment Possession but for which no final order of condemnation has been issued as of the date of termination, this Agreement shall continue. in effect for the limited purpose of Agency's acquisition and conveyance to the Developer of such parcel or property interest. The Agency shall promptly return unexpended funds advanced by the Developer to the Agency to cover the Agency's Acquisition Costs for the Agency Sales Parcel, and the Agency shall promptly release any portion of the letter of credit provided to secure payment of such Acquisition Costs which is not required to cover obligations of the Agency incurred for such acquisition prior to the date of termination or, as to property interests for which an Order of Prejudgment Possession has been obtained but no final order of condemnation has been issued, through the conclusion of the litigation. _42_ H. [S611] Liquidated Damages In the event that, after the conveyance by the Agency to the Developer of the last of the parcels/property interests included within the Agency Sales Parcel and the City Parcel, as set forth in Article III, the Developer defaults hereunder by failing to commence or diligently proceed with construction of the project on the Site, and such default continues for a period of ninety (90) days of the written notice from the Agency, upon the Agency's written demand the Developer shall either (i) reconvey to the Agency the City Parcel (with title in the same condition as when conveyed by the Agency to the Developer) or ( ii ) pay to the Agency liquidated damages in the sum of Two Million Five Hundred Thousand Dollars ($2,500,000.00). The Agency and Developer agree that the Agency's damages in the event of such a default by the Developer would be difficult or impracticable to measure, and that the sum of $2,500,000.00, representing the mutually agreed upon value of the City Parcel (which is being conveyed to the Developer hereunder for $1.00) is a reasonable approximation of the Agency's actual damages. The Agency and Developer each acknowledge its agreement to this liquidated damages provision by the initials of its authorized representative below: Agency Developer VLF I. [S612] io o Pur hase Re ur hase In the event that the Developer fails to timely proceed with the planning, financing, and construction of the Developer Improvements on the Site in accordance with the Schedule of Performance (Attachment No. 3), and such failure shall continue for a period of not less than ninety (90) days after written notice from the Agency to the Developer and to the holder of any mortgage, deed of trust, or other conveyance for financing, the Agency shall have the option, but not the obligation, exercisable by written notice to the Developer and such holder within six (6) months after the occurrence of an event giving rise to such option (but at no later date), and assuming that such failure or default has not been cured in the meantime, to purchase all (but not less than all) of the parcels/property interests then owned by the Developer within the Site (including any parcels/interests previously conveyed by the Agency to the Developer hereunder) and to purchase the mortgage or deed of trust of such holder; provided, however, that such purchase option shall not exist if the Developer's failure to so proceed is extended pursuant to Section 703, waived or extended by the Agency, excused by any Agency default hereunder, or excused by the failure or -43- delay in satisfaction of any of the following specific conditions: (i) the City Council's failure or refusal to timely approve the street/alley vacation (Section 202); (ii) the City's or Agency's failure or refusal to timely approve all discretionary land use pernits for the development after and despite the Developer's submittal of the necessary applications therefor in conformity with Section 203 and the Scope of Development (Attachment No. 3); (iii) the Agency's failure or refusal to timely elect to exercise its power of eminent domain as needed to acquire the remaining parcels/interests to be acquired in the Site (Section 201); or (iv) the Agency's failure to timely obtain title or financeable possession of the remaining parcels/interests to be acquired in the Site (Section 201). In the event the Agency exercises its option to purchase, as provided herein, the Agency shall pay to the holder, if any, the amount which such holder would be entitled to receive under Section 412 if the Agency had proceeded directly under said Section, and the Agency shall then be entitled to a conveyance from the holder of the holder's interest in the Site. in addition, the Agency shall pay to the Developer an amount equal to one hundred percent (100t) of (i) all of the Developer's costs in acquiring, holding, and maintaining such parcels/property interests from the date of the Developer's acquisition of same through the date title is conveyed to the Agency, with such costs to include without limitation amounts paid to the seller(s) pursuant to option and purchase agreement(s) and any of the Acquisition Cosh advanced or paid by the Developer pursuant to Section 201 hereof, escrow and title fees and charges, relocation expenses, financing costs, interest carry expense, maintenance costs, insurance, and taxes, but excluding amounts paid or to be paid to the holder, if any, pursuant to the preceding sentence less the sum of (1i) all rental income received by the Developer with respect to such parcels/interests during the period of the Developer's ownership thereof, and (iii) that portion of the disbursement, if any, by the holder to the Developer which are not utilized by the Developer for financing the direct or indirect costs of planning, financing, developing, constructing, and operating the Developer Improvements on or with respect to the Site. During the period that the Agency's purchase option exists, the Developer agrees, upon written request from the Agency, to deliver to the Agency a written statement identifying the purchase price and an itemization of the expenses and income upon which the purchase price has been calculated. The closing shall occur within thirty (30) days after the Agency exercises its option. The purchase price shall be payable in cash at the closing. -44- ' Jf If the Agency exercises its purchase option under this Section 612, it shall not be entitled to liquidated damages under Section 611. VII. (S700] GENERAL PROVISIONS A. (5701] jigticeg, Pemands and -Communications Among the Parties Written notices, demands and communications between the Agency and the Developer shall be sufficiently given if delivered by hand or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Agency or the Developer, as_ applicable. 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 701. Any written notice, demand or communication shall be deemed received immediately if delivered by hand and shall be deemed received on the fifth (5th) day from the date it is postmarked if delivered by registered or certified mail. B. [57021 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. No member, official or employee of the Agency shall be personally liable to the Developer, 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 Developer or successor or on any obligations under the terms of this Agreement. C. (57031 Enforged Delay: Extension of Tim s 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 -45- 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 an other party; acts or failures to act by any 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 reasonable control or without the fault of the party claiming an extension of time to perform. The failure by the Developer to timely submit to the Agency's Executive Director for review and approval the Developer's evidence of financing, pursuant to Section 204, or to provide the letter .of credit to secure its advance of the Agency's Acquisition -Costs, as provided in Section 201, shall not be excused pursuant to this Section 703. In the event, however, that the Developer exercises reasonable diligence to obtain the City's and Agency's approval of any of the plans, documents, or other matters referenced in Sections 203, 204, or 205, but the City or Agency disapprove the same (or approve subject to conditions that the Developer reasonably determines it is unable to satisfy), the Developer shall be entitled to a reasonable additional period of time, not to exceed six (6) months, to resubmit such plans, drawings, or other matters for approval. 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 only and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other parties 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 Agency and Developer. D. [§704] on-li bill f gffigiAls_And Employees of the Agency No member, official or employee of the Agency shall be personally liable to the Developer, 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 Developer or its successors, or on any obligations under the terms of this Agreement. E. [S7051 Submittal of Documents to the Agency for Approval Whenever this Agreement states that a submittal by the Developer to the Agency of any plan, drawing, document, or other matter shall be deemed approved if not acted on by the Agency within the specified time, said matter shall be deemed approved only if the request for -46- approval has been accompanied by a letter to the Agency's Executive Director referencing this Section 705 of the Agreement and stating that such matter is being submitted and will be deemed approved unless rejected by Agency within the stated time. F. [S7061 Eg-1ocA tion of -Existing Occupants Subject only to the Agency's performance of its obligations under Section 201.6 and paragraph 2 of the Method of Financing with respect to payment for ;elocation expenses, the Developer shall defend, indemnify, and hold harmless the Agency from and against any claims, demands, or lawsuits as may be. made by any of the existing owners, tenants, and occupants within the Site for relocation assistance or benefits alleged to be payable pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. Section 4601, et sea.), or implementing regulations, related to the Agency's activities pursuant to this Agreement. G. (57071 Amendments to this Agreement The Developer and Agency agree to mutually consider reasonable requests for amendments to this Agreement which may be made by lending institutions, or the Agency's counsel or financial consultants, provided said requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. Minor modifications to this Agreement which do not materially affect the rights or obligations of the Agency may be approved by the Executive Director without the necessity of additional action by the governing board of the Agency. VIII.[$8001 ENTIRE AGREEMENT, WAIVERS, APPROVALS This Agreement is executed in nine (9) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through and Attachments 1 through 8, which constitutes the entire understanding and agreement of the parties. This Agreement may be executed in counter -parts which shall have full force and effect. 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 and signed by the appropriate authorities of the Agency and the Developer, and all amendments hereto must be -47- r........,... .� in writing and signed by the appropriate authorities of the Agency and the Developer. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. IX. [59001 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement, when executed by the Developer and delivered to the Agency, must be authorized, executed and delivered by the Agency on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Agency. IN WITNESS WHEREOF, the Agency and the Developer have signed this Agreement on the respective dates set forth below. DV D 1986 HUNTINGTON BEACH REDEVELOPMENT AGENCY ATTEST: a�z -4 � �-' Agency Secretary APPROVED AS TO FORM: Agency Special Cou s 1 REVIEWED AND APPROVED AS TO FORM: A e cy Atto ney n 1` By1 ` Chairman INITIATED AND APPROVED AS TO -X. Depy City Administrator/ Red velopment APPROVED: AL'AMEZZMA - - . . -48- D , 1986 - qo'; , 1986 , 1986 4/112/011323-0001/01 FUNTINGTON PACIFIC I, dba EUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, By PACIFIC HERITAGE CORPORATION, a California corporation (general partne } By: It • By AVIV GROUP LIMITED, a California limited partnership -49- By: AVIV DEVELOPMENT CORPORATION, a California corporation By. (""2 44/ ). - Its: By: Its: HUNTINGTON PACIFIC I, dba HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, 1986" By PACIFIC HERITAGE CORPORATION, a California corporation (general partner) OCj Q 7 , 1986 , 1986 4/112/011323-0001/01 By By: Its: AVIV GROUP LIMITED, a California limited partnership By: AVIV DEVELOPMENT CORPORATION, a California corporation By• � j a Its: f By: Its: -49- Lr Su Yy) m atl C-� V rc.A451 Pli rhilth) .• %.) 10-6-86 SUMMARY REPORT 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 a proposed first amended Disposition and Development Agreement ("Agreement") between the Agency and Huntington Pacifica I, doing business as Huntington Pacifica Development Group ("Developer") for the development of a complex including a first class hotel, related commercial/office uses, entertainment and recreational facilities, and related ancillary improvements 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 land acquisition costs, clearance costs, relocation costs, costs of improvements to be provided by the Agency, and the expected interest on any loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed and leased, determined at the highest uses permitted under the Redevelopment Plan; and V 3. The purchase payments to be paid by the Developer. This Report and the proposed Agreement is made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT. 1. Developer Responsibilities: Under the proposed Agreement, the Developer agrees to develop and construct, or cause the development and construction of, at a construction cost of at least Thirty Three Million Five Hundred Thousand Dollars ($33,500,00, exclusive of land value), the following: a) A first-rate high quality hotel of not less than 280 rooms with a minimum gross leasable floor area of 205,000 square feet including associated retail shops, meeting rooms, banquet facilities and at Least one (1) high quality, full service restaurant. b) A retail commercial and office building or buildings with a gross leasable area of 32,000 square feet, Including at the developers option an approximately 25,000 square foot theatre complex. c) Parking with a minimum of 450 parking spaces beneath and adjacent to the hotel. The Developer shall pay for any shortfall In required parking beyond that which is provided; exclusive of the first 200 spaces of any shortfall which shall be the responsibility of the Agency. d) A Public Plaza of approximately 5,000 square feet at the corner of Main Street and Pacific Coast Highway which would include open passive rest and landscaped areas, plus an elevated connecting pedestrian walkway to Pier Side Village. e) The Devdnfper shall be responsible fo r All on -site and off -site improvements -- sidewalks, street lighting, curbs, gutters, street trees, street improvements, surface parking lot Improvements, parking structures, etc., shall conform to the design and materials as approved by the Agency. Sanitary sewers, storm drains, fire hydrants, water supply, gas lines, telephone and electrical power facilities, (if required) to be brought to, modified, or relocated from the perimeter of the Property. All such existing underground utility lines will be capped by the Developer within the public right-of-way as close as possible to building locations to be served by such utilities and to be attached and connected by the Developer. Improvements required In connection with and as a result of review by the Agency and the City of plans, drawings, or environmental assessments relative to the Developer Improvements or this Agreement. 2. Agency Responsibilities: The Agency is responsible for and shall commit to the project the following: a) All construction costs experienced for water delivery facilities upgraded and constructed in connection with the Developer Improvements; (approximately $1,000,000). In addition, all utilities shall be provided to the site in sufficient capacities to accommodate the proposed development; b) Funding to a maximum amount of One Million Dollars ($1,000,000) for the relocation of persons or entities, and the acquisition of surface entry rights in association with oil resource recovery.; c) All costs .incurred by the Agency or the City in undergrounding utilities and relocation of any lines to be abandoned within the project area, (approximately $350,000); d) The construction of a public parking structure, on about the same time schedule as the proposed project and located within a reasonable walking distance of the project. 200 spaces within the structure may be used to offset any shortfall of the projects required parking. Additional parking for a project shortfall may also be accommodated within this structure at a cost to the Developers. The Agency shall make available to the Developer the following: e) For a period of ten 0 0) years commencing with the opening of the hotel for business, one hundred percent (100%) of transient occupancy tax ("TOT") received by the City generated by the hotel development. However, if after the 5th full year of operation a cumulative sum of gross room revenues is in excess of $180,000 per room then the pledge back shall be terminated. f) For a period of two (2) years commencing with the completion of all of the Developer Improvements, one hundred percent (100%) of the "Net Property Tax I411�ment," which is that amount dete"�ed as follows: from (i) the property tax revenue received by the Agency pursuant to Section 33670(b) equal to that paid or caused to be paid by the Developer in connection with the Developer Improvements, deduct GO twenty percent (20%) of such amount (consistent with Section 33334.2 of the California Health and Safety Code), (iii) all funds payable to affected taxing agencies pursuant to between 33401 of the California Health and Safety Code or agreements heretofore entered into by the Agency, and further deduct (iv) an amount equal to three percent (3%) of the total tax increment generated by the Developer Improvements, which shall be retained by the Agency for its administrative overhead and expenses. in the 3rd year only fifty percent (50%) of the Net Property Tax Increment shall be pledged back. In the 4th year the remaining fifty percent (50%) of the 3rd year Increment shall be pledged back. 3. Method of Financing: The proposed Agreement provides that the Developer will acquire all parcels within the "Remaining Portion of the Walnut Alain Portion." The cost of any land acquisition by the Agency will be borne by the Developer. The cost of acquisition, lease or other means of securing the "Northeast Portion" of the "Walnut Alain Portion" will be borne by the Developer; however, inclusion of this portion is optional and will require authorization by the existing property owners. The City shall have constructed underground utility improvements in conjunction with the Developers Project and pay actual costs. Funding to come from the Underground Utility District Funds. The City shall have constructed Improvements to the water delivery facilities in the Downtown area and shall make all connections with the Developers Improvements and shall pay actual costs. Funding to come from various City funds including the City's General Fund. The City shall provide to the Agency funding for the relocation of residents and businesses and the acquisition of surface entry rights for oil resource recovery within the Project Area up to $1,000,000. Funding to come from the U.S. Department of Housing and Urban Development Community Development Block Grant Program and other fund balances. B. COST OF AGREEMENT TO THE AGENCY. The estimated cost of the Agreement to the Agency is as follows: Land Acquisition Costs $-0- Value of City Parcels (27,500 sq. ft. @ $55/sq. ft.) $1,512,500 Demolition, Site Preparation, and On and Off -site Improvement Costs $1,350,000 Relocation Costs $1,000,000 Public ParNwdg Facilities Costs $'I"k0,000 (200 spaces @ $7,500fspace) Loan for Demoiition and Site Clearance $6,275,000 Administrative Costs $-0- (3) Bond Issuance $-0- (2) Interests on Loans and Bonds to Finance Agreement S-0- 6.16.337, 500 1. Any land acquisition on the part of the Agency either through purchase, option, lease or eminent domain, shall be as an interim step prior to conveyance to the Developer. The cost of any such transaction shall be borne by the Developer. 2. Although not directly part of this project, the Agency recognizes the need for additional parking in the Downtown area and will begin the development of public parking facilities. These structures will be within a reasonable walking distance of the proposed development and will be designed to accommodate an anticipated parking demand greater than just the proposed improvements. The Agency will be responsible for the development of 200 spaces in one of these facilities for this project. The cost for the bond Issuance used to develop these structures has been calculated into the $7,500 per space cost. 3. Although no figure has been identified in this calculation, three percent of the tax increment revenues received by the city have been identified for project administrative costs. C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED TO THE DEVELOPER DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN. The determination of the estimated value of the interests to be conveyed to the Developer pursuant to the proposed Agreement are made by Keyser Marston Associates, Inc., (KMA). In this analysis KMA has estimated the market value of the "Alain -Pier Portion." The analysis determined that the highest and best use of the "Remaining Portion" of the "Alain -Pier Portion" would be development of a hotel and retail commercial complex. Given such magnitude of development, privately constructed parking for 450 cars and the Inclusion of public amenities such as a plaza and pedestrian overcrossing, WA has estimated the fair market value of the "Main -Pier Portion" to be $1.5 Million, assuming development at its highest and best use and without consideration of Agency goals in Project implementation. D. PURCHASE PRICE BY DEVELOPER AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN. 1. The Developer shall purchase from the Agency the "City Parcel" upon execution of the Agreement for the price of one dollar ($ 0. The City agrees to convey and the Agency agrees to accept conveyance of the City Parcel promptly upon the exercise of the Developer Option to accommodate the conveyance to the Developer. 4 • The terms and condfkow�s of sale by and between the A�Jcy and the City are a matter of no concern to the Developer. Health and Safety Code Section 33433 provides that if the sales price and lease payments for the Site are less than fair market value for the highest and best use consistent with the Redevelopment Plan, the Agency shall explain the reasons for the difference. In order to assist the project at the start of development the Agency has to write down the land value. This differential of $1.5 million will be well offset over the life of the project through an increase in the amount of tax increment monies generated by the project. By subsidizing the project on the front end, through a write down in the value of the City's parcels the Developer has agreed to a reduction in the amount and time frame for tax increment pledge back to the project. This reduction will amount to approximately $3.6 million over the first 15 years. Therefore, the highest and best use -value is being achieved through a write down in land value and an increase in the amount and years of tax increment provided to the Agency. 0372H-A �sUrnmo.r Lecu,e PA 11 ve,•Af s V SUMMARY REPORT 10-6-86 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 a proposed Pier Side Lease ("Lease") between the Agency and Pier Side Development ("Developer") for the development of a complex including a specialty retail commercial village and related ancillary improvements in the Main -Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed Lease to the Agency, including land acquisition costs, clearance costs, relocation costs, costs of improvements to be provided by the Agency, and the expected interest on any loans or bonds to finance the Agreement; 2. The estimated value of the interests conveyed and leased, determined at the highest uses permitted under the Redevelopment Plan; and v 3. The lease payments to be paid by the Developer. This Report and the proposed Lease is made available for public inspection prior to the approval of the Lease. A. SALIENT POINTS OF THE AGREEMENT. 1. Developer Responsibilities: Under the proposed Lease, the Developer agrees to develop and construct, or cause the development and constructicn of, at a construction cost of at least Twenty -Five Million Dollars ($25,000,000), the following: a) A Pier Side Village consisting of speciality commercial uses with a minimum gross leasable area of 75,000 square feet, plus a multiple -tiered parking structure of not less than 600 spaces. Part of the minimum gross leasable area of 75,000 square feet shall consist of deck area added to the Pier; such added deck area shall approximate 25,000 square feet. All Improvements shall be in conformity with Conditional Use Permit No. 86-43 and Coastal Development Permit No. 86-27 as approved by the City or as may be subsequently amended. b) The Developer shall pay the costs for relocation and reconstruction of the existing lifeguard facility within the project site to a location outside of the project area. This obligation shall not exceed $500,000. 0 The Pier Side improvements shall include access for emergency City vehicles to the Pier from the City Beach Safety Facility. d) The Pier Side Developer shall provide a pedestrian overcrossing of Pacific Coast Highway to the proposed hotel location, the cost of which shall be shared with the Hotel/Commercial project in an amount not to exceed $250,000. e) The reloper shall be responsible for 41 on -site and off -site improvements relating to the development of the Property and in accordance with the terms and schedules as set forth in this Lease including, but not limited to, the following: All on -site and off -site improvements -- sidewalks, street lighting, curbs, gutters, street trees, street improvements, surface parking lot improvements, parking structures, etc., shall conform to the design and materials as approved by the Agency. Sanitary sewers, storm drains, fire hydrants, water supply, gas lines, telephone and electrical power facilities, (if required) to be installed to, modified, or relocated from the perimeter of the Property. Improvements required in connection with and as a result of review by the Agency and the City of plans, drawings, or environmental assessments relative to the Developer Improvements or this Lease. 2. Agency Responsibilities: The Agency is responsible for and shall commit to the project the following: a) The actual construction tests of all off premise improvements constructed in connection with the Developer Improvements; b) The costs incurred to maintain and repair the existing City Pier in good and safe condition and open to public access; c) The costs incurred by the Agency or the City in undergrounding utilities on the Property; The Agency shall make available to the Developer the following: e) For a period of two (2) years commencing with the completion of all of the Developer Improvements, one hundred percent 0 00%) of the "Net Property Tax Increment," which is that amount determined as follows: from G) the property tax revenue received by the Agency pursuant to Section 33670(b) equal to that paid or caused to be paid by the Developer in connection with the Developer Improvements, deduct (ii) twenty percent (20%) of such amount (consistent with Section 33334.2 of the California Health and Safety Code), (M) all funds payable to affected taxing agencies pursuant to between 33401 of the California Health and Safety Code or agreements heretofore entered into by the Agency, and further deduct (iv) an amount equal to three percent 0%) of the total tax increment generated by the Developer Improvements, which shall be retained by the Agency for its administrative overhead and expenses. In the 3rd year only fifty percent (50%) of the Net Property Tax Increment shall be pledged back. In the kth year the remaining fifty percent (50%) of the 3rd year Increment shall be pledged back. 3. Method of Financing: The City shall provide improvements as needed to all utility delivery systems to assure sufficient capacities to adequately service the project and shall make all connections wiythe Developers Improvements and shall pay actual costs. Funding to come from the various City funds including the General Fund. The City shall have constructed underground utility improvements in conjunction with the Developers Project and pay actual costs. Funding to come from the Underground Utility District Funds. The income received by the Agency as rent for replacement parking will be use to, partially finance the; construction of new parking facilities within the Downtown area. B. COST OF AGREEMENT TO THE AGENCY. The estimated cost of the Agreement to the Agency is as follows: Off -site Improvements and Relocation Costs Public Parking Facilities Costs $-0- (2) Administrative Costs $-0- (3) Bond Issuance $-0- Q) Loan for Demolition, Site clearance, etc. $680,000 Interests on Loans and Bonds to Finance Agreement $-0- 680 000 1. All costs associated with off -site improvement have to be accounted for in the First Amended Disposition and Development Agreement with Huntington Pacifica 1 doing business as Huntington Pacifica Development Group for the hotel and related commercial development; therefore no further itemization is necessary in this project. 2. Although not directly part of this project, the Agency recognizes the need for additional parking In the Downtown area and will begin to pursue locations for parking facilities. These structures will be within a reasonable walking distance of the proposed development and will be designed to accommodate an anticipated parking demand greater than just the proposed improvements. 3. Although no figure has been identified in this calculation, three percent of the tax increment revenues received by the city have been identified for project administrative costs. C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED TO AND LEASED BY THE DEVELOPER DETERNIINE13 AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPhl The determination of the estimated value of the interests to be conveyed to the Developer pursuant to the proposed Agreement are made by Keyser Marston Associates, Inc., (KR&. In this Analysis, KMA has estimate-Wfthe market value of the Pier Side area. The analysis determined that the highest and best use of the site would be development of a specialty retail commercial complex. Given such magnitude of development, privately constructed parking for approximately 600 cars and the inclusion of public amenities such as a pedestrian overcrossing, KMA has estimated the fair market value of the site to be equivalent to the compensation identified in Section "D" of this report, assuming development at its highest and best use and without consideration of Agency goals in Project implementation. D. SUM OF LEASE PAYMENTS BY DEVELOPER AND REASONS FOR DIFFERENCE IN t'ALK MAKKtl VtkLUt rUK lriC HILMtZil UZ!n UNUM Mr- Kr-UrVr-LvrAtir.IVl PLAN. The total sum of the lease payments during the term of the lease to be paid by the Developer for the interests conveyed In the "Pier Side" Lease are: 1. The Developer shall pay to the Agency rent in the form of "minimum annual rent," "Percentage rent," and "parking replacement rent," for each accounting year. a) Minimum Annual Rent: LESSEE shall pay to LESSOR during the lease term (55 years) a minimum annual rent of $1 per year plus existing rent from Dwights, during the first three years. Beginning with the third anniversary of the completion of the "Pier Side Improvement," and continuing until the sixth anniversary the minimum annual rent shall be in the amount equal to $4 per square foot of gross leasable area of improvements on the Premises. Beginning with the sixth anniversary of the commencement of this lease, the Minimum Rent shall automatically be annually increased by seventy five percent (75%) of the increase in the Consumer Price Index for the Los Angeles - Long Beach - Anaheim - Metropolitan areas, provided that such inflationary increases shall not exceed 6% with respect to any year. b) Percentage Rental: In addition to the minimum annual rent, the Developer shall pay a percentage rent With respect to each year after the third anniversary at twelve percent 02%) of the gross rental receipts received by the Developer during such accounting year or partial accounting year, less the minimum annual rent payable with respect to such period. When the rents received by the Developer equal Six Million Dollars ($6,000,000) or the sixth anniversary, whichever first occurs, percentage rent shall be fifteen percent (15%), less the minimum annual rent payable. c) Parking Rental: In addition to the minimum annual rent and the percentage rent, the developer shall pay to the lessor as parking replacement rent the sum of $100,000 per year, subject to annual inflationary increases. Beginning with the third anniversary of the commencement of this lease, the parking replacement rent shall be adjusted annually by a figure equal to the percentage change in the CPI from the previous year; provided that such annual adjustments shall not exceed six percent (6%) per year. . • Health and Safety �e Section 33433 provides that if �"�e sales price and lease payments for the Site are less than fair market value for the highest and best use consistent with the Redevelopment flan, the agency shall explain the reasons for the difference. The "Pier Side" lease begins at a rate equal to the rent presently received by the City for the existing parking. In addition the City will continue the lease with Maxwell's at the current rate. The beginning rent at a minimum rate will allow the Developer a period of stabilization after which the Agency will receive a percentage of sub -lessee sales receipts. Therefore, the better the project performs, the greater the Agency benefits. This type of lease agreement should produce a greater value over the life of the lease than any other reuse which is consistent with the Redevelopment Plan. 0372H-A ECONOMIC INFORMATION KEYSER MARSTON ASSOCIATES, INC. . 04 • {. w ' Richard L Botti Calvin G Hollis.11 SAN 1)1EGO h1vN1?-47w1 Heinz A.Schilling SAN FRANCISCO415/34H-3141 Timothy C. Kelly A.lerry Keyser Michael Marston Kate Earle Funk Robert J.Wei more Michael Conlon October 3, 1986 fir. Douglas LaBelle Deputy City Administor/Redevelopment City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Dear Doug: %S) Ctr,Bs apt, iL 550 South Hill Street. Suite 980 Los Angeks.CafiWrnia 90013 2111622-t+(a<)S '�tti G'ejy SO -rK1 r~ This letter summarizes Keyser Marston Associates, Inc. (KMA) review of the economic modifications contained in the proposed Amended Disposition and Development Agreement and Pier Side Lease (Main - Pier Phase I). While there are numerous legal and technical changes/modifications in the Agreement, the modifications to the economic terms are rela- tively modest in nature. From our perspective, these changes re- volve around the request by the developer to reduce the front-end cash requirement/burden of the project. In our opinion, such a request is not unreasonable given the heavy front end cash require- ments of the project, particularly the hotel development. Specifically, the proposed hotel has an initial land and parking cost per room approaching $25,000, an amount considerably higher than typical. As you recall, the original DDA provided an offset for these high development costs by providing both a tax increment rebate as well as a rebate of transient occupancy taxes. However, such an ap- proach does not reduce the front end cash requirements of the project. In order to reduce the front-end cash requirenent or burden, the proposed amended agreement calls for the Agency to sell the City parcel fronting Pacific Coast Highway to the developer for $1 as well as to provide 200 off -site parking spaces to the developer. The existing DDA established a maximum value of $55 per square foot Real Estate Pwdevekoxnent&Evaluatig Services r Mr. Douglas LaBelle October 3, 1986 Page 2 for the City property. Therefore, the 27,500 square foot City par- cel would have a maximum value of $1,512,500. The 200 parking spaces represents a cost to the City of $1,500,000 ($7,500 per space). Thus, the added gross costs of proceeding with the amended agreement is $1,512,500 (the implied loss of revenue from City parcel), plus $1,500,000 (the costs of parking) for a total cost of $3,012,500, say $3.0 million. The Agreement, however, substantially reduces the tax increment rebate to the developer by shortening the rebate period from 15 years to 4 years with only 50% payment in years 3 and 4. This reduction will create a major new source of revenue to the Agency in years 3 through 15. In order to determine the value of the added tax increment revenue to be retained by the Agency, KMA un- dertook a comparison of the tax increment revenue the Agency would have received during the initial 15 years under the terms contained in the existing DDA, as compared to the amount that would be gen- erated by the terms contained in the amended DDA. This analysis assumes the current scope of development. These projections, as shown in accompanying Tables A, B, and C, indicate a total gain in revenue (to the Agency in present value terms) of slightly under $3.5 million as shown below: Pier Side Retail $1,432,437 Hotel 1,501,341 Main Street Retail 548,726 $3,482,504 or say $3,480,000 it should also be noted that the amended DDA contains a revised scope of development that includes a larger Main Street retail component. The total increase in Agency revenues due both the revision to the rebate schedule as well as the an larged Main Street retail is +$3.6 million. As indicated above, the proposed revised Agreement will, in present value terms, produce between $3.5 to $3.6 million of increased revenue over that produced under the existing Agreement. This amount is greater than the anticipated additional costs of $3.0 million. Given the uncertainty always involved in projection of future revenues, we are of the opinion that the increase in ex- pected revenue represents fair compensation to the Agency to com- pensate for the additional uncertainty, as well as for the in- creased commitment by the Agency to provide off -site parking. our analysis further indicates that the developer rates of return have not changed significantly from the returns indicated in our August, 1985 analysis. eyserMarstonAssociate5lnc, t Mr. Douglas LaBelle October 3, 1986 Page 3 Sincerely, AYS MARSTON SOCIATES, INC. Richard L. Botti RLB:lp 86377.HTB KeyserMars!o AssociatesInc. • . - 1 Tau A TAC iocRErai RMMS To AGENCY - RETAIL CIMPONE" DFYEIOPER I.MIYES 4 YEAR MATE (771,713 Ice, 33.51' T13 3941 )0"11Tf�GM HAN ME9 "ME PROJECT VEVISfb PtA►4l) 1l11t11T11Cin11 tEdtll,cA11FORRTA j COl"MUC7101 TEAR I YEA! 2 YEAR 3 TEAR 4 Yfll S YEAR 6 :'fAR 7 YEAR 8 YEAR 9 YEAR 10 TEAR 11 TEAR I? MR 13 YfAR 14 YEAI 15 .-...�---------------------------------. ........ ....... ........ ........ --------........ ........ -----------------•------------- NIAL TAX VICtEY. 1 Ri'ffliM 218.553 2941157 299,011 30LM 311.599 317,654 323.918 330,014 336,401 343,017 349,677 3%,1.71 '141,004 371,080 313,50? IIE,S) SET ASIDES 66,367 61.656 69,770 70,309 71,tt9 71,454 74,471 751917 77.191 79.814 80,426 8?,TJ4 81,475 85,319 37,055 ----------- •--•--. .................................----------- -------....... ----------- .»........ ....... -... ........... ........... -..-...------------... nuou IA; mcRrpm 222,186 226,591 230,899 235,38I 239.9J1 241,5110 241,140 21,4,157 24.9,09; 264,12I 219,252 214,111 201,124 285,71? 241,117 USS) CE7EIePER MAI 222,1i"6 226,501 115.450 117,692 0 0 1 0 9 0 Q 0 0 0 0 a i......... ......... .................. ......... ........ ......... .................. ......... .................. ........................... VFT in Ince.r H1 To AGney 0 0 115,450 117.60? 139,911 244,5g0 749.340 254,117 29,1192 264,123 269,252 274.637 200,1.9 °Z•;5,732 291,447 NFV H1f TAX IMP.E!'.ERT I1412.437 TIM 711 I VE01 I iC SET AMES 1 r1 WS VVE109 MATE 66.367 67,656 194,420 1a8,091 311.599 317.650 321.010 330,074 336,44 341,017 149,977 3S6,611 363,801 371,0100 JIM02 +:''! AMMY S1WE 11 ME M. WIDE) :,020,187 t UPI tHrUtPil !;f'-ilf :35,250 t PP? TOM TAX iKMEl1T REYIWiS 19,555,437 i 'NO LfAL (1S YEAR MOVE) ........................ } PrVFLArfi MATE 222,186 22S,501 M,999 2351]s3 237,931 244,590 249,340 251,157 259,092 214,123 2£9,252 271,6:1 29-3,129 285.732 291,447 CEViL4PER Rf1ATE i?461,657 t ff9 11'SS TO DEV 01,13? NEV DEAL 1;432,437 t ; i Fey ACE11cY S+fAPE 11 (11lr SET AMU) 597,751 4 HF7 CAN 14 AGEKY'PlUR Wl Dfit 10432,137 t i i TASIF 1-1 SUS 141 trVEMIS CD147luclim YEAR I YEAR 2 YEAR I YEAR 4 TEAR S YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR IO YEAR 11 YEAR 12 TEAR II YEAR 14 YEAR 15 RESTAUP.AHT WES I' 14,090,000 21,738.OtO 27,342.001 29,709,100 :0,144,555 11,651,721 31,234.372 34.096,093 36,640.89S 18.472.940 40,396,587 42.116,411 44,537,237 46,714,099 49,102,301 REIATL SAES } 5,950,800 1I,913,985 15,303.433 18,370,120 20.092.319 21,096,93V. 22,1S1,781 21.259,370 24.422,330 25,643,45S 26,92S.629 23,271,11(1 29,d3S,.05 31,169.780 32,729,269 ...... ....... ...... .------------ ..... .... .......... .......... ------... .... ..-- . ------- -------------------------- 985 _... TOTAL :ALES 2'1,830,844 35,]13,4?,d50,431 4],079,220 50.2]d,873 52,748,717 55,]8d,151 59,1SS,4C0 61.04I,ZII 61,11d,39S d7,32291 ,215 10,633,32t 14,222,J4? 11.4il,Slo ,330,377 ;Airs TAX trvri 1E9 209.1@8 I67,140 426,504 479,712 5A2,30 527,487 553,tt62 581,55S 610,632 641,164 673.222 716,083 742,227 779,337 818,3d6 far► Si4t! TAl REVEMYS 1.111.029 { TAof E 1 F - ' TAX IK?,EKXT tfY MYS 70 WWI NMI Vve-.� OEYELOM IMI ES 1 YfA1 ulkif - 1771 its I12, 32.5€ YES 311} mmirimm PEACH HIM USE PR0IEET (REVISIOAARS) MINTIMI4H !EACH, [AtIFORNIA ' MitVCT10H YEAR I TE1.1 2 YEA 3 YEAR 1 TEA[ S TFAR 6 YEAR 7 YfAR 8 YEAR 1 YEAR 10 YE11 11 YFA1 12 YEAR 13 YEAR 14 YFA1 15 TOTAL 1AY INCRfFfWT REYEHI!ES 302.433 303,307 314,291 31.0,397 33.528 332,933 339,39S 315,95! 352,669 359,517 366,198 373,5.9 301,305 N8,9I1 39e,709 {[ESSI SET ASIDES 69,SED 70 M I 72,283 73,691 75,1IS 16,571 72,031 79,369 81,II1 82,689 81,29S 25190 27,70 89.151 91,213 i .......... ......... ....------.......... .......... ...... ..------------........ ---... ..---------------- ....... ---------- ......- -- AYATIAt1E III IRMEM"I , 232,874 237,316 212,006 246,706 251,473 256,156 1.61,334 2(6,181 271.555 276,021 2`a2,203 287,843 293,601 219,111 305,461 IIFs51 6Eti' [PER REBATE + 232,074 737,396 121,DO3 121,153 D a a 0 0 O a 1 a 0 0 .......... .......... .......... .......... .......... .......... a......... .......... .........., .......... .......... .......... .......... .......... .......... MT III I:'CCfmir iD AGERCY a 0 121,003 123.351 251,473 256135R 2LI,331 2U,313 271,555 276,820 202.201 237,043 ?9 AI 719,171 �05,1i•6 lIPY 11E.1 IAT 19tirr•f1lT TOTAL TAY 14CREMERT In. !CI ASIDES 41H8; D£SrLOPER MAIE 69,560 70,9tl 193,29t 197.011 326.518 33?,930 339,39S 345,952 352.669 151.517 366,498 373,021 391,305 P9,931 396,709 UY MCI SNARE 11 IIHC SH ASKI 2,117,364 t 11ry DES'ELCPER MATE �60,997 � VPY REVEI.'GES 2,i19,361 ,N S DfAI (15 YEAR REBATE} "f1;;°PI4 ............... ----23713?6 4.211.111,410 ,��S 25t,173 2`�c,35r, 'L1,3'.1 U5,103 271,555 276,0:0 :°?,203 17.W 293.604 299,477 :GS.IU FrY I ASS 19 DiY MPER PEP DEAL t,cDt,511 1 1"PY AUM SPAPE it Im. U7 ASIDE) $16.021 1 IM 5AIN 10 AUNCY MINI hrY DEAL 1,5^_1,311 r y I I 1 , 4 . E C C - Tilt( C TAX I1xTF" REVENUES 10 AaKT - RAIN STREET RETAIL DEVEL0E1 HCf1VES 4 TfAR IfIM 1771 Us 112. 39.51 Y13 3i4) . 1R01II1041 IFACII WED OSE MIECT ' WITlk'6T08 SEXH, CALIFORNIA CONS'£CCT104 YEAR I YEAR 2 tEA1 3 YEAR A YEAR 5 YEAR 6 YEAR 7 YYAII 8 MA 9 YEAR 10 YEAR 11 YTAI 12 YEAR 13 YEAR 14 YFAR 15 TOM TAX INCRE)IFNT RFVEIIL'ES 110.042 112,179 11413S1 116,S18 118,830 171,138 121,411 125,076 129,320 130,e12 133,352 136,019 139.737 1411514 MINI ILESS) SEI ASIDES --------- 25,310 25,001 26,302 ----- 26,313 ......... 27.331 --------- 21,962 ......... 28 jal ......... 72.152 ......... 211,514 ......... 30,087 30,621 31,201 31,910 32,549 ......... 31.199 ......... AVA11A?IE fir FEVEME 11,732 ......... R61379 ---- 83,aSS 89,763 91,491 13,24 95;090 96.925 73,107 ......... IC0,725 ......... W.601 ......_.. 104,735 ......... 116.921 1091 b 111,115 I1153) MVfiOMt RMIE 14,74 84,732 43,189 44,020 ......... 0 0 ......... a 0 ......... 0 ......... 0 0 O 0 0 --------- D ......... HE] TAX ihCREP,fRT TO ACENCT (C6) --....... 1164S ......... 44,641 4S,739 --------- 91,411 93,271 ......... Y51009 96,925 98,C01 ----..... 1^9,725 ......... 102,681 ......... 104.735 --•------ 106,029 1C8,966 111.145 RPv Kr In 1uGR por ;4S,72L TATAL TAX T!ICFMVT PC SET ASIDES RIMS DEVELOPER WATE 25,253 21,447 71,168 72,550 111,930 121,139 121,499 M.S76 128,320 130,812 133,352 136,019 133,739 14I.514 111,314 HfV A EM SWE 11 (1NC SET AIIDE) ?72,869 Pr'V tEVIU M MATE { ,01,655 1 Nil TOTAL III INCF;11:N1 RLVC`U'ES 174.SiA f4 D DtAI (IS YCAR Rf AKI 1S1vF15iif IFbA:F ~ . + 11.732 96.378 8R,C55 89,155 91,119 91,276 95,C33 16,92S 99,ev 141,72S 1a2,4.9I 1a4,135' M IS29 109196R 111,I15 flFv DEVELVIt EEUM 750,311 % NTY LOSS 10 M UNDF) WN DEAL i 148,726 1 Iffy Army SHARE 71 (INC SEI ASM) '.24,143 $ I1Fv EM TO ACERCY VmfR NEII SEAL 1,11,725 1 ' r-. �, `� �J � � i T �D1r1�' I"'� ���c. R�.ar � n 0`�4�5 -- _ _ •_ Nam-.-. * :-_ _� _ - `� ._ . 'ti'^...." i; - �� . •'ate .. �o NOTICE OF aODiT PUBLIC HEARING BY THE I �j CITY CO OF HIINTINGTON BEACH &ND THE REDEVELOPS[FnNESPOSITION T AGE:iCY OF THE CITY OF HUN'TINGTON BEACH ON THE A.ND DEVELOPY BETWEEN THE REDEYELOPMENT AGENCY A+*iD HU, G PACIFICA DEVELOPMENT GROIIP �— �. �,,,�,� o.. n•��."' �, ciok•• ( f Y NOTICE IS HEREBY GIVEN that the Clty CourciI of the Clt of Hun irgton Beach and the Redevelopment Agency of the City of Huntington Beach ' ill hoa joint public hearing on : ",496-r, at 7:30 P.M., in the Council Chambers, City, Hall, 000 Main Street, Huntington Beach, California, to consider and act upon th Disposition and Development Agreement between the Redevelopment Agency of the City of Huntington Beach and Huntington Pacific s Development Group and -the-leas"n4 sale of the land j pursuant thereto. The Agreement provides for the development of a hotel -' -t!-," _ '_ f retail comra`ercial' Wdt slon; Alain S tree t,,;*pub lie plaza witti a pedestrian overcressing of Pacific Coast Highway, to ty -Ke T.tr s•L 4 -c�sall. iael #i ier-re?�ah ttat:cn-end-poasiZrie�ier-ax^rensian, within the Main -Pier d Redevelopment Project Area. Descriptions of the sites can be found in the Agreement. The terms of 4`t lease and sale f property between the Agency and Huntington Pacifica Development Group are set forth in the Agreement. The preFcsed projects are covered by a fins! Environmental impact Report for the Main -Pier Redevelopment Project Area for which a Notice of Preparation was filed cn May s, l 5. Copies of the(Disposition and Development Agreement and the Environmental Impact Report are on file fcr public inspection and copying for the cost of duplication at the office of the City Clerk, City of Huntington Beach, Z000 Main Street, Huntington Beach, California, between the hours of 8:90 A.H. and 5:00 P.M., Monday thru Friday, exclusive of holidays. Interested persons may submit written comments addressed to the City Cleric of the City of Huntington Beach. Post Office Box 190, Huntington Beach, California 92648, prior to the hour of 5:00 P.5I. on4ugus"S94985. At th me_and place noted above, all persons Interested in the above matter may appear nd be -heard. 4���� A c�;• 1, i4r Published Orang_ oast Daily Pilot RECEIVED 1is4h AU6 U t'.' W5 CITY OF HONTINGTON BEACH By: Alicia M. Wentworth C. ty Clerk RFne�c��Ex�' t4ntbired 10 Publish Advertisements 01411 kinds tntlud+ng pubtK . n:;ices by Decree of the Superlor court of Ofange County. California, Number A•6214. dalad 29 September, l961, and . A•24631. dated 1 t June. 1963 STATE OF CALIFORNIA County of Orange .VbkC Maine Aa-Ort"-"e'a•arie to 9K4 e064 im wet" 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 Orange Coast DAILY PILOT, with which is combined the NEWS -PRESS, a newspaper of general circulation. printed and published in the City of Costa Mesa, County of Orange. State of California, and that a Notice of JOINT PUBLIC HEARING • of which Copy attached hereto is a true and complete copy. was printed and published in the Costa Mesa, Newport Beach, Huntington Beach, Fountain Valley, Irvine, t'te South Coast communities and Laguna Beach Issues of said newspaper for - sIwo ccnsecutive weeks to wit the Issue(s) of October 6 198 6 October 13 198 b 198 -• _ —, t98 , 198 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 3 198 6 t sta Mesa, California. - - -Signature PUBLIC 1110TU PiiIBLIC NOTICE IW]TiCE OF A JOINT PUIs- sration was Bled on May 6. M HEARIXG ay THE CIVV 1945, OUNCIL OF HUNT- Copies of Ina Amended INGTON IIEACH AND THE 01spos1110n and Develop- Kf:DEVELOPMENT AOEN- ment Agreement and the GY OF THE CfT1r OF HURT. Environmental Impact Re- f *GTOM BEACH ON THE port are on file for py,bl,c Aa1ENDEO 016"SIrm" i,ispecdon and copytrig for AND DEVELOPMENT the cost ofduplication atthe � AGREEMENT EETWEEN office or the City Clerk, City THE Prof VELOPMENT 0 Huntington Beach, 20oo AGENCY AND HUNT- ktain Street, Huntinglon IWITON PACIFICA 1, damp Leach. California. between tou9k Ise as "L"V OTON the hours of 5 00 A.hA_ and ►ACIFICA DEVELOPMENT 5.00 P.M., Monday thru 400111, day, exclusive of holidays. NOTICE IS HEREBY Interested persons may I16EN that the City Council submit written comments the City of Huntington aldressed to_ the City Clerk $stch and the Redevelop• o' the City of FluMrngton 1T+ant Agency of the City of 8each• Post Off ce Box Igo, 1i Jr tington Beach will hold a Huntington Reach, tali. in public heerinq e I OCIp. fcrnia 92648. orior to the K 20. 1986. at 7 P.M., In hour of 5:0o P-M- on Octo- the Council Chambers, City air 17, 1986. a11.2�00Mam5heel.Hun1- At the time and prate, lrw;tln Beach, California, 10 noted • above, al' persons 1 ccm ader and act upon the iwerested in the above mat. Ar-irndad Disposition and te•- may -appear and be Ot•velopment Agreement heard. berr^esnthe Redevelopment DatCITY OFNOctober bar I, i9 mtli Agency Of Ike City L. Hunt- inittin Beach and Hunt. BEACH.- By- Alicia M-1 in4 tom Pacifica Dwielop- wantvorllh, CH1i Clank "n- Group and sale of the published Orange. Coast' and pursuant thereto. The Daily Pilot October 6. 113,' Agreement provides for the 193b1. de�eiopment of a first rate - -•- • -� • a.. 33t i high adatity hotel, retail ornrnerc,al and office space LLwn, Main SuetH and public pla.a frith a pedeelrise Over- ,Fros!ing of Pacihc Coast iginraV. to the parr side de- Velupment, within the Main. Pier I1"evelopment Protect rei. Ci scnptions Of the Site, tap be found in the Agr at ment. The terms of the lease and sale Of FrOperty between the Agency and Huntington Pa- hca Development G.-mp [d'..Vf1CprnerI' a silt forth In the Agree- nt. Tt *proposed projects, Are vt•rod by a final . En- Orinientai impaCt Report, r. ttie - Mein -Pier Re profact Area tkh,Ch • frous of Prep PrIOOF OF PUBLICATION r.. 1 jrI NOTICE OF A JOINT PUBLIC HEARING BY THE CITY COUNCEL OF HUNTINGTON BEACH AND THE f� � REDEVELOPMENT AGENCY OF THE CrPT OF HUNTINGTON BEACH ON THE$#9 H-9£�BP3t�EE3t�T-- Esc.. BETWEEN THE REDEVELOPMENT AGENCY ANWi INGTON- NOTICE ES HEREB,Y GIYEv that the City Council of the City of Huntington Beach and the Redeveioprneni :agency of the City of Huntington Beach xM hold a joint public hearing cn-Attrsst- 9A ff5; at ':30 P.M., in the Council Cbambets, City Hall, 2000 Main Street, Huntington Beach, Cantor us, to consider and act upon the4Hspeait - �e1u. _De"Ioperent-Agreement between the Redevelopment Agency of the City of Huntington Beach andrF�+tirEe-Pae' fro-Eht r - �purscartt-tttereta.-The-Agr e`di nt provides for the development of a-300-r©a=-hatel,- 'e� �a� lauarv�'ep_L�ai-:stair-camia �loc�g�dain.5treet, redestan+retecun3-af-P`s,`r�re-6oaat-13!t tet-af specialty retail?Mcl'u' pier rehabilitaticn and possible pier expansion, within the Main -Pier L..�.� Redevelopment Project Area. Descriptions of the sites can be found In the Agrasmant- Lza,;� Tie terms of the lease.ar:d-3ae-of property between the Agency and-Hunt"lon - -244�ftea Development Grip are set forth in the-Aqreement.- U i �e . The prwosed projects are covered by a rinsi Environmental Impact Report fcr the Mains e— �Redeveicpment Project Ares for which a Notice of Preparation was filed on May , 1?85. L.{ L5L Copies of the and the Environmental Impact Report are on file fcr public Inspection and copying for the cast of duplication at the oft:ce of the City Clerk, City of Huntington Beach, 2000 ]Bain street, Huntington Beach, California, between the hours of 8:00 A.M. and 5:00 P.H., Monday thru Friday, exclusive of holidays Interested persons may submit written comments addressed to the City Cleric of the City of Huntington Beach, Post Office Box Igo, Huntington Beach, California 92648, prior to the hour of 5:00 P.M. on-Augwt-16,1g85— C� -V-. 1 ) 14 8d At the time and place noted above, all persons interested In the above matter may appear and be heard. , Orange Coast Daily Pilot RECEIVED HUU U M5 RFr M, OPMENT CITY OF HUNTINGTON BEACH By: Alicia M. Wentworth City Clerk �. - .. •tom.. � �� -Autlr rued to PubriSh AdverliSemenlS Of asp limos 11ud+n9 public t,olicef I2y Decree of the Superior Court of Orange County. Galdornra. Number A-6214. dared 29 September. 1951• and . /•-24831, dated 11 June. 1963 ,c TATE OF CALIFORNIA County of Orange .iraii� raiA Ad.ertwV towed sy ew anksioi rf is to in 1' par" wie 10 P" Cob.~ weft 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 Orange Coast DAILY PILOT, with which is combined the MEWS -PRESS, a newspaper of general circulation, printed and published in the City of Costa Mesa. County of Orange. State of California, and that a Notice of JOINT PUBLIC HEARING of which copy attached hereto is a true and complete copy. was printed and published in the Costa Mesa, Newport Beach. Huntington Beach, Fountain Valley, lrrine, the South Coast communities and Laguna Brach issues of said newspaper for TWO consecutive weeks to wit the issue(s) of October 6 , 198 6 October 13 - -- _ , 198 , 198 , 198 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on October 13 198 6 tiCio,pa Mesa, Calif mia. . Sigrtiature PUBLIC MOTICE i PTP II, TICE OF A JOINT PUB- !C HEARING BY THE CITY , G COUNCIL OF HURT- INGTON BEACH AND TME, MOEYELCPKENT ApqMr, 1Q Y OF THE CITY OF Hip NGTON BEACH ON THE: n EASE BLTMIELM THE E•' J f '• G - )EVELOPMEI�'T AGENCYL l-[li G, rw0 PtER81bE DEVELOP.' RENT LltilrTED NOTICE 1$ HERE8 ,IVEN that the City Count+ if the City of Huntingloni leach and the Rirdeveiop- lent Agency of she City of iurt,ng'on Beach will hoid a ),nt public heR^rig on Oclo- Y - er 20, 1986. at 7.30 P-M . in lle Council Chambers. City tall 20.^_OSt3inStrnet.Hunt. 5 /� rg-in Beach. California. 10 ors,der and act upon the "✓7 eaIe between the Re- developmeni Agency Of the X14 Ot HunGnglon Beach' e-)C. P-er Side Development 'L miled The Lease provides j J �vr the development of a /ir,wixty wail Commercial P.?rler including pier re-. �`l tiihtafron and poss.ble e*pans-on, wthin thean-Pier Redevelopment l 'O ml Are-- Descriptions the siles can be found In 11r.onerty e Lease The terms of the lease of between the Agen- CI and Pier Side Develop. menl Limited are set forth in the Lease. iThe proposed projects are ve•ed by a final En-. onmenlal Impact Report for the Main -Pier Re - di ve opment Project Area rrwh,Ch a Notice of Prep - Ikon was tiled on May 6, }1985 i Upies of the Lease and �^ hiv- £nvfronm.nfal impact �iporl are on file for put.l+c ni peCtion and cop Ling for. he cost o1 duplicahcn at the 11li6e Of the City Clerk. City' d H,intington Beac-t. 2000 ! .Amn Street. Huntington teach, Caidernia. bel*een l-i- P 3urs of 8 01 A M. and llrrrree CO P M . Monday thru Fri- 3r. exclusive Of holidays interested persors may udtfrh 1 wr Iten comments •tressed to the City Clerk tl the City of Hurhngtorl Eelc" Post Crtice Bax 193. Lunt rigion Beach, Cali - for Ira 92648, prior to the hoi+r of 5 00 P M. On OctJ- opt 17. 1486 ;.1 the lime and place i 3ted above, 04 rersons ti rested in the above mat- 1i86 r ray aprear a -id be' La'ed October 1. 1986 CITY OF HUNT*#GTON EkCH By: Allele M.' •'Ilworth• City ClerkPuut-Autd Orange COaLt „y Pilot Ocrot,er 6. U. -- ----�-,. M332 PROOF OF PUBLICATION jc)- 13 - "Anu4e-��ea� �I lQ-j �� -P.Pz, M.onnouU To R'?rb 0 gx 0-0 Co�, u-q.3 d- cbptl.)? A��k -",� 1) 1 �d , —�� ),s I "i-C, 01 0 1 let 7 C, f;p-P ru O-03 W , +K ,/4 oci, -�a col co"W, 41D"„s " • " rag 7 - Council Min.:; is a 101'13!ss The City Clerk announced that all legal requirements for notification, publi- cation and posting had been met, and that she had received no communications or written protests to the matter. The Mayor declared the hearing open. A motion was made by MacAllister, seconded by Kelly, to continue the public hearing to October 20, 1986 to consider the appeal filed by Councilman John Thomas to the Planning Commission's denial of Zone Change 85-4, Use Permit 86-7, Zone Change 86-4 pertaining to Angus Petroleum Corporation. The oration carried by the following roll call vote: AYES Ully, MacAllister, Finley, Mandic, Bailey, Green NOESS None ABSENTS Thomas PUBLIC HIAMC - APPEAL FILED BY WMINGTON BEACH TOMORROW TO PLLHNIHG CO* - The Mayor announced thst this was the day and hour set for a public bearing to consider an appeal filed by Huntington Beach Tomorrow to the approval by the FlannlaS Commission of Conditional Use Permit 86-43/Coastal Development Permit 06-27, a request by the Huntington Pacifica Development Corporation and Bryant L. !orris DDsrelopaent in conjunction with the Huntington Beach Redevelopment Agency to permit the followings Development of an 87,500 t square foot spe- cialty commercial cantar, related support facilities and 696+ space parking structure on the ocean side of Pacific Coast Highway between Main Street and Lake Street, Downtown Specific Plan, District 10. Said development will Z n— asally be located within the existing parking lot ,just south of the pier. The proposed project is within an appealable area of the Coastal Zone. The proposed project is covered by previously approved Environmental Impact Uport 62-2 and Main -Pier Redevelopment Project Area focused Invironumtal Impact Report (July, 1982) The City Cleric annm=sd that all legal requirements for notification, publi- cation sad postins had been met, and that she had received no coewmicationa or writtau protests to the matter. John Cahill, Project Architect, reviewed the project, particularly pedestrian circulation, elovstions and building heights. Discussion was hold regarding parking and building heights as it relates to Iselfic Gast Highway. ff " Adams, friacipal Redevelopment Planners reviewed the 24 issues rtfarred to is the letter from the appellant, Huntington Beach T arrow, dated September 26, 1986. RKr. Adams referred to tba staff report dated October 131 1986 and rep aded the Alternative Action on the last page as followst Approve Conditional We iermit No. W43 and Coastal Development Permit Has 86-27 lased on lindlags sad, conditions as approved by the Planning Comaission at their Septeiber It. .1.13 ' Page-3 - Council Minutes - 1W3/86 1985 meeting and amended to include a provision Which will require that fol- lowing the various departmental and other reviews the Redevelopment Agency will have final review and approve on the additional submittals outlined in: Condition No. 1 (a)-(m) - Significant Modifications to the site plan. Condition No. 7 - Roof top mechanical equipment plan. Condition No. 9 - (Vier Scape Concerns) List of proposed uses within village and review of minor modification to plan. Condition No. 11 - Onsite circulation modification plans. Condition No. 12 - Traffic Impact Analysis Report. Condition ho. 13 — Parking Management Plan. Condition No. 24 - Covenants, Conditions and Restrictions for the village. Condition No. 25 - Onsite areas Maiutenance•Agreement with City. Condition No. 26 - Public areas Maintenance Agreement with City. Condition No. 41 - Beach Division Headquarters relocation plan. The Mayor declared the hearing open. Geri Orte a Chairman of Huntington Beach Tomorrow, Dr. Victor Leipzig, Lance Ja�cot, Charles Ellik, Norma Vander Molen esent re rin the Community Services Commission, Jerr Warren, Mar Rosczy , Irene B�riCoEy Bersc , Chaunce =exaa3er, Heuzy Bohrman, James Lane, Dean Albrri t member of Environmental Board, Abd Memon, President of the Downtown Merchants-M-ild, am nni, Ted �! �Kllxen_, Ur. UOnaln 5n2 le , Uals Lyons, vorotn ,, Lorraine Faber spoke n opposition —to the Piers e e. Susan _ Newman, __ Vice -President of __Huntington_ _Beach To&ether, Natalie Kotsch, Larry Washa, President of Chamber of Commerce, James Johnson, Elaine Craft, Carole Ana Wall, Kirk Kirkland of Huntington $eac Fountain_ Valley Board of Realtors presented an informal petition to the Mayor with approximately 400 signatures and approximately 140 letters in support of Pierside Village, Bill Holman, Barrx Bussiere, Ron Shenkmaa Vice -Chairman of Huntington Beach To e- t er, Stan Sabin, M&EX Aileen Mat eis, Matt Messier, David C. Smith, Ralph Bauer, Daniel Bathurst, Stanford Tharp, Ann Chlebicki, Lila Howell, AS Si%omaker, Bobmayor, KayMacLeod, member of Citizens Advisory Board on Pier - side Village, Robert Missmaan spoke in support of the Pierside Village. Thomas Pratte, representing The Surfrider Foundation, requested that Condition No. l(i) in the report be amended to require a 50 foot setback from the mean tideline. David Perry stated that he has often walked dowra to the pier with his wife and children and has always felt safe. There being no one present to speak further on the matter and there being no further protests filed, either oral or written, the hearing was closed by the Mayor. Recess - Reconvene 'The Mayor called a recess of Council at 11:15 P.M. The meeting was reconvened fat 11:20 P.M. r'cUr 4 - Council Minutes - i0113186 Following discussion, a motion was made by MacAllister, seconded by Kelly, to approve Conditional Use Permit No. 86-43 and Coastal. Development Permit No. 86-27 based on findings and conditions as approved by the Planning Commission at their September 16, 1986 meeting and amended to include a provision which will require that following the various departmental and other reviews the Redevelopment Agency will have final review and approval on the additional submittals outlined in: Condition No. 1 W-W - Significant Modifications to the site plan. Condition No. 7 - Roof top mechanical equipment plan. Condition No. 9 - (View Scape Concerns) List of proposed uses within village and review of minor modification to plan. Condition No. 11 - Onsite circulation modification plans. Condition No. 12 - Traffic Impact Analysis Report. Condition No. 13 - Parking Management Plan. Coudition,No. 24 - Covenants, Conditions and Restrictions for the village. Condition No. 25 - Onsite areas Maintenance Agreement with City. Condition No. 26 - Public areas Maintenance Agreement with City. Condition No. 41 - Beach Division Headquarters relocation plan. Following discussion, a motion was made by Mandic, seconded by Bailey, to amend Condition 43 to add the words "Following various departmental and other reviews the Redevelopment Agency will have final review and approval." The motion carried by the following straw vote: AYES: Finley, Mandic, Bailey, Green, Thomas FOES: Kelly, MacAllister ABSLNT: None It ,was the consensus of Council to modify Conditions 4, 5 and 6 by adding the words "Following the various departmental and other reviews the Redevelopment Agency will have final review and approval." The motion made by MacAllister, seconded by Kelly, to approve Conditional Use permit No. 86-43 and Coastal Development Permit No. 86-27 based on findings and conditions as follows: Findings_ for Approval: (COASTAL DEVELOPMF-%T PMMIT NO. 86-27) 1. The proposed "Pierside village" is consistent with the city's Coastal Zone suffix and the visitor -serving commercial standards, as well as other provisions of the Huntington Beach Ordinance Code applicable to the property; it conforms with the plans, policies, requirements and stan- dards of the city's Coastal Land Use Plan. 2. The proposed development conforms with the public access and public recreation policies of Chapter 3 of the California Coastal Act. 3. The proposed development can be provided with infrastructure in a manner that is consistent with the Coastal Land Use Plan. Underground sewer and water utilities are existing in the area and are ,sufficient to handle the: proposed development. Page S - Council Minutes�%+10/13/86 Finds $ng for.Ap rovalse (CONDITIONAL USE PU MIT NO. 86-43) 1. The proposed development of a specialty retail village will have a bene- ficial effect upon the general health welfare, safety, and convenience of persons residing or working in the area due to the type, variety, and quality of the activities proposed, and will contribute to an Increase in the value of the property and improvements in the neighborhood. 2. The proposed "Pierside Village" is designed to be in conformance with the city's adopted General Plan (including the state certified Coastal Ele- ment), the Downtown Specific Plan, and the Downtown Design Guidelines. 3. The proposed "Pierside Village" is compatible with existing or other pro- posed or anticipated uses in the area. The project will directly connect with other developments on the inland side of Pacific Coast Highway and will be responsible for the rehabilitation and/or relocation of existing structures in the project area. 4. The proposed location, site layout, and design will properly adapt the proposed structures to streets, driveways, and other adjacent structures to streets, driveways, and other adjacent structures and uses in a har- monious manner. 5. The proposed combination and relationship of uses to one another on the site are properly integrated. The proposed project will provide a greater number and variety of people an opportunity to enjoy the city beach and pier area and related ocean activities. 6. The proposed access to and parking for the "Pierside Village" will increase traffic and circulation concerns; however, controlling vehicular access to the project, separating vehicular and pedestrian access, and relocating traffic signals along Pacific Coast Highway will improve the current circulation system. Conditions of Approval: 1. The site and section plans dated September 11, 1986, and augmented site plan sheet 2, dated September 12, 1986, shall be modified to include the changes outlined below. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval on the submittals. (a) All habitable building areas shall be limited to two stories. Exceptions to this will only be permitted as part of an Interior loft or mezzanine Which is mostly open to the shop below. In no case may habit- able building area exceed 25' in height or two stories above the eleva- tion of the pier. (b) Building heights shall be limited south of the centerline of Lake Street. No structure may be higher than the elevation of Pacific Coast Highway. (c) The freestanding concession stand as proposed on the beach in front of the major access point to the village shall be relocated to back within the village. The shop shall have direct access on to the beach access road and serve the convenience of the beach user. €' • Page 6 - Council Minutes - 10/:.3/86 (d) Improvements on the north side of the pier shall provide a number of public amenities such as a major beach access way adjacent to the parking structure. The detail design of this proposal shall be subject to review and approval by the Design Review Board in conjunction with the depart- ments of Development Services, Community Services, and Public Works. (e) The light wells adjacent to Maxwells balcony shall be increased in size to provide additional natural light penetration under the pier. Other light penetrations or alternative methods of illumination including the alternate decking designs shall be required to achieve an adequate level of comfort and security for the area under the pier. (f) The project shall include a pedestrian overcrossing of Pacific Coast Highway linking the Pierside Village with the inland side of Pacific Coast Highway. The design shall be compatible with the Village and the Downtown Design Guidelines. This structure shall be constructed concur- rent with the "Pierside Village.' (g) The parking control mechanisms depicted on the plans shall be relo- cated to a location within the parking structure. The accessway to the control stations should provide for a minimum stacking area to accommo- date 24 cars. (h) The plans shall identify public restroom locations in sufficient quantities and areas to adequately accommodate the village patrons. (i) No structures shall be developed oceanward of the mean high tide line established on the north side of the pier (405' south of the Pacific Coast Highway right-of-way). (j) The project shall be approved in two phases. The first phase is proposed for the south side of the pier on the area controlled by the city of Huntington Beach. The second phase is proposed for the north side of the pier. The city is presently negotiating with the state for control of that portion of Bolsa Chica State Beach. A plan shall be sub- mitted which indicates the phasing an3 associated development with each phase. This entitlement application shall be limited to the proposal for Phase I. (k) The ferris wheel shown on the plot plan shall be removed. (1) Retail square footage on the new pier decking shall be 90% devoted to major sit down restaurants of unique and high quality, subject to definition in the operator's lease agreement. (m) Parking layout shall include bicycle parking facilities in suffi- cient quantities to accommodate village patrons. 2. Floor plans and elevations for each commercial suite and restaurant shall be prepared and submitted to the director of Development Services for review and approval prior to issuance of any building permits. All structures onsite shall reflect a compatible architectural theme which is consistent with the city's Downtown Design Guidelines. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. • Page 7 - Council MinutesQ10/13/86 3. A detailed materials pallet shall be prepared depicting all proposed exterior materials and colors and submitted to the Design Review Board for recommendation and approval. Following the various departmental and other reviews the Redevelopment Agency will have final review and appro- val. 4. A planned sign program for the entire village shall be prepared pursuant to the Downtown Design Guidelines and submitted to the Design Review Board for review and approval prior tc the issuance of any sign permits. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval., S. The developer shall submit a plan which shall include the parking struc- ture and area under the pier, lighting, public plaza, and street furni- ture plan which is in compliance with.the Downtown Design Guidelines sub- ject to review and approval of the Design Review Board. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 6. A detailed landscape and irrigation plan shall be submitted to the city and approved by the Department of Development Services and the Department of Public Forks prior to the issuance of building permits. Such a plan shall include all the landscaped areas and lighting within the public parking lot, medians, and the walkway system around the project perimeter and connection to the pier. The association shall maintain all land- scaped areas within the project. All existing palm trees onaite shall remain within the project, however, they may be relocated from their pre- sent location. Perimeter landscaping, with a minimum of ten feet in width, shall be provided along the parkway area, adjacent to P.C.H. Fol- lowing the various departmental and other reviews the Redevelopment Agency will have final review and approval. 7. A roof top mechanical equipment plan shall be submitted to the Department of Development Services, which indicates screening of all equipment and delineates the type of material proposed prior to the issuance of Build- ing permits. Such projected equipment shall not exceed the maximum heights depicted in the Building Code or Downtown Specific Plan. Follow- ing the various departmental and other reviews the Redevelopment Agency will have final review and approval. 8. A detailed soils analysis shall be prepared by a registered soils engi- neer. This analysis shall include onsite sampling and laboratory testing of materials to provide detailed recommendations regarding grading, chem- ical and fuel properties, foundations, retaining walls, streets and util- ities, etc. 9. The developer shall submit a list of all proposed uses within the village and their respective square footages to the Development Services Depart- ment for approval to determine compliance with all zoning codes and rede- velopment policies prior to the issuance of building permits. Any expan- sion or major change of uses, or increase in intensity of uses, will be subject to an additional Conditional Use Permit. Minor modifications not proposing expansion shall also be submitted to Development Services and Redevelopment Office for review and approval (e.g. exterior tenant modi- fications, public plaza configuration, structure layout, etc.). Follow- ing the various departmental and other reviews the Redevelopment Agency will have final review and approval. 8 - Cc:unc:,_l MiL ute., - i0f `.�,', 6 10. All parking space design and size shall be in conformance with the Hunt- ington Beach Ordinance Code. 11. Onsite circulation shall be revised in accordance with Public Works Department requirements. Specifically, the control system at the Lake Street entrance to the parking garage needs to be moved into the garage to allow stacking distance for 12 vehicles without overflow onto Pacific Coast Highway. No addition or deletion of vehicular access points shall be made without approval of the Public Works Department. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 12. The developer shall verify the staff's traffic impact analysis for the proposed development to confirm that the traffic projections fall within the parameters of those analyzed in E.I.R. 82-2. This report shall be completed prior to the issuance of building permits and should include an analysis of the traffic impacts at various times of the day and year. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 13. The developer shall prepare a parking management and control plan for review by the Development Services Department, Public Works Department, Community Services Department and all other effected departments prior to the issuance of any building permits. This plan should address valet services, shuttle programs, and methods of controlling vehicular ingress and egress. In addition the plan shall identify mitigation methods for the Phase I parking shortfall (e.g. reciprocal and joint use parking, remote parking and shuttle, limiting the issuance of certificate of occu- pancy to the extent that parking is made available). Following the vari- ous departmental and other reviews the Redevelopment Agency will have final review and approval. 14. The project will be responsible for construction of the new decking areas adjacent to the city pier and the reconstruction of the existing pier within the project areas. This effort should be coordinated with the Department of Public Works and other city departments. 15. A review of the use shall be conducted within one year of the issuance of the first Certificate of Occupancy to verify compliance with all condi- tions of approval and applicable Articles of the Huntington Beach Ordi- nance Code. If, at that time, there is a violation of these conditions no additional Certificates of Occupancy will be issued until the viola- tion is corrected. 16. Offsite improvements (e.g. streets, sidewalks, gutters, etc.) shall be constructed in accordance with Public Works Department standards and/or Caltrans standards. All sidewalks on Pacific Coast Highway shall be a minimum of 8 feet. 17. No parking shall be allowed adjacent to the project on Pacific Coast Highway. The removal of these 14 parking spaces shall be offset by an equal number of spaces in the project. During construction of the pro- ject, the developer, in conjunction with the city, shall provide a number of parking spaces within a reasonable distance to accommodate beach and pier access. Page 9 - Council Minute► 10/13/86 18. Sewer, water and fire flow, and drainage improvements shall be con- structed in accordance with Public Works Department standards. The applicant shall submit to the Department of Public Works a water network and distribution analysis prior to issuance of grading permits. All necessary improvements as determined by the analysis shall be constructed. 19, The project shall be responsible for the construction of full median improvements on Pacific Coast Highway adjacent to the site in accordance with Public Works Department and Caltrans' standards. 20. Energy efficient lighting, such as high pressure sodium vapor lamps, shall be used in parking lots to prevent spillage onto adjacent areas and for energy conservation. 21. All approved drives designated as fire lanes shall be signed as such to the approval of the Huntington Beach Fire Department. All fire apparatus access roadways shall be designated no parking. 22. A fire sprinkler system shall be designed and installed in those struc- tures deemed necessary by the Huntington Beach Fire Department. An auto- matic system shall be required on all parking levels and pedestrian ways. 23. Entry gates or other control devices for the parking structure proposed at the entrance shall be reviewed and approved by the Development Ser- vices Department, Public Works Department, Fire Department, Police Department, and all other appropriate departments. 24. The Covenants, Conditions, and Restrictions shall be subject" to review and approval by the City Attorney's office and contain a provision that will prohibit storage of vehicles, trailers, and other materials on site, unless an area that is specifically designated for such storage is pro- vided for in the project. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 25. The developer, Agency, and the city shall enter into a maintenance agree- ment for the public parking area, municipal pier, and all landscaping. The perimeter walkway, lighting, etc., shall be maintained by the pro- ject's association. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. 26. The developer, Agency, and the city shall execute a landscape maintenance agreement requiring the developer to maintain all landscaping on site, including setbacks, public right of ways, and along the street front- ages. Following the various departmental and other reviews the Redevel- opment Agency will have final. review and approval. 27. All fire access roads are to be a minimum 24 feet. 28. All canopies or roof structures over roadways are to provide a minimum overhead clearance of 13 feet 6 inches in height from the road area to the lowest point of the canopy within the 24 foot road clearance. 29. All corner turns of fire lanes are to be a minimum of 17 feet inside and 45 feet outside radius. 'Page 10 - Cnuncil Minot_-i - 10/i3!J5 • 30. The beach access roadway on the south must be a minimum 24 feet and must loop with the beach access road on the north side of the pier. This roadway must also be a minimum 24 feet. The overhead clearance under the pier must be a minimum 13 foot 6 inches in height. The roadway must be designed to facilitate beach service vehicles, bicycles, and pedestrian access, subject to city review and approval. 31, The roadway and access ways designated as fire lanes on the pier and over the subterranean parking area are to be reinforced to sustain the weight of fire apparatus. 32. Another stairway shall be located on the north side of the pier, subject to review and approval of the Fire Department and Development Services Department. 33. Fire hydrants shall be installed on fire access roadways and the pier to provide fire apparatus with.an access travel distance of 150 feet or less from all structures. 34. An automatic supervised fire alarm system shall be installed to provide the following: (a) Audible alarm. (b) Water flow signal. (c) Valve tamper signal. (d) Trouble signal. (e) Manual pull station. (f) Graphically displayed in strategic location(s). 35. An engineering geologist shall be engaged to submit a report indicating the ground surface acceleration from earth movement for the subject pro- perty. All structures within this development shall be constructed in compliance with the G-factors as indicated by the geologist's report. Calculations for fittings and structural members to withstand anticipated G-factors, shall be submitted to the city for review prior to the issu- ance of building permits. 36. A plan for silt control for all storm runoff from the property during construction and during initial operation of the facilities shall be sub- mitted to the Department of Public Works for review. 37. The developer shall provide the city with a detailed description of the project's proposed security systems for review and approval by all affected departments. 38. Natural gas shall be stubbed in at the locations of cooking facilities, water heaters, and central heating units. This` requirement may be waived provided that the applicant will install a more energy efficient alterna- tive subject to the review and approval of the Development Services Department. 39. All building spoils, such as unused lumber, wire, pipe, and other surplus or unusable materials, shall be disposed of at an offsite facility equip- ped to handle them. r� A.A. • 'Page 11 - Council Minute 10/13186 • 40. During construction, the developer shall make adequate provisions for continued pier access. The construction of the super structure of the proposed expanded deck areas on the pier shall be limited to the non -sum- mer months. i 41. The project shall be responsible for the removal and relocation of the Beach Division Headquarters and Junior Lifeguard facilities. Following the various departmental and other reviews the Redevelopment Agency will have final review and approval. The motion carried by the following roll call vote: AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: None ABSENT: None Recess - Reconvene The Mayor called a recess of Council at 11:55 P.M. The meeting was reconvened at 12:05 P.M. Mayor Mandic requested a reconsideration of the motion to approve the Pierside Village as he wanted to modify Condition No. 1(i) to require a 50' setback from the mean tide line as requested by Thomas Pratte, representing the Surf- riders Foundation, during the public testimony portion of the public hearing. A motion was made by Mandic, seconded by Green, to reconsider the motion made by MacAllister, seconded by Kelly, to approve Conditional Use Permit No. 86-43 and Coastal Development Permit No. 86-27. The motion to reconsider carried by the following roll call vote: AYES: Finley, Mandic, Bailey, Green NOES: Kelly, MacAllister, Thomas ABSENT: None Following discussion, a motion was made by Mandic, seconded by Green, to mod- ify Condition 1(i) by changing the words "...on the north side of the pier (4051 south of the Pacific Coast Highway right -of -gray...)" to read "...on the north side of the pier (355' south of the Pacific Coast Highway right-of- way...)". The motion failed by the following roll call straw vote: AYES: Finley, Mandic, Green NOES: Kelly, MacAllister, Bailey, Thomas ABSENTS None The motion originally made by MacAllister, seconded by Kelly, to approve Cond- itional Use Permit No. 86-43 and Coastal Development Permit No. 86-27 based on findings and conditions as approved by the Planning Commission at their September 269 1986 meeting and further modified by Council carried by the fol- lowing roll call vote: AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: None ABSD?T: None -Pe,e 12 -- Council Minu: eLi-1— INI;;'i6 11 r PC DENIAL OF ZONE 86-34 - CONTINUED TO 10/20/86 -- The Mayor announced that this was the day and hour set for a public hearing to consider an appeal filed by Jerome Bame, Attorney at Law, on behalf of Spe- cialists Enterprises, to the denial by the Planning Commission of a request to change the zone designation from R5 (Office Professioaal)to R3 (Medium High Density Residential) which would permit a total of 13 units on two sites located at the southeast corner of Cameron Street Street and Newman Avenue - (17712 and 17762 Cameron Street) Negative Declaration #86-34 assessing the environmental effects of the zone change gill also be considered by Council. The City Clerk announced that all legal requirements for notification, publi- cation and posting had been met, and that she had received a communication from Jerome Bame dated October 2, 1986 requesting a continuance of said appeal to October 20, 1986.# The Mayor declared the hearing open. A motion was made by MacAllister, seconded by Kelly, to continue the public hearing to consider an appeal filed by Jerome Bame, attorney at law, on behalf of Specialists Enterprises, to the denial by the Planning Commission of Zone Change 86-20 and Negative Declaration 86-34 to October 20, 1986. The motion carried by the following roll call vote: AYES: Kelly, MacAllister, Finley, Mandic, Bailey, Green, Thomas NOES: None ABSL47: None PUBLIC HEARING - ZONE CHANCE 86-22/NEGATIVE DErIARATION 86-39 - APPROVED ORD NO 2877 - INTRODUCTION APPROVED - N HEIL/S/ALHAMBEA/BTWN SILVWBFACH BLVD The Mayor announced that this was the day and hour set for a public hearing to consider a change of zone initiated by the City of Huntington Beach on pro- perty located north of Heil Avenue, south of Alhambra Drive, between Silver Lane and Beach Boulevard from R2 (Medium Density Residential) permitting one unit per 2,000 square feet of lot area) to U-15 (permitting fifteen units per gross acre). This zone change Is being processed as a result of the widening of Heil Avenue which has taken twenty-five feet from the rear of many of these lots. The intent is to increase the density such that the identical number of units are permitted to be constructed as would have been prior to the addi- tional dedication for Heil Avenue. The City Council will also consider Nega- tive Declaration No. 86-39 which assesses the environmental effects of the request. The City Clerk announced that all legal requirements for notification, publi- cation and posting had been met, and that she had received no communications or written protests to the matter. The Director of Development Services presented a staff report. The Mayor declared the hearing open. Ed Whittin stated that the property would be too small to build a triplex on when Heil Avenue is widened in the future. • � �� �•� CA 86-24 CITY OF HUNTINGTON BEACH COUNCIL - ADMINISTRATOR COMMUNICATION HUNTINGICri RACH To Honorable Mayor and From Charles W. Thompson, City Council Members City Administrator Subject MAIN -PIER PHASE I - HUNTINGTON PACIFICA DEVELOPMENT GROUP STATUS REPORT Date March 21, 1986 y �kil * 3l}�1�� Since your action of February 18, to approve the First Implementation Agreement, staff has been working with the developer (Huntington Pacifica Development Group) to achieve the benchmarks provided for in that document (Exhibit 1). Paragon IIotels and Bryant L. Morris Development have been proposed as the developers/operators of the hotel and pier side portions of the project respectively. Under the First Implementation Agreement, it is appropriate for the Agency to make a determination as to the acceptability of these developers at an early date. Attached to this memorandum, you will find background information that has been forwarded to us relative to Paragon IIotels which we have included for your information. Additionally, you will find background information on Bryant L. Morris Development. Staff will be prepared to review the current status of Main -Pier Phase I with you at your March 24 meeting. Respec omitted, les IV. Thompson, City Administrator C%VT/DLD:1p Attachments: First Implementation Agreement Background Letters of Information Hotel Information Pier Side Village Information 2202h 'UP FIRST IMPLEMENTATION AGREEMENT EXHIBIT 1 RESTATED FIRST IMPLEMENTATION AGREEMENT THIS RESTATED FIRST IMPLEMENTATION AGREEMENT is entered into this day of February, 1986 by and between the HUNTINGTON BBEACH REDEVELOPMENT AGENCY ("Agency") AND HUNTINGTON PACIFICA DEVELOPMENT GROUP ("Developer") implementing that certain DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") by and between the parties hereto dated August , 1985. RECITALS A. Developer has advised Agency that it is unable to perform its obligations under the provisions of the DDA and has requested certain modifications and amendments thereto. B. Agency believes that the DDA is fair and reasonable and therefore should be strictly enforced; however subject to the completion of an updated market feasibility study and timely performance of Developer's obligations under this First Implementation Agreement, Agency may consider Developer's requested modification to the DDA. C. Developer acknowledges that Agency has the right to terminate the DDA but desires that the Agency not do so until Developer has had an opportunity to provide Agency with evidence supporting its requested modifications. Now, Therefore, the parties agree as follows: AGREEMENT 1. Developer shall complete an update of the original market feasibility study for the proposed hotel in accordance with the scope and quality described in the DDA on or before March 1, 1986. 2. Developer shall provide Agency with a letter of intent from a hotel operator and a hotel developer indicating their respective willingness to operate and develop the hotel, on or before March 1, 1986. The Agency shall indicate its acceptance or rejection of the hotel operator and/or developer within 30 days after submittal by Developer. �.J 3. Developer shall enter into an Agreement with another developer, acceptable to the Agency, which developer will proceed with the development of "Pier Side Village' with a project of the scope and quality, and as an integral part of the total development, as envisioned by the Scope of Development in the DDA on or before March 1, 1986. 4. Following fulfillment of the obligations described hereinabove the Agency will consider certain of the requested modifications to the DDA, including the possibility of permitting the Pier Side development to proceed prior to the hotel/retail development subject to appropriate conditions, acceptable to the Agency, to be determined by March 15, 1986, to insure complete development of the Hotel. 5. Entitlement plans for the Motel/Retail Pier -Side shall be filed by Developer in a completed form pursuant to the requirements of the City of Huntington Beach, Development Services Department on or before May 1, 1986. 6. Time is of the essence herein. Failure of Developer to perform hereunder shall be considered a default under the DDA and shall entitle Agency to terminate the DDA in accordance with section 612 thereof. This Agreement does not constitute a novation of the DDA. 7. As long as the Developer timely completes its obligations hereunder Agency agrees not to terminate the DDA pursuant to the terms thereof. 8. The Devleoper warrants, agrees and acknowledges that the execution of this Agreement by the Agency shall not constitute a waiver, release or excuse from requirements of the DDA, and the Developer shall make no contention that it constitutes a waiver release, or excuse in any proceedings related to the DDA. The Agency shall be entitled to specific enforcement of this paragraph 8, and the Developer shall be estopped to deny the enforceability of this Section 8. 9. Notwithstanding anything herein to the contrary, the DDA shall remain in full force and effect in accordance with its terms unless subsequently amended by the parties thereto and Developer shall be obligated to commence construction on or before the time set forth in Attachment No. 5 of the DDA or as otherwise amended. 02-10-86 0985k/2460/00 -2- IN WITNESS WHEREOF, the Agency, the City, and the Developer have signed this Agreement on the respective dates set forth below. , 19 ATTEST: Agency Secretary 19 ATTEST: rZL z City Clerk APPROVED AS TO FORM: Agency Special Counsel HUNTINGTON BEACH REDEVELOPMENT AGENCY gy Chairman CITY OF HUNTINGTON BEACH II Mayor ITIATED AND APPROVED AS TO CONTENT FA Depu y City Admi� :strator/ Redevelopment 11 02-10-86 0985k/2460/00 -3- REVIEWED AND APPROVED APPROVED: AS TO FORM: City Attorney City Administrator7ExecutiVe Director Agency Attorney HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, PACIFIC HERITAGE CORPORATION, a California Corporation Its: By: Its: AVIV DEVELOPMENT CORPORATION, a Cal By: By: Its: 02-10-B5 0985k/2460/00 -4- L1 BACKGROUND LETTERS City ot Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF TH4 CITY ADMINISTRATOR March 7, 1986 Mr. Stanley Bloom Randall Foods 2905 East 50th Street Vernon, California 90058 Dear Stan, T`:ann vo : for the timely submittai under the First lmplementation Agreement of your updated letter from Laventhol ano Horwath, the letter from Mr. -Jim O Rhead, President of the Paragon Hotel group, and the letter from Bryant Morris and yourself to Doug La Belle, regarding the Pier Side Village portion of your project. To completely fulfill the provisions of the First Implementation Agreement, and to allow the Agency to make a final determination pursuant to the Agreement of the acceptability of your proposed hotel and Pier Side Village operators, I would request the following additional information: With respect to the Laventhol be Horwath letter (Attachment 1), please submit a copy of the engagement letter dated February 12, from yourselves to Laventhol & Horwath, as referenced in their February 13 letter to the Huntington Pacifica Development Group. In terms of the Paragon Hotel's letter (Attachment 2), there are several questions relative to the current status of their intent regarding the Pier Side project. The First Implementation Agreement provides that you will submit a Letter of Intent to us with regard to the individual who will be operating, as well as developing, the hotel. This is further provided for in the Disposition and Development Agreement. Their letter to you dated February 24, which you have transmitted to us, appears more preliminary in nature than we had requested. Our interpretation of their letter is one expressing a general interest rather than being a specific letter of intent. Further, there is no indication from you as to the acceptability of Paragon as part of the development team. Additional background information on Paragon Hotel's current operating status in terms of recent Annual Reports company history relating to the types of hotels constructed in terms of quality and quantity, and the current information of each of the hotels they operate is necessary. Our objective is to be able to complete our staff evaluation of the Paragon Hotel group in terms of their acceptability as a hotel developer/operator for 'Main -Pier Phase I, within the 30 day timeframe provided for in the First Implementation Agreement. To accomplish this, the above information is requested by no later than Wednesday, March 12. Telephone (7 I4) 536-5202 In terms of your communication to Doug --La BeUa.of my office regarding your arrangement wl%h Bryant L. Morris (Attachment 3), the specific partnership Agreement that details the project's scope and quality between yourselves and Bryant L. Morris is needed to satisfy the '`:larch 1 requirement of the First Implementation Agreement. We are prepared to continue our discussions regarding the various items to be resolved regarding the DDA, and I further am confident that all of the outstanding issues can be resolved to our mutual satisfaction. Between now and May 1, which is the deadline for planning entitlement submittal, our objective should be to resolve all outstanding issues with regard to the Disposition and Development Agreement, as well as complete a precise development plan in accordance with the objectives of yourself, the hotel developer/operator selected, the Pier Side Village developer/operator selected, and the Redevelopment Agency. Again, I would request the above additional information at your earliest possible convenience and as always your continuing cooperation and assistance is sincerely appreciated. Sincerely Charles IV. Thompson Citv _Administrator C WTala C Douglas N. La Belle. Deputy City Administrator lrlike Adams, Principal Redevelopment Planner Dick �clnwart.7, Huntington Pacifica Development Group Uri Gati, Huntington Pacifica Development Group Dick Harlow, Harlow & Associates 12 6h ATTACHMENT 1 :.W. N February 27, 1986 Mr. Doug LaBelle Redevelopment Director Huntington Beach City Hall 2000 Main Street Huntington Beach, Calif. 92648 Re: Huntington Pacifica Development Corporation - Bryant Morris, Huntington Beach Redevelopment Agency Dear Mr. LaBelle: You have requested that we supply a letter confirming that partnership arrangement exists between Huntington Pacifica Development Group and Mr. Bryant Morris with respect to the development of the so-called "Pierside Village" portion of Main -Pier Redevelopment Project. a the We are pleased to advise you that a partnership arrangement does exist between Huntington Pacifica Development Group and Mr. Morris with respect to the development and ultimate operation of the proposed "Pierside Village" project. Although ::ertain details of that partnership remain to be worked out between the parties, we are fully confident that this will occur and that the �ry partnership. will successfully complete., the project. T We trust that the foregoing satisfies your immediate needs for confirmation of the partnership arrangement. However, if we may be of further assistance to you, please do not hesitate to contact the undersigned. RECEIVED '"I"Ali 0 3 ftb Very truly yours, HUNTINGTON PACIFICA DEVELOPMENT GROUP By: Pacific Heritage Corporation, a California corporation, By: Stanley Blooln, President RFnnjrl O°MENT ry t Morris ATTACHMENT 2 Laventhol & Homath CertiW iutic Accountants �3�C�jy�D FEB 2 4 iboo pfnp�i4FMF� Huntington Pacifica Development Group 322 Main Street Huntington Beach, CA 92684 Gentlemen: Suite 1100 6U Anton Boulevard Costa Mesa. CA 92626 (714) 556.4244 February 13, 1986 In accordance with our engagement letter dated February 12, 1986 we have completed a limited overview of the Huntington Beach market area, as it pertains to your proposed 240-room, first- class beachfront hotel. Our original study was dated June 8, 1984. Our overview consisted of reviews of our original findings, the current competitive lodging market, and anticipated future additions to that market. Our research revealed the market area has performed as we projected in regards to occupancy and average rate. The only change revealed by our research was an anticipated future increase in the competitiveness of the first-class hotel market in the greater Huntington Beach area. The number of new hotels expected to enter the market in 1986 and in future years has increased over our original estimates. This increase is largely due to continued intense interest on the part of major hotel companies and real estate developers in the Long Beach and Newport Beach markets. The trend towards continued building in these markets is expected to make the operating climate more competitive in the coming years. Based on our brief overview, and the above considerations, -- --,we found no basis for . changing our _orig;.nal _recommendations _ relating to developing a 240-room hotel: A hotel of the quality and average room rate previously recommended, in our opinion, still appears to be the type of property best suited for this particular development. In regards to retail development proximate to the proposed hotelp we perceive that retail space serves to provide a conducive atmosphere for a hotel, but has not been shown to have a direct effect on a hotel's occupancy. Thus, regarding the current development, it may be worthwhile for the retail space to be completed before the hotel is.built. However, no measurable effect on hotel occupancy should be anticipated from the retail activity. In conclusion, our limited overview generally reaffirms our original market study which supported development of a 240-room first-class hotel. A member of Horwath & Horvnth Intemanonal with affiliated oFkes worldwide. Huntington Pacifica Development Group February 13, 1986 Page 2 Please contact us if you would like us to formally update the June, 1985 market study and financial projections. Very truly yours, LAVENTHOL & HORWATH Richard H. Carpe Partner 4avid Kinkade Manager RHC,IDK : pr s cc: Steve Runnke Bruce Eidelson I k"..) PARAGON H•0-T•E•L•S February 24, 1986 Mr. Dick Schwartz PACIFIC HERITAGE LAND AND HOLDING COMPANY 322 Main Street Huntington Beach, CA 92648 Re: Hotel Development - Huntington Beach Dear Dick, ATTACHMENT 3 RECEIVED FEB 24- WOO REOEYEIOPMENT I am sending you this letter as a re -affirmation of our strong desire to develop an approximately 300 room, full service, first quality hotel in the Huntington Beach re -development. We have labored some 1� years and expended considerable dollars during the interim period while you have attempted to assemble the land and negotiate the DDA with the city of Huntington Beach. Your efforts are rearing completion, thus enabling us to once again make plans to move ahead with our efforts. We have been frustrated and disappointed that the land assemblage has not been completed. This of course means that the hotel site is not yet really available. We were certainly encouraged by the city's willingness to condemn and take such other steps as are necessary to -enable the development to move forth.•-.-It•is essential this not not take an undue amount of time and throw us off the desired time schedule. For Paragon to continue with its efforts, which at this point is becoming very time consuming and expensive, we ::lust be assured of site control. The city with its condemnation rights and its own considerable land hold- ings must be willing at this point to step up and warrant a buildable pad or all of these efforts to date will have been frustrated and the development cannot move forward. Letter to Mr. Schwartz February 24, 1986 Page Two A I have reviewed your list of 15 items to be resolved regarding DDA matters and Ne agree very strongly that each of these items must be discussed and resolved with the city, however, we would caution you greatly against negotiating away item #6, the Tax Increment and Bed Tax. Inasmuch as this is a major incentive for the hotel to be developed, these previously agreed to benefits are necessary during the start-up phase of the hotel to, assure its success. Without them, a strong hotel program can not occur. The Tax Increment must remain in place for at least 5 years and then should be phased out over approximately a 3-year period of time. Having these benefits remain in place is critical to the planning, development, financing and ultimately the operational success of a hotel of the magnitude desired by the city. We are hopeful you will be successful in the continued negotiations with the city and in the continued assemblage of the land. If we can provide any additional information to you, please call us. Sincerely, ''` 0. Rhead President JOR: tk fXHIBiT t RESTATED _� FIRST IMPf%PMENTATION AGREEMENT THIS �TED FIRST IMPLEMENTATION AGREEMENT is entered into this ay of February, 1986 by and between the HUNTINGTON BEACH REDEVELOPMENT AGENCY ("Agency") AND HUNTINGTON PACIFICA DEVELOPMENT GROUP ("Developer") implementing that certain DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") by and between the parties hereto dated August , 1984. RECITALS A. Developer has advised Agency that it is unable to perform its obligations under the provisions of the DDA and has requested certain modifications and amendments thereto. B. Agency believes that the DDA is fair and reasonable and therefore should be strictly enforced; however subject to the completion of an updated market feasibility steady and timely performance of Developer's obligations under this First Implementation Agreement, Agency may consider Developer's requested modification to the DDA. C. Developer acknowledges that Agency has the right to terminate the DDA but desires that the Agency not do so until Developer has had an opportunity to provide Agency with evidence supporting its requested modifications. Now, Therefore, the parties agree as follows: AGREEMENT 1. Developer shall complete an update of the original crarket' feasibility study -for the proposed hotel in accordance with the scope and quality described in the DDA on or before March 1, 1986. 2. Developer shall provide Agency with a letter of intent from a hotel operator and a hotel developer indicating their respective willingness to operate and develop the hotel, on or before March 1, 1986. The Agency shall indicate its acceptance or rejection of the hotel operator and/or developer within 30 days after submittal by Developer. t..J �W1 3. Developer shall enter into an_.4greement with another developeracceptable to tie Agency, which developer will proceed with the development of "Pier Side village" with a project of the scope and quality, and as an integral part of the total development, as envisioned by the Scope of Development in the DDA on or befo4,e March 1, 1986. 4. Following fulfillment of the obligations described hereinabove the Agency will consider certain of the requested modifications to the DDA, including the possibility of permitting the Pier Side development to proceed prior to the hotel/retail development subject to appropriate conditions, acceptable to the Agency, to be determined by March 15, 1986, to insure complete development of the Hotel. 5. Entitlement plans for the Hotel/Retail Pier -Side shall be filed by Developer in a completed form pursuant.to the requirements of the City of Huntington Beach, Development Services Department on or before May 1, 1986. 6. Time is of the essence herein. Failure of Developer to perform hereunder shall be considered a default under the DDA and shall entitle Agency to terminate the DDA in accordance with section 612 thereof. This Agreement does not constitute a novation of the DDA. 7. As long as the Developer timely completes its obligations hereunder Agency agrees not to terminate the DDA pursuant to the terms thereof. 8. The Devleoper warrants, agrees and acknowledges that the execution of this Agreement by the Agency shall not constitute a waiver, release or excuse from requirements of the DDA, and the Developer shall make no contention that it constitutes a waiver release, or excuse in any proceedings related to the DDA. The Agency shall be entitled to specific enforcement of this paragraph 8, and the Developer shall be estopped to deny the enforceability of this Section B. - - +.ter •-'► ti. r. •ti.-.y •ti • - r w. -. •rr. t � • _. _. �.. • .a _ _ _ � _r i r aar 9. Notwithstanding anything herein to the contrary, the DDA shall remain in full force and effect in accordance with its terms unless subsequently amended by the parties thereto and Developer shall be obligated to commence construction on or before the time set forth in Attachment No. 5 of the DDA or as otherwise amended. ' 02-10-86 0985k/2460/00 -2- IN WITNESS WHEREOF, the Agency=, thia-wCity, and the Developer - have signed this AgreementA on the respective dates set forth below. 19R. ATTEST: Agency Secretary 19 ATTEST: City Clerk APPROVED AS TO FORM: Agency Special Counsel HUNTINGTON BEACH REDEVELOPMENT AGENCY Y - L-7v yv"C' Chairman CITY OF HUNTINGTON BEACH By i" --- — Mayor / a ATED AND APPROVED AS TO CONTENT - r . - -46!!4 Depu y City Admi istrator/ Redevelopment 02-10-86 ncaar,ti l )Arn/nn _Z_ REVIEWED AND APPROVED AS TO FORK: &Ci y Attorney j Agency Attorney vj `.J APPROVED City Administratol7Execut Ne Director J HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, PACIFIC HERITAGE CORPORATION, a California Corporation 011 By:_ cti t Imo' Itg:, By: Its: AVIV DEVELOPMENT CORPORATION, a Cal By: By: iJ Its: OZ-10-86 nORRc/2460/00 -4- V City of Huntip,gton Beach ZflS)0 MAIN STREET CALIFORNIA 92"8 OFFICE OF THE CITY ADMINISTRATOR March 20, 1986 Mr. Stanley Bloom Randall Foods 2905 East 50th Street Vernon, California SUBJECT: PROPOSED PIER SIDE VILLAGE DEVELOPER/OPERATOR Dear Mr. Bloom: The purpose of this letter is to respond to a series of questions raised by your proposed developer for pier side village regarding the present deal points. At our meeting of ~larch 13, 1986, Bryant .`.iorris asked for the clarification of various items, prior to his proceeding forward with retaining an architect, and beginning the process of preparing his formal entitlement application for filing with the city by May 1. The Agency staff's response to those points raised by Bryant Morris is as follows: 1. The pier side village lease can be separate from the Disposition and Development Agreement and merely referenced as a separate document within the DDA. Specific language to this effect shall be prepared and approved by legal counsel for both parties as a part of the revised DDA. 2. The planning area for the project should be expanded to include both sides of the Pier and may be phased but must be a unified project. Parking to be provided must maximize both sites, providing structures, as appropriate. The design must assure maximum accessibility to the beach and related uses, and be in accordance with our Downtown Specific Plan and design guidelines. A detailed, but preliminary concept, must be completed by March 31, 1986. 3. We have reviewed the matter with regard to the possessory interest provision and the point raised by Bryant Morris appears reasonable. Appropriate language will be drafted for inclusion In the revised DDA. Please note that any provisions of the DDA that require amendment, will only be amended at the time of the entitlement hearings. 4. Insurance liability limits will be adjusted in accordance with the current market place. Telephone (714) 536-5202 �.J 5. Pier improvements to be done will be done by the City/Agency, with deck expansion improvements to be doneby thet1rveloper. 6. Deposit requirements will be modified to reflect a single deposit, as appropriate, by you as the developer. I would again emphasize that we will proceed with nbeded amendments to the Disposition and Development Agreement only as a part of processing formal entitlement plans for the project in accordance with the May 1 First Implementation Agreement schedule. It is hoped that the above serves to address the various matters raised by Bryant L. Morris, and as a result of this, he will move forward in a timely and expeditious fashion to complete his formal entitlement plans prior to the May 1, 1986 deadline. ' Should you have any questions, please feel free to contact me, Doug La Belle, or Mike Adams at your convenience. Sincerely, GC / C s IV. Thomp , City Administrator CIVT:lp xc: Douglas N. La Belle, Deputy City Administrato./Redevelopment Mike Adams, Principal Redevelopment Planner Dick Schwartz, Huntington Pacifica Development Group Uri Gati, Huntington Pacifica Development Group Dick Harlow, Harlow & Associates Bryant L. Morris, Bryant L. ;Morris Development 2196h u City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY ADMINISTRATOR March 20, 1986 Mr. Stanley Bloom Randall Foods 2905 East 50th Street Vernon, California 11 SUBJECT: PROPOSED HOTEL DEVELOPERIOPERATOR Dear Mr. Bloom: This letter is in response to communications we have received from Paragon IIotels regarding Main -Pier Phase L Initially, it should be Indicated that to complete our review we must have a letter from the Huntington Pacifica Development Group indicating that Paragon Hotels is both the operator and developer you intend to have develop and operate this portion of the project. Staff is presently reviewing Paragon's initial letter of February 24, 1986, as well as their letter of March 12, 1986, and the accompanying supplemental materials. Based upon this information, it is our understanding that Paragon Hotel Corporation intends to develop a suite hotel of approximately 300 rooms on a site to be determined within the Main -Pier Phase I. While we have not completed our analysis, the following initial points should be made to reaffirm our desire for the hotel portion of the project: 1. The hotel must be of the scope and quality of that intended within the original Disposition and Development Agreement (Irvine Marriott quality). 2. The hotel franchise is subject to the approval of the City/Agency. 3. The hotel must provide for restaurant(s) and public meeting areas with banquet facilities the scope of which are subject to the approval of the City/Agency. Telephone (7 14) 536-5202 Following completion of our review, approval by the Redevelopment Agency, and subject to the receipt of the above referened IetM from the Huntington Pacifica Development Group, we will advise you of the acceptability of Paragon Hotels as the project's hotel opera torldeveloper. If you have any questions, please feel free to contact me at your convenience. Sincerel . rles W. Thom son, City Administrator CWT:lp xc: Honorable 1layor and City Council Members Dick Schwartz, Huntington Pacifica Develcpment Group Uri Gati, Huntington Pacifica Development Group Dick Harlow, Harlow do Associates Douglas N. LaBelle, Deputy City Administrator/Redevelopment Mike Adams, Principal Redevelopment Planner Jim Rhead, Paragon Hotels 2181h rJ OR HOTEL INFORMATION PARAGON H•0-T•E•L•S RECEIVED LETTER OF INTENT March 12, 1986 MAR 1 31yb6 REDEVELOPMENT 11 Honorable Mayor and City Council Huntington Beach, California Gentlemen: Paragon Hotel Corporation is a 25 year old hotel operating company previously called Romney International Hotels. You will find enclosed in this package, information about our history, our financials and the properties we are presently operating. Today we have some 19 properties open or under construction, most of which are new, upscale suite hotels. We have included some general information about those properties that are somewhat reflective of our proposed efforts for Huntington.Beach. Most of our properties are new due to a restructuring of the company that began in 1977 and accelerated in 1980. Previously, most of our efforts were in roadside hotels, today, most of our properties are upscale suite hotels and I have the privilege of serving on the Executive Committee for the Embassy Suite chain, where I am Chariman of the Construction Development Committee. We view this concept as the latest state of the art, appreciated both by commerical customers and vacationers. Subject to the availability and proper assemblage of the land, it is the intent of Paragon Hotel Corporation to develop approximately a, 300-suite hotel in Huntington Beach. To this end we have worked some 1� years and expended thousands of dollars in consulting and architectural P.O. Box 7098 9 5333 North 7th Street • Phoenix, Arizona 85011 0 602/248-0811 Letter of Intent March 12, 1986 Page Two fees. When the city and Huntington Pacifica have con- cluded their assemblage and negotiating efforts, we will be prepared to move ahead with the architecture, financing and development of the hotel. If there is any additional information we can provide you with respect to this intent or with respect to ' Paragon, please feel free to contact us. Sincerely, im O. Rhead President JOR:tk cc: Dick Schwartz Hotellirm adopts classy image to survive Zy Linda Stowell Republic. Romney 'International Hotels Inc., a little-known Phoenix -based company, plans to add a touch of class to its marketing plans and gum million of dollars into its hotels in an attempt: to crests a first-class; image. "There's going to be a shakeout in the hotel industry," said Jim Rhead, president and chairman of the board. `To survive, hotels and. resorts are going to have to have high quality and an acceptable product. Mink some of the older ones will clone or be sold and converted to something else." Romney, a 20 year -old privately held company, is going after busi- ness aggressively by changing its name, building a new headquarters, changing its hotels into suite resorts and penetrating the market with four to six new first -class -hotels each year. The new horn% effective March 1, will be Paragon Hotels. "Paragon mearA a model of excellence, and we feel that our name change will help to clarify our Image," Rhead said. In addition to the new hotels and resorts we are now developing, we will be upgrad- IN our existing pro pertiet to reflect this new image and to provide first- class accommodations and serv- ices." ' Romney will move its headquar- ters from 212 ig. Osborn to Seventh Street and Missouri in March. "We have had some credibility problems," Rhead. said. "Romney properties historically have been older, roadside properties." The company owns and manages motel and hotel properties in seven Western states Its most recent addition is a $12 million Grenada Royale hotel and conference center as, Tucwn . Jatp oiksial Airport that opened in November 1982. "Our plan is to have 30 hotels in five years. Now, we have 13," Rhead said. Some of those new hotels will be in Arizona. Rhmd plans to build hotels in Sedona, Mesa .and north Phoenix. The company now has eight hotels in Arizona. The other five are in Kansas, New Mexico, Texas,' Washington and Wyoming. In the Valley, it manages the Sun Dancer Hotel at 803 E. Van Buren and Ramada Inn at 1100 N. Litchfield Road, Goodyear. Rom- ney is looking at Scottadale and Tempe for sites for more hotels. The resort in Sedona - called Los Abrigsdoe — will have 200 rooms. Its poet is .pegged at $16 million. "People are more sophisticated - now; they're demanding service and quality," Rhead acid. Many industry wateb m have said Arizona already is overbuilt with hotels and resorts. Jeanne James, executive vice president of the Arizona Hotel -Motel Associa- tion, is skeptil al about all of thq resorts planned -for Arizona. "If all of the proposed 6,000. rooms in Arizona are added to the ones already existing, we will have to increase tourism and travel by 17 percent to maintain the' current occupancy level of an average of 60- some percent," James said. "If you . consider a large percentage of occupancy is one or more people, that means we will have to attract 1 million more people a year to Arizona to maIntaW our - current level." ' But Rhead isn't worried. He said • the resorts Romney is building will not be in competition with destina- tion resorts. "Our thrust is IR Romney International . Hotels , PARAGON the business- "There's going to be a shakeout in the hotel Industry," predicts Jim —Ho34 Alb Rhead, president and chairman of the board of the Row" chain. Hotel pumped into fixing some of the extsttng hotels. ` Continued fram A14 "If we can't fix it up and Est a return on our investment, we'll jell traveler," he said. it," Rhead said. "We'll keep sozae, What will make the new Paragon- and they will survive as Mom and Pop hotels' facilities different is ambiance and amenities, he said. - Rhead has no intentions of taking tha company into the gam - " The resort in Sedona will have 'spa bling industry. tennis courts, a health and "First, I have some moral prob. three swimming pools. Every room Isms with gambling, and second, it's will be a suite with a kitchenette. I a whole different ball game," he think it's the amenities that make a- sold. difference." $moues Romney is a privately Rhead said the suite concept is held company, Rhead did not increasing in popularity. release its earningsfor 19W. He did ., More hotels are going to suites, say all projections indicate earnings will be up this year. Opce someone has stayed in a suite, be or she prefers a suite." "I'm optimistic — you have to daydream a little about what you The company plans to sell one or want to become," he said. "For .jo two of its older properties each'. long, we have just coasted a1mg. year, Rhead said. One that may be Older products just became older .- soW is the Sun Dancer Hotel in and if T4 on than we wouldpI, Pboanix. About $12 million will be axN►t.$$ ,., _ ,- .,-. -A . . �4 i✓ �� `.� t�lrri ar�rr ra-ve,,i ac bumeme L iews pOB The MvwspVor Of The Buskw" Trawl lndustry Ssptsr 0w ?4. 1904 Destination P"agon .hotels k.&v=pW PHOENIX. ARIL — A hotel eom- luxury hotel nett to the Tucson Medi- pany based here has changed its name cal Center. It is scheduled to open by and revamped its image to respond to Mu98 March 15. The site was selected by today'* more demanding business Paragon because the northeast section travelers, according to its chief e:ecu- of Tucson did not have enough facili- tive officer. ties to service travelers. Rhead noted. Jim Rhead, president of Paragon The hotel will include 137 suites, Hotel Corp. —formerly Romney Inter- complimentary breakfast and cocktail national —said the company has tar- hours. and recreation facilities. State- goted the business traveler as a ke� of -the -art audio-visual equipment, a part ofitemarketing strategy, and will 6. msquare-foot ballroom and three make a priority ameaiUes such as tale- executive conference rooms also are in amferencing and theater-dyb audito- the plan. riuma. Paragon also reoopises that the Another property under construe - suite concept has a'great deal of accept- tion is Los Abrigados, a $20 million ability" and Mans to build several all. venture in Sedona. Phoenix's neighbor suite properties in the scat five yeam to the north. This resort -spa complex. The name change A^aeA Romney to which will sit on 20 scenic acres. almid Paragon was made to dg-Wfy "a mark be completed by late summer 1985. of excellence," according to Rhead. Other Arizona projects will be two Other changes Include completion of a all -suite hotels in northwest Phoenix now corporate headquarters in north off the Black Canyon Freeway and in Phoenix and expansion into the nigh- east Mom new the Fiesta Mall. Rhead wW market. said construction on these properties Rhead said the lodging group will will begin within the year. Paragon, only construct 200- to 400-unit hotels. according to Rhead. is also considering and estimated it will • spend about sites east of the Mieaie*ippppI $75,000 per room on suites and about Paragon barely resemblea the old $100,000 per room on resort units. Romney International. Founded in Overall, the lodging concern hopes to 1962 by Wayne Romney, the chain was open four to six feast -class properties a like most of its era. concentrating on par for the next firs years. Currently, "Mom and Pop" roadside motel a. At its Paragon owns or operates 14 hotels in peak. the company ran 53 properties seven western states. nationwide, but plans to enter the in - The project closest to completion un- ternational market never material - der the restructured company is Hotel isnd, Rhead said. Park Tucson, a $22 million, 217-unit Romney was sold in 1971 to Western .. To Address Business Market C . Financi al Corp., then the holding com- pany of Western Savings. Rhead, a vice president with the banking insti- tution, was tapped to head the finan- cially ailing hotel group because of his extensive background in real estate and development. 'Ifie recession in the mid-1970s put a damper on any hopes for a rebound and Western was peessus to unload Rorn- ney as as asset. Tleia�ooe prnprrtiee were said, and In IbWOK the company w A ririts� belda ei its oPr.1 saers. does not te+r►�as1i i !ulna ial stand- ings. Rhead @*po s revenue of $20 million this year and $50 million pithin two years. PARAGON HOTELS CORPORATION FINANCIAL STATEMENTS, AUDITORS' REPORT ANED ADDITIONAL INFORMATION DECEMBER 31, 19B4 AND 1983 MILLER, ALLEN & CO., P. C. CawTiRlao PuauC wccou*dr•NT; PARAGON MOTELS CORPORATION r FINANCIAL STATEMENTS DECEMBER 31, 1984 AND 1983 TABLE OF CONTENTS FINANCIAL STATEMENTS Auditors' Report . . . . . . . . . . . . . . . . . . . . 1 Balance Sheets, December 31, 1984 and 1983 . . . . . . . . . . . . . . . . . 2 Statements of income and Retained Earnings, For the Years Ended December 31, 1984 and 1983 . . . . . . . . . . . . . 3 Statements of Changes in Financial Position, For the Years Ended December 31, 1984 and 1983 . . . . . . . . . . . . . 4 Changes -in Components of working Capital, For the Years Ended December 31, 1984 and 1983 . . . . . . . . . . . . 5 Notes to Financial Statements, December 31, 1984 . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1C ADDITIONAL INFORMATION SCHEDULE 1 - Schedule of Hotel Properties and Residential Housing, For the Years Ended December 31, 1984 and 1983 . . . . . 11 SCHEDULE 2 - Schedule of Home Office, For the Years Ended December 31, 1984 and 1963 . . . . . 12 MILLER. ALLEN & CO.. P. C. CKNInplao fbvsuc AccouMTAMrs r MILLER, ALLEN & CO.. P. C. CENTiFIC0 Pusuc ACCOUNTANTS ROBERT L. MILLER, C. P. A. JAMES R. ALLEN. C. P. A. MARK L.LAN OY, C.RA, OLIVER C. STALLINGS. C.P A. Board of Directors Paragon Hotel Corporation 815 EAST CAMELBACK ROAD PHOENIX,ARIZONA 85014 (602) 264.3858 we have examined the balance sheets of Paragon Hotel Corporation as of December 31, 1984 and 1983, and the related statements of income and retained earnings and changes in financial position for the years then ended. Our exam-inations were made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the financial statements referred to above present fairly•the financial position of Paragon Hotel Corporation as of December 31, 1984 and 1983 and the results of its operations and cnanges in its financial position for the years then ended, in conformity with generally accepted accounting principles applied on a consistent basis. Our examinations were made for the purpose of forming an opinion cn the basic financial statements taken as a whole. The accompanying a-.citional information (Schedules 1 and 2) for the years ended December 31, 1984 and 1983 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the examination of the basic financial s;ate- ments and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. 117., "a 6 � � f 6 " /, � / 25 February 1985 1 ASSETS Current assets Cash Refundable income taxes Trade accounts receivable, less allowances of $3,817 - 1984 and $3,114 - 1983 Interest receivable Notes receivable, current portion - Note 2 Due from related entities - NOte 1 Other accounts receivable Inventory - Note 1 PIepaid expenses Total current assets PARAGON HOTEL CORPORATION BALANCE SHEETS DECEMBER 31, 198A AND 1983 1984 1983 5 330,020 5 1,236,461 50,702 141,531 74,272 110,960 43,163 28.235 282,116 395,802 930,025 252.337 23,292 44;562 310,533 46t.403 5,253 2,883 2,049,376 2,632,174 Property, plant and equipment, net - Notes 1, 3, 5, 6, and 8 8,388,389 6,561,488 Investments and other assets Notes receivable, less current portion - Note 2 Investments - Note 1 Deferred charges - Note 1 Other assets - Note 5 . Total other assets TOTAL ASSETS 1,817,630 2,012,479 2,910,558 1,970,399 183,866 195,841 32.331 177.787 4,946,385 4,356.50� $15.384,150 $13,600,168 LIABILITIES AND STOCKHOLDER'S EQUITY 1984 1983 Current liabilities Accounts payable E 229,031 E 197,173 Construction notes payable - Note 5 260,211 Current portion of long-term debt - Note 5 1,257,736 636,942 Current portion of obligations under capital lease - Note 6 19,318 26,654 Accrued income taxes - Note 1 5,075 31,923 Accrued expenses 349,998 364,422 Total current liabilities 1,861,158 1,517,325 Long-term debt, less current portion Notes and mortgages payable - Notes 4 and 5 10,331,332 8,896,655 Obligations under capital lease - Note 6 11,623 35,973 10,342,955 8,932,628 Other liabilities Deposits 21,385 6,300 Deferred income taxes - Note 1 287,316 282,268 Total other liabilities 308,701 288,568 Commitments and contingencies - Note 7 Stockholder's equity Common stock, no par value, authorized 100,000 shares, Issued and outstanding 100 shares - Note 4 10,000 10,000 Additional paid in capital 2,573,037 2,573.037 Retained earnings 288,299 278,610 Total stockholder's equity 2,871,336 2,861,647 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $15,384,150 $13,600,168 The accompanying notes are an integral part of these financial statements. M14LER. ALLEN & CO, P C 2 CERT-ro PUBLIC -COU„ -s PARAGON HOTEL CORPORATION STATEMENTS OF INCOME AND RETAINED EARNINGS FOR THE YEARS ENDED DECEMBER 31, 1984 AND 1983 1984 1983 Hotel Properties Revenues S 5,407,084 S 5,472,324 Expenses _ 41512,448 4,402,790 Profit before capital income and expense 894,636 1,069,536 Capital income and (expense) Interest income 224,558 120,390 Rent (213,778) (182,602) Property tax (124,719) (162,673) Depreciation - Notes 1 and 3 (399,518) (498,603) Interest expense (470,153) __(568,799) (983,610) (1,292,287) Hotel properties loss _ (88,974) (222,753) Residential housing loss .(23,332) (125,233) Home office Revenues 1,662,145 2,046,248 Expenses 1,553,149 _ 1,347,507 Home office profit I 108,996 698,741 Net income (loss) before income taxes (3,310) 350,7;5 i Income taxes - Note I Current (18,047) (58,905) Deferred 54048 57,76E Income tax (benefit), (12.999) (1,139) Net income 9,689 351,894 Retained earnings (deficit), beginning of perioo _ 278,610 (73,284) Retained earnings, end of period S. 288,299 S 275,61C The accompanying notes are an integral part of these f!nancial statements. MILLER. ALLEN & CO., P. C. 3 CEATIFIEO rV661C ACCOUNTANTS i � J V PARAGON MOTEL. CORPORATION STATEMENTS OF CHANGES IN FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 1984 AND 1983 • 1984 Sources of working capital : Net income S 9,689 Add (deduct) items not requiring the use of working capital Depreciation 474,268 Increase in deferred income taxes 5,048 Income from investments - Note 1 (61,088) Amortization of deferred charges w11,975 working capital provided by operations 439,892 Proceeds from long-term debt 3,113,328 Decrease in notes receivable, less current portion 192,849 Decrease in other assets 145,456 Increase in deposits 15,085 Dividends receiveC - Note 1 90,000 Distributions from investments 31,500 Net book value of assets sold 1,860,244 Total sources Of working capital 5,888,354 Applications of working capital Increase in notes receivable, less current portion Purchase of property, plant, and eQuipment Investments Increase in deferred charges Decrease in customer deposits Reduction of long-term debt Reduction of obligations under capital lease Total applications of working capital Increase (decrease) in working capital working capital (deficit), be -inning of teriod Working capital, end of perioc A,162,413 1,000,571 1,678,651 __ 24,350 6, 8",985 (976,631) 1983 $ 351,894 498,603 57,766 (285,516) 66.254 689,001 5,039,046 142,206 10,374 155,000 549,176 _ IsC5.6. 252 7,641,057 851,691 1,597,590 177,769 161,108 2,682 31648,950 25.517 6.465.307 1,175,75G 1,164,849 (IC.901) 3 188,218 S1116C,849 aasaacsasa cm..cccacaa Tne accompanying notes are an integral part of these financial statements. MILLER. ALLEN & CO., P. C. 4 C FATI/IED ►USUC ACCOUNTANTS - • PARAGON HOTEL CORPORATION CHANGES IN COMPONENTS OF WORKING CAPITAL FOR THE YEARS ENDED DECEMBER 31, 1984 AND-1983 f 1984 1983 Increase (decrease) in current assets Cash S (906,441) S 776,523 Refundable income taxes (90,829) 956 Trade accounts receivable (36,688) 3,050 Interest receivable 14,928 (58,676) Current portion of notes receivable' (113,686) (171,769) Due from related entities 677,688 (2,298) Other accounts receivable (21,270) (242) Inventory (158,870) (675,148) Prepaid expenses 2,370 (16,503) .(6323798) (146,107) (Increase) decrease in current liabilities Accounts payable .(31,858) 23,555 Construction notes payable 260,211 714,974 Current portion of long-term debt (620,794) 252,839 Current portion of obligations under capital lease 7,336 7,456 Due to related parties 396,381 Accrued expenses 14,424 (41,425) Accrued income taxes 26,848 (31,923) (343,88333) 1.321,857 Increase (decrease) in working capital S (976,631) $1,175,750 The accompanying notes are an integral part of these financial statements. MILLER. ALLEN & CO., P. C. 5 CERTIRItD PUBLIC ACCOUNTANTS - - PARAGON HOTEL CORPORATION r . NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1984 NOTE l: SUMMARY Of SIGNIFICANT ACCOUNTING POLICIES: FINANCIAL STATEMENT PRESENTATION - Paragon Hotel Corporation is the wholly -owned subsidiary of Romco Financial Corporation and is the parent company of two wholly -owned subsidiaries presented in these finan- cial statements as long-term investments. Unconsolidated statements are being presented to more clearly indicate the individual operations of Paragon Hotel Corporation. INVENTORY - Inventory is stated at the lower of cost or market (first -in, first -out) method and consists of $41,344 (E39,357 - 1983) of food, bev- erage, and jewelry and $269,189 (S4,300,046 - 1983) of condominiums for sale. PROPERTY, PLANT, -AND EQUIPMENT - Property, plant, and equipment are valued at cost and are being depreciated principally on the straight-line method over their estimated useful lives. Leasehold improvements are amortized over their estimated useful lives not to exceed the term of the lease. Expenditures for major renewals, replacements, and betterments are capitalized and depreciated. INVESTMENTS - Investments consist of unconsolidated wholly -owned subsid- iaries and partially owned parent company, at equity and other invest- ments at cost. DEFERRED CHARGES - Motel systeir franchises for properties are amortized by the straight-line method over the lesser of the term of the lease or ten years. Deferred loan costs are being amortized by the straight-line method over the lives of the related loans. INVESTMENT TAX CREDITS - Investment tax credits are used to reduce the Income tax provision in the year in which the_crecits are available. INCOME TAX - The Company is included in the consolidated income tax returns filed by the parent. The consolidated'income tax experses (bene- fits) are allocated to the subsidiaries based on. their respective taxaole Income or loss. The provision for income taxes includes the Company's share of the consolidated income tax expense or benefits as allocates to the Company. Deferred income taxes arise from the recognition of certain items of - income and expense for financial statement purposes in different account- ing periods than for income tax reporting. MILLER, ALLEN & CO.. P. C. 6 caw"Plao.u■uc wccov.+r..kra PARAGON HOTEL CORPORATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1984 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLILIES (Continued) RELATED PARTIES - The Company has management agreements with other cor- porations and a partnership in which the owners of Paragon have a finan- cial interest. The Company received $391,353 ($391,215 - 1983) in fees from these entities in 1984. In addition, the affiliated partnership is indebted to the Company for $607,348 at December 31, 1984. This receivable is due on demand and bears no rate of interest. NOTE 2: NOTES RECEIVABLE: 1984 1983 Mortgage notes receivable in varying terms until 1995 with interest rates varying from 8% t'o 18% $2,101,746 $2,408,281 Current portion (282,116) (395,802) $1,819,630 $2,012,479 -------------------- -------------------- At December 31, 1984 and 1983, the mortgages were fully collateralized by the properties involved. NOTE 3: PROPERTY, PLANT, AND EQUIPMENT, AT COST: 1984 1963 Land $1,264,288 $ 436,121 Buildings and leasehold improvements 6,980,596 4,142,923 Furniture and equipment 1,638,283 1,479,051 Automobiles 95,570 58,700 Construction in process 2,458,796 Equipment under capital lease 109,676 109,676 10,088,413 8,685,267 Less: Accumulated depreciation - Note 1 1,700,024 2.123,779 Net property, plant, and equipment $ 8,388,389 $6,561,488 Depreciation expense was $474,268 and $498,603 for 1984 and 1983, respectively. NOTE 4: COMMON STOCK Romco Financial Corporation (the parent company) has entered a stock pledge and security agreement whereby the seller of Paragon Hotel Corporation holds the Company's stock certificates in Paragon Hotel Corporation as collateral for the Company's note given in the purchase transaction. In addition, no consolidation, merger, sale, or lease of Paragon Hotel Corporation assets in excess of $250,000 may be made without written consent of seller. See Note 5. MILLER, ALLEN & CO. P. C. 7 CERTIFIED PUBLIC ACCOUNTANTS W PARAGON HOTEL CORPORATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1984 NOTE 5 LONG-TERM DEBT: 1984 1983 Construction notes payable bearing interest rates of 14%. Collater- alized by real estate inventory $ $ 260,211 Mortgage notes payable bearing interest rates ranging from 6% to 10 1/4%. Collateralized by properties involved 1,289,138 2,741,363 Note payable, stock purchase, principal installments of $50,000 semi-annually plus interest at 9%. Collateralized by the Company's stock ! 690,429 740,428 Other mortgage notes payable bearing interest from 10 1/2% to 13 1/2%. Collateralized by properties involved 8,810,384 5,837,036 Insurance company loans at 6% interest secured by the cash surrender value of officers' life insurance policies 114,770 Unsecured notes payable to bank. Interest at 2% over prime due within one year 799,117 100,000 11,589,068 9,793,808 Less: Construction notes payable (260,211) Less: Current portion of mortgage notes and unsecured notes (1,257,736) (6362942) $10,331,332 ----------- ----------- $8,896,655 ---------- ---------- The following is a schedule by years of future minimum principal payments required by the above long-term debt: 1985 $ 458,619 1986 382,835 1987 390,423 1988 412,298 1989 400,159 Later years 8,745,617 $10,789,951 MILLER, ALLEN & CO, P C 8 CERTIFIED PUSUC ACCOUNTANTS PARAGON HOTEL CORPORATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1984 NOTE 6: LEASES: OBLIGATIONS UNDER CAPITAL LEASE - The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 1964. Year ended December 31, 1985 $ 31,308 1986 17,107 Total minimum lease payments 48,415 Less: Amount representing interest (17,474) Present value of net minimum lease payments 30,941 Less: Current portion (19,318) Long-term obligations under capital lease $ 11,623 OPERATING LEASES - The Company operates certain motel properties under non -cancellable land lease agreements. In addition, certain equipment, primarily televisions, is leased. The following is a schedule by years of minimum rental payments require under operating leases. This is not a forecast of future rent expense. Year ended December 31, 1985 $ 61,635 1986 58,032 1987 42,259 1988 29,289 1989 14,445 Later years 397,151 Total minimum lease payments $ 602,811 MILLER, ALLEN & CO., P C C CERTIFIED IsUbLIC ACCOUNTANTS ' i PARAGON HOTEL CORPORATION NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1984 NOTE 7: COMMITMENTS AND CONTINGENCIES: PARTNERSHIP INTEREST - The Company is the general partner in a limited partnership that owns a hotel property managed by the Company. The Company has made no monetary investment and the interest is not reflected in the financial statements. The Company will have no investment until the limited partners have received their original investment in either cash or tax benefits. At that time, the Company will begin receiving its 50% share of the gains and losses. The Company does have a contingent liability on the note made to purchase the property in the amount of $2,500,000. The note is secured by the property, which has an appraised value in excess of the contingent liability. NOTE 8: SUBSEQUENT EVENTS: SALE OF PROPERTY - On February 1, 1985, the Company sold its home office building for $8,000,000. The property had a book value of $4,845,069 with a mortgage of $5,838,876 at December 31, 1984. The original building construction project was a joint venture in which Paragon received 50% of any subsequent gain or loss on the sale of the property. MILLER, ALLEN & CO.. P. C. 10 ' CERTIFIED PUBLIC ACCOUNTANTS r..i SCHEDULE 1 PARAGON HOTEL CORPORATION SCHEDULE OF HOTEL PROPERTIES AND RESIDENTIAL HOUSING FOR THE YEARS ENDED DECEMBER 31, 1984 AND 1983 - 1984 1983 Hotel Properties Revenues Rooms Food Beverage Other Total revenues Hotel Properties Expenses Rooms Food Beverage Other Total expenses Residential Housing Sales Cost of sales Residential housing loss $ 2,980,113 $ 3,425,895 1,655,998 1,414,893 468,084 311,772 302,889 319,764 $ 5,407,084 $ 5,472,324 $ 920,794 $ 1,047,403 1,439,495 1,243,979 290,877 205,864 1.861.282 1.905.544 $ 4,512,448 $ 4,402,790 $ 238,000 $ 704,658 261,332 829,891 $ (23,332) $ (125,233) The accompanying notes are an integral part of this schedule. MILLER, ALLEN & CO., P. C. 11 CEF+TIFIEO PUBLIC ACCOUNTANTS 3 PARAGON HOTEL CORPORATION SCHEDULE OF HOME OFFICE FOR THE YEARS ENDED DECEMBER 31, 1984 AND 1983 Home Office Revenues Management fees Gain on sale of assets Income from investments - Note 1 Other income Design and development Total revenues Home Office Expenses General and administrative Interest expense Total expenses SCHEDULE 2 1984 1983 $ 391,353 $ 391,215 867,508 1,321,184 61,088 285,516 84,758 48,333 257,438 $ 1,662,145 $ 2,046,248 $ 1,314,606 $ 988,675 238,543 358,832 $ 1,553,149 $ 1,347,507 The accompanying notes are an integral part of this schedule. MILLER, ALLEN & CO., P. C. 12 r CERTWIED PUBLIC ACCOUNTANTS PARAGIA, HOTEL CCW%*ATIVc BALANCE SHEET SEPTErER 30, •19 A:.:ETS 11ABI.: T IES A• i CA":TA Cif M ASSETS: CL:RREKT LIABILITIES: CASH ! 501,997 ACCOUNTS RECE1032—TRADE 134,019 ACCOUNTS PAYABLE 4 445,513 LESS' ALLOWANCE FOR EMPLOYEE TAXES V7744ELP 32.927 MtBTFLL ACCOi1Ni 611ci K:C Elf FXPERSES 3701909 INVE►;T(AIES 40,81.F• AVJEL INCOME TAPES 9 l"ll Uk OLII COWDOMINIUM� Al CMT U C!RREI!T PORTIO!d —� % TERM VIE 1,292.474 INTERS-4 RECEIVABLE 4's, 51) PREVk1U EXPENSES 5516K TOTAL CtFRENT LIABILITIES 1 2,472,62/6 OTHER RECEIVA6t.ES 30,945 r..< FkECE I VABLE FROM FEL4TED CO'S 1,265,260 C1JRfiE 11 MATURITIES ON LW LONG TERM DEFT TERK FECES LES 12,276 APPROXIMATELY TWFKTY—ONE NOTES 10TAL WRRENT ASSE—TS % WITH VAPYINr INTEFEST RATES FROM 61 TO .13 1 /2% 17's INVESTt9UT IN GEMS AT COST 6E.,Q:►. LESS AMOL�'T KF WITHIN ONE YEAF 1, M, 474 LK TERM RECEIVABES: z WiTES IiECEIVABLF 1,6Qi,5E:1 LESS DEFERKEL IW.Uf 51 04 LONG TM- DEBT NI: TT 4, 44b, 6" SJBTOTA6 1,596,53ti ----------- OTHEF LIABILITIES: AMOUNT DUE WITHIN ONE YEAR (121276) DEFERRED INCOME TAXES :17,317 LOk5 TERM; RECEIVARA NET 1,5S4.21R, SECURITY DEPOSITS 5,0Uh PROPERTY— AT U67 MOTEL, LAND, BUILD1NO,S ETC. 5,429,465 TOTAL -OTHER LIABILITIES 292,817 ACCLK, LATED DEF%CIATION (2,N- 90) PKPERTY )ET 3,372,515 STOC*N DER'S EQUITY: 01HER ASSET::: C# At STOCk: 10,0(K► INVESTMENT IN Sta&SIDIARIES 411,152 PAID IN WITAL 2,5731036 INVESTMENT IN PARTNE.RS(IFS 1,364,0:3%, RETAINED EARNIhr= 78e,5�i3 DEPOSITS %,273 DEFERRU, EXPENSES 30,799 LASH VALUE LIFE 1NSlJ dtf 0 STOC.F:HOLDER�S E !ITY 3, •7,5?9 IN'RSTMENT IN AND ADVANCES 71f PARENT CUfANY 1,2K3,144 OTHEP ASSETS �TGTAL 01HER ASSETS ---� S,163,13t• TOTAL ASSETS 410,574,ISO TOTAL LIABILITES Attt CA.'ITAL f10,579.18!► Laventhol &.Horvath suite ll00 R C E 1 V E D 6u Anton Boulevard Certified Public Accountants Costa Mesa, CA 92626 MAR 131965 (714) 556-4244 REDEVELOPMENT February 13, 1986 Huntington Pacifica Development Group 322 Main Street Huntington Beach, CA 92684 Gentlemen: This letter is to confirm David Kinkade's discussion with you to provide consulting services relative to the development of your proposed hotel to be located in Huntington Beach, California. in June, 1984 Laventhol & Horwath prepared a market study and financial projections for a proposed 240-room first-class beachfront hotel in Huntington Beach. You have now requested we respond to the following questions: - Will the proposed retail space have a major impact on the hotel? - Will it be advantageous if the retail space was built before the hotel? - Should the developer (you) consider building a 300-coon hotel rather than the previously proposed 240-room hotel? - Should you consider developing a higher quality hotel with a higher room rate than that originally recommended? To respond to 'your' request, ue will accomplish the following - a tasks: -- Review available, in-house data on historical 1984 and 1985 performance of competitive hotels in nearby market areas. - Update, briefly, the in-house listing of proposed competitive hotels in nearby market areas. A member of Horvath & Horwath International with affiliated offices worldwide. Huntington Pacifica Development Group February 13, 1986 Page 2 Briefly analyze the data obtained in the first two tasks and arrive at preliminary conclusions as to the competitiveness of the proposed hotel. Specifically, do we anticipate that the proposed hotel's market area will be more or less competitive than reflected in our June, 1984 market study? Evaluate, in general terns, the impact of the proposed retail space on the proposed hotel. ' Prepare a brief letter advising you of our brief analysis and preliminary conclusions, based on *the preceeding tasks. We expect to have this letter to you by Friday, February 14, 1986. Our fees to complete the work are anticipated to be approximately $1,500. These professional fee estimates do not include provision for our out-of-pocket expenses for travel, report reproduction, computer time, etc. These out-of-pocket expenses will be billed to you at our cost in addition to our professional fees. It is our firm's policy to require a retainer prior to commencement of any engagement. The amount of retainer for this engagement is $1,000. The retainer will be applied to our final billing under this agreement. Invoices will be presented to you every two weeks _ as work progresses and are payable upon presentation. All outstanding invoices must be paid prior to release of our final report. In the event any invoice is not paid within 30 days of - presentation, it shall commence bearing interest at the rate of 1.5 percent per month; all accrued interest, together with charge for services and expenses provided for in this assignment are then due and payable. Any additional services beyond the scope of work described in this proposal will be billed to you, based upon our hourly rate schedules and the actual time spent. Examples of services beyond the scope of this engagement would include preparation for presentations to outside groups, including city representatives, public meetings, potential lenders, partners, or tenants, and expert testimony or related preparation. We will not undertake any additional services without your prior authorization. If at any point during the course of this engagement our findings lead us to a negative conclusion(s) concerning the project, we will meet with you or telephone to discuss our findings and alternative approaches, and reach an agreement on how we should proceed with the engagement. If the decision is made to Huntington Pacifica Development Group February 13, 1986 Page 3 discontinue our work, our fees will be based upon the time and out-of-pocket expenses incurred through that date. In that event, our invoices will be due and payable upon presentation. Our preliminary engagement plan 'includes allowance for the elements and conditions which we expect to encounter in the course of the engagement. In the event that we encounter situations which include a need for revision or modification in the estimated fees, we will discuss with you the causes and likely effects of the required modification, both in terms of timing and fees. ' TERMS AND CONDITION Our letter submitted to you will be based on estimates, assumptions and other information developed from research of the market, our knowledge of the real estate industry and meetings during which you will provide certain information. The sources of information and basis of the estimates and assumptions will be stated in the appropriate sections of our letter. The terms of this engagement are such that we will have no obligation to revise this letter to reflect events or conditions which occur subsequent to the last day of our field work. However, we will be available to discuss the necessity for revision in view of the changes in the economic or market factors affecting the proposed project. We will not ascertain the legal and regulatory requirements applicable to this project. Further, no effort will be made to determine the possible effect on this project of future federal, state or local legislation including any environmental or ecological matters or interpretations thereof. _With respect to market demand analysis, our work will not include an analysis of the potential impact of possible energy shortages. Since the market and/or financial projections will be based on estimates and assumptions, which are inherently subject to variation depending upon evolving events, we will not represent them as results that will actually be achieved. This proposed Scope of Services and professional fees are valid for a period of sixty (60) days from the date of this engagement letter. Our letter is intended for the information of Huntington Pacifica Development Group. It may also be discussed with local planning officials. Otherwise, neither the reports nor their contents may be referred to or quoted in any registration statement, prospectus, loan or other agreement or document without the written consent of Laventhol & Horwath. Huntington Pacifica Development Group February 13, 1986 Page 4 ACCEPTANCE OF PROPOSAL In order to conf irm our services, according to this proposal, please sign the enclosed copy of this letter and return it to us together with the retainer. Based on our discussions, we have already started our field work. We thank you for the opportunity to be engaged for this study and Zook forward to working with you on this project. Very truly yours, LAVENTHOL & HORWATH ' By: Richard H. Car e Partner ` avid R. Kinkade Manager RHC/DRR/sc Enclosure (00940) cc: Tom Goff Bruce Eidelson APPROVED: Huntington Pacifica Development Group By: Date : �j Laventhol &i orwath Certified Public Accountants �b FEB 2 4 goo Huntington Pacifica Development Group 322 Main Street Huntington Beach, CA 92684 Gentlemen: Suite I10Q Ell Anton Boulevard Costa Mesa. CA 92626 (714) 536-4244 February 13, 1986 r In accordance with our engagement letter dated February 12, 1986 we have completed a limited overview of the Huntington Beach market area, as it pertains to your proposed 240-room, first- class beachfront hotel. Our original study was dated June 8, 1984. Our overview consisted of reviews of our original findings, the current competitive lodging market, and anticipated future additions to that market. our research revealed the market area has performed as we projected in regards to occupancy and average rate. The only change revealed by our research was an anticipated future increase in the competitiveness of the first-class hotel market in the greater Huntington Beach area. The number of new hotels expected to enter the market in 1986 and in future years has increased over our original estimates. This increase is largely due to continued intense interest on the part of major hotel companies and real estate developers in the Long Beach and Newport Beach markets. The trend towards continued building in these markets is expected to make the operating climate more competitive in the coming years. Based on our brief overview, and the above considerations, we found no basis for changing our original recommendations relating to developing a 240-room hotel. A hotel of the quality and average room rate previously recommended, in our opinion, still appears to be the type of property best suited for this particular development. In regards to retail development proximate to the proposed hotel, we perceive that retail space serves to provide a conducive atmosphere for a hotel, but has not been shown to have a direct effect on a hotel's occupancy. Thus, regarding the current development, it may be worthwhile for the retail space to be completed before the hotel is built. However, no measurable effect on hotel occupancy should be anticipated from the retail activity. In conclusion, our limited overview generally reaffirms our original market study which supported development of a 240-roam first-class hotel. A member of Horwath & Horu-ath Internanonal with affiliated offices worldwide. Huntington Pacifica�M)velopment Group February 13, 1986 Page 2 Please contact us if you would like us to formally update the June, 1985 market study and financial projections. Very truly yours, LAVENTHOL & HOWATH e--•L Q - D-,— Richard E. Carpe Partner 4x�xii�dK i n k a d Manager RHC/DK:prs cc: Steve Ruhnke Bruce Eidelson PIER SIDE VILLAGE INFORMATION BRYANT MORRIS DEVELOPMENT Bryan[L.Monis Development 2270 Camino Vies Roble. Suite L, Carlsbad, CA 92008 (714) 43&',909 BRYANT L. MORRIS DEVELOPMENr BACRGRUND INFORMATION The individuals that comprise Bryant L. Morris Development have had extensive personal and business background in the development and operation of a variety of waterfront theme and specialty activities in the Southern California area. Bryant Morris, in particular, has a lengthy history of successful water - related and recreational projects. In 1957 the Morris family developed Paradise Cove, a one hundred acre beachfront park located about one mile north of Malibu Beach, California. The Morris operation of the park spanned a ten year period and included the general management of a 1,000 foot pier, boat rentals, food concessions, a recreational vehicle park, surf and beach equipment rentals, sport fishing, yacht moorings, a marine fuel dock, and complete maintenance of the adjoining beachfront. The Dorris family also held a Master Lease with the County of Los Angeles between 1960 and 1964 for the operation and management of the food and beach rental operations at Zuma Beach, California. The operation had a number of outlet locations spread over approximately three miles of very popular public beach. Currently, the Morris family manages and operates food concessions on approx- imately 2� miles of beach just north of Santa Monica, California. Bryant Morris conceived and developed Fisherman's Village in Marina del Rey, California. The landmark product of his efforts was opened in 1969 as one of the first elements in the waterfront area adjacent to the City's vast yachting and public marina development. The village theme specialty shopping center of 32,000 square feet of gross leaseable area contains one major restaurant, 35 specialty shops, and four fast-food operations. This delightful village is a key part of a carefully coordinated plan designed to serve land-lubbers and sailors alike by offering visitor docks, boat slips, and other marine services. Many Fisherman's Village tenants have enjoyed successful business histories at this popular attraction for over a decade. Raging Waters, a sixty acre water themed amusement park in San Dimas, California, is also one of Bryant L. Morris Development's successful projects. The park has been operated under a lease agreement between Bryant L. Morris Development and Los Angeles County since March of 1983. Page 2 Bryant Morris has successfully developed and served as President of Seaport Village in San Diego, California. Seaport Village is a fourteen million dollar project on fourteen acres of waterfront property on lease from the Unified Port District on San Diego Bay. The theme center is composed of three major restaurnats, twelve smaller themed restaurants, and more than sixty retail specialty shops in 90,000 square feet of gross leaseable area. The village complex opened to the public in the spring of 1980 and has been quite favorably received by both the local and tourist ccmaurnities. The architectural theme, the maintenance, the environmental, the entertainment, and security aspects of Seaport Village should serve as an example of the quality of a family oriented venture that one can expect from an involvement with Mr. Morris. Bryant L. Morris Development's background in industrial development goes back over thirty years. In the 19401s, the Morris family built over 500,000 square feet of commercial industrial buildings in Vernon, California. They were maintained and operated by the company until 1983. In Santa Monica, California, the :Morris family owns and operates 119,000 square feet of commercial industrial property which they developed in 1948. Currently in the planning stage are two additional. industrial developments in San Diego County. These projects are scfeduled to begin construction in January of 1986. Bryant Morris Development has also completed Shoreline Village, a 6.9 acre waterfront site which has evolved as a key element of the Long Beach City's Downtown Redevelopment Plan. The City has doubled its marina capacity by building 2,000 boat slips directly adjacent to and carefully coordinated with the "Village" site. The Shoreline Village project is a Victorian themed specialty center of 55,000 square feet of gross leaseable area including two major restaurants, facilities for yacht sales, a marine hardware and electronics outlet, thirty-five retail specialty shops, and four themed fast food operations. Along with the marine retail services, this project demonstrates the careful planning between the City and the developer to layer the various elements of the overall waterfront development plan into an exciting recreational and entertainment center that enriches the lives of both residents and visitors alike. "gJ Bryan[L.Monis Development Everett, Washington Scheduled for completion in late 1983, Everett Marina Village will be situated in a gentle pocket cf historic Puget Sound, just south of Vancouver, British Columbia. It will be an authentic "Seaside Marketplace" in design and atmosphere, evoking the warm feeling of early days along the Sound. Its authentic design and the extensive use of handcrafted materials will create a center of history, comfort ' and charm unmatched in the ncrthwest. Plans for the $4.5 million %illage call for two major restaurants to grace the water's edge, up to 35 shops framing a cobblestone village square, and a 2,000-slip marina. Everett Marina Village is part of extensive moorage, entertainment and industrial remodeling under way in Washington's Snohomish County, a trade area of nearly 400,000 persons. When opened, it will attract visitors from nearby Seattle and Canada, as well as tourists who come from more distant points to dine and shop in one of the Pacific Northwest's finest attractions. i t. { . ._ 0 • TradiHon, Innovalion,Success There is a special magic that lures people to places where land meets water, where history blends with innovation, and where fantasy is interwoven with the practicalities of modern retailing, merchandising, dining and entertainment. The Bryant L. Morris Development concept is simple. A company that builds reality from the gossamers of dreams to create special places and achieve extraordinary results. Places where the magic — and the bottom line — endure in good economic times and bad. The theory is proven in specialty centers, bayside attractions and other unique environments created by Bryant L. Morris Development. Even greater things lie ahead. We hope to share a Iittle of the magic here, through our designs, our site plans, our results,our people and even the old carousels that symbolize our goal of combining the feeling of yesterddy and the ;•-�:e"�",�„W � fun of today to produce sustained success. ■�tiT+V•�1L��r4 e 7 .fit f/ � � r �4 wa/■ ww . -1 k .� �a•r .�.r. .� •..mow lo Creative CorporateTeam .0 Each member of the Morris development team has a history of involvement with restoration,. design, planning, construction and special effects. In addition, we retain some of the country's best consultants on authenticity, management, site planning, marketing, research and construction. BRYANT L. MORRIS, chief executive officer, has a past as exciting as the projects he develops. The purchase and reconstruction of a three -masted square rig sailing ship, two years of sailing the South Pacific, the development and operation of Paradise Cove in Malibu, Fisherman's Village in Marina del Rey, and the other projects highlighted herein, demonstrate the ultimate in creativity — the zest of life and attentiveness to detail that Bryant's personality demands in every project from planning to completion. TOM LOCHTEFELD, senior vice president, holds a master's degree in taxation and a doctorate in law. He has owned, restored and operated four historic hotels and participated in planning and negotiations for several major theme parks. As corporate counsel, he handles site acquisitions, leasing and contracts. SCOTT MORRIS, construction coordinator, has a degree in business administration. He serves as liaison with government and regulatory agencies, directs our data processing center and supervises construction and leasing. JIM JENKINS, project coordinator, has a degree in fine arts and a practical background in architec- tural restoration and preservation. He oversees project design and construction and coordinates the implementation of ideas with our artists a LongBeach, Cal' omia Bryant L. Morris Development was selected frcm among several renowned developers and contractors to build a seven -acre theme attraction as part of a 51.3 billion downtown and waterfront redevelopment project in Long Beach. Our concept for a turn -of -the -century entertainment complex flanked by twin marinas was conceived by our corporate creative team and Raymond E. Wallace Special Productions. Shoreline Village features a blend of early western Victorian -style architecture, a waterfront boardwalk, covered walkways, an authentic Charles Looff carousel, two major restaurants, four smaller specialty restaurants, 43 shops and a complete marine center with sail loft, yacht brokerage and electronic repairs. Shoreline Village's eventual success was apparent before the first shovel of earth was turned. Not only had berths in the marinas been leased, but leases had been signed for the two major restaurants and almost half the retail shops in the $7.5 million center, a trend that led it to be fully leased before the grand opening. �.- .u� 4LO_ 1' - R �a 1 1i i within the mark \.� acreage stra c 7hePlanningPracess the magic of our success is no mystery. Quality developnient demands creativity, discipline and planning. Our creative concepts evolve into plans that go beyond mere land use decisions. They become distinctive architectural landmarks with both outstanding visual impact and direct economic impact to the surrounding community. We spend hundreds of hours meticulously researching the many components that lead to successful projects: land use and architectural history of an area; local traditions, landmarks and personalities; current demographics; projections and master plans; traffic flow; the economv; financial feasibility forecasts; competitive factors eting area; square -footage -to - ratios; and marketing position and tegy. From site exploration and onstruction financing to tenant mix and grand opening, we leave San Diego's Seaport Village Sunset Magazine called it "the most approachable harborfront on the West Coast." Los Angeles Magazine hailed it as the "state's most enjoyable waterfront complex." Built on 14 acres fronting San Diego Bay at a cost of $14 million, Seaport Village encompasses the look and feel of OId Monterey, Victorian San Francisco and traditional Mexico of a century ago. It is the most dramatic in a series of improvements to San Diego's evolving downtown and embarcadero areas. Designed by Raymond E. Wallace Special Productions, Seaport Village boasts miles of pathways, lush landscaping, running brooks, a gazebo, antique marine artifacts, a northern Pacific -style lighthouse and a bayfront boardwalk. Nestled among its plazas and park areas are three major restaurants, 13 theme cafes and more than 60 specialty shops. The restaurants offer visitors a choice of Mexican, seafood or continental cuisine. The smaller cafes feature Chinese, Greek, Italian, English and other ethnic or specialty fare. The shops are unique and provide a wealth of one -of -a -kind collectibles, including handcrafted leather, wooden toys, fine art, antiques, fashions, items for the left-handed and even a bookstore/coffee house. Seaport ViIlage's most popular He rescued the Charles Looff merry-go-round just in time to save it from being sold piecemeal to several museums throughout the country, and had each of its 46 handcarved wooden animals painstakingly restored by famed preservationist Tom Layton. From its site planning, to its design, to its construction. Sear)ort Villaee represents the New Horizons Te foregoing conveys only part of the Bryant L. Morns Development story. New chapters soon will be added from projects in Florida, Northern California, the Midwest and East. Our creative approach to people -oriented projects is succeeding in an era of escalating competition for consumers' imagination and discretionary income. Evolving socio-economic patterns will continue to place a premium on the creative approach. Bryant Moms Development gives a project the ideas, the touches, the concerns and the care that make it more than wood and stucco, steel and stone. Our long-standing association with cities, counties and ports gives us the experience to balance the environmental, political and economic interests of any municipality or individual. That balance is born of the same sensitivity to people that breathes life, character and magic into everything we do. D R A F T L+) City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY ADMINISTRATOR 3 -.7 �G Aiarch 25, 1986 Air. Stanley Bloom Randall Foods 2905 East 50th Street Vernon, California SUBJECT: PROPOSED PIER SIDE VILLAGE DEVELOPER/OPERATOR Dear Air. Bloom: The purpose of this letter is to respond to your submittal of Paragon hotels Corporation as the developer/operator of the Alain -Pier Phase I hotel. Paragon Hotels is acceptable to the Agency, subject to the following terms and conditions: 1. That formal entitlement plans be prepared and submitted for this portion of the project, pursuant to the First Implementation Agreement, by the %lay 1 deadline. 2. The hotel must be of the scope and quality of that intended within the original Disposition and Development Agreement (Irvine Marriott quality). 3. The hotel franchise is subject to the approval of the City/Agency. 4. The hotel must provide for restaurant(s) and public meeting areas with banquet facilities the scope of which are subject to the approval of the City/Agency. 5. No later than Monday, lurch 31, you must provide to us a letter from the Huntington Pacifica Development Group indicating that Paragon Hotels Is both the operator and developer you have selected to develop and operate this portion of the project. Telephone (714) 535-5202 �D Should you have any questions, please feel free to ccntact me, Doug La Belle, or ~like Adams, at your convenience. Sincerely, Charles W. Thompson, City Administrator C;V T:lp xc: Honorable Mayor and City Council Members Douglas N. La Belle, Deputy City Administrator/Redevelopment Mike Adams, Principal Redevelopment Planner Dick Schwartz, Huntington Pacifica Development Group Uri Gat!, Huntington Pacifica Development Group Dick Harlow, Harlow do Associates 2220h D R A F T -' City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY ADMINISTRATOR March 25, 1986 Mr. Stanley Bloom Randall Foods 2905 East 50th Street Vernon, California SUBJECT: PROPOSED PIER SIDE VILLAGE DEVELOPER/OPERATOR Dear Mr. Bloom: The purpose of this letter is to respond to your submittal of Bryant L. Morris Development Company, as the developer/operator of Pier Side Village. Bryant L. Morris Development is acceptable to the Agency, subject to the following terms and conditions: 1. That formal entitlement plans be prepared and submitted for this portion of the project, pursuant to the First Implementation Agreement, by the May 1 deadline. That includes the total development concept for Pier Side Village Phases I be II. 2. No later than Monday, March 31, you must provide to us a copy of an Agreement that you have entered into with Bryant L. Morris Development for the "Pier Side Village" project. The project must also be constructed in accordance with the scope and quality and as an integral part of the total development as provided for in the Disposition and Development Agreement, previously entered into. Should you have any questions, please feel free to contact me, Doug La Belle, or Mike Adams, at your convenience. Sincerely, Charles W. Thompson, City Administrator CWT:lp xc: Honorable Mayor and City Council Members Douglas N. La Belle, Deputy City Administrator/Redevelopment Mike Adams, Principal Redevelopment Planner t_ Dick Schwartz, Huntington Pacifica Development Group Uri Gati, Huntington Pacifica Development Group Dick Harlow, Harlow do Associates Telephone (714) 536-5202 2195h + D �• lv 1.� 7 u +� PARAGON MAR 2 q LJ1 H• O T E.• I. • S CITY OF HU IIN;GTON cEAC.-i PDMINISTRATIVE OFFIC- March 21, 1986 Honorable Mayor and City Council City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Gentlemen: As a follow up to our letter of March 12, 1986, and our subsequent phone conversations with City Manager, Charles Thompson and Doug LaBelle, I am sending this letter as a further indication of our desire and intent todevelop a first-class, approximately a 300 suite hotel,_ according to the standards as outlined in the DDA to be franchised as either an Embassy Suite, Hilton or Sheraton. In this regard, we are prepared to move ahead immediately upon being designated the hotel operator and developer of choice with the hotel project. We will immediately upon receiving that designation reinstitute our architectural design efforts. To accomplish this, we have selected Peter A. Lendrum and Associates in Phoenix, Arizona, as our architect and have contracted with them, subject to our selection, to further undertake this work. We've already expended considerable dollars in preliminary site studies with their firm. Peter A. Lendrum is an extremely competent hotel design firm. Over the years they have been involved in most of the hotels developed by Red Lion's and Doubletree Inns and are presently in- volved with a large Red Lion and a Ramada Renaissance development in San Diego. They hold outstanding credentials and I know everyone will be pleased with their efforts. We have had preliminary discussions with several builders but no decision will be made on this until the preliminary plans are complete and a bidding, interview selection process is undertaken. Paragon is also exceptionally qualified as a developer operator of the proposed hotel. We are a 25 year old operating company that has been developing substantial hotels for some 15 years. We have additionally developed P.O. Box 7098 0 5333 North 7th Street e Phoenix, Arizona 85011 a 602/248-08I1 V `J Letter to Honorable Mayor and City Council March 21, 1986 Page Two commercial office buildings and apartments. Our primary emphasis on development goes back to 1972-73, when we developed the 170 room Airport Ramada Inn in Spokane. We followed two years later with a large Ramada in Bozeman, Montana and two years after that the large Ramada Inn and trailer park in Sun City, Arizona. Our efforts as developer accelerated in the 1980's when we acted as the developer or co -developer of the following projects: , Los Abrigados, Sedona, Arizona - 186 Casita Suites, destination resort, $25 million. Tucson Airport Embassy Suites - commercial hotel, 207 Suites, $18 million. Baton Rouge Embassy Suite - commercial hotel, 224 Suites, $22 million. Hotel Park Tucson - commercial hotel, 217 Suites, $21.8 million. Hilton Inn - commercial, convention hotel, 272 Suites, $20 million. Additionally, we are presently under development on the following: Brookfield Embassy Suites - commercial hotel, 203 Suites, $16 million (cpening December 1986). Ramada Inn - commercial hotel, 150 Rooms, $7.5 million (opening September 1986). Hampton Inn - commercial hotel, 127 Rooms, $6.0 million (opening October 1986). Mission Hills Resort and Country Club - 248 Suites, $30 million (opening February 1987). As you can see from the hotels enumerated above, we have been involved in hotel development for some 15 years and probably have as much experience as anyone in the develop- ment and operation of suite hotels. Because it would be premature to do so, we have not solicited financing for this hotel, specifically. However, we have had conversations conceptually with two pension funds,; Coast Federal Savings & Loan, Great Western Savings &.Loan, Letter to Honorable Mayor and City Council March 21, 1986 Page Three 49 Bear Stearns and two brokers representing a number of major institutional lenders. We -have found a great deal of conceptual acceptance of the project and when our preliminary plans are complete, we will create a package to solicit this financing. obtaining the dollars for the project is always one of the more difficult aspects. How- ever, we have been 100% successful in every major project we've undertaken and would expect no less success on this opportunity. In conclusion, let me once again reaffirm and reiterate that we at Paragon Hotels are prepared to move ahead imm- ediately upon our designation and will undertake whatever steps are necessary to accomplish the project as conceived. We have already assigned a Project Manager and are just awaiting your designation so that we can move ahead. The need for a quick determination can not be overstressed as it will take from 9 to 12 months to get all of the architect- ural work complete, approvals done and bidding and builder selection and financing finished. It is estimated the construction period will be approximately 16 months. If we are to open for the 1988 summer season, a designation needs to take place immediately so that our efforts can begin. We've appreciated your help and cooperation and again stand ready to answer any additional questions or provide any additional information you may desire. Sincerely, Jim . Rhead President JOR:tk cc: Stan Bloom RESTATED FIRST IMPLEMENTATION AGREEMENT THIS R STATED FIRST IMPLEMENTATION AGREEMENT is entered into this day of February, 1986, by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency") and HUNTINGTON PACIFICA DEVELOPMENT GROUP ("Developer"), implementing that certain DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") by and between the parties hereto dated August 20 , 19 . R E C I T A L S A. Developer has advised Agency that it is unable to perform its obligations under the provisions of the DDA and has requested certain modifications and amendments thereto. B. Agency believes that the DDA is fair and reasonable and therefore, should be strictly enforced; however, subject to the completion of an updated market feasibility study and timely performance of Developer's obligations under this First Implementation Agreement, Agency may consider Developer's requested modification to the DDA. C. Developer acknowledges that Agency has the right to terminate the DDA, but desires that the Agency not do so until Developer has had an opportunity to provide Agency with evidence supporting its requested modifications. WC4, THEREFORE, the parties agree as follows: AnV rr urrv•r 1. Developer shall complete an update of the original market feasibility study for the proposed hotel in accordance with the scope and quality described in the DDA on or before March 1, 1986. 2. Developer'shall provide Agency with a letter of intent from a hotel operator and a hotel developer indicating their respective willingness to operate and develop the hotel, on or before March 1, 1986. The Agency shall indicate its acceptance or rejection of the hotel operator and/or developer within 34 days after submittal by Developer. 3. Developer shall enter into an Agreement with another developer, acceptable to the Agency, which developer will proceed with the development of "Pier Side Village" with a project of the scope and quality, and as an integral part of the total development, as envisioned by the Scope of Development in the DDA, on or before March 1, 1986. 4. Following fulfillment of the obligations described hereinabove, the Agency will consider certain of the requested modifications to the DDA, including the possibility of permitting the Pier Side development to proceed, prior to the hotel/retail development subject to appropriate conditions acceptable to the Agency, to be determined by March 15, 1986, to ensure complete development of the hotel. 5. Entitlement plans for the hotel/retail Pier Side shall be filed by Developer in a completed form pursuant to the requirements of the city of Huntington Beach, Development Services Department, on or before May 1, 1986. 6. Time is of the essence herein. Failure by Developer to perform hereunder shall be considered a default under the DDA and shall entitle Agency to terminate the DDA in accordance with Section 612 thereof. This Agreement does not constitute a novation of the DDA. 7. As long as the Developer timely completes its obligations hereunder, Agency agrees not to terminate the DDA pursuant to the terms thereof. 2. 8. The Developer warrants, agrees, and acknowledges that the execution of this Agreement by the Agency shall not constitute a waiver, release, or excuse from requirements of the DDA, and the Developer shall make no contention that it constitutes a waiver, release, or excuse in any proceedings related to the DDA. The Agency shall be entitled to specific enforcement of this Paragraph 8, and the Developer shall be estopped to deny the enforceability of this Section 8. 9. Notwithstanding anything herein to the contrary, the DDA shall remain in full force and effect in accordance with its terms unless subsequently amended by the parties thereto and Developer shall be obligated to commence construction on or before the time set forth in Attachment No. 5 of the DDA, or as otherwise amended. IN WITNESS THEREOF, the Agency and the Developer, have signed this Agreement on the respective dates set forth below. ATTEST: Agency Clerk APPROVED AS TO FORM: Z =:2h 41t,73--1 Agency Counsel II?ITIATED AND APPROVED: f De u y City Administrator Reel_ elopment 4t'I VP. 'k - Chairman APPROVED AS TO FORM: Special Agency, C-Ounsel APPROVED: Chief Executive Officer 3. HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, PACIFIC HERITAGE CORPORATION, a California Corporation By: Its: P esiaent By: Or Its: AVIV DEVELOPMENT CORPORATION, a Cal'� By: Its: By: Its: 4. /- cv0-r" REQUEST FO,., RE �ORM,E-NTUA, E N C Y c TY C14DK February 10, 1986 Honorable Chairman and Redevelopment Agency hlergpefg Submitted to: Charles IV. Thompson, Chief Executive Officer x/ Submitted by: Douglas N. La Belle, Deputy City Administrator/Redevelopment Prepared by: RESTATED FIRST IMPLEMENTATION AGREEMENT MAIN -PIER SUBAREA Subject: DISPOSITION AND DEVELOPMENT AGREEMENT ACTION RII 86-12 Consistent with Council policy? [x] Yes (] New Policy or Exception Statement of Issue, Recommendation, Analysis, Fundin j Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmitted for the Agency's consideration is a restated first implementation agreement to the 1l1ain-Pier subarea Disposition and Development Agreement with the Huntington Pacifica Development Group. RECOMMENDATION: Agency to review and approve the restated implementation agreement to Disposition and Development Agreement for the hiafn-Pier Redevelopment Subarea. ANALYSIS: At the special Redevelopment Agency meeting of January 27, 1986 the Agency directed staff to prepare an agreement which will commit the Huntington Pacifica Development Group to an established course of action. This agreement was approved February 3, and Identified benchmark activities necessagL for the Blain Pier Phase I development project to continue within the approved Schedule of Performance. The Redevelopment Committee and staff met with the developer on Friday, February 7, and as a result of that meeting several modifications to the agreement are proposed for the Agency's consideration. FUNDING SOURCE: Not directly applicable. ALTERNATIVE ACTION: Direct staff to work with the developer under the provisions of the original DDA. ATTACHMENTS: 1 First Implementation Agreement to the Main -Pier Subarea D.D.A. 2. Restated First Implementation Agreement to the plain -Pier Subarea D.D.A. CWT/DLB/MA:ajh 1960h � 3� vroi11s5 FIRST IMPLEMENTATION AGREEMENT THIS FIRST IMPLEMENTATION AGREEMENT is entered into this K day of February, 1986 by and between the HUNTINGTON BEAC REDEVELOPMENT AGENCY ("Agency") AND HUNTINGTON PACIFICA DEVELOPMENT GROUP ("Developer") implementing that certain DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") by and between the parties hereto dated August, 198q. RECTTAT.S A. Developer has advised Agency that it is unable to perform its obligations under the provisions of the DDA and has requested certain modifications and amendments thereto. B. Agency believes that the DDA is fair and reasonable and therefore should be strictly enforced; however subject to the completion of an updated market feasibility study and timely performance of Developer's obligations under this First Implementation Agreement, Agency may consider Developer's requested modification to the DDA. C. Developer acknowledges that Agency has the right to terminate the DDA but desires that the Agency not do so until Developer has had an opportunity to provide Agency with evidence supporting its requested modifications. Now, Therefore, the parties agree as follows: AGREEMENT 1. Developer shall complete an updated market feasibility study for the proposed hotel in accordance with the scope and quality described in the DDA on or before March 1, 1986. The Agency staff shall select the consultant to perform the updated marketing feasibility study and the Developer shall pay for said study. 2. Developer shall provide Agency with a letter of intent from a hotel operator and a hotel developer indicating their respective willingness to operate and develop the hotel, on or before May 1, 1986. The Agency shall indicate its acceptance or rejection of the hotel operator and/or developer within 30 days after submittal by Developer. 3. Developer shall enter into an Agreement with another developer, acceptable to the Agency, which developer will proceed with the development of "Pier Side Village" with a project of the scope and quality, and as an integral part of the total development, as envisioned by the Scope of Development in the DDA on or before March 17, 1986. 4. Following fulfillment of the obligations described hereinabove the Agency may consider certain of the requested modifications to the DDA, including the possibility of permitting the Pier Side development to proceed prior to the hotel/retail development subject to appropriate conditions, acceptable to the Agency, to insure complete development of the Hotel. 5. Entitlement plans for the Hotel/Retail Pier -Side shall be filed by Developer in a completed form pursuant to the requirements of the City of Huntington Beach, Development Services Department on or before May 1, 1986. 6. Time is of the essence herein. Any failure of Developer to timely perform hereunder shall be considered a default under the DDA and shall entitle Agency to terminate the DDA in accordance with section 612 thereof. This Agreement does not constitute a novation of the DDA. 7. As long as the Developer timely completes its obligations hereunder Agency agrees not to terminate the DDA pursuant to the terms thereof. 8. The Devleoper warrants, agrees and acknowledges that the execution of this Agreement by the Agency shall not constitute a waiver, release or excuse from requirements of the DDA, and the Developer shall make no contention that it constitutes a waiver release, or excuse in any proceedings related to the DDA. The Agency shall be entitled to specific enforcement of this paragraph 8, and the Developer shall be estopped to deny the enforceability of this Section 8. 9. Notwithstanding anything herein to the contrary, the DDA shall remain in full force and effect in accordance with its terms unless subsequently amended by the parties thereto and Developer shall be obligated to commence construction on or before the time set forth in Attachment No. 5 of the DDA. 0205m IN WITNESS WHEREOF, the Agency, the City, and the Developer have signed this Agreement on the respective dates set forth below. 19P4 HUNTINGTON BEACH REDEVELOPMENT AGENCY By • W-V-� Chairman ATTEST: z 'em Agency Secretary Tf?6i^vRry .3 19S'6 CITY OF HUNTINGTON BEACH By Mayor ATTEST: 4�L .1. City Clerk APPROVED AS TO FORM: INITIATED AND APPROVED AS TO CONTENT gencyf Special Counsel De y City Admini trator i- 36-O Re elopment 020 5m ti REVIEWED AND APPROVED APPROVED: AS TO FORM: t l 4 City Attorney City Administrator Exec ive Director 112 Agency Attorney • Ity A(3 1131 HUNTINGTON PACIFICA DEVELOPMENT GROUP, a California General Partnership, PACIFIC HERITAGE CORPORATION, a California Corporation By: Its: By: Its: AVIV DEVELOPMENT CORPORATION, a California corporation By: Its: By: Its: 020 5m w h CJ/ iJt / 1 r I�� 322 `Main Sewer � %44 TA. 92648 17141460.8541 HUNTINGTON PACIFICA DEVELOPMENT Items To Be Resolved Regarding DDA 1. Separate Beach Side development from North Side Pacific Coast Highway. Proceed with Pier Side development first with proper ties to the Hotel/Retail site. 2. Agency to assume responsibility for Plaza and pedestrian bridge over Pacific Coast Highway. 3. Agency to assume responsibility for oil relocation. 4. One Hotel site to be located between 2nd and 3rd Streets, Pacific Coast Highway and Walnut Street. 5. Pacific Coast Highway and Main Street to be a retail/com- mercial of approximately 50,000 sq. ft. 6. Huntington Pacifica will give up the ten year Tax Increment and the last four years of Bed Tax committed to the project by the Redevelopment Agency. 7. Agency will sell to us Agency property at their original cost. 8. Agency to provide the parking structure, to be built concurrently with development. 9. Agency to relocate lifeguard facility. 10. Agency to acquire Tubach holdings in project area. 11. Agency to delete provision in DDA relating to definition of Gross Receipts specifying Agency interest in proceeds from sale of project. 12. Possessory interest tax on pier side to be discussed With developer for that side. 13. 25,000 sq. ft. deck expansion to be phased concurrently with development of the -deck area. Timing shall be at developer discretion. 14. Hotel criteria to be negotiated directly with hotel opera- tor when selected by developer and approved by Agency. 15. Issues of the pierside lease to be discussed at a later time after point 11 is resolved and developer is present. A Monies given up_by Developer: $3,186,859 Tax Increment Return 2,790,171 Transient Occupancy Tax (last 4 years) $5,977,030* Total Agency Responsibilities: Reimburse developer for the cost of public imrovements (plaza] overpass, underground utilities, street improvements and lighting, etc.) Assume responsibility for hook-up fees for the Hotel Clear up oil problem Sell PCH property to Huntington Pacifica for the amount originally paid when the property was purchased to provide parking to serve the area. * Note: These figures do not include a tax increment for the pier side and additional retail for Main Street and Pacific Coast Highway which will be retained by Huntington Pacifica. RELOCATION COSTS TO BE PAID FOR BY CITY WITH $1,0000000 PREVIOUSLY ALLOCATED TO DEVELOPER: Lifeguard facility $ 700,000.00 Golden Bear (possibly) 200,000.00 10 Families (F $4,500.00 each) 45400.00 4 Businesses (@ $15*000 each) 60j000.00 Total Relocation Cost $ 10005,000.00 MINUTES REDEVELOPKW AGENCY Council Chamber, Civic Center �-- Huntington Beach, California Monday, January 27, 1986 A tape recording of this meeting is on file in the City Clerk's Office Chairman Mandic called the adjourned regular meeting of the Redevelopment Agency to order. ROLL CALL Present: MacAllister, Finley, Mandic, Bailey, Green Absent: Kelly, Thomas PUBLIC COMMITS Barbara Milkovich addressed the Agency regarding preservation of buildings with historical value. She requested that the Agency suspend issuance of dem- olition permits pertaining to buildings over fifty years old. She stated this would give the Historical Society time to inform building owners of options available to them to either preserve the building or allow the Society to take pictures, develop an oral history or preserve the facade if such action were merited. AMENDMENT TO THE MAIN -PIER -SUBAREA DISPOSITION b DEVELOPMENT ACREEKENT - EMINGTON PACIFICA DEVELAPPMT GROUP The Deputy Clerk presented a communication from the Deputy City Administrator - Redevelopment transmitting an amendment to the Main -Pier Subarea Disposition and Development Agreement with the Huntington Pacifica Development Group. Doug LaBelle, Deputy City Administrator/Redevelopment presented a staff report. Mike Adams, Principal Redevelopment Planner, presented an overview of the "Scope of Development". He stated that the developer was in possession of 7.5 parcels representing sixty-seven percent of the site area. This repre- sents one-half interest short of the two-thirds of owner participation requirement. Discussion was held regarding possible modifications to the Disposition and Development Agreement. Councilman MacAllister questioned staff regarding Coastal Commission approval of the proposed Pier Side Village. A motion was made by MacAllister, seconded by Bailey, to direct staff to obtain a written response from the Coastal Ccmmission as to the appealability and their responsibility of direct review of development on the ocean side of Pacific Coast Highway. The motion carried by the following roll call vote: Page 2 - Redevelopment Agency Minutes - 1/27/86 AYES: MacAllister, Finley, Mandic, Bailey, Green NOES: Hone ABSENT: Kelly, Thomas Councilman Green suggested that Work on the Pier Side Village not be done dur- ing the tourist season. Mr. LaBelle presented an overview of the developers request for modification of the Main Pier Disposition and Development Agreement dated August 19. He read the six Benchmark Activities as recommended by staff. Discussion was held regarding the matter. Closed Session Chairman Mandic called a Closed Session of the Redevelopment Agency pursuant to Government Code Section 54956.8 to give instruction to the City's negotia- tor regarding negotiation with Huntington Pacifica Corporation concerning the purchase/sale/exchange/lease of the property located at Main -Pier Redevelop- ment Project Area. Recess - Reconvene The Chairman called a recess of the Agency at 8:20 P.M. The meeting was reconvened at 10:00 P.M. A motion was made by MacAllister, seconded by Mandic, to direct staff to bring back to Council in the form of an agreement at the next Redevelopment Agency meeting to be executed by all parties to the existing DDA the modifications as required to implement the following acitivities: 1. Hotel Market Analysis That an up -dated marketing feasibility study be completed for a hotel of the scope and quality described in the DDA by March 1, 1986. The Agency staff shall select the consultant and the Developer shall pay for the said study. "2. DDA Amendments Agency believes that the DDA is fair and reasonable and therefore should be strictly enforced, however, following fulfillment of paragraph 1 and analysis of the same by Agency, Agency staff and consultants, Agency staff may be authorized to negotiate modifications to the DDA in accor- dance with up -dated market feasibility. 3. Hotel Develo er/0 erator That the Developer provide Agency with a letter of intent from a hotel operator/developer acceptable to the Agency by May 1, 1986. 4. Pier Side Developer That a pier side Developer who will proceed with the development of the "pier side village" with a project of the scope and quality and as an Page 3 - Redevelopment Agency Minutes - 1/27/86 integral portion of the total development as provided for in the Disposi- tion and Development Agreement be approved by the Agency by March 17, 1986. 5. Pier -Side Development Following fulfillment of paragraph 4, above, Agency may consider allowing the Pier -Side Development to proceed p_ior to the Hotel/Retail, subject to appropriate conditions acceptable to the Agency to insure complete development of the Hotel. b. Entitlements That the entitlement plans for the Hotel/Retail and Pier -Side be filed in a completed form pursuant to the requirements of the City of Huntington Beach, Development Services Department by no later than May 1, 1986. The motion carried by the following roll call vote: AYES: MacAllister, Finley, Handle, Bailey, Green NOES: None ABSENT: Kelly, Thomas MODIFICATION OF AGENCY RESOLUTION i48 The Deputy Clerk presented a Communication from the Deputy City Administrator - Redevelopment transmitting Resolution No. 128 - "A RESOLUTION OF THE REDE- VELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ADOPTING PROCEDURES FOR APPROVING DEVELOPMENT PROPOSALS WITHIN THE MAIN -PIER REDEVELOPMENT PROJECT ARIA," which supersedes the provisions of Resolution No. 48 relative to para- meters under which the Agency's powers of eminent domain will be utilized to acquire property for redevelopment purposes. A motion was made by MacAllister, seconded by Bailey, by Y.inute Action that the area bounded by Main Street, Walnut Avence, Pacific Coast Highway and 2nd Street be excluded from Resolution No. 48 except for that portion defined in the map as the northeast portion. Following discussion the motion carried by the following roll call vote: AYES: MacAllister, Finley, Mandic, Bailey NOES: Green :_�:= ABSENT: Kelly, Thomas Page 4 — Redevelopment Agency Minutes — 1/27/86 AWOURNlCENT The Chairman adjourned .the regular meeting cf the Redevelopment Agency. ATTEST: Alicia M. Wentworth l.1erK BY: V�, Deputy Clerk Alicia M. Wentworth Clerk BY: Deputy ]ark a rman REQUEST F0,.--4REDEVELOPMENT A-e�ENCY ACTION Oti �17,46 G4/"`J `0,N it 86-05 January 23, 1986 Honorable Mayor and City Council Members Submitted to: Charles IV. 'Thompson, City Admini. ator , Submitted by: Douglas N. La Belle, Deputy City Administrator/Redevelopmen Prepared by: AMENDMENT TO THE MAIN -PIER SUBAREA DISPOSITION AND Subject: DEVELOPMENT AGREEMENT Consistent with Council Policy? DQ Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Fundinh Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmitted for the Agency's consideration is an amendment to the Main -Pier subarea Disposition and Development Agreement with the Huntington Pacifica Development Group. RECOMMENDATION: Agency to review and discuss the contents of this report and direct staff to draft an amended Disposition and Development Agreement with the changes outlined and schedule a public hearing before the Agency at the earliest possible time. ANALYSIS: On August 19, 1985, the Redevelopment Agency unanimously approved the plain -Pier subarea Disposition and Development Agreement with Huntington Pacifica Development Group. Although it was approved on August 19, 1985, the agreement could not be executed until the Agency received and reviewed the developer's Final Report required as part of the Exclusive Negotiating Agreement for the project area. At their January 6, 1986 meeting the Agency approved a minor modification to the agreement which extended the time table fo: the submittal of the conditions precedent from 120 days after agreement approval to 200 days. This additional time is intended to provide the developer with an opportunity to identify those issues in the original agreement which have become obstacles to the project proceeding as originally proposed. Staff has had numerous meetings and telephone conversations with the developer following Agency action, as identified in the City Administrator's communication to Council dated January 17, 1986. The following Items are the issues which have been raised in these discussions: 1. To develop the project in consecutive phases, Pier -side village to be the first phase, followed by the hotel and inland commercial development. Staff can support this proposal provided that adequate assurances are drafted into the agreement which will guarantee hotel development within a certain time fra m e. G Plonks RH 86-05 January 23, 1886 Page Two 2. To modify the hotel side development to accommodate additional commercial square footage of approximately 50,000 square feet, this concept will shift the hotel further to the south in the project area. This detail of site plan development and evolution can be reviewed and revised through the entitlement process. Staff agrees in concept to the proposal. 3. To remove the detailed quantitative measures by which a "first rate, high quality" hotel is defined in the agreement, such as 300 rooms, $16,000 per room, and 420 square feet per room, etc. Staff can support this provided that the provision for Agency review and approval of both hotel developer and operator remain in the agreement. It will then be through this review and approval process that the measures of first quality can be used for evaluation. 4. To modify the pier side development to allow for phasing of the pier expansion decks to occur when the city has obtained control of the State Beach area. This request is another example of the design decisions which will be made during the entitlement process. Staff agrees in concept to the proposal. 5. To allow for review of the pier side lease agreement by the pier side sub -developer and for the Agency to be open to any suggested modifications the sub -developer may propose. Staff agrees in concept, however, the details of any proposed modifications will need to be reviewed on an Item -by -Item basis. In addition to the above stated issues the developer is also proposing modifications to the financial assistance provided by the Agency. Staff would recommend that these Items be reviewed in an executive session. FUNDING SOURCE: Not directly applicable, see attachment for further explanation. ALTERNATIVE ACTION: Direct staff to work with the developer in an attempt to make the original agreement workable. ATTACHMENTS: Scope of Development CIVT/DLB/111A:ajh 1884h SCOPE OF DEVELOPMENT 1. ARCHITECTURE AND DESIGN: n, a Site shall be designed and developed as an integrated complex in which the buildings will have architectural excellence, both individually, as well as, in the content of a total complex. IL DEVELOPER'S RESPONSIBILITIES: A. Developer Improvements - The Developer agrees to develop and construct, or cause the development and construction, at a construction cost of at least Seventy -Five Million Dollars ($75,000,000), exclusive of land value.. I. A first rate, high quality hotel of a minimum of 300 rooms, with a minimum gross leasable floor area of 231,000 square feet with associated retail shops, meeting rooms. banquet facilities and at least one first-class restaurant. Surface and subterranean parking with a .minimum of 300 parking ;paces beneath to the hotel. 2. A retail commercial building with a minimum gross leasable area of 30,000 square feet (PCH and Main). The Developer shall additionally provide Public Plaza of approximately 5,000 square feet which would include open passive rest and landscaped areas, plus an elevated connecting pedestrian walkway to Pier Side Village. 3. A Pier Side Village consisting of speciality commercial uses with a gross leasable area of 75,000 - 100,000 square feet, plus a multiple -tiered parking structure with not less than 500 spaces. 4. The Developer shall contribute to the rehabilitation of the existing city Pier to render it structurally sound and in conformity with the Uniform Building Code and to provide structural supports for new develop pads to be made available to the Developer for commercial use. The developer shall expend the sum of Two Million Five Hundred Thousand Dollars W,1 500,000) of its funds in carrying out its obligations. 5. The Developer shall be responsible for all or+site and offsite improvements relating to the development of the Site, including the following: a) All onsite and offsite improvements -- side-malks, street lighting, curbs, gutters, street trees, street improvements, surface parking lot improvements, parking structures, etc., shall conform to the design and materials as approved by the agency. �.l b) Sanitary sewers, storm drains, water supply, gas lines, telephone and electrical power facilities (if required) to be brought to, modified, or relocated from the perimeter of the Site. All such existing underground utility lines will be capped by the Developer nithin the public right-of-way is close as possible to building locatiors to be served by such utilities and to be attached and connected by the Developer. c) Traffic control sign41s (if required) and related to the Site Hill be provided at approved intersections and 'Locations on the streets ad;acent to the Site. d) Improvements required in connection with and as a result of review by the .agency and the city of plans, drawings, or environmental assessments relative to the Developer Improvements or this Agreement. 1499h SUMMARY OF AGREEMENT PIER SIDE DEVELOPER AGREES TO THE FOLLOWING: 1. , Construction of '. 5,000 to 100,000 square feet of specialty retail space. (Approximately o01 food -related uses), including four (4) dinner restaurants. -2. Construction of a 500-space parking structure designed under and around the specialty retail areas. (Approximately 300 spaces will serve as replacement for parking Ntlich currently exists). 3. Contribute to the rehabilitation and expansion of the City Pier S2,500,000. 4. Lease the city property for a base fee of S286,000 per year for the first six years, after which the base figure will be adjusted by the consumer price index figure. The base rent shall be the minimum amount received by the city. After the development becomes established, the city will share in a percentage of the receipts. 5. Pay for all infrastructure, onsite and offsite improvements, except as otherwise noted. SUMMARY OF AGREEMENT DEVELOPER AGREES TO THE FOLLOWLNG: 1. Construction of a 300-room "first class" hotel, including 231,000 square feet of associated retail shops, meeting rooms, banquet facilities, restaurants, and 300 onsite parking spaces. 2. Construction of 30,00o square feet of leasable retail commercial area. 3. Construction of 5,000 square foot public plaza. 4. Construction and dedication to the city of a pedestrian over crossing to the Pier side commercial. 5. Purchase the city property and any subsequent city acquisitions of a price to be determined by the value of the improvements proposed Upon it, {The present city property may or may not be necessary fcr the construction of the hotel, the precise location is yet to be determined). 6. Pay for all infrastructure, onsite and offsite imnprovements, except as otherwise noted. SUMMARY OF AGREEMENT CITY CONTRIBUTIONS THE CITY AGREES TO THE FOLLOWING: 1. Rehabilitation and expansion of the City Pier to the surf line. (City to apply for a coastal conservancy loan and/or grant). 2. Construction of a parking structure within a reasonable walking distance of the proposed improvements (approximately 1000 spaces). City to establish a parking assessment district to pay for construction costs). r 3. Acquire or work with the remaining property owners to assure a uniformity to the overall development plan. 4. Pay relocation expenses up to $1,000,000 from H.C.D. funds. 5. Pay for the upgrading of water service in the project area up to $1,000,000. 6. Pay for the undergrounding of utilities within the project site up to $350,000. 7. Pass through all available tax increment revenues generated for both project areas to their respective projects for a period of 15 years. S. Pass through all transient occupancy tax revenues to the hotel project for a period of 10 years. 1100h ,. REQUEST F R . O.r.� . EDEVELOPMENT I-._�ENCY ACTIONt�i/-thc. ISl' CITY COVNGt1. A1P1L0��1) RIi 86-08 -�"""��r Date Jantinry-29 1 8 . 9 6_- Submitted to: Submitted by: Prepared by: Subject: Honorable Chai bers Charles W. Thompson, Chief Executive Offiwru//// ' Douglas N. La Belle, Deputy City Administrator/Redevelopmen FIRST IMPLEMENTATION AGREEMENT TO THE MAIN -PIER SUBAREA DISPOSITION AND DEVELOPMENT AGREEMENT Consistent with Council Policy? k ] Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Fundinq Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: Transmitted for the Agency's consideration is the first implementation agreement to the h1ain-Pier subarea Disposition and Development Agreement with the Huntington Pacifica Development Group. RECOMMENDATION: Agency to review and approve the Implementation agreement to Disposition and Development Agreement for the Rlain-Pier Redevelopment Subarea. ANALYSIS: At the special Redevelopment Agency meeting of January 27, 1986 the Agency directed staff to prepare an agreement which will commit the Huntington Pacifica Development Group to an established course of action. This agreement is intended to identify benchmark activities which must occur in order for the development project to continue within the approved Schedule of Performance. Staff has presented this agreement to the developer for review and approval and it is our understanding that they have scheduled a meeting prior to your February 3 meeting regarding the agreement. FUNDING SOURCE: Not directly applicable. ALTERNATIVE ACTION: Direct staff to work with the developer under the provisions of the original DDA without the First Implementation Agreement. ATTACHMENTS: First Implementation Agreement to the ]Bain -Pier Subarea D.D.A. CWT/DLB/NIA:ajh G 1911h PI O/1 /85 r MINUTES REDEVELOPMENT AGENCY Council Chamber, Civic Center Huntington Beach, California Honday, January 27, 1986 A tape recording of this meeting is on file in the City Clerk's Office Chairman Mandic called the adjourned regular meeting of the Redevelopment Agency to order. Present: MacAllister, Finley, Mandic, Bailey, Green Absent: Kelly, Thomas PUBLIC COMMENTS Barbara Milkovich addressed the Agency regarding preservation of buildings with historical value. She requested that the Agency suspend issuance of dem- olition permits pertaining to buildings over fifty years old. She stated this would give the Historical Society time to inform building owners of options available to them to either preserve the building or allow the Society to take 1%4.00- pictures, develop an oral history or preserve the facade if such action were merited. AMENDMENT TO THE MAIN --PIER SUBARFA DISPOSITION & DEVELOPMENT AGREEKE T HUNTINGTON PACIFICA DEVELOPMENT GROUP The Deputy Clerk presented a communication from the Deputy City Administrator - Redevelopment transmitting an amendment to the Main -Pier Subarea Disposition and Development Agreement with the Huntington Pacifica Development Group. Doug LaBelle, Deputy City Administrator/Redevelopment presented a staff report. Mike Adams, Principal Redevelopment Planner, presented an overview of the "Scope of Development". He stated that the developer was in possession of 7.5 parcels representing sixty-seven percent of the site area. This repre- sents one-half interest short of the two-thirds of owner participation requirement. Discussion was held regarding possible modifications to the Disposition and Development Agreement. Councilman MacAllister questioned staff regarding Coastal Commission approval of the proposed Pier Side Village. A motion was made by MacAllister, seconded by Bailey, to direct staff to { obtain a written response from the Coastal Commission as to the appealability �-►` and their responsibility of direct review of development on the ocean side of Pacific Coast Highway. The motion carried by the following roll call vote: Page 2 - Redevelopment Agency Minutes - 1/27/86 AYES: MacAllister, Finley, Mandic, Bailey, Green NOES: None ABSENT: Kelly, Thomas Councilman Green suggested that work on the Pier Side Village not be done dur- ing the tourist season. Mr. LaBelle presented an overview of the developers request for modification of the Main Pier Disposition and Development Agreement dated August 19. He read the six Benchmark Activities as recommended by staff. Discussion was held regarding the matter. Closed Session Chairman Mandic called a Closed Session of the Redevelopment Agency pursuant to Government Code Section 54956.8 to give instruction to the City's negotia- tor regarding negotiation with Huntington Pacifica Corporation concerning the purchase/sale/exchange/lease of the property located at Main -Pier Redevelop- ment Project Area. Recess - Reconvene The Chairman called a recess of the Agency at 8:20 P.M. The meeting was reconvened at 10:00 P.M. A motion was made by MacAllister, seconded by Mandic, to direct staff to bring back to Council in the form of an agreement at the next Redevelopment Agency meeting to be executed by all parties to the existing DDA the modifications as required to implement the following acitivities: 1. Hotel Market Analysis That an up -dated marketing feasibility study be completed for a hotel of the scope and quality described in the DDA by March 1, 1986. The Agency staff shall select the consultant and the Developer shall pay for the said study. 2. DDA Amendments Agency believes that the DDA is fair and reasonable and therefore should be strictly enforced, however, following fulfillment of paragraph 1 and analysis of the same by Agency, Agency staff and consultants, Agency staff may be authorized to negotiate modifications to the DDA in accor- dance with up -dated market feasibility. 3. Hotel Developer/Operator That the Developer provide Agency with a letter of intent from a hotel operator/developer acceptable to the Agency by May 1, 1986. 4. Pier Side Developer That a pier side Developer who will proceed with the development of the "pier side village" with a project of the scope and quality and as an i Page 3 - Redevelopment Agency Minutes - 1/27/86 integral portion of the total development as.provided for in the Disposi- tion and Development Agreement. be approved by the Agency by March 17, 1986. 5. Pier -Side Development Following fulfillment of paragraph 4, above, Agency may consider allowing the Pier -Side Development to proceed prior to the Hotel/Retail, subject to appropriate conditions acceptable to the Agency to insure complete development of the Hotel. 6. Entitlements That the entitlement plans for the Hotel/Retail and Pier -Side be filed in a completed form pursuant to the requirements of the City of Huntington Beach, Development Services Department by no later than May 1, 1986. The motion carried by the following roll call vote: AYES: MacAllister, Finley, Mandic, Bailey, Green NOES: None ABSENT: Kelly, Thomas MODIFICATION OF AGENCY RESOLUTION #48 The Deputy Clerk presented a communication from the Deputy City Administrator - Redevelopment transmitting Resolution No. 128 - "A RESOLUTION OF THE REDE- VELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ADOPTING PROCEDURES FOR APPROVING DEVELOPMM PROPOSALS WITHIN THE MAIN -PIER REDEVELOPMENT PROTECT AREA," which supersedes the provisions of Resolution No. 48 relative to para- meters under which the Agency's powers of eminent domain will be utilized to acquire property for redevelopment purposes. A motion was made by MacAllister, seconded by Bailey, by Minute Action that the area bounded by Main Street, Walnut Avenue, Pacific Coast Highway and 2nd Street be excluded from Resolution No. 48 except for that portion defined in the map as the northeast portion. Following discussion the motion carried by the following roll call vote: AYES: MacAllister, Finley, Mandic, Bailey 10"*N NOES: Green ABSENT: Kelly, Thomas Page 4 - Redevelopment Agency Minutes - 1/27/86 ADJOURNMENT The Chairman adjourned the regular meeting of the Redevelopment Agency. Alicia M. Wentworth ATTEST: Clerk BY: Deputy Clerk Alicia M. Wentworth C er Chairman BY: Deputy Clerk