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HomeMy WebLinkAboutWaterfront Hilton - 1996-08-05Page 2 - Council/Agency Agenda - 08/19196 COMPUTER BULLETIN BOARD ACCESS TO CITY COUNCIL AGENDAS IS AVAILABLE PRIOR TO COUNCIL MEETINGS (TELEPHONE NO.374-4215) Closed Session - City Council pursuant to Government Code Section 54956.8 to give Instructions to the city's negotiator, Michael Uberuaga, regarding negotiations with Robert L. Mayer Corporation concerning the possible grant of an easement for the property located adjacent to the Waterfront Hilton on Pacific Coast Highway. Irstruction will concern: Price and terms of payment. Subject: Waterfront DDA (Disposition and Development Agreement.) (120.80) The City Council and the Redevelopment Agency of the City of Huntington Beach vAli regularly convene in joint session for the purpose of considering the following City Council -Redevelopment Agency Agenda Items. The Huntington Beach Parking Authority, the Huntington Beach Public Financing Authority are also agencies on which Council serves as members. On each Agenda these Agencies may have items scheduled. 7:00 P.M. Council Chamber Reconvene City Council/Redevelopment Agency Meeting Roll Cali: Harman, Leipzig, Bauer, Sullivan, Dettloff, Green, Garofalo [Present] Flact Ceremony And invocation B. PUBLIC COMMENTS THE CiTY COUNCIL WELCOMES PUBLIC COMMENTS ON ALL ITEMS ON THiS AGENDA OR OF COMMUNITY INTEREST. WE RESPECTFULLY REQUEST THAT THIS PUBLIC FORUM BE UTILIZED IN A POSITIVE AND/OR CONSTRUCTIVE MANNER. PLEASE FOCUS YOUR COMMENTS ON THE ISSUE OR PROBLEM THAT YOU WOULD LIKE TO BRING TO THE ATTENTION OF THE CITY COUNCIL NEGATIVE COMMENTS DIRECTED AT INDIVIDUALS ARE NOT ACCEPTABLE. (Complete the attached Pink Form and give to the Sergeant -at -Arms who Is located near the Speaker's Podium.) 11 (3 minutes per person, time may not be donated to others. No action can be taken by Council/Agency on this date, unless agendized). This Is the time to address Council regarding Items of _Interest or on agenda Items OTHER than public hearings. [(1) Request that funding in City budget remain for Newland House operations] C-1. Council Committee/Council Liaison Reports [None] C-2. City Administrator's Report [Public hearing on budget for City scheduled for 913196 (Tuesday) Appreciation extended to "The Wave" Newspaper for printing budget charts. Correction made by City Administrator regarding (2) Page 4 - Council/Agar y Agenda - 08/19/96 �.l D-2. (City Council Redevelopment Agency) Public Hearing - Draft Environmental Impact Report No. 96-2 (EIR) -The Huntington Beach Five Redevelopment Prolect Plans-- Yorktown -Lake, Talbert -Beach, Main -Pier, Oakvlew and Huntington Center Commercial District Projects (410.05) Purpose: To receive public comments on the adequacy and scope of Draft Environmental Impact Report (DEIR) No. 96-2. DEIR No. 96-2 addresses potential impacts associated with the Amendment Merger of the City of Huntington Beach Redevelopment Projects. Background: DEIR No. 96-2 analyzes Vie potential environmental impacts associated with the proposed Redevelopment Plan Amendment Merger. The Proposal would: 1. Merge the five existing redevelopment plans Into Huntington Beach Redevelopment Plan, 2. Increase the dollar limit on the cumulative amount of tax increment revenue the agency may collect, 3. Increase the dollar limit on the amount of indebtedness that may be outstanding at any one time, 4. Extend the time within which the Agency may incur debt, 6. Extend the time the Agency may use eminent domain for the acquisition of non-residential properties within the !lain -Pier and Huntington Center sub- areas, 7. Extend the time the Agency may engage in redevelopment activities and collect tax increment, and 8. expand the list of public facilities and projects that may be undertaken by the Agency. Recommended Action: 1. Open publi hearing 2. Receive public testimony 3. Close public hearing [Open -- No speakers -- Closed -- No motion required] D-3. (City Council/Redevelopment Agency) Public Hearing - Request To. Discontinue Public Hearing Which Was Opened On July 15 1996 On Approval of Grant Of Parking Easement For Waterfront Hilton New (Public Hearing Scheduled For August 26, 1996) (600.30) A public hearing was opened on July 15, 1996, for consideration of approval of a Parking Easement Agreement for the Waterfront Hilton and contnued open until August 5, 1996, at which time a second continuance was granted to August 19, 1996. The previously noticed public hearing will not be necessary since a newublic hearing has been advertised for August 26 1996. Recommended Action: Motion to: Discontinue current public hearing. -(New pub!(s-heark;g-has- been-scWu1ed#o"i< gusc-26,499&4 {Nearing-discontfnue"s-ne"ub(1c-hearing-scheduled #oir4lQ6186] [This item completely canceled per information received 8120196] (4) "A-,% PUBLIC NOTICE . PROOF OF PUBLICATION STATE OF CALIFORNIA) ) SS. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: August 8, 22, 1996 declare, under penalty of perjury, that the foregoing is true and correct. Executed on August 22 199 h at Costa Mesa, California. aL-& �j� Signature NOTICE OFk PUBLIC HEARING CITY COUNCIL/ REDEVELOPMENT AGENCY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONSENT TO AMEND DISPOSITION & DEVELOPMENT AGREEMENT GRANT OF 76-YEAR LEASE/PARKING EASEMENT BY REDEVELOPMENT AGENCY TO WATERFRONT HILTON OF 1.6 ACRE PARCEL NOTICE IS HEREBY S GIVEN that the City Council/Redevelopment Agency of the City, of Hun. tington Beach will hold a public hearing in the Coun- cil Chambers at the Hun- tington Beach Civic Center f located at 2000 Main Street, Huntington Beach, CalKornla, on the date and , time Indicated below to re- ceive and consider the statements of all persons who wish -to be heard rela- tive to the City Council/Re. development Agency ac- tion described below. DATE/TIME: Monday, Au- gust 26, 1996 at 7:00 PM COUNCIL/AGENCY AC- TION: To consider the ap- proval of the Re- development Agency of the City of Huntington Beach amending the existing Dis- position & Development Agreement by granting a 76 year lease/parking ease- ment to the Waterfront . Hilton of 1.6 acre parcel. LOCATION: 21100 Pacific Coast Highway (NE corner of PCH and Huntington Av- REDEVELOPMENT PROJECT AREA: Main -Pier Pro ect area. O FILE: The proposed Disposition & Development Agreement amendment, lease/easemeM, and a staff report Including a summary of the amendment, Teasel easement and a report pre- pared by the Agency of the . estimated value of the lease/easement are avail- able for public Inspection at, the Office of the City Clerk, 2000 Main Street, Huntington Beach, Califor- nia 92648. ALL INTERESTED PER- SONS are Invited to; attend said hearing and express opinions or submit evi- dence for or against the action outlined above. If you challenge the Cltv Agency's action , in court, you may be limited to rats- tro only those Issues you or someone else ralsed at the public hearing de- scribed in this notice, or in. written correspondence de- livered to the City Clerk, at, or prior to the public hear - mg. If there are any further questions, please call Michael Hennessey, As- sistant Project Manager at (714) 374-1529. Direct your written communication to the City Clerk. CONNIE BROCKWAY, CITY CLERK CITY OF HUNTINGTON 996. " ", BEACH, r•` A2648 227 J Huntington ain Valley 1n= August 8, 22, PROOF OF PUBLICATION STATE OF CALIFORNIA) ) SS. County of Orange ) I am a, Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and. complete copy as was printed and published in the Huntington Beach and Fountain Valley issues of said newspaper to wit the issue(s) of: July 4, 1996 July 11, 1996 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on July 11, 1996- at Costa Mesa, California. Signature PUBLIC NOTICE NOTICE OF PUBLIC HEARING CITY COUNCIL/ .REDEVELOPMENT AGENCY THE CITY COUNCIL OF THE CITY OF . HUNTINGTON BEACH CONSENT TO GRANT OF PARKING EASEMENT BY REDEVELOPMENT AGENCY TO WATERFRONT HILTON 1 NOTICE IS HEREBY GIVEN that the City Council Redevelopment Agency of ' the City of Huntington Beach will hold a public hearing In the Council Chambers at the Hunting- ton Beach Civic Center lo- cated at 2000 Main Street, Huntington Beach, Califor- nia, on the date and time indicated below to receive and consider the state- ments of all persons who wish to be heard relative to 15, 1996 7:00 PM 0 consider the approval of the Redevelopment Agency of the City of Huntington Beach extending. the term of a parking easement ':pre-. vlously granted _to the, We - Hilton. '; ,: LOCATION: 21100 Pacific ! Coast HIghway (Northeast Corner of PC H and ` Hun - REDEVELOPMENT ROJECT AREA: Maln-Pier 'roject Area. _ ON FILE: The proposed asement, and a staff re- ort including a summary f, the easement and a re• ort pre b)r the ? gency of the estimated alue .of the extension of to easement are available x'public Inspection at the Iffice of the City Clerk, 000 Main Street, unting- Dn Beach, California 2648. ALL INTERESTED PER- ONS are invited to attend aid hearing and express pinions or submit evi- ence for or against the ction outlined above.,, if ou challenge the City ouncils action in court, Du may be limited to rats- ig only those issues you r someone else raised at to public hearing de cribed in this notice, or in i Tittencorrespondence de ✓ered to the City Clerk, at r prior to, the public hear- ig. If there are any further uestI please call Iichael Hennessey, As- stant Project Manager at 114) 374-1529: Direct your Titten communication to , to City Clerk. CONNIE BROCKWAY, i ITY CLERK, CITY OF IUNTINGTON BEACH, 000 MAIN STREET, NO FLOOR, HUNTING. 'ON BEACH,, CALIFOR- IIA 92648, (714) 536- 227: Published Huntingtor,j each -Fountain, Vaitay`;In;-.) ependent July 4, 11, 1996. ; l 071-907 f I '�lu.�,so Council/Agency Meeting Held:,�� De rredlContinued to: pproved CI Conditionally Approved O Denied City Clerk's Signature Council Meeting Date: August 19, 1996 Department ID Number. ED 96-58 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Dire or G PREPARED BY: DAVID C. BIGGS, Director of Economic Development SUBJECT: Request to Discontinue Public Hearing on Approval of Grant of Parking Easement for Waterfront Hilton I Statement of Issue, Funding Source, Aeco rrnended Action, Alternative Action(s), Analysis, Environmental Status. Attachment(s) 11 Statement of Issue: A public hearing was noti ;ed for July 15, 1996, for consideration of approval of a parking easement agreement for the Waterfront Hilton. On that date, the public hearing was continued opened until August 5, 1996, at which time a second continuance was granted to August 19, 1996. The previously noticed public hearing will not be necessary since a new public hearing has been advertised for August 26,1996. Funding Source: No direct costs. /_ r Recommended Action: Motion to: 1) Discontinue public hearing. Alternative_Action(sl: 7 1'� A �. 1) Continue public hearing open to August 261996. Analysis: In anticipation of the completion cf the documentation necessary to allow for the consideration of a parking easement agreement with the Waterfront Hilton, a public hearing was noticed for July 15, 1996, and continued most recently to August 19, 1996. A new public hearing has been advertised for August 26, 1996. As such, the now open public hearing needs to be discontinued. Environmental Status: NIA e'P3 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Request to Discontinue Public Hearing - Grant of Parking Easement/Waterfront COUNCIL MEETING DATE: August 19, 1996 RCA ATTACHMENTS STATUS Ordinance (w/exhibits 8, legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (wlexhibits if applicable) (Signed in full by the MY Attome Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by gEtZ Attorne Not Applicable Certificates of Insurance (Approved by the Cit Attomgj Not Ap2licable Financial h2act Statement Unbud et, over $5,000 Not Applicable Bonds if applicable) Not Applicable Staff Report If a licatfle ----NotAppficable Commission, Board or Committee Report if applicable) Not Applicable Find in s/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWAtMED Administrative Staff Assistant City Administrator Initial City Administrator Initial Citv Clerk ( ) EXPLANATION FOR RETURN OF ITEM: � s z SUMMARY REPORT PURSUANT TO SECTION 33433 of the r CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a PARKING EASEMENT AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and WATERFRONT CONSTRUCTION #1, A CALIFORNIA LTD PARTNERSHIP This Summary Report has been prepared for the Huntington Beach Redevelopment Agency (Agency) pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed parking easement agreement (Agreement) between the Agency and Waterfront Construction 01, A California Limited Partnership (Waterfront Construction). The transaction requires the Agency to provide Waterfront Construction with an easement on land owned by the Agency to allow for the construction of 150 parking spaces to serve the Waterfront Hilton. The parking easement area includes approximately 1.628 acres of land, which is a part of a 6.01 acre parcel subject to a ground lease between the Agency and the Robert L. Mayer Trust (Mayer Trust). This parcel is also subject to a Disposition and Development Agreement (VDA), which requires Robert L. Mayer to construct a multi -phase commercial/residential development within a defined schedule of performance. If the Mayer Trust parcel is developed in accordance with the identified tune schedule, the ground lease will be extended for a 89 year term. If the time schedule is not met, the parcel will revert to the Agency in 2010. The parking easement will not take effect until the existing ground lease between the Agency and the Mayer Trust terminates. The compensation to be received by the Agency for providing the parking easement will be paid in two tiers. The first tier payment is $240,000. The second tier payment is structured to mirror the terms of the ground lease between the Agency and Waterfront Construction for the Waterfront Hilton property. This Summary Report is based upon information contained within the proposed Agreement; and Is organized into the following six sections: I. Salient_Points of the Proposed Agreement This section includes a description of the major responsibilities of the Agency and Waterfront Construction; 11. Cost of the Agreement to -the Agency This section outlines the total and net cost of the Agreement to the Agency; Ill. Estimated Value of the Interest to be_ConveY2d This section summarizes the value of the parking easement to be conveyed to Waterfront Construction; IV. Consideration Received and Reasons Therefore This section describes the consideration to be received by the Agency for the parking easement being conveyed, and the reasons therefore. tt also contains a comparison of the fair reuse value of the property for the proposed use and the fair market value of the property at the highest and best use consistent with the redevelopment plan; V. Blight Elimination This section describes the former blighting conditions on the property, and explains how the Agreement will alleviate the blighting Influence. and; 111. Conformance with AB1290 IMpleMentation Plan This section explains how the proposed Agreement complies with the redevelopment strategy identified in the AB1290 Implementation Plan. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. 1. SAUENT POINTS OF THE PROPOSE© AGREEMENT A. Waterfront Construction Responsibilities Under the proposed Agreement, Waterfront Construction must accept the following responsibilities: 1. Waterfront Construction must construct the 150 parking spaces subject to the proposed easement. 2 ♦' 2. Waterfront Construction must agree to relocate the 150 parking spaces if the Iarger development parcel on which the parking area is located is ultimately developed. 3. If a parking structure is constructed to provide the parking spaces subject to the easement, Waterfront Construction must pay the marginal cost associated with adding.150 spaces to the parking structure at the time of construction. From that point forward, in - lieu of the ground lease payments described in Section IV (2) of this report, Waterfront Construction will be required to make air space lease payments at the fair market value defined in the Agreement. 4. Waterfront Construction shall be responsible for all costs associated with operating and maintaining the parking area. If a parking structure is developed, Waterfront Construction must pay the pro rats share of the ongoing operating expenses for the structure. B. Agency Responsibilities Under the proposed Agreement, the Agency must accept the following responsibilities: 1. The Agency must limit the future use of the easement area to parking that will exclusively serve the Waterfront Hilton. 2. The Agency must forego reversion of the easement area at the termination of the Mayer Trust ground lease. 3. The Agency must subordinate the land included in the easement area to the Waterfront Hilton financing. II. COST OF THE AGREEMENT TO AGENCY The parking easement area is part of the 6.01 acre Mayer Trust Parcel, which is In turn a part of thr. 20 acre Waterfront commercial property. The 20 acre parcel, and the adjacent 24 acre residential parcel, are subject to a ground lease, a purchase agreement, and a DDA. As a part of the conveyance, a Summary Report in compliance with Section 33433 of the California Health and Safety Code was prepared in August of 1888. That Summary Report estimated the net cost to the Agency of undertaking the full scope of development defined in the DDA 7 r The proposed Agreement effectively causes a portion of the area subject to the Mayer Trust ground lease to be reallocated to the land area included in the Waterfront Hilton ground lease. Bruce Hull, an MAI appraiser, reviewed the proposed Agreement and concluded that the value of the 6.01 acre Mayer Trust parcel is diminished by $240,000 as a result of granting the parking easement. This is implicitly a cost to be borne by the Agency to effect the proposed Agreement. No other new costs will be incurred as a result of the proposed Agreement. Ill. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED Section 33433 of the California Health and Safety Code requires the Agency to identify the value o;the Interests being conveyed at the highest use allowed under the redevelopment plan. The value of the entire Waterfront development property was appraised by Bruce Hull, an MAI appraiser, In May, 1995. This appraisal was prepared for the property as though it was being sold as a fee simple interest at the highest use allowed by the redevelopment plan. The resulting value for the entire development site was $36.66 million, or $18.70 per square toot of land area. This equates to $1.33 million for the 1.628 acre parking easement site. IV. CONSIDERATION RECEIVED AND REASONS THEREFORE The parking easement provides the site subject to the Waterfront Hilton ground lease with the use of an additional 1.628 acres of land. The proposed Agreement provides for the Agency to receive two forms of compensation for the easement, which can be described as follows: 1. Waterfront Construction shall execute a $240,000 note, to which the Agency will be the beneficiary. The note will carry 8°% interest, and will be amortized in 15 annual payments of $25,962. The payments from Waterfront Construction to the Agency will commence In August, 1996. 2. The 1.625 acre site subject to the parking easement will be subject to ground lease payments in accordance with the schedule defined for the Waterfront Hilton. These payments will commence when the Mayer Trust Interest in the property terminates. Bruce Hull, an MAI appraiser, determined that granting the proposed parking easement will diminish the value of the 6.01 acre Mayer Trust parcel by $240,000. To compensate the Agency for the decrease in value, Waterfront Construction will execute the note: referenced in (1) above. The total value of the note payments is $389,430, and the net present value of the payments, at an 8% discount rate, Is $240,000. Thus. the proposed note amount Is equal to the appraiser's estimate of the decrease in the Mayer Trust parcel land value. 4 The parking easement provides the site subject to the Waterfront Hilton ground tease with the use of an additional 1.628 acres of land. This easement allows Waterfront Construction to construct 150 parking spaces In excess of the City code requirements for the Waterfront Hilton, but It does not allow for any additional development on the site. The value of the additional land is therefore equal to the value created by the surface parking spaces, which is significantly lower than the value associated with commercial development. Thus, the compensation being paid is actually greater than the supportable value given the development restrictions being Imposed. V. BLIGHT ELIMINATION Section 33031 of the Califomia Health and Safety Code includes lack of parking as a physical condition that causes blight The addition of 150 parking spaces to serve the Waterfront Hilton hotel will create sufficient parking to adequately fulfill the needs of the hotel and meeting space_ This will directly assist in the Agency's efforts to eliminate blight within the Main -Pier Redevelopment Project Area. VI. CONFORMANCE WITH AB1290 IMPLEMENTATION PLAN The Main -Pier Redevelopment Project Area has an established goal of increasing the visitor serving commercial uses In the City's historical commercial core. The proposed Waterfront commercialfreaidential mixed -use project is identified in the Agency's AB1290 Implementation Plan as a key component in the downtown revitalization program. The construction of adequate parking to serve the Waterfront Hilton hotel is considered important to the continuing success of the hotel. Thus, the proposed Agreement is deemed to be In conformance with the AB1290 Implementation Plan. 0etie.KM 1 m8B.= August 8. i WO 5 �y NOTICE OF PUBLIC HEARING CITY COUNCIUREDEVELOPMENT AGENCY THE CITY COUNCILIREDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONSENT TO AMEND DISPOSITION R DEVELOPMENT AGREEMENT GRANT OF 75 YEAR LEASEMARKING EASEMENT BY REDEVELOPMENT AGENCY TO WATERFRONT HILTON OF 1.6 ACRE PARCEL NOTICE IS HEREBY GWEN that the City Council/Redevelopment Agency of the City of Huntington Beach will hold a public hearing in the Council Chambers at the Huntington Beach Civic Center located at 2000 Main Street, Huntington Beach, California, on the date and time indicated below to receive and consider the statements of all persons who which to be heard relative to the City CounciVRedevclopment Agency action described below. DATEITIME: Monday, August 26, 1996 at 7:00 PM COUNCIUAGENCY To consider the approval of the Redevelopment Agency of ACTION: the City of Huntington -Beach amending the existing Disposition & Development Agreement by granting a 76-year leasc/parking easement to the Waterfront Hilton of 1.6 acre parcel. LOCATION: 21100 Pacific Coast Mgh-%%my (NE corner of PCH and Huntington Avenue). REDEVELOPMENT Main -Pier Project Area. PROJECT AREA: ON FILE: The proposed Disposition & DeveIopment Agreement amendment, lcaseleasement, and a staff report including a summary of the amendment, leaseleasemcnt and a report prepared by the Agency of the estimated value of the of the lease/casement are available for public inspection at 6e Office of the City Clerk, 2000 Main Street, Huntington Beach, California 92648. ALL INTERESTED PERSONS arc invited to attend said hearing and express opinions or submit evidence for or against the action outlined above. If you challenge the City Council's/ Redevelopment Agency's action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described is this notice, or in ►witten correspondence delivered to the City Clerk, at or prior to the public hearing. If there are any further questions, please call Michael Hennessey, Assistant Project Manager at (714) 374-1529. Direct }-our «Titten communication to the City Clerk. CONNIE BROCKWAY, CITY CLERK CITY OF HUNTENGTON BEACH 2000 MAIN STREET, 2ND FLOOR HUNTINGTON BEACH, CALIFORNIA 92648 (714) 536-5227 By: Connie Brocknay, City Clerk City of Huntington Beach Publish August 8 & 15,1996 08/07/1996 17:41 213622159N KEYSER Mr-RST014 LA PAGE 02 SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a PARKING EASEMENT AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and WATERFRONT CONSTRUCTION 91, A CALtFORNIA LTD PARTNERSHIP This Summary Report has been prepared for the Huntington Beath Redevelopment Agency (Agency) pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed parking easement agreement (Agreement) between the Agency and Waterfront Construction #1, A California Limited Partnership (Waterfront Construction). The transaction requires the Agency to provide Waterfront Construction with an easement on land owned by the Agency to allow for the construction of 150 parking spaces to serve the Waterfront Hilton. The parking easement area includes approximately 1.628 acres of land, which is a part of a 6.01 acre parcel subject to a ground lease between the Agency and the Robert L. Mayer Trust (Mayer Trust). This parcel is also subject to a Disposition and Development Agreement (DOA), which requires Robert L. Mayer to construct a multi -phase commerciallresidential development within a defined schedule of performance. If the Mayer Trust parcel is developed in accordance with the identified time schedule, the ground Iease will be extended for a 99-year term. if the time schedule is not met, the parcel will revert to the Agency in 2010. The parking easement v6ill not take effect until the existing ground lease between the Agency and the Mayer Trust terminates. The compensation to be received by the Agency for providing the parking easement will be paid In two tiers. The first tier payment is $240.000. The second tier payment is structured to mirror the terms of the ground lease between the Agency and Waterfront Construction for the Waterfront Hilton property. This Summary Report Is based upon Information contained within the proposed Agreement; and Is organized Into the following six sections: 08/07/1996 17:41 2136275204 KEYSER MARSTOtl 1 A PAGE 03 I. Salient Points of the Proposed Agreement This section includes a description of the major responsibilities of the Agency and Waterfront Construction; 11. Cost of the Agreement to the Agency This section outlines the total and net cost of the Agreement to the Agency; Ill. Estimated Value of the Interest to be Conveyed This section summarizes the value of the parking easement to be conveyed to Waterfront Construction; IV. Consideration Received and Reasons Therefore This section describes the consideration to be received by the Agency for the parking easement being conveyed, and the reasons therefore. It also contains a comparison of the fair reuse value of the property for the proposed use and the fair market value of the property at the highest and best use consistent with the redevelopment plan; V. Blight Elimination This section describes the former blighting conditions on the property, and explains how the Agreement will alleviate the blighting influence, and; V1. Conformance with AB1290Implementation Plan This section explains how the proposed Agreement complies with the redevelopment strategy Identified in the AS1290 Implementation Plan. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement_ I. SALIENT POINTS OF THE PROPOSED AGREEMENT A. Waterfront Construction Responsibilities Under the proposed Agreement, Waterfront Construction must accept the following responsibilities: 1. Waterfront Construction must construct the 150 parking spaces subject to the proposed easement. 2 08/0VISS6 17:41 2136225`1 t«YSER MARSTO 4 t 4 PAGE 04 V 2. Waterfront Construction must agree to relocate the 150 parking spaces if the larger development parcel un which the parking area is located is ultimately developed. 3. If a parking structure is constructed to provide the parking spaces subject to the easement, Waterfront Construction must pay the marginal cost associated with adding - 150 spaces to the parking structure. This payment will be made at the time of construction, and will replace. the compensation provided for the parking easement. 4. Waterfront Construction shall be responsible for all costs associated with operating and maintaining the parking area. If a parking structure Is developed, Waterfront Construction must pay the pro rats share of the ongoing operating expenses for the structure. S. Agency Responsibilities Under the proposed Agreement, the Agency must accept the following responsibilities: 1. The Agency must limit the future use of the easement area to parking that will exclusively serve the Waterfront Hilton. 2. The Agency must forego reversion of the easement area at the termination of the Mayer Trust ground lease. 3. The Agency must subordinate the land included in the easement area to the Waterfront Hilton financing. 11. COST OF THE AGREEMENT TO AGENCY The parking easement area is part of the 6.01 acre Mayer Trust Parcel, which is In turn a part of the 20 acre Waterfront commercial property. The 20 acre parcel, and the adjacent 24 acre residential parcel, are subject to a ground lease, a purchase agreement, and a DDA. As a part of the conveyance, a Summary Report in compliance with Section 33433 of the California Health and Safety Code was prepared In August of 1988. That Summary Report estimated the net cost to the Agency of undertaking the full scope of development defined in the DDA The proposed Agreement effectively causes a portion of the area subject to the Mayer Trust ground lease to be reallocated to the land area included in the Waterfront Hilton ground lease area. Bruce Hull, an MAI appraiser, reviewed 3 ZS/87/1996 17:41 2136225204 KEYSER MARSTW LA PAGE 135 the proposed Agreement and concluded that the value of the 6.01 acre Mayer Trust parcel is diminishes' by $240,000 as a result of granting the parking easement. This is effectively a cost that is being borne by the Agency to effect the proposed Agreement. No other new costs will be incurred as a result of the proposed Agreement. Ill. ESTIMATED VALUE OF THE INTEREST TO.BE CONVEYED Section 33433 of the California Health and Safety Code requires the Agency to Identify the value of the interests being conveyed at the highest use allowed under the redevelopment plan. The value of the entire Waterfront development property was appraised by Bruce Hull, an MAI appraiser, in May of 1995. This appraisal was prepared for the property as though it was being sold as a fee simple interest at 0e highest use allowed by the redevelopment plan. The resulting value for the entire development site was $36.65 million, or $18.70 per square foot of land area. This equates tv $1.33 mittion for the 1.628 acre parking easement site. IV. CONSIDERATION RECEIVED AND REASONS THEREFORE The parking easement provides the site subject to the Waterfront Hilton ground lease with the use of an additional 1.628 acres of land. The Agreement provides for the Agency to receive two forms of compensation for the easement, which can be described as follows: 1. Waterfront Construction shall pay the Agency S240,000 in the form of a 15 year note carrying 8% Interest. The note payments will commence on August 15, 1996, and will be due in equal annual installments thereafter. 2_ The 1.628 acre site subject to the parking easement will be subject to ground lease payments in accordance with the schedule defined for the Waterfront Hilton. These payments will commence when the Mayer Trust Interest in the property terminates. Bruce Hull, an MAl appraiser, determined that granting the proposed parking easement will diminish the value of the 6.01 acre Mayer Trust parcel by $240,000. The Agreement requires Waterfront to pay the Agency $240,000 in the form of a note bearing Interest, which will be fully repaid in 2010. Thus, the proposed parking easement payment of $240,000 Is equal to the value established by the appraiser. The parking easement provides the site subject to the Waterfront Hilton ground lease with the use of an additional 1.628 acres of land. This easement allows Waterfront Construction to construct 150 parking spaces in excess of the City code requirements for the Waterfront -Hilton, but it does not allow for any 4 08/07/1996 17:41 2136225204 KEYSER fi1.",r,ST014 LA PACE 06 V additional development on the site. The value of the additional land is therefore equal to the value created by the surface parking spaces. which Is significantly lower than the value associated with commercial development. Thus, the compensation being paid is actually greater than the supportable value given the development restrictions being imposed. V. BLIGHT ELIMINATION Section 33031 of the California Health and Safety Code includes lack of parking as a physical condition that causes blight. The addition of 150 parking spaces to serve the Waterfront Hilton hotel will create sufficient parking to adequately fulfilI the needs of the hotel and meeting space. This will directly assist in the Agency's efforts to eliminate blight within the Main -Pier Redevelopment Project Area. VI. CONFORMANCE WITH AB1290 IMPLEMENTATION PLAN The Main -Pier Redevelopment Project Area has an established goal of increasing the visitor serving commercial uses In the CVs historical commercial core. The proposed Waterfront commercial/residential mixed -use project is identified in the Agency's A01290 Implementation Plan as a key component in the downtown revitalization program. The construction of adequate parking to serve the Waterfront Hilton hotel Is considered Important to the continuing success 'of the hotel. Thus. the proposed Agreement is deemed to be in conformance with the AS1290 Implementation Plan. 96438.HT B 140M C" 5 V CITY OF HUNTINGTON BEACH TO Connie Brockway, City Clerk FROM David C. Biggs, Director of Economic Development 04 SUBJECT Waterfront Easement Update DATE July 30, 1996 For you records I have enclosed updated copies of the 33433 Report and the Real Estate Appraisal for the subject property. If you have any questions, please call me or, in my absence, please calf Michael Hennessey of my staff at ext. 1529. DCB/MH:lb e7/29/1996 11:39 21362252e4 KEYSER M1ARSTON LA PAGE 02 tti SUMMARY REPORT PURSUANT TO SECTION 33433 of the CAUFORNIA COMMUNITY REDEVELOPMENT LAW on a PARKING EASEMENT AGREEMENT by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and WATERFRONT CONSTRUCTION #11, A CAUFORNIA LTD PARTNERSHIP This Summary Report has been prepared for the Huntington Beach Redovelopment Agency (Agency) pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed parking easement agreement (Agreement) between the Agency and Waterfront Construction #?, A California Limited Partnership (Waterfront Construction). The transaction requires the Agency to provide Waterfront Construction with an easement on land owned by the Agency to allow for tho construction of 150 parking spaces to serve the Waterfront Hilton. The parking easement area includes approximatoly 1.628 acres of land, which is a part of a 6.01 acre parcel subject to a ground tease between the Agency and the Robert L. Mayer Trust (Mayer .Trust). This parcel is also subject to a Disposition and Development Agreement (DDA), which requires Robert L. Mayer to construct a multi -phase commercialfresidential development within a defined schedule of performance. If the Mayer Trust parcel is developed in accordance with the identified time schedule, the ground lease will be extended for a 99-year term. If the time schedule is not met, the parcel will revert to the Agency in 2010. The parking easement will not take effect until the existing ground lease between the Agency and the Mayer Trust tenninates. The compensation to be received by the Agency for providing the parking easement will be paid in two tiers. The first tier payment is $240,000. The second tier payment Is structured to mirror the terms of the ground lease between the Agency and Waterfront Construction for the Waterfront Hilton property. This Summary Report Is based upon Information contained within the proposed Agreement; and Is organized into the following six sections: I. Salient Points of the Proposed Agreement This section includes a description of the major responsibilities of the Agency and Waterfront Construction; OU29/1996 11:39 213622520a KEY" -;ER t'WRSTW LA Pam€ 03 It. Cost of the Agreement to the Agency This section outlines the total and net cost of the Agreement to the Agency; W. Estimated Value of the Interest to be Conveyed This section summarizes the value of the parking easement to be conveyed to Waterfront Construction; IV. Consideration Received and Reasons Therefore This section describes the consideration to be received by the Agency for the parking easement being conveyed, and the reasons therefore. It also contains a ccmparison of the fair reuse value cf the property for the proposed use and the fair market value of the property at tho highest and best use consistent with the redevelopment plan; V. Blight Elimination This section describes the former blighting conditions on the property, and explains how the Agreement will alleviate the blighting influence. and: Vl. Conformance with ABf 290 Implementation Plan This section explains how the proposed Agreement complies with the redevelopment strategy identified in the ABt290 Implementation Plan. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement 1. SALIENT POINTS OF SHE PROPOSED AGREEMENT A. Waterfront Construction Responsibilities Under the proposed Agreement, Waterfront Construction must accept the following responsibilities: 1. Waterfront Construction must construct the 150 parking spaces subject to the proposed easement. 2. Waterfront Construction must agree to relocate the 150 parking spaces if the larger development parcel on which the parking area Is located is ultimately developed. 2 07/29/1996 11:39 2136225204 KEYSER MARSTON EA PAGE 64 3. If a parking structure is constructed to provide the parking spaces subject to the eagwment, Waterfront Construction must pay the 'Waterfront Parking Facility Rent'. This rent will replace the compensation provided for the parking easement. The rent will be equal to the greater of the parking easement payment or the marginal cost associated with adding 150 spaces to the parking Structure, 4. Waterfront Construction 511211 be responsible for all costs associated with operating and maintaining the parking area. if a parking structure is developed, Watefront Construction must pay the pro rats share of the ongoing operating expenses for the structure. B. Agency Responsibilities Under the proposed Agreement, the Agency must accept the following responsibilities: I The Agency must limit the future use of the easement area to parking that will exclusively serve the Waterfront Hilton. 2. The Agency must forego reversion of the easement area at the terminations of the Mayer Trust ground lease. 3. The Agency must subordinate the land included in the easement area to the Waterfront Hilton financing. 11. COST OF THE AGREEMENT TO AGENCY The parking easement area is part of the 6.01 acre Mayer Trust Parcel, which is in turn a part of the 20 acre Waterfront commercial property. The 20 acre parcel, and the adjacent 24 acre residential parcel, are subject to a ground lease, a purchase agreement, and a DDA. As a part of the conveyance, a Summary Report in compliance with Section 33433 of the California Health and Safety Code was prepared in August of 1988. That Summary Report estimated the net cost to the Agency of undertaking the full scope of development defined in the DIVA. The proposed Agreement effectively causes a portion of the area subject to the Mayer Trust ground lease to be reallocated to the land area included in the Waterfront Hilton ground lease area. The Agency is not required to incur any new cost to effect the proposed Agreement, nor is the compensation per square foot of land area modified from the terms of the executed ground lease and DDA. 3 it711:+11%G 11:39 21362252©4 KE'rSER MARSTON LA PAGE E5 ESTIMATED VALVE OF THE INTEREST TO BE CONVEYED Bruce Hull, an MAI appraiser, reviewed the proposed Agreement and concluded that the value associated with the parking easement varies depending on the identity of the future developer of the 6.01 acre site. If Waterfront Construction is the developer of the 6.01 acre site, the appraiser established the value of the parking easement at $1,000 to $2,500. If the 6.01 acre site is conveyed to another developer, the appraiser determined that the parking easement has a value of $240,000. IV. CONSIDERATION RECEIVED AND REASONS THEREFORE The consideration to be received by the Agency for the parking easement is $240,000, which shalt be provided in the form of a 14 year note carrying 8% Interest. The note payments Wit commence on August 15.1996, and will be due in equal annual installments thereafter. If the 0.01 acre site is conveyed to Waterfront Construction, then the note will terminate, and all note payments previously made to the Agency by Waterfront Construction will be retumed. Similarly, if Waterfront Construction wishes to terminate the parking easement prior to the conveyance of the 6.01 acre parcel to another developer, the Agency must return all note payments made by Waterfront Construction. The proposed parking easement payment of $240,000 is equal to the value established by Bruce Hull, an MAI appraiser. based on the assumption that the 6.01 acre site is not conveyed to Waterfront Construction. Th© return of the note payments is also in accordance with the appraiser's valuation conclusion, which placed a nominal value on the easement in the event the 6.01 acre site is ultimately conveyed tc Waterfront Construction. V. BLIGHT ELIMINATION Section 33031 of the California Health and Safety Code includes lack of parking as a physical condition that causes blight. The addition of 150 parking spaces to serve the Waterfront Hilton hotel will create sufficient parking to adequately fulfill the needs of the hotel and meeting space. This will directly assist in the Agencys efforts to eliminate blight within the Main -Pier Redevelopment Project Area. 4 07/2911996 11. 39 2136225204 KEYSER MARST014 LA PAGE 06 LT0 CONFORMANCE WITH A81290 IMPLEMENTATION PLAN The Main -Pier Redevelopment Project Area has an established goal of Increasing the visitor serving commercial uses in the City's historical commercial core. The proposed Waterfront commercialhesidential mixed -use project is identified In the Agency's A81290 tmplemefiation Plan as a key component In the downtown revitalization program. The construction of adequate parking to serve the Waterfront Hilton hotel is considered important to the continuing success of the hotel. Thus, the proposed Agreement Is deemed to be in conformance with the AB1290 Implementation Plan. sr".Mre 14OW OOM July M.199e 5 /.JL LIMITED -RESTRICTED APPRAISAL REPORT PROPOSED PARKING EASEMENT Waterfront Hilton City of Huntington Beach, California (Appraiser's File No. 96-27) Prepared For i'. City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Prepared By Bruce W. Hull & Associates, Inc. 13700 Alton Parkway, Suite 154 Irvine, California 92718 BTU@@ W, Hugo & °, %@@NaU@Q On o REAL ESTATE APPRAISERS b CONSULTANTS July 25, 1996 Mr. David Biggs Director of Economic Development City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 Reference: Proposed Parking Easenent to (to be) Granted to Waterfront Hilton City of Huntington Beach Dear Mr. Biggs: At your request, I have completed a limited restricted appraisal report of the proposed parking easement as referenced above. A complete description of that easement is included in the Addenda of this report. As a result of this investigation, analyses, and based upon my knowledge and experience, the following two valuation premises have been prepared. Premise I assumes that the Waterfront Hilton will continue to be the developer of the property on which -the easement is located. As a result of this investigation and studies, I have concluded at a nominal value, under this premise, of ONE THOUSAND DOLLARS ($1,000) Premise II assumes a developer other than Waterfront will develop the property on which the easement is encumbered ("Future Developer"). As a result of this investigation and studies, I have concluded at a value for the parking easement of: TWO HUNDRED FORTY THOUSAND DOLLARS ($240,000) This report is defined as a Limited Restricted Appraisal Report which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(c) of the- Uniform Standards of Professional Appraisal Practice (USPAP) effective July 1, 1994 for a Summary Appraisal Report. As such, it does not include discussions of data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Supporting documentation .- concerning the data, reasoning, and analyses is retained in the appraiser's file. The depth of discussion in this report is specific ,._ 13700 Alton Parkway - Suite 154 - W.rn, Galitmia 92718 - 714/561-21a4 w Mr. David Biggs City of Huntington Beach July 25, 1996 Page Two to the needs of the client. The appraiser is not responsible for unauthorized uses of this report. Furthermore, in accordance with the agreement between the client and appraiser, this report is a limited appraisal report in that certain allowable departures from specific guidelines of the Uniform Standards of Professional Appraisal Practice were invoked. The intended user of this report is warned that the reliability of the value conclusion provided may be impacted to the degree there is a departure from specific guidelines of USPAP. Departure Provisions applicable in this report are USPAP Standards 1-3, 1-2(d), 1-4(h) and 1-4(e). Respectfully qubmitted, RSJ E W. H L & ASS IATES, INC. r B ce W. Hull, MAI State Certified General IAC004964 BWH : dh Attachment 09 si"Wl CLIENT: City of Huntington Beach Redevelopment Agency 2000 Main Street Huntington Beach, California 92648 APPRAISER: Bruce W. Hull & Associates, Inc Bruce W. Hull, MAI 13700 Alton Parkway, Suite 154 Irvine, California 92618 SUBJECT: Proposed Parking Easement to be located on Mayer Trust Property (Exhibit A of this report) Huntington Beach, California PURPOSE OF THE APPRAISAL To estimate the market value of the above referenced parking easement. The reader should note that under Premise I the value conclusion is not a market value since it considers the Waterfront Hilton Will continue to be the developer. Specifically, "Value in Use" is defined as "Use value is the value a specific property has for a -specific use. Use -value focuses on the value the real estate contrib- utes to the enterprise of which it is a part, without regard to j the property -Is highest and best use or the monetary amount that might be realized upon its sale. Use value may vary depending on the management of the property and external conditions such as changes in the business." Premise II will consider the market value which is defined as follows: "The highest price on the date of valuation that would be agreed to by a seller, being willing to sell, but under no • particular or urgent necessity for so doing, nor obliged to sell, and a buyer being ready, willing and able to buy, but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. The fair market value of the property shall not include any Increase or decrease in the value of, the property that is attributable to any of the following: aj Project for which property is taken. bj Eminent domain proceedings in which the property is taken. I + � V cj Any preliminary actions of the plaintiff related to the taking of the property."I TNTEND_D USE OF THE REPORT For the sole use of assisting the client, the City of Huntington Beach Redevelopment Agency, in evaluating the granting of a parking easement. As a means of background, this parking easement is being requested by the Waterfront Hilton to accommodate the terms of a loan agreement with their lender. If they do not accomplish this by August 31, 1996 they would be required to pay down the existing loan by $1.5 million. If not completed by an additional six months, the lender would require an additional $1.5 million. INTEREST VALUED Parking easement which shall commence as of the expiration or earlier termination of the Mayer Trust Lease and shall expire upon the expiration or earlier termination of the Waterfront Construc- tion Lease. In the case at hand, I have assumed the year 2013 for the termination of the lease. The reader should note that the termination of the waterfront Construction lease is in the year 2086. The client has requested that the analysis is to exclude the on - site parking (Exhibit C located in Addenda of this report) which would exist prior to the development of the property. -EFFECTIVE DATE OF REP,_ORT July 25, 1996. DATE OF REPORT ` July 25, 1996. 3_ PPRAISAL REPORTING AND DEVELOPMENT PROCESS In preparing this report I reviewed the proposed parking easement ., agreement, gathered information from the subject neighborhood, interviewed representatives of Waterfront Hilton and lenders, and analyzed information gathered in the due diligence process. 'Title 7, Pg 3 CCP, Article 4, Paragraphs 1263.32 and 1263.33 REAL ESTATE APPRAISED The real estate being appraised is a parking easement for .150 spaces within a future parking facility. For a detailed descrip- tion please refer to Paragraph 10 (Construction of Parking Facility of Parking Easement) which is located in the Addenda of this report. HIGHEST AND BEST USE Departure Provision.I-3 from USPAP Standards was invoked for this portion of the assignment. No independent study of the highest and best use was completed. This assignment assumes that a parking facility will be constructed for the highest and best use of the property to occur on the larger parcel (Exhibit A in the Addenda of this report). CONCLUDED VALUE Subject to the following Assumptions/Limiting Conditions, Certifi- cation and as of said date of value, I have concluded that under Premise I the value is the nominal amount of (say) $1,000. The Proposed Parking Easement is vague in portions of the document. In addition, it imposes a burden on the larger parcel which could affect the marketability of the site. As a result, there is an uncertainty that is created by the granting of this easement. As a result of this burden, I have estimated the market value of the proposed parking easement at $240,000. ASSUMPTIONS AND LIMITING CONDITIONS 1. This is a Limited -Restricted Appraisal Report which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(c) of the Uniform Standards of • Professional Appraisal Practice for a Restricted Appraisal Report. As such, it does not include discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraiser's opinion of value. Support- ing documentation concerning the data, reasoning, and analyses is retained in the appraiser's file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraiser is not responsible for unauthorized use of this report. 2. No responsibility is assumed for legal or title consider- ations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 3 V L,i 3. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 4. Responsible ownership and competent property management are assumed unless otherwise stated in this report. 5. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 6. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 7. It is assumed that there are no hidden or unapparent condi- tions of the property, subsoil, or structures that render.it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 8. It is assumed that there is full compliance with all applica- ble federal, state, and local environmental regulations and laws unless otherwise stated in this report. 9. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconform- ity has been stated, defined, and considered in this appraisal report. 10. It is assumed that all required licenses, certificates of occupancy or other legislative or administrative authority from any local., state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. 11. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is express or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. r 12. It is assumed that the utilization of the land and improve - rents is within the boundaries or property lines of the property described and that there is not encroachment or trespass unless otherwise stated in this report. 13. The appraiser is not qualified to detect hazardous waste :# and/or toxic materials. Any comment by the appraiser that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination 4 La I- L would require investigation by a qualified asbestos, urea - formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The apprai- ser's value estimate is predicated on the assumption that there is not such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraiser's descriptions and resulting comments are the result of the routine observations made during the appraisal process. 14. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communi- cations barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, marketability, or utility. 15. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 16. The distribution, if any; of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used•in conjunction with any other appraisal and are invalid if so used. 17. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraiser, and in any event, only with proper written qualification and only in its entirety. 18. Neither all nor any part of the contents of this report shall be conveyed to any person or entity, other than the appraiser or firm's client, through advertising, solicitation materials, .. public 'relations, news, sales, or other media without the written consent and approval of the authors, particularly as 9' to valuation conclusions, the identity of the appraiser or firm with which the appraiser is connected, or any reference to the Appraisal Institute or MAI. Further, the appraiser or firm assumes no obligation, liability, or accountability to any third party. If this report is placed in the hands of anyone but the client, client shall make such party aware of all the assumptions and limiting conditions of the assignment. 5 19. That a title report and survey of the subject property were not made available for the appraiser's review. 20. That the Departure Provisions invoked in this report were 1-3, 1-2 (d) , 1-4 (h) and 1-4 (e) of Uniform Standards of Professional Appraisal Practice (USPAP). CERTIFICATION I certify that, to the best of my knowledge and belief: 1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions. 3. 1 have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved. 4. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. 5. This appraisal was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. 6. My analyses, opinions, and conclusions were developed, and this report has bee prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 7. I have made a personal inspection of the property that is the subject of this report. 8. No one provided significant professional assistance to the person signing this report. 9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 6 10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 11. As of the date of this report, I, Bruce W. Hull, have complete,,,,Lrequirements of the continuing education program of the Asal Institute. B e, I State Certified General IAC004964 7 DDENDA EXHIBIT "A" MAYER TRUST PROPERTY EXHIBIT "A" MAYER TRUST PROPERTY THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER TRACT MAP 13045 FILED IN BOOK 628, PAGES 46 AND 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID CCUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EAST CORNER OF LOT 1 OF SAID TRACT MAP 13045; THENCE NORTHEASTERLY ALONG A 1145.00 FOOT RADIUS CURVE, CONCAVE NORTHWESTERLY, THROUGH A CENTRAL ANGLE OF 04059'50", 99.87 FEET; THENCE NORTH 57037'50" WEST 100.00 FEET TO THE BEGINNING OF A 1055.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH A CENTRAL ANGLE OF 17041'32", 325.77 FEET; THENCE SOUTH 39056'18" EAST 100.00 FEET TO THE BEGINNING OF A 1175.00 FOOT RADIUS CURVE, CONCAVE NORTHEASTERLY, THROUGH A CENTRAL ANGLE 0F04049'38", 98.99 FEET TO A POINT OF REVERSING CURVATURE WITH A 65.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH A CENTRAL ANGLE OF 80020'54", 91.15 FEET; THENCE SOUTH 36054'11" WEST 204.63 FEET -TO THE BEGINNING OF A 32.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY, THROUGH AN ANGLE OF 90°00'00", 50.27 FEET; THENCE NORTH 53005'49" WEST 120.00 FEET TO THE BEGINNING OF A 183.00' RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH AN ANGLE OF 15002'47", 48.06 FEET, TO A POINT OF REVERSING CURVATURE WITH A 167.00' RADIUS CURVE, CONCAVE NORTHEASTERLY, THROUGH AN ANGLE OF 15002'48", 43.86 FEET; THENCE NORTH 53005'49" WEST 257.47 FEET; THENCE NORTH 53004'23" WEST 244.66 FEET TO A POINT ON THE EASTERLY LINE OF SAID LOT 1; THENCE NORTH 36*54'19" EAST ALONG SAID EASTERLY LINE 362.54 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. ENCLOSING AN AREA OF 6.01 ACRES, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "A", SHEET 2 OF 2. ATTACHED HERETO AND MADE A PART HEREOF. WP51100C* WATERFRO.2521FXH48ITA.II SHEET 1 OF 2 z EWH/a r 'A' SHEET 2 OF 2 i EXGTW HLTOM Nora LOT -1 TRACT 13045 - I MM 628/47-48 N 3654'11" E e 'o- o = 17' 41 ' 32 " R = 1055.00 L = 325.77 ' d = 04'49'38' R = 1175.00 L = 93.99 ' n = 80' 20' 54' R = 65.00 ' L = 91. 15 EXHIBIT "C" PARKING AREA � EXHIBIT 'C' PARKING AREA 1 1.628 ACRES j ACIFIC VIEW AVENUE i P INr of BEGINNING —{-25 7. 00' N 53 45'40." W RECIPROCAL - FIRE! ANE ACCESS a- EASEMEN r� -�`- - EXIS77NG HILTON HOTEL z W — — � o o o LOT 1 7 r', A r 1 330% to Itr 257.00' N 53 05'40" W I �\ 2 PACIFIC COAST HIGHWAY EXHIBIT 0C•1 a PARKING AREA AN EASEMENT FOR PARKING INGRESS AND EGRESS PURPOSES OVER THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, 1N THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER TRACT MAP 13045 FILED IN BOOK 628, PAGES 46 AND 47, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EAST CORNER OF LOT 1 OF SAID TRACT MAP 13045; THENCE SOUTH 530 05' 40" EAST 257.00 FEET; THENCE SOUTH 360 54' 20" WEST 276.00 FEET; THENCE NORTH 530 05' 40" WEST 257.00 FEET TO A POINT ON THE SOUTHEASTERLY LINE OF LOT 1 OF SAID TRACT MAP 13045; THENCE NORTHEASTERLY ALONG SAID LINE 276.00 FEET TO THE POINT OF BEGINNING, ENCLOSING AN AREA OF 1.628 ACRES, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "C" ATTACHED HERETO AND MADE A PART HEREOF. PARKING EASEMENT AGREEMENT RECORDING REQUESTED BY: WHEN RECORDED MAIL TO: RUTAN & TUCKER P.O. Box 1950 Costa Mesa, CA 92628-1950 Attn: Lori Sarner Smith, Esq. Space above this line for Recorder's use only PARKING EASEMENT AGREEMENT THIS PARKING EASEMENT AGREEMENT (this "Agreement") is made as of this day of , 1996 by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and WATERFRONT CONSTRUCTION #1, a California limited partnership ("Waterfront Construction"). R E C I T A L S A. Agency is the fee owner of certain real property located in the County of Orange, State of California, a portion of which is more particularly described in Exhibit "All and is referred to herein as the "Mayer Trust Property") and that certain real property located in the County of Orange, State of California, more particularly described in Exhibit "B" (the "waterfront Construction Property"). The Mayer Trust Property and the Waterfront Construction Property are sometimes collectively referred to herein as the "Subject Property." T' B. ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayer Trust") holds a leasehold estate in the Mayer Trust Property and other real - property created by that certain Third Amended and Restated Lease dated April 28, 1989, between the Agency and Mayer Trust, as amended, a memorandum of which was recorded on November 30, 1992, as Instrument No. 92-818329 in the Official Records of the Orange County Recorder ("Mayer Trust Lease"). Except as otherwise provided therein, the Mayer Trust Lease expires by its terms on January 31, 2013. The term "Mayer Trust Lease" as used herein shall include any extension or modification of the Mayer Trust Lease hereafter entered into. C. Waterfront Construction holds a leasehold estate in the Waterfront Construction Property created by that certain Lease -- dated April 28, 1989, between the Agency and Waterfront Construction, as amended, a memorandum of which was recorded on April 28, 1989, as Instrument No. 89-225546 in the Official Records x� V of the Orange County Recorder ("Waterfront Construction Lease"). The Waterfront Construction Lease expires by its terms on December 31, 2086. The term "Waterfront Construction Lease" as used herein shall include any extension or modification of the Waterfront Construction Lease hereafter entered into. D. Mayer Trust and Waterfront Construction previously entered into that certain Parking and Ancillary Use Easement dated as of August 30, 1995 and recorded September 1, 1995 as Instrument No. 95-0384751 ("Mayer Trust Parking Easement"). The Agency was not a party to the Mayer Trust Parking Easement. Upon expiration or earlier termination of the Mayer Trust Lease, the easements granted by Mayer Trust pursuant to the Mayer Trust Parking Easement will be of no force or effect against the fee interest in the Mayer Trust Property held by the Agency. Therefore, the parties desire to enter into this Agreement so the easements described herein shall survive the expiration or earlier termination of the Mayer Trust Lease until the expiration or earlier termination of the Waterfront Construction Lease. NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the mutual covenants and conditions contained herein and for other good and valuable consideration, receipt of which is hereby acknowledged, Agency and Waterfront Construction covenant and declare that their respective interests in the Subject Property shall be held and conveyed subject to the covenants, conditions and easements set forth below, which covenants, conditions and easements are hereby declared to be for the benefit of said respective interests in the Subject Property, the owners of said interests and their successors and assigns, and further agree as follows: 1. Term of Easement. This Agreement shall be effective immediately, however, the term of the Parking Easement granted herein shall commerce as of the expiration or earlier termination of the Mayer Trust Lease ("Commencement Date") and shall expire upon the expiration or earlier termination of the Waterfront - - Construction Lease (the "Parking Easement Term"). Agency agrees not to encumber the Mayer Trust Property prior to the Parking Easement Term in such manner as would interfere with the rights of Waterfront Construction under this Agreement. 2. Relationship to Mayer Trust Parking Easement. The Agency is not a party to the Mayer Trust Parking Easement and shall not be bound by the Mayer Trust Parking Easement. The Mayer Trust Parking Easement shall continue to govern the rights and obligations of Waterfront Construction and Mayer Trust prior to the Commencement Date. Following the Commencement Date, this Agreement shall govern and control and the Mayer Trust Parking Easement shall be of no further force and effect. t, _2_ •"' '.n15 �MuMN�,'_1917t%.11 :ikS :Srk, W" V 3. Relationship to Fire -Lane Access Easement. The "Fire Lane Access Easement" is that certain Reciprocal Fire Lane Access Easement Agreement dated as -of August 30, 1995 and recorded September 1, 1995 as Instrument No. 95-0384750, executed by the Agency, Mayer Trust and Waterfront Construction. The rights and obligations created under this Agreement are independent of the rights and obligations created under the Fire Lane Access Easement and the Fire Lane Access Easement shall continue in full force and effect and shall not be affected or diminished in any respect by reason of this Agreement. 4. Grant of Parkin{ Easement. (a) For purposes of this Agreement, the term "Minimum Parking" shall mean the space necessary to accommodate parking for one hundred fifty (150) automobiles. Agency,'for itself and its respective successors and assigns, hereby grants to Waterfront Construction, its tenants, subtenants, successors, assigns, agents, licensees and invitees (including employees and guests) an exclusive easement appurtenant to the Waterfront Construction Property and right-of-way in, upon, over, and under the real property depicted on Exhibit."CO and described on Exhibit 11C-1" (and all improvements located thereon) ("Parking Area") for -the purpose of providing motor vehicle parking for the benefit of the Waterfront Construction Property. As a matter not to concern Agency, Waterfront Construction intends and believes that the Parking Area is sufficient to provide the Minimum Parking. (b) In no event shall the use of the Parking Easement interfere with the use of the Fire Lane Access Easement and no barriers shall be erected within the portion of the Parking Easement on which the Fire Lane Access Easement is located. (c) The Parking Easement is granted together with, and the term "Parking Easement" is deemed to include the right to enter upon and to pass and repass over and along the Parking Area for ingress and egress thereto, as well as the right, subject to Waterfront Construction securing necessary permits from the City of Huntington Beach, to construct and maintain parking improvements on the Parking Area including, but not c' limited to, paving, striping, curbs, sidewalks, walls, fences, ,• landscaping, lighting and parking control equipment. (d) Waterfront Construction shall have the right within the Parking Area, subject to Waterfront Construction securing necessary permits from the City of Huntington Beach, to install and maintain electric, telephone, water, drainage facilities and other utilities as reasonably necessary to serve the parking facilities to be located on the Parking Easement, together with the incidental right of access to same and the right to grant same to public utilities and other parties providing such services, provided that any such use shall not unreasonably interfere with the use of the Fire Lane -3- F5='-__3'•illSwxuxx��+=lx}7SA.t[ a�xr2.l9n I `.J Access Easement. The foregoing grant and reservation of utility easements shall include, the right of each party and the utility companies or other parties providing such services to enter upon the Waterfront Construction Property and the Mayer Trust Property to the extent necessary to repair, replace and generally maintain the connections, lines or facilities located within the Parking Easement, provided that each such entering party shall not unreasonably interfere with the use: and enjoyment of such property and shall diligently and promptly repair and damage caused by such entry, maintenance and/or repair as promptly as possible following completion of such work. S. Compensation for Parkin Easement. Commencing on the Commencement Date and continuing for the duration of the Parking Easement Term (except as otherwise provided in Paragraph 10(d)), Waterfront Construction shall pay to the Agency compensation for the use of the Parking Easement in an amount equal to the rental per square foot then being paid by Waterfront Construction under the Waterfront Construction Lease,rrultiplied by the square footage within the Parking Area ("Parking Easement Compensation"), which Parking Easement Compensation shall be payable at the same time and in the same manner, and subject to adjustment in the same manner, as the base rental payable under the Waterfront Construction Lease. 6. Insurance. At all times, Waterfront Construction shall maintain and provide to the Agency and Future Developer evidence of public liability'insurance naming the Agency, the Future Developer and Waterfront Construction as co -insureds (and, if requested, the Waterfront Mortgagee and the Future Developer Mortgagee as additional insureds), covering the Parking Area, subject to the same requirements for insurance coverage as provided under the Waterfront Construction Lease. 7. Maintenance of Parkin Area; Comoliance with Law. From and after the Commencement Date, Waterfront Construction shall, at ' Waterfront Construction's sole cost and expense, M maintain and repair the Parking Area, and all improvements and facilities thereon, in a good and orderly condition, including such trash pickup, sweeping, cleaning, restriping, repaving and other work as necessary in order to make use of the Parking Easement; and (ii) comply with all laws, regulations, rules, ordinances, conditions and recorded restrictions, and procure and maintain all permits and approvals applicable to the Parking Area, and the use and operation thereof. 8. Utilities Servicing __Parking _Area. Subject to the provisions hereof regarding the Future Parking Facility, Waterfront Construction shall pay all utility costs associated with Waterfront Construction's use of the Parking Area. 9. Indemnity. indemnify, ^defend, and free and harmless from Waterfront Construction hold the Agency and the and against any and all -4 - hereby agrees to Future Developer losses, claims, %5:1+__3'1115.YA%MNMI2!2IX375% 11 alWV2.4 6 demands, liens, causes of action, defenses, damages, costs and expenses of any kind or nature, including without limitation, attorneys' fees ,and costs, relating to or arising out of the use of the Parking Easement and/or the Parking Area by Waterfront Construction, its tenants, employees, guests, invitees, licensees or agents, and third parties contracting with and/or otherwise claiming under or through Waterfront Construction, excluding, however, any such losses, claims, demands, liens, causes of action, defenses, damages, costs or expenses arising out of or relating to the negligence or willful acts or omissions of the Agency, the Future Developer or their respective agents or employees and third parties contracting with and/or otherwise claiming under or through the Agency and/or Future Developer. 10. Constru pion of Parkin Fac'li In the event that, following the Commencement Date, the Agency and/or the developer, if any, of the Mayer Trust Property following expiration or earlier termination of the Mayer Trust Lease (the "Future Developer") determine that either wishes to develop or cause to be developed the portion of the Mayer Trust Property on which the Parking Easement is located in a manner inconsistent with the use thereof as an exclusive Parking Easement for the benefit of waterfront Construction ("Future Development"), then, subject to the remaining provisions of this Paragraph 10, Agency and/or the Future Developer shall cause the Minimum Parking to be included for the benefit of Waterfront Construction within a parking facility constructed as a part of such Future Development (the "Future Parking Facility"). It is contemplated that the Future Parking Facility will be a part of one or more of the buildings within the Future Development. (a) The Agency, Future Developer (if any) and Waterfront Construction shall have the right to approve the location and configuration of the Future Parking Facility, which approval shall not be unreasonably withheld. The Minimum Parking spaces shall be grouped together within the Future Parking Facility to the extent reasonably possible. During the course of construction of the Future Parking Facility, the Agency and/or the Future Developer shall have the right to relocate the Parking Easement to a temporary location, subject to the approval of Waterfront Construction, which approval shall not be unreasonably withheld. (b) The total number of parking spaces located within the Future Parking Facility shall be sufficient to provide the Minimum Parking for the benefit of the Waterfront Construction in addition to such number of parking spaces as is necessary for the uses included in the Future Development. Reasonable means of access for Waterfront Construction to the Future Parking Facility and the Minimum Parking shall be provided in the design of the Future Development and the Future Parking Facility (including incidental rights of ingress and egress over such portions of the Mayer Trust Property as are designated for such purposes), which means of access shall be subject to the approval of the Agency, the Future Developer -5- F$_'__1 _[.0-1iN I 3116!_1,91 and Waterfront Construction, which approval shall not be unreasonably withheld, and such means of access shall be deemed to be part of the Parking Easement granted hereunder. (c) As of the date the Future Parking Facility is completed and made available for use by for Waterfront Construction, its customers and invitees ("Parking Facility Commencement Date"), the Parking Easement shall be deemed located on and within the Future Parking Facility, together with the reasonable incidental rights of ingress and egress for access thereto as described in the foregoing Paragraph 10(b). (d) Effective as of the Parking Facility Commencement Date, Waterfront Construction shall commence to pay the "Waterfront Parking Facility Rent" as determined in accordance with this Paragraph 10(d) in lieu of and in replacement of the Parking Easement Compensation. Commencing on a date selected by Agency not later than one year prior to the estimated date for commencement of construction of the Future Parking Facility, Agency and Waterfront Construction shall meet and attempt to agree on the Waterfront Parking Facility Rent, taking into account the factors set forth in Paragraph 11 below. In the event the Agency and Waterfront Construction cannot agree on the Waterfront Parking Facility Rent on or before the date which is ninety (90) days following said meeting, the Waterfront Parking Facility Rent shall be determined by appraisal in accordance with Paragraph 11 below. Following such determination, the Waterfront Parking Facility Rent shall be subject to annual adjustment in accordance with the inflation adjustment provisions applicable to the rent payable under the Waterfront Construction Lease and shall further be subject to periodic market value adjustments at the same times set forth for market value rent adjustments applicable to the rent pal -able under the Waterfront Construction Lease but in the same manner as provided in this Agreement for determination of the initial Waterfront Parking Facility Rent. (e) In addition to the Waterfront Parking Facility Rent, commencing as of the Parking Facility Commencement Date and continuing for the remainder of the Parking Easement Tern, Waterfront Construction shall contribute on an annual basis an amount (the "Parking Maintenance Share") to the Agency or (as directed by the Agency) the Future Developer, for the purpose of defraying a fair share of the expenses for utilities, lighting and ventilation, sweeping and cleaning of the Future Parking Facility, and repairs to parking control equipment for the parking spaces within the Future Parking Facility ("Parking Maintenance Expenses"). The Parking Maintenance Share payable during each calendar year shall be equal to the amount determined by dividing the Minimum Parking (i.e. 150) by the total number of parking spaces included in the Future Parking Facility, and multiplying that quotient by the actual -5- FS'�_';'rrl`WNI+NaI�'��XZ'iY �W) Parking Maintenance Expenses incurred during the preceding calendar year and shall be paid within thirty (30) days following receipt of a statement setting forth the amount of the Parking Maintenance Expenses incurred for the preceding calendar year, together with reasonable documentation supporting the amount of said Parking Maintenance Expenses. Following the Parking Facility Commencement Date, waterfront Construction's obligations under Paragraphs 6, •7 and 8 of this Agreement shall be satisfied by contribution of the Parking Maintenance Share. The Agency and/or the Future Developer shall have the right to require Waterfront Construction to pay quarterly installments of its Parking Maintenance Share in advance based on reasonably estimated Parking Maintenance Expenses, with annual adjustments to the actual Parking Maintenance Expenses incurred. Waterfront Construction shall have the right to audit the records of the Agency and/or the Future Developer pertaining to the Parking Maintenance Expenses and the calculation of the Parking Maintenance Share. (f) The Future Developer's obligation to operate, repair and maintain the Minimum Parking within the Future Parking Facility and Waterfront Construction's rights and obligations with respect thereto shall be embodied in a form of Declaration of Reciprocal Easement and Maintenance Agreement in form customary in Southern California for properties of similar shared usage and otherwise satisfactory to Waterfront Construction, the Agency, the Future Developer, the Waterfront Mortgagee and the Future Developer Mortgagee (the "Parking Declaration"). The Parking Declaration shall include a grant to Waterfront Construction of the easement rights created pursuant to this Agreement, reasonable safeguards regarding the nature of the Parking Maintenance Expenses and the right of Waterfront Construction to audit same, provisions reasonably acceptable to Waterfront Construction and the Waterfront Mortgagee regarding their protections in the event of damage to, destruction of or condemnation of all or any portion of the Future Parking Facility and mortgagee protection provisions at least as favorable to a mortgagee as such mortgagee protection provisions contained in this Agreement and reciprocal indemnity provisions similar in substance and effect to the indemnity provisions set forth in Paragraph 9 of this Agreement. (g) As a condition to Waterfront Construction and the Agency and/or Future Developer entering into the Parking Declaration, W the Waterfront Mortgagee shall be permitted to encumber Waterfront Construction's interest in and to the Parking Declaration and the easements created thereunder and shall subordinate the lien of the Waterfront Deed of Trust thereto; and (ii) any lender with a deed of trust recorded against the Future Developer's interest in and to the portion of the Mayer Trust Property on which the Parking Easement and Future Parking Facility is located ("Future Developer Mortgagee") shall be permitted to encumber the Future -7- FS_'223'n15.14na4rQ 2Ia17�X 11 :arrr,24,4s �.J Developer's interest in and to the Parking Declaration and the easements created thereunder and shall subordinate the lien of its deed of trust thereto. 11. Determination of Waterfront Parking Facility Rent. The Waterfront Parking Facility Rent shall be equal to the incremental fair rental value attributable to the use of the Minimum.Parking within the Future Parking Facility ("Minimum Parking Fair Market Rent"). The determination of the Minimum Parking Fair Market Rent shall take into account the costs to construct the Minimum Parking within the Future Parking Facility, all encumbrances affecting the Future Parking Facility and restrictions on use thereto, and the contribution by Waterfront Construction of the Parking Maintenance Share pursuant to Paragraph 10 (e) . In no event shall the waterfront Parking Facility Rent be (i) less than the Parking Easement Compensation then payable pursuant to Paragraph 5 of this Agreement; nor (ii) greater than the fair market rental value for the entire Future Parking Facility less the fair market rental value for a parking facility which is identical to, an similarly situated in terms of location and configuration as, the Future Parking Facility but which has one hundred fifty fewer parking spaces, taking into account that such identical parking facility would have similar construction costs and development constraints as does the Future Parking Facility -and further taking into account any increased cons_ruction costs that may be encountered by reason of expanding the total number of parking spaces within the Future Parking Facility so as to provide =he additional Minimum Parking therein. (a) In the event the Agency and Waterfront Construction cannot agree on the Waterfront Parking Facility Rent on or before the date which is ninety (90) days following the meeting between Agency and Waterfront Construction held for such purposes pursuant to Paragraph 10(d) above, Agency and Waterfront Construction shall jointly attempt to agree on the appointment of a Qualified Appraiser. If the parties so agree, the single Qualified Appraiser jointly appointed by, the parties shall determine the Mir_imum Parking Fair Market Rent in the manner herein specified within sixty (60) days after its appointment. The cost of the services performed by such single Qualified Appraiser shall be shared equally by the Agency and Waterfront Construction. (b) If the Agency and Waterfront Construction fail to agree on a single Qualified Appraiser within one hundred five days (105) days following the meeting between Agency and Waterfront Construction held for such purposes pursuant to Paragraph 10(d) above, Agency and Waterfront Construction shall each, within an additional fifteen (15) days, separately at its own cost, designate a Qualified Appraiser. Such appraisers shall render their respective appraisals within sixty (60) days following the dates of their respective appointment. Each party shall respectively bear the cost of -8- FS.._:I'll 15144 wr12..2NINS.11 :Ax,:'21:.x, the appraisal given by the appraiser appointed by it under this Paragraph il(b). (c) If two Qualified Appraisers are appointed and they concur on the Minimum Parking Fair Market Rent, the Minimum Parking Fair Market Rent determined by them shall be the Waterfront Parking Facility Rent commencing as of the;Parking Facility Commencement Date. If the appraisers do not concur, but the difference between the two determinations of the Minimum Parking Fair Market Rent is less than or equal to ten percent (10%) of the amount of ;.he higher determination of the Minimum Parking Fair Market Rent, the mean average of the two determinations shall be the Waterfront Parking Facility Rent. (d) If the appraisers do not concur and the difference between the two determinations of the Minimum Parking Fair Market Rent is more than ten percent (10%) of the amount of the higher determination of the Minimum Parking Fair Market Rent, the two appraisers shall jointly select a third Qualified Appraiser. If said two appraisers are unable to agree on a third Qualified Appraiser, either of the Agency or, Waterfront Construction, by giving fifteen (15) days notice to the other party, may apply to the presiding judge of the Superior Court of Orange County to select a third Qualified Appraiser. The expenses related to the selection and services of the third appraiser shall be shared equally by the Agency and Waterfront Construction. (e) In the event the third Qualified Appraiser is to be appointed, then, within fifteen (15) days from the date of the selection of the third appraiser, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Minimum Parking Fair Market Rent. The third appraiser shall review all such findings, data, 'and conclusions, and shall determine which of the two appraisers' respective determinations of the Minimum Parking Fair Market Rent is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any - - other independent determination of the Minimum Parking Fair Market Rent. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser. The appraiser's determination found by the third appraiser to be the most reasonable determination of the Minimum Parking Fair Market Rent shall be the Waterfront Parking Facility Rent commencing on the Parking Facility Commencement Date. (f) A „Qualified Appraiser" shall mean a member of the American Institute of Real Estate Appraisers (or any successor thereto) or the Society of Real Estate Appraisers (or any - successor thereto), or, in the event the American Institute or Society of Real Estate Appraisers or any successor shall not then be in existence, a disinterested real estate appraiser 1 .. -9- FS::±? UISyti>-��.�± +;x;?S% 11 yxJ:tniti 6— having the other qualifications set forth in this Paragraph 11( f) , with at least ten (10 ) years professional experience in Southern California in appraising land and improvements similar to the Future Development and the Future Parking Facility, and who is impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to any of the parties hereto, or their successors. ; (g) Each Qualified Appraiser shall certify that he or she has personally inspected the Future Development and the Future Parking Facility (and/or reviewed plans of same if construction has not yet been completed) and all properties used as comparisons, that he or she has no past, present or contemplated future interest in the Waterfront Construction Property, the Mayer Trust Property, the Future Parking Facility, or any part thereof, that the compensation to be received by him or her from any source for making the appraisal is solely in accordance with this Agreement, that he or she has followed the instructions as set forth in this Paragraph 11 for valuing the Minimum Parking Fair Market Rent as of the estimated Parking Facility Commencement Date, that neither his nor her employment to make the appraisal nor his nor her compensation therefore is contingent upon reporting a predetermined value or values, or a value or values within a predetermined range of values, that he or she has had at least (10) years professional experience in Southern California in appraising land and improvements similar to the Future Development and the Future Parking Facility, that he or she is a member of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers or respective successors thereto and that his or her appraisal was prepared in conformity with the standards of professional practice of the Institute or Society or Successor thereto. (h) The Waterfront Parking Facility Rent established under this Paragraph 11 shall be binding and conclusive on the parties. If for any reason the waterfront Parking Facility Rent is not established under this Paragraph 11, no party may avail itself of a Waterfront Parking Facility Rent more - - favorable to such party than the Minimum Parking Fair Market Rent determined by the appraiser appointed by such party. 12. Further Cooneration. Each party hereto agrees to execute, have notarized if appropriate, and deliver to the other party promptly upon request of the other party any instrument requested by such other party in order to implement the terms of this Agreement. Without limiting the generality of the foregoing, in the event that prior to the Commencement Date, a parking facility is constructed (with all necessary approvals by the Agency and the City) which provides not less than the Minimum Parking for the benefit of the Waterfront Construction Property and is approved by Waterfront Construction, the Waterfront Mortgagee and the Agency, then Agency and waterfront Ccnstruction agree to cooperate, subject to the approval of the Waterfront Mortgagee, executing such -10- FS:'_:?'iilsx�i�.�rn�,lti�75c 11 :kiA':4,Qk, 4 documents as necessary to terminate and replace this Agreement with an agreement granting an easement in favor of Waterfront Construction over such parking facility for the then remaining Parking Easement Term, such replacement parking easement and agreement to contain substantially the same terms and conditions as provided for herein and as contemplated to be provided in the Parking Declaration for the Future Parking Facility under Paragraph 10(f) above. 13. Waterfront Construction's Right to TerminateParking Easement. Waterfront Construction may, at any time upon written notice given to the Agency and (if applicable) the Future Developer prior to the date which is thirty (30) days following the determination of the initial Waterfront Parking Facility Rent pursuant to Paragraphs 10(d) and 11 above, terminate the Parking Easement, provided that such termination shall be subject to the prior written consent of the Waterfront Mortgagee. Any such termination shall be effective thirty (30) days after receipt of such written notice by the Agency and (if applicable) the Future Developer. 14. Binding Covenants. Successors. (a) Subject to Paragraph 14(c) hereof, Waterfront Construction and the Agency intend that the grants, covenants, conditions, and restrictions contained herein shall run with the Mayer Trust Property and the leasehold estate created under the Waterfront Construction Lease for the benefit of the owners, occupants and tenants of the Waterfront Construction Property, and shall bind and inure to the benefit of Waterfront Construction and Agency and their respective tenants, subtenants, heirs, personal representatives, successors, assigns and any and all successive leasehold owners of the Waterfront Construction Property and all successive owners of the Parking Area and the Mayer Trust_ Property. (b) This Agreement shall be recorded in the Office of the Recorder of the County of Orange and shall serve as notice - - to all successive owners that the Mayer Trust Property, the Parking Area and the Waterfront Construction Property shall be benefited and/or restricted in the manner herein described. The Parking Easement granted pursuant to the provisions hereof is expressly for the benefit of the Waterfront Construction Property, and the Waterfront Construction Property shall be the dominant estate and the property upon which the Parking Easement is located shall be the servient estate. (c) Notwithstanding anything to the contrary in Paragraphs 14(a) and 14(b), if Waterfront Construction sells or assigns its leasehold interest in any portion of the Waterfront Construction Property, Waterfront Construction said shall be automatically freed and relieved, and its transferee shall be automatically burdened, from and after the date of -11- ,- such sale or assignment, with respect to all liabilities regarding the performance of any agreements or obligations on the part of Waterfront Construction contained in this Agreement thereafter to be performed with respect to the Waterfront Construction Property, it being intended hereby that the agreements and obligations contained in this instrument on the part of Waterfront Construction shall be binding on Waterfront Construction only during its ownership of the leasehold interest in the Waterfront Constriction Property, but that the selling cr assigning party shall remain liable for any obligations incurred prior to the effective date of such sale or assignment. 15. Breach Shall Not Permit Termination. It is expressly agreed that no breach of this Agreement shall entitle any party to cancel, rescind or otherwise terminate this Agreement or the Parking Easement granted hereunder. Nothing in the foregoing shall affect or limit, in any manner, any other right or remedies which either party may have hereunder, or at law or in equity by reason of any breach of this Agreement, including, but not limited to, damages and/or injunctive relief. 16. Mortgagee Protection. (a) Any approvals or consents to be given by Waterfront Construction under this Agreement shall be conditioned on Waterfront Construction obtaining approval by any lender with a deed of trust recorded in a first lien position against Waterfront Construction's leasehold interest in the Waterfront Construction Property ("Waterfront Construction Mortgagee"). (b) No breach by any party of any of the terms, conditions, covenants or restrictions of this Agreement shall defeat or render invalid the lien of any deed of trust made in good faith and for value encumbering all or any portion of the Subject Property, but such terms, conditions, covenants or restrictions shall be binding upon and effective against any person who acquires title to any such portion of the Subject Property by foreclosure, trustee's sale, deed in lieu of - - foreclosure or otherwise, provided, however, that such party shall only be obligated for obligations accruing during the period of ownership of their respective interest in the Subject Property. (c) Agency and the Future Developer shall give any Waterfront Mortgagee which has delivered written notice to Agency and Future Developer of its existence and address or - addresses, such written notices as Agency and/or the Future Developer are required to deliver to Waterfront Construction hereunder, including without limitation, written notice of breach by Waterfront Construction under this Agreement. (d) Agency acknowledges and agrees that Lehman Brothers Holdings Inc., doing business as Lehman Capital, A Division of -12- Lehman Brothers Holdings Inc., a ("Lehman"), is a waterfront Mortgage and notices shall be given to Lehman Lehman Brothers Holdings Inc. Three World Financial Center New York, New York 10285 Attn: Xavier Sheid With a copy to: e Delaware corporation as of the date hereof as follows: Steefel, Levitt and Weiss One Embarcadero Center, 30th Floor San Francisco, CA 94111 Attn: Bruce E. Prigoff, Esq. Such addresses may be changed from time to time by written notice from Lehman to Agency given by registered or certified mail. 17. Development Agreement and Disposition and Dev_e2_onment Agreement. The parties hereto acknowledge that the Mayer Trust Property is presently subject to (i} a Development Agreement dated August 15, 1988 by and between the Mayer Trust and the City of Huntington Beach, as may have been heretofore amended ("Development Agreement"); and (ii) a Disposition and Development Agreement entered into by and between the Agency and the Mayer Trust on or about August 15, 1988, as amended by First Amendment dated June 17, 1991, Second Amendment dated August 1, 1991, Third Amendment dated March 16, 1992 and Fourth Amendment dated April 20, 1992 and as may have been further heretofore amended ( "DDA") . Agency and City each agree that in the event there is any conflict between the terms and conditions of this Agreement and the Development Agreement or the DDA, the terms and conditions of this Agreement shall apply with respect to the Parking Easement granted hereby, that the Development Agreenent and the DDA are hereby deemed amended as necessary to -permit the grant of the Parking Easement granted pursuant to this Agreement and the Mayer Trust Parking Easement, and that the Development Agreement and the DDA are hereby subordinated to this Agreement and the Mayer Trust Parking Easement with respect to the rights of Waterfront Construction respecting the Minimum Parking. Nothing in the foregoing shall be deemed as waiving any rights of the Agency or the City respecting approvals for the construction of parking facilities contemplated by this Agreement or the Mayer Trust Parking Easement. 18. Damaae or Destruction. In the event of any damage or destruction of the improvements on the Parking Area (prior to r commencement of construction of the Future Parking Facility), Waterfront Construction shall repair and restore all such damages. In such event Agency agrees to make available for disbursement to Waterfront Construction any proceeds of insurance carried by =- Waterfront Construction with respect to such improvements. -13- FS_:__3uI<.,u4N1122Is+"5.+II Wf-.Nun 19. Non -Dedication. Nothing contained in this Agreement shall be deemed to be a gift or dedication of any portion of the Subject Property to the general public or for any public use or purpose whatsoever, it being the intention of the parties hereto and their successors and assigns and that nothing in this Agreement, expressed or implied, shall confer upon any person, other than the parties hereto and their successors and assigns, any rights or remedies under or by reason of this Agreement. 20. Governir_cr Laws. This Agreement shall be construed in accordance with the laws of the State of California. 21. Severability. If any term, provision or condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement for the application of such term, provision or condition to persons or circumstances other than those in respect of which it is invalid or unenforceable), except those terms, provisions or conditions which are made subject to or conditioned upon such invalid or unenforceable terms, provisions or conditions, shall not be affected thereby, and each term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 22. Attornevs' Fees. In the event of any controversy, claim, or dispute arising out of or relating to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from the other party reasonable expenses, attorneys' fees and costs. 23. Modifications. This Agreement and the easements granted hereunder may not be amended or otherwise modified, except by an agreement in writing signed by the parties hereto. No such amendments or modifications shall have any force or effect whatsoever unless and until they are written and executed in such a manner. If required by the terms of the Waterfront Deed of Trust and any Future Developer Deed of Trust, any amendment to this Agreement shall require the prior written approval of the Waterfront Mortgagee and/or the Future Developer Mortgagee. - - 24. Exhibits. Exhibits °A", "a", "C', and °C-1" are attached hereto and incorporated herein by reference. -14- f•S. IN WITNESS WHEREOF, Agency and Waterfront Construction have executed this Parking Easement Agreement on the day and year first above written. ATTEST THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: By: Agency Clerk Chairman. "Agency" WATERFRONT CONSTRUCTION #1, a California limited partnership By: WATERFRONT DEVELOPMENT, INC., a California corporation, General Partner By: Stephen K. Bone President "Waterfront Construction" AGREED AND CONSENTED TO AS OF THIS DAY OF . 1996 ATTEST THE CITY OF HUNTINGTON BEACH, a public bcdy, corporate and politic By: By: Agency Clerk Chairman "City" AGREED AND CONSENTED TO AS OF THIS DAY OF �, 1996 ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended "Mayer Trust" -15- STATE OF CALIFORNIA ss. COUNTY OF ORANGE On , 1996, before me, personally appeared STEPHEN K. BONE, 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. Notary Public (SEAL; STATE OF CALIFORNIA Lx-m COUNTY OF ORANGE On , 1996, before me, , personally appeared ROBERT L. MAYER, 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. (SEAL] Notary Public -16- STATE OF CALIFORNIA ss. COUNTY OF ORANGE On , 1996, before me, personally appeared personally known to rye (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 ir. 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. Notary Public [SEAL) STATE OF CALIFORNIA ss. COUNTY OF ORANGE On 1996, 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 persons) acted, executed the instrument. _ Witness my hand and official seal. Notary Public [SEAL] -17- APPRAISER'S QUALIFICATIONS - 1 QUALIFICATIONS OF -BRUCE W. HULL, MAI Educat(Q� Bachelor of Arts in Business Administration, Westmont Col- lege, Santa Barbara, California (1969) Post -graduate Study, School of Public Administration, San Diego State College The Appraisal Institute Real Estate Appraisal Courses: 1-A, Newport Beach; IV, Condemnation Appraisal, Southwest- ern University Law School, Los Angeles; II -A, Case Stud- ies, Southwestern Law School; II-B, Report Writing, South- western Law School; Standards of Professional Practice. Society of Real Estate Appraisal Course: Course 201, Income Producing Property California State Board of Equalization Courses: Basic Appraisal Techniques; Introduction to the Appraisal of Income Producing Properties; Instant Mortgage Equity. Employment January 1974 - Present: Self -Employed Real Estate Appraiser. Since 1974 the real estate appraisal experience has included a diversified work product. This includes property types as indus- trial/commercial; mixed -use; master-plannned communities; residential and multi -family projects; shopping centers; and office buildings. In recent years, appraisal services have involved a varie- ty of complex assignments. These include assignments for public agencies, bond undevwriters, and financial institu- tions. September 1969 - January 1974: Associate Appraiser for the Ventura County Assessor, Ventura, California. Duties included the appraisal of the more complex commercial and industrial properties. Types of properties appraised were single-family residence (custom and tract), multi -family residence, commercial, industrial, institutional, and acreage. Also represented County Assessor before the Assessment Appeals Board in 1972 and 1973. ,Partial List Q_C1gnti Have completed appraisal assignments for a wide variety of clients. These include financial institutions, government agencies, and development companies. A partial list of these clients includes the following. Akins Development Bank of America NT & SA Bank of Montreal Bear, Stearns & Co., Inc. Chino Unified School District Citicorp, N.A. City of San Bernardino City of Chino City of Colton City of Corona City of Fullerton City of Huntington Beach City of Mission Viejo City of Moreno Valley City of Orange City of San Marcos Coast Federal Bank Colton Joint Unified School District Country of Los Angeles Country of Orange County of Riverside County of San Bernardino Downey Savings and Loan FannieMae F.D.I.C. Federal National Martgage Association Fieldnan, Rolapp & Associates Financial Consultants Irvine Ranch Water District Irvine Unified School District Jurupa Community Services District V Partial List Of Client^ nt' Metropolitan Water District of So. California Meserve, Mumper & Hughes Law Firm Rialto Unified School District Saddleback Valley Unified School District Sidley & Austin Law Firm Southern California Edison Company Stone & Youngberg Bond Underwriters The Irvine Company Wells Fargo Bank Wells Fargo Mortgage Company Western Pacific Financial Corporation Weyerhaeuser Mortgage Company Whipple, Kinsell & Co., Inc. Court Experigricg Qualified expert witness in the following counties: Los Angeles County Superior Court Orange County Superior Court Riverside County Superior Court Organizations Member -- #6894 - The Appraisal Institute Licenses Real Estate Broker - State of California Certified General Appraiser - State of California (Appraiser No. AG004964) Guest Speaker {for) UCLA Symposium on Mello Roos Districts - 1988 "Exploring the Rumors & Realities of Land Secured Debt in California" - Conference sponsored by Stone & Youngberg, financial consultants, held in Los Angeles on January 16, 1992 Miscellaneous Member Advisory Panel to California Debt Advisory Co=ission regarding Apppraisal Standards for Land Secured Financing (May, 1994) N V Council/Agency Meeting Held: 9 A (2 Deferred/Continued to: wr eApproved O Conditionally Approved l] Denied ,�,, ity Clerk's 13idnature Council Meeting Date: August 5, 1996 Department ID Number: ED 96-54 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: H0140RABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Director PREPARED BY: DAVID C. BIGGS, Director of Economic Development SUBJECT: Public Hearing and Approval of Grant of Parking Easement for Waterfront Hilton Statement of Issue, Funding Source, Recommended Action, Alternative Actions), Analysis, Envir rrlental Status, Attachment(s) !'' Statement of Issue: A public hearing was noticed for July 15, 1996, for consideration of approval of a parking easement agreement for the Waterfront Hilton. On that date, the public hearing was continued opened until August 5, 1996. A second continuance is requested to August 19, 1996. Funding Source: No direct costs. Recommended Action: 1) Motion to continue public hearing open until August 19, 1996. Alternative Action(s): 1) Do not open public hearing and direct staff to re -notice the public hearing. Analysis: In anticipation of the completion of the documentation necessary to allow for the consideration of a parking easement agreement with the Waterfront Hilton, a public hearing was noticed for July 15, 1996. On that date, the Agency continued the public hearing open until August 5, 1996. Staff recommends a further continuance until August 19, 1996, to allow for completion of all necessary documentation. Environmental Status: NIA v � REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: August 6,1996 ttachment s : (dcb:rcas:easemen3) DEPARTMENT ID NUMBER: ED 96-54 EASEMENIDOC -2- OTIM961:51 PM L CounciVAgency Meeting Field: 7116be, Defem=n nuedto:,rIV;& ❑ Approved ❑ Conditionally Approved O Denied a City Clerk's Si66ature Council Meeting Date: July 15, 1996 Department ID Number: ED 9645 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Director U� PREPARED BY: DAVID C. BIGGS, Director of Economic Development SUBJECT: Public Hearing and Approval of Grant of Parking Easement for Waterfront Hilton Statement of Issue, Funding Source, Recommended Action. Alternative Action(s). Analysis. Environmental Status. Attachment(s) Statement of Issue: A public hearing was noticed for July 15, 1996, for consideration of approval of a parking easement agreement for the Waterfront Hilton. The public hearing needs to be continued opened until August 5, 1996. Funding Source: No direct costs. Recommended Action: 1) Open Public Hearing; 2) Motion to continue public hearing open until August 5, 1996. Alternative Action(s): 1) Do not open public hearing and direct staff to re -notice the public hearing. U REQUEST FOR REDEVELOPMENT AGEtS�Y ACTION MEETING DATE: July 15, 1996 DEPARTMENT ID NUMBER: ED 96-46 Analysis: In anticipation of the completion cf the documentation necessary to allow for the consideration of a parking easement agreement with the Waterfront Hilton, a public hearing was noticed for July 15, 1996. Staff recommends that the public hearing be continued as open until August 5, 1996, to allow for completion of all necessary documentation. Environmental Status: NIA Attachment(sl :{ I 1 11 1 City Clerk's Page Number (dcb:maceasemen2) EASEMENIDOC -2- 07/08/96 9:36 PM V 0-9 Parking Easement Agreement ATT 7......HMENT #1 L.� s r z RECORDING REQUESTED BY: CO n rl ern -+en WHEN RECORDED MAIL TO: ., t• PUTAPd & TUCKER P.O. Box 195o -- = Costa Mesa, CA 92628-1950 Attn: Lori Sarner Smith, Esq. Space above this line for Recorder's use only PARKING EASEMENT AGREEMENT THIS PARKING EASEMENT AGREEMENT (this "Agreement") is made as of this day of , 1996 by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency") and WATERFRONT CONSTRUCTION #1, a California limited partnership ("Waterfront Construction"). R S C 1 1 A L S A. Agency is the fee owner of certain real property located in the County of Orange, State of California, a portion of which is more particularly described in Exhibit "A"_ and is referred to herein as the "Mayer Trust Property") and that certain real property located in the County of Orange, State of California, more particularly described in Exhibit "B" (the "Waterfront Constructior Property"). The Mayer Trust Property and the Waterfront Construction Property are sometimes collectively referred to herein as the "Subject Property." B. ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1982, dated June 22, 1982, as amended ("Mayen Trust") holds a leasehold estate in the Mayer Trust Property and other real x - property created by that certain Third Amended and Restated Leas dated April 28, 1989, between the Agency and Mayer Trust, as amended, a memorandum of which was recorded on November 30, 1992ct= C „ as Instrument No. 92-818329 in the Official Records of the Orange �m County Recorder ("Mayer Trust Lease"). Except as otherwide provided therein, the Mayer Trust Lease expires by its terms on January 31, 2013. The term "Mayer Trust Lease" as used herein shal1- irclude any extension or modification of the Mayer Trust Lease. hereafter entered into. C. Waterfront Construction holds a leasehold estate in the Waterfront Construction Property created by that certain Lease dated April 28, 1989, between the Agency and Waterfront Construction, as amended, a memorandum of which was recorded on April 28, 1989, as Instrument No. 89-225546 in the Official Records F52+L'lu�ISlaawtxl2�:1x173�.11 a{1h12a19h of the orange County Recorder ("Waterfront Construction Lease"). The Waterfront Construction Lease expires by its terms on December 31, 2085. The term "Waterfront Construction Lease" as used herein shall include any extension or modification of the Waterfront Construction Lease hereafter entered into. D. Mayer Trust and Waterfront Construction previously entered into that certain Parking and Ancillary Use Easement dated as of August 30, 1995 and recorded September 1, 1995 as Instrument No. 95-0384751 ("Mayer Trust Parking Easement"). The Agency was not a party to the Mayer Trust Parking Easement. Upon expiration or earlier termination of the Mayer Trust Lease, the easements granted by Mayer Trust pursuant to the Mayer Trust Parking Easement will be of no force or effect against the fee interest in the Mayer Trust Property held by the Agency. Therefore, the parties desire to enter into this Agreement so the easements described herein shall survive the expiration or earlier termination of the Mayer Trust Lease until the expiration or' earlier termination of the Waterfront Construction Lease. NOW, THEREFORE, incorporating the foregoing recitals and in consideration of the mutual covenants and conditions contained herein and for other good and valuable consideration, receipt of which is hereby acknowledged, Agency and Waterfront Construction covenant and declare that their respective interests in the Subject Property shall be held and conveyed subject to the covenants, conditions and easements set forth below, which covenants, conditions and easements are hereby declared to be for the benefit of said respective interests in the Subject Property, the owners of said interests and their successors and assigns, and further agree as follows: 1. Term of Easement. This Agreement shall be effective immediately, however, the term of the Parking Easement granted herein shall commence as of the expiration or earlier termination of the Mayer Trust Lease ("Commencement Date") and shall expire upon the expiration or earlier termination of the Waterfront - - Construction Lease (the "Parking Easement Term"). Agency agrees not to encumber the Mayer Trust Property prior to the Parking Easement Term in such manner as would interfere with the rights of Waterfront Construction under this Agreement. 2. Relationship to Mayer Trust Parking Easement. The Agency is not a party to the Mayer Trust Parking Easement and shall not be bound by the Mayer Trust Parking Easement. The Mayer Trust Parking Casement shall continue to govern the rights and obligations of Waterfront Construction and Mayer Trust prior to the Commencement Date. Following the Commencement Date, this Agreement shall govern and control and the Mayer Trust Parking Easement shall be of no further force and effect. -2- FS2VL'3Wi5A[xWc) W183758.11 SOW4196 3. Relationship to Fire Lane Access Easement. The "Fire Lane Access Easement" is that certain Reciprocal Fire Lane Access Easement Agreement dated as of August 30, 1995 and recorded September 1, 1995 as Instrument No.' 95-0384750, executed by the Agency, Mayer Trust and Waterfront Construction. The rights and obligations created under this Agreement are independent of the rights and obligations created under the Fire Lane Access Easement and the Fire Lane Access Easement shall continue in full force and effect and shall not be affected or diminished in any respect by reason of this Agreement. 4. Grant of Parking Easement. (a) For purposes of this agreement, the term "Minimum Parking" shall mean the space necessary to accommodate parking for one hundred fifty (150) automobiles. Agency, for itself and its respective successors and assigns, hereby grants to Waterfront Construction, its tenants, subtenants, successors, assigns, agents, licensees and invitees (including employees and guests) an exclusive easement appurtenant to the Waterfront Construction Property and right-of-way in, upon, over, and under the real property depicted on Exhibit-"C" and described on Exhibit 11C-1" (and all improvements located thereon) ("Parking Area") for the purpose of providing motor vehicle parking for the benefit of the Waterfront Construction Property. As a matter not to concern Agency, Waterfront Construction intends and believes that the Parking Area is sufficient to provide the Minimum Parking. (b) in no event shall the use of the Parking Easement interfere with the use of the Fire Lane Access Easement and no barriers shall be erected within the portion of the Parking Easement on which the Fire Lane Access Easement is located. (c) The Parking Easement is granted together with, and the term "Parking Easement" is deemed to include the right to enter upon and to pass and repass over and along the Parking Area for ingress and egress thereto, as well as the right, subject to Waterfront Construction securing necessary permits - from the City of Huntington Beach, to construct and maintain parking improvements on the Parking Area including, but not limited to, paving, striping, curbs, sidewalks, walls, fences, landscaping, lighting and parking control equipment. (d) Waterfront Construction shall have the right within the Parking Area, subject to Waterfront Construction securing necessary permits from the City of Huntington Beach, to install and maintain electric, telephone, water, drainage facilities and other utilities as reasonably necessary to serve the parking facilities to be located on the Parking Easement, together with the incidental right of access to same and the right to grant same to public utilities and other parties providing such services, provided that any such use shall not unreasonably interfere with the use of the Fire Lane -3- FS2=%01S80 *U1.%21R3TSA.11 3W24196 MW Access Easement. The foregoing grant and reservation of utility easements shall include the right of each party and the utility companies or other parties providing such services to enter upon the Waterfront Construction Property and the Mayer Trust Property to the extent necessary to repair, replace and generally maintain the connections, lines or facilities located within the Parking Easement, provided that each such entering party shall nct unreasonably interfere with the use and enjoyment of such property and -shall diligently and promptly repair and damage caused by such entry, maintenance and/or repair as promptly as possible following completion of such work. S. Compensation for Parking Easement. Commencing on the Commencement Date and continuing for the duration of the Parking Easement Term (except as otherwise provided in Paragraph 10(d)), Waterfront Construction shall pay to the Agency compensation for the use of the Parking Easement in an amount equal to the rental per square foot them being paid by Waterfront Construction under the Waterfront Construction Lease, multiplied by the square footage within the Parking Area ("Parking Easement Compensation"), which Parking Easement Compensation shall be payable at the same time and .in the same manner, and subject to adjustment in the same manner, as the base rental payable under the Waterfront Construction Lease. 6. Insurance. At all times, Waterfront Construction shall maintain and provide to the Agency and Future Developer evidence of public liability insurance naming the Agency, the Future Developer and Waterfront Construction as co -insureds (and, if requested, the Waterfront Mortgagee and the Future Developer Mortgagee as additional insureds), covering the Parking Area, subject to the Came requirements for insurance coverage as provided under the Waterfront Construction Lease. 7. Maintenance of Parking Area: Compliance with Law. From and after the Commencement Date, Waterfront Construction shall, at Waterfront Construction's sole cost and expense, (i) maintain and repair the Parking Area, and all improvements and facilities thereon, in a good and orderly condition, including such trash pickup, sweeping, cleaning, restriping, repaving and other work as necessary in order to make use of the Parking Easement; and (ii) comply with all laws, regulations, rules, ordinances, conditions and recorded restrictions, and procure and maintain all permits and approvals applicable to the Parking Area, and the use and operation thereof. 8. Utilities _Servicing Parking Area. Subject to the provisions hereof regarding the Future Parking Facility, Waterfront Construction shall pay all utility costs associated with Waterfront Construction's use of the Parking Area. 9. Indemnity. Waterfront Construction hereby agrees to indemnify, defend, and hold the Agency and the Future Developer free and harmless from and against any and all losses, claims, -4- FS3�223w15Ho0�xxr�21A]758.11 ,if6s24t9G demands, liens, causes of action, defenses, damages, costs and expenses of any kind or nature, including without limitation, attorneys' fees and costs, relating to or arising out of the use of the Parking Easement ' and/or the Parking Area by waterfront Construction, its tenants, employees, guests, invitees, licensees or. agents, and third parties contracting with and/or otherwise claiming under or through Waterfront Construction, excluding, however, any such losses, claims, demands, liens, causes of action, defenses, damages, costs or expenses arising out of or relating to the negligence or willful acts or omissions of the Agency, the Future Developer or their respective agents or employees and third parties contracting with and/or otherwise claiming under or through the Agency and/or Future Developer. 10. Construction of Parking Faci]iity. In the event that, following the Commencement Date, the Agency and/or the developer, if any, of the Mayer Trust Property following expiration or earlier termination of the Mayer Trust Lease (the "Future Developer") determine that either wishes to develop or cause to be developed the portion of the Mayer Trust Property on which the Parking Easement is located in a manner inconsistent with the use thereof as an exclusive Parking Easement for the benefit of Waterfront Construction ("Future Development"), then, subject to the remaining provisions of this Paragraph 10, Agency and/or the Future Developer shall cause the Minimum Parking to be included for the benefit of Waterfront Construction within a parking facility constructed as a part of such Future Development (the "Future Parking Facility"). It is contemplated that the Future Parking Facility will be a part of one or more of the buildings within the Future Development. (a) The Agency, Future Developer (if any) and Waterfront Construction shall have the right to approve the location and configuration of the Future Parking Facility, which approval shall not be unreasonably withheld. The Minimum Parking spaces shall be grouped together within the Future Parking Facility to the extent reasonably possible. During the course of construction of the Future Parking Facility, the Agency and/or the Future Developer shall have the right to relocate the Parking Easement to a temporary location, subject to the approval of Waterfront Construction, which approval shall not be unreasonably withheld. (b) The total number of parking spaces located within the Future Parking Facility shall be sufficient to provide the Minimum Parking for the benefit of the Waterfront Construction in addition to such number of parking spaces as is necessary for the uses included in the Future Development. Reasonable means of access for Waterfront Construction to the Future Parking Facility and the Minimum Parking shall be provided in the design of the Future Development and the Future Parking Facility (including incidental rights of ingress and egress over such portions of the Mayer Trust Property as are designated for such purposes), which means of access shall be subject to the approval of the Agency, the Future Developer -5- FSZ%237a1158WaX12t219375$.11 a06124196 and Waterfront Construction, which approval shall not be unreasonably withheld, and such means of access shall be deemed to be part of the Parkin,,:, Easement granted hereunder. (c) As of the date the Future Parking Facility is completed and made available for use by for Waterfront Construction, its customers and invitees ("Parking Facility Commencement Date"), the Parking Easement shall be deemed located on and within the Future Parking Facility, together with the reasonable incidental -rights of ingress and egress for access thereto as described in the foregoing Paragraph 10(b). (d) Effective as of the Parking Facility Commencement Date, Waterfront Construction shall commence to pay the "Waterfront Parking Facility Rent" as determined in accordance with this Paragraph 10(d) in lieu of and in replacement of the Parking Easement Compensation. Commencing on a date selected by Agency not later than one year prior to the estimated date for commencement of construction of the Future Parking Facility, Agency and Waterfront Construction shall meet and attempt to agree on the Waterfront Parking Facility Rent, taking into account the factors set forth in Paragraph 11 below. In the event the Agency and Waterfront Construction cannot agree on the Waterfront Parking Facility Rent on or before the date which is ninety (90) days following said meeting, the Waterfront Parking Facility Rent shall be determined by appraisal in accordance with Paragraph 11 below. Following such determination, the Waterfront Parking Facility Rent shall be subject to annual adjustment in accordance with the inflation adjustment provisions applicable to the rent payable under the Waterfront Construction Lease and shall further be subject to periodic market value adjustments at the same times set forth for market value rent adjustments applicable to the rent payable under the Waterfront Construction Lease but in the same manner as provided in this Agreement for determination of the initial Waterfront Parking Facility Rent. (e) In addition to the Waterfront Parking Facility Rent, commencing as of the Parking Facility Commencement Date and continuing for the remainder of the Parking Easement Term, Waterfront Construction shall contribute on an annual basis an amount (the "Parking Maintenance Share") to the Agency or (as directed by the Agency) the Future Developer, for the purpose of defraying a fair share of the expenses for utilities, lighting and ventilation, sweeping and cleaning of the Future Parking Facility, and repairs to parking control equipment for the parking spaces within the Future Parking Facility ("Parking Maintenance Expenses"). The Parking Maintenance Share payable during each calendar year shall be equal to the amount determined by dividing the Minimum Parking (i.e. 150) by the total number of parking spaces included in the Future Parking Facility, and multiplying that quotient by the actual sle fst�223W1Slxxuxrn2�2�x1isR.tt aWZAt% Parking Maintenance Expenses incurred during the preceding calendar year and shall be paid within thirty (30) days following ieceipt of a statement setting forth the amount of the Parking Maintenance Expenses incurred for the preceding calendar year, together with reasonable documentation supporting the amount of said Parking Maintenance Expenses. Following the Parking Facility Commencement Date, Waterfront Construction's obligations under Paragraphs 6, -7 and 8 of this Agreement shall be satisfied by contribution of the Parking Maintenance Share. The Agency and/or the Future Developer shall have the right to require Waterfront Construction to pay quarterly installments of its Parking Maintenance Share in advance based on reasonably estimated Parking Maintenance Expenses, with annual adjustrients to the actual Parking Maintenance Expenses incurred. Waterfront Construction shall have the right to audit the records of the Agency and/or the Future Developer pertaining to the Parking Maintenance Expenses and the calculation of the Parking Maintenance Share. (f) The Future Developer's obligation to operate, repair and maintain the Minimum Parking within the Future Parking Facility and Waterfront Construction's rights and obligations with respect thereto shall he embodied in a form of Declaration of Reciprocal Easement and Maintenance Agreement in form customary in Southern California for properties of similar shared usage and otherwise satisfactory to Waterfront Construction, the Agency, the Future Developer, the Waterfront Mortgagee and the Future Developer Mortgagee (the "Parking Declaration"). The Parking Declaration shall include a grant to Waterfront Construction of the easement rights created pursuant to this Agreement, reasonable safeguards regarding the nature of the Parking Maintenance Expenses and the right of Waterfront Construction to audit same, provisions reasonably acceptable to Waterfront Construction and the Waterfront Mortgagee regarding their protections in the event of damage to, destruction of or condemnation of all or any portion of the Future Parking Facility and mortgagee protection provisions at least as favorable to a mortgagee as such mortgagee protection provisions contained in this - - Agreement and reciprocal indemnity provisions similar in substance and effect to the indemnity provisions set forth in Paragraph 9 of this Agreement. (g) As a condition to Waterfront Construction and the Agency and/or Future Developer entering into the Parking Declaration, (i) the Waterfront Mortgagee shall be permitted to encumber Waterfront Construction's interest in and to the Parking Declaration and the easements created thereunder and shall subordinate the lien of the Waterfront Deed of Trust thereto; and (ii) any lender with a deed of trust recorded against the Future Developer's interest in and to the portion of the Mayer Trust Property on which the Parking Easement and Future Parking Facility is located ("Future Developer Mortgagee") shall- be permitted to encumber the Future -7- FS21223+01380")OZZ _IX375x.11 2061241% Developer's interest in and to the Parking Declaration and the easements created thereunder and shall subordinate the lien of its deed of trust thereto. 1.1. Determination of Waterfront Parking Facility Rent. The Waterfront Parking Facility Rent shall be equal to the incremental fair rental value attributable to the use of the Minimum -Parking within the Future Parking Facility ("Minimum Parking Fair Market Rent"). The determination of the Minimum Parking Fair Market Rent shall take into account the costs to construct the Minimum Parking within the Future Parking Facility, all encumbrances affecting the Future Parking Facility and restrictions on use thereto, and the contribution by Waterfront Construction of the Parking Maintenance Share pursuant to Paragraph 10 (e) . In no event shall the Waterfront Parking Facility Rent be W less than the Parking Easement Compensation then payable pursuant to Paragraph 5 of this Agreement; nor (ii) greater than the fair market rental value for the entire Future Parking Facility less the fair market rental value for a parking facility which is identical to, an similarly situated in terms of location and configuration as, the Future Parking Facility but which has one hundred fifty fewer parking spaces, taking intc account that such identical parking facility would have similar construction costs and development constraints as does the Future Parking Facility and further taking into account any increased construction costs that may be encountered by reason of expanding the total number of parking spaces within the Future Parking Facility so as to provide the additional Minimum Parking therein. (a) In the event the Agency and Waterfront Construction cannot agree on the Waterfront Parking Facility Rent on or before the date which is ninety (90) days following the meeting between Agency and Waterfront Construction held for such purposes pursuant to Paragraph 10(d) above, Agency and Waterfront Construction shall jointly attempt to agree on the appointment of a Qualified Appraiser. If the parties so agree, the single Qualified Appraiser jointly appointed by the parties shall determine the Minimum Parking Fair Market Rent in the manner herein specified within sixty (60) days after its appointment. The cost of the services performed by such single Qualified Appraiser shall be shared equally by the Agency and Waterfront Construction. (b) If the Agency and Waterfront Construction fail to agree on a single Qualified Appraiser within one hundred five days (105) days following the meeting between Agency and Waterfront Construction held for such purposes pursuant to Paragraph 10(d) above, Agency and Waterfront Construction shall each, within an additional fifteen (15) days, separately at its own cost, designate a Qualified Appraiser. Such appraisers shall render their respective appraisals within sixty. (60) days following the dates of their respective appointment. Each party shall respectively bear the cost of -8- F521223141580O-"M1K1758A1 ao6124M the appraisal given by the appraiser appointed by it under this Paragraph 11(b). (c) If two Qualified Appraisers are appointed and they concur on the Minimum Parking Fair Market Rent, the Minimum Parking Fair Market Rent determined by them shall be the Waterfront Parking Facility Rent commencing as of the;Parking Facility Commencement Date. if the appraisers do not concur, but the difference between the two determinations of the Minimum Parking Fair Market Rent is less than or equal to ten percent (10%) of the amount of the higher determination of the Minimum Parking Fair Market Rent, the mean average of the two determinations shall be the Waterfront Parking Facility Rent. (d) If the appraisers do not concur and the difference between the two determinations of the Minimum Parking Fair Market Rent is more than ten percent (10%) of the amount of the higher determination of the Minimum Parking Fair Market Rent, the two appraisers shall jointly select a third Qualified Appraiser. If said two appraisers are unable to agree on a third Qualified Appraiser, either of the Agency or Waterfront Construction, by giving fifteen (15) days notice to the other party, may apply to the presiding judge of the Superior Court of Orange County to select a third Qualified Appraiser. The expenses related to the selection and services of the third appraiser shall be shared equally by the Agency and Waterfront Construction. (e) In the event the third Qualified Appraiser is to be appointed, then, within fifteen (15) days from the date of the selection of the third appraiser, all three appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, data, and conclusions as to the Minimum Parking Fair Market Rent. The third appraiser shall review all such findings, data, and conclusions, and shall determine which of the two appraisers' respective determinations of_the Minimum Parking Fair Market Rent is the most reasonable determination under the criteria set forth above. The third appraiser shall not be permitted to make any - other independent determination of the Minimum Parking Fair Market Rent. The third appraiser's conclusion shall be reached within thirty (30) days from the selection of the third appraiser. The appraiser's determination found by the third appraiser to be the most reasonable determination of the Minimum Parking Fair Market Rent shall be the Waterfront Parking Facility Rent commencing on the Parking Facility Commencement Date. (f) A "Qualified Appraiser" shall mean a member of the American Institute of Real Estate Appraisers (or any successor thereto) or the Society of Real Estate Appraisers (or any successor thereto), or, in the event the American Institute or Society of Real Estate Appraisers or any successor shall not then be in existence, A disinterested real estate appraiser Wz Fs2122]WFSIKK)-(XKI_V21H3759.11 aO6/24/% having the other qualifications set forth in this Paragraph 11(f) , with at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the Future Development and the Future Parking Facility, and who is impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to any of the parties hereto, or their successors. ; (g) Each Qualified Appraiser shall certify that he or she has personally inspected the Future Development and the Future Parking Facility (and/or reviewed plans of same if construction has not yet been completed) and all properties used as comparisons, that he or she has no past, present or contemplated future interest in the Waterfront Construction Property, the Mayer Trust Property, the Future Parking Facility, or any part thereof, that the compensation to be received by him or her from any source for making the appraisal is solely in accordance with this Agreement, that he or she has followed the instructions as set forth in this Paragraph 11 for valuing the Minimum Parking Fair Market Rent as of the estimated Parking Facility Commencement'Date, that neither his nor her employment to make the appraisal nor his nor her compensation therefore is contingent upon reporting a predetermined value or values, or a value or values within a predetermined range of values, that he or she has had at least (10) years professional experience in Southern California in appraising land and improvements similar to the Future Development and the Future Parking Facility, that he or she is a member of the American Institute of Real Estate Appraisers or the Society of Real Estate Appraisers or respective successors thereto and that his or her appraisal was prepared in conformity with the standards of professional practice of the Institute or Society or successor thereto. (h) The Waterfront Parking Facility Rent established under this Paragraph 11 shall be binding and conclusive on the parties. If for any reason the Waterfront Parking Facility Rent is not established under this Paragraph 11, no party may avail itself of a Waterfront Parking Facility Rent more - - favorable to such party than the Minimum Parking Fair Market Rent determined by the appraiser appointed by such party. 12. Further Cogperation. Each party hereto agrees to execute, have notarized if appropriate, and deliver to the other party promptly upon request of the other party any instrument requested by such other party in order to implement the terms of this Agreement. Without limiting the generality of the foregoing, in the event that prior to the Conmencement Date, a parking facility is constructed (with all necessary approvals by the Agency and the City) which provides not less than the Minimum Parking for the benefit of the Waterfront Construction Property and is approved by Waterfront Construction, the Waterfront Mortgagee and the Agency, then Agency and Waterfront Construction agree to cooperate, subject to the approval of the Waterfront Mortgagee, executing such -10- FS2t22305AUDOXIMIA3738.11 a(iN241% documents as necessary to terminate and replace this Agreement with an agreement granting an easement in favor of Waterfront Construction over such parking facility for the then remaining Parking Easement Term, such replacement parking easement and agreement to contain substantially the same terms and conditions as provided for herein and as contemplated to be provided in the Parking Declaration for the Future Parking Facility under Paragraph 10 (f ) above. 13. Waterfront_ Construction's ,Right_ to_Terminate Parkina Easement. Waterfront Construction may, at any time upon written notice given to the Agency and (if applicable) the Future Developer prior to the date which is thirty (30) days following the determination of the initial Waterfront Parking Facility Rent pursuant to Paragraphs 10(d) and 11 above, terminate the Parking Easement, provided that such termination shall be subject to the prior written consent of the Waterfront Mortgagee. Any such termination shall be effective thirty (30) days after receipt of such written notice by the Agency and (if applicable) the Future Developer. 14. Bindincr Cov nan s Successors. (a) Subject to Paragraph 14(c) hereof, Waterfront Construction and the Agency intend that the grants, covenants, conditions, and restrictions Contained herein shall run with the Mayer Trust Property and the leasehold estate created under the Waterfront Construction Lease for the benefit of the owners, occupants and tenants of the Waterfront Construction Property, and shall bind and inure to the benefit of Waterfront Construction and Agency and their respective tenants, subtenants, heirs, personal representatives; successors, assigns and any and all successive leasehold owners of the Waterfront Construction Property and all successive owners of the Parking Area and the Mayer Trust Property. (b) This Agreement shall be recorded in the Office of the Recorder of the County of orange and shall serve as notice - to all successive owners that the Mayer Trust Property, the Parking Area and the Waterfront Construction Property shall be benefited and/or restricted in the manner herein described. The Parking Easement granted pursuant to the provisions hereof is expressly for the benefit of the Waterfront Construction Property, and the Waterfront Construction Property shall be the dominant estate and the property upon which the Parking Easement is located shall be the servient estate. (c) Notwithstanding anything to the contrary in Paragraphs 14(a) and 14(b), if Waterfront Construction sells or assigns its leasehold interest in any portion of the Waterfront Construction Property, Waterfront Construction said shall be automatically freed and relieved, and its transferee shall be automatically burdened, from and after the date of -11- FS21223ti11S80NUM2183758,11 OVUM such sale or assignment, with respect to all liabilities regarding the performance of any agreements or obligations on the part of Waterfront Construction contained in this Agreement thereafter to be performed with respect to the Waterfront Construction Property, it being intended hereby that the agreements and obligations contained in this instrument on the part of Waterfront Construction shall be binding on Waterfront Construction only during its ownership of the leasehold interest in the Waterfront Constriction Property, but that the selling or assigning party shall remain liable for any obligations incurred prior to the effective date of such sale or assignment. 15. Brea h Shall Not Permit Termination. It is expressly agreed that no breach of this Agreement shall entitle any party to cancel, rescind or otherwise terminate this Agreement or the Parking Easement granted hereunder. Nothing in the foregoing shall affect or limit, in any manner, any cther right or remedies which either party may have hereunder, or at law or in equity by reason of any breach of this Agreement, including, but not limited to, damages and/or injunctive relief. 16. Mortgagee Protection. (a) Any approvals or consents to be given by Waterfront Construction under this Agreement shall be conditioned on Waterfront Construction obtaining approval by any lender with a deed of trust recorded in a first lien position against Waterfront Construction's leasehold interest in the Waterfront Construction Property ('Waterfront Construction Mortgagee"). (b) No breach by any party of any of the terms; conditions, covenants or restrictions of this Agreement shall defeat or render invalid the lien of any deed of trust made in good faith and for value encumbering all or any portion of the Subject Property, but such terms, conditions, covenants or restrictions shall be binding upon and effective against any person who acquires title to any such portion of the Subject Property by foreclosure, trustee's sale, deed in lieu of - foreclosure or otherwise, provided, however, that such party shall only be obligated for obligations accruing during the period of ownership of their respective interest in the Subject Property. (c) Agency and the Future Developer shall give any Waterfront Mortgagee which has delivered written notice to Agency and Future Developer of its existence and address or addresses, such written notices as Agency and/or the Future Developer are required to deliver to Waterfront Construction hereunder, including without limitation, written notice of breach by Waterfront Construction under this Agreement. (d) Agency acknowledges and agrees that Lehrran Brothers Holdings Inc., doing business as Lehman Capital, A Division of -12- FS212231O15&J040(r-1 193758A1 a1J6a4ft u Lehman Brothers Holdings Inc., a Delaware corporation ("Lehman"), is a Waterfront Mortgagee as of the date hereof and notices shall be given to Lehman as follows: • •r Lehman Brothers Holdings Inc. Three World Financial Center New York, New York 10285 Attn: Xavier Sheid With a copy to: Steefel, Levitt and Weiss One Embarcadero Center, 30th Floor San Francisco, CA 94111 Attn: Bruce E. Prigoff, Esq. Such addresses may be changed from time to time by written notice from Lehman to Agency given by registered or certified mail. 17. Development Agreement and Disposition and Development Agreement. The parties hereto acknowledge that the Mayer Trust Property is presently subject to (i) a Development Agreement dated August 15, 1988 by and between the Mayer Trust and the City of Huntington Beach, as may have been heretofore amended ("Development Agreement"); and (ii) a Disposition and Development Agreement entered into by and between the Agency and the Mayer Trust on or about August 15, 1988, as amended by First Amendment dated June 17, 1991, Second Amendment dated August 1, 1991, Third Amendment dated March 16, 1992 and Fourth Amendment dated April 20, 1992 and as may have been further heretofore amended ("DDA"). Agency and City each agree that in the event there is any conflict between the terms and conditions of this Agreement and the Development Agreement or the DDA, the terms and conditions of this Agreement shall apply with respect to the Parking Easement granted hereby, that the Development Agreement and the DDA are hereby deemed amended as necessary to permit the grant of the Parking Easement granted pursuant to this Agreement and the Mayer Trust Parking Easement, and that the Development Agreement and the DDA are hereby subordinated to this Agreement and the Mayer Trust Parking Easement with respect to the rights of Waterfront Construction respecting the Minimum Parking. Nothing in the foregoing shall be deemed as waiving any rights of the Agency or the City respecting approvals for the construction of parking facilities contemplated by this Agreement or the Mayer Trust Parking Easement. 18. Damage or Destruction. In the event of any damage or destruction of the improvements on the Parking Area (prior to commencement of construction of the Future Parking Facility), Waterfront Construction shall repair and restore all such damages. In such event Agency agrees to make available for disbursement to Waterfront Construction any proceeds of insurance carried by Waterfront Construction with respect to such improvements. -13- FS21223w15?u10ax> 12%2183758.11 aW241% 19. on -Dedication. Nothing contained in this Agreement shall be deemed to be a gift or dedication of any portion of the Subject rroperty to the general public or for any public use or purpose whatsoever, it being the intention of the parties hereto and their successors and assigns and that nothing in this Agreement, expressed or implied, shall confer upon any person, other than the parties hereto and their successors and assilqns, any rights or remedies under or by reason of this Agreement. 20. Governing Laws. This Agreement shall be construed in accordance with the laws of the State of California. 21. Severability. If any term, provision or condition contained in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement (or the application of such term, provision or condition to persons or circumstances other than those in respect of which it is invalid or unenforceable), except those terms, provisions or conditions which are made subject to or conditioned upon such invalid or unenforceable terms, provisions or conditions, shall not be affected thereby, and each term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 22. Attorneys' _Fees. In the event of any controversy, claim, or dispute arising out of or relating to this Agreement or the breach thereof, the prevailing party shall be entitled to recover from the other party reasonable expenses, attorneys' fees and costs. 23. Modifications. This Agreement and the easements granted hereunder may not be amended or otherwise modified, except by ah agreement in writing signed by the parties hereto. No such amendments or modifications shall have any force or effect whatsoever unless and until they are written and executed in such a manner. If required by the terms of the Waterfront Deed of Trust and any Future Developer Deed of Trust, any amendment to this Agreement shall require the prior written approval of the Waterfront Mortgagee and/or the Future Developer Mortgagee. 24. Exhibits. Exhibits "A", "B", "C" and 11C-1" are attached hereto and incorporated herein by reference. -14- FS2Q23V)151 XMXX)ZU1E7758.t1 ,OVW96 IN WITNESS WHEREOF, Agency and Waterfront Construction have executed this Parking Easement Agreement on the day and year first above written. ATTEST THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON EEACH, a public body, corporate and politic By: By: Agency Clerk Chairman "Agency" WATERFRONT CONSTRUCTION #1, a California limited partnership By: WATERFRONT DEVELOPMENT, INC., a California corporation, General Partner By: Stephen K. Bone President "Waterfront Construction" AGREED AND CONSENTED TO AS OF THIS DAY OF , 1996 ATTEST THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic By: By: Agency Clerk Chairman "City" AGREED AND CONSENTED TO AS OF THIS DAY OF , 1996 ROBERT L. MAYER, as Trustee of the Robert L. Mayer Trust of 1962, dated June 22, 1962, as amended "Mayer Trust" -15- F52%223VU13AKNKf0Z%21M]738.11 sffia r% M STATE OF CALIFORNIA ss. COUNTY OF ORANGE -r On , 1996, before me, , personally appeared STEPHEN K. BONE, personally known to, me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose nam.e(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. Notary Public [SEAL] STATE OF CALIFORNIA ss. COUNTY OF ORANGE On , 1996, before me, , personally appeared ROBERT L. MAYER, 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/hex'/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. Notary Public [SEAL] -16- FS2122]�tt5xtxl-t1tx12ti25i1]758.i1 at16t241gh 1W M STATE OF CALIFORNIA COUNTY OF ORANGE ss. On , 1996, 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. Notary Public t SEALI STATE OF CALIFORNIA ss. COUNTY OF ORANGE On 1996, 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. Notary Public (SEAL] -17- FS:u:]u)1S±aN)4Nxi?�-7IH]758.11 aO6r24/% EXHIBIT "A" MAYER TRUST PROPERTY THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 1 1 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER TRACT MAP 13045 FILED IN BOOK 628, PAGES 46 AND 47 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EAST CORNER OF LOT 1 OF SAID TRACT MAP 13045; THENCE NORTHEASTERLY ALONG A 1145.00 FOOT RADIUS CURVE, CONCAVE NORTHWESTERLY, THROUGH A CENTRAL ANGLE OF 04059'50", 99.87 FEET; THENCE NORTH 57°37'50" WEST 100.00 FEET TO THE BEGINNING OF A 1055.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH A CENTRAL ANGLE OF 17041'32", 325.77 FEET; THENCE SOUTH 39056'18" EAST 100.00 FEET TO THE BEGINNING OF A 1175.00 FOOT RADIUS CURVE, CONCAVE NORTHEASTERLY, THROUGH A CENTRAL ANGLE OF 04-49,38", 98.99 FEET TO A POINT OF REVERSING CURVATURE WITH A 65.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH A CENTRAL ANGLE OF 80020'54", 91.15 FEET; THENCE SOUTH 36054'11" WEST 204.63 FEET TO THE BEGINNING OF A 32.00 FOOT RADIUS CURVE, CONCAVE NORTHERLY, THROUGH AN ANGLE OF 90°00'00", 50.27 FEET; THENCE NORTH 53005'49" WEST 120.00 FEET TO THE BEGINNING OF A 183.00, RADIUS CURVE, CONCAVE SOUTHWESTERLY, THROUGH AN ANGLE OF 15002'47", 48.06 FEET, TO A POINT OF REVERSING CURVATURE WITH A 167.00' RADIUS CURVE, CONCAVE NORTHEASTERLY, THROUGH AN ANGLE OF 15°02'48", 43.86 FEET; THENCE NORTH 53005'49" WEST 257.47 FEET; THENCE NORTH 53004'23" WEST 244.66 FEET TO A POINT ON THE EASTERLY LINE OF SAID LOT 1; THENCE NORTH 36'54'19" EAST ALONG SAID EASTERLY LINE 362.54 FEET, MORE OR LESS, TO THE POINT OF BEGINNING. ENCLOSING AN AREA OF 6.01 ACRES, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "A", SHEET 2 OF 2, ATTACHED HERETO AND MADE A PART HEREOF. W P51 /COCS/W ATERFR0.252/EXHIBITA.11 SHEET 1 OF 2 N 81 E?ffHBfT 'A' SHEET 2 OF 2 l EX1STM HILTON HOM LOT f TRACT 13046 � MM 628/47-48 N 3654'11 " E TWIN DOLPHIN DRNE MA a = 17*41'32` R = 1055.00 L = 325.77 ' 6 = 04' 49' 38' R = 1175.00 ' L r 98.99 o = 80' 20' 540 R = 65.00 L = 91.15 V EXHIBIT "B" •. «�•av s t s M • s • :� « •r r • • a Y• • rt• � r't f �• :471t s • PAR=j 1: ICT 1 OF TRACT NO. 13 04 5 AS PER HAP FILED 3N BOOK 62 $ PFGM 4 6 AND 4 7 OF M-11,c Lr' M"'OM MAPS IN THE OFFICE OF THE OC7iUl Y RECORDER OF SAID CLIJ R Y. PARCEL 2: •• C' :4'�t AS FOLL=: BEGIN NIM AT A P0IMr IN THE SOUTH LIINE OF SAID NUM ME 71W IS DISTANT TIMMW NORM 89' 43' 07" EAST 103.28 F=T FROM CE14T R TDZE OF RUN IGI'Oti STREET, AS SHMT ON RDOORD OF SURVEY NO. 81-1151, F= IN BOOK 103, PAGES 28 AND 29 OF RECORDS OF SURVEY 3N THE OFFICE OF SAID OOCUN RECORDER, SAID POINT BE JG, CK A NON—TANGEti+ 2355.00 FUOT RADIUS CURVE THAT 3S CONCAVE SCUMMSTERLY, A RADIAL TD SAID POINT BEARS Ni 31. 56' 15" FAST; 'IIBZ;CE NOMMESTEM 5.94 FEET All M SAID CURVE TfRIMi A CENTRAL ANGLE OF 0. 081 40" TO THE SDGMM rG OF A 32.00 IVO RADIUS CURVE Tilp►T IS CONCAVE SaUliE2LY; THENCE NMSTER .Y 41.11 FEET AIDNG SAID CURVE TERCLUi A CENTRAL, A= OF 73" 36' 25" TO SAID SOMH LINE; MMICE NORTH 89" 431 07" FAST 43.24 FEET ALCM SAID SOUTH 1= TO = POINT' OF EMSINNING. ALL AS SHOWN ON TKE ATTACHED PAGE 2 OF THIS EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF. , EXHIBIT "B" PAGE 1 OF 2 ICY-231 134.1204 U 31 47' 35" E Q PARCEL 2 \ /I CA z ,— w w w )`rKRAD 5� L5" E �NRA4D1 �8w50", 11 z - 0 F- 0 z z s � OA 0o08'40" R 2355.00' L 5.94' b - 73'35'25" R - 32.00' L - 41.11' N 99°43`07" E 43,24' PARCEL S TRACT NO. 13045 LOT 1 r1.rs. 6.28— E s R2 + COAST HIGHWAY p�CIFSC grAl f', t " " fin• EXHIBIT "U' :?_ 7 _ Aq EXHIBIT "Cr PARKING AREA 1 1.628 ACRES PACIFIC VIEW AVENUE I POINT OF RECIPROCAL FIRELANE ACCESS EASEMENT EXSVN(3 HILTON HOTEL w Q C14 v- co 0 T -1 Irn TRACT -13046 1 :�: NIN] 528/47-48 257.00' N 53*05 '4 0' W . . ........... 257.00' N 53*05'40*" W PACIFIC COAST HIGHWAY LIT v- u') to 14) EXHIBIT "C-1" PARKING AREA AN EASEMENT FOR PARKING INGRESS AND EGRESS PURPOSES OVER THAT PORTION OF THE NORTHEAST QUARTER OF SECTION 14, TOWNSHIP 6 SOUTH, RANGE 11 WEST, IN THE RANCHO LAS BOLSAS, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER TRACT MAP 13045 FILED IN BOOK 628, PAGES 46 AND 47, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE EAST CORNER OF LOT 1 OF SAID TRACT MAP 13045; THENCE SOUTH 530 05' 40" EAST 257.00 FEET; THENCE SOUTH 360 54' 20" WEST 276.00 FEET; THENCE NORTH 530 05' 40" WEST 257.00 FEET TO A POINT ON THE SOUTHEASTERLY LINE OF LOT 1 OF SAID TRACT MAP 13045; THENCE NORTHEASTERLY ALONG SAID LINE 276.00 FEET TO THE POINT OF BEGINNING, ENCLOSING AN AREA OF 1.628 ACRES, MORE OR LESS. ALL AS SHOWN ON EXHIBIT "C" ATTACHED HERETO AND MADE A PART HEREOF. , 09 Summary Report Pursuant to Section 33433 ATTACHMEN'i' #2 07/03/1996 11:55 213622520A KEYSER MARSTON t" cam. W = SUMMARY REPORT PURSUANT TO SECTION 33433 of the co CALIFORNIA COMMUNITY REDEVELOPMENT LAW z on a PARKING EASEMENT AGREEMENT PAGE 02 by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH and WATERFRONT CONSTRUCTION 01, A CALFORNIA LIMITED PARTNERSHIP This Summary Report has been prepared for the Huntington Beach Redevelopment Agency (Agency) pursuant to Section 33433 of the Califomia Health and Safety Code. This report sets forth certain details of the proposed parking easement agreement (Agreement) between the Agency and Waterfront Construction #f1, A Califomia Limited Partnership (Waterfront Construction). The transaction requires the Agency to provide Waterfront Construction with an easement on land m ned by the Agency to allow for the construction of 150 parking spaces to serve the Waterfront Hilton. The parking easement area includes approximately 1.628 acres of land, which Is a part of a 6.01 acre parcel subject to a ground tease between the Agency and the Robert L. Mayer Trust (Mayer Trust). This parcel Is also subject to a Disposition and Development Agreement (DDA), which requires Robert L. Mayer to construct a multi -phase commercial/residential development within a defined schedule of performance. If the Mayer Trust parcel is developed in accordance with the identified time, schedule, the ground lease will be extended for a 99-year term. If the time schedule Is not met the parcel will revert to the Agency in 2010. The parking easement will not take effect until the existing ground lease between the Agency and the Mayer Trust terminates. The compensation to be received by the Agency for providing the parking easement will be structured to mirror the terms of the ground lease between the Agency and Waterfront Construction for the Waterfront Hilton property. This Summary Report is based upon informat;on contained within the proposed Agreement; and is organized into the following six sections: I. Salient oints f the P1212osed A ire This section includes a description of the major responsibilities of the Agency and Waterfront Construction; 07/03/1996 11;55 2136225204 KEYSER MaRSTR4 LA PAGE 03 it. Cost of the}Igreement t4 the Agency This section outlines the total and net cost of the Agreement to the Agency; Ill. Estimated Value of the Interest to be Conveyed This section summarizes the value of the parking easement to be conveyed to Waterfront Construction; IV. Consideration Received and Reasons Therefore This section describes the consideration to be received by the Agency for the parking easement being conveyed. and the reasons therefore. It also contalns a comparison of the fair reuse value of the property for the proposed use and the fair market value of the property at the highest and best use consistent with the redevelopment plan; V. Slight Elimination This section describes the former blighting conditions on the property, and explains how the Agreement will alleviate the blighting Influence, and; Vl. Conformance with ABf 290 Impl!tmentation Plan This section explains how the proposed Agreement complies with the redevelopment strategy identified in the A131290 Implementation Plan. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. I. SALIENT POINTS OF THE PROPOSED AGREEMENT A. Waterfront Construction Responsibilities Under the proposed Agreement. Waterfront Construction must accept the following responsibilities: 1. Waterfront Construction must construct the 150 parking spaces subject to the proposed easement. 2. Waterfront Construction must agree to relocate the 150 parking spaces #` the larger development parcel on which the parking area is located is ultimately developed. 2 07/03/1996 11:55 2136225204 KEYSER MARSTON LA .�_ � PAGE 04 3. tf a parking structure is constructed to provide the parking aces 'Pubject to the easement, Waterfront Construction must pay the .'Waterfront Parking Facility Renr. This rent will replace the compensation provided for the parking easement. The rent will be equal to the greater of the parking easement payment or the marginal cost associated wi~,ti adding 150 spaces to the parking structure. 4. Waterfront Construction shall be responsible for all costs associated with operating and maintaining the parking area. If a parking structure is developed, Watefront Construction must pay the pro rata share of the ongoing operating expenses for the structure. B. - Agency Responsibilities Under the proposed Agreement, the Agency must accept the following responsibilities: 1. The Agency must limit the future use of the easement area to parking that wilt exclusively sere the Waterfront Hilton. 2. The Agency must forego reversion of the easement area at the termination of the Mayer Trust ground tease. 3. The Agency must subordinate the land included in the easement area to the Waterfront Hilton financing. 11. COST OF THE AGREEMENT TO AGENCY The parking easement area is part of the 6.01 acre Mayer Trust Parcel, which is in turn a part of the 20 acre Waterfront commercial property. The 20 acre parcel, and the adjacent 24 acre residential parcel, are subject to a ground lease, a purchase agreement, and a DDA. As a part of the conveyance, a Summary Report in ccmpliance with Section 33433 of the California Health and Safety Code was prepared In August of 1988. That Summary Report estimated the net cost to the Agency of undertaking the full scope of development defined in the DDA. The proposed Agreement effectively causes a portion of the area subject to the Mayer Trust ground loase to be ' reallocated to the land area included in the Waterfront Hilton ground lease area. The Agency is not required to incur any new cost to effect the proposed Agreement, nor is the compensation per square foot of land area modified from the terms of the executed ground lease and DDR. 3 p7193/1996 11:55 2136225204 i(EYSER MARSTON I ^ PAGE 05 poi The proposed Agreement does, however, impact the future use of the 6.01 acre development parcel. Bruce Hull, an MAI appraiser, reviewed the proposed parking easement and concluded that the developer of the 6.01 acre site might have to alter the development plan to accommodate the 150 parking spaces. The potential scenarlos are: AILI: The developer would exclude the 1.628 acre area encumbered by the parking easement when calculating the developable area of the site; Alt.2: The developer would build a parking structure by choice, and; AI0: The developer would be required to include a parking structure in the project when it otherwise could have been served by surface parking. The three altematives create different impacts, which can be described as follows: Alt'i: This option would not Impact the total compensation to be paid to the Agency for the site, because Waterfront Construction is obligated to make the ground lease payments for the 1.628 acre portion of the site. Alt.2: This alternative would not Impact the total compensation to be paid to the Agency for the site, because presumably the project would have been designed to ma)amize the financial benefits to the developer. This in tum would maximize the supportable land value. Alt.3: If the developer of the 6.01 acre site is required to build a parking structure in piece of surface parking, the land value supported by the development will be decreased.. The amount of the reduction will bo equal to the marginal cost associated Wth constructing a structure rather than surface parking. Given the the current land use policies used by the City, it Is extremely unlikely that the developer of the 6,01 acre site would be allowed to serve the project with a surface parking lot, even if a parking easement was not granted to Waterfront Construction. Thus, It is likely that either Alternative I or Alternative 2 will occur, neither of which alter the amount of compensation the Agency will receive for the subject site. Ill. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED The determination of the estimated value of the interest to be conveyed to Waterfront Construction pursuant to the proposed Agreement was made by Keyser Marston Associates, Inc. (KMA) prior to the execution of the ground lease and DDA in 1988. That analysis concluded that the ground lease structure 4 07/a3/1996 11:55 2136225204 KEYS£R I�iARSTRd LA @6 generated payments with a net present value equivalent to the fair reuse value supported by the required scope of development Since the mix of uses has not been altered as a part of the proposed Agreement, this conclusion remains valid. 1V. CONSIDERATION RECEIVED AND REASONS THEREFORE The KMA analysis performed for the entire ' Waterfront development site concluded that moderate density residential development would generate the highest value to the land. This conclusion remains valid in the current market place. However, since a primary objective of the redevelopment plan for the Main -Pier Project Area is the attraction of visitor serving commercial uses, the Agency required the development to include a major resort oriented component. The KMA financial analysis of the Waterfront commercial/residential development concluded that the scope of development and schedule of performance required by the DDA and ground lease reduced the value of the interests being conveyed. V. BLIGHT ELIMINATION Section 33031 of the Califomia Health and Safety Code includes lack of parking as a physical condition that causes blight. The addition of 150 parking spaces to serve the Waterfront Hilton hotel yWll create sufficient parking to adequately fulfill the needs of the hotel and meeting Space. This will directly assist In the Agency's efforts to eliminate blight within the Main -Pier Redevelopment Project Area. VI. CONFORMANCE WITH AB1290 IMPLEMENTATION PLAN The Main -Pier Redevelopment Project Area has an established goal of increasing the visitor serving commercial uses in the City's historical commercial core. The proposed Waterfront commerciallresidential mixed -use project is identified In the Agenc/s ABUSO Implementation Plan as a key component in the downtown revitalization program. The construction of adequate parking to serve the Waterfront Hilton hotel is considered Important to the continuing success of the hotel. Thus. the proposed Agreement is deemed to be in conformance with the A91290 implementation Plan. 904strrs Iaoe MM my3. 1990 5 N CITY OF HUNTINGTON BEACH INTER -DEPARTMENT COMMUNICATION Economic Developrn-.nt Department TO: Connie Brockway, City Clerk BY: David C. Biggs, Director of Economic Development VO DATE: July 8, 1996 SUBJECT: WATERFRONT HILTON PARKING EASEMENT PUBLIC HEARING Thank you for the assistance which your staff provided in noticing a public hearing for Monday, July, 15, 1996, on the approval of a parking easement for the Waterfront Hilton. Unfortunately, all of the documentation desired for consideration of this matter will not be completed for July 15th. As such, I have prepared an Request for Council Action which asks the Council to continue the public hearing open until August 5, 1996. Since the legal notice has appeared, you may be asked by members of the public for copies of the proposed parking easement and the Section 33433 report. Copies of these documents are attached for your use. Please let me know if I can answer any questions about this matter. Once again, thank you for your assistance. cc: Michael Uberuaga, City Administrator Ray Silver, Assistant City Administrator Michael Hennessey, Assistant Project Manager /mmoduxhrl.doc Paz" '7/y -� 71 ff NOTICE OF PUBLIC HEARrN 6.'iy cw-x:L /{'PDeve oP" tknCy, THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH CONSENT TO GRANT OF PARKING EASEMENT BY REDEVELOPMENT AGENCY TO WATERFRONT HILTON Ct NOTICE IS HEREBY GIVEN that the City Counci)&y of Huntington Beach %%ill hold a public hearing in the Council C:harnbcrs at the Huntington Beach Civic Center located at 2000 Main Street, Huntington Beach, California, on the date and time indicated below to receive and consider the statements of all persons who mash to be heard relative to the City Council action described below. DATEJTIME: Monday, July 15, 1996 7:00 PM. COUNCIL ACTION: To consider the approval of the Redevelopment Agency of the City of Huntington Beach extending the term of parking easement previously granted to the Waterfront Hilton. LOCATION: 21100 Pacific Coast tlighw-ay (Northeast Corncr of PC1I and Huntington Avenue). REDEVELOPMENT PROJECT AREA: Main -Pier Project Area. ON FILE: The proposed easement, and a staff report including a summary of the easement and a report prepared by the Agency of the estimated value of the extension of the easement are available for public inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach, California 92648. ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or submit evidence for or against the action outlined above. If you challenge the City Councils action in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in «zittcn correspondence delivered to the City Clerk, at or prior to, the public hearing. If there are any further questions please call Michael Hennessey, Assistant Project Massager at (714) 374-1529. Direct you written communication to the City Clerk. CONNIE BROCKIVAY, CITY CLERK CITY OF HUNTINGTON BEACH 2000 MAIN STREET 2ND FLOOR HUNTINGTON BEACH CALIFORNIA 92648 (714) 536-5227 By: Connie Brockway, City Clerk City of Huntington Beach Publish July 4 S 11,1996 CITY CLERKS OFFICE OF 200"ain street, HUNTINGTON REACH Huntington Beach, CA 92648 To: r Phone: Fax hone: e Date: _119 Number of pages including rover sheet: _jL From: Connie Brockway, CMC, City Clerk B: Ceputy C Clerk Phone: 714-536 5227 Fax phone: 714-374-1557 REI LUW: • ❑ Urgent ❑ for your miew ❑ Reply ASAP ❑ Please comment . V T-4 r 1 J t CITY COUNCILIREDEVELOPMENT AGENCY PUBLIC HEARING REQUEST SUBJECT: Pdc-&-APts?rJ AeWe.0 Gr�rr��� �A�n+���_tc WarrVl DEPARTMENT: , (-6(40M c. _ �� rr MEETING DATE: I E 9 CONTACT: 4CI �� ENN �S� PHONE: X /522 IA YES hO ( ) (/ ( ) Is the notice attached? ( ) (V(� ) Do the Heading and Closing of Notice reflect City Council (and/or Redevelopment Agency )'scaring? ( ) { () Are the date, day and time of the public hearing correct? ( Vil ( ) ( ) If an appeal, is the appellazt's name included in the notice? If Coastal Development Permit, does the notice include appeal language? { ( ) { ) Is there an Ernnronmental Status to be approved by Council? Is for a map attached publication? Is a larger ad required? Size ( V1 ( ) {) Is the verification statemert attached indicating the source and accuracy of the mailing list? ( Y)7 ( ) { ) Are the applicant's name and address part of the mailing labels? { { ) () Are the appellant's name and address part of the mailing labels? { { ) ( ) If Coastal Development Permit, is the Coastal Commission part of the mailing labels? ( V3 ) ( } If Coastal Development Permit, are the resident labels attached? Is the Report 33433 attached? (Economic Development Dept. items only) * 011 6-'- A44A.VE Please complete the follo�%ing: , I . Minimum days from publication to hearing date 2. Number of times to be published �z— • .3. Number of days between publications 21 � v RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Public Hearing & Approval of Grant of Parking Easement for Waterfront Hilton COUNCIL MEETING DATE: July 1 5, 1 996 RCA ATTACHMENTS STATUS Ordinance wlexhibits & legislative -draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (wlexhibits if applicable) Si ned in full by the Ci}y Attome Not Applicable Subleases, Third Party Agreements, etc. (Approved as to form by City Attome Not Applicable Certificates of Insurance (Approved by the City Attomgj Not Applicable Financial Impact Statement Unbud et, over $5,000 Not Ae2licable Bonds if applicable) Not Applicable Staff Re ort If applicable) Not Applicable Commission, Board or Committee Report If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS ..REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator(Initial) City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: . I PROOF OF PUBLICATION STATE OF CALIFORNIA) ) SS. County of Orange ) I am a Citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not a party to or interested in the below entitled matter. I am a principal clerk of the HUNTINGTON BEACH INDEPENDENT, a newspaper of general circulation, printed and published in the City of Huntington Beach, County of Orange, State of California, and that attached Notice is a true and. complete copy as was printed and published --in the Huntington Beach and Fountain Valley issues of said newspaper.to wit the issue(s) of: August 8, 1996 I declare, under penalty of perjury, that the foregoing is true and correct. Executed on August 8, 1996 at Costa Mesa, California. Signature PUBLIC NOTICE PUBLIC NOTICE NOTICE OF . PUBLIC HEARING CITY COUNCIL/ REDEVELOPMENT AGENCY THE CITY COUNCIL/ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH CONSENT TO AMEND DISPOSITION & DEVELOPMENT AGREEMENT GRANT OF 76-YEAR LEASE/PARKING EASEMENT BY REDEVELOPMENT AGENCY TO WATERFRONT HILTON OF 1.6 ACRE PARCEL NOTICE IS HEREBY GIVEN that the City Councll/Redevelopment Agency of the City of Hun- tlngton Beach ImI hold a public hearing In the Cour} cil Chambers at the Hun- tington Beach Civic Center located at 2000 Main Street, Huntington Beach, California, on the date and time Indicated below to re - calve and consider the statements of all persons who wish to be heard rela- tive to the City Councll/Re- development Agency ao- COUNCIL/AGENCY AC- TION: To consider the ap- proval of the Re- development Agency of the City of Huntington Beach amending the existing Dis- position & Development Agreement by. granting a ment to the Waterfront Hilton of 1.6 acre parcel. LOCATION: 21100 Pacific Coast Highway (NE comer — of PCH and. Huntington Av- enue). - REDEVELOP-MENT PROJECT AREA: Main -Pier project area - ON FILE: The proposed Disposition &.Development Agreement amendment, lease/easement, and a staff reporflncluding a summary of the, amendment, lease/ easement and a report pre- pared by the Agency of the estimated value of the P-aL_2( ant are able for public Inspection at the Office of the City Clerk, 2000 Main Street, Huntington Beach, Califor- nia 92648. ALL INTERESTED PER- SONS are Invited to attend said hearing and express opinions or submit evi- dence for or against the action outlined above. If you challenge the City Councll's/Redevelopment Agency's action In court, ou may be limited to rals- yng only those Issues you or someone else raised at the public hearing de- scribed In this notice, or In written correspondence de- livered to the Clty.Clerk, at or prior to the public hear- Ing. If there are any further questions, please call Michael Hennessey, As- sistant Project Manager at (714) 374-1529. Direct your written communication to the City Clerk. CONNIE BROCKWAY, CITY CLERK CITY OF HUNTINGTON BEACH 2000 MAIN STREET, 2ND HUNTINGTON BEACH, CALIFORNIA 92648 (714) 536-5227 Published Huntington Beach Independent August 8, 1996 082-097