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HomeMy WebLinkAboutMAKALLON ATLANTA HUNTINGTON BEACH, LLC - 2006-10-16Council/Agency Meeting Held: Deferred/Continued to: ,Ap ove ❑Conditionally Approved ❑Deniedp Cit erk' Signat Council Meeting Date: August 20, 2012 Departmen ,I Number: ED 12-34 CITY OF HUNTINGTON BEACH REQUESTFOR SUCCESSOR- D CITY COUNCIL•' SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager/Executive Director PREPARED BY: Bob Hall, Deputy City Manager/Director of Economic Development SUBJECT: Adopt City Council Resolution No. 2012-59 and Successor Agency Resolution No. 2012-03 Terminating the Owner Participation Agreement (OPA) between the City, Successor Agency and Makallon Atlanta Huntington Beach, LLC for the Pacific City Project Statement of Issue: The former Redevelopment Agency, the City and Makallon Atlanta Huntington Beach, LLC., a Delaware limited liability company ("Makar"), executed and delivered an Owner Participation Agreement pursuant to Agency Resolution No. 364 and City Resolution No. 2006-67 approved and adopted at the October 16, 2006 City Council meeting, as supplemented by letter dated February 1, 2008 and that certain Implementation Agreement entered into as of December 15, 2008 (collectively, the `OPA") for development of Pacific City. Due to the foreclosure of a deed of trust secured by the property which was the subject of the OPA, Makar is no longer the owner of the property. Staff believes the OPA has been terminated and is no longer in force and effect, but as a precautionary measure desire to take these perfunctory actions to terminate the OPA. Financial Impact: Not applicable Successor Agency and City Council Recommended Action: Motion to: A) Adopt Resolution No. 2012-59, "A Resolution of the City Council of the City of Huntington Beach Consenting to and Approving the Termination of an Owner Participation Agreement Among the City, the Former Redevelopment Agency and Makallon Atlanta Huntington Beach, LLC;" and, B) Adopt Resolution No Redevelopment Agency of t Termination of an Owne Redevelopment Agency and r . 2012-03, "Resolution of the Successor Agency of the he City of Huntington Beach Consenting to and Approving the Participation Agreement Among the City, the Former Makallon Atlanta Huntington Beach, LLC;" and, C) Authorize the City Manager/Executive Director or their respective designees to sign all documents and take all actions necessary to effectuate this item. Alternative Action(s): Do not take the perfunctory action to terminate the OPA and direct staff as necessary HB -297- Item 17. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 8/20/2012 DEPARTMENT ID NUMBER: ED 12-34 Analysis: The OPA was to provide for the development of Pacific City, a mixed use project as proposed by Makar. In October 2011, a deed of trust secured by the property which was the subject of the OPA was in default, was foreclosed on, and was sold through a Trustee Sale. Pursuant to Section 1007 of the OPA, there has been an incurable material default under the OPA due to an assignment without the prior written approval of the City and former Redevelopment Agency. The OPA has been terminated and is no longer in force and effect due to the incurable material default pursuant to Section 1007 of the OPA, the fact that the OPA was never implemented by Makar and Makar is no longer the owner of the property which was the subject of the OPA, and by the foreclosure of the deed of trust which was secured by the property which was the subject of the OPA. The City and Successor Agency to the Redevelopment Agency provided notice of an incurable material default and termination of the OPA to Makar and the current owner of the Property, 21002 HB, LLC, a Delaware limited liability company ("New Owner"). The new owner agrees that the OPA has been terminated for the reasons described above. If approved by the Successor Agency to the Redevelopment Agency, the perfunctory termination will be sent to the Oversight Board for consideration in accordance with applicable law. Environmental Status: Not applicable Strategic Plan Goal: Enhance economic development Attachment(s): 1. Resolution No. 2012-59, "A Resolution of the City Council of the City of Huntington Beach Consenting to and Approving the Termination of an Owner Participation Agreement Among the City, the Former Redevelopment Agency and Makallon Atlanta Huntinaton Beach. LLC" 2. Resolution No. 2012-03, "Resolution of the Successor Agency of the Redevelopment Agency of the City of Huntington Beach Consenting to and Approving the Termination of an Owner Participation Agreement Among the City, the Former Redevelopment Aqencv and Makallon Atlanta Huntinaton Beach. LLC" 3. 1 Owner Participation Agreement Item 17. - 2 HB -298- i RESOLUTION NO. 2012-59 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH CONSENTING TO AND APPROVING THE TERMINATION OF AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE FORMER REDEVELOPMENT AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC WHEREAS, on December 29, 2011, the California Supreme Court delivered its decision in California Redevelopment Association v. Matosantos, finding ABx1 26 (the "Dissolution Act") largely constitutional; and Under the Dissolution Act and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, all California redevelopment agencies, including the Redevelopment Agency of the City of Huntington Beach (the "Former Agency"), were dissolved on February 1, 2012; and The City Council adopted a resolution accepting for the City the role of Successor Agency to the Former Agency (the "Successor Agency"); and The Dissolution Act was amended when the Governor signed Assembly Bill 1484 ("AB 1484") on June 27, 2012; and Under the Dissolution Act, each Successor Agency shall have an oversight board with fiduciary responsibilities to holders of enforceable obligations and the taxing entities that benefit from distributions of property taxes and other revenues pursuant to Section 34188; and The oversight board has been established for the Successor Agency (hereinafter referred to as the "Oversight Board") and all seven (7) members have been appointed to the Oversight Board pursuant to California Health and Safety Code Section 34179. The duties and responsibilities of the Oversight Board are set forth in Health and Safety Code Sections 34179 through 34181 of AB 26 as amended by AB 1484; and The Former Agency, the City, and Makallon Atlanta Huntington Beach, LLC., a Delaware limited liability company ("Makar"), entered into that certain Owner Participation Agreement executed and delivered pursuant to Agency Resolution No. 3 64 and City Resolution No. 2006-67 approved and adopted at the October 16, 2006 City Council meeting, as supplemented by letter dated February 1, 2008 and that certain Implementation Agreement entered into as of December 15, 2008 (collectively, the `OPA"); and Makar defaulted on a promissory note which was secured by a deed of trust recorded against the property which was the subject of the OPA ("Property"). The holder of the 12-3440/82899.doc Resolution No. 2012-59 promissory note foreclosed on the deed of trust and became the new owner of the Property; and The OPA has been terminated and is no longer in force and effect due to the fact that the OPA was never implemented by Makar, due to a material incurable default under the OPA (an assignment without the City and Former Agency's approval), and by the foreclosure of the deed of trust. Assuming arguendo that the OPA was implemented, was not automatically terminated due to a material incurable default under the OPA , did survive the foreclosure of the deed of trust, and is in force and effect, as a precautionary measure, the current owner of the Property, 21002 HB, LLC, a Delaware limited liability company ("New Owner"), the City and the Successor Agency (as the successor -in -interest to the Former Agency under the OPA) all agree to terminate the OPA. The City and New Owner have negotiated a Development Agreement pertaining to the Property. The Development Agreement terms provide that the OPA has been terminated and is no longer in force and effect; and Health and Safety Code Section 34171(d)(1)(E) provides that nothing in the Dissolution Act prohibits the Successor Agency, with the approval or at the direction of the Oversight Board, from terminating any existing agreements or contracts; and All legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: The City Council hereby finds and determines that the foregoing recitals are true and correct. 2. Assuming arguendo the OPA is still in effect, the City Council hereby consents to, ratifies and approves the termination of the OPA and hereby terminates the OPA. 3. Without the requirement of any further approval of the City Council, the City Administrator or designee is authorized and directed to take any action and execute any and all documents and agreements necessary to implement and effectuate the actions approved by and the purposes of this Resolution, including, without limitation, executing any and all documents on behalf of the City. 4. The City Council does not intend, by adoption of this Resolution, to waive any constitutional and/or legal rights of the Successor Agency or the City under law and/or in equity, including, without limitation, by virtue of the adoption of this Resolution and actions approved and taken pursuant to this Resolution and, therefore, reserves all such rights of the Successor Agency and the City under law and/or in equity. 2 12-3440/82899.doc Resolution No. 2012-59 5. This Resolution shall take effect immediately upon its adoption. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 2 0 t h day of August 20 12. REVIE D D APPROVED: Ci ° a er 12-3440/82899.doc Mayor INITIAT D PROVED: Director of Ec omic Development APPROVED AS TO FORM: 1 y Attorney _ Res. No. 2012-59 STATE OF CALIFORNIA COUNTY OF ORANGE j ss: CITY OF HUNTINGTON BEACH j I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on August 20, 2012 by the following vote: AYES: Shaw, Harper, Dwyer, Hansen, Carchio, Bohr, Boardman NOES: None ABSENT: None ABSTAIN: None IL&M= Cit Jerk and ex-officio erk of the City Council of the City of Huntington Beach, California �, i -_ �: .. SUCCESSOR AGENCY RESOLUTION NO. 2012-03 RESOLUTION OF THE SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONSENTING TO AND APPROVING THE TERMINATION OF AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE FORMER REDEVELOPMENT AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC WHEREAS, on December 29, 2011, the California Supreme Court delivered its decision in California Redevelopment Association v. Matosantos, finding ABxl 26 (the "Dissolution Act") largely constitutional; and Under the Dissolution Act and the California Supreme Court's decision in California Redevelopment Association v. Matosantos, all California redevelopment agencies, including the Redevelopment Agency of the City of Huntington Beach (the "Former Agency"), were dissolved on February 1, 2012; and The City Council adopted a resolution accepting for the City the role of Successor Agency to the Former Agency (the "Successor Agency"); and The Dissolution Act was amended when the Governor signed Assembly Bill 1484 ("AB 1484") on June 27, 2012; and Under the Dissolution Act, each Successor Agency shall have an oversight board with fiduciary responsibilities to holders of enforceable obligations and the taxing entities that benefit from distributions of property taxes and other revenues pursuant to Section 34188; and The oversight board has been established for the Successor Agency (hereinafter referred to as the "Oversight Board") and all seven (7) members have been appointed to the Oversight Board pursuant to California Health and Safety Code Section 34179. The duties and responsibilities of the Oversight Board are set forth in Health and Safety Code Sections 34179 through 34181 of AB 26 as amended by AB 1484; and The Former Agency, the City, and Makallon Atlanta Huntington Beach, LLC., a Delaware limited liability company ("Makar"), entered into that certain Owner Participation Agreement executed and delivered pursuant to Agency Resolution No. 364 and City Resolution No. 2006-67 approved and adopted at the October 16, 2006 City Council meeting, as supplemented by letter dated February 1, 2008 and that certain Implementation Agreement entered into as of December 15, 2008 (collectively, the `OPA"); and Makar defaulted on a promissory note which was secured by a deed of trust recorded against the property which was the subject of the OPA ("Property"). The holder of the promissory note foreclosed on the deed of trust and became the new owner of the Property; and 12-3440/82898.doc SUCCESSOR AGENCY Resolution No. 2012-03 The OPA has been terminated and is no longer in force and effect due to the fact that the OPA was never implemented by Makar, due to a material incurable default under the OPA (an assignment without the City and Former Agency's approval), and by the foreclosure of the deed of trust. Assuming arguendo that the OPA was implemented, was not automatically terminated due to a material incurable default under the OPA, did survive the foreclosure of the deed of trust, and is in force and effect, as a precautionary measure, the current owner of the Property, 21002 HB, LLC, a Delaware limited liability company ("New Owner"), the City and the Successor Agency (as the successor -in -interest to the Former Agency under the OPA) all agree to terminate the OPA. The City and New Owner have negotiated a Development Agreement pertaining to the Property. The Development Agreement terms provide that the OPA has been terminated and is no longer in force and effect; and Health and Safety Code Section 34171(d)(1)(E) provides that nothing in the Dissolution Act prohibits the Successor Agency, with the approval or at the direction of the Oversight Board, from terminating any existing agreements or contracts; and All legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, the Successor Agency to the Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows: 1. The Successor Agency hereby finds and determines that the foregoing recitals are true and correct. 2. Assuming arguendo the OPA is still in effect, the Successor Agency, subject to the approval of the Oversight Board, hereby consents to, ratifies and approves the termination of the OPA and hereby terminates the OPA. 3. Without the requirement of any further approval of the Successor Agency Governing Board, the Executive Director of the Successor Agency or designee is authorized and directed to take any action and execute any and all documents and agreements necessary to implement and effectuate the actions approved by and the purposes of this Resolution, including, without limitation, executing any and all documents on behalf of the Successor Agency. 4. The Successor Agency does not intend, by adoption of this Resolution, to waive any constitutional and/or legal rights of the Successor Agency or the City under law and/or in equity, including, without limitation, by virtue of the adoption of this 2 12-3440/82898.doe SUCCESSOR AGENCY Resolution No. 2012-03 Resolution and actions approved and taken pursuant to this Resolution and, therefore, reserves all such rights of the Successor Agency and the City under law and/or in equity. PASSED AND ADOPTED by the Successor Agency to the Redevelopment Agency of the City of Huntington Beach. at a regular meeting thereof held on the 20th day of August 11.20 12 . REVI ND APPROVED: Ex / " v Director Chairperson INITIATE AND PROVED: Deputy Execu ' e Director APPROVED AS TO FORM: Mr A ncy C unsel ; nV _ S- I- 3 12-3440/82898.doe Successor Agency Res. No. 2012-03 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the Clerk of the Successor Agency to the Former City of Huntington Beach Redevelopment Agency, Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Successor Agency to the Former City of Huntington Beach Redevelopment Agency at a meeting held on August 20, 2012 and that is was so adopted by the following vote: AYES: Shaw, Harper, Dwyer, Hansen, Carchio, Bohr, Boardman NOES: None ABSENT: None ABSTAIN: None CIEs of the Successor Pncy to the Former City of Huntington Beach Redevelopment Agency, Huntington Beach, California ,-ATTACHMENT #3 HB -307- Item 17. - 11 RECEI'd ED Council/Agency Meeting. Held: Deferred/Continued to: ` f CIT1` ❑ Approved ❑ Conditionally Approved ❑ Denied City Cleric's SignatureHUN I 111M Council Meeting Date: 10/16/2006 Department ID Number: ED 06-20 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR 1 AGENCY CHAIRMAN AND CITY COUNCIL AGENCY MEMBERS SUBMITTED BY: PENELOPE B -GR�Dp , cc,T ADMINISTRATOR / EXECUTIV DIRECTOR PREPARED BY: STANLEY SMALEWITZ, ECONOMIC DEVELOMENT DIRECTOR / DEPUTY EXECUTIVE DIRECTOR SUBJECT: Adopt City and Agency Resolutions approving the Owner Participation Agreement with Makallon Atlanta Huntington Beach, LLC (also known as Makar) AM I1= V LVk t7 F IN BE, .I =,tement:ofIssue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) 11 Statement of Issue: The City of Huntington Beach (City), the Redevelopment Agency (Agency) and Makallon Atlanta Huntington Beach, LLC (Makar) (Participant) have negotiated an Owner Participation Agreement (OPA) for the Pacific City Project to be located on a 31- acre site in the Main -Pier sub -area of the Huntington Beach Redevelopment Project. The Pacific City Project is a 191,100 square feet mixed -use project that includes a 165 room, luxury boutique hotel, approximately 163,000 square feet of retail and 12,000 square feet of restaurant use, 516 condominium units above subterranean parking, surface parking, a 2.0- acre open space/park, public easement corridor, and other public improvements. The purpose of the OPA is to effectuate the public purposes of the Agency by providing for significant public benefits including: (1) An In -Lieu Housing fee to be paid to the Agency for the purposes of causing the construction of, or to otherwise making available, a minimum 117 additional affordable residential units in the City; (2) Development, design and construction of a Regional Urban Runoff Treatment System; (3) Construction of the Pacific View Avenue Extension and additional street enhancements; and (4) Development, design and construction of an approximately 45,000 square foot Senior Center on real property owned by the City including fumiture, fixtures and equipment. The Agency and City Council will consider adopting Resolutions that will approve the OPA and make certain determinations and findings. Funding Source: Participant will advance $5,500,000 to the Redevelopment Agency to fund the Agency's Obligation for the Regional Urban Runoff Treatment System and the Pacific View Drive Extension, which will be repaid over twenty years from the tax increment generated by the commercial and hotel portions of the Pacific City Project. Participant will pay to the Agency the In Lieu Housing fee of $20,000,000. The development, design and construction of the Senior Center will be funded by the Park In -Lieu Fee assessed against the residential portion of the Pacific City Project as calculated pursuant to Zoning and Subdivision Ordinance Section 254.08. 00 F-3 Item 17. - 12 HB -308- MEETING DATE: 10/16/2006 DEPARTMENT ID NUMBERED 06-20 s Agency Recommended Action: Motion to: 1. Approve the Owner Participation Agreement (there is a requirement under Resolution No. 214 (Attachment 1) that there be a 30-day review process of an Owner Participation Agreement prior to its submittal for Agency action). It is staffs recommendation that the Agreement be approved regardless of an action by the Agency Board, at the November 20, 2006 City Council meeting which would exceed the 30-day review process period. 2. Adopt Agency Resolution No. 364 (Attachment 2) approving an Owner Participation Agreement (Attachment 4) among the City, the Agency and Makallon Atlanta Huntington Beach, LLC and making certain determinations and findings_ City Recommended Action: Motion to: 1. Adopt City Resolution No. 2006-67 (Attachment 3) consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of Pacific View Avenue, approving an Owner Participation Agreement (Attachment 4) among the City, the Agency and Makallon Atlanta Huntington Beach, LLC, and making certain determinations and findings. Alternative Action(s: Do not adopt the Resolutions that would approve Owner Participation Agreement and refer back to staff for changes. Analysis: The 31-acre project site for the Pacific City Project (21002 Pacific Coast Highway), entirely owned by Makallon Atlanta Huntington Beach, LLC, is located inland of Pacific Coast Highway bounded by First Street, Atlanta Avenue, and Huntington Street. The project is located in the Main -Pier sub -area of the Huntington Beach Redevelopment Project Area. On June 7, 2004, after hearing a staff report presentation, conducting a public hearing, and discussion, the City of Huntington Beach City Council conditionally approved Coastal Development Permit No. 02-12 with Finding and Conditions of Approval as well as Tentative Tract Map No. 16338, Conditional Use Permit No. 02-20 with Special Permit No. 02-04, and Conceptual Master Plan. Tentative Tract Tract Map No. 16338 was approved by the City Council on June 14, 2004. Concurrent with this action, the Participant is processing an Entitlement Plan Amendment to provide consistency of Tentative Map No. 16338, Conditions No. 2b and 11, with the terms of the OPA. The Pacific City Project, a 191,100 square foot mixed -use project consisting of office, retail, restaurant, cultural, and entertainment uses will also include a 165-room three-story luxury boutique hotel with a 12,000 square foot restaurant, comprised of three buildings consisting of 163,000 square feet, 516 condominium units above subterranean parking, surface parking, a 2.0-acre open space/park and public easement corridor, Pacific View Avenue extension, and other public improvements, including a Regional Urban Runoff Treatment System. Under the terms of the OPA, the Agency agrees to reimburse the Participant with project -generated revenues of $5,500,000 for a portion of the construction of the Regional 1\AdministraUon\RCA\ED06-20 makar rca 10-16_doc -2- 1019/2006 r•19" DAN F� • HB -309- Item 17. - 13 REQUEST FOR ACTION MEETING DATE: 10116/2006 DEPARTMENT ID NUMBERED 06-20 Urban Runoff Treatment System and a portion of the Pacific View Avenue Extension including street enhancements, respectively budgeted at $1,500,000 and $4,000,000. Public benefits include the following: A source of funds to the Agency to provide affordable housing within the City; ® Funding, design and construction of a Senior Center according to City specifications; • Development and construction of a Regional Urban Runoff Treatment System for the First Street watershed storm flows; and Development and construction of the extension of Pacific View Avenue from Huntington Street to First Street. On December 23, 2003, the City and the Participant previously entered into an Affordable Housing Agreement for the Pacific City project wherein the Participant agreed to construct affordable housing units as complete satisfaction of Participant's Affordable Housing Obligation. The OPA provides. for Participant to pay to Agency $20,000,000 and for the Agency to cause to be constructed, or otherwise make available for, and occupied by, low - and moderate -income persons, 117 residential units. Participant's payments will be made in three lump sums payments according to a phasing plan that is consistent with the issuance of building permits for the construction of the residential units in the Pacific City Project. The OPA provides that the Participant will satisfy its Park In -Lieu Fee for the residential portion of the Pacific City Project by developing, designing, and constructing an approximately 45,000 square foot Senior Center on City owned property. The OPA also provides that the actual costs and expenses for the design and construction of the Senior Center shall not exceed more than $19,000,000 of the the Park In -Lieu Fee assessed against the residential portion of the Pacific City Project. The Participant will receive a 15% sweat equity credit from its own funds for managing and administering the development of the Senior Center. Should the assessed Park In -lieu fee exceed $19,000,000 in CFD generated funds and the 15% sweat equity credit ($2,850,000) then the Participant shall pay to the City a cash sum equal to the difference between the Senior Center Costs and the Park In -Lieu Fee or request that the City Council consider alternative funding options. After the City formally accepts the Senior Center following completion, the City will be responsible for its on- going maintenance and repair. The installation of the Senior Center on City owned parkland is contingent upon the outcome of a Measure T Vote. In the event that the Participant is not obligated to build the Senior Center, the Park In -Lieu Fee shall be paid in full to the City. And the Participant shall not be entitled to the sweat equity credit. The Regional Urban Runoff Treatment System shall also be designed, constructed, and dedicated to the City as a Participant obligation under the OPA. Under the terms of the OPA, the Agency will fund $1,500,000 as reimbursement to the Participant for a portion of the construction costs. One seventh (117) of the on -going annual operation and maintenance cost for the Regional Urban Runoff Treatment System will be provided for by G:1Carol\AdministrationlRCA1ED06-20 makar rca 10-16.doc -3- 101912006 5:06 PM Item 17. - 14 NB -3 10- F3. 3 REQUEST FOR ACTION MEETING DATE: 10/ 1612006 DEPARTMENT ID NUMBER:ED 06-20 a Property Owner's Association as required by the conditions of approval for the Pacific City project. After the City formally accepts the Regional Urban Runoff Treatment System, the City will be responsible for six -sevenths (6/7ths) of its on -going maintenance and repair. The OPA requires the Participant to develop, design, install and construct the Pacific View Avenue Extension, including enhancements to the pavement, curb and gutter, sidewalk, landscaping, streetlights, water lines and storm drains that go far beyond the scope of improvements detailed in the Agreement Between the City of Huntington Beach and the Huntington Beach Company Concerning the Huntington Beach Company's Atlanta Avenue Site dated December 15, 1986 (commonly known as the Walnut Avenue Agreement) which will be terminated upon the approval of the OPA. Under the terms of the OPA, the Agency will fund $4,000,000 as reimbursement to the Participant for a portion of the construction costs associated with the improvements to Pacific View Avenue. After the City formally accepts the public improvements, the City will be responsible for its on -going maintenance and repair except for those maintenance obligations required by the conditions of approval for the Pacific City Project. Redevelopment Agency Resolution No. 214 dated June 3, 1991 (Attachment 1) directs the Executive. Director to forward copies of all owner participation agreement and disposition and development agreements to the governing body at least thirty days prior to the Agency taking any action thereon. This requirement can be waived by a majority vote of the members. The Participant and Agency staff executed the OPA on October 5, 2006. The Participant has requested that this item be considered at the first regularly scheduled meeting of the Agency Board upon their execution of the OPA. Environmental Status: Environmental Impact Report No. 02-01, analyzing the potential environmental impacts of the Pacific City project, was certified by the City Council on .tune 7, 2004. The subject owner participation agreement is a financing mechanism that is exempt pursuant to the California Environmental Quality Act. Any projects that may occur as a result of funds available to the City of Huntington Beach and Redevelopment Agency for which environmental clearance has not already been granted shall require approval of entitlements, including environmental documentation, prior to implementation. F3.4 - :arol\Administration\RCA\ED06-20 makar rca 10-16.doc -4- HB -311- 10/9/2006 5:05 PM Item 17. - 15 REQUEST FOR ACTION MEETING DATE: 10/1612006 Attachment(s): List attachment(s) below. DEPARTMENT ID NUMBERED 06-20 IF-B • 6 1. Resolution No. 214 ,c e , 9 2. Redevelopment Agency Resolution No.3 approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC and making certain determinations and findings. 3. City Council Resolution No,&04-1-?1consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of Pacific View Avenue, approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC, and making certain determinations and findings. 4. The Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC. ,03 5. Insurance Certificates F-30 /J 6. PowerPoint Presentation G_1CarolkAda inisfration\RCA\ED06-20 makar rca 10-16.doc -5- 1015/20061:18 PAP Item 17. - 16 HB -31 F3.5 NB - 313- Item 17. - 17 VA - RESOLUTION NO. 21,E A RESOLUTION BY THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DIRECTING THE EXECUTIVE DIRECTOR TO FORWARD COPIES OF ALL OWNER PARTICIPATIOR AGREEMENTS AND DISPOSITION AND DEVELOPM&NT AGREEMENTS TO THE GOVERNING BODY AT LEAST THIRTY (30) DAYS PRIORTTO THE AGENCY TAKING ANY ACTION THEREON WHEREAS, Owner Participation and Disposition and Development Agreements passed upon by the Redevelopment Agency are generally lengthy and complicated documents which require extensive review before being.acted upon; and The members of the governing body desire adequate time to review such agreements; NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of Huntington Beach hereby directs the Executive Director to forward copies of all Owner Participation and Disposition and Development Agreements to the members of the governing body at least thirty (30) days prior to any required action by the Agency, unless, by a majority vote, such members waive this requirement. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a the 3rd day of J ATTE T A-gency- Clerk . REVIEWED AND APPROVED ��kExecutiv irector une regular meeting thereof held on 9 Chairman APPROVED AS TO F4 Agency Cou sel Item 17. - 18 HB 14- F'3.7 Res. No. - 214 STATE OF CALIFORNIA CWNTY -OF ORANGE CITY OF HUNTINGTON BEACH . t I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntingin Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of.the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 3rd day of June , 19_, and that it was so adopted ' by the following vote: AYES: Members: MacA11 ]stet V nr eSi_ Iva, Groen, Kelly_EQbitaille, Moulton-Pattexson TOES: Members: ABSENT: Members: Clerk of the Redevelopme Agency of the City of Huntington Beach. Ca. f a ; g i 4x44 Y 1 F3 . N HB 1 s- Item 17. - 19 ATTACHMENT #2 Item 17. - 20 HB -316- F3. 9 RESOLUTION NO. 364 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC AND MAKING CERTAIN DETERMINATIONS AND FINDINGS WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency'"} is engaged in activities necessary to carry *out and implement the Redevelopment Plan ("Redevelopment Plan") for the Merged Redevelopment Project Area (the "Project Area") of the City of Huntington Beach; and In order to implement and further the goals and objectives of the Redevelopment Plan, the Agency, the City of Huntington Beach ("City'') and Makallon Atlanta Huntington Beach, LLC ("Participant") have negotiated the terms of an Owner Participation Agreement (the "Agreement'). The Agreement provides, among other things, for Participant to design, develop, install and construct: (i) a Senior Center; (ii) a regional urban runoff treatment center for the First Street watershed storm flows ("Regional Treatment System"); and (iii) the extension of Pacific View Avenue from Huntington Street to First Street ("Pacific View Avenue Extension"). The Regional Treatment System and the Pacific View Avenue Extension are collectively referred to herein as the "Public Improvements". The Agreement also provides that the Agency will reimburse Participant, subject to all of the terms and conditions of the Agreement, certain costs related to the Public Improvements. Also pursuant to the Agreement, the Participant will pay the Agency an affordable housing in -lieu fee and the Agency would cause to be developed a certain number of affordable housing units. The Agreement also provides for the termination of an existing agreement between the City and Participant's predecessor -in -interest to the site, Huntington Beach Company, entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site°' dated as of December 15, 1986; and Pursuant to Section 33445(a) of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CR12 ), the Agency may, with the consent of the City Council ("City Council") of the City, pay all or part of the value of the land for and the cost of the installation and construction of any facility, structure, or other improvements which is publicly owned either within or outside a project area, if the City Council makes certain determinations; and Pursuant to Sections 33421 and 33421.1 of the CRL, the Agency may cause, provide or undertake or make provision with other agencies for the installation, or construction of streets, utilities, parks, playgrounds, or other public improvements necessary for carrying out the Redevelopment Plan in the Project Area upon consent of the City Council; and IFI_in KB -31 7- Item 17. - 21 Agency Res. No. 364 The fulfillment generally of the Agreement is in the vital and best interests of the City and the health., safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements; and It is in the best interests of the City and for the common benefit of residents, employees, business tenants and property owners within the Project Area and the City as a whole for the Public Improvements to be installed and constructed; and Since there are no other reasonable means available to the City to finance the installation and construction of the Public Improvements, the Agency proposes to reimburse Participant a portion of the cost of the installation and construction of the Public Improvements; and The Agency's agreement to pay part of the value of the cost 'of the installation and construction of the Public Improvements constitutes an indebtedness of the Agency for the purpose of carrying out the redevelopment for the Project Area; and The Public Improvements are of benefit to the Project Area and the immediate neighborhood in which the Public improvements are located; and The provision of the Public Improvements is necessary to effectuate the purposes of the Redevelopment Plan; and All other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED BY THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: The Agency hereby finds and determines that the foregoing recitals are true and correct. 2. Based on substantial evidence in the record, the Agency hereby finds and determines that: a The construction and installation of the Public Improvements are necessary to effectuate the purposes of the Redevelopment Plan and are of benefit to the Project Area and the immediate neighborhood in which the. Public Improvements are located. This determination is based, in part, on the fact that the construction and installation of the Public Improvements are in the best interests of the City and the health, safety, morals and welfare of its taxpayers, employees, business tenants, property owners and residents. In addition, the enumerated goals of the Five Year Implementation Plan include: (i) "[i]mprove public facilities and public infrastructure;" and (ii) "ji]mprove inadequate drainage infrastructure." Furthermore, the improvement of public 2 WIZ 11 Item 17. - 22 H B -318- Agency Res. No. .364 infrastructure in the Project Area which addresses substandard and inadequate public improvements in the Project Area is a specific project listed in the Five Year Implementation Plan as "Public Improvements." Pursuant to the Five Year Implementation Plan, such project will address the following conditions of blight identified in the Project Area: age, obsolescence and deterioration and inadequate public improvements. b. No other reasonable means of financing the Public Improvements are available to the City. This determination is based, in part, on the fact that the City itself is not in a position to finance the Public Improvements. The City is having difficulty fully assuming the costs of anticipated and needed public capital improvements. Without the assistance of tax increment funding from the Project Area, capital improvements in other parts ofthe City would have to _ be deferred or eliminated in order to fund the Public Improvements. Given the constraints on financing sources which are under the direction of the City, all anticipated and needed public capital improvements cannot be completed using only City funds. It is clear that there must be a combination of tax increment and non -tax increment funding. 'c_ The payment of funds by the Agency for the costs related to the Public Improvements will assist in the elimination of one or more blighting conditions within the Project Area and is consistent with the Agency's Five - Year Implementation Plan for the Project Area. This determination is based, in part, on the information contained in paragraph a., above. 3. The Agency hereby approves the Agreement in substantially the form presented to the Agency. The Agency Executive Director is hereby authorized to execute the Agreement on behalf of the Agency, together with such non -substantive changes and amendments as may be approved by the Agency Executive Director and Agency Counsel. Without the requirement of any further approval of the Agency, the Agency Executive Director or designee is authorized to take any action and execute any and all documents and agreements necessary to implement the Agreement. 4. This Resolution shall take effect immediately upon its adoption. 7".1 9'1 xB -31 9- Item 17. - 23 Agency Re. No. 364 PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting held thereof on the day of , 2006_ Chair REVIEWED AND APPROVED: APPROVED AS TO FORM: xecutive birector eneral Counsel 7 u 0 KANE, BALLMER & BERKMAN Agencyial Counsel INITIATED AND APPROVED: A'Director oftwnomic Development / Deputy Executive Director 4 F3.13 Item 17. - 24 BB -320- ATTACHMENT #3- 1 liB -32 t - Item 17. - 25 CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH RESOLUTION NO. 2oo6- 6 7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH CONSENTING TO PAYMENT BY THE REDEVELOPMENT AGENCY OF A PORTION OF THE COSTS OF THE INSTALLATION AND CONSTRUCTION OF: (i) A REGIONAL TREATMENT SYSTEM; AND (ii� THE EXTENSION OF PACIFIC VIEW AVENUE, APPROVING AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC, AND MAKING CERTAIN DETERMINATIONS AND FINDINGS WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan ("Redevelopment Plan") for the Merged Redevelopment Project Area (the "Project Area") of the City of Huntington Beach; and In order to implement and further the goals and objectives of the Redevelopment Plan, the Agency, the City of Huntington Beach ("City") and Makallon Atlanta Huntington Beach, LLC ("Participant") have negotiated the terms of an Owner Participation Agreement (the "Agreement"). -- ' The Agreement provides, among other things, for .Participant to design, develop, install and construct. (i) a Senior Center; (ii) a regional urban runoff treatment center for the First Street watershed storm flows ("Regional Treatment System"); and (iii) the extension of Pacific View Avenue from Huntington Street to First Street ("Pacific View Avenue Extension"). The Regional Treatment System and the Pacific View Avenue Extension are collectively referred to herein as the "Public Improvements". The Agreement also provides that the Agency will reimburse Participant, subject to all of the terms and conditions of the Agreement, certain costs related to the Public Improvements. Also pursuant to the Agreement, the Participant will pay the Agency an affordable housing in -lieu fee and the Agency would cause to be developed a certain number of affordable housing units. The Agreement also provides for the termination of an existing agreement between the City and Participant's predecessor -in -interest to the site, Huntington Beach Company, entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986; and Pursuant to Section 33445(a) of the California Community Redevelopment Law (Health. & Safety Code Section 33GOO et seq.) ("CRL"), the Agency may, with the consent of the City Council ("City Council") of the City, pay all or part of the value of the land for and the cost of the installation and construction of any facility, structure, or other improvements which is publicly owned either within or outside a project area, if the City Council makes certain determinations; and F3.15 Item 17. - 26 HB -322- Res. No. 2006-67 Pursuant to Sections 33421 and 33421.1 of the CRL, the Agency may cause, provide or `F undertake or make provision with other agencies for the installation, or construction of streets, utilities, parks; playgrounds, or other public improvements necessary for carrying out the Redevelopment Plan in the Project Area upon consent of the City Council; and The fulfillment generally of the Agreement is in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements; and It is in the best interests of the City and for the common benefit of residents, employees, business tenants and property owners within the Project Area and the City as a whole for the Public Improvements to be installed and constructed; and Since there are no other reasonable means available to the City to finance the installation and construction of the Public Improvements, the Agency proposes to reimburse Participant a portion of the cost of the installation and construction of the Public Improvements; and The Agency's agreement to pay part of the value of the cost of the installation and construction of the Public Improvements constitutes an indebtedness of the Agency for the purpose of carrying out the redevelopment for the Project Area; and The Public Improvements are of benefit to the Proj ect Area and the immediate neighborhood in which the Public Improvements are located; and The provision of the Public Improvements is necessary to effectuate the purposes of the Redevelopment Plan; and All other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, $E IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: 1. The City Council hereby finds and determines that the foregoing recitals are true and correct. 2. Based on substantial evidence in the record, the City Council hereby finds and determines that: a_ The construction and installation of the Public Improvements are necessary to effectuate the purposes of the Redevelopment Plan and are of benefit to the Project Area and the immediate neighborhood in which the Public Improvements are located. This determination is based, in part, on the fact that the construction and installation of the Public Improvements are in the 7 F3.16 NB -323- Item 17. - 27 Res. No. 2006-67 - best interests of the City and the health, safety, morals and welfare of its taxpayers, employees, business tenants, property owners and residents. In addition, the enumerated goals of the Five Year Implementation Plan include: (i) "[i]mprove public facilities and public infiastructure;" and (ii) "[i]mprove inadequate drainage infrastructure." Furthermore, the improvement of public infrastructure in the Project Area which addresses substandard and inadequate public improvements in the Project Area is aspecific project listed in the Five Year Implementation Plan as "Public Improvements." Pursuant to the Five Year Implementation Plan, such project will address the following conditions of blight identified in the Project Area: age, obsolescence and deterioration and inadequate public improvements. b. No other reasonable means of financing the Public Improvements are available to the City. This determination is based, in part, on the fact that the City itself is not in a position to finance the Public Improvements. The City is having difficulty fully assuming the costs of anticipated and needed public capital improvements. Without the assistance of tax increment funding from the Proj ect Area, capital improvements in other parts of the City would have to be deferred or eliminated in order to fund the Public Improvements. Given the constraints on financing sources which are under the direction of the City, all anticipated and needed public capital improvements cannot be completed using only City funds. It is clear that there must be a combination of tax increment and non -tax increment funding. The payment of funds by the Agency for the costs related to the Public Improvements will assist in the elimination of one or more blighting conditions within the Project Area and is consistent with the Agency's Five - Year Implementation Plan for the Project Area. This determination is based, in part, on the information contained in paragraph a., above. 3. The City Council hereby consents to payment by the Agency for part of the cost of the installation and construction of the Public Improvements as provided in the Agreement. 4. The City Council hereby approves the Agreement in substantially the form presented to the City Council. The City Administrator is hereby authorized to execute the Agreement on behalf of the City, together with such non -substantive changes and amendments as may be approved by the City Administrator and City Attorney. Without the requirement of any further approval of the City Council, the City Administrator or designee is authorized to take any action and execute any and all documents and agreements necessary to implement the Agreement. 5. This Resolution shall take effect immediately upon its adoption. 3 F3.17 Item 17. - 28 HB -324- Res. No. 2006-67 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the day of , 2006. r Mayor REVIEWED AND APPROVED: APPROVED AS TO FORM: - c- Ci Adrn' 'sttator Ci Attorney 1, KANE, BALLMER & II�TI'IA' ups - P-e'Director of E omic Development 4 F3.18 RB - 325- Item 17. - 29 ATTACHMENT #4 Item 17. - 30 HB -326- F3. 19 OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: 'Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Agency Secretary PA "OVF TM IDM FOR RECORDERS USE OWNER PARTICIPATION AGREEMENT by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, Agency and THE CITY OF HUNTINGTON BEACH, City and MAKALLON ATLANTA HUNTINGTON BEACH, LLC, Participant 0"76l4986 IRI In HB -327- Item 17. - 31 TABLE OF CONTENTS Page ARTICLE 100. -SUBJECT OF AGREEMENT.............................................................................. 1 § 101 Purpose of the Agreement............................................................................................. 1 § 102 The Redevelopment Plan.............................................................................................. 2 § 103 The Redevelopment Project Area................................................................................. 3 § 104 The Site........................................................................................................................ 3 § 105 Parties to the Agreement............................................................................................... 3 § 105.1 Agency......................................................................................................... 3 § 105.2 City ............................................................................................................... 3 § 105.3 Participant...........................................................................................---...... 3 ARTICLE 200. AFFORDABLE HOUSING OBLIGATION....................................................... 4 § 201 Affordable Housing Payment....................................................................................... 4 § 202 Agency Affordable Housing Plan................................................................................. 5 ARTICLE 300. PARK OBLIGATION.................:....................................................................... 5 § 301 Participant's Obligations............................................................................................... 5 § 302 Definitions ..................................................................................................................... 6 § 303 Funding Options for Remaining Park In -Lice Fee ....................................................... 7 § 304 Management Fee ................................. ........... .:............................................................. 7 § 305 Senior Center................................................................................................................ 7 ARTICLE 400. REGIONAL TREATMENT SYSTEM............................................................. 10 ARTICLE 500. PACIFIC VIEW AVENUE EXTENSION........................................................ 10 § 501 Pacific View Avenue Extension................................................................................. 10 § 502 Termination of Existing Site Agreement..................................................................... II ARTICLE 600. DEVELOPMENT AND CONSTRUCTION..................................................... 12 § 601 Permits/Entitlement Plan Amendment........................................................................ 12 § 602 Plans and Specifications............................................................................................. 12 § 603 Quality of Work; Compliance With Laws and Codes ................................................ 12 § 604 Standard of Performance............................................................................................. 13 § 605 Alterations to Senior Center, Regional Treatment System and Pacific View Avenue Extension................................................................................. 13 § 606 Maintenance of Senior Center, Regional Treatment System and Pacific View Avenue Extension................................................................................. 13 § 607 Construction Schedule................................................................................................ 15 § 608 Fees and Charges ..................................... .................................................................... 15 § 609 City and Agency Inspection of Senior Center, Regional Treatment System and Pacific View Avenue Extension.............................................................. 16 § 610 Default; Notice; Remedies. § 611 Administrative Costs................................................................................................... 17 47614986 Item 17. - 32 1 HB -328- § 612 Acceptance of Improvements; As -Built or Record Drawings .................................... 17 § 613 Warranty and Guarantee............................................................................................ 18 -§ 614 Security; Surety Bonds............................................................................................ 18 § 615 Indemnifidation............................................ § 616 Insurance..................................................................................................................... 20 § 617 Direct Payment Permit.............................................................. ........................... :...... 22 § 618 Prevailing Wages....................................................................................................... 22 § 619 Nondiscrimination during Construction..................................................................... 24 § 620 Meaning of "Dedicate"...............................:............................................................ 24 § 621 Not a Statutory Development Agreement................................................................... 25 ARTICLE 700. USE OF THE SITE.......................................................................................... 25 § 701 Uses ........................................................ § 702 Obligation to Refrain from Discrimination,................................................I................ 27 § 703 Effect and. Duration of Covenants............................................................................... 27 ARTICLE 800. AGENCY OBLIGATION AND COMMUNITY FACILITIES DISTRICTBONDS........................................................................................... 28 § 801 Agency Obligation...................................................................................................... 28 § 802 Payment of Agency Obligation.............................................•........................----.....---• 28 § 803 Community Facilities District Bonds......................................................................... 32 ARTICLE 900 DEFAULTS, REMEDIES AND TERMINATION ........................................... 34 § 901 Default................................................................................. § 902 Notice ......... .............:.............................................. .................. ............... ................... 34 § 903 Cure Period .............................. ............ .................. ........................ ............ ................. 34 § 904 Rights and Remedies................................................................................................... 35 ARTICLE 1000 GENERAL PROVISIONS.............................................................................. 35 § 1001 Notices, Demands and Communications between the Parties .................................... 35 § 1002 Conflict of Interest...................................................................................................... 35 § 1003 Nonliability of City and Agency Officials and Employees ......................................... 36 § 1004 Enforced Delay in Performance for Causes beyond Control of Party ........................ 36 § 1005 Inspection of Books and Records........................................................_...................... 36 § 1006 Approvals....................................................................................................................37 § 1007 Assignment ............................. ......................................................................---.......... 37 § 1008 Participant's Warranties.............................................................................................. 37 § 1009 Relationship of the Parties....•..................................................................................... 38 § 1010 Interpretation of Agreement........................................................................................ 38 § 1011 Authorized Representative of Agency and City ......................................................... 38 § 1012 Waivers ................................. :..................................................................................... 38 § 1013 Time of the Essence..........................................-_....................................•---................ 39 § 1014 Attorneys' Fees and Costs......................................................................................... 39 § 1015 Severability................................................................................................................. 39 § 1016 Non-exclusivity........................................................................................................... 39 § 1017 Complete Agreement.................................................................................................. 39 § 1018 Terminology......................................................................................... ii 0647614986 HB -329- Item 17. - 33 § 1019 Necessity for a Writing............................................................................................... 40 § 1020 No Third Party Beneficiaries...................................................................................... 40 § 1021 Authority to Sign......................................................................................................... 40 § 1022 Incorporation by Reference......................................................................................... 40 § 1023 Cooperation; Further Acts; Estoppel Certificates....................................................... 40 § 1024 Binding Effect............................................................................................................. 41 ARTICLE 1100: EFFECTIVE DATE ....................................................................................... 41 ATTACHMENTS ATTACHMENT NO. 1 - SITE MAP ATTACHMENT NO. 2 - LEGAL DESCRIPTION ATTACHMENT NO. 3 - DEPICTION OF COMMERCIAL PORTION OF PROJECT ATTACHMENT NO.4 - AGENCY AFFORDABLE HOUSING PLAN ATTACHMENT NO. 5 - SCOPE OF DEVELOPMENT ATTACHMENT NO. 6 - MEMORANDUM OF TERMINATION ATTACHMENT NO. 7 - DRAFT FORMS OF SECURITY ATTACHMENT NO. 8 - SENIOR CENTER PLANS AND SPECIFICATIONS -476/4986 Item 17. - 34 HB -330- OWNER PARTICIPATION AGREEMENT This OWNER PARTICIPATION AGREEMENT (this "Agreement") dated as of 2006 for references purposes only, is entered into by and among the- REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), the CITY OF HUNTINGTON BEACH, a charter city ("City"), and MAKALLON ATLANTA HUNTINGTON BEACH, .LLC, a Delaware limited liability company ("Participant"). ARTICLE 100. SUBJECT OF AGREEMENT § 101 Purpose of the Agreement Participant owns certain real property in the City of Huntington Beach hereinafter defined as the Site. Participant desires to develop on the Site a mixed use project consisting of: (1) approximately 191,000 square feet of office, retail, restaurant, cultural, and entertainments uses; (2) an -approximate 165 room, luxury boutique hotel with approximately 12,000 square feet of restaurant space, comprised of 3 buildings consisting of approximately 163,000 square feet with two (2) public view corridors (collectively, the "Hotel"); (3) 516 condominium units (collectively, the ."Residential Units") above subterranean parking to be built in phases; (4) an approximately 2.0 acre open spacelpark and public casement corridor (the "Village Green"); (5) Pacific View Avenue extension; and (6) associated infrastructure on the approximate 31-acre Site (collectively, the "Project"). The approximately 191,000 square feet of office, retail, restaurant, cultural, and entertainments uses described in subsection (1), above, and the approximate 165 room luxury boutique hotel described in subsection (2), above, shall collectively be referred to herein as the "Commercial Portion" of the Project. The Commercial Portion is depicted on Attachment No. 3, which is attached hereto and incorporated herein by reference. The City has imposed certain conditions of approval on the Project (collectively, the Conditions of Approval"), which conditions, among other things, require the Participant: (a) to provide affordable housing pursuant to an Affordable Housing Agreement as further described in Section 202 herein (the "Affordable Housing Obligation"); (b) to pay one hundred percent (100%) of the Park In -Lieu Fee (as defined below) for the residential portion of the Project (Condition of Approval No. 11 of Tentative Tract Map No. 16338) (the "Park Obligation"); and (c) to develop concept and design plans and cost estimates for a regional urban runoff treatment system for the First Street watershed storm flows ("Regional Treatment System"), post a bond equal to one -seventh (1/7) of the capital construction cost into an Urban Runoff Treatment Trust Fund for the Regional Treatment System and to provide in master CC&Rs for the Project that the Project- shall pay one -seventh (1/7) of the on -going annual operation and maintenance cost for the Regional Treatment System (Condition of Approval No. 5.b. of Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12. In addition, the Project entails the extension of Pacific View Avenue from Huntington Street to First Street (the "Pacific View Avenue Extension")_ 0647614986 N13 -331- Item 17. - 35 The Participant is concurrently processing an Entitlement Plan Amendment application with the City to provide consistency of Tentative Map No. 16338, Conditions No. 2b and 11, with the terms of this Agreement ("Entitlement Plan Amendment"). The purpose of this Agreement is to effectuate the public purposes of the Agency ' by providing for the. complete satisfaction of the Affordable Housing Obligation, the complete satisfaction of the Park Obligation, development and construction of the Regional Treatment System, development and construction of the Pacific View Avenue Extension, and subject to all -of the terms and conditions of this Agreement (including, without limitation, the provisions of Section 802, below, limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the Agency's agreement to reimburse Participant certain costs related to the Regional Treatment System and the Pacific View Avenue Extension. Notwithstanding anything to the contrary herein, if either the Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy all of its obligations under the Conditions of Approval. The satisfaction of the Affordable Housing Obligation, Park Obligation, development, design, installation and construction of the Regional Treatment System, the development, design, installation, and construction of the Pacific View Avenue Extension and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. Notwithstanding anything to the contrary in this Agreement, Participant shall be and shall remain obligated to fulfill and maintain all conditions of approval for Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12 as may be modified by the Entitlement Plan Amendment. To the extent of any conflict between this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment), the Conditions of Approval (as may be modified by the Entitlement Plan Amendment) shall control. § 102 The Redevelopment Plan This Agreement is made in accordance with and subject to the redevelopment plan for the Main -Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. 2 i47b/4985 Item 17. - 36 HB -332- § 103 The Redevelopment Proiect Area The Merged Redevelopment Project area is located in the City. The exact boundaries of such Project area are specifically and legally described in the Redevelopment Plan and Ordinance No. 3343. § 104 The Site The "Site" is that certain real property illustrated and designated as such on the "Map of the Site" (which is attached hereto and incorporated herein as Attachment No. 1) and having the legal description set forth in the "Legal Description of the Site" (which is attached hereto and incorporated herein as Attachment No. 2). The Site is located within the Merged Redevelopment Project Area and is subject to the Pacific City Master Plan dated July 10, 2003 (the "Master Plan"). Participant represents and warrants to Agency and City that it currently holds fee title to the entire Site. § 105 Parties to the A rg_ eement § 105.1 Agency Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Part 1 of Division 24 of the California Health and Safety Code (California Health and Safety Code Section 33000 etseq_)_ The principal office of Agency is located at City Hall, 2000 Main Street, Huntington Beach, California 92648, Attn: Agency Executive Director. "Agency," as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. § 105.2 city The principal office of City is located at City Hall, 2000 Main Street, Huntington Beach, California 92648, Attn: City Administrator. "City", as used in this Agreement, includes the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. § 105.3 Participant Participant is a Delaware limited liability company. The principal office of Participant is located at 4100 MacArthur Boulevard, Suite 200, Newport Beach, CA 92660, Attn: Michael Gagnet, Executive Vice President -Development. 3 06-476/4986 HB -333- Item 17. - 37 Wherever the term "Participant" is used herein, such term shall also include any assignee of or successor to its rights, powers and responsibilities. ARTICLE 200. AFFORDABLE HOUSING OBLIGATION .§ 201 Affordable Housing Payment - - 1. The City and the Participant previously entered into that certain Affordable Housing Agreement dated December 23, 2003, (the "Participant Affordable Housing Agreement") pursuant to which the Participant agreed to provide certain affordable housing units in complete satisfaction of the Affordable Housing Obligation. If the Entitlement Plan Amendment is approved by the City, it is the parties intent that the Participant Affordable Housing Agreement will be terminated in its entirety and replaced by that certain Affordable Housing Agreement dated June 16, 2006 between the City and the Agency attached hereto as Attachment No. 4 and incorporated herein by reference (the "Agency Affordable Housing Plan"). Notwithstanding anything to the contrary herein, if either the Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy all of its obligations under the Participant Affordable Housing Agreement and its Affordable Housing Obligation. Provided that the Entitlement Plan Amendment is approved by the City and the Participant Affordable Housing Agreement is terminated in its entirety, in complete satisfaction of the Affordable Housing Obligation, and in accordance with the Phasing Diagram attached to the Pacific City Master Plan dated July 10, 2003 as Exhibit D-007 (the "Phasing Diagram"), Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall pay to the Agency the amount of Twenty Million Dollars ($20,000,000.00) to be used for affordable housing purposes (the "Affordable Housing Payment''), which shall be payable in three (3) lump sum payments as follows: a. As a condition precedent to the issuance of any building permit for the construction of any Phase Iia Residential Unit, Participant shall pay the Agency in immediately available funds a portion of the Affordable Housing Payment equal to Five Million Dollars ($5,000,000.00); b. As a condition precedent to the issuance of any building permit for the construction of any Phase III Residential Unit, Participant shall pay the Agency in immediately available funds a portion of the Affordable Housing Payment equal to Ten Million Dollars ($10,000,000.00); and c. As a condition precedent to the issuance of any building permit for the construction of any Phase IV Residential Unit, Participant shall pay the Agency, in immediately available funds a portion of the Affordable Housing Payment equal to Five Million Dollars ($5,000,000.00). 4 Item 17. - 38 HB -334- - 2_ The Participant acknowledges and agrees that the City shall not be obligated to issue, and the Participant shall have no right to request, any building permit for any of the Phase Ila, Phase III or Phase IV Residential Units unless and until Participant has paid the applicable portion of the Affordable Housing Payment to Agency in immediately available funds as required by this Agreement. 3. Participant acknowledges and agrees that any proposed change to the Phasing Diagram shall be of no force and effect unless and until such change is submitted to and reasonably approved by the City Planning Director in accordance with Condition of Approval No. 3 of CUP-02-20 and, in addition, submitted to and approved in writing by the Agency Executive Director or designee in his or her reasonable discretion. § 202 Agency Affordable Housing plan Upon the termination of the Participant Affordable Housing Agreement, the Agency agrees to execute the Agency Affordable Housing Plan with the City, in substantially the form attached hereto as Attachment No. 4. The Agency Affordable Housing Plan shall provide that the Agency shall deposit any portion of the Affordable Housing Payment paid by Participant into an affordable housing fund designated by the Agency and the Agency shall cause to be constructed, or otherwise made available for and occupied by very low-, low- _and moderate - income persons, one'hundred seventeen (117) residential units... The Agency shall comply with all applicable requirements of the Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) in connection with the Agency's obligations under the Agency Affordable Housing Plan. ARTICLE 300. PARK OBLIGATION § 301 Participant's Obli ag; tions In complete satisfaction of the Park Obligation, Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall be obligated to either: (1) satisfy both of the following conditions precedent: (A) develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City in accordance with and pursuant to all of the terms and conditions of this Agreement (including, without limitation, Section 305, below, and Article 600) a Senior Center of approximately 45,000 square feet upon real property owned by the City (which property shall be provided by the City at no cost to the Participant), including, without limitation, furniture, fixture and equipment (including operations and maintenance manuals) as approved by the Director of Community Services ("Senior Center"), as more particularly set forth in this Agreement; and (B) pay in full any Remaining Park In -Lieu Fee (as defined below) to the City in immediately available funds; OR (2) pay the entire Park In -Lieu Fee to the City in immediately available funds as set forth in Section 305.8, below. "Project plan approval" as used in this Agreement shall include, without limitation, satisfaction of all environmental review and issuance of all entitlements. Notwithstanding anything to the contrary herein, if either the 5 06-476/4986 BB -335- Item 17. - 39 Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy the Participant's Park Obligation. § 302 Definitions " The following capitalized terns shall have the following definitions: 1. "Certified Cost Statement" shall mean a statement setting forth the total amount of Senior Center Costs, together with a certificate of an independent certified public accountant reasonably acceptable to City (the "Accountant"). The Accountant's certificate shall be addressed to City, shall be signed under penalty of perjury, and shall state that the Accountant is familiar with the definition of Senior Center Costs in this Agreement and attest to the accuracy of the Certified Cost Statement, subject to usual and customary qualifications. The Accountant shall be selected by Participant, but shall be a national accounting firm, first approved in writing by the City's Community Services Director. 2. "Management Fee" shall mean a credit toward the Park In _Lieu Fee in an amount equal to fifteen percent (15%) of the total Senior Center Costs set forth in the Certified Costs Statement. in no event shall either the City or Agency be obligated to pay out of pocket any portion of the Management Fee. 3. "Park In -Lieu Fee" shall mean the parkland in -lieu fee assessed against the residential portion of the Site as calculated and paid pursuant to Zoning and Subdivision Ordinance No. 254.08 for Tentative Tract Map No_ 16338. 4. "Project Budget" shall mean the Senior Center Costs budget approved by City and Agency as provided for under this Agreement, as amended from time to time as approved by the City and Agency as provided for under this Agreement_ 5. `.`Remaining Park In -Lieu Fee" shall mean an amount equal to the difference between the Total Senior Center Costs and the Park In -Lieu Fee. 6. "Senior Center Costs" shall mean actual costs and expenses for all design, environmental review, entitlement processing, fees, and plan check, as well as all construction to be performed by or on behalf of Participant for the development of the Senior Center required by this Agreement and plans and specifications approved therefor by the City and Agency, and all. furnishings, fixtures and equipment therefor to the extent that such costs and expenses are incurred and paid for by Participant to unrelated third parties and are included in a City/Agency-approved Project Budget. Any cost or fee not included in a Project Budget approved in writing by the City's Community Services Director and the 511 476/4986 Item 17. - 40 HB -336- Agency Executive Director or designee shall not be considered or included as a Senior Center Cost. 7. "Total" Senior Center Costs" shall mean an amount equal to the total Senior Center Costs as set forth in the Certified Cost Statement plus the Management Fee. § 303 Funding Options for Remaining Park In -Lieu Fee Concurrently or following final acceptance of the entire Senior Center by the City in accordance with the acceptance procedures described in Section 612, below, the Agency agrees to present to the City Council for the City's selection and approval in the City's sole and absolute discretion, the following list of recommended options to fund the Remaining Park In -Lieu Fee, if any; (1) payment by Participant in immediately available funds of the total Remaining Park -In Lieu Fee Payment; (2) providing a credit to Participant for the Village Green and improvements thereto; (3) any combination of the foregoing; or (4) any other funding option to be determined by the Agency, all subject to any conditions which may be desired by the Agency or City in order to proceed with such presentation to the City Council. In no event shall the Agency be obligated to make any such presentation to the City Council unless and until such time as the final acceptance of the entire Senior Center by the City in accordance with the acceptance procedures described in Section 612, below. § 304 Mana ggcment Fee Participant acknowledges and agrees that in no event shall the Management Fee be funded by Community Facilities District 2006-1; nor shall Participant be entitled to receive from either the City or the Agency any portion of the Management Fee credit if either the Senior Center Costs or the Total Senior Center Costs exceed the Park In -Lieu Fee. § 305 Senior Center This Section 305 shall apply only if the Senior Center shall be constructed by Participant pursuant to Section 301, above. 1. Participant agrees that Participant's obligation to design, develop, install and construct the Senior Center shall include, without limitation, all utilities, off site improvements, parking, landscaping and outdoor amenities. Participant agrees that design, development, installation and construction of the Senior Center shall include the preparation of all plans and specifications and processing and completing all environmental review, entitlements and plan checks. Participant agrees that Participant shall design, develop, install and construct the Senior Center in accordance with the Scope of Development attached hereto as Attachment No. 5 and incorporated herein by reference and in accordance with City approved plans and specifications, and furnishings, fixtures and equipment, attached hereto as Attachment No. 8 and incorporated herein by reference. 7 06-476/4986 HB -337- W11 In Item 17. - 41 2. Participant agrees that the final design, plans, and specifications, and furnishings, fixtures and equipment for the Senior Center and any modifications thereto or change orders shalt be subject to the complete satisfaction and prior written approval of the City's Community Services Director and the Agency Executive Director or designee. -.3.::. Participant agrees that Participant shall execute the design/build contract for the Senior Center and commence construction (not grading, excavation, demolition, grubbing, or the like) of Senior Center improvements (not utilities, public or private streets, public or private site improvements, landscaping or ancillary structures such as block walls, trash enclosures) permanently fixed to the site (e.g., a foundation or similar) no later than four (4) months following final project plan approval by the City Council for the Senior Center. 4. Participant. agrees that Participant shall provide all equipment (including all operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Senior Center unless the City elects otherwise in its sole and absolute discretion. The Site upon which the Senior Center shall be constructed shall be contributed by the City at no cost whatsoever to the Participant. 5. Participant agrees that within one hundred twenty (120) days after final acceptance of the Senior Center by the City as described in Section 612, below, Participant shall submit to City, for the review and written approval or disapproval of the City's Community Services Director the Certified Cost Statement. 6. a. Notwithstanding any provision of this Agreement to the contrary, in no event shall City or Agency have the right to request or demand, and in no event shall Participant have the obligation to implement, a Project Budget or actual Senior Center Costs to exceed a maximum of $19,000,000 (the "Maximum Senior Center Cost"), provided, however, that if (but only if) the actual Park In -Lieu Fee shall be greater than $21,850,000 and/or the City or Agency has allocated additional funds to the Senior Center other than the Park In -Lieu Fee, and, no delay in the design, installation, or construction of the Senior Center shall thereby result to the Participant in the exercise of its good faith and reasonable judgment (unless the City and Agency extend the elates herein for design, installation, construction and completion of the Senior Center,) then, upon written instrument approved by the City Council and executed by Participant, which Participant agrees to execute upon its good faith, reasonable determination that there will be no delay in the design, installation or construction of the Senior Center, the City and Agency shall have the right to increase the Maximum Senior Center Cost by any such allocated additional funds of the City or Agency or increased Park In -Lieu Fee greater than $21,850,000, up to a maximum of 87% of the actual Park In -Lieu Fee. In furtherance of the foregoing, this Agreement shall be interpreted in order to give effect to the Maximum Senior Center Cost hereby created. b. Participant shall prepare and submit to the City and Agency for written comment and discussion a proforma proposed Project Budget on or before December 1, 2007. City and Agency shall give written comment and/or approve such proforma budget within thirty 176/4986 8 �� ZB Item 17. - 42 uB -338- (30) days following submission thereof by Participant, shall submit a Project Budget within 90 days of the date of final plan approval of the Senior Center and thereafter may submit from time to time a revised Project Budget, which shall be subject to the review and approval of the City and Agency within thirty (30) days following submission thereof by Participant. City and Agency as used in this subsection shall, at the option of the Agency Executive Director and City Administrator, mean the Agency Board and City Council_ 7. Participant agrees that the development of the Senior Center is subject to and conditioned upon approval by a Measure C Vote and project plan approval for the development of the Senior Center. 8. Notwithstanding anything to the contrary contained herein, in the event: (a) a Measure C Vote does not approve development of the Senior Center prior to December 1, 2006, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than by the recordation of Final Tract Map No. 16338; or (b) the City Council does not authorize project plan approval for the development of the Senior Center by December 1, 2007 (subject to one extension of no more than 4 months provided such extension is in a writing signed by all parties hereto), Participant shall be relieved of its obligation to design., develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than December 31, 2007 (as may be extended by any such extension); or (c ) Participant does not in good faith obtain a building permit for the Senior Center by July 1, 2008, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than July 31, 2008; or (d) Participant does not in good faith complete construction of the Senior Center and dedicate the Senior Center to the City by July 1, 2009, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than July 31, 2009. Notwithstanding the foregoing or Section 610.1, if in accordance with the foregoing the Participant shall be released in whole or in part of its obligation to design, develop, install and/or construct the Senior Center and instead shall be obligated to pay the entire Park In Lieu Fee, or if in accordance with Section 610.1 the Participant shall be obligated for the entire Park In Lieu Fee, then and in either such event the Participant shall be entitled to a credit against the Park In Lieu Fee to the extent the Participant shall have expended fiends or incurred any expenses in furtherance of the design, development, installation and/or construction of the Senior Center, which funds and expenses shall be substantiated in a Certified Cost Statement and contained in a City and Agency approved proforma or Project Budget. As a condition to Participant being entitled to any credit against the Park In Lieu Fee as provided herein, Participant shall first assign to City all assignable third party work product represented by such credit. 9 06-476/4986 HB -339- Item 17. - 43 ARTICLE 400. REGIONAL TREATMENT SYSTEM Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall, develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City at Participant's own cost, expense, and liability (except as expressly provided below in Article 800), the Regional Treatment System as required by and within the limitations set forth in Condition of Approval No. 5.b. of Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12. Participant agrees that the Regional Treatment System shall include, without limitation, all utilities, and off -site improvements, . Participant agrees that Participant shall design, develop, install and construct the Regional Treatment System in accordance with City approved plans and specifications and subject to the written approval of the City's Director of Public Works, and shall complete construction within twelve (12) months of the date of approval of such plans and specifications. Participant agrees that development, design, installation and construction of the Regional Treatment System shall include the preparation of all plans and specifications, processing and completing all environmental review, entitlements and plan checks, and development, design, development, construction, and installation in accordance with City approved plans and specifications and development, design, construction, and installation shall be subject to the written approval of the City's Director of Public Works_ Participant agrees that the Regional System. Treatment shall be subject to the complete reasonable satisfaction of the City's Director of Public Works and the Agency Executive Director or designee. Participant agrees that Participant shall provide all equipment (including operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Regional System Treatment. ARTICLE 500_ PACIFIC VIEW AVENUE EXTENSION § 501 Pacific View Avenue Extension Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, that Participant shall, within the time limitation(s) set forth in the Conditions of Approval, develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City at Participant's own cost, expense, and liability (except as expressly provided below in Article 800), the Pacific View Avenue Extension_ Participant agrees that the Pacific View Avenue Extension shall include, without limitation, pavement, curb and gutter, sidewalk, landscaping, street lights and conduits, sewer and water lines and storm drains. Participant agrees that Participant shall design, develop, install and construct the Pacific View Avenue Extension in accordance with City approved plans and specifications. F.2 VA 7614986 Item 17. - 44 10 HB -340- Participant agrees that development, design, installation and construction of the Pacific View Avenue Extension shall include the preparation of all plans and specifications and processing and completing all environmental review, entitlements and plan checks, subject to the written approval of the City's Director of Public Works and the Agency Executive Director or designee. Participant agrees that the Pacific View Avenue .Extension shall be subject to the complete reasonable satisfaction of the City's Director -of Public Works and the Agency Executive Director or designee. Participant agrees that Participant shall provide all equipment (including operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Pacific View Avenue Extension. § 502 Termination of Existing Site Agreement City and Participant's predecessor -in -interest to the Site, Huntington Beach Company, entered into that certain agreement entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986 recorded on May 29, 1987 as Document No. 87-303610 ("Existing Site Agreement"). Upon the Effective Date of this Agreement, the Existing Site Agreement shall be automatically terminated, canceled and voided in its entirety and all covenants, terms and conditions, set forth in the Existing Site Agreement shall be forever relinquished, released and discharged without need of further act or document. Within a reasonable period of time following the City's execution of this Agreement but in no event later than five (5) calendar days following the Effective Date of this Agreement, Participant agrees to execute in recordable form the Memorandum of Termination, attached hereto as Attachment No. 6 and incorporated herein by reference. The Memorandum of Termination shall be recorded against the Site. City and Participant each understand that by their entry into this Agreement they are releasing the other party from all claims, demands, liabilities, and causes of action which are or which could he founded upon their respective rights and obligations under the Existing Site Agreement. City and Participant further understand that such release and waiver applies to claims, demands, obligations and liabilities both known and unknown, foreseeable or unforeseeable, current, retrospective or prospective. City and Participant each declare that it is their intent that any and all such claims, demands, obligations and liabilities of parties, whether known or unknown, foreseeable or unforeseeable, current, retrospective or prospective, be fully discharged, released and excused. City and Participant have been advised by their legal counsel concerning the content and effect of California Civil Code Section 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release, which if known by him must have materially effected his settlement with the debtor. 11 06-476/4986 HB -341- Item 17. - 45 City and Participant each hereby waive the benefits of Civil Code Section 1542 and all other state or federal statutes or judicial decisions of similar affect. City and Participant each hereby respectively represent and warrant to the other that they have not assigned, transferred, conveyed, or hypothecated any of their respective rights, remedies, and obligations under the Existing Site Agreement. City and Participant hereto.shall defend and indemnify and hold the other party harmless from any and all alleged damages, liabilities, costs and expenses (including reasonably reasonable attorneys' fees and costs of litigation) incurred by the other as a result of the intentionally or unintentionally falsity of any portion of the foregoing representation and warranty. ARTICLE 600. DEVELOPMENT AND CONSTRUCTION § 601 Permits/Entitlement Plan Amendment Prior to commencing any work on the Senior Center, Regional Treatment System, or Pacific View Avenue Extension„ Participant shall, at its sole cost, expense, and liability, obtain all necessary permits and licenses and give all necessary and incidental notices required for the lawful construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and performance of Participant's obligations under this Agreement. Participant shall also file and process the Entitlement Plan Amendment application to provide for consistency of Tentative Tract Map No. 16338, Conditions No. 2b and 1 i with the terms of this Agreement. Participant shall conduct the work in full compliance with the regulations, rules, and other requirements contained in any permit or license issued to Participant. § 602 Plans and _Specifications The scope of work and all plans and specifications must meet the specifications and approvals of the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee. Participant is prohibited from commencing work on the Senior Center, Regional Treatment System or Pacific View Avenue Extension until all plans and specifications for the Senior Center, Regional Treatment System and Pacific View. Avenue Extension have been submitted to and approved by the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee. Approval by the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee shall not relieve Participant from ensuring that the Senior Center, Regional Treatment System and Pacific View Avenue Extension conform with all other requirements and standards set forth in this Agreement. § 603 Quality of Work; Compliance With Laws and Codes The construction plans and specifications for the Senior Center, Regional Treatment System. and Pacific View Avenue Extension shall be prepared in accordance with all applicable federal, state and local laves, ordinances, regulations, codes, standards, and other requirements. The Senior Center, Regional Treatment System and Pacific View Avenue Extension shall all be 12 „_ ._6I498G Item 17. - 46 HB _342_ completed in accordance with all approved maps, plans, specifications, standard drawings, and special amendments thereto on file with City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements applicable at the time work is actually commenced, including, without limitation, the requirement to pay state prevailing wages as set forth in more detail in Section 618, below. § 604 Standard of Performance Participant and its contractors, if any, shall perform all work required to construct the Senior Center, Regional Treatment System and Pacific View Avenue Extension under this Agreement in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Participant represents and warrants that it or its contractors shall be skilled in the professional calling necessary to perform the work. Participant represents and warrants that all of its employees and contractors shall have sufficient skill and experience to perform the work assigned to them, and that they shall have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the work, and that such licenses, permits, qualifications and approvals shall be maintained throughout the term of this Agreement. § 605 Alterations to Senior Center, Regional Treatment System and Pacific View Avenue Extension The descriptions of the Senior Center, Regional Treatment System and Pacific View Avenue Extension herein are understood to be only a general designation of the work and improvements to be done, and not a binding description thereof. All work shall be completed and improvements made as shown on City -approved plans and specifications and shall be approved in writing by the City's Director of Community Services and Director of Public Works and the Agency Executive Director or designee. If during the course of construction and installation of the Senior Center, Regional Treatment System or Pacific View Avenue Extension it is determined by the City's Community Services Director, the Director of Public Works or the Agency Executive Director or designee that the public interest requires alterations in the Senior Center, Regional Treatment System or Pacific View Avenue Extension, Participant shall undertake such design and construction changes as may be required by the City's Community Services. Director, the Director of Public Works or the Agency Executive Director or designee. § 606 Maintenance of Senior Center Regional Treatment System and Pacific View Avenue Extension a. Senior Center and Regional Treatment System. Neither the City nor Agency shall be responsible or liable for the maintenance or care of the Senior Center or the City's six -sevenths (6/7) share of maintenance of the Regional Treatment System until the City approves and accepts the Senior Center or the Regional Treatment System, as applicable. Neither City nor Agency shall exercise any control over the Senior Center or the Regional Treatment System until accepted. Any use by any person of the 13 06-476/4996 1-1B -343- Item 17. - 47 Senior Center or the Regional Treatment System or any portion thereof, .shall be at the sole and exclusive risk of the Participant at all times prior to City's acceptance of the Senior Center and the Regional Treatment System, as applicable, except for any damages or injury resulting from the City's or Agency's willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or Agency. Participant shall maintain the Senior Center and the Regional Treatment System in a state of good repair until they are completed by Participant and approved and accepted by City, and until the security for the performance of this Agreement is released. Maintenance shall include, but shall not be limited to, to the extent applicable, repair of pavement, curbs, gutters, storm drains, street lighting, decorative paving, sidewalks, parkways, water mains, and sewers;. maintaining all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee; removal of debris from sewers and storm drains; and sweeping, repairing, and maintaining in good and safe condition all streets and street improvements_ It shall be Participant's responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City or Agency. If Participant fails to properly prosecute its maintenance obligation under this Agreement, City or Agency may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Participant and its surety, if any, under this Agreement. Neither City nor Agency shall be responsible or liable for any damages or injury of any nature in any way related to or caused by the Senior Center or the Regional Treatment System or their condition prior to acceptance, except for any damages or injury resulting from the City's or Agency's willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or Agency ; provided that the City and Agency agree to act in a reasonable and timely manner in processing any request by Participant for acceptance of the Senior Center and Regional Treatment System. - Participant acknowledges and agrees that pursuant to Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12 Condition 5B, Participant and/or the Master Association for the Project is obligated to provide one -seventh (1/7) of the on -going annual operation and maintenance cost for the Regional Treatment System. b. Pacific View Avenue Extension. Participant further acknowledges and agrees that, pursuant to Conditions of Approval No. 2(a)(4) and 3c of Tentative Tract Map No, 16338, Participant shall maintain the Pacific View Avenue Extension at its sole cost and expense. Neither the City nor the Agency shall have any liability, obligation or responsibility to maintain any portion of the Pacific View Avenue Extension_ Maintenance shall include, butshall not be limited to, repair of pavement, curbs, gutters, storm drains, street lighting, decorative paving, sidewalks, medians, landscaping including parkways; maintaining all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Director of Public Works and the Agency Executive Director or designee; and sweeping, repairing, and maintaining in good and safe condition all streets and street improvements. It shall be Participant's responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City or Agency. If Participant fails to properly prosecute its maintenance obligation under 14 '14986 Item 17. - 48 HB -344- this Agreement, City or Agency may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Participant. Neither City nor Agency shall be responsible or liable for any damages or injury of any nature in any way related to or caused by the Pacific View Avenue Extension, except for any damages or injury resulting from the City's or Agency's, as applicable, willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or ,agency, as applicable, as provided. in this Section .606.b (except for damages or injury relating in any way to inverse condemnation and subject to any protections provided or afforded to the City and Agency applicable law, rules and/or regulations, including, without limitation, the Government Tort Claims Act). § 607 Construction Schedule a. Senior Center. Participant agrees that Participant shall fully and adequately complete, or have completed, the Senior Center within twenty-four (24) months following commencement of construction as set forth in Section 305, above,. Participant agrees that completion of the Senior Center shall mean that the City has issued a final certificate of occupancy for all portions of the Senior Center, the City has accepted the entire Senior Center in accordance with the acceptance procedures described in Section 612, below, and Participant has designed, developed, installed and constructed the Senior Center in accordance with all of the teens and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). b. Regional Treatment System. Participant agrees that Participant shall fully and adequately complete, or have completed, the Regional Treatment System within twelve (12) months of the date of approval of the approved plans and specifications but subject in all respects to Force Majeure Delays. Participant agrees that completion of the Regional Treatment System shall mean that the City has accepted the entire Regional Treatment System in accordance with the acceptance procedures described in Section 612, below, and Participant has designed, developed, installed and constructed the Regional Treatment System in accordance with all of the terms and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). C. Pacific View Avenue Extension. Participant agrees that Participant shall fully and adequately complete, or have completed, the Pacific View Avenue Extension within the time limitation(s) set forth in the Conditions of Approval. Participant agrees that completion of the Pacific View Avenue Extension shall mean that the City has accepted the entire Pacific View Avenue Extension in accordance with the acceptance procedures described in Section 612, below, -and Participant has designed, developed, installed and constructed the Pacific View Avenue Extension in accordance with all of the terms and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). § 608 Fees and Charges Participant shall, at its sole cost, expense, and liability, pay all fees and taxes arising out of construction of the Senior Center, Regional Treatment System and Pacific View Avenue 15 06-476149M HB -345- " It Item 17. - 49 Extension, :including, but not limited to, all plan check, design review, engineering, inspection, and other service fees_ § 609 City and Agency Inspection of Senior Center, Regional Treatment System and Pacific View Avenue Extension Participant shall, at its sole cost, expense, and liability, and at all times during construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, maintain reasonable and safe facilities and provide safe access (subject to customary safety procedures .adopted by Participant or its contractors so long as such customary safety procedures have first been approved in writing by both the City's Director of Public Works and the City's Director of Community Services in their respective reasonable discretion) for inspection by City and Agency of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and areas where construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension is occurring or will occur. § 610 Default, Notice-, Remedies. 1. Notice. If Participant neglects, refuses, or fails to fulfill or timely complete any obligation, term, or condition of Article 300, 400, 500, or 600 or if there is a material violation by Participant of any federal, state, or local law, ordinance, regulation, code, standard, or other requirement relating to the development, design, construction or installation of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, either City or Agency may at any time thereafter declare Participant to be in default or violation of Articles 300, 400, 500 or 600 and make written demand upon Participant or its surety, if any, to immediately remedy the default or violation ("Public Improvement Notice"). Participant shall substantially commence the work required to remedy the default or violation within five (5) days of the Public Improvement Notice. If the default or violation constitutes an immediate threat to the public health, safety, or welfare, either City or Agency may provide the Public Improvement Notice verbally, and Participant shall substantially commence the required work within twenty-four (24) hours thereof. Immediately upon City's or Agency's issuance of the Public Improvement Notice with respect to the Senior Center, at the option of Agency and City, subject to Section 305.6, Participant and its surety, if any, shall be liable to City and Agency for the entire Park -In -Lieu Fee and all other administrative costs expenses as provided for in Section 611, below. 2. Failure to Remedy; City or Agency Action. If the work required to remedy the noticed default or violation is not diligently prosecuted to a completion within the time frame contained in the Public Improvement Notice, either City or Agency may complete all remaining work, arrange for the completion of all remaining work, and/or conduct such remedial activity as in its sole and absolute discretion it believes is required to remedy the default or violation. All such work or remedial activity shall be at the sole and absolute cost, expense, and liability of Participant and its surety, if any, without the necessity of giving any further notice to Participant or surety, if any. City's and Agency's right to take such actions shall in no way be limited by the fact that Participant or its surety, if any, may have constructed any of the required Senior Center, Regional Treatment System or Pacific View Avenue Extension at the time of City's or Agency's 16 ^AA76I4986 Item 17. - 50 HB -346- demand for performance. In the event City or Agency elects to complete or arrange for completion of the remaining work and improvements, City or Agency may require all work by Participant or its surety, if any, to cease in order to allow adequate coordination by City or Agency. 3. " -Other Remedies. No action by -City or Agency pursuant to this Section or any other Section shall prohibit City or Agency from exercising any other right or pursuing any other legal or equitable remedy available under this Agreement or any federal, state, or local law. City and Agency may exercise their rights and remedies independently or cumulatively, and City and Agency may pursue inconsistent remedies. City and/or Agency may institute an action(s) for damages, injunctive relief, or specific performance. § 611 Administrative- Costs If Participant fails to develop, design, construct, install or dedicate all or any part of the Senior Center, Regional Treatment System or Pacific View Avenue Extension within the time required by this Agreement, or if Participant fails to comply with any other obligation contained herein, Participant and its surety, if any, shall be jointly and severally liable to City and Agency for all administrative expenses, fees, and costs, including reasonable attorneys' fees and costs, incurred in obtaining compliance with this Agreement or in processing any legal action or for any other remedies permitted by law. § 612 Acceptance of Improvements; As -Built or Record Drawings If the Senior Center, Regional Treatment System and Pacific View Avenue Extension are properly completed by Participant and approved by the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee, and if the Senior Center, Regional Treatment System and Pacific View Avenue Extension comply with all applicable federal, state and local laws, ordinances, regulations, codes, standards, and other requirements, the City Council shall be authorized to and shall timely accept the Senior Center, Regional Treatment System and Pacific View Avenue Extension. The City Council may, in its sole and absolute discretion, accept fully completed portions of the Senior Center, Regional Treatment System and Pacific View Avenue Extension prior to such time as all of the entire Senior Center, Regional Treatment System and Pacific View Avenue Extension are complete, which shall not release or modify Participant's obligation to complete the remainder of the Senior Center, Regional Treatment System and Pacific View Avenue Extension within the time required by this Agreement. Upon the total acceptance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension by City, Participant shall file with the Recorder's Office of the County of Orange a notice of completion for the accepted Senior Center, Regional Treatment System and Pacific View Avenue Extension in accordance with California Civil Code section 3093, at which time the accepted Senior Center, Regional Treatment System and Pacific View Avenue Extension shall become the sole and exclusive property of .City without payment therefor. Notwithstanding the foregoing, City may not accept the Senior Center, Regional Treatment System and Pacific View Avenue Extension unless and until Participant provides the guarantee and warranty security described below in Section 614 and one (1) set of "as -built" or 17 06-476/4986 HB -347- Item 17. - 51 record drawings or plans to the City Engineer for the Senior Center, Regional Treatment System and Pacific View Avenue Extension. The drawings shall be certified and shall reflect the condition of the Senior Center, Regional Treatment System and Pacific View Avenue Extension as constructed, with all changes incorporated therein. § 613 Warranty and Guarantee . Participant hereby warrants and guarantees the Senior Center, Regional Treatment System and Pacific View Avenue Extension against any defective work or labor done, or defective materials furnished in the performance of this Agreement, including the maintenance of all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee, for a period of one (1) year following completion of the work and acceptance by City {"Warranty"). During the Warranty, Participant shall repair, replace, or reconstruct any defective portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension or other portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension which is unsatisfactory in accordance with the terms of this Agreement, in accordance with the current ordinances, resolutions, regulations, codes, standards, or other requirements of City, and to the reasonable approval of the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee. All repairs, replacements, or reconstruction during the Warranty shall be at the sole cost, expense, and liability of Participant and its surety, if any. As to any portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension which has been repaired, replaced, or reconstructed during the Warranty, Participant and its surety, if any, hereby agree to extend the Warranty for an additional one (1) year period following City's acceptance of the repaired, replaced, or reconstructed portion of the Senior Center, Regional Treatment System or Pacific View Avenue Extension but only as to the items repaired, replaced or reconstructed. Nothing herein shall relieve Participant from any other liability it may have under .federal, state, or local law to repair, replace, or reconstruct any portion of the Senior Center, Regional Treatment System or Pacific View Avenue Extension following expiration of the Warranty or any extension thereof. Participant's warranty obligation under this Section shall survive the expiration or termination of this Agreement § 614 Security; SurpV Bonds Prior to City's and Agency's execution of this Agreement (except for the guarantee and warranty bond which shall be provided to the City and Agency as a condition precedent to the City's acceptance of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, as applicable), Participant shall provide City and Agency with surety bonds in the amounts and under the terms set forth below ("Security"). The amount of the Security shall be based on a cost estimate prepared by Participant and approved by the City Engineer of the actual cost to construct the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including the replacement cost for all landscaping ("Estimated Costs"), If City determines, in its sole and absolute discretion, that the Estimated Costs have changed, Participant shall adjust the Security in the amount requested by City. Participant's compliance with this ^` 476/4986 IR, Item 17. - 52 HB -348- provision shall in no way limit or modify Participant's indemnification obligations provided herein. 1. Performance Bond and Guarantee and Warranty Bond. To guarantee the faithful performance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and all the provisions .of this Agreement, to protect City and Agency if Participant is in default hereunder as to Participant's obligations under Articles 300, 400, 500 or 600, and to secure Participant's one-year guarantee and warranty of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including the maintenance of all landscaping in a vigorous and thriving condition, Participant has provided City a performance bond and a guarantee and. warranty bond for the Pacific View Avenue Extension (which bands are on file with the City Engineer), Participant shall provide City and Agency a faithful performance bond in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Regional Treatment System, and a guarantee and warranty bond in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Regional Treatment System, and Participant shall provide City and Agency a faithful performance bond in the amount of Nineteen Million Dollars ($19,000,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Senior Center, and a guarantee and warranty bond in the amount of Nineteen Million Dollars ($19,000,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Senior Center. All security provided under this Section shall be released at the end of the Warranty period, provided that Participant is not in default under any provision of this Agreement. 2. Labor & Material Bond. To secure payment to the contractors, subcontractors, laborers, material men, and other persons furnishing labor, materials, or equipment for performance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and this Agreement, Participant has provided City a labor and materials bond for the Pacific View Avenue Extension (which bond is on file with the City Engineer), Participant shall provide City and Agency a labor and materials bond in the amount of Seven Hundred Fifty Thousand Dollars ($750,000), which sum is not less than fifty percent (50%) of the Estimated Costs for the Regional Treatment System, and Participant shall provide City and Agency a labor and materials bond in the amount of Nine Million Five Hundred Thousand Dollars ($9,500,000), which sum is not less than fifty percent (50%) of the Estimated Costs for the Senior Center. The security provided under this Section may be released by the City Council and Agency, in their sole and absolute discretion, by written authorization of the City Engineer after six (6) months from the date City accepts the final Senior Center, Regional Treatment System and Pacific View Avenue Extension. The amount of such security shall be reduced by the total of all stop notice or mechanic's lien claims of which City is aware, plus an amount equal to twenty percent (20%) of such claims for reimbursement of City's and Agency's anticipated administrative and legal expenses arising out of such claims. 3. Additional Requirements. The surety for any surety bonds provided as Security shall have a current A.M. Best's rating of no less than A:VIII, shall be licensed to do business in California, and shall be satisfactory to City and Agency. As part of the obligation secured by the 19 06-47614986 xB -349- Item 17. - 53 Security and in addition to the face amount of the Security, the Participant or its surety shall secure the costs and reasonable expenses and fees, including reasonable attorneys' fees and costs, incurred by City or Agency in enforcing the obligations of Participant under this Agreement. The Participant and its surety stipulate and agree that no change,. extension of time, alteration, or addition to the terms of this Agreement, the Senior Center, Regional Treatment System or Pacific View_ Avenue Extension, or the plans and specifications for the Senior Center, Regional Treatment System or Pacific View Avenue Extension shall in any way affect its obligation on the Security. 4. Evidence. and lncorporation of Security. Evidence of the Security shall be provided on the fornrks set forth in Attachment No. 7 and incorporated by this reference, unless other forms are deemed acceptable by the City Engineer, the City Attorney, and Agency General Counsel and when such forms are completed to the reasonable satisfaction of City and Agency, the forms and evidence of the Security shall be kept on file with the City Engineer. § 615 Indemnification Participant hereby agrees to protect, defend, indemnify and hold harmless the Agency, the City, their respective officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with Participant's (and Participant's contractors and subcontractors (if any)) negligent performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by Participant, its officers, agents or employees except such loss or damage which was caused by the gross negligence or willful misconduct of the Agency or City. Participant will conduct all defense at its sole cost and expense and the Agency shall reasonably approve selection of Participant's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Participant. § 616 Insurance Participant agrees to provide insurance in accordance with the requirements set forth in this Section. Participant shall, at all times, maintain good and sufficient insurance as required by City and Agency and reasonably acceptable to the City Risk Manager, City Attorney and Agency General Counsel. Such insurance may include, but is not limited to the following: 1. Types; Amounts. Participant shall procure and maintain, and shall require its contractors to procure and maintain, during construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension pursuant to this Agreement, insurance of the types and in the amounts described below ("Required Insurance"). If any of the Required Insurance contains a general aggregate limit, such insurance shall apply separately to this Agreement or be no less than two times the specified occurrence limit. we, Item 17. - 54 HB -350- a. General Liability. Participant and its contractors shall procure and . maintain occurrence version general liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence for bodily injury, personal injury, and property damage. b. Business Automobile Liability. Participant and its contractors shall procure and maintain business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for the ownership, operation, maintenance, use, loading, or unloading of any vehicle owned, leased, hired, or borrowed by the insured or for which the insured is responsible. C. Workers' Compensation. Participant and its contractors shall procure and maintain workers' compensation insurance with limits as required by the Labor Code of the State of California and employers' liability insurance with limits of not less than. $1,000,000 per occurrence, at all times during which an insured retains employees. d_ Professional Liability. For any consultant or other professional who will engineer or design the Senior Center, Regional Treatment System or Pacific View Avenue Extension, liability insurance for errors and omissions with limits not less than $1,000,000 per occurrence, shall be procured and maintained for a period of five (5) years following completion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension. Such insurance shall be endorsed to include contractual liability. 2. Deductibles. Any deductibles or self -insured retentions must be declared to and approved by City and Agency. At the option of City and Agency, either: (a) the insurer shall reduce or eliminate such deductibles or self -insured retentions as respects City, Agency and their respective elected officials, officers, employees, agents, contractors 'and consultants; or (b) Participant and its contractors shall provide a financial guarantee satisfactory to City and Agency guaranteeing payment of losses and related investigation costs, claims, and administrative and defense expenses. 3. ° Additional Insured; Separation of Insureds. The Required Insurance shall name City, Agency and their respective elected officials, officers, employees, agents, contractors and consultants as additional insureds with respect to work performed by or on behalf of Participant or its contractors, including materials, parts, or equipment furnished in connection therewith. The Required Insurance shall contain standard separation of insureds provisions, and shall .contain no special limitations on the scope of its protection to City, Agency or their respective elected officials, officers, employees, agents, contractors and consultants. .4. Primary Insurance; Waiver of Subrogation. The Required Insurance shall be primary with respect to any insurance or self-insurance programs covering City, Agency and their respective elected officials, officers, employees, agents, contractors and consultants. All policies for the Required Insurance shall provide that the insurance company waives all right of recovery by way of subrogation against City and Agency in connection with any damage or harm covered by such policy. 21 06-47614986 Item 17. - 55 5: Verification. Participant and its contractors shall furnish City and Agency with original endorsements effecting coverage for the Required Insurance. The endorsements for each insurance policy -shall be signedd by a person authorized by that insurer to bind coverage on its behalf. All endorsements must be received and approved by City and Agency before work pursuant to 'this Agreement can begin. City and Agency each reserve the right to require complete, certified copies of all required insurance policies, at any time. 6. Term; Cancellation Notice. Participant and its contractors shall maintain the Required Insurance for the term of this Agreement and shall replace any certificate, policy, or endorsement which will expire prior to that date. All policies shall be endorsed to provide that the Required Insurance shall not be suspended, voided, reduced, canceled, or allowed to expire except on thirty (30) days' prior written notice to City and Agency. 7. Insurer Rating. Unless approved in writing by City and Agency, all Required Insurance shall placed with insurers licensed to do business in the State of California and with a current A.M. Best rating of at least A:VIII. § 617 Direct Payment Permit Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, .that Participant shall apply for a "Direct Payment Pennit" from the California State Board of Equalization and Participant shall from and after the Effective Date of this Agreement designate City as the "point of sale" for all taxable sales and lease transactions occurring on the Site or any property on which development is contemplated or required under this Agreement and the development and operation of any and all improvements thereon, including, but not limited to, the purchase of construction goods and materials, in all reports to the California State Board of Equalization in accordance with the Bradley -Burns Uniform Sales and Use Tax Law (Revenue and Taxation Code 72000 et seq.), as it may be amended or substituted from time to time, and on sales tax returns to the State of California for all taxable sales occurring on the Site or any property on which development is contemplated or required under this Agreement and lease transactions occurring on the Site or any property on which development is contemplated or required under this Agreement and the development and operation of any and all improvements thereon, including, but not limited to, the purchase of construction goods and materials. § 618 Prevailing Wages a. Participant represents and warrants that it is aware of the requirements of California Labor Code Section 1770 et seq., which requires the payment of prevailing wage rates and the performance of other requirements on public works contracts. Participant agrees to comply with such requirements and to pay such prevailing rates to each worker needed to carry out the Senior Center, Regional Treatment System and Pacific View Avenue Extension and further agrees to comply with the penalty provisions of Section 1775 of the California Labor Code in the event of its failure to pay prevailing rates. Without limiting the generality of the 22 '614986 Item 17. - 56 1113.352_ foregoing, Participant agrees that: (1) Participant shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any -other provision of law; and (2) Participant shall have the .obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Participant agrees to indemnify, protect, defend and hold harmless the Agency, City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the design, development, installation and/or construction of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (a) the noncompliance by Participant of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws, including, without limitation, California Labor Code Section 1770 et seq. (including, without limitation, if applicable, the requirement to pay state prevailing wages); (b) the implementation of Chapter 804, Statutes of 2003; (c) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (d) failure by Participant to provide any required disclosure representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and. 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (e) failure by Participant to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The City and Agency hereby represent to the Participant and its contractor(s) for the Senior Center, Regional Treatment System and Pacific View Avenue Extension that the work to be covered by the bid or contract is a "public work," as defined in Section 1720 of the Labor Code. It is agreed by the parties that, in connection with the design, development, installation and construction (as defined by applicable law) of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including, without limitation, any public work (as defined by applicable law), if any, Participant shall bear . all risks of payment or non-payment of state prevailing wages and/or the implementation of Chapter 804, Statutes of 2003 and/or Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive any termination of this Agreement. b. Participant agrees to keep, or caused to be kept by each contractor and subcontractor, accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week for each journeyman, apprentice, worker, or other employee employed in connection with the Senior Center, Regional 23 06476/4986 HB -353- Item 17. - 57 Treatment System and Pacific View Avenue Extension, and the actual per diern wages paid to each journeyman, apprentice, worker, or other employee employed in connection with the Senior Center, Regional Treatment System and Pacific View Avenue Extension. Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following: (1) The information contained in the payroll record is true and correct. (2) The employer has complied with the requirements of Sections 1771, 1811., and 1815 of the Labor Code for any work performed by his or her employees on the Senior Center, Regional Treatment System or Pacific View Avenue Extension. C. The payroll records enumerated under subsection b., above, shall be certified and shall be available for inspection, auditing and/or copying by the City either, at the option of the City, at all reasonable hours at the principal, office of Participant as set forth above, or furnished to the City within five (5) days following written request therefor to Participant. Such records shall be kept for at least three (3) years after the end of the year to which they apply. Any copy of records made available for inspection or furnished upon request to the City may be marked or obliterated to prevent disclosure of an individual's name, address, and social security number. The name and address of the contractor awarded the contract or the subcontractor performing the contract shall not be marked or obliterated. d. Participant agrees that Participant shall pay all expenses incurred in connection with any inspection, audit or copying of the payroll records enumerated under subsection b., above. § 619 Nondiscrimination during Construction Participant for itself and its successors and assigns agrees that in the construction of the improvements provided for in this Agreement, Participant will not discriminate against any employee or applicant for. employment because of sex, marital status, race, color, creed, religion, national origin or ancestry. § 620 Meaning of "Dedicate" The term "dedicate," as used in this Agreement, means to acquire all necessary land or rights -of -way (except as to the Senior Center for which Participant shall have no obligation to acquire any land or right-of-way) and to construct thereon the public improvements required by this Agreement, and thereafter to offer to convey such land/rights-of-way (except as to the Senior Center) and improvements to the City at no cost to the City. The Participant shall offer the land/rights-of-way and public improvements at the time required by the City Engineer in the exercise of his or her reasonable discretion. n6-476/4986 24 Item 17. - 58 HB -354- The satisfaction of the Participant's obligations with respect to the dedication of the - public improvements described in this Agreement shall be contingent upon the City Council's acceptance of such improvements, which acceptance shall occur in a manner consistent with the City's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. § 621 Not a Statutory Development Agreement This Agreement is not a statutory development agreement as described by Government Code Section 65864 et seq. This Agreement confers no vested entitlements with respect to the development of the Project. This Agreement does not limit, in any way whatsoever, the City's authority to lawfully increase impact fees, change land use regulations, or otherwise lawfully exercise all powers available to the City pursuant to its police power, statutes, and judicial decision. Without limiting the generality of the foregoing paragraph, if. the City at any time increases its impact fees, and such increases can otherwise be lawfully imposed against the Project, then the Participant shall pay the increased impact fees. If the City increases an impact fee for which the Participant is satisfying its obligation by the construction and dedication of certain public improvements, and such increase results in the value (as established by the applicable fee program) of the improvements being less than the Participant's increased impact fee obligation for the Project, then Participant shall pay the amount of the difference between the improvement's value and the increased impact fee obligation for the Project. ARTICLE 700. USE OF THE SITE § 701 Uses Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except as expressly provided below in subsection 4.), that Participant and/or such successors and assigns shall: 1. Maintain, repair and operate the Site and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Site and all such improvements to be maintained, in a first quality condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, the Pacific City Master Plan, the City of Huntington Beach Municipal Code, and the following: a. All improvements on the Site shall be maintained in good, first quality condition in accordance with the custom and practice generally applicable to comparable developments in Orange County, and in conformance and compliance with all plans, drawings and related. documents approved by the City and Agency pursuant to this Agreement, all conditions of approval of land use entitlements adopted by the City or the Planning Commission, including painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline, including medians. 25 06.476/4986 1-113 -3155- Item 17. - 59 b. Notwithstanding anything to the contrary contained herein, the Pacific View Avenue Extension shall be maintained in accordance with that certain Maintenance License Agreement tor be entered into by Participant in accordance with Condition of Approval No. 3C of Tentative Tract Map No. 16338 ("Maintenance License Agreement"). To the extent of a conflict between the provisions of this Agreement and the Maintenance License Agreement, the Maintenance License Agreement shall control. Notwithstanding anything to the contrary contained herein, the Regional Treatment System shall be maintained pursuant to and in accordance with CUP Condition of Approval 5(b), and in the event of a conflict between the provisions of this Agreement and CUP Conditions of Approval 5(b), the CUP conditions shall govern. C. Landscape maintenance shall include, without limitation, watering/inigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain and keep the original designed theme and material selection in a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials with, at a minimum, the originally approved sizes; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. d. Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly, removal of all trash, litter and other debris from improvements and landscaping; clearance and cleaning.of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of off -site in a lawful manner by maintenance workers. 2. If the Agency gives written notice to Participant or any successor that the maintenance or condition of the Site or any portion thereof or any improvements thereon does not comply with this Agreement and such notice describes the deficiencies, Participant shall correct, remedy or cure the deficiency within thirty (30) calendar days following the submission of such notice, unless the notice accurately states that the deficiency is an urgent matter relating to public health and safety in which case Participant shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time. In the event Participant fails to maintain the Site or any portion thereof or any improvements thereon in accordance with this Agreement and fails to cure any deficiencies within the applicable period described above, the Agency shall have, in addition to any other rights and remedies hereunder, the right to maintain the Site and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Participant shall be responsible for payment of all such costs incurred by the Agency and until paid such costs shall be a line on the Site pursuant to Civil Code Section 2881. 3. Pay when due alI real estate taxes and the special taxes or assessments of the bond financing contemplated by Section 803 of this Agreement assessed and levied on the Site or any portion thereof or any improvements thereon or any interest therein and refrain from appealing, 26 -47614986 Item 17. - 60 HB _3156- challenging or contesting in any manner the validity or amount of any ad valorem property tax assessment, encumbrance or lien; provided, however, that Participant may appeal, challenge or contest (a) any increase in assessment of the Site improperly assessed because of a purported change of ownership where no such change took place; and (b) any increase in assessment of the Site occurring by reason of a bona fide arms -length sale to the extent such increase in assessment results in an assessment in excess of the purchase price of such bona fide aims -length sale, provided, however, that no such appeal, challenge or contest shall be permitted to attempt to obtain or result in an assessment which is lower than that existing prior to such sale. 4. The obligations set forth above in subsections 1. and 2. shall not apply to any individual residential owners of the Residential Units but shall apply to any property owners or homeowners association(s) established or created in connection with the Residential Units, as well as to Participant, its successors, its assigns and every other successor in interest to the Site or any part thereof. The obligations set forth above in subsection 3. shall not apply to any individual residential owners of the Residential Units but shall apply to Participant, its successors, its assigns and every other successor in interest to the Site or any part thereof. § 702 Obligation to Refrain from Discrimination Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part 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, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Site nor shall Participant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein agreed to be leased. § 703 Effect and Duration of Covenants All of the terms, provisions, promises, covenants and conditions established in this Agreement shall, without regard to technical classification and designation, be binding on Participant and any successor in interest to the Site, or any part thereof (except any individual residential owners of the Residential Lints as expressly forth herein), for the benefit and in favor of City, Agency, and their respective successors and assigns. The terms, provisions, promises, covenants and conditions against discrimination set forth in Section 702 shall remain in effect in perpetuity. The terms, provisions, promises, covenants and conditions regarding uses of the Site set forth in Section 702 shall expire upon termination of effectiveness of the Merged Project Redevelopment Plan. This Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns. All terms, provisions, promises, covenants and conditions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Agency, its successors and assigns, and the City and its 27 06-476/4986 HB -357- r.7 • Item 17. - 61 successors and assigns, against Participant, its successors and assigns, to or of the Site or any portion thereof or any interest therein, and any party in possession or occupancy of the Site or portion thereof. ARTICLE 800. AGENCY OBLIGATION AND COMMUNITY FACILITIES DISTRICT BONDS § 801 Agency Obligation a. Subject to all of the terms and conditions of this Agreement (including, without limitation, the provisions of Section 802, below, limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the principal amount payable by the Agency to Participant under this Agreement ("Agency Obligation") shall be the sum of Five Million Five Hundred Thousand Dollars ($5,500,000) payable as follows: (1) One Million Five Hundred Thousand Dollars ($1,500,000) to Participant as reimbursement for a portion of the costs of the installing and constructing the Regional Treatment System ("Regional Treatment System Portion"); and (2) Four Million Dollars ($4,000,000) to Participant as reimbursement for a portion of the costs of the installing and constructing the Pacific View Avenue Extension ("Pacific View Avenue Extension Portion"). b. The Agency Obligation represents reimbursement to Participant for construction and installation of public infrastructure improvements and facilities. In no event shall Participant be entitled to payment or reimbursement from Agency for any "construction, ' alteration, demolition, or repair work" (as such phrase is defined in Labor Code Section 1720(a) other than for such public infrastructure improvements and facilities. § 802 Payment of Agency Obligation The Agency Obligation shall be a special and limited obligation payable to Participant solely from the sources of funds expressly identified in this Article. The Agency shall have no obligation to pay any amounts to Participant pursuant to this Article except as follows: i . The following conditions precedent to each payment hereunder shall be satisfied: a. As to the Regional Treatment System Portion of the Agency Obligation, the Regional Treatment System Completion Date (defined below) shall have occurred, and as to the Pacific View Avenue Extension Portion of the Agency Obligation, the Pacific View Avenue Extension Completion Date (defined below) shall have occurred; b. Participant and any successors shall have cured any default as to any of their obligations under this Agreement or any related documents; C. The Commercial Portion Completion (defined below) shall have occurred; and ;;-5476/4986 Item 17. - 62 �— d. If Community Facilities District bonds or similar instruments have been issued pursuant to Section 803 of this Agreement, Participant and any successors shall have paid all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of their other obligations in connection with such bonds or similar instruments. 2. a. Subject to all of the terms and conditions of this Article (including, without limitation, the satisfaction of all of the conditions precedent to each payment set forth above in subsection 1.), on or prior to September 30 of each year, beginning with the first September 30 which follows both the Commercial Portion Completion and the Regional Treatment System Completion Date, and continuing until the earliest to occur of the following: (a) the date the Regional Treatment System Portion of the Agency Obligation has been paid in full; or (b) the Tax Increment Termination Date (defined below), the Agency shall pay annually to Participant an amount equal to the Regional Treatment System Payment (defined below) solely from Net Tax Increment (defined below) received by the Agency during the prior Agency fiscal year (July 1-June 30). b. Subject to all of the terms and conditions of this Article (including, without limitation, the satisfaction of all of the conditions precedent to each payment set forth above in subsection 1.), on or prior, to September 30 of each year, beginning with the first September 30 which follows both the Commercial Portion Completion and the Pacific View Avenue Extension Completion Date, and continuing until the earliest to occur of the following: (a) the date the Pacific View Avenue Extension Portion of the Agency Obligation has been paid in full; or (b) the Tax Increment Termination Date, the Agency shall pay annually to Participant an amount equal to the Pacific View Avenue Payment (defined below) solely from Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30). 3. Any amount of the Agency Obligation that remains unpaid on the Tax Increment Termination Date after application of all Net Tax Increment required to be paid to Participant by this Agreement, shall be forgiven by Participant and shall no longer be owed to Participant nor be considered an indebtedness of the Agency. 4. The Agency's obligations hereunder may be prepaid by the Agency, in whole or in part, at any time and from time to time without penalty. 5. The Agency Obligation shall constitute an indebtedness of the Agency for the purpose of carrying out the Redevelopment Plan. The indebtedness of the Agency created by this Agreement is- and shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Net Tax Increment to Participant under this Agreement is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 33671.5 of the Community Redevelopment Law. 29 06476/4986 HB -359- Item 17. - 63 6. Notwithstanding any other provision of this Agreement, the parties agree to the following limitations and conditions relating to the Agency's liability hereunder: a. In the event the Agency fails to make a payment when and as due, Participant's exclusive remedy shall be to sue only for payment of such payment; b. The Agency's monetary liability hereunder shall not be accelerated, but shall be limited to each payment installment if and as it falls due each year; and- C. Participant agrees that Agency shall never be liable for any amount in excess of the amount of a payment due for any given fiscal year. 7. The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts, if any, owed by Participant to the Agency against amounts payable by the Agency under this Article. 8. As used herein the following capitalized terms shall have the following meanings: a. "Commercial Portion Completion" shall mean that the Commercial Portion of the Project shall have been completed in compliance with all of the terms and conditions of this Agreement and all Conditions of Approval and the City shall have issued a final certificate of occupancy for one hundred percent (100%) of the Hotel portion of the Commercial Portion of the Project and ninety (90%) of the remaining retail space of the Commercial Portion of the Project, as determined by the Agency Executive Director or designee. b. "Net Tax Increment" shall mean the total ad valorem property tax increment revenue allocated to and received by the Agency pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount attributable by the Orange County Assessor solely to the Commercial Portion of the Project, but specifically excluding therefrom all of the following: (a) a portion of tax increment revenues from the Commercial Portion of the Project equal to the percentage of such revenues from the Commercial Portion of the Project that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law; and (b) a portion of tax increment revenues from the Commercial Portion of the Project equal to the tax increment revenues from the Commercial Portion of the Project that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements; and (c) a portion of tax increment revenues from the Commercial Portion of the Project equal to such revenues in the Commercial Portion of the Project which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 et seq. of the Community Redevelopment Law; and (d) the amount of any revenues received by the Agency which are ,V,l 41 Item 17. - 64 30 HB -360- r' attributable to any special taxes or assessments or voter -approved indebtedness; and (e) charges for County administrative charges, fees or costs equal to the percentage of such charges attributable to the Commercial Portion of the Project. c. "Pacific View Avenue Extension Completion Date" shall mean the date on which the City (in its regulatory capacity) and/or any other governmental entity with jurisdiction thereover has accepted as complete the Pacific View Avenue Extension, which acceptance shall occur in a manner consistent with the City's and other governmental entity's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. d. "Pacific View Avenue Payment" shall mean: a. If the Commercial Portion Completion occurs before the fifth (5"') anniversary of the Effective Date of this Agreement, the lesser of - (a) Two Hundred Sixty -Six Thousand Six Hundred and Sixty -Seven Dollars ($266,667); or (b) six and sixty seven one hundredths percent (6.67%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30); OR b. If the Commercial Portion Completion occurs after the fifth (51h anniversary of the Effective Date of this Agreement, the lesser of - (a) Two Hundred Thousand Dollars ($200,000); or (b) five percent -(5.00%) of Net Tax increment received by the Agency during the prior Agency fiscal year (July 1-June 30). e. "Regional Treatment System Completion Date" shall mean the date on which the City (in its regulatory capacity) and/or any other governmental entity with jurisdiction thereover has accepted as complete the Regional Treatment System, which acceptance shall occur in a manner consistent with the City's and other governmental entity's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. f. "Regional Treatment System Payment" shall mean: (1) If the Commercial Portion Completion occurs before the fifth (5a') anniversary of the Effective Date of this Agreement, the lesser of: (a) One Hundred Thousand Dollars ($100,000); or (b) two and fifty one hundredths percent (2.50%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30); OR (2} If the Commercial Portion Completion occurs after the fifth (Su`) anniversary of the Effective Date of this Agreement, the lesser of: (a) Seventy -Five Thousand Dollars ($75,000); or (b) two percent 31 06476/4986 HB -361- Item 17. - 65 (2.00%) of Net Tax Increment received by the Agency during the prior Agency :fiscal year (July 1-June 30). g. "Tax Increment Termination Date" shall mean: (1) As to the Regional Treatment System Portion of the Agency Obligation: (a) If the Commercial Portion Completion occurs before the fifth (5'") anniversary of the Effective Date of this Agreement, fifteen (15) years from the date of the first Regional Treatment System Payment; OR (b) If the Commercial Portion Completion occurs after the fifth (5'h) anniversary of the Effective Date of this Agreement twenty (20) years from the date of the first Regional Treatment System Payment. (2) As to the Pacific View Avenue Extension Portion of the Agency Obligation: (a) If the Commercial Portion Completion occurs before the fifth (5'h) anniversary of the Effective Date of this Agreement, fifteen (15) years from the date of the first Pacific View Avenue Payment; OR (b) If the Commercial Portion Completion occurs after the fifth (5'h) anniversary of the Effective Date of this Agreement, twenty (20) years from the date of the first Pacific View Avenue Payment. § 803 Community Facilities District Bonds i _ Pursuit of Bonds. Participant is requesting that the City consider the issuance of "Community Facilities District" bonds or similar instruments secured by a special tax on Participant's title to the residential portion of the Site and the improvements to be constructed thereon to fund eligible public improvements (such Community Facility District is referred to herein as "CFD 2006-1"). Participant agrees that as a condition precedent to the issuance of any such bonds the Agency Executive Director or designee and City's Community Services Director must reasonably determine that the special taxes levied against the residential portion of the Site shall not exceed 1.7% of the estimates of the sales prices of the Residential Units per square foot as submitted to and reasonably approved by the Agency Executive Director or designee and City's Community Services Director in writing and the Community Facilities District special tax and interest rates at the time of the formation of CFD No. 2006-1, if formed. 32 14986 Item 17. - 66 xB -362- 2. Payment of Special Taxes. a. In the event of an issuance of Community Facilities District bonds or similar instruments, the Bonds shall be secured solely by the pledge of the levy of a special tax on the Site and the improvements to be constructed thereon pursuant to this Agreement, and Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, that Participant shall pay all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of its other obligations in connection with such bonds or other instruments. Participant's failure to pay the special tax when due shall constitute a default under this Agreement. b. The Agency shall have no obligation to reimburse Participant for debt service, repayment of principal or interest, penalties or any other amounts due in connection with the bonds or similar instruments, including, but not limited to, any amounts which may become payable as a result of Participant's failure to pay special taxes and/or to timely perform Participant's other obligations thereunder. C. Participant agrees that the cost of the Regional Treatment System which is eligib3e for .Agency reimbursement in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) will not be financed by CFD 2006-1. Any amount over such reimbursement may be financed by CFD 2006-1. In the event the Regional Treatment System is financed by CFD 2006-1, the Regional Treatment System Portion, notwithstanding anything to the contrary contained herein, will be paid to CFD 2006-1, rather than to the Participant, to offset the special taxes that would otherwise be levied against the Site. The Agency's payment obligations under this Section shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. d. Participant agrees that the cost of the Pacific View Avenue Extension which is eligible for Agency reimbursement in an amount not to exceed Four Million Dollars ($4,000,000.00) will not be financed by CFD 200671. Any amount over such reimbursement may be financed by CFD 2006-1. In the event the Pacific View Avenue Extension is financed by CFD 2006-1, the Pacific View Avenue Portion, notwithstanding anything to the contrary contained herein, will be paid to CFD 2006-1, rather than to the Participant, to offset the special taxes that would otherwise be levied against the Site. The Agency's payment obligations under this Section shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. e. Participant agrees that up to Nineteen Million Dollars ($19,000,000.00) of the cost of the Senior Center maybe financed by CFD 2006-1. Participant agrees that no portion of the Management Fee related to the Senior Center may be financed by CFD 2006-1. 33 06-47614986 1413 -363- Item 17. - 67 ARTICLE 900 DEFAULTS, REMEDIES AND TERMINATION § 901 Default Each of the following shall constitute an Event of Default under this Agreement: 1. Failure or delay by a party to perform any term or provision of this Agreement within the time provided herein, as such times may be extended pursuant to Section 1004 of this Agreement. 2. Breach of any covenant, warranty or agreement contained in this Agreement. Subject to the extensions of time set forth in Section 1004, the party who fails to perform or delays performance of any term or provision of this Agreement shall immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with all due diligence. § 902 Notice If an Event of Default under this Agreement. occurs, the injured party shall give written notice (a "Default Notice") of the Event of Default to the party in default, specifying the nature of the default. failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it operate as a waiver of any rights or remedies of the injured party, but the injured party shall have no right to exercise any remedy hereunder prior to delivering the Default Notice as provided herein. Delays by either party in asserting any of its rights and remedies shall not deprive either 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. § 903 Cure Period With respect to defaults or events for which a specific cure period is provided elsewhere in this Agreement, the specific cure period in that Section shall be applicable in lieu of the cure periods provided in this Section and in no event shall the cure periods set forth in this Section be in addition to any other cure period set forth in this Agreement. The injured party shall have no right to exercise a right or remedy hereunder unless the subject Event of Default continues uncured for a period of thirty (30) days after delivery of the Default Notice with respect thereto, or, where the default is of a nature which cannot reasonably be cured within such thirty (30) day period, the defaulting party fails to commence such cure with all due diligence or fails to proceed diligently to complete the same; provided, however, that (1) in no event shall the injured party be prevented from exercising its rights or remedies for more than ninety (90) days following delivery of the Default Notice; and (2) a remedy necessary to prevent further damage may be obtained at any time following delivery of the Default Notice. An Event of Default for failure to pay a sum of money is a default which can be cured within F3.57 476/4986 34 Item 17. - 68 HB -364- thirty (30) days. If the default is not cured within the time periods specified above, the non - defaulting party, at its option, may pursue such other rights and remedies as it may have. § 904 Rights and Remedies - Upon the occurrence -of an Event of Default and the expiration of the applicable cure period provided herein or by law, the injured party shall have all rights and remedies against the defaulting party as may be available at law or in equity to cure, correct or remedy any default, to obtain specific performance, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such rights and remedies are cumulative, and except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the exercise of one or more of such rights or remedies shall not preclude the exercise, at the same or different times, of any other rights or remedies for the same default or any other default by the defaulting party. ARTICLE 1000 GENERAL PROVISIONS § 1001 Notices, Demands and Communications between the Parties Formal notices, demands and communications between the parties shall be deemed sufficiently given if dispatched by first class mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of a "hard" copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), to the addresses of the parties as set forth in Section 105 hereof. All notices to the City shall be sent to the attention of the City Administrator and all notices to the Agency shall be sent to the attention of the Agency Executive Director. Such written notices, demands and communications may be sent in the same manner to such other addresses as any party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission, provided that if such transmission is delivered after 5:00 p.m., notice shall be deemed given on the next business day; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. § 1002 Conflict of Interest -No member, official or employee of City or Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 35 06-476/4986 HB -365- Item 17. - 69 Participant warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. § 1003 Nonliabilit of City and Agency Officials and Employees - -No member, official or employee of City or Agency shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by City or Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement. Participant hereby waives and releases any claim it may have against any member, official or employee of the Agency or the City with respect to any default or breach by the Agency or the City or for any amount which may become due to Participant or its successors, or on any obligations, under the terms of this Agreement. Participant makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known .by him must have materially affected his settlement with the debtor." § 1004 Enforced Delay in Performance for Causes beyond Control of Party For the purposes. of any of the provisions of this Agreement, no party nor any successors in interest to any party shall be considered in breach of, or default in, its obligations under this Agreement as a result of the enforced delay in the performance of such obligations due to acts of God, acts of terrorism, acts of the public enemy, acts of the state or federal government, fires, floods, epidemics, quarantine restrictions, strikes, labor disputes, freight embargoes, inability to obtain materials or supplies or unusually severe weather or delays of contractors or subcontractors due to such causes (each a "Force Majeure Delay"); it being the purpose and intent of this provision that in the event of the occurrence of any such enforced delay, the time or times for performance of the obligations of the parties shall be extended for the period of the enforced delay and any commercially reasonable period thereafter for the adjustment of insurance, if applicable. Provided that the party seeking the benefit of the provisions of this Section shall promptly notify the other party in writing of such enforced delay and of the causes thereof, the extension of time for performance shall run from ten (10) days prior to the date on which such notice is given, but in no event earlier than the date of commencement of the cause. Financial inability shall not extend the time for performance, or excuse non-performance or untimely performance, of any obligation under this Agreement. § 1005 Inspection of Books and Records In addition to the rights of the City set forth in Section 618, above, the City and Agency each have the right upon three (3) business days' notice (excluding weekends and holidays) at all reasonable times to inspect the books and records of Participant pertaining to the Site as pertinent 36 514986 Item 17. - 70 HB -366- to the purposes of this Agreement. The books and records referred to in this Section shall be maintained or made available in a single location in Orange County. § 1006 Approvals Except as- expressly provided otherwise in this Agreement, approvals required of the parties shall not be unreasonably withheld or delayed_ § 1007 Assignment This Agreement is not assignable, in whole or in part, by the Participant, without the prior written approval of the City and Agency in their respective sole discretion, and any assignment in violation of the foregoing shall be void and shall constitute an incurable material default under this Agreement. Notwithstanding the foregoing, Participant may assign this Agreement to any entity controlled by or under common control with Participant. , and this Agreement may be freely assigned to a successor -in -interest to the Site or a portion thereof at such time as all of (i) the Affordable Housing Payment has been paid in full, (ii) a certificate of occupancy for the Senior Center has been issued or the Park In -Lieu Fee paid in full (as the case may be), (iii) the Regional Treatment System is completed and accepted; and (iv) Pacific View Extension is completed and accepted. § 1008 Participant's Warranties Participant hereby represents the following to Agency and the City for the purpose of inducing Agency and City to enter into this Agreement and to consummate the transactions contemplated hereby, all of which shall be true as of the date hereof 1. The Participant has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein to which the Participant is a party, to consummate the transactions contemplated hereby, to take any steps or actions contemplated hereby, and to perform its obligations hereunder. 2. All requisite action has been taken by the Participant and all requisite consents have been obtained in connection with the entering into this Agreement and the instruments and documents referenced herein to which the Participant is a party, and the consummation of the transaction contemplated hereby, and the same are authorized by the Redevelopment Plan and comply with all applicable laws, statutes, ordinances, rules and governmental regulations. 3. This Agreement is duly executed by the Participant, and all agreements, instruments and documents to be executed by the Participant pursuant to this Agreement shall, at such time as they are required to be executed hereunder, be duly executed by the Participant, and each such agreement is, or shall be at such time as it is required to be executed hereunder, valid and legally binding upon the Participant and enforceable in accordance with its terms and the execution and delivery thereof shall not, with due notice or the passage of time, constitute a 37 06-476/4986 I-113 -367- Item 17. - 71 default under or violate the terms of any indenture, agreement or other instrument to which the Participant is a party. 4. There is no pending or threatened litigation which, in the reasonable opinion of the Participant, would prevent the Participant from performing its duties and obligations hereunder. 5. Participant is not the subject of a bankruptcy proceeding. 6. Participant is the current owner of fee title to the entire Site. § 1009 Relationship of the Parties Nothing containedd in this Agreement shall be deemedor construed as creating a partnership, joint venture, or any other relationship between the parties hereto other than. as specified in the provisions contained herein, or cause the Agency or City to be responsible in any way for the debts or obligations of Participant or any other party. § 1010 Interpretation of Agreement This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters addressed in this Agreement. In addition, each party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Accordingly, any rule of law (including Civil Code section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose and intent of the parties to this Agreement. § 1011 Authorized Representative of Agency and City Unless otherwise specified or the context requires otherwise, all references in this Agreement and its attachments to the Agency shall mean the Executive Director of the Agency or any officer or employee of the Agency to whom the Executive Director or the Board of the Agency delegates authority to perform, carry out and/or enforce this Agreement, and all references in this Agreement and its attachments to the City shall mean the Administrator of the City or any officer or employee of the City to whom the Administrator or the City Council delegates authority to perform, carry out and/or enforce this Agreement. § 1012 Waivers The waiver by any party of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. 14986 38 mis cti Item 17. - 72 1-113 -368- § 1013 Time of the Essence Time is of the essence of this Agreement and each and all of its provisions. § 1014 Attorneys' Fees and Costs If any action or proceeding is brought by any party against any other party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing party shall be entitled to recover all costs and expenses, including the fees of its attorneys and any expert witnesses in such action or proceeding. This provision shall also apply to any postjudgment action by either party, including without limitation efforts to enforce a judgment and actions on appeal- § 1015 Severability Any provision of this Agreement which shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect. § 1016 Non -exclusivity No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity_ § 1017 Complete Agreement This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between the parties with regard to the subject matter hereof, and there are no promises, representations, agreements, warranties, or inducements either express or implied other than as are set forth in this Agreement. Each party warrants and represents prior to executing this Agreement, it has relied upon, or has had the opportunity to rely upon, legal advice from the attorney of its choice, the terms of this Agreement have been read and each party fully understands the terms and consequences (including risks, complications, and costs) of this Agreement. Participant further acknowledges and represents, in executing this Agreement, it has not relied on any inducements, promises, or representations made by City, Agency or any party representing or serving City or Agency. § 1018 Terminology When the context so requires when used in this Agreement, the masculine gender shall be deemed to include the feminine and neuter genders and the neuter gender shall be deemed to include the masculine and feminine genders. When the context so requires when used in this Agreement, the singular shall be deemed to include the plural, and vice versa. The paragraph 39 O&A761498b HB -369- Item 17. - 73 and section headings in this Agreement are for convenience only, and shall not be used in the interpretation hereof § 1019 _Necessity for a Writing .No amendment, change, or addition to, or waiver of termination of, this Agreement -or any part hereof shall be valid unless in writing and signed by all of the parties. § 1020 No Third Party Beneficiaries The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the parties, and not for the benefit, directly or indirectly, of any other person or entity. § 1021 Authority to Sign Each individual executing this Agreement on behalf of a party hereto represents that he or she has full authority to do so and to bind such party to perform pursuant to the terms and conditions of this Agreement. § 1022 fncorporation by Reference Each of the attachments and exhibits attached hereto is incorporated herein by this reference. § 1023 Cooperation, Further Acts-, Estoppel Certificates The parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement. Each party hereto agrees that upon reasonable notice at reasonable times it shall, at the request of any other party or any then current or prospective holder of a mortgage or deed of trust, execute estoppel certificates regarding the status of the performance of the other party of its obligations hereunder, including, without limitation., whether a default or breach exists (or would exist with the passage of time, or giving of notice, or both) under this Agreement, certifying as to whether the City has accepted the Senior Center, Regional Treatment System or Pacific View Avenue Extension pursuant to Section 612, above, and certifying as to whether or not a party has at the date of such certification complied with any obligation of the party hereunder as to which such party or holder may inquire (including, without limitation, whether any Affordable Housing Payment has been made hereunder). The form of any estoppel certificate shall be prepared by the holder or party requesting the estoppel certificate, as applicable, and shall be in a form reasonably acceptable .to the other party and the other party's legal counsel and shall be at no cost to the other party. The Agency Executive Director the City Administrator shall be authorized to execute such estoppel certificates on behalf of the Agency and City, respectively. '1986 40 Item 17. - 74 HB -370- § 1024 Binding Effect Each and all of the covenants and conditions set forth in this Agreement (including any exhibits and/or attaclunents hereto) shall be binding on and shall inure to the benefit of the parties, and their successors, heirs, personal representatives, or assigns. This section shall not be construed as an authorization for Participant to assign any right or obligation. ARTICLE 1100. EFFECTIVE DATE This Agreement shall not be effective unless and until all five (5) of the following conditions are satisfied: (a) the City Council approves Entitlement Plan Amendment No. 06-02 and Final Tract Map No. 16338; (b) this Agreement has been executed by the Agency and the City (and the Agency and City shall so execute and deliver this Agreement to Participant within ten (10) calendar days of approval of the Entitlement Plan Amendment by the City Council); (c) Participant provides the security of the type and in the amounts required by this Agreement; (d) Participant records Final Tract Map No. 16338 in the Recorder's Office of the County of Orange; and (e) either Participant, City or Agency records this Agreement in the Recorder's Office of the County of Orange within thirty (30) days following the City Council's approval of this Agreement. . If the above described conditions are not satisfied by July 31, 2007, this Agreement shall automatically terminate without need of further action by any party. The "Effective Date" of this Agreement shall be the date of the approval by City Council of this Agreement. [Signatures continued on following page] 41 06-476/4986 HB -371- Item 17. - 75 Date: 4.o MAKALLON ATLANTA HUNTINGTON BEACH LLC, a Delaware limited liability company, its Member By: Makar Properties, LLC, a Delaware limited liability company, its Authorized Member Managing Member By: Paul Makarechian Chief Executive Officer Item 17. - 76 4 HB -372- r STATE OFiiYJ1�I�- } } ss. COUNTY OF �iPj/G j On �G D� ' 200 fk, efore me, the undersi ed, a Notary Public in and for said State, personally appeared ersonally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he/�xecuted the same in his r authorized capacity, and that by his 4er signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument. VaTNE y h d official seal. Signature of Notary Public t � � HB -373- Item 17. - 77 Date: ATTEST: Agency Secretary REVIEWED AND APPROVED: It Agency xecutive Dire tol REVIEWED AND APPROVED AS TO FORM: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH Chairman REVIEWED AND APPROVED AS TO FORM: Agency Counsel [Signatures continued on following page] K AMHOTacific GtyA0PA (10-6) final.doc 43 Item 17. - 78 HB _374_ THE CITY OF HUNTINGTON BEACH Date: Mayor ATTEST: City Clerk REVIEWED AND APPROVED AS TO FORM: City Attorney APPROVED AS TO FORM: KANE, BALLMER & BERKMAN [Signatures continued on following page] K_1CG MPacific City10PA (10-6) fwal.doc 44 HB -375- Item 17. - 79 STATE OF ) ss. COUNTY OF ) On , 200__, before me, the undersigned, a Notary Public in and for said State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. Signature of Notary Public STATE OF ) ss. COUNTY OF ) On , 200 _, before me, the undersigned, a Notary public in and for said State, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. Signature of.Notary Public vi_69 45 Item 17. - 80 HB -3176- ATTACHMENT NO. I SITE MAP (behind this page] HB -377- Item 17. - 81 �lm CF1�F r•.i,.0 ij fT �1 4; i'�� �y rs�vS,�m' ATTACHMENT NO.2 LEGAL DESCRIPTION [behind this page] HB -379- Item 17. - 83 21002 PACIFIC COAST HIGHWAY / PACIFIC CITY PARCEL (APN 024-271-03) LEGAL DESCRIPTION REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: PROPOSED TRACT NO. 16338, BEING A SUBDIVISION OF THE FOLLOWING: PARCEL 1, AS SHOWN AND DESCRIBED IN THAT CERTAIN CONDITIONAL CERTIFICATE OF COMPLIANCE NO. 96-6, RECORDED FEBRUARY 28, 1996 AS INSTRUMENT NO. 19960095327 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND DESCRIBED AS PARCELS I AND 2 IN DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 449 OF OFFICIAL RECORDS, THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER, OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON, WITHIN, OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE, AND REMOVE THE SAME, AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING, OR SINKING OF WELLS, SHAFTS, OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL AND SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND. ALSO EXCEPTING THEREFROM THE SUB.SURFACE BELOW 500 FEET MEASURED VERTICALLY FROM THE SURFACE. ALSO EXCEPTING THEREFROM ALL MINERALS, PETROLEUM, ASPHALT, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON, OR UNDER, OR THAT MAY BE PRODUCED FROM, SAID LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM LOCATIONS ON OTHER LANDS INTO AND THROUGH, AND TO CONSTRUCT OR DEVELOP MINES, TUNNELS, SHAFTS, OR OTHER WORKS IN AND THROUGH THE SUBSURFACE OF SAID LAND FOR THE PURPOSES OF RECOVERING SAID RESERVED SUBSTANCES FROM SAID LAND OR RECOVERING LIKE SUBSTANCES FROM OTHER LANDS; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID LAND SHALL NOT BE USED FOR THE Item 17. - 84 H B - 380- EXPLORATION, DEVELOPMENT, EXTRACTION, OR REMOVAL OF SAID MINERALS OR SUBSTANCES FROM SAID LAND OR OTHER LANDS, AS RESERVED IN THE DEED FROM CITY OF HUNTINGTON BEACH, RECORDED JANUARY 13, 1960 IN BOOK 5051, PAGE 383 OF OFFICIAL RECORDS. ALSO EXCEPTING AND RESERVING THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE AND REMOVE THE SAME AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING OR SINKING OF WELLS, SHAFTS OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL OR SUBJACENT SUPPORT OF SAID LAND OR ANY WROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FOR PARCEL 2 FROM PACIFIC ELECTRIC RAILWAY COMPANY RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 446 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW A DEPTH OF 500 FEET VERTICALLY BELOW THE SURFACE OF THAT PORTION OF SAID LAND INCLUDED WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED AS "THIRD" IN THE DEED FROM THE HUNTINGTON BEACH COMPANY TO LOS ANGELES INTER -URBAN RAILWAY COMPANY RECORDED APRIL 9, 1907 IN BOOK 155, PAGE 260 OF DEEDS, RECORDS OF SAID ORANGE COUNTY. HB -381- Item 17. - 85 ATTACHMENT NO. 3 DEPICTION OF COMMERCIAL PORTION OF PROJECT [behind this page] FA '7e Item 17. - 86 HB -382- Z-== PACIFIC CITY HUNTINQTQN BEACH �� KrGY GROUP, K w¢xmamw ATTACHMENT NO. 4 FORM OF AGENCY AFFORDABLE HOUSING PLAN [behind this page] U'2 FM Item 17. - 8 8 HB -384- AFFORDABLE HOUSING PLAN PACIFIC CITY PROJECT DATED: June 16, 2006 I) Requirements As the Pacific City Project is within a Redevelopment Project area, the affordability requirement is 15% of all housing units developed. Pursuant to Condition (2)(B)(5) of Tract Map No. 16338, a minimum of 50% of the required number of affordable housing units shall be on -site and the remaining number of units can be on -site or off -site. As an option to the minimum 50% on -site is that these units may be off -site provided the number of units is increased on a two -to -one basis and located within a redevelopment area. On behalf of Makallon Atlanta Huntington Beach, LLC, the Redevelopment Agency for the City of Huntington Beach proposes to satisfy this affordable housing requirement in the following manner: El The Agency or its assignee shall cause to be constructed, or otherwise made available for and occupied by very low-, low-, and moderate -income persons, 117 affordable housing units within the Merged Redevelopment Project area; 13 At least 39 of the required units shall be targeted to median income households (100% of Orange County median income); At least 39 units will be targeted to low income households (51% to 80% Orange County median income); El At least 39 units will be targeted to very low income households (less than 50% of the Orange County median income); fl The units will be available for occupancy prior to the issuance of building permits for the last phase of the Pacific City residential development; or evidence of the Agency's reasonable progress towards attainment of completion of the affordable units for the respective phase. CADocuments and Settingsleleanor%oca1 SettingsWemporary Intemet ReAOLK481AFFORDABLE HOUSING PLAN 6r16-06 V2.doc m1s "n HB -385- Item 17. - 89 Affordable Housing Playa Page 2 June 16, 200b 2) Unit description A. The units will be composed of a mix of studios, one bedroom to three bedroom units. B_ The sales price and/or rents for all units will be determined by current schedules based on income standards distributed by HUD for Orange County. 3) Affordability Covenants The 117 units will have affordability covenants and restrictions for 60 years. CADocuments and Settings\e1eanor%zca1 SeuingslTemporary Intemet Filesl0i.K481AFFORDABLE HOUSING PLAN 6-16-06 VIP Md% v? .1oc Item 17. - 90. HB -386- ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT [behind -this page] HB -38-7- Item 17. - 91 Unustdoor Space Summary Auto Parking (200 spaces) Landscape Courtyards/Gardens/Amenities Transportation Vehicles Service Area 1.8 AC .8 AC 1.0 AC .2 AC .2 AC 0 . 4 ..... 8 ....... 6 . ... a tl ... 4 .... O . f .. .. tl 0 ... . ....... . ... * ... * . 8 .... ... . . . ? a 4 . 0 .... tl 0 . l F3.81 Item 17. - 92 last Space Program Building Support Space Entry/Lobby/Social Lounge Building Storage ns (2@150) Office Storage Subtotal Administration Supervisor Office Coordinator Office - Rec Coordinator Office - Volunteer Marketing Office Administrative Asst Workstations (4@80) Maintenance Tech Office Workroom/Office Supply Storage Breakroom File Archives Staff Restroom (2) Subtotal Resource Center Reception/Waiting area Case worker offices (3@120). 1@160) Visiting Services/COA Offices Consultation Meeting rooms (small) Consultation Meeting rooms (large) Travel Resource Area Travel Office Subtotal Education Center Arts and Crafts Room Arts and Crafts Room Storage Computer Room Classroom/Meeting Room 1 Classroom/Meeting Room 11Storage Classroom/Meeting Room 2 Classroom/Meeting Room 2/Storage Subtotal Social Center Social Lounge Game Room Community Hall/Dining room (300) Community Hall/Dining room (300) storage Dressing Room HB -389- taro .... Item 17. - 93 Kitchen Kitchen Service Corridor Kitchen restroom Kitchen Pantry Site Nufrition office Kitchen_ Meals to Home/Classroom Storage Workstations (meals) Meal to Home Pantry Kitchen Classroom Storage Restrooms - Men Restrooms - Women Subtotal Fitness and Wellness Center Fitness Room Fitness/Wellness Office Fitness - Assessment(Testing Fitness Storage Group Exercise Room Group Exercise Room Storage Dance Room Dance Room Storage Subtotal Transportation Center Transportation Coordinator Office Driver's Workstation area Waiting Area Dispatcher area Storage Subtotal Sub Total Net Assignable Area Circulation, walls, etc TOTAL GROSS SQ FT Item 17. - 94 HB -390- HUNTINGTON BEACH SENIOR CENTER Construction Lost Net Building Area $300/SF 33,970/SF $10,191,000 Grossing Factor 75% Efficient 300/SF 22 320/SF 3,396,000 Subtotal Gross Building Area $13,587,000 45,290/SF 1,070,000 Site Costs Allowance Parking Utilities within T of Building Perimeter Landscape $14,557,000 Subtotal Preliminary Construction Costs (not site specific) $ 1,319,000 Soft Costs 513,000 Architect, A/E, Acoustic, Recreation, AV Consult. (9%) 733,000 Printing, Testing, Survey, Permits (3.5%) 100,000 FF&E Allowance (5%) 50,000 CEQA 732,850 Legal Project Management 5% Subtotal Soft Costs $ 3,447,850 Subtotal Construction Costs & Soft Costs $18,104,850 Contingency Design & Construction 2,931,400 Subtotal with 20% Contingencies $ 21,036,250 Escalation 5% for Three Years 2 273 667 OPINION OF TOTAL PROJECTS COSTS 23,409,917 *Estimate is NOT site specific; therefore., Litigation for contamination, traffic signal modification, purchase of land, etc. are NOT included in cost estimate. KB -;91- Item 17. - 95 ATTACHMENT NO.6 MEMORANDUM OF TERMINATION -(behind this page] Wx Qr Item 17. - 96 x8 -392- OFFICIAL BUSINESS Document entitled to'free recording per Government Code Sections 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: City Clerk pace Above e Mr r s Use MEMORANDUM OF TERMINATION OF AGREEMENT REGARDING ATLANTA AVENUE SITE This Memorandum of Termination of Agreement Regarding Atlanta Avenue Site ("Memorandum') is entered into as of , 2006 by and between the CITY OF HUNTINGTON BEACH, a charter city ("City"), and MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company ("Participant"). RECITALS A. Participant is the owner of certain real property located in the City of Huntington Beach, California (the "Site"). The Site is depicted on Exhibit A and more particularly described on Exhibit B, both of which exhibits are attached hereto and incorporated herein by reference. B. The City and Participant's predecessor -in -interest to the Site, Huntington Beach Company, entered into that certain agreement entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986 recorded on May 29, 1987 as Document No. 87-303610 ("Existing Site Agreement"). The Existing Site Agreement is hereby incorporated by reference. Reference herein to the Existing Site Agreement shall include any and all exhibits and/or attachments thereto. C. The City, Participant and the Redevelopment Agency of the City of Huntington Beach entered into that certain Owner Participation Agreement dated as of 2006 (the "OPA'). The parties desire to record this Memorandum in accordance with Section 502 of the OPA to notice the termination of the Existing Site Agreement. CADocuments and SettingAcleanor\Local SeWmgffemporary Intemet Fi1es\0LK481Memo of Term (8-30-06).doc HB -393- Item 17. - 97 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: MEMORANDUM 1. The parties hereto agree that as of , the effective date of the OPA, the Existing Site Agreement was automatically terminated, canceled and voided in its entirety and all covenants, terms and conditions set forth in the Existing Site Agreement shall be forever relinquished, released and discharged without need of further act or document. 2. The parties hereby acknowledge and agree that this Memorandum is only intended to provide notice of the termination of the Existing Site Agreement and shall not be deemed to modify or amend any provisions of the OPA. IN WITNESS WHEREOF, the parties to this Memorandum have caused this instrument to be duly executed as of the date first above written. Date: THE CITY OF HUNTINGTON BEACH LE City Administrator ATTEST: City Clerk REVIEWED AND APPROVED AS TO FORM: City Attorney APPROVED AS TO FORM: KANE, BALLMER & BERKMAN Special Counsel C_1Documents and Settingsleicanor%Local SettingsUemporary Intemet Mes%0LK48\ivlemo of Term (8-30-06) (2).doc ,'-1 ®h 2 Item 17. - 98 HB - 394- Date: MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company, its Member By: Makar Properties, LLC, a Delaware limited liability company, its Authorized Member Paul Makarechian, Chief Executive Officer CADocuments and Settings\Mu1vihW\Loca1 Settings%Temporary Internet Fi1es10LK14C\Memo of Tenn (8 30-06).doc HB -395- Item 17. - 99 STATE OF CALIFORNIA COUNTY OF On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) islare subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature STATE OF CALIFORNIA COUNTY OF On before me, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same m his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature Item 17. - 100 HB -396- STATE OF CALIFORNIA ) } COUNTY OF } On before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/sheJthey executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature I xs -397- Item 17. - 101 EXHIBIT A MAP OF SITE [behind this page] VA - 91 Item 17. - 102 HB -398- EXHIBIT B LEGAL DESCRIPTION OF SITE [behind this page] F3.93 Item 17. - 104 21002 PACIFIC COAST HIGHWAY I PACIFIC CITY PARCEL (APN 024-271-05) LEGAL DESCRIPTION REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: PROPOSED TRACT NO. 16338, BEING A SUBDIVISION OF THE FOLLOWING: PARCEL 1, AS SHOWN AND DESCRIBED IN THAT CERTAIN CONDITIONAL CERTIFICATE OF COMPLIANCE NO. 96-6, RECORDED FEBRUARY 28, 1996 AS INSTRUMENT NO. 19960095327 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND DESCRIBED AS PARCELS 1 AND 2 IN DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 449 OF OFFICIAL RECORDS, THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS - AND MINERAL ORES OF EVERY KIND AND CHARACTER, OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON, WITHIN, OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY -OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER. WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE, AND REMOVE THE SAME, AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE. AS IS NECESSARY OR NTjpN��W� p,ND_.pTHER_rI; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING, OR.SWKING OF WELLS, SHAFTS, OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL AND SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND. ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW 500 FEET MEASURED VERTICALLY FROM THE SURFACE. ALSO EXCEPTING THEREFROM ALL MINERALS, PETROLEUM, ASPHALT, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON, OR UNDER, OR THAT MAY BE PRODUCED FROM, SAID LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM LOCATIONS ON OTHER LANDS INTO AND THROUGH, AND TO CONSTRUCT OR DEVELOP MINES, TUNNELS, SHAFTS, OR OTHER WORKS IN AND THROUGH THE SUBSURFACE OF SAID LAND FOR THE PURPOSES OF RECOVERING SAID RESERVED SUBSTANCES FROM SAID LAND OR RECOVERING LIKE SUBSTANCES FROM OTHER LANDS; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID LAND SHALL NOT BE USED FOR THE HB -40 1 - Item 17. - 105 EXPLORATION, DEVELOPMENT, EXTRACTION, OR REMOVAL OF SAID MINERALS OR SUBSTANCES FROM .SAID LAND OR OTHER LANDS, AS RESERVED IN THE DEED FROM CITY OF HUNTINGTON BEACH, RECORDED JANUARY 13, 1960 IN BOOK 5051, PAGE 383 OF OFFICIAL RECORDS. ALSO EXCEPTING AND SERVING THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER OCCURRING '500 FEET TH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON WITHIN. OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM; OIL, NATURAL GAS AND OTHER HYDROCARBON .SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAIDLAND TO EXPLORE FOR, EXTRACT, MINE AND REMOVE THE SAME AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL. OR SLANT DRILLING, DIGGING, BORING OR SINKING OF WELLS, SHAFTS OR TUNNELS TO OTHER. LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL - OR SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID: LAND, AS RESERVED IN THE DEED FOR PARCEL ' 2 FROM PACIFIC ELECTRIC RAILWAY COMPANY RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 446 OF OFFICIAL RECORDS_ ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW A DEPTH OF 500 FEET VERTICALLY BELOW THE SURFACE OF THAT PORTION OF SAID LAND INCLUDED WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED AS "THIRD" IN THE DEED FROM THE HUNTINGTON BEACH COMPANY TO LOS ANGELES INTER URBAN RAILWAY COMPANY RECORDED APRIL 9, 1907 IN BOOK 1.55, PAGE 260 OF DEEDS, RECORDS OF SAID ORANGE COUNTY. F3.95 Item 17. - 106 HB -402- ATTACHMENT NO.7 DRAFT FORMS OF SECURITY [behind this page] NB -403- Item 17. - 107 BOND NO. PREMIUM FAITHFUL PERFORMANCE BOND WHEREAS, the City Council of the City of Huntington Beach, State of California, and (hereinafter designated as "principal") have entered into an agreement whereby principal agrees to install and complete designated public improvements, which said agreement, dated 120 , and identified as project , is hereby referred to and made a part hereof; and WHEREAS, said principal is required under the terms of said agreement to fumish a bond for the faithful performance of said agreement. Now, therefore, we, the principal and as surety, are held and firmly bound unto the City of Huntington Beach, hereinafter called City", the penal sum of dollars ($...... ) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents. The condition of this obligation is such that if the above bounded principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenant, condition and provisions in the said agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless "City", its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect; Item 17. - 108 HB -404- As a part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included costs and reasonable expenses and fees, including reasonable attomey's fees incurred by "City" in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. ' The surety hereby stipulates and agrees that no charge, extension of time, alteration, or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations on this bond, and it does hereby waive notice of any change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications In witness whereof, this instrument has been duly executed by the principal and surety above named, on , 24 By as Principal as Surety 2 L"4 Ian HB -405- Item 17. - 109 STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND . PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT.AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES 3 Item 17. - 110 H13 -406- BOND NO. PREMIUM i GUARANTEE AND WARRANTY EON® WHEREAS, , as a Principal, and , a corporation organized under the laws of the State of and duly authorized to do business in the State of California, as Surety, are held and firmly bound unto the City of Huntington Beach, California, as Obligee, in the penal sum of ($ }, representing 10 percent of the contract price entered into between the Principal and Obligee, to which payment well and truly to be made we do bind ourselves, and each of our heirs, executors, administrators, successors and assigns jointly and severally. WHEREAS, the said Principal entered into a contract with said Obligee, dated for work described as follows: WHEREAS, said contract provides that the Principal will furnish a bond conditioned to guarantee and warrant for the period of one year after completion of the work and acceptance thereof by the Obligee, against all defects in workmanship and materials during said one-year period. WHEREAS, said work has been completed, and accepted by Obligee on NOW, THEREFORE, the Principal and Surety, jointly and severally shall indemnify the Obligee for all loss that the Obligee may sustain b reason of an defective materials or g Y Y Y workmanship, which become apparent during the period of one year from and after date of completion of work and acceptance thereof by Obligee. 1 � HB -407- Item 17. - 111 In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on , 20 as Principal By 2 Item 17. - 112 HB -408- STATE OF CALIFORNIA ) SS COUNTY OF ORANGE j ON , BEFORE ME, _, A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WrrHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE PRINTED NAME STATE OF CALIFORNIA ) ) SS COUNTY OF ORANGE ) MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY MY COMMISSION EXPIRES ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND . PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT_ WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES 3 118111,1111M • Item 17. - 113 BOND NO. PREMIUM LABOR AND MATERIAL BOND WHEREAS, the City Council of the City of Huntington Beach, State of California, and , (hereinafter designated as 'Principal") have entered into an agreement whereby Principal agrees to install and complete designated public improvements, which said agreement, dated , 20 , and identified as project is hereby referred to and made a part hereof, and WHEREAS, under the terms of said agreement, Principal is required before entering upon the performance of the work, to file a good and sufficient payment bond with the City of Huntington Beach to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of Civil Code of the State of California. Now, therefore, said Principal and the undersigned as corporate Surety, are held firmly bound unto the City of Huntington Beach and all contractors, subcontractors, laborers, materialmen and other persons employed in the performance of the aforesaid agreement and referred to in the aforesaid Code of Civil Procedures in the sum of dollars {$ 1, for materials furnished for labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said Surety will pay the same in an amount not exceeding the amount hereinabove set for forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by "City" in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered. It is hereby expressly stipulated and agreed that this bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond. Item 17. - 114 HB -410- Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of said agreement or the sp6cifications accompanying the same shall in any manner affect its obligation on this bond, and it does hereby waive notice of any such change, extension, alteration or addition. In witness whereof, this instrument has been fully executed by the Principal and Surety above named, on , 20 By By. By By , as Principal as Principal HB -41 1- Item 17. - 115 STATE OF CALIFORNIA ) SS COUNTY OF ORANGE } ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND . PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE PRINTED NAME STATE OF CALIFORNIA ) )Ss COUNTY OF ORANGE ) MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY MY COMMISSION EXPIRES ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES g.,% -2 atc Item 17. - 116 HB -412- ATTACHMENT NO.8 SENIOR CENTER PLANS AND SPECIFICATIONS [TO BE -PREPARED IN ACCORDANCE WITH ARTICLE 3001 HB -413- Item 17. - 117 ATTACHMENT #5 Item 17. - 118 HB -414- F3. 107 t INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST r 1. Requested by: Christi Mendoza., Risk Management AUG 01 2006 2. Date: July 28 Cii 200 4Y 01 Hunti'l . Y A3rl Baacti tto 3. Name of contractor/penT ittee: Makallon Atlanta Huntington Beach, tWeys Once 4. Description of work to be performed: "Pacific City" Protect to include 191,100 sa ft for 165 room luxury boutique ho of 163,000 sq ft of retail and 12,000 sg ft of restaurant use: 5. Value and length of contract: $44 500 000• Undet fined to date (agreerrient stage_) 6. Waiver/modification request: 07 000 deductibl general MIRY 7. Reason for request and why it should be granted: Unable to comely with the cit_'s zero deductible insurance .requirement 8. Identify the risks to the City in approving this waiver/modification: none 3l 6.6 D artrr►ent H nature Date: APPROVALS Approvals must beobtWnedin the- or+der listed an :this form- Two approvals arse. required for a request to be granted. Approval Rom..the ciity f dminlstrator ss office is only req[iired if Risk tiAa.ag"wt and the .City-: . e Office disagree. 9. Risk Management /Approved ❑ Denied Signature Da 2. City Attorney's Office Approved ❑ Denied /� 4/ K f1� Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modificati tegeest is to be subrnitted to the City Attorneys (3ffice along with the coritradforappraval. once the c Ontract has been. approved, this form is to be filed with the `Risk Mainagement Divisor. of Administrative Services xB -41 s_ Item 17. - 119 ��R A fY�A bD'a J17f :ACORO GERTICATV U 4l_1.7 I 8M fi1M aA tauar4 7It�lcila6 . M L D Ia$s . ancE- 0ro�fets, lrit+: EOt$ti:� :G gar.�aNf #?iIQ W # lEQ AA A WATTER QF IN�QR�4Tff3td �s�� i+- #31�"T-R-UPDAI tr T.F ,TE CCss#1o7�A1V�E�in,:l�ct��la.c}R r M. OF 14 irrBurtEa A�a�ic�i2 dt anta��'nf4cr" +.� �fi,u-�' 4ii�{#ac�•r•#Mr�Bl'ih4..�• � zits Car :�.�` _ _1F�s�tlenalrj,�e���,, -"-- M arrrrY} - la ' .: �F'1M 1�1p�.h�.��p'C _. `"i't�.P.�►'�FI;iO[i1�ID,t�Ti� �€S$T,p,�1Dt11ts A i' R€ N. 9si !tRE ��i3Gt. E?LCEi�S1G1�ARD' �pf€8�i+iS1tFSUL`ii w RE 1 C� 14fi#tP12E 'K*- 90 PROM- ?f ataEtitst`. awyog too as►�er'.,r.Acia:4r�. s .� 9�t1 X � i i �.AIfTOldOf�QlE fJA6ELri,Y.. RUY AUTP w R ci�evta`o arsi?s ticv+� ;�_� sou�i nutios E 'MvV(! ,a AVTgs .. i ApPIOvo i JSN �• ... � y TO: igE ,» [ Ck AM" ( �j�• SiIVP,R.S� ECLiET {, i—Od-O Y ,•, 3 E3ifi�Y![ittJ2Y i. GARR.LrrtBlcirY 1J�E70Ni1f-EA,SCEtHi. 5 fige }� AIdCIk` A� 41. — 3_ B. >- ' EXCF SsfMOREUAIJASICgJY s DE FJiCtt.[iExLiRREi S 8 000po — 4it s A1F�PhpP1PJiRi(FllTiftE R!�(i"�1?C.iEli! 0 k f)j5E}S$E :-RbC8�1 OJT r& �' ffiHEfi 4,E$CiiJQTIDnJ9F9P�QN�:ikSf(..ATfON$.iVEKICLEg7�EX�CLi1S.�D}�3Ai(O ��C�f%1'SP�t;IAt:Pitfil't651tlhi5� . Stteet.Itrapr¢YsttEelrt arni i tfiiit�y Wptit.reiats�d fa Eae-Racific i"g eci; 3ie:Gitji: € lturtQrl tnis cti; ate, dfloi s and.emp!q es.aAd the#iexlsveloFur nt Agectcy o> tt1e, City di 41u tcsn Seartt fs x a$ Aailit (_aRsite e� tSer attaQhed [+ amecl liYs A0 tts *Kkf& ARaicaifon #R a .l�le it tPR 1, i;}4Gi.M��C$C Pt31F TN Caty of l-lurttin tnn Bi acfi, 4agest+OuLAMY(WWW aM.9a�stMEo1POUCIES �e:s 0BEFOi6*TMC-E"RA�"04. tnts,offtimm.andempioyeesaridthe OATETHERWE,THE SStiNG7NSURERML600VAYbOikEVUC3Q O"Iv+turrEW RedQvN9T*TalHr=.E�caCBaz P`TOTFL:r aeni;jJOL Cyo� untington aeach 2WO Main Street; 5th Stcee# HuntingtonBeach, CA SZt 48- AuT ORVED f Mstt: ,Mnw ACORD 25 (2001108) Q ACQR!? CORPORATION IWa Item 17. - 120 HB -4 t 6- POLICY NUMBER OGLSF184262016 COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANCES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL y; t DESIGNATED ]PERSON O,R FIIf *N This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART apoll Name of Person or Organization: The City of Huntington Beach, its agents, officers and employees and the Redevelopment Agency of the City of Huntington Beach 2000 Main Street, 5th Street Huntington Beach, CA 92848- RE: Street Improvement and Utility Work related to the Pacific City project;. The City of Huntington Beach, its agents, officers and employees and the Redevelopment Agency of the City of Huntington Beach is named as Additional Insured per attached company. form. Named Insureds Include: Makallon Atlanta Huntington Beach, LLC Makar Properties, LLC; Makalton, LLC. (if no entry appears above, information required to complete this endorsement will be shown in the Declarations as appficable.to this endorsement.) WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. CG 20 261185 CopydgK lnw mm Setsace Office, tnc-- 1984 HB -417- Item 17. - 121 SAW ThaCertficafe IN% udng kmr-er(s)-,l �w�ized i cdemativety. or fly tNbfy amer4 A-,S*OMO!* 54 wA. re aftrttd by *& Pokes risto OweoA Item 17. - 122 ' HB -418- MAKARPR-01 SANM AC®Rdt/re, CERTIFICATE ®F LIABILITY INSURANCE D 7„1` 12006 '�)DucER THIS CERTIFICATE IS ISSUEDASA MATTER OF INFORMATION D. Insurance Brokers, Inc. F10D2 5325 ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. 26 Corporate5325 Park #204 Irvine, CA 92606 INSURERS AFFORDING COVERAGE NAIC # WSURED Makallon Atlanta Huntington Beach, LLC INSURER Azz Everest National Ins, Co. 4100 MacArthur Blvd. #200 Newport Beach, CA 92660-7080 INSURER B_ INSURER C: INSURER D_ INSURER E: COVERAGES THE POLICIES OF 1 MRANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIK THE INSURANCE AFFORDED BY THE POLICES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. JRANCE POLICY NUMBER POLICY EFFECTIVE D POLICY EXPIRATION LIMITS GENERAL LIABLITY EACH OCCURRENCE S PREMISISS Ea occueence S COMMERCIAL GENERAL LIABILITY MED EXP tAny one person► $ CLAIMS MADE ri OCCUR PERSONAL R ADV INJURY S GENERAL AGGREGATE S GENtAGGREGATE LJMITAPPLI=SPER- PRODUCTS-COMPWAGG S POLICY PRO- LOC AUTOMOBILE LIABILITY ANY AUTO COMBINED SINGES LIMIT (Ea accident) S BODiILYINJURY (per PM�n) $ ALL OWNED AUTOS SCHEOULED AUTOS BOD>LY INJURY (Per ardderd) S HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE tPera=dent) S LLAetUtY AUTO ONLY -EA ACCCENT S OTHER THAN EA ACC S Y AUTO TAN' S AUTO ONLY: AGO EXCESSfUMBRELLA LIABILITY EACH OCCURRENCE $ OCCUR FICLAIMS MADE AGGREGATE $ S S DEDUCTIBLE S RETENTOON S WORKERS COMPENSATION AND - WC STATU- OTH- X 7'O(iYLIPMHS ER A EMPLOYERS' LIABILITY ANY PROPRIET0R/PARTNER1EXECLrfNE OF"CERMAaM3ER EXCLUDED? CA20010536051 8112/2005 8112/2006 El. EACH ACCIDENT S 1,000,00( EL OLSEASE . EA EMPLOYE S 1,000,04 Iyes desaibeunder. SPEC ALPROYISIONSW. E.LDISEASE-POUCYL7MIT $ 1.004.E OTHER DESCRIPTION OF OPERATIONS f LOCATIONS f VEHICLES f EXCLUSIONS ADDED BY E14DORSEMENT f SPECIAL PROVISIONS Operations of the Named Insured RE: Street Improvement and Utility Work related the Pacific City project. City of Huntington Beach and the Redevelopment Agency of the City of Huntington Beach Attn: Risk Management 2000 Main Street, 5th Street Huntington Beach, CA 92648- SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATK DATE THEREOF, THE ISSUING INSURER YAL1)W4V1XVJM MAIL 3O DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, L AUTHORRLD REPRESENTATIVE ACORD 25 (2001108) 14B -419- © ACORD CC�0^fl %-M" Item 17. - 123 MAKARPR-01 SANU IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s)- If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon_ F3. 113 d!`ADn 7C I-M.%4 0% Item 17. - 124 HB -420- T" C. L is -• i � 4 � i �.. VT xB _42 1 - Item 17. - 125 =��:: 2 `'� :: ny,atc Mocei � °:.�, Hilton Flote Hyatt Hotel r-e Item 17. - 128 HB -424- F3 - P2.117 Agreement T�m Participant • Advance $5.5 million to the Agency; — Regional Urban Runoff Treatmentstm — Pacific View Extension • $20 million in In -Lieu Housing fees • Park In -Lieu Fee assessed against the. r..esWendd portion will fund the Senior Center Ftoje-C Agengy • Pay the $5.5 million over a 20 year _period foot Tax Increment. .118 HB -425- 4 Item 17. - 129 Recommended Action Cily Council: Adopt City Resolution No. consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of`Facifie View Avenue, approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, -LLC, and making certain determinations and findings. F3. Pk.119 Item 17. - 130 NB _426_ 120 HB -427- 6 Item 17. - 131 L Council/Agency Meeting Held: 0TW04 Deferred/Continue to: c _ AW&� �� ° y �A Pr ved 'C] onditionallyApproved ❑Denied .$�Q• •Ci Cler Sig ure ouncil Meeting Dat eA.A A y' CCQr 1T16/2006 Department ID Number: ED 06-20 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL/REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE MAYOR / AGENCY CHAIRMAN AND CITY COUNCIL / AGENCY MEMBERS SUBMITTED BY: PENELOPE -GRAF , DP , IT ADMINISTRATOR / EXECUTIV "DIRECTOR PREPARED BY: STANLEY SMALEWITZ, ECONOMIC DEVELOMENT DIRECTOR / DEPUTY EXECUTIVE DIRECTOR SUBJECT: Adopt City and Agency Resolutions approving the Owner Participation Agreement with Makallon Atlanta Huntington Beach, LLC (also known as Makar) Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The City of Huntington Beach (City), the Redevelopment Agency (Agency) and Makallon Atlanta Huntington Beach, LLC (Makar) (Participant) have negotiated an Owner Participation Agreement (OPA) for the Pacific City Project to be located on a 31- acre site in the Main -Pier sub -area of the Huntington Beach Redevelopment Project. The Pacific City Project is a 191,100 square feet mixed -use project that includes a 165 room, luxury boutique hotel, approximately 163,000 square feet of retail and 12,000 square feet of restaurant use, 516 condominium units above subterranean parking, surface parking, a 2.0- acre open space/park, public easement corridor, and other public improvements. The purpose of the OPA is to effectuate the public purposes of the Agency by providing for significant public benefits including: (1) An In -Lieu Housing fee to be paid to the Agency for the purposes of causing the construction of, or to otherwise making available, a minimum 117 additional affordable residential units in the City; (2) Development, design and construction of a Regional Urban Runoff Treatment System; (3) Construction of the Pacific View Avenue Extension and additional street enhancements; and (4) Development, design and construction of an approximately 45,000 square foot Senior Center on real property owned by the City including furniture, fixtures and equipment. The Agency and City Council will consider adopting Resolutions that will approve the OPA and make certain determinations and findings. g,y �J ! C i H Funding Source: Participant will advance $5,500,000 to the Redevelopment Agency to fund the Agency's Obligation for the Regional Urban Runoff Treatment System and the Pacific View Drive Extension, which will be repaid over twenty years from the tax increment generated by the commercial and hotel portions of the Pacific City Project. Participant will pay to the Agency the In Lieu Housing fee of $20,000,000. The development, design and construction of the Senior Center will be funded by the Park In -Lieu Fee assessed against the residential portion of the Pacific City Project as calculated pursuant to Zoning and Subdivision Ordinance Section 254.08. F-3 REQUEST FOR ACTION MEETING DATE: 10/16/2006 DEPARTMENT ID NUMBER:ED 06-20 Agency Recommended Action: Motion to: 1. Approve the Owner Participation Agreement (there is a requirement under Resolution No. 214 (Attachment 1) that there be a 30-day review process of an Owner Participation Agreement prior to its submittal for Agency action). It is staff's recommendation that the Agreement be approved regardless of an action by the Agency Board, at the November 20, 2006 City Council meeting which would exceed the 30-day review process period. 2. Adopt Agency Resolution No. 364 (Attachment 2) approving an Owner Participation Agreement (Attachment 4) among the City, the Agency and Makallon Atlanta Huntington Beach, LLC and making certain determinations and findings. City Recommended Action: Motion to: 1. Adopt City Resolution No. 2006-67 (Attachment 3) consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of Pacific View Avenue, approving an Owner Participation Agreement (Attachment 4) among the City, the Agency and Makallon Atlanta Huntington Beach, LLC, and making certain determinations and findings. Alternative Action(s): Do not adopt the Resolutions that would approve Owner Participation Agreement and refer back to staff for changes. Analysis: The 31-acre project site for the Pacific City Project (21002 Pacific Coast Highway), entirely owned by Makallon Atlanta Huntington Beach, LLC, is located inland of Pacific Coast Highway bounded by First Street, Atlanta Avenue, and Huntington Street. The project is located in the Main -Pier sub -area of the Huntington Beach Redevelopment Project Area. On June 7, 2004, after hearing a staff report presentation, conducting a public hearing, and discussion, the City of Huntington Beach City Council conditionally approved Coastal Development Permit No. 02-12 with Finding and Conditions of Approval as well as Tentative Tract Map No. 16338, Conditional Use Permit No. 02-20 with Special Permit No. 02-04, and Conceptual Master Plan. Tentative Tract Tract Map No. 16338 was approved by the City Council on June 14, 2004. Concurrent with this action, the Participant is processing an Entitlement Plan Amendment to provide consistency of Tentative Map No. 16338, Conditions No. 2b and 11, with the terms of the OPA. The Pacific City Project, a 191,100 square foot mixed -use project consisting of office, retail, restaurant, cultural, and entertainment uses will also include a 165-room three-story luxury boutique hotel with a 12,000 square foot restaurant, comprised of three buildings consisting of 163,000 square feet, 516 condominium units above subterranean parking, surface parking, a 2.0-acre open space/park and public easement corridor, Pacific View Avenue extension, and other public improvements, including a Regional Urban Runoff Treatment System. Under the terms of the OPA, the Agency agrees to reimburse the Participant with project -generated revenues of $5,500,000 for a portion of the construction of the Regional G:\Carol\Administration\RCA\ED06-20—makar rca 10-16.doc -2- 10/9/2006 5:24 PM REQUEST FOR ACTION MEETING DATE: 10/16/2006 DEPARTMENT ID NUMBER:ED 06-20 Urban Runoff Treatment System and a portion of the Pacific View Avenue Extension including street enhancements, respectively budgeted at $1,500,000 and $4,000,000. Public benefits include the following: • A source of funds to the Agency to provide affordable housing within the City; • Funding, design and construction of a Senior Center according to City specifications; • Development and construction of a Regional Urban Runoff Treatment System for the First Street watershed storm flows; and • Development and construction of the extension of Pacific View Avenue from Huntington Street to First Street. On December 23, 2003, the City and the Participant previously entered into an Affordable Housing Agreement for the Pacific City project wherein the Participant agreed to construct affordable housing units as complete satisfaction of Participant's Affordable Housing Obligation. The OPA provides for Participant to pay to Agency $20,000,000 and for the Agency to cause to be constructed, or otherwise make available for, and occupied by, low - and moderate -income persons, 117 residential units. Participant's payments will be made in three lump sums payments according to a phasing plan that is consistent with the issuance of building permits for the construction of the residential units in the Pacific City Project. The OPA provides that the Participant will satisfy its Park In -Lieu Fee for the residential portion of the Pacific City Project by developing, designing, and constructing an approximately 45,000 square foot Senior Center on City owned property. The OPA also provides that the actual costs and expenses for the design and construction of the Senior Center shall not exceed more than $19,000,000 of the the Park In -Lieu Fee assessed against the residential portion of the Pacific City Project. The Participant will receive a 15% sweat equity credit from its own funds for managing and administering the development of the Senior Center. Should the assessed Park In -lieu fee exceed $19,000,000 in CFD generated funds and the 15% sweat equity credit ($2,850,000) then the Participant shall pay to the City a cash sum equal to the difference between the Senior Center Costs and the Park In -Lieu Fee or request that the City Council consider alternative funding options. After the City formally accepts the Senior Center following completion, the City will be responsible for its on- going maintenance and repair. The installation of the Senior Center on City owned parkland is contingent upon the outcome of a Measure T Vote. In the event that the Participant is not obligated to build the Senior Center, the Park In -Lieu Fee shall be paid in full to the City. And the Participant shall not be entitled to the sweat equity credit. The Regional Urban Runoff Treatment System shall also be designed, constructed, and dedicated to the City as a Participant obligation under the OPA. Under the terms of the OPA, the Agency will fund $1,500,000 as reimbursement to the Participant for a portion of the construction costs. One seventh (1/7) of the on -going annual operation and maintenance cost for the Regional Urban Runoff Treatment System will be provided for by G:\Carol\Administration\RCA\ED06-20 makar rca 10-16.doc -3- 10/9/2006 5:06 PM REQUEST FOR ACTION MEETING DATE: 10/16/2006 DEPARTMENT ID NUMBER:ED 06-20 a Property Owner's Association as required by the conditions of approval for the Pacific City project. After the City formally accepts the Regional Urban Runoff Treatment System, the City will be responsible for six -sevenths (6/7ths) of its on -going maintenance and repair. The OPA requires the Participant to develop, design, install and construct the Pacific View Avenue Extension, including enhancements to the pavement, curb and gutter, sidewalk, landscaping, streetlights, water lines and storm drains that go far beyond the scope of improvements detailed in the Agreement Between the City of Huntington Beach and the Huntington Beach Company Concerning the Huntington Beach Company's Atlanta Avenue Site dated December 15, 1986 (commonly known as the Walnut Avenue Agreement) which will be terminated upon the approval of the OPA. Under the terms of the OPA, the Agency will fund $4,000,000 as reimbursement to the Participant for a portion of the construction costs associated with the improvements to Pacific View Avenue. After the City formally accepts the public improvements, the City will be responsible for its on -going maintenance and repair except for those maintenance obligations required by the conditions of approval for the Pacific City Project. Redevelopment Agency Resolution No. 214 dated June 3, 1991 (Attachment 1) directs the Executive Director to forward copies of all owner participation agreement and disposition and development agreements to the governing body at least thirty days prior to the Agency taking any action thereon. This requirement can be waived by a majority vote of the members. The Participant and Agency staff executed the OPA on October 5, 2006. The Participant has requested that this item be considered at the first regularly scheduled meeting of the Agency Board upon their execution of the OPA. Environmental Status: Environmental Impact Report No. 02-01, analyzing the potential environmental impacts of the Pacific City project, was certified by the City Council on June 7, 2004. The subject owner participation agreement is a financing mechanism that is exempt pursuant to the California Environmental Quality Act. Any projects that may occur as a result of funds available to the City of Huntington Beach and Redevelopment Agency for which environmental clearance has not already been granted shall require approval of entitlements, including environmental documentation, prior to implementation. G:\Carol\Administration\RCA\ED06-20—makar rca 10-16.doc -4- 10/9/2006 5:05 PM REQUEST FOR ACTION MEETING DATE: 10/16/2006 DEPARTMENT ID NUMBER:ED 06-20 Attachment(s): List attachment(s) below. 1. Resolution No. 214 2. Redevelopment Agency Resolution No. approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC and making certain determinations and findings. 3. City Council Resolution No.)OW,47"consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of Pacific View Avenue, approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC, and making certain determinations and findings. 4. The Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC. 5. Insurance Certificates 6. PowerPoint Presentation G:\Carol\Administration\RCA\ED06-20—makar rca 10-16.doc -5- 10/5/2006 1:18 PM ATTACHMENT #1 i RESOLUTION NO. 21� A RESOLUTION BY THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH DIRECTING THE EXECUTIVE DIRECTOR TO FORWARD COPIES OF ALL OWNER PARTICIPATION AGREEMENTS AND DISPOSITION AND DEVELOPMENT AGREEMENTS TO THE GOVERNING BODY AT LEAST THIRTY (30) DAYS PRIOR(TO THE AGENCY TAKING ANY ACTION THEREON I WHEREAS, Owner Participation and Disposition and Development Agreements passed upon by the Redevelopment Agency are generally lengthy and complicated documents which require extensive review before being acted upon; and The members of the governing body desire adequate time to review such agreements; NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of Huntington Beach hereby directs the Executive Director to forward copies of all Owner Participation and Disposition and Development Agreements to the members of the governing body at least thirty (30) days prior to any required action by the Agency, unless, by a majority vote, such members waive this requirement. PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting thereof held on the 3rd day of June Chairman ATTE i Agency Clerk . REVIE✓JED AND APPROVED: Executiv irector APPROVED AS TO FQ Agency Cob selnn 1 f STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF HUNTINGTON BEACH) I, CONNIE BROCKWAY, Clerk of the Redevelopment Agency of the City of Huntington Beach-, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a meeting of said Redevelopment Agency held on the 3rd day of June 1.931., and that it was so adopted by the following vote: AYES: Members: MacAllistej_-, WjncjMj1. Silva. Green. Kelly, Egbitaille. M-gal Pattersm NOES:Members: lJone ABSENT: Members: None. e - Clerk of the RedeveTopmtfff Xg ncy of the City of Huntingtoh Beach, Cra. ATTACHMENT #2 RESOLUTION NO. 364 RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC AND MAKING CERTAIN DETERMINATIONS AND FINDINGS WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan ("Redevelopment Plan") for the Merged Redevelopment Project Area (the "Project Area") of the City of Huntington Beach; and In order to implement and further the goals and objectives of the Redevelopment Plan, the Agency, the City of Huntington Beach ("City") and Makallon Atlanta Huntington Beach, LLC ("Participant") have negotiated the terms of an Owner Participation Agreement (the "Agreement"). The Agreement provides, among other things, for Participant to design, develop, install and construct: (i) a Senior Center; (ii) a regional urban runoff treatment center for the First Street watershed storm flows ("Regional Treatment System"); and (iii) the extension of Pacific View Avenue from Huntington Street to First Street ("Pacific View Avenue Extension"). The Regional Treatment System and the Pacific View Avenue Extension are collectively referred to herein as the "Public Improvements". The Agreement also provides that the Agency will reimburse Participant, subject to all of the terms and conditions of the Agreement, certain costs related to the Public Improvements. Also pursuant to the Agreement, the Participant will pay the Agency an affordable housing in -lieu fee and the Agency would cause to be developed a certain number of affordable housing units. The Agreement also provides for the termination of an existing agreement between the City and Participant's predecessor -in -interest to the site, Huntington Beach Company, entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986; and Pursuant to Section 33445(a) of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL"), the Agency may, with the consent of the City Council ("City Council") of the City, pay all or part of the value of the land for and the cost of the installation and construction of any facility, structure, or other improvements which is publicly owned either within or outside a project area, if the City Council makes certain determinations; and Pursuant to Sections 33421 and 33421.1 of the CRL, the Agency may cause, provide or undertake or make provision with other agencies for the installation, or construction of streets, utilities, parks, playgrounds, or other public improvements necessary for carrying out the Redevelopment Plan in the Project Area upon consent of the City Council; and Agency Res. No. 364 The fulfillment generally of the Agreement is in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements; and It is in the best interests of the City and for the common benefit of residents, employees, business tenants and property owners within the Project Area and the City as a whole for the Public Improvements to be installed and constructed; and Since there are no other reasonable means available to the City to finance the installation and construction of the Public Improvements, the Agency proposes to reimburse Participant a portion of the cost of the installation and construction of the Public Improvements; and The Agency's agreement to pay part of the value of the cost of the installation and construction of the Public Improvements constitutes an indebtedness of the Agency for the purpose of carrying out the redevelopment for the Project Area; and The Public Improvements are of benefit to the Project Area and the immediate neighborhood in which the Public Improvements are located; and The provision of the Public Improvements is necessary to effectuate the purposes of the Redevelopment Plan; and All other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, BE IT RESOLVED BY THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: 1. The Agency hereby finds and determines that the foregoing recitals are true and correct. 2. Based on substantial evidence in the record, the Agency hereby finds and determines that: a. The construction and installation of the Public Improvements are necessary to effectuate the purposes of the Redevelopment Plan and are of benefit to the Project Area and the immediate neighborhood in which the Public Improvements are located. This determination is based, in part, on the fact that the construction and installation of the Public Improvements are in the best interests of the City and the health, safety, morals and welfare of its taxpayers, employees, business tenants, property owners and residents. In addition, the enumerated goals of the Five Year Implementation Plan include: (i) "[i]mprove public facilities and public infrastructure;" and (ii) "[i]mprove inadequate drainage infrastructure." Furthermore, the improvement of public 2 Agency Res. No..364 infrastructure in the Project Areawhich addresses substandard and inadequate public improvements in the Project Area is a specific project listed in the Five Year Implementation Plan as "Public Improvements." Pursuant to the Five Year Implementation Plan, such project will address the following conditions of blight identified in the Project Area: age, obsolescence and deterioration and inadequate public improvements. b. No other reasonable means of financing the Public Improvements are available to the City. This determination is based, in part, on the fact that the City itself is not in a position to finance the Public Improvements. The City is having difficulty fully assuming the costs of anticipated and needed public capital improvements. Without the assistance of tax increment funding from the Project Area, capital improvements in other parts of the City would have to _ be deferred or eliminated in order to fund the Public Improvements. Given the constraints on financing sources which are under the direction of the City, all anticipated and needed public capital improvements cannot be completed using only City funds. It is clear that there must be a combination of tax increment and non -tax increment funding. The payment of funds by the Agency for the costs related to the Public Improvements will assist in the elimination of one or more blighting conditions within the Project Area and is consistent with the Agency's Five - Year Implementation Plan for the Project Area. This determination is based, in part, on the information contained in paragraph a., above. 3. The Agency hereby approves the Agreement in substantially the form presented to the Agency. The Agency Executive Director is hereby authorized to execute the Agreement on behalf of the Agency, together with such non -substantive changes and amendments as may be approved by the Agency Executive Director and Agency Counsel. Without the requirement of any further approval of the Agency, the Agency Executive Director or designee is authorized to take any action and execute any and all documents and agreements necessary to implement the Agreement. 4. This Resolution shall take effect immediately upon its adoption. 3 Agency Re. No. 364 PASSED AND ADOPTED by the Redevelopment Agency of the City of Huntington Beach at a regular meeting held thereof on the 16 t h day of October , 2006. Chair REVIEWED AND APPROVED: APPROVED AS TO FORM: G1 " xecutive 13irector eneral Counsel 10Q I:I:�►1 ::� �1 �1:��:31:i;�T/:V I 0 MTIATED AND APPROVED: Director o conomic Development / Deputy Executive Director 0 Res. No. 364 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF HUNTINGTON BEACH ) I, JOAN FLYNN, Clerk of the Redevelopment Agency of the City of Huntington Beach, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Redevelopment Agency of the City of Huntington Beach at a regular meeting of said Redevelopment Agency held on the 16th day of October, 2006 and that it was so adopted by the following vote: AYES: Bohr, Green, Coerper, Sullivan, Hansen NOES: Hardy, Cook ABSENT: None ABSTAIN: None Q"ij- 41 - F. - -1 ) Cler f the Redevelopment agency of the City of Huntington Beach, CA ATTACHMENT #3 CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH RESOLUTION NO. 2 0 0 6- 6 7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH CONSENTING TO PAYMENT BY THE REDEVELOPMENT AGENCY OF A PORTION OF THE COSTS OF THE INSTALLATION AND CONSTRUCTION OF: (i) A REGIONAL TREATMENT SYSTEM; AND (ii) THE EXTENSION OF PACIFIC VIEW AVENUE, APPROVING AN OWNER PARTICIPATION AGREEMENT AMONG THE CITY, THE AGENCY AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC, AND MAKING CERTAIN DETERMINATIONS AND FINDINGS WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is engaged in activities necessary to carry out and implement the Redevelopment Plan ("Redevelopment Plan") for the Merged Redevelopment Project Area (the "Project Area") of the City of Huntington Beach; and In order to implement and further the goals and objectives of the Redevelopment Plan, the Agency, the City of Huntington Beach ("City") and Makallon Atlanta Huntington Beach, LLC ("Participant") have negotiated the terms of an Owner Participation Agreement (the "Agreement"). The Agreement provides, among other things, for Participant to design, develop, install and construct: (i) a Senior Center; (ii) a regional urban runoff treatment center for the First Street watershed storm flows ("Regional Treatment System"); and (iii) the extension of Pacific View Avenue from Huntington Street to First Street ("Pacific View Avenue Extension"). The Regional Treatment System and the Pacific View Avenue Extension are collectively referred to herein as the "Public Improvements". The Agreement also provides that the Agency will reimburse Participant, subject to all of the terms and conditions of the Agreement, certain costs related to the Public Improvements. Also pursuant to the Agreement, the Participant will pay the Agency an affordable housing in -lieu fee and the Agency would cause to be developed a certain number of affordable housing units. The Agreement also provides for the termination of an existing agreement between the City and Participant's predecessor -in -interest to the site, Huntington Beach Company, entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986; and Pursuant to Section 33445(a) of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL"), the Agency may, with the consent of the City Council ("City Council") of the City, pay all or part of the value of the land for and the cost of the installation and construction of any facility, structure, or other improvements which is publicly owned either within or outside a project area, if the City Council makes certain determinations; and 1 Res. No. 2006-67 Pursuant to Sections 33421 and 33421.1 of the CRL, the Agency may cause, provide or undertake or make provision with other agencies for the installation, or construction of streets, utilities, parks, playgrounds, or other public improvements necessary for carrying out the Redevelopment Plan in the Project Area upon consent of the City Council; and The fulfillment generally of the Agreement is in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements; and It is in the best interests of the City and for the common benefit of residents, employees, business tenants and property owners within the Project Area and the City as a whole for the Public Improvements to be installed and constructed; and Since there are no other reasonable means available to the City to finance the installation and construction of the Public Improvements, the Agency proposes to reimburse Participant a portion of the cost of the installation and construction of the Public Improvements; and The Agency's agreement to pay part of the value of the cost of the installation and construction of the Public Improvements constitutes an indebtedness of the Agency for the purpose of carrying out the redevelopment for the Project Area; and The Public Improvements are of benefit to the Project Area and the immediate neighborhood in which the Public Improvements are located; and The provision of the Public Improvements is necessary to effectuate the purposes of the Redevelopment Plan; and All other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE,13E IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AS FOLLOWS: The City Council hereby finds and determines that the foregoing recitals are true and correct. 2. Based on substantial evidence in the record, the City Council hereby finds and determines that: a. The construction and installation of the Public Improvements are necessary to effectuate the purposes of the Redevelopment Plan and are of benefit to the Project Area and the immediate neighborhood in which the Public Improvements are located. This determination is based, in part, on the fact that the construction and installation of the Public Improvements are in the K Res. No. 2006-67 best interests of the City and the health, safety, morals and welfare of its taxpayers, employees, business tenants, property owners and residents. In addition, the enumerated goals of the Five Year Implementation Plan include: (i) "[i]mprove public facilities and public infrastructure;" and (ii) "[i]mprove inadequate drainage infrastructure." Furthermore, the improvement of public infrastructure in the Proi ect Area which addresses substandard and inadequate public improvements in the Project Area is a specific project listed in the Five Year Implementation Plan as "Public Improvements." Pursuant to the Five Year Implementation Plan, such project will address the following conditions of blight identified in the Project Area: age, obsolescence and deterioration and inadequate public improvements. b. No other reasonable means of financing the Public Improvements are available to the City. This determination is based, in part, on the fact that the City itself is not in a position to finance the Public Improvements. The City is having difficulty fully assuming the costs of anticipated and needed public capital improvements. Without the assistance of tax increment funding from the Project Area, capital improvements in other parts of the City would have to be deferred or eliminated in order to fund the Public Improvements. Given the constraints on financing sources which are under the direction of the City, all anticipated and needed public capital improvements cannot be completed using only City funds. It is clear that there must be a combination of tax increment and non -tax increment funding. C. The payment of funds by the Agency for the costs related to the Public Improvements will assist in the elimination of one or more blighting conditions within the Project Area and is consistent with the Agency's Five - Year Implementation Plan for the Project Area. This determination is based, in part, on the information contained in paragraph a., above. 3. The City Council hereby consents to payment by the Agency for part of the cost of the installation and construction of the Public Improvements as provided in the Agreement. 4. The City Council hereby approves the Agreement in substantially the form presented to the City Council. The City Administrator is hereby authorized to execute the Agreement on behalf of the City, together with such non -substantive changes and amendments as may be approved by the City Administrator and City Attorney. Without the requirement of any further approval of the City Council, the City Administrator or designee is authorized to take any action and execute any and all documents and agreements necessary to implement the Agreement. This Resolution shall take effect immediately upon its adoption. Res. No. 2006-67 PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 16 t h day of October , 2006. Mayor REVIEWED AND APPROVED: APPROVED AS TO FORM: Ci Admi istrator - jCittorney KANE, BALLMER & MTIA Director of E omic Development 4 Res. No. 2006-67 STATE OF CALIFORNIA COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at an regular meeting thereof held on the 16th day of October, 2006 by the following vote: AYES: Bohr, Green, Coerper, Sullivan, Hansen NOES: Hardy, Cook ABSENT: None ABSTAIN: None City ark and ex-officio C k of the City Council of the City of Huntington Beach, California ATTACHMENT #4 OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Recorded in Official Records, Orange county Tom Daly, clerk-Recorder !II!11111ii11'IIIIIIIIIIIIIIIII!III!IIIIIIIIIIIIIIIIIIIIIIIIIIIIIilllllllll NO FEE 2006000718534 08:23am 10/25106 213 160 Al2 90 0.00 0.00 0.00 0.00 0.00 0.00 0.00 D.00 Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: Agency Secretary SPACE ABOVE THIS LINE FOR RECORDERS USE OWNER PARTICIPATION AGREEMENT by and among REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, Agency and THE CITY OF HUNTINGTON BEACH, City and MAKALLON ATLANTA HUNTINGTON BEACH, LLC, Participant 1,T w)9, W 06-476/4986 TABLE OF CONTENTS Page ARTICLE 100. -SUBJECT OF AGREEMENT.............................................................................. 1 § 101 Purpose of the Agreement............................................................................................. 1 § 102 The Redevelopment Plan.............................................................................................. 2 § 103 The Redevelopment Project Area................................................................................. 3 § 104 The Site......................................................................................................................... 3 § 105 Parties to the Agreement............................................................................................... 3 § 105.1 Agency......................................................................................................... 3 § 105.2 City............................................................................................................... 3 § 105.3 Participant.................................................................................................... 3 ARTICLE 200. AFFORDABLE HOUSING OBLIGATION....................................................... 4 § 201 Affordable Housing Payment....................................................................................... 4 § 202 Agency Affordable Housing Plan................................................................................. 5 ARTICLE 300. PARK OBLIGATION......................................................................................... 5 § 301 Participant's Obligations ................. § 302 Definitions..................................................................................................................... 6 § 303 Funding Options for Remaining Park In -Lieu Fee ....................................................... 7 § 304 Management Fee........................................................................................................... 7 § 305 Senior Center................................................................................................................ 7 ARTICLE 400. REGIONAL TREATMENT SYSTEM............................................................. 10 ARTICLE 500. PACIFIC VIEW AVENUE EXTENSION........................................................ 10 § 501 Pacific View Avenue Extension................................................................................. 10 § 502 Termination of Existing Site Agreement.................................................................... 11 ARTICLE 600. DEVELOPMENT AND CONSTRUCTION..................................................... 12 § 601 Permits/Entitlement Plan Amendment........................................................................ 12 § 602 Plans and Specifications............................................................................................. 12 § 603 Quality of Work; Compliance With Laws and Codes ................................................ 12 § 604 Standard of Performance............................................................................................. 13 § 605 Alterations to Senior Center, Regional Treatment System and Pacific View Avenue Extension .................. § 606 Maintenance of Senior Center, Regional Treatment System and Pacific View Avenue Extension................................................................................. 13 § 607 Construction Schedule................................................................................................ 15 § 608 Fees and Charges........................................................................................................ 15 § 609 City and Agency Inspection of Senior Center, Regional Treatment System and Pacific View Avenue Extension.............................................................. 16 § 610 Default; Notice; Remedies.......................................................................................... 16 § 611 Administrative Costs................................................................................................... 17 i 06-476/4986 § 612 Acceptance of Improvements; As -Built or Record Drawings .................................... 17 § 613 Warranty and Guarantee............................................................................................. 18 § 614 Security; Surety Bonds............................................................................................... 18 § 615 Indemnification........................................................................................................... 20 § 616 Insurance..................................................................................................................... 20 § 617 Direct Payment Permit.........................................................................................:...... 22 § 618 Prevailing Wages........................................................................................................ 22 § 619 Nondiscrimination during Construction..................................................................... 24 § 620 Meaning of"Dedicate .. ............................................................................................... 24 § 621 Not a Statutory Development Agreement................................................................... 25 ARTICLE 700. USE OF THE SITE........................................................................................... 25 § 701 Uses............................................................................................................................. 25 § 702 Obligation to Refrain from Discrimination................................................................. 27 § 703 Effect and Duration of Covenants............................................................................... 27 ARTICLE 800. AGENCY OBLIGATION AND COMMUNITY FACILITIES DISTRICTBONDS........................................................................................... 28 § 801 Agency Obligation...................................................................................................... 28 § 802 Payment of Agency Obligation................................................................................... 28 § 803 Community Facilities District Bonds......................................................................... 32 ARTICLE 900 DEFAULTS, REMEDIES AND TERMINATION ........................................... 34 § 901 Default......................................................................................................................... 34 § 902 Notice.......................................................................................................................... 34 § 903 Cure Period................................................................................................................. 34 § 904 Rights and Remedies................................................................................................... 35 ARTICLE 1000 GENERAL PROVISIONS.............................................................................. 35 § 1001 Notices, Demands and Communications between the Parties .................................... 35 § 1002 Conflict of Interest....................................................................................................... 35 § 1003 Nonliability of City and Agency Officials and Employees ......................................... 36 § 1004 Enforced Delay in Performance for Causes beyond Control of Party ........................ 36 § 1005 Inspection of Books and Records............................................................................... 36 § 1006 Approvals....................................................................................................................37 § 1007 Assignment................................................................................................................. 37 § 1008 Participant's Warranties.............................................................................................. 37 § 1009 Relationship of the Parties.......................................................................................... 38 § 1010 Interpretation of Agreement........................................................................................ 38 § 1011 Authorized Representative of Agency and City ......................................................... 38 § 1012 Waivers....................................................................................................................... 38 § 1013 Time of the Essence.................................................................................................... 39 § 1014 Attorneys' Fees and Costs.......................................................................................... 39 § 1015 Severability................................................................................................................. 39 § 1016 Non-exclusivity........................................................................................................... 39 § 1017 Complete Agreement.................................................................................................. 39 § 1018 Terminology ............................................... ............ 39 ii 06-476/4986 § 1019 Necessity for a Writing............................................................................................... 40 § 1020 No Third Party Beneficiaries...................................................................................... 40 § 1021 Authority to Sign....................................................................................... .............. 40 § 1022 Incorporation by Reference......................................................................................... 40 § 1023 Cooperation; Further Acts; Estoppel Certificates....................................................... 40 § 1024 Binding Effect ............. _................................................................................................. 41 ARTICLE 1100. EFFECTIVE DATE....................................................................................... 41 ATTACHMENTS ATTACHMENT NO. 1 - SITE MAP ATTACHMENT NO. 2 - LEGAL DESCRIPTION ATTACHMENT NO. 3 - DEPICTION OF COMMERCIAL PORTION OF PROJECT ATTACHMENT NO.4 - AGENCY AFFORDABLE HOUSING PLAN ATTACHMENT NO.5 - SCOPE OF DEVELOPMENT ATTACHMENT NO. 6 - MEMORANDUM OF TERMINATION ATTACHMENT NO. 7 - DRAFT FORMS OF SECURITY ATTACHMENT NO. 8 - SENIOR CENTER PLANS AND SPECIFICATIONS 06-476/4986 OWNER PARTICIPATION AGREEMENT This OWNER PARTICIPATION AGREEMENT (this "Agreement") dated as of OC-70WR i1 , 2006 for references purposes only, is entered into by and among the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), the CITY OF HUNTINGTON BEACH, a charter city ("City"), and MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company ("Participant"). ARTICLE 100. SUBJECT OF AGREEMENT § 101 Purpose of the Agreement Participant owns certain real property in the City of Huntington Beach hereinafter defined as the Site. Participant desires to develop on the Site a mixed use project consisting of: (1) approximately 191,000 square feet of office, retail, restaurant, cultural, and entertainments uses; (2) an approximate 165 room, luxury boutique hotel with approximately 12,000 square feet of restaurant space, comprised of 3 buildings consisting of approximately 163,000 square feet with two (2) public view corridors (collectively, the "Hotel"); (3) 516 condominium units (collectively, the "Residential Units") above subterranean parking to be built in phases; (4) an approximately 2.0 acre open space/park and public easement corridor (the "Village Green"); (5) Pacific View Avenue extension; and (6) associated infrastructure on the approximate 31-acre Site (collectively, the "Project"). The approximately 191,000 square feet of office, retail, restaurant, cultural, and entertainments uses described in subsection (1), above, and the approximate 165 room luxury boutique hotel described in subsection (2), above, shall collectively be referred to herein as the "Commercial Portion" of the Project. The Commercial Portion is depicted on Attachment No. 3, which is attached hereto and incorporated herein by reference. The City has imposed certain conditions of approval on the Project (collectively, the Conditions of Approval"), which conditions, among other things, require the Participant: (a) to provide affordable housing pursuant to an Affordable Housing Agreement as further described in Section 202 herein (the "Affordable Housing Obligation"); (b) to pay one hundred percent (100%) of the Park In -Lieu Fee (as defined below) for the residential portion of the Project (Condition of Approval No. 11 of Tentative Tract Map No. 16338) (the "Park Obligation"); and (c) to develop concept and design plans and cost estimates for a regional urban runoff treatment system for the First Street watershed storm flows ("Regional Treatment System"), post a bond equal to one -seventh (1/7) of the capital construction cost into an Urban Runoff Treatment Trust Fund for the Regional Treatment System and to provide in master CC&Rs for the Project that the Project shall pay one -seventh (1/7) of the on -going annual operation and maintenance cost for the Regional Treatment System (Condition of Approval No. 5.b. of Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12. In addition, the Project entails the extension of Pacific View Avenue from Huntington Street to First Street (the "Pacific View Avenue Extension"). 1 06-476/4986 The Participant is concurrently processing an Entitlement Plan Amendment application with the City to provide consistency of Tentative Map No. 16338, Conditions No. 2b and 11, with the terms of this Agreement ("Entitlement Plan Amendment"). The purpose of this Agreement is to effectuate the public purposes of the Agency by providing for the_ complete satisfaction of the Affordable Housing Obligation, the complete satisfaction of the Park Obligation, development and construction of the Regional Treatment System, development and construction of the Pacific View Avenue Extension, and subject to all of the terms and conditions of this Agreement (including, without limitation, the provisions of Section 802, below, limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the Agency's agreement to reimburse Participant certain costs related to the Regional Treatment System and the Pacific View Avenue Extension. Notwithstanding anything to the contrary herein, if either the Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy all of its obligations under the Conditions of Approval. The satisfaction of the Affordable Housing Obligation, Park Obligation, development, design, installation and construction of the Regional Treatment System, the development, design, installation, and construction of the Pacific View Avenue Extension and the fulfillment generally of this Agreement are in the vital and best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. Notwithstanding anything to the contrary in this Agreement, Participant shall be and shall remain obligated to fulfill and maintain all conditions of approval for Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12 as may be modified by the Entitlement Plan Amendment. To the extent of any conflict between this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment), the Conditions of Approval (as may be modified by the Entitlement Plan Amendment) shall control. § 102 The Redevelopment Plan This Agreement is made in accordance with and subject to the redevelopment plan for the Main -Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. 2 06-476/4986 § 103 The Redevelopment Project Area The Merged Redevelopment Project area is located in the City. The exact boundaries of such Project area are specifically and legally described in the Redevelopment Plan and Ordinance No. 3343. § 104 The Site The "Site" is that certain real property illustrated and designated as such on the "Map of the Site" (which is attached hereto and incorporated herein as Attachment No. 1) and having the legal description set forth in the "Legal Description of the Site" (which is attached hereto and incorporated herein as Attachment No. 2). The Site is located within the Merged Redevelopment Project Area and is subject to the Pacific City Master Plan dated July 10, 2003 (the "Master Plan"). Participant represents and warrants to Agency and City that it currently holds fee title to the entire Site. § 105 Parties to the Agreement § 105.1 A enc Agency is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Part 1 of Division 24 of the California Health and Safety Code (California Health and Safety Code Section 33000 et seq.). The principal office of Agency is located at City Hail, 2000 Main Street, Huntington Beach, California 92648, Attn: Agency Executive Director. "Agency," as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. § 105.2 City The principal office of City is located at City Hall, 2000 Main Street, Huntington Beach, California 92648, Attn: City Administrator. "City", as used in this Agreement, includes the City of Huntington Beach, and any assignee of or successor to its rights, powers and responsibilities. § 105.3 Participant Participant is a Delaware limited liability company. The principal office of Participant is located at 4100 MacArthur Boulevard, Suite 200, Newport Beach, CA 92660, Attn: Michael Gagnet, Executive Vice President -Development. 3 06A76/4986 Wherever the term "Participant" is used herein, such term shall also include any assignee of or successor to its rights, powers and responsibilities. ARTICLE 200. AFFORDABLE HOUSING OBLIGATION § 201 Affordable Housing Payment - 1. The City and the Participant previously entered into that certain Affordable Housing Agreement dated December 23, 2003, (the "Participant Affordable Housing Agreement") pursuant to which the Participant agreed to provide certain affordable housing units in complete satisfaction of the Affordable Housing Obligation. If the Entitlement Plan Amendment is approved by the City, it is the parties intent that the Participant Affordable Housing Agreement will be terminated in its entirety and replaced by that certain Affordable Housing Agreement dated June 16, 2006 between the City and the Agency attached hereto as Attachment No. 4 and incorporated herein by reference (the "Agency Affordable Housing Plan"). Notwithstanding anything to the contrary herein, if either the Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy all of its obligations under the Participant Affordable Housing Agreement and its Affordable Housing Obligation. Provided that the Entitlement Plan Amendment is approved by the City and the Participant Affordable Housing Agreement is terminated in its entirety, in complete satisfaction of the Affordable Housing Obligation, and in accordance with the Phasing Diagram attached to the Pacific City Master Plan dated July 10, 2003 as Exhibit D-007 (the "Phasing Diagram"), Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall pay to the Agency the amount of Twenty Million Dollars ($20,000,000.00) to be used for affordable housing purposes (the "Affordable Housing Payment"), which shall be payable in three (3) lump sum payments as follows: a. As a condition precedent to the issuance of any building permit for the construction of any Phase IIa Residential Unit, Participant shall pay the Agency in immediately available funds a portion of the Affordable Housing Payment equal to Five Million Dollars ($5,000,000.00); b. As a condition precedent to the issuance of any building permit for the construction of any Phase III Residential Unit, Participant shall pay the Agency in immediately available funds a portion of the Affordable Housing Payment equal to Ten Million Dollars ($10,000,000.00); and C. As a condition precedent to the issuance of any building permit for the construction of any Phase IV Residential Unit, Participant shall pay the Agency in immediately available funds a portion of the Affordable Housing Payment equal to Five Million Dollars ($5,000,000.00). 4 06476/4986 2. The Participant acknowledges and agrees that the City shall not be obligated to issue, and the Participant shall have no right to request, any building permit for any of the Phase Ila, Phase III or Phase IV Residential Units unless and until Participant has paid the applicable portion of the Affordable Housing Payment to Agency in immediately available funds as required by this Agreement. 3. Participant acknowledges and agrees that any proposed change to the Phasing Diagram shall be of no force and effect unless and until such change is submitted to and reasonably approved by the City Planning Director in accordance with Condition of Approval No. 3 of CUP-02-20 and, in addition, submitted to and approved in writing by the Agency Executive Director or designee in his or her reasonable discretion. § 202 Agency Affordable Housing Plan Upon the termination of the Participant Affordable Housing Agreement, the Agency agrees to execute the Agency Affordable Housing Plan with the City, in substantially the form attached hereto as Attachment No. 4. The Agency Affordable Housing Plan shall provide that the Agency shall deposit any portion of the Affordable Housing Payment paid by Participant into an affordable housing fund designated by the Agency and the Agency shall cause to be constructed, or otherwise made available for and occupied by very low-, low- .and moderate - income persons, one hundred seventeen (117) residential units. The Agency shall comply with all applicable requirements of the Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) in connection with the Agency's obligations under the Agency Affordable Housing Plan. ARTICLE 300. PARK OBLIGATION § 301 Participant's Obligations In complete satisfaction of the Park Obligation, Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall be obligated to either: (1) satisfy both of the following conditions precedent: (A) develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City in accordance with and pursuant to all of the terms and conditions of this Agreement (including, without limitation, Section 305, below, and Article 600) a Senior Center of approximately 45,000 square feet upon real property owned by the City (which property shall be provided by the City at no cost to the Participant), including, without limitation, furniture, fixture and equipment (including operations and maintenance manuals) as approved by the Director of Community Services ("Senior Center"), as more particularly set forth in this Agreement; and (B) pay in full any Remaining Park In -Lieu Fee (as defined below) to the City in immediately available funds; OR (2) pay the entire Park In -Lieu Fee to the City in immediately available funds as set forth in Section 305.8, below. "Project plan approval" as used in this Agreement shall include, without limitation, satisfaction of all environmental review and issuance of all entitlements. Notwithstanding anything to the contrary herein, if either the 5 06A76/4986 Entitlement Plan Amendment or this Agreement is not approved by the City Council or Agency or is overturned or is successfully challenged, then Participant agrees that Participant shall remain obligated, at Participant's sole cost and expense, to satisfy the Participant's Park Obligation. § 302 Definitions The following capitalized terms shall have the following definitions: 1. "Certified Cost Statement" shall mean a statement setting forth the total amount of Senior Center Costs, together with a certificate of an independent certified public accountant reasonably acceptable to City (the "Accountant"). The Accountant's certificate shall be addressed to City, shall be signed under penalty of perjury, and shall state that the Accountant is familiar with the definition of Senior Center Costs in this Agreement and attest to the accuracy of the Certified Cost Statement, subject to usual and customary qualifications. The Accountant shall be selected by Participant, but shall be a national accounting firm, first approved in writing by the City's Community Services Director. 2. "Management Fee" shall mean a credit toward the Park In -Lieu Fee in an amount equal to fifteen percent (15%) of the total Senior Center Costs set forth in the Certified Costs Statement. In no event shall either the City or Agency be obligated to pay out of pocket any portion of the Management Fee. 3. "Park In -Lieu Fee" shall mean the parkland in -lieu fee assessed against the residential portion of the Site as calculated and paid pursuant to Zoning and Subdivision Ordinance No. 254.08 for Tentative Tract Map No. 16338. 4. "Project Budget" shall mean the Senior Center Costs budget approved by City and Agency as provided for under this Agreement, as amended from time to time as approved by the City and Agency as provided for under this Agreement. 5. "Remaining Park In -Lieu Fee" shall mean an amount equal to the difference between the Total Senior Center Costs and the Park In -Lieu Fee. 6. "Senior Center Costs" shall mean actual costs and expenses for all design, environmental review, entitlement processing, fees, and plan check, as well as all construction to be performed by or on behalf of Participant for the development of the Senior Center required by this Agreement and plans and specifications approved therefor by the City and Agency, and all, furnishings, fixtures and equipment therefor to the extent that such costs and expenses are incurred and paid for by Participant to unrelated third parties and are included in a City/Agency-approved Project Budget. Any cost or fee not included in a Project Budget approved in writing by the City's Community Services Director and the 6 06-476/4986 Agency Executive Director or designee shall not be considered or included as a Senior Center Cost. 7. "Total Senior Center Costs" shall mean an amount equal to the total Senior Center Costs as set forth in the Certified Cost Statement plus the Management Fee. - § 303 Funding Options for Remaining Park In -Lieu Fee Concurrently or following final acceptance of the entire Senior Center by the City in accordance with the acceptance procedures described in Section 612, below, the Agency agrees to present to the City Council for the City's selection and approval in the City's sole and absolute discretion, the following list of recommended options to fund the Remaining Park In -Lieu Fee, if any: (1) payment by Participant in immediately available funds of the total Remaining Park -In Lieu Fee Payment; (2) providing a credit to Participant for the Village Green and improvements thereto; (3) any combination of the foregoing; or (4) any other funding option to be determined by the Agency, all subject to any conditions which may be desired by the Agency or City in order to proceed with such presentation to the City Council. In no event shall the Agency be obligated to make any such presentation to the City Council unless and until such time as the final acceptance of the entire Senior Center by the City in accordance with the acceptance procedures described in Section 612, below. § 304 Management Fee Participant acknowledges and agrees that in no event shall the Management Fee be funded by Community Facilities District 2006-1; nor shall Participant be entitled to receive from either the City or the Agency any portion of the Management Fee credit if either the Senior Center Costs or the Total Senior Center Costs exceed the Park In -Lieu Fee. § 305 Senior Center This Section 305 shall apply only if the Senior Center shall be constructed by Participant pursuant to Section 301, above. 1. Participant agrees that Participant's obligation to design, develop, install and construct the Senior Center shall include, without limitation, all utilities, off -site improvements, parking, landscaping and outdoor amenities. Participant agrees that design, development, installation and construction of the Senior Center shall include the preparation of all plans and specifications and processing and completing all environmental review, entitlements and plan checks. Participant agrees that Participant shall design, develop, install and construct the Senior Center in accordance with the Scope of Development attached hereto as Attachment No. 5 and incorporated herein by reference and in accordance with City approved plans and specifications, and furnishings, fixtures and equipment, attached hereto as Attachment No. 8 and incorporated herein by reference. 7 06476/4986 2. Participant agrees that the final design, plans, and specifications, and furnishings, fixtures and equipment for the Senior Center and any modifications thereto or change orders shall be subject to the complete satisfaction and prior written approval of the City's Community Services Director and the Agency Executive Director or designee. -3. Participant agrees that Participant shall execute the design/build contract for the Senior Center and commence construction (not grading, excavation, demolition, grubbing, or the like) of Senior Center improvements (not utilities, public or private streets, public or private site improvements, landscaping or ancillary structures such as block walls, trash enclosures) permanently fixed to the site (e.g., a foundation or similar) no later than four (4) months following final project plan approval by the City Council for the Senior Center. 4. Participant agrees that Participant shall provide all equipment (including all operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Senior Center unless the City elects otherwise in its sole and absolute discretion. The Site upon which the Senior Center shall be constructed shall be contributed by the City at no cost whatsoever to the Participant. 5. Participant agrees that within one hundred twenty (120) days after final acceptance of the Senior Center by the City as described in Section 612, below, Participant shall submit to City, for the review and written approval or disapproval of the City's Community Services Director the Certified Cost Statement. 6. a. Notwithstanding any provision of this Agreement to the contrary, in no event shall City or Agency have the right to request or demand, and in no event shall Participant have the obligation to implement, a Project Budget or actual Senior Center Costs to exceed a maximum of $19,000,000 (the "Maximum Senior Center Cost"), provided, however, that if (but only if) the actual Park In -Lieu Fee shall be greater than $21,850,000 and/or the City or Agency has allocated additional funds to the Senior Center other than the Park In -Lieu Fee, and, no delay in the design, installation, or construction of the Senior Center shall thereby result to the Participant in the exercise of its good faith and reasonable judgment (unless the City and Agency extend the dates herein for design, installation, construction and completion of the Senior Center,) then, upon written instrument approved by the City Council and executed by Participant, which Participant agrees to execute upon its good faith, reasonable determination that there will be no delay in the design, installation or construction of the Senior Center, the City and Agency shall have the right to increase the Maximum Senior Center Cost by any such allocated additional funds of the City or Agency or increased Park In -Lieu Fee greater than $21,850,000, up to a maximum of 87% of the actual Park In -Lieu Fee. In furtherance of the foregoing, this Agreement shall be interpreted in order to give effect to the Maximum Senior Center Cost hereby created. b. Participant shall prepare and submit to the City and Agency for written comment and discussion a proforma proposed Project Budget on or before December 1, 2007. City and Agency shall give written comment and/or approve such proforma budget within thirty 8 06476i4986 (30) days following submission thereof by Participant. shall submit a Project Budget within 90 days of the date of final plan approval of the Senior Center and thereafter may submit from time to time a revised Project Budget, which shall be subject to the review and approval of the City and Agency within thirty (30) days following submission thereof by Participant. City and Agency as used in this subsection shall, at the option of the Agency Executive Director and City Administrator, mean the Agency Board and City Council. 7. Participant agrees that the development of the Senior Center is subject to and conditioned upon approval by a Measure C Vote and project plan approval for the development of the Senior Center. 8. Notwithstanding anything to the contrary contained herein, in the event: (a) a Measure C Vote does not approve development of the Senior Center prior to December 1, 2006, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than by the recordation of Final Tract Map No. 16338; or (b) the City Council does not authorize project plan approval for the development of the Senior Center by December 1, 2007 (subject to one extension of no more than 4 months provided such extension is in a writing signed by all parties hereto), Participant shall be relieved of its obligation to design, develop, install and construct the Senior. Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than December 31, 2007 (as may be extended by any such extension); or (c ) Participant does not in good faith obtain a building permit for the Senior Center by July 1, 2008, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than July 31, 2008; or (d) Participant does not in good faith complete construction of the Senior Center and dedicate the Senior Center to the City by July 1, 2009, Participant shall be relieved of its obligation to design, develop, install and construct the Senior Center as set forth in this Section and shall instead pay the entire Park In -Lieu Fee to the City in immediately available funds no later than July 31, 2009. Notwithstanding the foregoing or Section 610.1, if in accordance with the foregoing the Participant shall be released in whole or in part of its obligation to design, develop, install and/or construct the Senior Center and instead shall be obligated to pay the entire Park In Lieu Fee, or if in accordance with Section 610.1 the Participant shall be obligated for the entire Park In Lieu Fee, then and in either such event the Participant shall be entitled to a credit against the Park In Lieu Fee to the extent the Participant shall have expended funds or incurred any expenses in furtherance of the design, development, installation and/or construction of the Senior Center, which funds and expenses shall be substantiated in a Certified Cost Statement and contained in a City and Agency approved proforma or Project Budget. As a condition to Participant being entitled to any credit against the Park In Lieu Fee as provided herein, Participant shall first assign to City all assignable third party work product represented by such credit. 9 06476/4986 ARTICLE 400. REGIONAL TREATMENT SYSTEM Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except any individual residential owners of the Residential Units), that Participant shall, develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City at Participant's own cost, expense, and liability (except as expressly provided below in Article 800), the Regional Treatment System as required by and within the limitations set forth in Condition of Approval No. 5.b. of Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12. Participant agrees that the Regional Treatment System shall include, without limitation, all utilities, and off -site improvements, . Participant agrees that Participant shall design, develop, install and construct the Regional Treatment System in accordance with City approved plans and specifications and subject to the written approval of the City's Director of Public Works, and shall complete construction within twelve (12) months of the date of approval of such plans and specifications. Participant agrees that development, design, installation and construction of the Regional Treatment System shall include the preparation of all plans and specifications, processing and completing all environmental review, entitlements and plan checks, and development, design, development, construction, and installation in accordance with City approved plans and specifications and development, design, construction, and installation shall be subject to the written approval of the City's Director of Public Works. Participant agrees that the Regional System Treatment shall be subject to the complete reasonable satisfaction of the City's Director of Public Works and the Agency Executive Director or designee. Participant agrees that Participant shall provide all equipment (including operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Regional System Treatment. ARTICLE 500. PACIFIC VIEW AVENUE EXTENSION § 501 Pacific View Avenue Extension Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, that Participant shall, within the time limitation(s) set forth in the Conditions of Approval, develop, design, install and construct, or cause to be developed, designed, installed and constructed, and dedicate to the City at Participant's own cost, expense, and liability (except as expressly provided below in Article 800), the Pacific View Avenue Extension. Participant agrees that the Pacific View Avenue Extension shall include, without limitation, pavement, curb and gutter, sidewalk, landscaping, street lights and conduits, sewer and water lines and storm drains. Participant agrees that Participant shall design, develop, install and construct the Pacific View Avenue Extension in accordance with City approved plans and specifications. 10 06A76/4986 Participant agrees that development, design, installation and construction of the Pacific View Avenue Extension shall include the preparation of all plans and specifications and processing and completing all environmental review, entitlements and plan checks, subject to the written approval of the City's Director of Public Works and the Agency Executive Director or designee. Participant agrees that the Pacific View Avenue Extension shall be subject to the complete reasonable satisfaction of . the City's Director -of Public Works and the Agency Executive Director or designee. Participant agrees that Participant shall provide all equipment (including operations and maintenance manuals), tools, materials, labor, tests, design work, engineering services, and the payment of monies, or any combination thereof, necessary or required to fully and adequately complete the Pacific View Avenue Extension. § 502 Termination of Existing Site Agreement City and Participant's predecessor -in -interest to the Site, Huntington Beach Company, entered into that certain agreement entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986 recorded on May 29, 1987 as Document No. 87-303610 ("Existing Site Agreement"). Upon the Effective Date of this Agreement, the Existing Site Agreement shall be automatically terminated, canceled and voided in its entirety and all covenants, terms and conditions _ set forth in the Existing Site Agreement shall be forever relinquished, released and discharged without need of further act or document. Within a reasonable period of time following the City's execution of this Agreement but in no event later than five (5) calendar days following the Effective Date of this Agreement, Participant agrees to execute in recordable form the Memorandum of Termination, attached hereto as Attachment No. 6 and incorporated herein by reference. The Memorandum of Termination shall be recorded against the Site. City and Participant each understand that by their entry into this Agreement they are releasing the other party from all claims, demands, liabilities, and causes of action which are or which could be founded upon their respective rights and obligations under the Existing Site Agreement. City and Participant further understand that such release and waiver applies to claims, demands, obligations and liabilities both known and unknown, foreseeable or unforeseeable, current, retrospective or prospective. City and Participant each declare that it is their intent that any and all such claims, demands, obligations and liabilities of parties, whether known or unknown, foreseeable or unforeseeable, current, retrospective or prospective, be fully discharged, released and excused. City and Participant have been advised by their legal counsel concerning the content and effect of California Civil Code Section 1542, which provides: A general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release, which if known by him must have materially effected his settlement with the debtor. it 06476/4986 City and Participant each hereby waive the benefits of Civil Code Section 1542 and all other state or federal statutes or judicial decisions of similar affect. City and Participant each hereby respectively represent and warrant to the other that they have not assigned, transferred, conveyed, or hypothecated any of their respective rights, remedies, and obligations under the Existing Site Agreement. City and Participant hereto shall defend and indemnify and hold the other party harmless from any and all alleged damages, liabilities, costs and expenses (including reasonably reasonable attorneys' fees and costs of litigation) incurred by the other as a result of the intentionally or unintentionally falsity of any portion of the foregoing representation and warranty. ARTICLE 600. DEVELOPMENT AND CONSTRUCTION § 601 Permits/Entitlement Plan Amendment Prior to commencing any work on the Senior Center, Regional Treatment System, or Pacific View Avenue Extension, Participant shall, at its sole cost, expense, and liability, obtain all necessary permits and licenses and give all necessary and incidental notices required for the lawful construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and performance of Participant's obligations under this Agreement. Participant shall also file and process the Entitlement Plan Amendment application to provide for consistency of Tentative Tract Map No. 16338, Conditions No. 2b and 11 with the terms of this Agreement. Participant shall conduct the work in full compliance with the regulations, rules, and other requirements contained in any permit or license issued to Participant. § 602 Plans and Specifications The scope of work and all plans and specifications must meet the specifications and approvals of the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee. Participant is prohibited from commencing work on the Senior Center, Regional Treatment System or Pacific View Avenue Extension until all plans and specifications for the Senior Center, Regional Treatment System and Pacific View Avenue Extension have been submitted to and approved by the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee. Approval by the City's Community Services Director, Director of Public Works and the Agency Executive Director or designee shall not relieve Participant from ensuring that the Senior Center, Regional Treatment System and Pacific View Avenue Extension conform with all other requirements and standards set forth in this Agreement. § 603 Quality of Work; Compliance With Laws and Codes The construction plans and specifications for the Senior Center, Regional Treatment System and Pacific View Avenue Extension shall be prepared in accordance with all applicable federal, state and local laws, ordinances, regulations, codes, standards, and other requirements. The Senior Center, Regional Treatment System and Pacific View Avenue Extension shall all be 12 06476/4986 completed in accordance with all approved maps, plans, specifications, standard drawings, and special amendments thereto on file with City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements applicable at the time work is actually commenced, including, without limitation, the requirement to pay state prevailing wages as set forth in more detail in Section 618, below. § 604 Standard of Performance Participant and its contractors, if any, shall perform all work required to construct the Senior Center, Regional Treatment System and Pacific View Avenue Extension under this Agreement in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Participant represents and warrants that it or its contractors shall be skilled in the professional calling necessary to perform the work. Participant represents and warrants that all of its employees and contractors shall have sufficient skill and experience to perform the work assigned to them, and that they shall have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the work, and that such licenses, permits, qualifications and approvals shall be maintained throughout the term of this Agreement. § 605 Alterations to Senior Center, Regional Treatment System and Pacific View Avenue Extension The descriptions of the Senior Center, Regional Treatment System and Pacific View Avenue Extension herein are understood to be only a general designation of the work and improvements to be done, and not a binding description thereof. All work shall be completed and improvements made as shown on City -approved plans and specifications and shall be approved in writing by the City's Director of Community Services and Director of Public Works and the Agency Executive Director or designee. If during the course of construction and installation of the Senior Center, Regional Treatment System or Pacific View Avenue Extension it is determined by the City's Community Services Director, the Director of Public Works or the Agency Executive Director or designee that the public interest requires alterations in the Senior Center, Regional Treatment System or Pacific View Avenue Extension, Participant shall undertake such design and construction changes as may be required by the City's Community Services Director, the Director of Public Works or the Agency Executive Director or designee. § 606 Maintenance of Senior. Center, Regional Treatment System and Pacific View Avenue Extension a. Senior Center and Regional Treatment System. Neither the City nor Agency shall be responsible or liable for the maintenance or care of the Senior Center or the City's six -sevenths (6/7) share of maintenance of the Regional Treatment System until the City approves and accepts the Senior Center or the Regional Treatment System, as applicable. Neither City nor Agency shall exercise any control over the Senior Center or the Regional Treatment System until accepted. Any use by any person of the 13 06A7614986 Senior Center or the Regional Treatment System or any portion thereof, shall be at the sole and exclusive risk of the Participant at all times prior to City's acceptance of the Senior Center and the Regional Treatment System, as applicable, except for any damages or injury resulting from the City's or Agency's willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or Agency. Participant shall maintain the Senior Center and the Regional Treatment System in a state of good repair until they are completed by Participant and approved and accepted by City, and until the security for the performance of this Agreement is released. Maintenance shall include, but shall not be limited to, to the extent applicable, repair of pavement, curbs, gutters, storm drains, street lighting, decorative paving, sidewalks, parkways, water mains, and sewers;. maintaining all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee; removal of debris from sewers and storm drains; and sweeping, repairing, and maintaining in good and safe condition all streets and street improvements. It shall be Participant's responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City or Agency. If Participant fails to properly prosecute its maintenance obligation under this Agreement, City or Agency may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Participant and its surety, if any, under this Agreement. Neither City nor Agency shall be responsible or liable for any damages or injury of any nature in anyway related to or caused by the Senior Center or the Regional Treatment System or their condition prior to acceptance, except for any damages or injury resulting from the City's or Agency's willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or Agency provided that the City and Agency agree to act in a reasonable and timely manner in processing any request by Participant for acceptance of the Senior Center and Regional Treatment System. Participant acknowledges and agrees that pursuant to Conditional Use Permit No. 02-20 with Special Permits/Coastal Development Permit No. 02-12 Condition 513, Participant and/or the Master Association for the Project is obligated to provide one -seventh (1/7) of the on -going annual operation and maintenance cost for the Regional Treatment System. b. Pacific View Avenue Extension. Participant further acknowledges and agrees that, pursuant to Conditions of Approval No. 2(a)(4) and 3c of Tentative Tract Map No. 16338, Participant shall maintain the Pacific View Avenue Extension at its sole cost and expense. Neither the City nor the Agency shall have any liability, obligation or responsibility to maintain any portion of the Pacific View Avenue Extension. Maintenance shall include, but shall not be limited to, repair of pavement, curbs, gutters, storm drains, street lighting, decorative paving, sidewalks, medians, landscaping including parkways; maintaining all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Director of Public Works and the Agency Executive Director or designee; and sweeping, repairing, and maintaining in good and safe condition all streets and street improvements. It shall be Participant's responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City or Agency. If Participant fails to properly prosecute its maintenance obligation under 14 06-476/4986 this Agreement, City or Agency may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Participant. Neither City nor Agency shall be responsible or liable for any damages or injury of any nature in any way related to or caused by the Pacific View Avenue Extension, except for any damages or injury resulting from the City's or Agency's, as applicable, willful misconduct or gross negligence in connection with any maintenance work undertaken by the City or Agency, as applicable, as provided. in this Section 606.b (except for damages or injury relating in any way to inverse condemnation and subject to any protections provided or afforded to the City and Agency applicable law, rules and/or regulations, including, without limitation, the Government Tort Claims Act). § 607 Construction Schedule a. Senior Center. Participant agrees that Participant shall fully and adequately complete, or have completed, the Senior Center within twenty-four (24) months following commencement of construction as set forth in Section 305, above,. Participant agrees that completion of the Senior Center shall mean that the City has issued a final certificate of occupancy for all portions of the Senior Center, the City has accepted the entire Senior Center in accordance with the acceptance procedures described in Section 612, below, and Participant has designed, developed, installed and constructed the Senior Center in accordance with all of the terms and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). b. Regional Treatment System. Participant agrees that Participant shall fully and adequately complete, or have completed, the Regional Treatment System within twelve (12) months of the date of approval of the approved plans and specifications but subject in all respects to Force Majeure Delays. Participant agrees that completion of the Regional Treatment System shall mean that the City has accepted the entire Regional Treatment System in accordance with the acceptance procedures described in Section 612, below, and Participant has designed, developed, installed and constructed the Regional Treatment System in accordance with all of the terms and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). C. Pacific View Avenue Extension. Participant agrees that Participant shall fully and adequately complete, or have completed, the Pacific View Avenue Extension within the time limitation(s) set forth in the Conditions of Approval. Participant agrees that completion of the Pacific View Avenue Extension shall mean that the City has accepted the entire Pacific View Avenue Extension in accordance with the acceptance procedures described in Section 612, below, and Participant has designed, developed, installed and constructed the Pacific View Avenue Extension in accordance with all of the terms and conditions of this Agreement and the Conditions of Approval (as may be modified by the Entitlement Plan Amendment). § 608 Fees and Charges Participant shall, at its sole cost, expense, and liability, pay all fees and taxes arising out of construction of the Senior Center, Regional Treatment System and Pacific View Avenue 15 06A76/4986 Extension, including, but not limited to, all plan check, design review, engineering, inspection, and other service fees. § 609 City and Agency Inspection of Senior Center, Regional Treatment System and Pacific View Avenue Extension Participant shall, at its sole cost, expense, and liability, and at all times during construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, maintain reasonable and safe facilities and provide safe access (subject to customary safety procedures adopted by Participant or its contractors so long as such customary safety procedures have first been approved in writing by both the City's Director of Public Works and the City's Director of Community Services in their respective reasonable discretion) for inspection by City and Agency of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and areas where construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension is occurring or will occur. § 610 Default; Notice; Remedies. 1. Notice. If Participant neglects, refuses, or fails to fulfill or timely complete any obligation, term, or condition of Article 300, 400, 500, or 600 or if there is a material violation by Participant of any federal, state, or local law, ordinance, regulation, code, standard, or other requirement relating to the development, design, construction or installation of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, either City or Agency may at any time thereafter declare Participant to be in default or violation of Articles 300, 400, 500 or 600 and make written demand upon Participant or its surety, if any, to immediately remedy the default or violation ("Public Improvement Notice"). Participant shall substantially commence the work required to remedy the default or violation within five (5) days of the Public Improvement Notice. If the default or violation constitutes an immediate threat to the public health, safety, or welfare, either City or Agency may provide the Public Improvement Notice verbally, and Participant shall substantially commence the required work within twenty-four (24) hours thereof Immediately upon City's or Agency's issuance of the Public Improvement Notice with respect to the Senior Center, at the option of Agency and City, subject to Section 305.6, Participant and its surety, if any, shall be liable to City and Agency for the entire Park -In -Lieu Fee and all other administrative costs expenses as provided for in Section 611, below. 2. Failure to Remedy; City or Agency Action. If the work required to remedy the noticed default or violation is not diligently prosecuted to a completion within the time frame contained in the Public Improvement Notice, either City or Agency may complete all remaining work, arrange for the completion of all remaining work, and/or conduct such remedial activity as in its sole and absolute discretion it believes is required to remedy the default or violation. All such work or remedial activity shall be at the sole and absolute cost, expense, and liability of Participant and its surety, if any, without the necessity of giving any further notice to Participant or surety, if any. City's and Agency's right to take such actions shall in no way be limited by the fact that Participant or its surety, if any, may have constructed any of the required Senior Center, Regional Treatment System or Pacific View Avenue Extension at the time of City's or Agency's 16 06-476/4986 demand for performance. In the event City or Agency elects to complete or arrange for completion of the remaining work and improvements, City or Agency may require all work by Participant or its surety, if any, to cease in order to allow adequate coordination by City or Agency. 3. Other Remedies. No action by .City or Agency pursuant to this Section or any other Section shall prohibit City or Agency from exercising any other right or pursuing any other legal or equitable remedy available under this Agreement or any federal, state, or local law. City and Agency may exercise their rights and remedies independently or cumulatively, and City and Agency may pursue inconsistent remedies. City and/or Agency may institute an action(s) for damages, injunctive relief, or specific performance. § 611 Administrative Costs If Participant fails to develop, design, construct, install or dedicate all or any part of the Senior Center, Regional Treatment System or Pacific View Avenue Extension within the time required by this Agreement, or if Participant fails to comply with any other obligation contained herein, Participant and its surety, if any, shall be jointly and severally liable to City and Agency for all administrative expenses, fees, and costs, including reasonable attorneys' fees and costs, incurred in obtaining compliance with this Agreement or in processing any legal action or for any other remedies permitted by law. § 612 Acceptance of Improvements; As -Built or Record Drawings If the Senior Center, Regional Treatment System and Pacific View Avenue Extension are properly completed by Participant and approved by the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee, and if the Senior Center, Regional Treatment System and Pacific View Avenue Extension comply with all applicable federal, state and local laws, ordinances, regulations, codes, standards, and other requirements, the City Council shall be authorized to and shall timely accept the Senior Center, Regional Treatment System and Pacific View Avenue Extension. The City Council may, in its sole and absolute discretion, accept fully completed portions of the Senior Center, Regional Treatment System and Pacific View Avenue Extension prior to such time as all of the entire Senior Center, Regional Treatment System and Pacific View Avenue Extension are complete, which shall not release or modify Participant's obligation to complete the remainder of the Senior Center, Regional Treatment System and Pacific View Avenue Extension within the time required by this Agreement. Upon the total acceptance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension by City, Participant shall file with the Recorder's Office of the County of Orange a notice of completion for the accepted Senior Center, Regional Treatment System and Pacific View Avenue Extension in accordance with California Civil Code section 3093, at which time the accepted Senior Center, Regional Treatment System and Pacific View Avenue Extension shall become the sole and exclusive property of City without payment therefor. Notwithstanding the foregoing, City may not accept the Senior Center, Regional Treatment System and Pacific View Avenue Extension unless and until Participant provides the guarantee and warranty security described below in Section 614 and one (1) set of "as -built" or 17 06476/4986 record drawings or plans to the City Engineer for the Senior Center, Regional Treatment System and Pacific View Avenue Extension. The drawings shall be certified and shall reflect the condition of the Senior Center, Regional Treatment System and Pacific View Avenue Extension as constructed, with all changes incorporated therein. - § 613 Warranty and Guarantee . Participant hereby warrants and guarantees the Senior Center, Regional Treatment System and Pacific View Avenue Extension against any defective work or labor done, or defective materials furnished in the performance of this Agreement, including the maintenance of all landscaping in a vigorous and thriving condition reasonably acceptable to the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee, for a period of one (1) year following completion of the work and acceptance by City ("Warranty"). During the Warranty, Participant shall repair, replace, or reconstruct any defective portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension or other portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension which is unsatisfactory in accordance with the terms of this Agreement, in accordance with the current ordinances, resolutions, regulations, codes, standards, or other requirements of City, and to the reasonable approval of the City's Community Services Director, the Director of Public Works and the Agency Executive Director or designee. All repairs, replacements, or reconstruction during the Warranty shall be at the sole cost, expense, and liability of Participant and its surety, if any. As to any portion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension which has been repaired, replaced, or reconstructed during the Warranty, Participant and its surety, if any, hereby agree to extend the Warranty for an additional one (1) year period following City's acceptance of the repaired, replaced, or reconstructed portion of the Senior Center, Regional Treatment System or Pacific View Avenue Extension but only as to the items repaired, replaced or reconstructed. Nothing herein shall relieve Participant from any other liability it may have under federal, state, or local law to repair, replace, or reconstruct any portion of the Senior Center, Regional Treatment System or Pacific View Avenue Extension following expiration of the Warranty or any extension thereof. Participant's warranty obligation under this Section shall survive the expiration or termination of this Agreement. § 614 Security; Surety Bonds Prior to City's and Agency's execution of this Agreement (except for the guarantee and warranty bond which shall be provided to the City and Agency as a condition precedent to the City's acceptance of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, as applicable), Participant shall provide City and Agency with surety bonds in the amounts and under the terms set forth below ("Security"). The amount of the Security shall be based on a cost estimate prepared by Participant and approved by the City Engineer of the actual cost to construct the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including the replacement cost for all landscaping ("Estimated Costs"). If City determines, in its sole and absolute discretion, that the Estimated Costs have changed, Participant shall adjust the Security in the amount requested by City. Participant's compliance with this 18 06A76/4986 provision shall in no way limit or modify Participant's indemnification obligations provided herein. 1. Performance Bond and Guarantee and Warranty Bond. To guarantee the faithful performance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and all the provisions .of this Agreement, to protect City and Agency if Participant is in default hereunder as to Participant's obligations under Articles 300, 400, 500 or 600, and to secure Participant's one-year guarantee and warranty of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including the maintenance of all landscaping in a vigorous and thriving condition, Participant has provided City a performance bond and a guarantee and warranty bond for the Pacific View Avenue Extension (which bonds are on file with the City Engineer), Participant shall provide City and Agency a faithful performance bond in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Regional Treatment System, and a guarantee and warranty bond in the amount of One Million Five Hundred Thousand Dollars ($1,500,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Regional Treatment System, and Participant shall provide City and Agency a faithful performance bond in the amount of Nineteen Million Dollars ($19,000,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Senior Center, and a guarantee and warranty bond in the amount of Nineteen Million Dollars ($19,000,000), which sum is not less than one hundred percent (100%) of the Estimated Costs for the Senior Center. All security provided under this Section shall be released at the end of the Warranty period, provided that Participant is not in default under any provision of this Agreement. 2. Labor & Material Bond. To secure payment to the contractors, subcontractors, laborers, material men, and other persons furnishing labor, materials, or equipment for performance of the Senior Center, Regional Treatment System and Pacific View Avenue Extension and this Agreement, Participant has provided City a labor and materials bond for the Pacific View Avenue Extension (which bond is on file with the City Engineer), Participant shall provide City and Agency a labor and materials bond in the amount of Seven Hundred Fifty Thousand Dollars ($750,000), which sum is not less than fifty percent (50%) of the Estimated Costs for the Regional Treatment System, and Participant shall provide City and Agency a labor and materials bond in the amount of Nine Million Five Hundred Thousand Dollars ($9,500,000), which sum is not less than fifty percent (50%) of the Estimated Costs for the Senior Center. The security provided under this Section may be released by the City Council and Agency, in their sole and absolute discretion, by written authorization of the City Engineer after six (6) months from the date City accepts the final Senior Center, Regional Treatment System and Pacific View Avenue Extension. The amount of such security shall be reduced by the total of all stop notice or mechanic's lien claims of which City is aware, plus an amount equal to twenty percent (20%) of such claims for reimbursement of City's and Agency's anticipated administrative and legal expenses arising out of such claims. 3. Additional Requirements. The surety for any surety bonds provided as Security shall have a current A.M. Best's rating of no less than A:VIII, shall be licensed to do business in California, and shall be satisfactory to City and Agency. As part of the obligation secured by the 19 06476/4986 Security and in addition to the face amount of the Security, the Participant or its surety shall secure the costs and reasonable expenses and fees, including reasonable attorneys' fees and costs, incurred by City or Agency in enforcing the obligations of Participant under this Agreement. The Participant and its surety stipulate and agree that no change, extension of time, alteration, or addition to the terms of this Agreement, the Senior Center, Regional Treatment System or Pacific View Avenue Extension, or the plans and specifications for the Senior Center, Regional Treatment System or Pacific View Avenue Extension shall in any way affect its obligation on the Security. . 4. Evidence and Incorporation of Security. Evidence of the Security shall be provided on the forms set forth in Attachment No. 7 and incorporated by this reference, unless other forms are deemed acceptable by the City Engineer, the City Attorney, and Agency General Counsel and when such forms are completed to the reasonable satisfaction of City and Agency, the forms and evidence of the Security shall be kept on file with the City Engineer. § 615 Indemnification Participant hereby agrees to protect, defend, indemnify and hold harmless the Agency, the City, their respective officers, elected or appointed officials, employees, agents and volunteers from and against any and all claims, damages, losses, expenses, judgments, demands and defense costs (including, without limitation, costs and fees of litigation of every nature or liability of any kind or nature) arising out of or in connection with Participant's (and Participant's contractors and subcontractors (if any)) negligent performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement by Participant, its officers, agents or employees except such loss or damage which was caused by the gross negligence or willful misconduct of the Agency or City. Participant will conduct all defense at its sole cost and expense and the Agency shall reasonably approve selection of Participant's counsel. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as limitation upon the amount of indemnification to be provided by Participant. § 616 Insurance Participant agrees to provide insurance in accordance with the requirements set forth in this Section. Participant shall, at all times, maintain good and sufficient insurance as required by City and Agency and reasonably acceptable to the City Risk Manager, City Attorney and Agency General Counsel. Such insurance may include, but is not limited to the following: 1. Types; Amounts. Participant shall procure and maintain, and shall require its contractors to procure and maintain, during construction of the Senior Center, Regional Treatment System and Pacific View Avenue Extension pursuant to this Agreement, insurance of the types and in the amounts described below ("Required Insurance"). If any of the Required Insurance contains a general aggregate limit, such insurance shall apply separately to this Agreement or be no less than two times the specified occurrence limit. 20 06476/4986 a. General Liability. Participant and its contractors shall procure and maintain occurrence version general liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence for bodily injury, personal injury, and property damage. b. Business Automobile Liability. Participant and its contractors shall procure and maintain business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for the ownership, operation, maintenance, use, loading, or unloading of any vehicle owned, leased, hired, or borrowed by the insured or for which the insured is responsible. C. Workers' Compensation. Participant and its contractors shall procure and maintain workers' compensation insurance with limits as required by the Labor Code of the State of California and employers' liability insurance with limits of not less than $1,000,000 per occurrence, at all times during which an insured retains employees. d. Professional Liability. For any consultant or other professional who will engineer or design the Senior Center, Regional Treatment System or Pacific View Avenue Extension, liability insurance for errors and omissions with limits not less than $1,000,000 per occurrence, shall be procured and maintained for a period of five (5) years following completion of the Senior Center, Regional Treatment System and Pacific View Avenue Extension. Such insurance shall be endorsed to include contractual liability. 2. Deductibles. Any deductibles or self -insured retentions must be declared to and approved by City and Agency. At the option of City and Agency, either: (a) the insurer shall reduce or eliminate such deductibles or self -insured retentions as respects City, Agency and their respective elected officials, officers, employees, agents, contractors and consultants; or (b) Participant and its contractors shall provide a financial guarantee satisfactory to City and Agency guaranteeing payment of losses and related investigation costs, claims, and administrative and defense expenses. 3. Additional Insured; Separation of Insureds. The Required Insurance shall name City, Agency and their respective elected officials, officers, employees, agents, contractors and consultants as additional insureds with respect to work performed by or on behalf of Participant or its contractors, including materials, parts, or equipment furnished in connection therewith. The Required Insurance shall contain standard separation of insureds provisions, and shall contain no special limitations on the scope of its protection to City, Agency or their respective elected officials, officers, employees, agents, contractors and consultants. 4. Primary Insurance; Waiver of Subrogation._ The Required Insurance shall be primary with respect to any insurance or self-insurance programs covering City, Agency and their, respective elected officials, officers, employees, agents, contractors and consultants. All policies for the Required Insurance shall provide that the insurance company waives all right of recovery by way of subrogation against City and Agency in connection with any damage or harm covered by such policy. 21 06-476/4986 5. Verification. Participant and its contractors shall furnish City and Agency with original endorsements effecting coverage for the Required Insurance. The endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. All endorsements must be received and approved by City and Agency before work pursuant to this Agreement can begin. City and Agency each reserve the right to require complete, certified copies of all required insurance policies, at any time. 6. Term; Cancellation Notice. Participant and its contractors shall maintain the Required Insurance for the term of this Agreement and shall replace any certificate, policy, or endorsement which will expire prior to that date. All policies shall be endorsed to provide that the Required Insurance shall not be suspended, voided, reduced, canceled, or allowed to expire except on thirty (30) days' prior written notice to City and Agency. 7. Insurer Rating. Unless approved in writing by City and Agency, all Required Insurance shall placed with insurers licensed to do business in the State of California and with a current A.M. Best rating of at least A:VIII. § 617 Direct Payment Permit Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, that Participant shall apply for a "Direct Payment Permit" from the California State Board of Equalization and Participant shall from and after the Effective Date of this Agreement designate City as the "point of sale" for all taxable sales and lease transactions occurring on the Site or any property on which development is contemplated or required under this Agreement and the development and operation of any and all improvements thereon, including, but not limited to, the purchase of construction goods and materials, in all reports to the California State Board of Equalization in accordance with the Bradley -Burns Uniform Sales and Use Tax Law (Revenue and Taxation Code 72000 et seq.), as it may be amended or substituted from time to time, and on sales tax returns to the State of California for all taxable sales occurring on the Site or any property on which development is contemplated or required under this Agreement and lease transactions occurring on the Site or any property on which development is contemplated or required under this Agreement and the development and operation of any and all improvements thereon, including, but not limited to, the purchase of construction goods and materials. § 618 Prevailing Wages a. Participant represents and warrants that it is aware of the requirements of California Labor Code Section 1770 et seq., which requires the payment of prevailing wage rates and the performance of other requirements on public works contracts. Participant agrees to comply with such requirements and to pay such prevailing rates to each worker needed to carry out the Senior Center, Regional Treatment System and Pacific View Avenue Extension and further agrees to comply with the penalty provisions of Section 1775 of the California Labor Code in the event of its failure to pay prevailing rates. Without limiting the generality of the 22 06A76/4986 foregoing, Participant agrees that: (1) Participant shall have the obligation to provide any and all disclosures, representations, statements, rebidding, and/or identifications which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and (2) Participant shall have the obligation to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. Participant agrees to indemnify, protect, defend and hold harmless the Agency, City and their respective officers, employees, contractors and agents, with counsel reasonably acceptable to Agency and City, from and against any and all loss, liability, damage, claim, cost, expense, and/or "increased costs" (including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the design, development, installation and/or construction of the Senior Center, Regional Treatment System or Pacific View Avenue Extension, including, without limitation, any and all public works (as defined by applicable law), results or arises in any way from any of the following: (a) the noncompliance by Participant of any applicable local, state and/or federal law, including, without limitation, any applicable federal and/or state labor laws, including, without limitation, California Labor Code Section 1770 et seq. (including, without limitation, if applicable, the requirement to pay state prevailing wages); (b) the implementation of Chapter 804, Statutes of 2003; (c) the implementation of Sections 1726 and 1781 of the Labor Code, as the same may be enacted, adopted or amended from time to time, or any other similar law; (d) failure by Participant to provide any required disclosure representation, statement, rebidding and/or identification which may be required by Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law; and/or (e) failure by Participant to provide and maintain any and all bonds to secure the payment of contractors (including the payment of wages to workers performing any public work) which may be required by the Civil Code, Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time, or any other provision of law. The City and Agency hereby represent to the Participant and its contractor(s) for the Senior Center, Regional Treatment System and Pacific View Avenue Extension that the work to be covered by the bid or contract is a "public work," as defined in Section 1720 of the Labor Code. It is agreed by the parties that, in connection with the design, development, installation and construction (as defined by applicable law) of the Senior Center, Regional Treatment System and Pacific View Avenue Extension, including, without limitation, any public work (as defined by applicable law), if any, Participant shall bear all risks of payment or non-payment of state prevailing wages and/or the implementation of Chapter 804, Statutes of 2003 and/or Labor Code Sections 1726 and 1781, as the same may be enacted, adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall have the meaning ascribed to it in Labor Code Section 1781, as the same may be enacted, adopted or amended from time to time. The foregoing indemnity shall survive any termination of this Agreement. b. Participant agrees to keep, or caused to be kept by each contractor and subcontractor, accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week for each journeyman, apprentice, worker, or other employee employed in connection with the Senior Center, Regional 23 06476/4986 Treatment System and Pacific View Avenue Extension, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed in connection with the Senior Center, Regional Treatment System and Pacific View Avenue Extension. Each payroll record shall contain or be verified by a written declaration that it is made under penalty of perjury, stating both of the following: (1) The information contained in the payroll record is true and correct. (2) The employer has complied with the requirements of Sections 1771, 1811, and 1815 of the Labor Code for any work performed by his or her employees on the Senior Center, Regional Treatment System or Pacific View Avenue Extension. C. The payroll records enumerated under subsection b., above, shall be certified and shall be available for inspection, auditing and/or copying by the City either, at the option of the City, at all reasonable hours at the principal office of Participant as set forth above, or furnished to the City within five (5) days following written request therefor to Participant. Such records shall be kept for at least three (3) years after the end of the year to which they apply. Any copy of records made available for inspection or furnished upon request to the City may be marked or obliterated to prevent disclosure of an individual's name, address, and social security number. The name and address of the contractor awarded the contract or the subcontractor performing the contract shall not be marked or obliterated. d. Participant agrees that Participant shall pay all expenses incurred in connection with any inspection, audit or copying of the payroll records enumerated under subsection b., above. § 619 Nondiscrimination during Construction Participant for itself and its successors and assigns agrees that in the construction of the improvements provided for in this Agreement, Participant will not discriminate against any employee or applicant for employment because of sex, marital status, race, color, creed, religion, national origin or ancestry. § 620 Meaning of "Dedicate" The term "dedicate," as used in this Agreement, means to acquire all necessary land or rights -of -way (except as to the Senior Center for which Participant shall have no obligation to acquire any land or right-of-way) and to construct thereon the public improvements required by this Agreement, and thereafter to offer to convey such land/rights-of-way (except as to the Senior Center) and improvements to the City at no cost to the City. The Participant shall offer the land/rights-of-way and public improvements at the time required by the City Engineer in the exercise of his or her reasonable discretion. 24 06476/4986 The satisfaction of the Participant's obligations with respect to the dedication of the public improvements described in this Agreement shall be contingent upon the City Council's acceptance of such improvements, which acceptance shall occur in a manner consistent with the City's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. § 621 Not a Statutory Development Agreement This Agreement is not a statutory development agreement as described by Government Code Section 65864 et seq. This Agreement confers no vested entitlements with respect to the development of the Project. This Agreement does not limit, in any way whatsoever, the City's authority to lawfully increase impact fees, change land use regulations, or otherwise lawfully exercise all powers available to the City pursuant to its police power, statutes, and judicial decision. Without limiting the generality of the foregoing paragraph, if the City at any time increases its impact fees, and such increases can otherwise be lawfully imposed against the Project, then the Participant shall pay the increased impact fees. If the City increases an impact fee for which the Participant is satisfying its obligation by the construction and dedication of certain public improvements, and such increase results in the value (as established by the applicable fee program) of the improvements being less than the Participant's increased impact fee obligation for the Project, then Participant shall pay the amount of the difference between the improvement's value and the increased impact fee obligation for the Project. ARTICLE 700. USE OF THE SITE § 701 Uses Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof (except as expressly provided below in subsection 4.), that Participant and/or such successors and assigns shall: 1. Maintain, repair and operate the Site and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Site and all such improvements to be maintained, in a first quality condition, free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, the Pacific City Master Plan, the City of Huntington Beach Municipal Code, and the following: a. All improvements on the Site shall be maintained in good, first quality condition in accordance with the custom and practice generally applicable to comparable developments in Orange County, and in conformance and compliance with all plans, drawings and related documents approved by the City and Agency pursuant to this Agreement, all conditions of approval of land use entitlements adopted by the City or the Planning Commission, including painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline, including medians. 25 06-476/4986 b. Notwithstanding anything to the contrary contained herein, the Pacific View Avenue Extension shall be maintained in accordance with that certain Maintenance License Agreement to be entered into by Participant in accordance with Condition of Approval No. 3C of Tentative Tract Map No. 16338 ("Maintenance License Agreement"). To the extent of a conflict between the provisions of this Agreement and the Maintenance License Agreement, the Maintenance License Agreement shall control. Notwithstanding anything to the contrary contained herein, the Regional Treatment System shall be maintained pursuant to and in accordance with CUP Condition of Approval 5(b), and in the event of a conflict between the provisions of this Agreement and CUP Conditions of Approval 5(b), the CUP conditions shall govern. C. Landscape maintenance shall include, without limitation, watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain and keep the original designed theme and material selection in a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials with, at a minimum, the originally approved sizes; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. d. Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed -free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping; clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of off -site in a lawful manner by maintenance workers. 2. If the Agency gives written notice to Participant or any successor that the maintenance or condition of the Site or any portion thereof or any improvements thereon does not comply with this Agreement and such notice describes the deficiencies, Participant shall correct, remedy or cure the deficiency within thirty (30) calendar days following the submission of such notice, unless the notice accurately states that the deficiency is an urgent matter relating to public health and safety in which case Participant shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time. In the event Participant fails to maintain the Site or any portion thereof or any improvements thereon in accordance with this Agreement and fails to cure any deficiencies within the applicable period described above, the Agency shall have, in addition to any other rights and remedies hereunder, the right to maintain the Site and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Participant shall be responsible for payment of all such costs incurred by the Agency and until paid such costs shall be a line on the Site pursuant to Civil Code Section 2881. 3. Pay when due all real estate taxes and the special taxes or assessments of the bond financing contemplated by Section 803 of this Agreement assessed and levied on the Site or any portion thereof or any improvements thereon or any interest therein and refrain from appealing, 26 06A76/4986 challenging or contesting in any manner the validity or amount of any ad valorem property tax assessment, encumbrance or lien; provided, however, that Participant may appeal, challenge or contest (a) any increase in assessment of the Site improperly assessed because of a purported change of ownership where no such change took place; and (b) any increase in assessment of the Site occurring by reason of a bona fide arms -length sale to the extent such increase in assessment results in an assessment in excess of the purchase price of such bona fide aims -length sale, provided, however, that no such appeal, challenge or contest shall be permitted to attempt to obtain or result in an assessment which is lower than that existing prior to such sale. 4. The obligations set forth above in subsections 1. and 2. shall not apply to any individual residential owners of the Residential Units but shall apply to any property owners or homeowners association(s) established or created in connection with the Residential Units, as well as to Participant, its successors, its assigns and every other successor in interest to the Site or any part thereof The obligations set forth above in subsection 3. shall not apply to any individual residential owners of the Residential Units but shall apply to Participant, its successors, its assigns and every other successor in interest to the Site or any part thereof. § 702 Obligation to Refrain from Discrimination Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part 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, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Site nor shall Participant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein agreed to be leased. § 703 Effect and Duration of Covenants All of the terms, provisions, promises, covenants and conditions established in this Agreement shall, without regard to technical classification and designation, be binding on Participant and any successor in interest to the Site, or any part thereof (except any individual residential owners of the Residential Units as expressly forth herein), for the benefit and in favor of City, Agency, and their respective successors and assigns. The terms, provisions, promises, covenants and conditions against discrimination set forth in Section 702 shall remain in effect in perpetuity. The terms, provisions, promises, covenants and conditions regarding uses of the Site set forth in Section 702 shall expire upon termination of effectiveness of the Merged Project Redevelopment Plan. This Agreement, and the terms, provisions, promises, covenants and conditions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns. All terms, provisions, promises, covenants and conditions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by Agency, its successors and assigns, and the City and its 27 06476/4986 successors and assigns, against Participant, its successors and assigns, to or of the Site or any portion thereof or any interest therein, and any party in possession or occupancy of the Site or portion thereof. ARTICLE 800. AGENCY OBLIGATION AND COMMUNITY FACILITIES DISTRICT BONDS § 801 Agency Obligation a. Subject to all of the terms and conditions of this Agreement (including, without limitation, the provisions of Section 802, below, limiting the Agency's payment obligation hereunder to a maximum amount and to particular sources of funds), the principal amount payable by the Agency to Participant under this Agreement ("Agency Obligation") shall be the sum of Five Million Five Hundred Thousand Dollars ($5,500,000) payable as follows: (1) One Million Five Hundred Thousand Dollars ($1,500,000) to Participant as reimbursement for a portion of the costs of the installing and constructing the Regional Treatment System ("Regional Treatment System Portion"); and (2) Four Million Dollars ($4,000,000) to Participant as reimbursement for a portion of the costs of the installing and constructing the Pacific View Avenue Extension ("Pacific View Avenue Extension Portion"). b. The Agency Obligation represents reimbursement to Participant for construction and installation of public infrastructure improvements and facilities. In no event shall Participant be entitled to payment or reimbursement from Agency for any "construction, alteration, demolition, or repair work" (as such phrase is defined in Labor Code Section 1720(a) other than for such public infrastructure improvements and facilities. § 802 Payment of Agency Obligation The Agency Obligation shall be a special and limited obligation payable to Participant solely from the sources of funds expressly identified in this Article. The Agency shall have no obligation to pay any amounts to Participant pursuant to this Article except as follows: 1. The following conditions precedent to each payment hereunder shall be satisfied: a. As to the Regional Treatment System Portion of the Agency Obligation, the Regional Treatment System Completion Date (defined below) shall have occurred, and as to the Pacific View Avenue Extension Portion of the Agency Obligation, the Pacific View Avenue Extension Completion Date (defined below) shall have occurred; b. Participant and any successors shall have cured any default as to any of their obligations under this Agreement or any related documents; C. The Commercial Portion Completion (defined below) shall have occurred; and W 06476/4986 d. If Community Facilities District bonds or similar instruments have been issued pursuant to Section 803 of this Agreement, Participant and any successors shall have paid all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of their other obligations in connection with such bonds or similar instruments. 2. a. Subject to all of the terms and conditions of this Article (including, without limitation, the satisfaction of all of the conditions precedent to each payment set forth above in subsection 1.), on or prior to September 30 of each year, beginning with the first September 30 which follows both the Commercial Portion Completion and the Regional Treatment System Completion Date, and continuing until the earliest to occur of the following: (a) the date the Regional Treatment System Portion of the Agency Obligation has been paid in full; or (b) the Tax Increment Termination Date (defined below), the Agency shall pay annually to Participant an amount equal to the Regional Treatment System Payment (defined below) solely from Net Tax Increment (defined below) received by the Agency during the prior Agency fiscal year (July 1-June 30). b. Subject to all of the terms and conditions of this Article (including, without limitation, the satisfaction of all of the conditions precedent to each payment set forth above in subsection 1.), on or prior to September 30 of each year, beginning with the first September 30 which follows both the Commercial Portion Completion and the Pacific View Avenue Extension Completion Date, and continuing until the earliest to occur of the following: (a) the date the Pacific View Avenue Extension Portion of the Agency Obligation has been paid in full; or (b) the Tax Increment Termination Date, the Agency shall pay annually to Participant an amount equal to the Pacific View Avenue Payment (defined below) solely from Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30). 3. Any amount of the Agency Obligation that remains unpaid on the Tax Increment Termination Date after application of all Net Tax Increment required to be paid to Participant by this Agreement, shall be forgiven by Participant and shall no longer be owed to Participant nor be considered an indebtedness of the Agency. 4. The Agency's obligations hereunder may be prepaid by the Agency, in whole or in part, at any time and from time to time without penalty. 5. The Agency Obligation shall constitute an indebtedness of the Agency for the purpose of carrying out the Redevelopment Plan. The indebtedness of the Agency created by this Agreement is and shall be subordinate to the Agency's existing bonded indebtedness and bond issuance(s) and the refunding or refinancing thereof and any future bonds the Agency may issue and the bonded indebtedness incurred in connection therewith. Bonded indebtedness includes any indebtedness incurred by the Agency for bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency. The Agency's obligation to pay a portion of Net Tax Increment to Participant under this Agreement is not and shall not be construed as a "pledge" of property tax revenues for purposes of Section 33671.5 of the Community Redevelopment Law. 29 06476/4986 6. Notwithstanding any other provision of this Agreement, the parties agree to the following limitations and conditions relating to the Agency's liability hereunder: a. In the event the Agency fails to make a payment when and as due, Participant's exclusive remedy shall be to sue only for payment of such payment; b. The Agency's monetary liability hereunder shall not be accelerated, but shall be limited to each payment installment if and as it falls due each year; and C. Participant agrees that Agency shall never be liable for any amount in excess of the amount of a payment due for any given fiscal year. 7. The Agency shall have the right at its option and as a non-exclusive remedy to set off amounts, if any, owed by Participant to the Agency against amounts payable by the Agency under this Article. 8. As used herein the following capitalized terms shall have the following meanings: a. "Commercial Portion Completion" shall mean that the Commercial Portion of the Project shall have been completed in compliance with all of the terms and conditions of this Agreement and all Conditions of Approval and the City shall have issued a final certificate of occupancy for one hundred percent (100%) of the Hotel portion of the Commercial Portion of the Project and ninety (90%) of the remaining retail space of the Commercial Portion of the Project, as determined by the Agency Executive Director or designee. b. "Net Tax Increment" shall mean the total ad valorem property tax increment revenue allocated to and received by the Agency pursuant to Section 33670(b) of the California Health and Safety Code, as said statute may be amended from time to time, by application of the one percent (1%) tax levied against real property as permitted by Article XIIIA of the California Constitution, in an amount attributable by the Orange County Assessor solely to the Commercial Portion of the Project, but specifically excluding therefrom all of the following: (a) a portion of tax increment revenues from the Commercial Portion of the Project equal to the percentage of such revenues from the Commercial Portion of the Project that is set aside pursuant to Sections 33334.2 et seq. of the California Health and Safety Code or any successor law; and (b) a portion of tax increment revenues from the Commercial Portion of the Project equal to the tax increment revenues from the Commercial Portion of the Project that the Agency is required to pay to any and all governmental entities pursuant to any provision of law, as amended from time to time, or pursuant to tax sharing/pass-through agreements; and (c) a portion of tax increment revenues from the Commercial Portion of the Project equal to such revenues in the Commercial Portion of the Project which the Agency may be required by the State of California to pay from time to time, including, for example, and without limiting the generality of the foregoing, any payments which the Agency may be required to pay to the Education Revenue Augmentation Fund pursuant to Section 33681 et seq. of the Community Redevelopment Law; and (d) the amount of any revenues received by the Agency which are 30 06A76/4986 attributable to any special taxes or assessments or voter -approved indebtedness; and (e) charges for County administrative charges, fees or costs equal to the percentage of such charges attributable to the Commercial Portion of the Project. C. "Pacific View Avenue Extension Completion Date" shall mean the date on which the City (in its regulatory capacity) and/or any other governmental entity with jurisdiction thereover has accepted as complete the Pacific View Avenue Extension, which acceptance shall occur in a manner consistent with the City's and other governmental entity's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. d. "Pacific View Avenue Payment" shall mean: a. If the Commercial Portion Completion occurs before the fifth (5th) anniversary of the Effective Date of this Agreement, the lesser of: (a) Two Hundred Sixty -Six Thousand Six Hundred and Sixty -Seven Dollars ($266,667); or (b) six and sixty seven one hundredths percent (6.67%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30); OR b. If the Commercial Portion Completion occurs after the fifth (5a') anniversary of the Effective Date of this Agreement, the lesser of: (a) Two Hundred Thousand Dollars ($200,000); or (b) five percent (5.00%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30). e. "Regional Treatment System Completion Date" shall mean the date on which the City (in its regulatory capacity) and/or any other governmental entity with jurisdiction thereover has accepted as complete the Regional Treatment System, which acceptance shall occur in a manner consistent with the City's and other governmental entity's standard policies and standards for the acceptance of dedicated public improvements, and on the Participant's compliance with its obligations hereunder. £ "Regional Treatment System Payment" shall mean: (1) If the Commercial Portion Completion occurs before the fifth (51h) anniversary of the Effective Date of this Agreement, the lesser of (a) One Hundred Thousand Dollars ($100,000); or (b) two and fifty one hundredths percent (2.50%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30); OR (2) If the Commercial Portion Completion occurs after the fifth (5`h) anniversary of the Effective Date of this Agreement, the lesser of: (a) Seventy -Five Thousand Dollars ($75,000); or (b) two percent 31 06476/4986 (2.00%) of Net Tax Increment received by the Agency during the prior Agency fiscal year (July 1-June 30). g. "Tax Increment Termination Date" shall mean: (1) As to the Regional Treatment System Portion of the Agency Obligation: (a) If the Commercial Portion Completion occurs before the fifth (51h) anniversary of the Effective Date of this Agreement, fifteen (15) years from the date of the first Regional Treatment System Payment; OR (b) If the Commercial Portion Completion occurs after the fifth (5`h) anniversary of the Effective Date of this Agreement, twenty (20) years from the date of the first Regional Treatment System Payment. (2) As to the Pacific View Avenue Extension Portion of the Agency Obligation: (a) If the Commercial Portion Completion occurs before the fifth (5`h) anniversary of the Effective Date of this Agreement, fifteen (15) years from the date of the first Pacific View Avenue Payment; OR (b) If the Commercial Portion Completion occurs after the fifth (51h) anniversary of the Effective Date of this Agreement, twenty (20) years from the date of the first Pacific View Avenue Payment. § 803 Community Facilities District Bonds 1. Pursuit of Bonds. Participant is requesting that the City consider the issuance of "Community Facilities District" bonds or similar instruments secured by a special tax on Participant's title to the residential portion of the Site and the improvements to be constructed thereon to fund eligible public improvements (such Community Facility District is referred to herein as "CFD 2006-1"). Participant agrees that as a condition precedent to the issuance of any such bonds the Agency Executive Director or designee and City's Community Services Director must reasonably determine that the special taxes levied against the residential portion of the Site shall not exceed 1.7% of the estimates of the sales prices of the Residential Units per square foot as submitted to and reasonably approved by the Agency Executive Director or designee and City's Community Services Director in writing and the Community Facilities District special tax and interest rates at the time of the formation of CFD No. 2006-1, if formed. 32 06-476/4986 2. Payment of Special Taxes. a. In the event of an issuance of Community Facilities District bonds or similar instruments, the Bonds shall be secured solely by the pledge of the levy of a special tax on the Site and the improvements to be constructed thereon pursuant to this Agreement, and Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Site or any part thereof, that Participant shall pay all special taxes (and any related penalties, costs, fees or other charges) due in connection with such bonds or similar instruments and shall be in full compliance with all of its other obligations in connection with such bonds or other instruments. Participant's failure to pay the special tax when due shall constitute a default under this Agreement. b. The Agency shall have no obligation to reimburse Participant for debt service, repayment of principal or interest, penalties or any other amounts due in connection with the bonds or similar instruments, including, but not limited to, any amounts which may become payable as a result of Participant's failure to pay special taxes and/or to timely perform Participant's other obligations thereunder. C. Participant agrees that the cost of the Regional Treatment System which is eligible for Agency reimbursement in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00) will not be financed by CFD 2006-1. Any amount over such reimbursement may be financed by CFD 2006-1. In the event the Regional Treatment System is financed by CFD 2006-1, the Regional Treatment System Portion, notwithstanding anything to the contrary contained herein, will be paid to CFD 2006-1, rather than to the Participant, to offset the special taxes that would otherwise be levied against the Site. The Agency's payment obligations under this Section shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. d. Participant agrees that the cost of the Pacific View Avenue Extension which is eligible for Agency reimbursement in an amount not to exceed Four Million Dollars ($4,000,000.00) will not be financed by CFD 2006-1. Any amount over such reimbursement may be financed by CFD 2006-1. In the event the Pacific View Avenue Extension is financed by CFD 2006-1, the Pacific View Avenue Portion, notwithstanding anything to the contrary contained herein, will be paid to CFD 2006-1, rather than to the Participant, to offset the special taxes that would otherwise be levied against the Site. The Agency's payment obligations under this Section shall not be pledged to payment of the bonds or similar instruments, and the Agency shall have no obligation to the bondholders or any third party in connection with such bonds or similar instruments. e. Participant agrees that up to Nineteen Million Dollars ($19,000,000.00) of the cost of the Senior Center may be financed by CFD 2006-1. Participant agrees that no portion of the Management Fee related to the Senior Center may be financed by CFD 2006-1. 33 06-476/4986 ARTICLE 900 DEFAULTS, REMEDIES AND TERMINATION § 901 Default Each of the following shall constitute an Event of Default under this Agreement: 1. Failure or delay by a party to perform any term or provision of this Agreement within the time provided herein, as such times may be extended pursuant to Section 1 004 of this Agreement. 2. Breach of any covenant, warranty or agreement contained in this Agreement. Subject to the extensions of time set forth in Section 1004, the party who fails to perform or delays performance of any term or provision of this Agreement shall immediately commence to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with all due diligence. § 902 Notice If an Event of Default under this Agreement occurs, the injured party shall give written notice (a "Default Notice") of the Event of Default to the party in default, specifying the nature of the default. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default, nor shall it operate as a waiver of any rights or remedies of the injured party; but the injured party shall have no right to exercise any remedy hereunder prior to delivering the Default Notice as provided herein. Delays by either party in asserting any of its rights and remedies shall not deprive either 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. § 903 Cure Period With respect to defaults or events for which a specific cure period is provided elsewhere in this Agreement, the specific cure period in that Section shall be applicable in lieu of the cure periods provided in this Section and in no event shall the cure periods set forth in this Section be in addition to any other cure period set forth in this Agreement. The injured party shall have no right to exercise a right or remedy hereunder unless the subject Event of Default continues uncured for a period of thirty (30) days after delivery of the Default Notice with respect thereto, or, where the default is of a nature which cannot reasonably be cured within such thirty (30) day period, the defaulting party fails to commence such cure with all due diligence or fails to proceed diligently to complete the same; provided, however, that (1) in no event shall the injured party be prevented from exercising its rights or remedies for more than ninety (90) days following delivery of the Default Notice; and (2) a remedy necessary to prevent further damage may be obtained at any time following delivery of the Default Notice. An Event of Default for failure to pay a sum of money is a default which can be cured within 34 06476/4986 thirty (30) days. If the default is not cured within the time periods specified above, the non - defaulting party, at its option, may pursue such other rights and remedies as it may have. § 904 Rights and Remedies Upon the occurrence -of an Event of Default and the expiration of the applicable cure period provided herein or by law, the injured party shall have all rights and remedies against the defaulting party as may be available at law or in equity to cure, correct or remedy any default, to obtain specific performance, to recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement. Such rights and remedies are cumulative, and except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the exercise of one or more of such rights or remedies shall not preclude the exercise, at the same or different times, of any other rights or remedies for the same default or any other default by the defaulting party. ARTICLE 1000 GENERAL PROVISIONS § 1001 Notices, Demands and Communications between the Parties Formal notices, demands and communications between the parties shall be deemed sufficiently given if dispatched by first class mail, registered or certified mail, postage prepaid, return receipt requested, or by electronic facsimile transmission followed by delivery of a "hard" copy, or by personal delivery (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), to the addresses of the parties as set forth in Section 105 hereof All notices to the City shall be sent to the attention of the City Administrator and all notices to the Agency shall be sent to the attention of the Agency Executive Director. Such written notices, demands and communications may be sent in the same manner to such other addresses as any party may from time to time designate by mail. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a "hard" copy, shall be deemed delivered upon its transmission, provided that if such transmission is delivered after 5:00 p.m., notice shall be deemed given on the next business day; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), shall be deemed received on the documented date of receipt; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required shall be deemed received on the date of receipt thereof. § 1002 Conflict of Interest No member, official or employee of City or Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 35 06-476/4986 Participant warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. § 1003 Nonliability of City and Agency Officials and Employees - No -member, official or employee of City or Agency shall be personally liable to Participant, or any successor in interest, in the event of any default or breach by City or Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement. Participant hereby waives and releases any claim it may have against any member, official or employee of the Agency or the City with respect to any default or breach by the Agency or the City or for any amount which may become due to Participant or its successors, or on any obligations, under the terms of this Agreement. Participant makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." § 1004 Enforced Delay in Performance for Causes beyond Control of Party For the purposes of any of the provisions of this Agreement, no party nor any successors in interest to any party shall be considered in breach of, or default in, its obligations under this Agreement as a result of the enforced delay in the performance of such obligations due to acts of God, acts of terrorism, acts of the public enemy, acts of the state or federal government, fires, floods, epidemics, quarantine restrictions, strikes, labor disputes, freight embargoes, inability to obtain materials or supplies or unusually severe weather or delays of contractors or subcontractors due to such causes (each a "Force Majeure Delay"); it being the purpose and intent of this provision that in the event of the occurrence of any such enforced delay, the time or times for performance of the obligations of the parties shall be extended for the period of the enforced delay and any commercially reasonable period thereafter for the adjustment of insurance, if applicable. Provided that the party seeking the benefit of the provisions of this Section shall promptly notify the other party in writing of such enforced delay and of the causes thereof, the extension of time for performance shall run from ten (10) days prior to the date on which such notice is given, but in no event earlier than the date of commencement of the cause. Financial inability shall not extend the time for performance, or excuse non-performance or untimely performance, of any obligation under this Agreement. § 1005 Inspection of Books and Records In addition to the rights of the City set forth in Section 618, above, the City and Agency each have the right upon three (3) business days' notice (excluding weekends and holidays) at all reasonable times to inspect the books and records of Participant pertaining to the Site as pertinent 36 06-476/4986 to the purposes of this Agreement. The books and records referred to in this Section shall be maintained or made available in a single location in Orange County. § 1006 Approvals Except as expressly provided otherwise in this Agreement, approvals required of the parties shall not be unreasonably withheld or delayed. § 1007 Assignment This Agreement is not assignable, in whole or in part, by the Participant, without the prior written approval of the City and Agency in their respective sole discretion, and any assignment in violation of the foregoing shall be void and shall constitute an incurable material default under this Agreement. Notwithstanding the foregoing, Participant may assign this Agreement to any entity controlled by or under common control with Participant. , and this Agreement may be freely assigned to a successor -in -interest to the Site or a portion thereof at such time as all of (i) the Affordable Housing Payment has been paid in full, (ii) a certificate of occupancy for the Senior Center has been issued or the Park In -Lieu Fee paid in full (as the case may be), (iii) the Regional Treatment System is completed and accepted; and (iv) Pacific View Extension is completed and accepted. § 1008 Participant's Warranties Participant hereby represents the following to Agency and the City for the purpose of inducing Agency and City to enter into this Agreement and to consummate the transactions contemplated hereby, all of which shall be true as of the date hereof. 1. The Participant has the legal power, right and authority to enter into this Agreement and the instruments and documents referenced herein to which the Participant is a party, to consummate the transactions contemplated hereby, to take any steps or actions contemplated hereby, and to perform its obligations hereunder. 2. All requisite action has been taken by the Participant and all requisite consents have been obtained in connection with the entering into this Agreement and the instruments and documents referenced herein to which the Participant is a party, and the consummation of the transaction contemplated hereby, and the same are authorized by the Redevelopment Plan and comply with all applicable laws, statutes, ordinances, rules and governmental regulations. 3. This Agreement is duly executed by the Participant, and all agreements, instruments and documents to be executed by the Participant pursuant to this Agreement shall, at such time as they are required to be executed hereunder, be duly executed by the Participant, and each such agreement is, or shall be at such time as it is required to be executed hereunder, valid and legally binding upon the Participant and enforceable in accordance with its terms and the execution and delivery thereof shall not, with due notice or the passage of time, constitute a 37 06-476/4986 default under or violate the terms of any indenture, agreement or other instrument to which the Participant is a party. 4. There is no pending or threatened litigation which, in the reasonable opinion of the Participant, would prevent the Participant from performing its duties and obligations hereunder. 5. Participant is not the subject of a bankruptcy proceeding. 6. Participant is the current owner of fee title to the entire Site. § 1009 Relationship of the Parties Nothing contained in this Agreement shall be deemed or construed as creating a partnership, joint venture, or any other relationship between the parties hereto other than as specified in the provisions contained herein, or cause the Agency or City to be responsible in any way for the debts or obligations of Participant or any other party. § 1010 Interpretation of Agreement This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters addressed in this Agreement. In addition, each party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Accordingly, any rule of law (including Civil Code section 1654) or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose and intent of the parties to this Agreement. § 1011 Authorized Representative of Agency and City Unless otherwise specified or the context requires otherwise, all references in this Agreement and its attachments to the Agency shall mean the Executive Director of the Agency or any officer or employee of the Agency to whom the Executive Director or the Board of the Agency delegates authority to perform, carry out and/or enforce this Agreement, and all references in this Agreement and its attachments to the City shall mean the Administrator of the City or any officer or employee of the City to whom the Administrator or the City Council delegates authority to perform, carry out and/or enforce this Agreement. § 1012 Waivers The waiver by any party of any term, covenant, or condition herein contained shall not be a waiver of such term, covenant, or condition on any subsequent breach. 38 06A76/4986 § 1013 Time of the Essence Time is of the essence of this Agreement and each and all of its provisions. § 1014 Attorneys' Fees and Costs If any action or proceeding is brought by any party against any other party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing party shall be entitled to recover all costs and expenses, including the fees of its attorneys and any expert witnesses in such action or proceeding. This provision shall also apply to any postjudgment action by either party, including without limitation efforts to enforce a judgment and actions on appeal. § 1015 Severability Any provision of this Agreement which shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provisions shall remain in full force and effect. § 1016 Non -exclusivity No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity. § 1017 Complete Agreement This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between the parties with regard to the subject matter hereof, and there are no promises, representations, agreements, warranties, or inducements either express or implied other than as are set forth in this Agreement. Each party warrants and represents prior to executing this Agreement, it has relied upon, or has had the opportunity to rely upon, legal advice from the attorney of its choice, the terms of this Agreement have been read and each party fully understands the terms and consequences (including risks, complications, and costs) of this Agreement. Participant further acknowledges and represents, in executing this Agreement, it has not relied on any inducements, promises, or representations made by City, Agency or any party representing or serving City or Agency. § 1018 Terminology When the context so requires when used in this Agreement, the masculine gender shall be deemed to include the feminine and neuter genders and the neuter gender shall be deemed to include the masculine and feminine genders. When the context so requires when used in this Agreement, the singular shall be deemed to include the plural, and vice versa. The paragraph 39 06476/4986 and section headings in this Agreement are for convenience only, and shall not be used in the interpretation hereof. § 1019 Necessity for a Writing No amendment, change, or addition to, or waiver of termination of, this Agreement -or any part hereof shall be valid unless in writing and signed by all of the parties. § 1020 No Third Party Beneficiaries The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of the parties, and not for the benefit, directly or indirectly, of any other person or entity. § 1021 Authority to Sign Each individual executing this Agreement on behalf of a party hereto represents that he or she has full authority to do so and to bind such party to perform pursuant to the terms and conditions of this Agreement. § 1022 Incorporation by Reference Each of the attachments and exhibits attached hereto is incorporated herein by this reference. § 1023 Cooperation; Further Acts; Estoppel Certificates The parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement. Each party hereto agrees that upon reasonable notice at reasonable times it shall, at the request of any other party or any then current or prospective holder of a mortgage or deed of trust, execute estoppel certificates regarding the status of the performance of the other party of its obligations hereunder, including, without limitation, whether a default or breach exists (or would exist with the passage of time, or giving of notice, or both) under this Agreement, certifying as to whether the City has accepted the Senior Center, Regional Treatment System or Pacific View Avenue Extension pursuant to Section 612, above, and certifying as to whether or not a party has at the date of such certification complied with any obligation of the party hereunder as to which such party or holder may inquire (including, without limitation, whether any Affordable Housing Payment has been made hereunder). The form of any estoppel certificate shall be prepared by the holder or party requesting the estoppel certificate, as applicable, and shall be in a form reasonably acceptable to the other party and the other party's legal counsel and shall be at no cost to the other party. The Agency Executive Director the City Administrator shall be authorized to execute such estoppel certificates on behalf of the Agency and City, respectively. 40 06476/4986 § 1024 Binding Effect Each and all of the covenants and conditions set forth in this Agreement (including any exhibits and/or attachments hereto) shall be binding on and shall inure to the benefit of the parties, and their successors, heirs, personal representatives, or assigns. This section shall not be -construed as an authorization for Participant to assign any right or obligation. ARTICLE 1100. EFFECTIVE DATE This Agreement shall not be effective unless and until all five (5) of the following conditions are satisfied: (a) the City Council approves Entitlement Plan Amendment No. 06-02 and Final Tract Map No. 16338; (b) this Agreement has been executed by the Agency and the City (and the Agency and City shall so execute and deliver this Agreement to Participant within ten (10) calendar days of approval of the Entitlement Plan Amendment by the City Council); (c) Participant provides the security of the type and in the amounts required by this Agreement; (d) Participant records Final Tract Map No. 16338 in the Recorder's Office of the County of Orange; and (e) either Participant, City or Agency records this Agreement in the Recorder's Office of the County of Orange within thirty (30) days following .the City Council's approval of this Agreement. . If the above described conditions are not satisfied by July 31, 2007, this Agreement shall automatically terminate without need of further action by any party. The "Effective Date" of this Agreement shall be the date of the approval by City Council of this Agreement. [Signatures continued on following page] 41 06-476/4986 7 D // O O OAJ /s 'ty CITY OF HUNTINGTON BEACH 1 CITY AMINISTRATOR'S OFFICE 2000 Main Street, Huntington Beach, CA 92648 February 1, 2008 Michael Gagnet, Executive Vice -President — Development Makallon Atlanta Huntington Beach, LLC 4100 MacArthur Boulevard, Suite 200 Newport -Beach, CA 92660 Dear Michael: Re: Owner Participation Agreement dated October 16, 2006 On October 16, 2006, the City of Huntington Beach ("City"), Redevelopment Agency of the City of Huntington Beach ("Agency"), and Makallon Atlanta Huntington Beach, LLC ("Makar") entered into an Owner Participation Agreement ("OPA"). Among other things, the OPA provided for the development, design, and construction of a Senior Center. The OPA is premised upon certain events occurring pursuant to a schedule of performance agreed to by the parties. One such event was the recordation of the subdivision map for Pacific City on or before July 31, 2007. As you know, over the course of several months, city staff -and Makar successfully negotiated several ancillary agreements to ensure map recordation at the earliest possible time. As a result of significant effort on the part of both city staff and Makar, the map was approved by the City Council on August 6, 2007, and recorded in the Orange County Recorder's Office on August 30, 2007. One purpose of this letter is to confirm that both parties hereby agree that the OPA remains in effect notwithstanding the recordation of the map subsequent to July 31, 2007. By signature on the attached page, Makar acknowledges that the OPA is hereby amended to reflect a modification to the schedule included in Article 1100 of the OPA. Please return an executed copy of the attachment at your earliest convenience. On behalf of all city staff, we continue to look forward to working with Makar to implement all of the provisions of the OPA. Very try o s, i PAUL EMERY Interim City ministrator 714-536-5575 • pemery(a surfcity-Worg Makallon Atlanta Huntington Beach, LLC hereby agrees to amend the OPA such that the date upon which all of the conditions listed in Article 1100 must be satisfied is August 31, 2007. MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company, By: Makar Properties, LLC, a Delaware limited liability company, its Authorized Member Date: By: Paul Makarechian Chief Executive Officer c: Jennifer McGrath, City Attorney Jim Engle, Director of Community Services Scott Hess, Director of Planning Stanley Smalewitz, Director of Economic Development MAKALLON ATLANTA HUNTINGTON BEACH LLC, a Delaware limited liability company Date: C)(Zw (12bD10 42 06476/4986 Makar Properties, LLC, a Delaware limited liability company, its Authorized Member By: Paul Makarechian Chief Executive Officer STATE OF�f�•iv1� ) ss_ COUNTY OF On 200�, efore me, the undersi ned, a Notary Public in and for said State, personally appeared �QL known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that hexecuted the same in his r authorized capacity, and that by hiss signature on the instrument the persons or the entities upon behalf of which the person acted executed the instrument. WITNE my ha d official seal. Signature of Notary Public ATTEST: g cy Secretary REVIEWED AND APPROVED: Agency rxecuTive Dire to REVIEWED AND APPROVED AS TO FORM: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH L. By: lX�c �✓�ti Chairman REVIEWED AND APPROVED AS TO FORM: Agency Counsel i V � I P FAM'. i-� � �in [Signatures continued on following page] KACG\HB\Pacific City\OPA (10-6) final.doc 43 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On October 17, 2006 before me --------- P. L. Espana ------- Date Name and Title of Olricer (e.g., "Jane Doe, Notary Public') personally appeared ----- --------------- ---- Dave Sullivan ---------------- ------- ------ -------- Name(s) of Signer(s) Place Notary Seal Above t 6 personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(e) whose name(s) is/afe subscribed to the within instrument and acknowledged to me that he/eheft" executed the same in his/tw/tle- authorized capacity(ies), and that by his/lie4;449r signature(s) on the instrument the person($), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. SigWre of Notary tllc OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: owner Participation Agreement with Makallon Atlanta, Huntington Beach, LLC Document Date: October 16, 2006 Number of Pages: Signer(* Other Than Named Above: Joan L. Flynn. Agency Secretary Capacity(!") Claimed by Signer Signer's Name: Dave Sullivan ❑ individual C�f Corporate Officer — Title(s): Chairman ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: The Redevelopment Agency of the City of Huntington Beach 0 1999 National Notary Association - 9M Oe Soto Ave.. P.O. Box 2402 - Chatsworth. CA 91313-2402 - www.raborA*mtary.org Prod. No. 5907 Reorder: Call Toll -Free 14W-8764W CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On October 17, 2006 , before me, --------- P. L. Esparza------- Date Name and Tide of Officer (e.g., `Jane Doe. Notary Public" personally appeared ------------------------ Joan L. Flynn Nan*s) of s"r(s) Place Notary Seal Above personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(*) whose name(*) is/am subscribed to the within instrument and acknowledged to me that lo/she/0W executed the same in 4vis/her/ti air authorized capacity(ies), and that by W/her/tapir signature(s) on the instrument the person(e), or the entity upon behalf of which the person(s) acted, executed the instrument. . j .offi cial •' •t Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Owner Participation Agreement with Makallon Atlanta, Huntington Beach, LLC Document Date: October 16, 2006 Number of Pages: Signerj* Other Than Named Above: Dave Sullivan Chairman Capacity(kw) Claimed by Signer Signer's Name: Joan L. Flynn ❑ Individual Cl Corporate Officer — T)tle(s): Agency Clerk ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: The Redevelopment Agency of the City of Huntington Beach 0 1M National Notary Association • 9M Do Solo Ave.. P.O. Box 24M • Chatewoft, CA 91313-2402 • www.nobonekwi".org Prod. No. S907 Reorder: Cab Toil -Free 1-800-8766W THE CITY OF HUNTINGTON BEACH By: GL—+-�- Mayor ATTEST: it Jerk REVIEWED AND APPROVED AS TO FORM: City Attorney t� s loc. i'' 9 IoU APPROVED AS TO FORM: KANE, BALLMER & BERKMAN [Signatures continued on following page] K:\MHB\Pacific City\OPA (10-6) final.doc 44 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of Orange On October 17, 2006 before me ---- ---- P. L. Esparza, Notary Public ------- Date Name and Title of Officer (e.g., "Jane Doe, Notary Public") personally appeared ------------------------ Dave Sullivan ------------- -------------------------- Name(s) of S'Igrler(s) 7g— Place Notary Seal Above Yf personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/afe subscribed to the within instrument and acknowledged to me that he/sh+e/they executed the same in his/fair/tiwir authorized capacity(ios), and that by his/terAbeir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNES m h nd an official seal. &'i," 'Signs re Publ' OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document:Owner Participation Agreement with Makallon Atlanta, HB, LLC Document Date: October 17, 2006 Number of Pages: Signer( Other Than Named Above: Joan L. Flynn. City Clerk Capacity(iss) Claimed by Signer Signer's Name: Dave Sullivan, Mayor ❑ Individual L`f Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ rustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: The City of Huntington Beach of thumb here 0 1999 Natioral Notary As ociatim • 9350 De Solo Ave.. P.O. Swi 2402 • Cheteworlh, CA 91313.2402 • www.rafiorokvWiy.org Prod. too. 5907 lasorder Call To! -Free 1.W"764927 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California SS. County of Orange On October 17, 2006 before me ----- --- P. L. Esparta, Notary Public ------- Date Name and Title of Officer (e.g., 'Jane Doe, Notary Public-) personally appeared --- ------------------ --- Joan L. Flynn -- --------------------- ---------------- , Names) of Signer(s) 7 11 Place Notary Seal Above if personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/afe subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Isis/her/th& authorized capacity(ise), and that by W/hedtheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Sign ture of Lary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Owner Participation Agreement with Makallon Atlanta, HB, LLC Document Date: October 17, 2006 Signer* Other Than Named Above: Dave Sullivan. Mayor Capacity(iss) Claimed by Signer Signer's Name: Joan L. Flynn ❑ Individual [!1 Corporate Officer — Title(s): City Clerk ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ .rustee ❑ Guardian or Conservator ❑ Other: Signer is Representing: The City of Huntington Beach Number of Pages: 0 1999 National Notary Association - 9350 De Sob Ave., P.O. Box 2402 - Chatswo&r, CA 91313-2402 - www.nabonakiotaryorg Prod. No. SW7 Reorder: Cell Tot -Free 1-W"764W ATTACHMENT NO. 1 SITE MAP [behind this page] PACIFIC CITY KFGY GROUP, „� HUNTINGTON BEACH �BE �..�,...........�.....-.tee � a.w.,.v ATTACHMENT NO.2 LEGAL DESCRIPTION [behind this page] 21002 PACIFIC COAST HIGHWAY / PACIFIC CITY PARCEL (APN 024-271-05) LEGAL DESCRIPTION REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: PROPOSED TRACT NO. 16338, BEING A SUBDIVISION OF THE FOLLOWING: PARCEL 1, AS SHOWN AND DESCRIBED IN THAT CERTAIN CONDITIONAL CERTIFICATE OF COMPLIANCE NO. 96-6, RECORDED FEBRUARY 28, 1996 AS INSTRUMENT NO. 19960095327 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND DESCRIBED AS PARCELS 1 AND 2 IN DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 449 OF OFFICIAL RECORDS, THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER, OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON, WITHIN, OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE, AND REMOVE THE SAME, AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING, OR SINKING OF WELLS, SHAFTS, OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL AND SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND. ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW 500 FEET MEASURED VERTICALLY FROM THE SURFACE. ALSO EXCEPTING THEREFROM ALL MINERALS, PETROLEUM, ASPHALT, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON, OR UNDER, OR THAT MAY BE PRODUCED FROM, SAID LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM LOCATIONS ON OTHER LANDS INTO AND THROUGH, AND TO CONSTRUCT OR DEVELOP MINES, TUNNELS, SHAFTS, OR OTHER WORKS IN AND THROUGH THE SUBSURFACE OF SAID LAND FOR THE PURPOSES OF RECOVERING SAID RESERVED SUBSTANCES FROM SAID LAND OR RECOVERING LIKE SUBSTANCES FROM OTHER LANDS; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID LAND SHALL NOT BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, OR REMOVAL OF SAID MINERALS OR SUBSTANCES FROM SAID LAND OR OTHER LANDS, AS RESERVED IN THE DEED FROM CITY OF HUNTINGTON BEACH, RECORDED JANUARY 13, 1960 IN BOOK 5051, PAGE 383 OF OFFICIAL RECORDS. ALSO EXCEPTING AND RESERVING THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE AND REMOVE THE SAME AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING OR SINKING OF WELLS, SHAFTS OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL OR SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FOR PARCEL 2 FROM PACIFIC ELECTRIC RAILWAY COMPANY RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 446 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW A DEPTH OF 500 FEET VERTICALLY BELOW THE SURFACE OF THAT PORTION OF SAID LAND INCLUDED WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED AS "THIRD" IN THE DEED FROM THE HUNTINGTON BEACH COMPANY TO LOS ANGELES INTER -URBAN RAILWAY COMPANY RECORDED APRIL 9, 1907 IN BOOK 155, PAGE 260 OF DEEDS, RECORDS OF SAID ORANGE COUNTY. ATTACHMENT NO.3 DEPICTION OF COMMERCIAL PORTION OF PROJECT [behind this page] PACIFIC CITY HUNTINGTON BEACH wnw�y„r• KTGY GROUP, Y WN N�uwwl ATTACHMENT NO. 4 FORM OF AGENCY AFFORDABLE HOUSING PLAN [behind this page] AFFORDABLE HOUSING PLAN PACIFIC CITY PROJECT DATED: June 16, 2006 1) Requirements As the Pacific City Project is within a Redevelopment Project area, the affordability requirement is 15% of all housing units developed. Pursuant to Condition (2)(B)(5) of Tract Map No. 16338, a minimum of 50% of the required number of affordable housing units shall be on -site and the remaining number of units can be on -site or off -site. As an option to the minimum 50% on -site is that these units may be off -site provided the number of units is increased on a two -to -one basis and located within a redevelopment area. On behalf of Makallon Atlanta Huntington Beach, LLC, the Redevelopment Agency for the City of Huntington Beach proposes to satisfy this affordable housing requirement in the following manner: El The Agency or its assignee shall cause to be constructed, or otherwise made available for and occupied by very low-, low-, and moderate -income persons, 117 affordable housing units within the Merged Redevelopment Project area; At least 39 of the required units shall be targeted to median income households (100% of Orange County median income); At least 39 units will be targeted to low income households (51% to 80% Orange County median income); At least 39 units will be targeted to very low income households (less than 50% of the Orange County median income); The units will be available for occupancy prior to the issuance of building permits for the last phase of the Pacific City residential development; or evidence of the Agency's reasonable progress towards attainment of completion of the affordable units for the respective phase. CADocuments and Settings\eleanor\Local Settings\Temporary Intemet Files\OLK48\AFFORDABLE HOUSING PLAN 6-16-06 V2.doc Affordable Housing Plan Page 2 June 16, 2006 2) Unit description A. The units will be composed of a mix of studios, one bedroom to three bedroom units. B. The sales price and/or rents for all units will be determined by current schedules based on income standards distributed by HUD for Orange County. 3) Affordability Covenants The 117 units will have affordability covenants and restrictions for 60 years. CADocuments and Settings\eleanor\Local Settings\Temporary Intemet Files\OLK48\AFFORDABLE HOUSING PLAN 6-16-06 V2.doe ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT [behind -this page] Outdoor Space Summary Auto Parking (200 spaces) Landscape Courtyards/Gardens/Amenities Transportation Vehicles Service Area 1.8 AC 1.0 AC J .2 AC S ffi 0 R .. b .. a R 6 . AF 6 0 % 9 O w . . . 9 . # S .. eF % B 8 * . B f * a * A 0 0 . . £R . . P . .. .. # . . � . J .. sR & � . 4 R . A . 3 . 0 . A R # . Building Area TOTAL SITE AREA 1.0 AC HB SENIOR CENTER SPACE Space Program Building Support Space 1PROPOSED Entry/Lobby/Social Lounge 1,000 Cafe 300 General Building Storage 200 Restrooms (2@150) 300 Maintenance/Storage/Workshop 400 Custodial Office 100 Custodial Storage 200 Subtotal Z500 Administration Supervisor Office 180 Coordinator Office - Rec 120 Coordinator Office - Volunteer 120 Marketing Office 160 Administrative Asst 100 Workstations (4@80) 320 Maintenance Tech Office 100 Workroom/Office Supply Storage 300 Breakroom 240 File Archives 100 Staff Restroom (2) 170 Subtotal 1,910 Resource Center Reception/Waiting area 300 Case worker offices (3@120), 1@160) 520 Visiting Services/COA Offices 360 Consultation Meeting rooms (small) 200 Consultation Meeting rooms (large) 300 Travel Resource Area 200 Travel Office 150 Subtotal Z030 Education Center Arts and Crafts Room 1,000 Arts and Crafts Room Storage 400 Computer Room 600 Classroom/Meeting Room 1 1,200 Classroom/Meeting Room 1/Storage 200 Classroom/Meeting Room 2 400 Classroom/Meeting Room 2/Storage 100 3,900 Subtotal Social Center Social Lounge 1,500 Game Room 1,000 Community Hall/Dining room (300) 6,300 Community Hall/Dining room (300) storage 700 Dressing Room 200 ien Service Corridor ien restroom ien Pantry Nutrition office ien: Meals to Home/Classroom Workstations (meals) Meal to Home Pantry Kitchen Classroom Storage Restrooms - Men Restrooms - Women Subtotal Fitness and Wellness Center 1 Fitness Room Fitness/Wellness Office Fitness - Assessment/Testing Fitness Storage Group Exercise Room Group Exercise Room Storage Dance Room Dance Room Storage Subtotal Transportation Center Transportation Coordinator Office Driver's Workstation area Waiting Area Dispatcher area Storage Subtotal Sub Total Net Assignable Area Circulation, walls, etc TOTAL GROSS SO FT 1,000 1,000 50 100 100 800 150 160 100 400 420 1 14,0401 4000 120 100 100 2,200 350 1.500 120 120 180 300 300 1,0201 33,970 11,320 HUNTINGTON BEACH SENIOR CENTER LPA'S PRELIMINARY PROJECT COSTS* Construction Cost Net Building Area $300/SF 33,970/SF $10,191,000 Grossing Factor 75% Efficient 300/SF 22 320/SF 3,396,000 Subtotal Gross Building Area $13,587,000 45,290/SF 1,070,000 Site Costs Allowance Parking Utilities within 5' of Building Perimeter Landscape $14,657,000 Subtotal Preliminary Construction Costs (not site specific) $ 1,319,000 Soft Costs 513,000 Architect, A/E, Acoustic, Recreation, AV Consult. (9%) 733,000 Printing, Testing, Survey, Permits (3.5%) 100,000 FF&E Allowance (5%) 50,000 CEQA 732,850 Legal Project Management 5% Subtotal Soft Costs $ 3,447,850 Subtotal Construction Costs & Soft Costs $18,104,850 Contingency Design & Construction 2 931,400 Subtotal with 20% Contingencies $ 21,036,250 Escalation 5% for Three Years 2,273,667 OPINION OF TOTAL PROJECTS COSTS 23,309,917 *Estimate is NOT site specific; therefore, mitigation for contamination, traffic signal modification, purchase of land, etc. are NOT included in cost estimate. ATTACHMENT NO. 6 MEMORANDUM OF TERMINATION "[behind this page] OFFICIAL BUSINESS T RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Attn: City Clerk Recorded in Official Records, Orange County Tom Daly, Clerk-RecorderIIIIIIIIiilllllllllli�11111111110.00 IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIillllllllllli 2006000783506 0100pm 11120106 116 96 T02 11 0.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 Space Above This Line For Recorder's Use MEMORANDUM OF TERMINATION OF AGREEMENT REGARDING ATLANTA AVENUE SITE This Memorandum of Termination of Agreement Regarding Atlanta Avenue Site ("Memorandum") is entered into as of I la , 2006 by and between the CITY OF HUNTINGTON BEACH, a charter city ("City"), and MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company ("Participant"). RECITALS A. Participant is the owner of certain real property located in the City of Huntington Beach, California (the "Site"). The Site is depicted on Exhibit A and more particularly described on Exhibit B, both of which exhibits are attached hereto and incorporated herein by reference. B. The City and Participant's predecessor -in -interest to the Site, Huntington Beach Company, entered into that certain agreement entitled "Agreement between the City of Huntington Beach and the Huntington Beach Company Concerning Huntington Beach Company's Atlanta Avenue Site" dated as of December 15, 1986 recorded on May 29, 1987 as Document No. 87-303610 ("Existing Site Agreement"). The Existing Site Agreement is hereby incorporated by reference. Reference herein to the Existing Site Agreement shall include any and all exhibits and/or attachments thereto. C. The City, Participant and the Redevelopment Agency of the City of Huntington Beach entered into that certain Owner Participation Agreement dated as of October 16, 2006 (the "OPA"). The parties desire to record this Memorandum in accordance with Section 502 of the OPA to notice the termination of the Existing Site Agreement. 06-476 / 5175 1 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: MEMORANDUM The parties hereto agree that as of October 16, 2006, the effective date of the OPA, the Existing Site Agreement was automatically terminated, canceled and voided in its entirety and all covenants, terms and conditions set forth in the Existing Site Agreement shall be forever relinquished, released and discharged without need ,of further act or document. 2. The parties hereby acknowledge and agree that this Memorandum is only intended to provide notice of the termination of the Existing Site Agreement and shall not be deemed to modify or amend any provisions of.the OPA. IN WITNESS WHEREOF, the parties to this Memorandum have caused this instrument to be duly executed as of the date first above written. THE CITY OF HUNTINGTON BEACH Date: ATTEST: City 'lerk REVIEWED AND APPROVED AS TO FORM: City Attorney APPROVED AS TO FORM: KANE, BALLMER & BERKMAN 06-476 / 5175 2 City Administrator MAKALLON ATLANTA HUNTINGTON BEACH, LLC, a Delaware limited liability company, By: Makar Properties, LLC, a Delaware limited liability company, its Authorized Member Date: BY: Paul Makarechian, Chief Executive Officer 06-476 / 5175 3 STATE OF CALIFORNIA COUNTY OF 4e,"&- On 11-eAlvX 2f ,02e before me, ��,� , co personally appeared/ /j%,Q�¢lV6C�L1,4 personally known to me (cam a n„ tl,a k _ f ca icfortnry P.,;�en�.) to be the personos whose name(s) is/,are subscribed to the within instrument and acknowledged to me that he/Atc/l Zey executed the same in his jbeir authorized capacity(Ie j, and that by his/fir/t4eir signature(s. on the instrument the personf� or the entity upon behalf of which the person(*acted, executed the instrument. WITNESS hand and official seal. Signature STATE OF CALIFORNIA COUNTY OF On before me, personally appeared , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of 0L_jC0C-- ss. Ono?C' , before me, - Z, Date / Na e and Title of Officer (e.g., "Jane Doe, Kotary Public") personally appeared L--Z Cep (/ - Name(s) of Signer(s) impersonally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their s ma 0-0signature(s) on the instrument the person(s), or the P L. ESPARZA entity upon behalf of which the person(s) acted, Commission # 1599179 pow, public _ Callfornfa executed the instrument. Orange County 110.11fiv Comm. Expires Aug 6, 2009 WITNES y an nd oftc7al seal. Place Notary Seal Above •—�-� Signature o otary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached ,Document _ Title or Type of Document: Z q V — Document Date: %Z� ")_006 Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer— Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIGHT THUMBPRINT OFS1 NER Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here 0 2004 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 Reorder: Call Toll -Free 1-800-876-6827 CALIFORNIA•ACKNOWLEDGMENT C�.,.�aY:.,:a.. va -va :». �..TS�a.,.aa.<a.'�>,T.,:s��..T.,.s�C,�s.� �'✓,.�C�.-�� ,sa.`,�s�.a�.s �� Z�L�Y��.,�z,:�.,:+��.,s�.�. a.,�a. Via. �v�S✓.-+a. �. State of Californiani �// '�,�6L ss. County of ��� On %�✓cr�/L /� 906 before me, - L- - S A0 4- All Date Name and Title of Officer (eg "Jane Doe, Notary Public") _ems .� personally appeared %�.�i� L • %- tip Name(s) of Signer(s) P. L. ESPARZA ComRdssfon # 1899179 t4otary Public - Cawomia Orange County 10My Comm. ExpIm Aug 4. 20 Place Notary Seal Above /ILpersonally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WI NES ha and �icial seal. Signature of tary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: ��JC�n/�r'TL_ �� �� Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — El Partner — ❑ Limited ❑ Attorney in Fact ❑ Trustee Title(s): ❑ General ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIGHT THUMBPRINT OF SIGNER .. of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): _ ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: 7Z, - RIGHT THUMBPRINT OF SIGNER © 2004 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 - Chatsworth, CA 91313-2402 Item No. 5907 Reorder: Call Toll -Free 1-800-876-6827 EXHIBIT A MAP OF SITE [behind this page] OL VL 1� 041VA PACIFIC CITY HUNTINGTON EACH OWN TGY GROUP,,. ' ' EXHIBIT B LEGAL DESCRIPTION OF SITE [behind this page] 21002 PACIFIC COAST HIGHWAY / PACIFIC CITY PARCEL (APN 024-271-05) LEGAL DESCRIPTION REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: PROPOSED TRACT NO. 16338, BEING A SUBDIVISION OF THE FOLLOWING: PARCEL 1, AS SHOWN AND DESCRIBED IN THAT CERTAIN CONDITIONAL CERTIFICATE OF COMPLIANCE NO. 96-6, RECORDED FEBRUARY 28, 1996 AS INSTRUMENT NO. 19960095327 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM THAT PORTION THEREOF INCLUDED WITHIN THE LAND DESCRIBED AS PARCELS 1 AND 2 IN DEED FROM PACIFIC ELECTRIC RAILWAY COMPANY, RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 449 OF OFFICIAL RECORDS, THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER, OCCURRING 500 FEET BENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON, WITHIN, OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE, AND REMOVE THE SAME, AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR ----USEFI7L ON VIEREW�TI4—AJaII�--OTI��R-LISE�TIEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING, OR SINKING OF WELLS, SHAFTS, OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL AND SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND. ALSO EXCEPTING THEREFROM THE SUB.SURFACE BELOW 500 FEET MEASURED VERTICALLY FROM THE SURFACE. ALSO EXCEPTING THEREFROM ALL MINERALS, PETROLEUM, ASPHALT, BREA, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN, UPON, OR UNDER, OR THAT MAY BE PRODUCED FROM, SAID LAND, TOGETHER WITH THE SOLE AND EXCLUSIVE RIGHT TO DRILL SLANTED WELLS FROM LOCATIONS ON OTHER LANDS INTO AND THROUGH, AND TO CONSTRUCT OR DEVELOP MINES, TUNNELS, SHAFTS, OR OTHER WORKS IN AND THROUGH THE SUBSURFACE OF SAID LAND FOR THE PURPOSES OF RECOVERING SAID RESERVED SUBSTANCES FROM SAID LAND OR RECOVERING LIKE SUBSTANCES FROM OTHER LANDS; PROVIDED, HOWEVER, THAT THE SURFACE OF SAID LAND SHALL NOT BE USED FOR THE EXPLORATION, DEVELOPMENT, EXTRACTION, OR REMOVAL OF SAID MINERALS OR SUBSTANCES FROM SAID LAND OR OTHER LANDS, AS RESERVED IN THE DEED FROM CITY OF HUNTINGTON BEACH, RECORDED JANUARY 13, 1960 IN BOOK 5051, PAGE 383 OF OFFICIAL RECORDS. ALSO EXCEPTING AND SERVING THE TITLE AND EXCLUSIVE RIGHT TO ALL OF THE MINERALS AND MINERAL ORES OF EVERY KIND AND CHARACTER OCCURRING 500 FEET BIENEATH THE SURFACE THEREOF, NOW KNOWN TO EXIST OR HEREAFTER DISCOVERED UPON WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED THEREFROM, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ALL PETROLEUM, OIL, NATURAL GAS AND OTHER HYDROCARBON SUBSTANCES AND PRODUCTS DERIVED THEREFROM, TOGETHER WITH THE EXCLUSIVE AND PERPETUAL RIGHT OF SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS, OF INGRESS AND EGRESS BENEATH THE SURFACE OF SAID LAND TO EXPLORE FOR, EXTRACT, MINE AND REMOVE THE SAME AND TO MAKE SUCH USE OF SAID LAND BENEATH THE SURFACE AS IS NECESSARY OR USEFUL IN CONNECTION THEREWITH; AND OTHER USE THEREOF; WHICH USES MAY INCLUDE LATERAL OR SLANT DRILLING, DIGGING, BORING OR SINKING OF WELLS, SHAFTS OR TUNNELS TO OTHER LANDS NOT SUBJECT TO THOSE RESERVATION AND EASEMENTS; PROVIDED, HOWEVER, THAT SAID GRANTOR, ITS SUCCESSORS AND ASSIGNS SHALL NOT USE THE SURFACE OF SAID LAND IN THE EXERCISE OF ANY OF SAID RIGHTS AND SHALL NOT DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON OR REMOVE OR IMPAIR THE LATERAL OR SUBJACENT SUPPORT OF SAID LAND OR ANY IMPROVEMENTS THEREON, AND SHALL CONDUCT NO OPERATIONS WITHIN 500 FEET OF THE SURFACE OF SAID LAND, AS RESERVED IN THE DEED FOR PARCEL 2 FROM PACIFIC ELECTRIC RAILWAY COMPANY RECORDED SEPTEMBER 13, 1960 IN BOOK 5413, PAGE 446 OF OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM THE SUBSURFACE BELOW A DEPTH OF 500 FEET VERTICALLY BELOW THE SURFACE OF THAT PORTION OF SAID LAND INCLUDED WITHIN THAT CERTAIN PARCEL OF LAND DESCRIBED AS "THIRD" IN THE DEED FROM THE HUNTINGTON BEACH COMPANY TO LOS ANGELES INTER -URBAN RAILWAY COMPANY RECORDED APRIL 9, 1907 IN BOOK 155, PAGE 260 OF DEEDS, RECORDS OF SAID ORANGE COUNTY. ATTACHMENT NO. 7 DRAFT FORMS OF SECURITY [behind this page] BOND NO. PREMIUM FAITHFUL PERFORMANCE BOND WHEREAS, the City Council of the City of Huntington Beach, State of California, and (hereinafter designated as "principal") have entered into an agreement whereby principal agrees to install and complete designated public improvements, which said agreement, dated , 20 , and identified as project, hereby referred to and made a part hereof; and is WHEREAS, said principal is required under the terms of said agreement to furnish a bond for the faithful performance of said agreement. Now, therefore, we, the principal and as surety, are held and firmly bound unto the City of Huntington Beach, hereinafter called "City", the penal sum of dollars ($ ) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by these presents. The condition of this obligation is such that if the above bounded principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenant, condition and provisions in the said agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless "City", its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect. As a part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees incurred by "City" in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. The surety hereby stipulates and agrees that no charge, extension of time, alteration, or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect its obligations on this bond, and it does hereby waive notice of any change, extension of time, alteration or addition to the terms of the agreement or to the work or to the specifications In witness whereof, this instrument has been duly executed by the principal and surety above named, on .20 as Principal as Surety By By 2 STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC 1N AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES 3 BOND NO. PREMIUM GUARANTEE AND WARRANTY BOND WHEREAS, - , as a Principal, and , a corporation organized under the laws of the State of and duly authorized to do business in the State of California, as Surety, are held and firmly bound unto the City of Huntington Beach, California, as Obligee, in the penal sum of t$ ), representing 10 percent of the contract price entered into between the Principal and Obligee, to which payment well and truly to be made we do bind ourselves, and each of our heirs, executors, administrators, successors and assigns jointly and severally. WHEREAS, the said Principal entered into a contract with said Obligee, dated for work described as follows: WHEREAS, said contract provides that the Principal will furnish a bond conditioned to guarantee and warrant for the period of one year after completion of the work and acceptance thereof by the Obligee, against all defects in workmanship and materials during said one-year period. WHEREAS, said work has been completed, and accepted by Obligee on NOW, THEREFORE, the Principal and Surety, jointly and severally shall indemnify the Obligee for all loss that the Obligee may sustain by reason of any defective materials or workmanship, which become apparent during the period of one year from and after date of completion of work and acceptance thereof by Obligee. 1 In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on , 20 as Principal By m STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND , PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE PRINTED NAME STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY MY COMMISSION EXPIRES ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND . PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES 3 BOND NO. PREMIUM LABOR AND MATERIAL BOND WHEREAS, the City Council of the City of Huntington Beach, State of California, and (hereinafter designated as "Principal") have entered into an agreement whereby Principal agrees to install and complete designated public improvements, which said agreement, dated , 20 , and identified as project is hereby referred to and made a part hereof; and WHEREAS, under the terms of said agreement, Principal is required before entering upon the performance of the work, to file a good and sufficient payment bond with the City of Huntington Beach to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of Civil Code of the State of California. Now, therefore, said Principal and the undersigned as corporate Surety, are held firmly bound unto the City of Huntington Beach and all contractors, subcontractors, laborers, materialmen and other persons employed in the performance of the aforesaid agreement and referred to in the aforesaid Code of Civil Procedures in the sum of dollars ($ ), for materials furnished for labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said Surety will pay the same in an amount not exceeding the amount hereinabove set for forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by "City" in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered. It is hereby expressly stipulated and agreed that this bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond. Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect. The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of said agreement or the sp6cifications accompanying the same shall in any manner affect its obligation on this bond, and it does hereby waive notice of any such change, extension, alteration or addition. In witness whereof, this instrument has been fully executed by the Principal and Surety above named, on , 20 , as Principal By M , as Principal By AM STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND , PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE PUBLIC IN AND FOR SAID STATE PRINTED NAME STATE OF CALIFORNIA SS COUNTY OF ORANGE ) MY PRINCIPAL PLACE OF BUSINESS NOTARY IS IN COUNTY MY COMMISSION EXPIRES ON , BEFORE ME, , A NOTARY PUBLIC IN AND FOR SAID STATE, PERSONALLY APPEARED AND PERSONALLY KNOWN TO ME (OR PROVED TO ME ON THE BASIS OF STATISFACTORY EVIDENCE) TO BE THE PERSONS WHOSE NAMES ARE SUBSCRIBED TO THE WITHIN INSTRUMENT AND ACKNOWLEDGES TO ME THAT THEY EXECUTED THE SAME IN THEIR AUTHORIZED CAPACITIES, AND THAT BY THEIR SIGNATURES ON THE INSTRUMENT THE PERSONS, OR THE ENTITY UPON BEHALF OF WHICH THE PERSONS ACTED, EXECUTED THE INSTRUMENT. WITNESS MY HAND SIGNATURE MY PRINCIPAL PLACE OF BUSINESS NOTARY PUBLIC IN AND FOR SAID STATE IS IN COUNTY PRINTED NAME MY COMMISSION EXPIRES ATTACHMENT NO. 8 SENIOR CENTER PLANS AND SPECIFICATIONS [TO BE -PREPARED IN ACCORDANCE WITH ARTICLE 300] ATTACHMENT #5 INSURANCE AND INDEMNIFICATION WAIVER MODIFICATION REQUEST 1. Requested by: Christi Mendoza, Risk Management`s 2. Date: July 28, 2006 ")3 C t Cityic ffi g5 `s CJ„ 3. Name of contractor/permittee: Makallon Atlanta Huntington Beach, LLC ' ''ec" 4. Description of work to be performed: "Pacific CjY' Project to include 191.100 so ft for 165-room luxury boutique hotel, 163,600 sq ft of retail and 12,000, sq ft of restaurant use: 516 condiminium units, above subterranean parking, surface parking, 2.0 acres of open space park, public easment corridor and other public improvements. 5. Value and length of contract: $44,500,000: Undeterined to date (agreement stage) 6. Waiver/modification request: $10,000 deductible/general liability 7. Reason for request and why it should be granted: Unable to comply with the city's zero deductible insurance requirement 8. Identify the risks to the City in approving this waiver/modification: None DcVartme6—tHead_%gnature Date: APPROVALS Approvals must be obtained in the order listed on this form. Two approvals are required for a request to be granted. Approval from the City Administrator's Office is only required if Risk Management and the City ey's Office disagree. 1. Risk Management P"A�pproved ❑ Denied Signature 2. City Attorney's Office KApproved ❑ Denied Signature Date 3. City Administrator's Office ❑ Approved ❑ Denied Signature Date If approved, the completed waiver/modification request is to be submitted to the City Attorney's"Office along with the contract for approval. Once the contract has been approved, this form is to be filed with the Risk Management Division of Administrative Services POLICY NUMBER DGLSF184262015 COMMERCIAL GENERAL LIABILITY THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED - DESIGNATED PERSON OR ORGANIZATION This endorsement modifies insurance provided under the following: COMMERCIAL GENERAL LIABILITY COVERAGE PART SCHEDULE Name of Person or Organization: The City of Huntington Beach, its agents, officers and employees and the Redevelopment Agency of the City of Huntington Beach 2000 Main Street, 5th Street Huntington Beach, CA 92648- RE: Street Improvement and Utility Work related to the Pacific City project, The City of Huntington Beach, its agents, officers and employees and the Redevelopment Agency of the City of Huntington Beach is named as Additional Insured per attached company form. Named Insureds Include: Makallon Atlanta Huntington Beach, LLC, Makar Properties, LLC, Makallon, LLC. (If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.) WHO IS AN INSURED (Section 11) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you. CG 20 261185 Copyright, Insurance service tom, Inc_ 1984 If the certificate holder is an ADDITIONAL INBUkW, the policy(ies) must be endorsed;A statement: can this certificate does not confer rights to the certificate holder in lieu of such eridorsement(s). If SUBROGATION IS VNAtVeD. subject to the terft "and conditions, of the policy, certalry policies r a° require an endorsement .A statement on this tifcate does not confer rights to the: cerfifi to holder in lieu of such endorsernent(s). The Certificate of Insurance on the reverse side of this form dies not constitute a contract between the issuing insurer(s),; authorized representative' or producer, and the certificate' holder, nor does it affirmatively' or negatively amend, extend or alter the, coverage afforded by the policies fisted thereon. MAKARPR-01 SANM ACORD-.. CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY) 7/11/2006 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION D.LD. Insurance Brokers, Inc. Lic#OD25325 26 Corporate Park #200 ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. Irvine, CA 92606 INSURERS AFFORDING COVERAGE NAIC # INSURED Makallon Atlanta Huntington Beach, LLC INSURER A: Everest National Ins. CO. 4100 MacArthur Blvd. #200 Newport Beach, CA 92660-7080 INSURER B: INSURER C: INSURER D: INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR ADDT URANCE POLICY NUMBER POLICY EFFECTIVE D TE MM DD POLICY EXPIRATION DATE LIMITS GENERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY A A E To RENTED PREMISES Ea occurence $ MED EXP (Any one person) $ CLAIMS MADE F—IOCCUR PERSONAL & ADV INJURY $ GENERAL AGGREGATE $ GEN'L AGGREGATE LIMITAPPLIES PER PRODUCTS-COMP/OP AGG $ POLICY JECT PRO- LOC AUTOMOBILE LIABILITY ANY AUTO COMBINED SINGLE LIMB (Ea accident) $ BODILY INJURY (Per person) $ ALL OWNED AUTOS SCHEDULED AUTOS BODILY INJURY (Per accident) $ HIRED AUTOS NON -OWNED AUTOS PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $ OTHER THAN EA ACC $ ANY AUTO $ AUTO ONLY: AGG EXCESS/UMBRELLA LIABILITY EACH OCCURRENCE $ AGGREGATE $ OCCUR CLAIMS MADE $ DEDUCTIBLE $ RETENTION $ A WORKERS COMPENSATION AND EMPLOYERS' LIABILITY ANY PROPRIETOR/PARTNER/EXECUTIVE CA20010536051 8/12/2005 8/12/2006 X W C STATUS TOR STAYLIMITS I I ER E.L. EACH ACCIDENT $ 1,000,00 E.L DISEASE - EA EMPLOYE $ 1,000,00 OFFICER/MEMBER EXCLUDED? 6 yes, describe under SPECIAL PROVISIONS below - E.L. DISEASE - POLICY LIMIT $ 1,000,00 OTHER DESCRIPTION OF OPERATIONS LOCATIONS / VEHICLES / EXCLUSIONS ADDED BY ENDORSEMENT / SPECIAL PROVISIONS Operations of the Named Insured E: Street Improvement and Utility Work related the Pack City project. CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION Redevelopment Agency of the City of Huntington City Huntington Beach and the DATE THEREOF, THE ISSUING INSURER WILli0LVJ fa0tb MAIL 30 DAYS WRITTEN Beach NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, 00XY@1LXJ00LXXXYWXL Attn: Risk Management own 2000 Main Street, 5th Street Huntington Beach, CA 92648- AUTHORIZED REPRESENTATIVE ACORD 25 (2001/08) © ACORD CORPORATION 1988 MAKARPR-01 SANM IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORD 25 (2001108) ATTACHMENT'#6 Pacific City Owner Participation Agreement October 16, 2006 1 2 Project Desc 191,100 sf mixed -use projec 165 room, luxury boutique 1 • 163,000 sf retail & 12,000 s • 516 condominium units abo parking and surface parking • 2.0-acre open space/park, pt corridor, and other public in ion an t 3 Public Ben 1. In -Lieu Housing fee ($20 create additional 117 units 2. Regional Urban Runoff Trc 3. Pacific View Avenue Exte additional street enhancem 4. 45,000 sf Senior Center s, t Agreement Terms Participant • Advance $5.5 million to the Agency: — Regional Urban Runoff Treatment System — Pacific View Extension • $20 million in In -Lieu Housing fees • Park In -Lieu Fee assessed against the residential portion will fund the Senior Center Project Agenc • Pay the $5.5 million over a 20 year period from Tax Increment. 2 Recommended Ac A enc : 1. Waive the 30 day OPA receipt requirem an action as required by Agency Resolu 213 (Attachment 1), and 2. Adopt Agency Resolution No. (Attachment 2) approving an Owner Pa Agreement (Attachment 4) among the C Agency and Makallon Atlanta Huntingto LLC and making certain determinations' findings. h, Recommended Action City Council: Adopt City Resolution No. consenting to payment by the Redevelopment Agency of a portion of the costs of the installation and construction of (i) a Regional Urban Runoff Treatment System, and (ii) the extension of Pacific View Avenue, approving an Owner Participation Agreement among the City, the Agency and Makallon Atlanta Huntington Beach, LLC, and making certain determinations and findings. 5 CITY OF HUNTINGTON BEACH ACTRECEIVED I i CIT- Interdepartmental Communication j y _ �` HUNTINGT ?i BEACH TO: JOAN FLYNN, City Clerk FROM: JENNIFER MCGRATH, City Attorney DATE: October 12, 2006 SUBJECT City Council Meeting 10/16/06, Agenda Item F-3 E The attached signature page is an original signature dated October 6, 2006, for Paul Makarechian, Chief Executive Officer for Makallon Atlanta Huntington Beach, LLC, a party to the Owner Participation Agreement ("OPA") that will be considered for approval as part of Agenda Item F-3 of the City Council meeting to be held on October 16, 2006. } I On behalf ofMakallon Atlanta Huntington Beach, LLC, this office requests that the attached` page replace page 42 of the OPA included in Agenda Item F-3 as it correctly identifies Makallon Atlanta Huntington Beach, LLC as the party to the OPA JENNIFER MCGRATH, j City Attorney /lc Attachment as above c: Administration 0 �6 /e, � 06-476/5077 Date: A%C y ' / /(D // � /0 � MAKALLON ATLANTA HUNTINGTON BEACH LLC, a Delaware limited liability company, its Member By: Makar Properties, LLC, a Delaware limited liability company, its Authorized Member Managing Member By: . Paul Makarechian \ Chief Executive Officer 42 CITY OF HUNTINGTON BEACH 2000 MAIN STREET OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK October 19, 2006 Tom Daly O. C. Clerk — Recorder 12 Civic Center Plaza, Rm. 101 Santa Ana, CA 92701-4057 Attn: Document Examiner CALIFORNIA 92648 Enclosed please find the an OWNER PARTICIPATION AGREEMENT by and among Redevelopment Agency of the City of Huntington Beach, Agency and The City of Huntington Beach, City and Makallon Atlanta Huntington Beach, LLC, Participant to be recorded and returned to the City of Huntington Beach, Office of the City Clerk, 2000 Main Street, Huntington Beach, CA 92648. Please return a conformed copy of the Owner Participation Agreement when recorded to this office. We have enclosed a copy of the agreement for you to conform. . I ty Clerk JF:pe Enclosures Attachment: Pacific City G:/followup/deeds/deedlefter2002.doe Procedure #18 ( Telephone: 714-536-5227 ) JJ CITY OF HUNTINGTON BEACH Interdepartmental Communication TO: JOAN FLYNN, City Clerk ROBERT BEARDSLEY, Director of Public Works STANLEY SMALEWITZ, Director of Economic Development SCOTT HESS, Acting Director of Planning FROM: JENNIFER McGRATH, City Attorney DATE: November 20, 2006 SUBJECT: PACIFIC CITY OPA/TERMINATION OF WALNUT AVENUE AGREEMENT By this memorandum, we are transmitting the original Memorandum of Termination of Agreement Regarding Atlanta Avenue Site to the City Clerk's office for retention. A copy of this agreement is also being included for the files of Economic Development, Public Works, Planning and Agency Special Counsel. Please do not hesitate to contact me if you have questions. JENNIFER McGRATH City Attorney Enclosure as noted cc: Susan Apy, Kane Ballmer & Berkman 06-476/6037 o � � ... REV(Vr\s . FGri Gilt' COUNCL At, P.1ed Date to: To Honorable Mayor and City Council Witted by: Charles W. Thompson, City Administrat r pared by: Paul E. Cook, Director of Public Works L .�X DPromhPr in. 19A/ G1ZZ GOUrC,1L ject: AGREEMENT WITH HUNTINGTON BEACH COMPANY ERTAIN �, cizY 0- CERTAIN ARTERIAL STREET IMPROVEMENTS IN THE - I REDEVELOPMENT AREA sistent with Council Policy? [X] Yes [ ] New Policy or Exception Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments: STATEMENT OF ISSUE: In order to fully develop arterial highways to accommodate redevelopment in the Main -Pier area, it is necessary to acquire the necessary street rights -of -way within the Huntington Beach Company's Atlanta Property. _ RECOMMENDATION: Approve the agreement between the City and the Huntington Beach Company providing for the Company to dedicate the necessary rights -of -way for the widening and full )rovements on the south side of Atlanta Avenue from Huntington Street to Lake Street ..i the east side of Lake Street from Pacific Coast Highway to Atlanta Avenue, as well as full improvements for the extension of Walnut Avenue from Lake Street to Huntington Street. -- ANALYSIS: In order to improve traffic flow to accomdate redevelopment in the Main -Pier area, it will be necessary to fully develop the arterial highways in the area including bth Street, Orange Avenue, Walnut Avenue, Lake Street and Atlanta Avenue. The City does not now have adequate rights -of -way to widen many of these streets. Within the Huntington Beach Company's Atlanta property which is shown on the attached map, 20 feet of additional. right-of-way is needed on both Lake Street and Atlanta Avenue. Also, in order to construct the extension of Walnut Avenue,.Rcrfeet of right-of-way needs to be acquired for that highway. ').= The Huntington Beach Company has agreed to dedicate the necessary rights -of -way to the City in exchange for the City constructing all the required improvements including pavement, curb and gutter, sidewalk, landscaping, street lights, water lines and storm drains. These improvements will be installed when the City Council deems them to be necessary. FUNDING SOURCE: ost of these street improvements will be rnative funding sources are redevelopment County aid. financed from yet undetermined sources. funds, City gas tax, Federal aid and � T RCA - Agreement with H.B. Company Pretaining to Certain Arterial St. Imp. in the Main -Pier Redevelopment Area December 10, 1966 Page 2 ALTERNATIVE ACTION: 1. Do not approve the attached agreement. 2. Negotiate a new agreement. ATTACHMENTS: 1. Agreement 2. Map. C W T: PE C:d w " 1137g r AVFwuE ►`V Im Q Y ® Page 11 - Council Minutes - 12/15/86 Following discussion, a Notion was made by Winchell, seconded by Green, to adopt Resolution Nu. 5740. The motion carried by the following roll call vote: AYES: Winchell, Mays, Kelly, Erskine, Green NOLIS : None ABSENT: Finley, (Bannister out of the room) AGREEMENT APPROVED-- QUITCLAIM DEED FROM HUNTINGTON BEACH CO - PERR RIGHT -OP - WAY BETWEEN UTICA b ELNIRA The City Clerk presented a communication from the Director of Public Works regarding a proposed agreement between the City and the Huntington Beach Com- pany. Following discussion, a motion was made by Mays, seconded by Erskine, to approve and authorize execution of an agreement between the City and the Hunt- ington Beach Company of a quitclaim by the Huntington Beach Company to City of its interests in the Pacific Electric Railroad right-of-way between Utica and Elmira Avenues excepting a ten foot wide easement for Chevron and lines along the east side of the right-of-way. The motion carried by the fol- lowing roll call vote AYES: Mays, Kelly, Erskine, Green 'OES: Winchell _,BSENT: Finley, (Bannister out of the room) AGREEMENT APPROVED - HUNTINGTON BEACH COMPANY - CERTAIN. ARTERIAL STREET IMPROVEMENTS IN MAIN -PIER REDEVELOPMENT AREA The City Clerk presented a communication from the Director of Public Works regarding a proposed agreement between the City and the Huntington Beach Com- pany. A motion was made by Mays, ..seconded by Erskine, to approve and authorize exe- cution of an agreement between the City and Huntington Beach Company providing for the Huntington Beach Company to dedicate the necessary rights -of -way for the widening and full improvements on the south side of Atlanta Avenue from Huntington Street to Lake Street and the east side of Lake Street from Pacific Coast Highway to Atlanta Avenue, as well as full improvements for the exten- sion of Walnut Avenue from Lake Street to Huntington Street. The motion car- ried by the following roll call vote: AYES: Mays, Kelly, Erskine, Green NOES Winchell, ABSENT: Finley, (Bannister out of the room) `EEMENT APPROVED - HUNTINGTON BEACH CO - WATER BOOSTER STATION ODNSTRUCTION ,W CORNER CLAY GOLDENWEST Thee City Clerk presented a communication from the Director of Public Works regarding a proposed agreement between the City and the Huntington Beach Com- pany. ' - ' it I� , � `` , 1. I ' Ai :: it i c'it �II I I A•W111�!Ifd I EUMPT. 87-30381 U 1 tot �J AT THE REQUEST CF AND AGREEMW4T BETWEEN T11E CITY OF HUNTINGTON W AT THE RE OF CITY CLERK BEACH AND THE HUNTINGTON BEACH COMPANY CONCERNING HUNTINGTON REACH COMPANYIS "MIN STREET ATLANTA AVENUE PROPERTY INGTCN BEACH, CA 92648 This Agreement is entered into this 1L day of December, i986, at :luntington Beach, California, by and between the HUNTINGiON 13EACH COMPANY hereinafter called 'OWNER,' and the CITY Of HUNTINGTON BEACH, a municipal corporation of the State of California, hereinafter called 'CITY.' WITNESSETh WHEREAS, OWNER owns the Atlanta Avenue property described on Exhibit A attached hereto and hereinafter called the 'Property'; and WN.::REAS, THE CITY would like OWNER to dedicare certain 1sr.rLion:; ?i 1.11u 11ruporLy LU +•hlr CITY tur public u::r: ..nd development; and WHFREAS, in consider.aL•ion of OWNER's dedication of such pottions of. the Property, CITY is willing to install at CITY's sole cost and expense certain public imp.:ovements on the dedicated portions of the Property. ;If?W, THEE FORE, the parties hereto agree as follows: 1. AULhority: Lach party hereL•o repres+.nLS to the other Lhat it has Lull and complete tsuthoriLy co enter into this Agroelrent, and Lha1: each party hereto considers tlri:; Aureement to be ioir, reasonable and ndvantayaeu:l to each, and this Agreement- sh4ll be binding regarulenu of the tact that thc• rirlht:r and obligations; may be dCall• wi!.h tsy ::LCCe,sor lcyialal•ivv Iwdieu of CTTY. Thip, docum9nt i:r noluly for thn ufficInI L ss:Env n.. th" rf ty or rwla Suo. 610Z turd 11,0111d ho s•ucas•ded 1 •iption: Orange, CA Document -Year. DoclD 1987. 303610 Page: 1 of 9 2226116 karina Comment: I I a '�1�)1��!r lii,.i '1'. ' j'� d�» "�,'i�"0 '.i�flil::;; i �g ,i i �i�j41i I � � �`•if.;d;.�, 87-303610 2. Owner's Obligation: OWNER agrees to dedicate to CITY upon City's demand, and CITY agrees tO accept those portions of the Property necessary for public street Improvements, as said Improvements are hereinafter described, in Lake Street, Walnut Avenue and Atlanta Avenue as said streets are shown on Exhibit B, attached hereto. Said streets may be constructed in locations other than shown on Exhibit 8 by mutual agreement at OWNER and CITY. In the event the portions of the Property necessary for the Improvements have not been dedicated to the CITY within twenty (20) years of the date i.his a9ccement ::hall f.cr.min.itc and neither pr.r.ty hereto ;hat! t,4ve any fuct•her obliyaticn to the ether her --under. it is hereby agreed that OWNER's obligations declicaLe for s::id c:.recLz shall be limited as follows: a. Lake Street - Twenty feet (201) of property for widening take Street to a total width of Ninety five feet (95'). b. Atlanta Avenue - Thirty feet (30') of property for widening Atlanta Avenue to a total width of Ninety feet (90'). C. Walnut Avenue - Ninety feet (90') of property for widening Walnut Avenue Lo a total width of Ninety feet (90'). 3. In consideration of OWNI:N making the above described dedi.ral inn to CITY, CITY nhall, at its sole coat, construct or r:just- tc be constructed, all required public streeL improvemonts fot Lake-`Lrecl•, Walnut Avenue and Atlanta where rush-.LreeL:; adjoin or pass Lhrough the Property, and no costa for. nuch improvemeaLs sholl be impeded upon owner an a cc,ndition of any dev�_iopment, AG used in this nection, required public ntr.ect. mripttan: oxange,CA Document- Year. DocZD 1987.303610 Page: 2 of 9 �a'dP+11►') fit_ 2226116 karina Co—ent: 1111 i 1: I 1 I I I ' 1! I III i 9 I h d 87-303610 improvements shall include, but shall not be limited to, excavation, grading, compacted base, asphalt paving, striping, concrete curbs, sidewalks, gutters and medians, water lines, fire hydrants, sewer liness dnu wanhules, storm drains and inlet structures, street lights, signage, landscaping, and irrigation systems located within the public right of way, in accordance with standard Plans of CITY (hereinafter collectively called "'the Improvements"). The Improvements shall be installed concurrently with the development of the Property or any portion thereof for anich any portion of the Improvements are required. CITY may install the Improvements or any portion thereof prior to the development of the Property. No prevision Of Lhis Agreement shall be construed to limit the authority of the CITY to charge processing fees for land use approvals, building permits, and other similar permiL•s and entitlements which are in force and effect on a city-wide basis at the time those permits are applied for, except to the extent that ai►y such processing fees would be inconsistent with this Agreement. 5. California Law and Attorneys Fees: This Agreement shall be con-strued in accordance with the laws of the State of California. Should legal action be brought 1,y either party for breach of this Agreement, ur to enforce any covenants and L•here provir.ion:: heroin, tho prevailing pnrLy cf ouch action shall be entitled to reasonable attorney fees and all costs including, but not limited to, cuurL co::tc. G. lao .)oinl• Venture: The partie3 hereby renounce Lhe vxic_encv of any form of juiot venture or partnership between them and ayrce that nothing 3. :1iPt4cm: .Orange,CA Document-Year.DoclD 1987.303610 Page: 3 of 9 r: _ 222 126 karina Couzatent : I I�1 (I•� ,i �! 11:�1'liIl Ei a �i; I I III I ! i� i�l I li;,:l{ina�•ii!t�l.�lfl�+ii ( .I i l ._.�df 'Iaii�.� 87®203G10 contained herein, or in any document executed in connection herewith, a hall be construed a& making CITY and OWNER joint venturers or partners. 7. Legal Challenge: In the event of any leeal action instituted by any third party, or other governmental entity or official, challenging the validity of any of the provisions of this Agreement, the parties agree to cooperate in defending_ said sction. S. Best Interest: CITY has found and determined that execution of this .At1rc-cment is in the best inLcre;:.s of the public health, :-ZiFety ,ind qt-neral welfare, and the provisions of this Ajrrcment are consistent with existing ordinances or L•he CITY. 9. Notice: All notices required by this agreement shall be in wriL•ing and delivered in person or by certified mail, as follows: Notice to CITY shall be addressed as follows: City Administrator. City Df. iluntington Beach 20U0 Main strut HunL•ington Beach, CA 92640 Notice to OWNER shall h� cddressed an follows: 1lunt1nylon Dvach Company 2110 Mnin Street Huntington 3rach, CA 92640 10. Amend:nentu: This Agreement may only be amender] by mutual written consent of the parties. 4. sriptlan: Orange,CA Document-Year.DoclD 1987.303610 Page: 6 of 9 1ar�B�!$rl ®r: aaasi16 karina cozment: I I I 1 di 87-303610 11. Duplicate Originalet This Agceement is executed itt duplicate originals, each c:r which is deemed to be an original. i;ITNESS WHERLOC, the parties hereto have Caused thtr Agreement to be executed by and through their authorized officers at Huntington Beach, California on the day, month, and year first above written. HUNTINGTON I COMPANY V'.e c- residenL / ec,:etary. City Clerk kEVILWU APPROVED: Ct. Ad►ninis r STATE OF CAWroRNIA I s9s r.Otiii+OtY OF ORAIMR ) APPROVLD AS TO FORM: �Cy,Ctldrncy /' G�r—. I 'IATUD AND APPI: ED: i DT u y City AdminisLrator ke velopment On thi Ft day of _ /- de , 19*_, before nK, a Notary Yublic in &tad for said County and SLets, personally appeaxed r.. bdbf , known to ne to I» the Mayor 4rI0 AJA q,9& AA. f. :"gMU461 known to as to be the City Clark o: the City of Huntington boach, the municipal corporation that exocuted the within instrusaent, known to an to be the persons who executed the within inatruatent on behalf of said municipal corporation and acknowledged to me that such municipa: crorporation executed the &aims. A 1 .• r/aw OTAR• PU,u rG ' CALIOORruA i • +R" m.t rAilillY 1 Mr r rem 1.01ru On to. )no - •.�,.a..apfty . ription: Orange,CR Document-Year.DoclD 1987.303610 Page: 5 of 9 ,RgA••-� r: 2226116 karina Con=ent: if iIF"Pat 'il f �I; ii..il �{{u� ill,� p � i11`` !Ii iit 1 11� i� � ' . !! 1{ 1 ! STATE Of CALIFORNIA COUNTY•OF ORANGE_ ) ss. 87-303610 On this day of GeccrnY e(' , 1986, before me, the undersineld, a Notary Public in and for said State,' personally appeared known to ,ne or proved to me on the basis of satisfactory evidence to be the VIC F:::...- 1 and -- — i.._ known to ma or pi ovrd to me on thc• hasis at +::is'..etory evidence to be the _:_ ___ of HUNTINGTON Ira 1i t'OMPANY, t!lnt rxec.uted the lv,thill ir1Jt,Un)Clnt, :nd Ix-I%011.111) kr1own to r.ic to be The persons whose names are subscribed to the within in--trument on behalf of such corporation, and acknowledged to me that such corporation executed the some pursuant to its by-laws or a resolution of its Board of Directors. WITNESS my hand and official seal. l,����1 ,,.•L,..nlu,rl:1 rL �q�1O� _•/�1�11/^/iI.00A•A�T • art (This aten reserved for offlclni senl) Theresa Killeen _ P1ame (typed or printed) My commission expires: 1/26/90 r1ption: Orange,CA Document- Year.DoclD 1987.303610 Page: 6 of 9 =••ogl�ssw SJ— 2226116 kMr*1Tls rt)1M"Mnt • I I 6 0 !, t' ! pci l 1 l a !-fill It 4 1 e 87-303610 EXHIBIT A DESCRIPTION OF ATLANTA PROPERTY A portion of Section 14, Township 6, Range I West, in the City of Huntington Beach, County of Orange, State of California, generally bounded by and extending to the centerli!ns of the following streets: fi.tlanta Avenue to the north; Huntington Avenue, to the cast and southeast; Pacifir. Coast lii;;hway (Ocean Avenue), to the southwest; and Lake Steet (First Street), to the west and wiption: orange,CA Document -Year, Doc-M 1987. 303610 Page: 7 of 9 h fit C ATMTA i F LE. I I ATLANTA AVENUE PROPERTY 11 20 FEET 90 FEET ..ription: Orange,CA Document -Year. DoCID 1987.303610 Page: 8 of 9 877303610 El W-1AL RECORDS "' 111+ or-, A O"Vll OU"Ty C"L* COPOEO "C"" 11 C11L.C])R1N1k OUN OF OF 4: W29,87 _SSR PM .3 12 pm W 29,87 ATLANTA I I . I 1 I I I r-*---T-- 'x N1. 7iPtion: Orange,CA Document- Yeax. DocXD 1987.303610 Page: 9 of 9 2226116 kaxina Commant: