HomeMy WebLinkAboutPacific Beach Co./Orin G. Berge, Jr. - 1993-05-03 y
STATE OF CAUFORNIA
County of Orange
I am a Citizen of the United States and a
resident of the County aforesaid; I am over the
age of Eighteen years, and not a party to or
interested in the below entitled matter, i am a PUBLIC NOTICE
principal dart{ of the HUNTINGTON BEACH auaOTICEE f i
INDEPENDENT, a newspaper of general f HuKTIkQTOHBEACH
CENTER . .
dmulation, printed and published in the City of 'RED6 IMOPMENT
P !"' PROJECT AREA Cm
Huntington Beach, County of Orange, State of COUHctu
Caffomia, and that aMached Not;cs is a true and AGENCYD1�SiT OH
complete copy as was printed and published in AND DEVELOPMENT
the Huntington Bea ch and Fountain Valley MEE'WEE7'CEEN R
issues of said newspaper to wit the issue(s) of: AVENUE ON THE
SOUTH THE t403 •7
F7REEWAY ON THE '
NORTH AND EAST.OF
coTNARD STIR
hold
7M pm at the Chy Cur}
ca.crunbom. Main
S"" 1n the Gay of Hue
Counal 1n)M jession whn
the Redevetoprywt Ageney
Of the Qty at Hunbr'vw
April 15, 22, 1993 sa;nt���o on
A fln»rnent by and bobve.n
aethe
Beach and Orin, G.Berge.
Jr.. dated Fabt a is,
of prop«r► ewod by V*
op---Agency m
Orin a Berge•a.me re
port PryPafed pvsuar� to
Section a3tJ3 of ttu Cali•
forma Neagh and Salaty
Code and the DOA an
avaiiablo for 7Ynpeuiun at
ma otRce of the C7ty CW:
declare, under penalty of perjury( that the Ra�a� OA
iregoing is true and correct. to t» �� at V -
Ca sir. '8:aeiCwzy'
xecuted on April i l 2 z 199. ... ;tIng,on B*CRY
of
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California ` DaudosuhArePtaAi"Hu n1
Costa Me., Beach- r, Va>My I
dependent 15. 2Z
Signatu
PROOF OF PUBLICATION
CITY OF HUNTINGTON BEACH
20DO MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
June 8, 1993
Orin G. Berge, Jr.
Pacific Beach Company Inc.
18600 Main Street, Suite 280
Huntington Beach, CA 92648
Dear Mr. Berge:
Enclosed is a copy of the Disposition and Development
Agreement between you and the Redevelopment Agency of
the City of Huntington Beach, which was approved
by the City Council at the meeting of May 3, 1993.
Sincerely,
Connie Brockway, CMC
City Clerk
CB:pm
Enclosure
(Tdophon•:714.536.5227)
REQUEST FOR CITY COUNCIL/ REDEVELOPMENT AGENCY ACTION
APPROVED BY CITY COUNCIL
pi ED 93-08
Date: May 3, 1993
carry cLEKx
Submitted to: Honorable Mayor/Chairman and Council/Redevelopment Agency
Members
Submitted by: Michael T. Uberuaga, City Administrator/Executive Direct
a"4e—
Prepared by: Barbara A. Kaiser, Deputy City Administrator/Economic-13-(r
Development
Subject: DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN ORIN G.
BERGE, JR., AND THE REDEVELOPMENT AGENCY Of THE CITY OF
HUNTINGTON BEACHIHUNTINGTON CENTER PROJECT AREA p,t* L 479
Consistent with Council/Agency policy? pCl Yes 1 l New Policy or Exception 3
Statement of Issue.Recommended Agency Action.Analysis.Funding Source.Alternative Actions.Attachments I
a m n f l e•
Transmitted for City Council/Redevelopment Agency consideration is a Disposition and
Development Agreement with Orin G. Berge, Jr., the Developer. Council/Agency actions in
June 1997 and September 1990 authorized negotiations with Mr. Berge because of his
leaselsale negotiations with the Southern Pacific Railroad prior to the Agency purchase of land
for the Gothard-Hoover Street Extension and realignment between Center Avenue on the south
(Huntington Beach) and the IA05 Freeway (Westminster) on the north. The Agreement
provides for the Developer to lease with an option to buy approximately 3.8 acres of
Redevelopment Agency owned land. The Iand within the City of Huntington Beach is zoned
M-1 (2.7 acres)and land in Westminster is zoned Chf (1.1 acres). The DDA provides for a
time period for the Developer to present to the Agency a specific project that is a use allowed
under City zoning regulations.
Recommended City Council/Agency,Action:
Staff recommends the following actions be taken:
1. Conduct a Joint Public Hearing on the Disposition and Development Agreement.
2. Adopt City Council Resolution No.(wand Agency Resolution No.O f authorizing the
execution and implementation of the Disposition and Development Agreement between the
Redevelopment Agency and Orin G. Berge, Jr., Developer.
L� '
�1 �J 2
Analysis-
The Agency-owned land that is the subject of this Disposition and Development Agreement is
partly located within the boundary of the Huntington Center Redevelopment Project Area in
the City of Huntington Beach and partly within the City of Westminster adjacent to the Project
Area. One goal of the Huntington Center Redevelopment Plan is to improve traffic circulation
by realigning and extending Gothard Avenue north and parallel with the Southern Pacific
Railroad to connect with Hoover Street at Bolsa Avenue. After doing a feasibility analysis, the
City Council/Redevelopment Agency purchased land from the Southern Pacific Railroad in
1987 for the Gothard-Hoover Extension. The land is located adjacent to the rail line and is
one hundred feet wide and is approximately seventeen-hundred feet long. Attached is a
location map.
The northerly portion of the land purchased is designed for the Gothard-Hoover extension and
realignment and the southerly portion of this land parcel is available for development.
In June of 1987, the City Council/Redevelopment Agency authorized staff to proceed with
discussions to purchase needed right-of-way for the Gothard-Hoover Extension from Southern
Pacific and to discuss possible land ]eases or sale with Orin G. Berge, Jr. (Pacific Coast
Corporation). Air. Berge had been in discussions with Southern Pacific to lease/purchase the
land the City Council/Agency wanted to purchase for the Gothard-Hoover Extension and also
was processing an entitlement application through the City of Westminster, which was
withdrawn at the request of City of Huntington Beach officials.
Because of Mr. Berge's cooperation and assistance relative to the Gothard-Hoover Extension
right-of-way purchase, he was given the opportunity to Iease/purchase land purchased by
Agency from Southern Pacific that would not be needed for the street improvement project.
Discussions with Mr. Berge have been on hold since the right-of-way purchase in 1987. Due
to the lack of funding for commercial projects and staff changes, the agreement with Air.
Berge took several years to formulate.
After many discussions, a Disposition and Development Agreement with Mr. Berge has been
completed and is presented to the City Council/Redevelopment Agency for consideration.
The main deal points of this Disposition and Development Agreement are recommended as
follows:
Agent' Obligations:
1. Propgrty Disposition: Agency grants Developer exclusive right and options to acquire the
conveyance parcels or a combination of parcels within the conveyance parcels (Parcels IA,
113, 2 & 3). The total area is 3.8 acres.
2. Street Sit : Parcels 1B, 2 and 3 (2.8 acres) are currently proposed as the Gothard Street
realignment and extension to the north to connect with Hoover at Bolsa Avenue.
3. Term l A): The option to purchase Parcel I (I acre) shall automatically terminate if not
exercised by the Developer within ten (10) years of the date of execution of the
Agreement.
3
4. Term (113. 2. 3): The option to purchase Parcels 1B, 2 and 3 by the Developer shall
automatically terminate if not so executed by the later of(a) ten (10) years after the date of
execution of this Agreement by the Agency or (b) three (3) years after the date the Agency
gives written notice to Developer regarding which portions of the site are eligible for
purchase or lease under this Agreement.
5. Interim Lead: The Developer shall have the first right of refusal to enter into an interim
lease of the Site for a term which would expire upon the earlier of(a) the Conveyance (as
to the Conveyance Parcels only) or (b) ninety (90) days notice from the Agency.
6. Financial Assistance: The Agency is to provide up to $100,000 in city permit costs for a
nonresidential project and up to$650,000 for construction costs related to the development
of a low and moderate income housing project. The Agency is also liable for up to $5,000
for costs incurred by the Developer in changing site design resulting from changes in the
Hoover-Gothard alignment.
7. Hazardous Materials: The Agency is obligated for up to $50,000 for environmental
remediation work prior to conveyance. After conveyance the Developer is obligated to
accept the conveyance parcels in "as is" condition.
12eve3oper Obligations
1. Property Acquisition: The Developer has two options to acquire Agency parcels. He can
choose to purchase and receive fee simple title to the conveyance parcels. The purchase
price shall be fair market value to be determined by appraisal. Value will be the lowest of
two values (1) a prorata share of the original purchase price of$1,550,135 adjusted for
CFI or (2) fair market value as determined by an appraisal that reflects all encumbrances.
The fair market value shall be 100% of the appraised amount.
The Developer's second option is to lease the conveyance parcels with the following terms:
• Forty (40) years if the use is other than single room occupancy (low and moderate
income residential).
• Fifty-five years (55) if the use is single room occupancy and required by the lender.
• Rental amounts are $8,860 per month for the first five years, $12,400 per month for
the second five years, $17,365 for the third five years, $24,310 for the fourth five
years, $34,035 for the fifth five years, and fair market rental for the remainder of the
Iease term.
2. Entitlements fQr Development: Developer files jointly with Agency for entitlement. The
Developer is obligated to comply with all legal requirements and costs required by the City
regarding entitlements except as otherwise provided in the DDA.
3. inan in¢: All costs of development of a non-residential project are to be financed by the
developer except $100,000 in specified permit fees. For a residential development (low
4
and moderate income), the Developer may use up to $650,000 to be provided from the
Agency's Low and Moderate Income Housing Fund.
4. Hazardous Materials: After receiving title to the conveyance parcels the Developer is
obligated to fund and implement remediation that may be required to remove hazardous
materials.
Public Benefits of the Proposed Project
1. The DDA furthers the objectives of the Community Development Law, and implements the
Redevelopment Plan for the Huntington Center Redevelopment Project Area.
2. The DDA provides for the private development and ownership of formerly Agency owned
land. Through private ownership and development, the property tax base will be improved
and jobs may be provided.
Fconomic Analysis
An economic analysis to meet the Health and Safety Code Section 33433 has been completed
and is attached. The economic terms of this DDA are summarized as follows:
• Agency purchased site for$1,550,135 in 1987 (3.8 acres-zoned light industrial)
• Agency will pay up to $50,000 for hazardous materials remediation
• Agency will pay maximum $5,000 for design changes if Hoover-Gothard ROW changes
• Agency will provide $650,000 in assistance for a low/mod SRO project
• Agency will fund up to $100,000 in permits/fees for a project other than a SRO
Lease Rates;140:5 Years) Option IQ Purchase(IQ Years)
Y ars nnual P n Land Value = $1,923,000
1 -5 $ 106,320
6 - 10 148,800
11 - 15 208,380
16 - 20 291,720
21 - 25 408,420
26 + fair market value
Land Value - $1,450,000
Funding So1jrce:
The funds that may be needed for this DDA are: 1) $100,000 to cover costs of permits for a
non-residential project; or 2) $650,000 for the construction of housing from the Agency's Low
and Moderate Income Housing Fund; 3) $5,000 potential for design changes; and 4) $50,000
5
potential for hazardous remediation. Since the developer has a ten year option, the plan is to
request Agency/Council appropriation of funds when they are needed.
Alternative Actions:
1. Continue action on the Disposition and Development Agreement and related Resolutions
to allow for additional review time.
2. Direct staff to further negotiate specific points of the Agreement with the Developer.
3. Deny approval of the Disposition and Development Agreement and terminate
negotiations.
Attachments:
1. Location Diagram
2. Site Map
3. Health and Safety Code Report 33433
4. City Council Resolution
S. Redevelopment Agency Resolution
6. Disposition and Development Agreement
7. CEQA Determination
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ATTACIPMENT NO. 'L
Page 2 of 2
V 33433 REPORT (�•5)
r
Richard L lkxti 5W South Grad Avenue,Sulte RM
Calvin 1,HOlils.11 la4 Aupks.CaMomia 9om1
Kathleen H.Head 213/622.8C95 Fix 2t3/6=-5W4
SAN DIEGO 619/9 -"O
Hcloz A.Sc=ng
Gerald M.Umble
SAN FRANCISCO 4LV398.30SO
Mmot}yy C Kelly
A.hey Keyw
HLX0RANDVX
Kate Earle Punk
Robert L We nm=
Mkltael CDOM
Deana E.Ctsaley
TO: Me. Barbara Kaiser
Deputy City Administrator/Economic Development
City of Huntington Beach
PROMS KEYSER MARSTON ASSOCIATES, INC.
SUBJECTS Economic Analysis of Barge DDA
DATE: March 15, 1993
Pursuant to your request, Kayser Marston Associates, Inc. (KMA) has
prepared a preliminary economic analysis of the proposed option
agreement between the Huntington Bench Redsvolopinent Agency and
Orin Berge. It is important to note that the Disposition and
Development Agreement (DDA) provides for flexibility in the scope
and timing of development on the subject site, as well the
financial terms for the disposition. As such, it was necessary to
base the I= financial analysis on a series of assumptions
regarding the proposed development. At ouch time as sore
definitive terms are agreed to, the results of thin analysis are
subject to re-evaluation.
BacxaRov>sro
The DDA provides the developer with an option to either ground
lease or purchase the 3.8 acre subject site, of which portions are
located within the Cities of Huntington Beach and Westminster. At
this time, 2.8 acres of the subject site are proposed to be used
for the Gothard Street realignment and extension to the north to
connect meth Hoover at Bola& Avenue. There are currently no
specific plans for the. 1.0 acre residual parcel, although the
development of a single room occupancy hotel (SRO) is being
considered.
ANALYSIS
To determine the net Agency cost, Kl".A analyzed the agreement under
two scenarios: if the option is exercised to purchase the site or
if the option is exercised to lease the site. The basic
assumptions used in the analysis are as follows:
1 n * �Lol�xntR�E�1�Ea��!+f:St���•a
U3-15-1�y3 lb:Z4 213 622 5204 KEYSER MARSTON ASSOC. F.03
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Page 2
1. The Agency purchased the site in Deeembor, 1987 for
$1,550,135.
2. The Agency will pay up to $50,000 for snvironmental
rsmediation costs.
3. If Gothard Street is realigned through a portion of the
site currently designated for development, the Agency
will pay a maximum of $5,000 of the costs associated with
revising the developerfs plans and/or designs.
d. If an SRO project is constructed, and the developer
complies with the affordable housing restrictions, the
Agency will provide $650,000 in Assistance from its low
and moderate income housing fund.
S. If the developer Improvements do not include an SRO, the
Agency will fund up to $100,000 of permits and fees costs
associated with the proposed development.
Under the terms of the DDA, the developer may elect to purchase the
site for its fair market value. As defined in the DDA, the fair
market value is equal to the lesser of the then current appraised
value or the amount that the agency paid to purchase the site in
1987 as adjusted by changes in the Consumer Price Index (CPI)
occurring during the intervening period. The appraised value of
the site, as of March 25, 1992, was $1.97 million. The Agency
purchase price, As adjusted for the CPI, is currently $1.92
million. Therefore, unless an updated appraisal determines that
the value has significantly decreased, the adjusted Agency purchase
price would prevail as the fair market value.
Yf the developer constructs an SRO project, the Agency will incur
costs of $705,000 plus the $1.55 million in acquisition costs.
Thus, total costs to the Agency are $2.25 million, as shown in
Table 1. When these costs are offset by the revenues received, the
not Agency cost is $3320000.
If the developer exercises the option to purchase the site and does
not construct an SRO project, the agency will incur costs totalling
$155,000 plus the site acquisition cost of $1.55 million for total
Agency cost of $1.71 million. When these costs are offset by the
$1.92 developer purchase price, the net Agency revenue totals
$218,000.
�rstosscxi��lnc.
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Page 3
Under the terms of the DDA, the developer may lease the subject
site for up to 55 years. The annual rent schedule provides for
ground rent discounts over the first 25 yearn of the term. The
annual rent payments schedule can be summarized as follows:
Years 1-5 $106,320
Years 6-10 $148*800
Years 11-15 $208,380
Years 16-20 $2910720
Years 21-25 $408,420
In the twenty-sixth year, the rent will be readjusted to equal 10%
of the fair market value of the site. subsequent increased to
market value will be applied at the and of every five year period. .
IMA has assumed, for the purposes of this analysis, that the fair
market value of the site will increase at 0 annually. Based on
these assumptions, the discounted lease payments result in a 254
loss in income an compared to the payments that would be made if
the ground lease commenced at a market rate. Therefore, the
effective land value is diminished to approximately $1.44 million
from $1.92 million.
If the developer constructs an SRO project, the Agency will incur
costs or $705,000 plus the costs of the site acquisition of $1.55
million. Thus, total costs to the Agency are $2.25 million, as
shown in Table 2. When these costs are offset by the revenues
received, the net Agency cost is $805,000.
If the developer exercises the option to lease the site and does
not construct an SRO project, the Agency will incur costs totalling
$155,000 plus the site acquisition cost of $1.55 million, for total
r Agency costs of $1.71 million. When these costs a.rs offset by the
effective land value, the net Agency cost totals $255,000.
COWCLUSION
Based on the terms and conditions contained in the DDA, the not
cost to the Agency will range from $255,000 to 4805,000 it the
ground lease option is exercised by the developer. If the option
to purchase the site is exercised, the Agency will realize net
costs in the ranee of $332,000 if an SRO project is built, or net
revenues in the range of $218*000 if an SRO project is not built.
YHN.Ip
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Key�rM�n1���iat�Inc.
03-15-1593 16:35 213 622 5204 KEY5ER JiN S70N A550C.
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TABLE I
NETAGE14CY REVENUESJ(COSTS)
GEM DOA:OPTION TO PURCHASE
HUNTINGTON BEACH,CALIFORNIA
IF SRO PROJECT CONSTRUCTED
9�
AQ�CY REVENUES
DEVELOPER PURCHASE PRICE $1.023,000
TOTAL AGENCY REVENUES $1,923,000
a mQuosT6
PURCHASE PRICE $1,660.000
ENVIRONMENTAL REMEDIATION 50,000
DESIGNIPLAN CHANGES 5,000
LOW-MODERATE HOUSING FUND 660,000
TOTAL AGENCY COSTS $2,258,000
tigl AgENCY BEYENUg&jCOQI;l (SM-000)
IFFSSROO PROJECT NOT CONSTRUCTED
AGENCX REVENUER
DEVELOPER PURCHASE PRICE $1.923,000
TOTAL AGENCY REVENUES $1,923,000
AQ�1C• Q08TS
PURCHASE PRICE $1,560,000
ENVIRONMENTAL FIEMEDIATION $0,000
DESIOMPLAN CHANGES 5,000
PERMITS AND FEES 100.000
TOTAL AGENCY COSTS $1,705,000
paM�wM
NU AQENCYAEYENUESK096M 5218,008
SWAM KYSER MAWON ASSOCIATES,INC.
FILE NAME:BER4E:M04H.IWl IliLW
03-15-1993 16:36 213 622 5204 KEYSCR tiARSTON ASSOC. F.OG
V
TA81 E 2
NEC 04ENCY REVENUES/(COSTS)
BEROE DDA.OPTION TO LEASE
HUNTINGTON BEACH,CALIFORNIA
IF,SRO PROJECT CONSTRUCTED
A9EN9X REVENUES
EFFECTIVE LAND VALUE $1,450,000
TOTAL AGENCY REVENUES $1,4150.000
AGENQX COSTS
PURCHASE PRICE Si,660.000
ENVIRONMENTAL REMEDIATION 50,000
DESIGN/PLAN CHANGES 5,000
LOW-MODERATE HOUSING FUND M.000
TOTAL AGENCY COSTS $2,253.000
NET Y BEYOUEMQITA ($805,000)
IF SAO PROJECT NOT CONSTRUCTED
6GENC
EFFECTIVE LAND VALUE $1.460.000
TOTAL AGENCY REVENUES $1,460,000
dQEN!�y COTA
PURCHASE PRICE $1,560,000
ENVIRONMENTAL REMEDIATION 60,000
DESIGN/PLAN CHANGES 51000
PERMn AND FEES 100,000
TOTAL AGENCY COSTS $117051000
NET.&raWCY_REVENUESI[COSTS1 (S255,000)
SWACE:KEYSM MARSTON ASSOCIATES,INC.
FILE NAMI~BERGM MARCH.AM:RLW
Notice of Exemption (Wo. -7) Farm V
To: ❑ Office of Planning and Research From:(Public Agency)_ City of Huntington Beach
1400 Tenth Street,Room 121 Planning Department, 2000 Main Street,
Sacramento.CA 95814 four"
.Huntington Beach, Ca 92648
�l County ok r
County of ang e,Public Service Division
` �
=2�1 W. Santa Ana Blvd.
Santa Ana, Ca 92702
Project Title: Berge DDA (Disposition and Development Agreement)
Project Location-Speclflc: Southwest corner of Mcfadden Ave. and the S.P.R.R.
Railroad easement.
Project Location-City: Huntington Beach Project Location-County: Orange
Descriptlon of Project:,Disposition -and eve1 nm!CL1t Agregment betwCen the City of
Huntington Beach and a private developer (Berge) to allow the lease/purchase
of aproximately 2.7 acres at the above location. . The agreement does not
include the approval of any development on the property. Subsequent
development of the site will be consistant with the current zoning and will
dame of Public Agency Approving Project: _ Huntington Beach City_ Council _ subj_t'—to enti-
tlement.
Name of Person or Agency Carrying Out Project:_ Tnm Andriynk%t, Rrnnnmir, Dcv
Exempt Status: (check one)
❑Ministerint(Sec.21080(bx1);15268);
❑Dc:lared Emergency(Sec.21080(b)(3); 15269(a));
❑Emergency Project(Sec.21080(b)(4); 15269(b)(c));
❑Ca egorical Exemption.State type and section number.
❑Statutory Exemptions.State code number.
Other. State Code No. 5061(3)
Reasons why project is exempt: The DDA involves the transfer of wnership of a parcel
of property and does not include any development or other activities which will
result in any adverse environmenEal impacts. As such, there is no possibility
that the project will have an imlRact on the environment and is not subject to
Lead Agency .
drusk
Contact Person: Tom Any Area Codetrelephone/Extension:
If filed by applicant:
1.Attach certified document of exemption finding.
2.Nas a Notice of Exemption been filed by the public agency approving the project? ❑Yes ❑No
Signature: Date: Tide:
0 Signed by Lead Agency Date received for Cling at OPR:
❑Signed by Applicant
RevFscd October 1489
46
RESOLUTION NO. 6479
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH APPROVING THE
DISPOSITION AND DEVELOPMENT AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH AND ORIN G. BERGE
WHEREAS, the Redevelopment Agency of the City of Huntington
Beach (hereinafter referred to as the "Agency") is engaged in
activities necessary to carry out and implement the
Redevelopment Plan for the Huntington Center Project area; and
In order to carry out and implement such Redevelopment Plan
',',the Agency proposes to enter into a Disposition and Development
Agreement (the "Agreement") with Orin G. Berge (the "Developer")
for the development of certain property in the Project Area (the
"Site") , all as described in the Agreement; and
The Developer has submitted to the Agency and the City
Council of the City of Huntington Beach copies of said proposed
Agreement in a form executed by the Developer; and
The Agency and the City Council of the City of Huntington
Beach have conducted a duly noticed joint public hearing
regarding the proposed disposition of real property in
accordance with California -Health - and $afety. Code Sections 33431
and 33433, and has considered oral and written objections
:submitted to the City and Agency in opposition to the project;
and
The Section 33433 report pertaining to the Agreement has
been available for inspection prior to the joint public hearing
in accordance with Section 33433 of the QaJifQ.xniA Health and
SaUty Coda; and
The Agency has duly considered all terms and conditions of
the proposed Agreement and believes that the redevelopment of
the Site pursuant thereto is in the best interests of the City
of Huntington Beach and the health, safety, and welfare of its
residents, and in accord with the public purposes and provisions
of applicable State and local law and requirements.
To the extent that the DDA provides for the participation by
Agency in the cost of installation and construction of certain
public improvements, the Agency finds that:
a. The buildings, facilities, structures, or other
improvements are of benefit to the project area or the
immediate neighborhood in which the project is located;
and
408:SCLk I
b. No other reasonable means of financing such buildings,
facilities, structures, or other improvements are
available to the community.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency
of the City of Huntington Beach as follows:
Section 1: The recitals set forth above are true and
correct.
SQctiQn : The Disposition and Development Agreement has
been analyzed pursuant to the California Environmental Quality
Act (CEQA) and has been determined to be exempt under CEQA
Guideline Section 15061(3) because the DDA involves transfer of
ownership of property only. At the time development or other
activity which may have an adverse environmental impact is
contemplated, the proposed project will be analyzed under CEQA
by the City's Environmental Assessment Committee and notice of
determination will be sent to the appropriate state agency.
Section 3 : The Disposition and Development Agreement is
hereby approved.
PASSED AND ADOPTED by the City Council of the City of Huntington
Beach at a regular meeting thereof held on the _ rd day
of 1993.
Mayor
ATTES . APPROVE AS TO ORM:
City Clerk y S-A3City Attorney
EVIEWED AND R V INITIATED AND APPROVED:
-S3
ity Ad is rator Administration 1
408:SCLk 2
b. No other reasonable means of financing such buildings,
facilities, structures, or other improvements are
available to the community.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency
of the City of Huntington Beach as follows:
$Qctign 1: The recitals set forth above are true and
correct.
j5Q�ct-ion,-2: The Disposition and Development Agreement has
been analyzed pursuant to the California Environmental Quality
Act (CEQA) and has been determined to be exempt under CEQA
Guideline Section 15061(3) because the DDA involves transfer of
ownership of property only. At the time development or other
activity which may have an adverse environmental impact is
contemplated, the proposed project will be analyzed under CEQA
by the City's Environmental Assessment Committee and notice of
determination will be sent to the appropriate state agency.
Section 3 : The Chairman of the Agency is hereby authorized
to execute the Agreement on behalf of the Agency. A copy of the
Agreement when executed by the Agency shall be placed on file in
the office of the Secretary of the Agency.
Section 4 : The Executive Director of the Agency (or his
designee) is hereby authorized, on behalf of the Agency, to sign
all documents necessary and appropriate to carry out and
implement the Agreement and to administer the Agency's
obligations, responsibilities and duties to be performed under
the Agreement and related documents.
PASSED AND ADOPTED by the Redevelopment Agency of the City
of Huntington Beach at a regular meeting thereof held on
the - 3rd - day of May 1993 .
Chairman
ATTEST: - l APPROVED AS TO FORM:
Agency Clerk ¢- - Agency Attorney
C-c 0
REV EWED A D APP D: INITIATED AND APPROVED:
xecutive irec or Director of Economic
Development/
APPR VED AS TO FORM:
r
A encyJSpe�ial Counsel
Res. No. 6479
STATE OF CALIFORNIA
COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City
Clerk of the City of Huntington Beach, and ex-officio Clerk of the
City Council of said City, do hereby certify that the whole number of
members of the City Council of the City of Huntington Beach is seven;
that the foregoing resolution was passed and adopted by the affirmative
vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 3rd daffy
of May , 19 93 by the following vote:
AYES: Councilmembers:
Rohitaille, Bauer Moulton Patterson,Windiellf Silva, Leipzig
NOES: Councilmembers:
None
ABSENT: Councilmembers:
Sullivan 04zt- _�9C h��•/►f
i y CIEFMMU ex-otticlo Merk
of the City Council of the City
of Huntington Beach, California
RESOLUTION NO. 918_ .
A RESOLUTION OF 79E REDEVELOPMENT AGENCY OF THE
CITY OF pugTINGTON BEACH APPROVING THE
DlsroSITION AND DEVELOPMENT AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH AND ORIN G. BERGE
WHEREAS, the Redevelopment Agency of the City of Huntington
g,each (hereinafter referred to as the "Agency") is engaged in
'activities necessary to carry out and implement the
Redevelopment Plan for the Huntington Center Project area; and
In order to carry out and implement such Redevelopment Plan
the Agency proposes to enter into a Disposition and Development
Agreement (the "Agreement") with Orin G. Berge (the "Developer")
for the development of certain property in . the Project Area (the
"Site") , all as described in the Agreement; and
The Developer has submitted to the Agency and the City
Council of the City of Huntington Beach copies of said proposed
Agreement in a form executed by the Developer; and
The Agency and the City Council of the City of Huntington
Beach have conducted a duly noticed joint public hearing
regarding the proposed disposition of real property in
accordance with Californio .Hulth DO Safety C09 Sections 33431
and 33433, and has considered oral and written objections
submitted to the City and Agency in opposition to the project;
and
The Section 33433 report pertaining to the Agreement has
been available for inspection prior to the joint public hearing
in accordance with Section 33433 of the California Health,-pnd
Safety Cgde; and
The Agency has duly considered all terms and conditions of
the proposed Agreement and believes that the redevelopment of
the Site pursuant thereto is in the best interests of the City
of Huntington Beach and the health, safety, and welfare of its
residents, and in accord with the public purposes and provisions
of applicable State and local law and requirements.
To the extent that the DDA provides for the participation by
Agency in the cost of installation and construction of certain
public improvements, the Agency finds that:
a. The buildings, facilities, structures, or other
improvements are of benefit to the project area or the
immediate neighborhood in which the project is located;
and
399:SCLk 1
Res. No. 238
STATE OF CALIPCENTA
COUNTY OF ORANGE ]
CITY OF BUNTINGTON BEACH)
I, CODNIE BAOCNWAY, Clerk of the Redevelopment Agency of the
City of Hmitington Beach, California, DO HEREBY CERTIFY that the foregoing
resolution was duly adopted by the Redevelopment Agency of the City of
Buntington. Beach at a meeting of said Redevelopment Agency held on the
_ 3rd day of _ - May , 1921.1 and that it was so adopted
by the following vote:
AYES: Members:
Robitaille, Bauer, Moulton-Patterson, Winchell, Silva, Leipzig
VOES• Members:
None
ABSENT: hers: 1
Sul l Evan_� ! h. .i�►v 1 - - - - - -
Clerk of the Redevelopment AgRhqy of
the City of Huntington Beach, Ca.
4
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
THE REDEVELOPMENT AGENCY OF
THE CITY OF HUNTINGTON BEACH,
AGENCY,
and
ORIN G. BERGE, JR. ,
DEVELOPER
h
� LJ
TABLE OF CONTENTS
I . [ §100] SUBJECT OF AGREEMENT
A. 1 §1011 Purpose of Agreement
B. [ 5102] The Redevelopment Plan
C. [ §103 ] The Conveyance Parcels
D. [ §104] Parties to the Agreement
1. [ §105] The Agency '
2. [ §106] The Developer
E. [ §107] Prohibition Against Change in Ownership,
Management and Control of Developer
II. [ §200] CONVEYANCE OF CONVEYANCE PARCELS
A. [ §201] Conveyance of the Conveyance Parcels
B. [ §202] Conditions Precedent to the Conveyance
C. [ §203 ] Conveyance of the Conveyance Parcels
D. [ §204] Escrow
E. [ §205] Conveyance of Title and Delivery of
Possession
F. [ §206] Form of Deed for the Conveyance
G. [ §207] Condition of Title
H. [ §208] Time for and Place of Delivery of Deed
I . [ §209] Recordation of Documents
J. [ §210] Title Insurance
K. [ §211] Commencement of Lease
L. [ §212 ] Taxes and Assessments
M. [ §213 ] Occupants of the Conveyance Parcels
N. [ §214] Condition of the Conveyance Parcels
(i)
0. [ §215 ] Preliminary Work
P. [ §216] Zoning of the Conveyance Parcels
Q. [ §2171 Relocation and Owner Participation
R. [ §218] Condominium Conversion
S. [ §219] Submission of Evidence of Financing
Commitments and Loan Closing
T. [ §220] Interim Lease
III. [ §300] DEVELOPMENT OF THE CONVEYANCE PARCELS
A. [ §301] Development of the Conveyance Parcels by the
Developer
1. [ §302] Scope of Development
2. [ §303 ] Conveyance Parcels Plan
3. [ §304] Construction Drawings and Related
Documents
4. [ §3051 Approval of Plans, Drawings, and
Related Documents
5 . [ §306] Cost of Construction
6. [ §307] Construction Schedule
7. [ §308] Bodily Injury and Property Damage
Insurance
S. [ §309] City and Other Governmental Agency
Permits
9. [ §3101 Rights of Access
10. [ §311] Local, State and Federal Laws
11. [ §3121 Antidiscrimination During Construction
B. 1 §3131 Taxes, Assessments, Encumbrances and Liens
C. 1§3141 Prohibition Against Transfer of the
Conveyance Parcels, the Buildings or
Structures Thereon and Assignment of
Agreement
D. 1 §3151 Certificate of Completion
(ii)
E. [ §316] Mortgage, Deed of Trust, Sale and Lease-Back
Financing; Rights of Holders
1. [ §317] No Encumbrances Except Mortgages, Deeds
of Trust, or Sale and Lease-Back for
Development
2. [ §318] Holder Not Obligated to Construct
Improvements
3 . [§319 ] Notice of Default to Mortgagee or Deed
of Trust Holders; Right to Cure
4. [ §320] Right of the Agency to Cure Mortgage or
Deed of Trust Default
IV. [ §400] USE OF THE CONVEYANCE PARCELS
A. [ §401] Use in Conformance with Plan and Agreement
B. [ §402 ] Single Room Occupancy Housing
C. [ §403 ] Rights of Access
D. [ §404] Effect of Violation of the Terms and
Provisions of this Agreement After
Completion of Construction
E. [ §405] Nondiscrimination
V. [ 6500] GENERAL PROVISIONS
A. [ §5011 Notices, Demands and Communications Between
the Parties
B. [ §502 ] Conflicts of Interest
C. [ §503 ] Enforced Delay; Extension of Tames of
Performance
D. [ §504] Nonliability of Officials and Employees of
the Agency
VI . [ §600] DEFAULTS AND REMEDIES
A. [ §601] Defaults -- General
B. [ §602 ] Legal Actions
1. [ §603] Institution of Legal Actions
2. 1 §6041 Applicable Law
(iii)
3 . [ §605) Acceptance of Service of Process
C. [ §606] Rights and Remedies Are Cumulative
D. [ §607) Inaction Not a Waiver of Default
E. 1 §6081 Remedies and Rights of Termination Prior to
Conveyance
1. [ §609 ] Damages
2. [ §610] SAecific Performance
3 . 1 §6111 Termination by the A enc
Prior to Conveyance
F. [ §612 ] Remedies of the Parties for Default After
Conveyance
1. [ §613 ] Termination and Damages
H. [ §614] Action for S ecific Performance
VII . 1 §7001 SPECIAL PROVISIONS
A. [ §701 ] Real Estate Commissions
B. [ §702 ] Successors in Interest
C. [ §703 ] Memorandum of Agreement
D. [ §704) Release of Claims
VIII . [ §800) ENTIRE AGREEMENT, WAIVERS
IX. [ §900) TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY
ATTAC1*1E11TS
Attachment No. 1 Conveyance Parcels Map
Attachment No. 2 Legal Description
Attachment No. 3 Schedule of Performance
Attachment No. 4 Grant Deed
Attachment No. 5 Ground Lease With Option to Purchase
Attachment No. 6 Interim Ground Lease
Attachment No. 7 Certificate of Ccmpletion for Construction
and Development
Attachment No. 8 Affordable Housing Restrictions
Attachment No. 9 Declaration of Covenants, Conditions, and
Restrictions
Attachment No. 10 Memorandum of Disposition and Development
Agreement
(iv)
DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (the
"Agreement" ) is entered into by and between the REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate
and politic (the "Agency") and ORIN G. BERGE, JR. , a married
man (the "Developer") . The Agency and the Developer hereby
agree as follows:
I . [ §100) SUBJECT OF AGREEMENT
A. [ §1011 Purpose of Agreement
The purpose of this Agreement is to effectuate the
Redevelopment Plan (as hereinafter defined) for the Huntington
Center Redevelopment Project (the "Project" ) by providing for
the development of certain property situated within the Project
Area (the "Project Area" ) of the Project. This Agreement is
entered into for the purpose of expeditiously developing the
Site and not for speculation in land holding. Completing the
development on the Site pursuant to this Agreement is in the
vital and best interest of the City of Huntington Beach,
California (the "City" ) and the health, safety and welfare of
its residents, and is in accord with the public purposes and
provisions of applicable state and local laws and requirements
under which the Project has been undertaken.
B. [ §1021 The Redevelopment Plan
The Redevelopment Plan was approved and adopted by the
City Council of the City of Huntington Beach by Ordinance
No. 2743; said ordinance and the Redevelopment Plan as so
approved (the "Redevelopment Plan" ) are incorporated herein by
reference.
C. [ §1031 The Site
The Site is that portion of the Project Area
designated on the "Conveyance Parcels Map" which is attached
hereto as Attachment No. 1, and described in the "Legal
Description", which is attached hereto as Attachment No. 2 and
is incorporated herein by reference. The Agency owns fee
simple title to the entire Site. For purposes of this
Agreement only, the Site is divided into four parcels (however,
the Site at this time is legally subdivided into three parcels
pursuant to Parcel Map 90-237) . Parcel 3, which is located in
the City of Westminster, and Parcel 2, which is located in the
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6594u/2460/049 -1-
City of Huntington Beach, are located in the probable path of
the proposed realignment of Gothard Street. Parcel 1B is
located in a proposed alternative realignment of Gothard
Street. Parcel 1A is not currently proposed to be in the path
of the primary or alternative plans for the realigrunent of
Gothard Street. The parties understand and agree that the
ability to develop the various parcels within the Conveyance
Parcels is dependent upon the plans for and actual construction
of the Gothard Street realignment project. The parties
understand that no funding source has presently been identified
for the Gothard Street realignment, and, therefore, the
approximate timing of such realignment project is unknown at
this time.
D. [ §104) Parties to the Agreement
1. [ §1051 The Agency
The Agency is a public body, corporate and
politic, exercising governmental functions and powers and
organized and existing under Chapter 2 of the Community
Redevelopment Law of the State of California. The principal
office of the Agency is located at City Hall, 2000 Main Street,
Huntington Beach, California 92648.
"Agency", as used in this Agreement, includes the
Redevelopment Agency of the City of Huntington Beach, and any
assignee of or successor to its rights, powers and
responsibilities.
2. [ §106] The Developer
The Developer is Orin G. Berge, Jr. , a married
man. The principal office and mailing address of the Developer
for the purposes of this Agreement is Pacific Beach Company,
Inc. , 18600 Main Street, Suite 260, Huntington Beach,
California 92648.
The Developer represents and warrants to the
Agency as follows:
(a) The Developer has duly authorized, executed
and delivered this Agreement and any and all other agreements
and documents required to be executed and delivered by the
Developer in order to carry out, give effect to, and consummate
the transactions contemplated by this Agreement.
(b) The Developer does not have any material
contingent obligations or any material contractual agreements
which could materially adversely affect the ability of the
Developer to carry out its obligations hereunder.
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6594u/2460/049 -2-
(c) There are no material pending or, so far as
is known to the Developer, threatened, legal proceedings to
which the Developer is or may be Made a party or to which any
of its property is or may become subject, which has not been
fully disclosed in the material submitted to the Agency which
could materially adversely affect the ability of the Developer
to carry out its obligations hereunder.
(d) There is no action or proceeding pending or,
to the Developer' s best knowledge, threatened by or against the
Developer which could affect the validity and enforceability of
the terms of this Agreement, or materially and adversely affect
the ability of the Developer to carry out its obligations
hereunder.
(e) The Developer has performed all of its
obligations to be performed at or prior to this date in
accordance-with the Schedule of Performance and is not in
default hereunder.
Each of the foregoing items (a) to (e) ,
inclusive, shall be deemed to be an ongoing representation and
warranty. The Developer shall advise the Agency in writing if
there is any change pertaining to any matters set forth or
referenced in the foregoing items (a) to (e) , inclusive.
E. [ §107] Prohibition Against Change in Ownership,
Management_and Control of _Developer
The qualifications and identity of the Developer
are of particular interest and concern to the City and the
Agency. It is because of these qualifications and identity
that the Agency has entered into this Agreement with the
Developer. Consequently, except as expressly set forth in this
Section 107, no person, whether a voluntary or involuntary
j successor in interest of the Developer, shall acquire any
rights or powers under this Agreement nor shall the Developer
assign or transfer all or any part of this Agreement or any
rights hereunder without the prior written approval of the
Agency. Any purported transfer, voluntary, involuntary, or by
operation of law, except with the prior written consent of the
Agency, shall constitute a default of Developer and shall
render this Agreement absolutely null and void and shall confer
no rights whatsoever upon any purported assignee or transferee.
All of the terms, covenants and conditions of
this Agreement shall be binding upon and shall inure to the
benefit of the Developer and the permitted successors and
assigns of the Developer. Whenever the term "Developer" is
used herein, such term shall include any other permitted
successors and assigns as herein provided.
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This Section 107 shall be inapplicable following
the issuance of a Certificate of Ccmpletion (as hereinafter
described in Section 315 of this Agreement) for all of the
'Developer Improvements" as hereafter defined in Section 302 of
this Agreement.
II . 1 §2001 CONVEYANCE OF CONVEYANCE PARCELS
A. [ §201 ] Conveyance of the Site
The Agency hereby grants the Developer an exclusive
right and option (the "Option" ) to acquire the entire
Conveyance Parcels, or a combination of parcels within the
Conveyance Parcels, from the Agency at the price and upon the
terms and conditions set forth in this Section 201. The Option
shall apply only to those parcels within the Site which are not
at the time of exercise of the Option proposed as the site of
the Gothard Street realignment (the "Conveyance Parcels") . As
of the date of this Agreement, the parties acknowledge and
agree that Parcels 1B, 2 and 3 are currently proposed as the
site of the Gothard Street rewidening, and only Parcel 1A is
not so proposed. However, the Conveyance Parcels may change as
a result of official action taken by the Cities of Huntington
Beach or Westminster, the California Public Utilities
Commission, or another public agency with jurisdiction over the
Gothard Street realignment project. Upon a final determination
of the site of the Gothard Street realignment, the Agency shall
so notify the Developer which parcels within the Site are
eligible for purchase or lease under this Agreement. The
Option to purchase Parcel 1A shall automatically terminate if
not so exercised within ten (10) years of the date of execution
of this Agreement by the Agency. The Option to purchase
Parcels 1B, 2 and 3 shall automatically terminate if not so
exercised by the later of (a) ten (10) years after the date of
execution of this Agreement by the Agency, or (b) three (3)
years after the date that the Agency gives written notice to
the Developer regarding which portions of the Site are eligible
for purchase or lease under this Agreement.
In connection with the Developer' s exercise of the
Option, the Developer shall elect any one (1) of the two (2)
alternative forms of conveyance (a) or (b) set forth below (the
"Conveyance") . Upon Developer' s exercise of the Option, the
Agency shall convey the Conveyance Parcels and the Developer
shall acquire the Conveyance Parcels upon the terms and
conditions set forth herein within the times set forth in the
Schedule of Performance which is attached hereto as Attachment
No. 4 and incorporated herein by this reference.
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(a) Sale. In connection with the Developer' s
exercise of the Option, the Developer may elect to purchase,
and upon such election the Agency shall sell to the Developer,
fee simple title to the Conveyance Parcels. The purchase price
for the Conveyance Parcels shall be the fair market value of
the Conveyance Parcels, as set forth herein (the "Purchase
Price") .
(b) Lease. In connection with the Developer' s
exercise of the Option, the Developer may elect to lease the
Conveyance Parcels from the Agency for a term of Forty (40)
years, or Fifty-Five (55) years if (a) the structure to be
constructed on the Site is a single room occupancy project, as
set forth in Section 402 of this Agreement, and (b) the
permanent lender for the single room occupancy housing project,
as a condition of loan approval, requires that the term of the
lease be Fifty-Five (55) years. The lease shall contain an
option to purchase the leased portion of the Conveyance
Parcels, as set forth in Section 211. The rental amount for
the entire Site shall be Eight Thousand Eight Hundred Sixty
Dollars ($8,860) per month for the first five years, Twelve
Thousand Four Hundred Dollars ($12,400) for the second five
years, Seventeen Thousand Three Hundred Sixty Five Dollars
($17,365) for the third five years, Twenty-Four Thousand Three
Hundred Ten Dollars ($24,310) for the fourth five years,
Thirty-Four Thousand Thirty Five Dollars ($34, 035) for the
fifth five years and the fair market rental value of the
Conveyance Parcels for the remainder of the lease term,
determined by appraisal as set forth herein (the "Rental
Amount" ) . If less than the entire Site is conveyed, the Rental
Amount shall be prorated based upon the ratio of the area of
the conveyed parcels to the area of the entire Site.
The fair market value and the fair rental value of the
Conveyance Parcels shall be determined as follows. For the
first ten (10) years following the execution of this Agreement
by the Agency, the fair market value of the Conveyance Parcels
is the lesser of (a) the pro rata portion of the price that the
Agency paid to purchase the Site, One Million Five Hundred
Fifty Thousand One Hundred Thirty-Five Dollars ($1,550,135) ,
adjusted by the percentage change in the United States
Department of Labor Bureau of Labor Statistics, Consumer Price
Index for Urban Wage Earners and Clerical Workers,
Los Angeles - Anaheim - Riverside Average, Subgroup "All Items"
(1982/84 = 100) from the date of the Agency' s purchase of the
Site until the date of the Conveyance of the Conveyance Parcels
or (b) the fair market value of the Conveyance Parcels as
determined in accordance with the requirements of this
Section 201(b) . The appraisal shall be based on the
assumptions that this Agreement and the Declaration of
Covenants, Conditions and Restrictions (as set forth in
Attachment No. 9 hereto) are in full force and effect and shall
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reflect the effect on value of any easements which encumber the
Conveyance Parcels. In determining fair market value or fair
rental value, the appraisal shall be based upon the
restrictions imposed upon the Conveyance Parcels by this
Agreement, the Lease and other sources, and the use to which
the Conveyance Parcels are actually being put, rather than the
highest and best use for the Conveyance Parcels. The fair
market value shall be One hundred Percent (100J) of the
appraised amount and the annual fair rental value shall be Ten
Percent (10 ) of the appraised amount.
Upon the Developer' s written notice to the Agency of
its exercise of the-Option, the Agency shall obtain an
appraisal from a certified M.A. I . appraiser, at the sole
expense of the Agency, of the fair market value of the
Conveyance Parcels, and the results of such appraisal shall be
delivered to the Developer within fifteen (15) days of the
Agency' s receipt thereof. If the Developer does not object in
writing to such result within thirty (30) days of its receipt
thereof, such appraised value shall conclusively be deemed the
fair market value of the Conveyance Parcels. If the Developer
objects, in writing, within such thirty (30) day period to the
Agency' s appraisal, the Developer may, at its own expense,
obtain an appraisal from a certified M.A. I . appraiser of its
choice, and deliver the results of such appraisal to the
Agency. If the results of the higher of the two appraisals is
no more than ten percent (10%) higher than the determination of
the lower of the two appraisals, the fair market value or fair
rental value shall be deemed the average of the two
appraisals. If the appraisals are more than ten percent (10%)
apart in their determinations of value, the two appraisers
shall select a third certified M.A. I . appraiser who shall
conduct an independent appraisal of the Conveyance Parcels.
The results of the third appraiser' s appraisal shall be
conclusively deemed the fair market value or fair rental value
of the Conveyance Parcels; provided, however, that if the third
appraisal is the highest or the lowest of the three appraisals,
the fair market value or fair rental value shall be the average
of the first and second appraisals. The costs of the third
appraiser, if any, shall be borne equally by the parties.
S. 1 §202) Conditions Precedent to the Conveyance
Prior to and as conditions to the Conveyance of the
Conveyance Parcels, the Developer shall complete each of the
following items a through h, subject to Section 503 of this
Agreement, by the respective times established therefor in the
Schedule of Performance (Attachment No. 3) :
a. the Developer shall not be in material default of
this Agreement;
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b. the Developer shall have exercised the Option in
the manner as set forth in Section 201 above;
C. if the Developer has exercised its Option to
purchase the Conveyance Parcels, the Developer
shall have deposited the Purchase Price, in cash,
in the Escrow;
d. if the Developer has exercised its Option to
lease the Conveyance Parcels, the parties shall
have entered into the Lease;
e. the Developer has provided proof satisfactory to
the Agency that the Developer has obtained a loan
or bond financing for construction for all of the
Developer Improvements pursuant to Section 219
hereof;
f. the Developer shall have provided proof of
insurance (certificates) conforming to Section
308 of this Agreement;
g. the Developer shall have obtained approval by the
City of a site plan, architectural elevations,
environmental clearance, landscape plan, specific
plan amendment or zoning changes and building
permit(s) as necessary for all improvements to be
provided on the Conveyance Parcels pursuant to
this Agreement; and
h. the Agency and the Developer shall have prepared
a mutually agreeable (which agreement shall not
be unreasonably withheld) Scope of Development
for the Conveyance Parcels (as defined in Section
302 herein) consistent with the zoning and land
use requirements of the City.
C. ( §2031 Conveyance of the Site
Upon the satisfaction of the conditions precedent to
Conveyance, as set forth in Section 202 hereof, the Agency
shall convey the Conveyance Parcels to the Developer, in the
manner elected by the Developer pursuant to Section 201 hereof
(the "Conveyance" ) . In the event the Agency conveys fee title
to the Conveyance Parcels to the Developer, the terms and
conditions of Sections 204 through 210 (and not Section 211)
shall apply to the Conveyance, and in the event the Agency
leases the Conveyance Parcels or leases the Conveyance Parcels
with an option to purchase the Conveyance Parcels, the
provisions of Section 211 (and not Sections 204 through 210)
shall apply.
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D. [ §204) Escrow
In the event that the Developer has exercised its
option to purchase the Conveyance Parcels, the Agency agrees to
open an escrow with First American Title Insurance Company, at
its office in Santa Ana, California, or with another mutually
agreeable escrow company (the "Escrow Agent") , by the time
established therefor in the Schedule of Performance (Attachment
No. 3) . The escrow described in this Section 204 shall be
referred to as the "Escrow, " and the conveyance provided for in
this Section 204 shall be referred to as the "Conveyance. "
This Agreement constitutes the joint basic escrow instructions
of the Agency and the Developer for the Conveyance, and a
duplicate original of this Agreement shall be delivered to the
Escrow Agent upon the opening of the Escrow. The Agency and
the Developer shall provide such additional escrow instructions
as shall be necessary for and consistent with this Agreement.
The Escrow Agent is hereby empowered to act under this
Agreement, and the Escrow Agent, upon indicating within five
(5) days after the opening of the Escrow its acceptance of the
provisions of this Section 204, in writing, delivered to the
Agency and the Developer, shall carry out its duties as Escrow
Agent hereunder.
Upon delivery of the Grant Deed (as hereafter defined)
to the Escrow Agent by the Agency pursuant to Section 206 of
this Agreement, the Escrow Agent shall record such deed when
title can be vested in the Developer in accordance with the
terms and provisions of this Agreement. The Developer shall
accept Conveyance of title or possession of the Conveyance
Parcels as provided in Section 201. The Escrow Agent shall pay
any applicable transfer tax. Any insurance policies covering
the Conveyance Parcels are not to be transferred.
The Developer shall pay into the Escrow the following
fees, charges and costs promptly after the Escrow Agent has
notified the Developer of the amount of such fees, charges and
costs, but not earlier than ten (10) days prior to the
scheduled date for closing the Escrow:
1. One-half (1/2) of the Escrow fee; and
2. That portion of the premium for the title
insurance policy to be paid by the Developer as set forth in
Section 210 of this Agreement; and
3. Any transfer tax and any state, county or city
documentary stamps; and
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4. The Purchase Price in cash.
The Agency shall pay into Escrow the following fees,
charges and costs promptly after the Escrow Agent has notified
the Agency of the amount of such fees, charges and costs, but
not earlier than ten (10) days prior to the scheduled date for
close of Escrow:
1.- One-half (1/2) of the Escrow fee;
2. Cost of drawing the deed;
3. Recording fees;
4. Notary fees;
5. That portion of the premium for the title
insurance policy to be paid by the Agency as set forth in
Section 210 of this Agreement; and
6. Ad valorem taxes, if any, upon the Conveyance
Parcels for any time prior to transfer of title.
The Agency shall timely and properly execute,
acknowledge and deliver a deed in substantially the form of the
"Grant Deed" (which is attached to this Agreement as Attachment
No. 5 and is incorporated herein) .
The Escrow Agent is authorized to:
1. Pay and charge the Agency and Developer,
respectively, for any fees, charges and costs payable under
this Section 204 of this Agreement. Before such payments or
charges are made, the Escrow Agent shall notify the Agency and
the Developer of the fees, charges and costs necessary to clear
title and close the Escrow.
2. Disburse funds and deliver the Grant Deed and
other documents to the parties entitled thereto when the
conditions of this Escrow have been fulfilled by the Agency and
the Developer. Funds deposited as part of the Purchase Price
shall not be disbursed by the Escrow Agent unless and until the
Escrow Agent has recorded the Grant Deed (Attachment No. 4) and
has delivered to the Developer and kif requested by the Agency)
the Agency, respectively, a title insurance policy insuring
title and conforming to the requirements Qf Sections 207 and
210 of this Agreement.
3. Record any instruments delivered through this
Escrow, if necessary or proper, to vest title in the Developer
in accordance with the terms and provisions of this Agreement.
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All funds received in this Escrow shall be deposited
by the Escrow Agent, with other escrow funds of the Escrow
Agent in an interest earning general escrow account or accounts
with any state or national bank doing business in the State of
California. Such funds may be transferred to any other general
escrow account or accounts. All disbursements shall be made by
check of the Escrow Agent. All adjustments are to be made on
the basis of a thirty (30) day month.
If this Escrow is not ir. condition to close on or
before the time for conveyance established in Section 208 of
this Agreement, either party who then shall have fully
performed the acts to be performed before the conveyance of
title may, in writing, demand from the Escrow Agent the return
of its money, papers or documents deposited with the Escrow
Agent. No demand for return shall be recognized until ten (10)
days after the Escrow Agent shall have mailed copies of such
demand to the other party or parties at the address of its or
their principal place or places of business. Objections, if
any, shall be raised by written notice to the Escrow Agent and
to the other party within the ten (10) day period, in which
event the Escrow Agent is authorized to hold all money, papers
and documents with respect to the Conveyance Parcels until
instructed by a mutual agreement of the parties or by a court
of competent jurisdiction. If no such demands are made, the
Escrow shall be closed as soon as possible.
The Escrow Agent shall not be obligated to return any
such money, papers or documents except upon the written
instructions of both the Agency and the Developer or until the
party entitled thereto has been determined by a final decision
of a court of competent jurisdiction.
Any amendment to these escrow instructions shall be in
writing and signed by both the Agen=y and the Developer. At
the time of any amendment, the Escrow Agent shall agree to
carry out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the Agency
or the Developer shall be directed to the addresses and in the
manner established in Section 601 of this Agreement for
notices, demands and communications between the Agency and the
Developer.
The liability of the Escrow Agent in the capacity as
escrow holder with respect to the Conveyance is limited to
performance of the obligations imposed upon it under
Sections 204 through 210, inclusive, of this Agreement.
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E. t §205] Conveyance of Title and Delivery of
Possession
Subject to any extensions of time mutually agreed upon
between the Agency and the Developer, the Conveyance shall be
completed on or prior to the date specified therefor in the
Schedule of Performance (Attachment No. 3) . The Schedule of
Performance (Attachment No. 3) is subject to revision from time
to time as mutually agreed upon in writing between the
Developer and the Agency. The Agency and the Developer agree
to perform all acts necessary to conveyance of title in
sufficient time for title to be conveyed in accordance with the
foregoing provisions.
Possession shall be delivered to the Developer
concurrently with the Conveyance of title. The Developer shall
accept title and/or possession on or before the date
established in the Schedule of Performance (Attachment No. 3)
for the Conveyance.
F. [ §206] Form of Deed for the Conveyance
The Agency shall convey to the Developer title to the
Conveyance Parcels, excepting the mineral rights thereto as
provided below in Section 207, in the condition provided in
Section 207 of this Agreement by grant deed substantially in
the form of the Grant Deed (Attachment No. 4) .
G. [ §207] Condition of Title
The Agency shall convey to the Developer fee simple
merchantable title to the Conveyance Parcels, excepting from
the parcel the mineral rights as provided below, and said title
shall be free and clear of all recorded or unrecorded liens,
encumbrances, covenants, assessments, easements, leases and
taxes, except for covenants and easements of record which the
Developer approves in writing, the Redevelopment Plan, and the
provisions contained in the Grant Deed (Attachment No. 4) . The
condition of title shall be compatible with and not preclude
development of the Improvements and the Developer shall review
easements prior to and as a condition of closing the Escrow
consistent with the foregoing. The parties shall act
reasonably in evaluation of any encumbrances and shall act
diligently and promptly to conform the condition of title to
that required for the Developer to proceed with development of
the Developer Improvements. In no event shall the Developer be
required to accept title subject to a deed of trust or mortgage.
The Agency shall reserve and except from the
Conveyance all interests in oil, gas, hydrocarbon substances
and minerals of every kind and character lying more than five
hundred (500) feet below the surface, together with the right
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to drill into, through, and to use and occupy all parts of the
Conveyance Parcels lying more than five hundred (500) feet
below the surface thereof for any and all purposes incidental
to the exploration for and production of oil, gas, hydrocarbon
substances or minerals from said site or other lands, but
without, however, any right to use either the surface of the
Conveyance Parcels or any portion thereof within five hundred
(500) feet of the surface for any purpose or purposes
whatsoever.
H. [ §208] Time for and Place of Delivery of Deed
Subject to any mutually agreed upon extension of time,
the Agency shall deposit the Grant Deed (Attachment No. 4) with
the Escrow Agent on or before the date established for the
Conveyance pursuant to the Schedule of Performance (Attachment
No. 3) .
I . [ §209 ] Recordation of Documents
The Escrow Agent shall file the Grant Deed (Attachment
No. 4) and the Declaration of Covenants, Conditions and
Restrictions (Attachment No. 9) for recordation among the land
records in the Office of the County Recorder for Orange County,
and shall deliver the Purchase Price (concurrent with the
Conveyance) to the Agency after delivery to the Developer of a
title insurance policy insuring title in conformity with
Section 207 of this Agreement.
J. [ §210] Title Insurance
Concurrently with recordation of the Grant Deed
(Attachment No. 4) conveying title to the Conveyance Parcels,
First American Title Company or another title company mutually
acceptable to the parties (the "Title Company" ) shall provide
and deliver to Developer a standard coverage ALTA title
insurance policy issued by the Title Company insuring that the
title to the Conveyance Parcels is vested in Developer in the
condition required by Section 207 of this Agreement. The Title
Company shall provide the Agency with copies of the title
insurance policies and the title insurance policies shall be
for the amount of the Purchase Price. The Agency shall bear
that amount equal to the cost of a standard coverage ALTA
policy for the amount of the Purchase Price. All additional
costs incurred for or related to Such title insurance shall be
borne solely by the Developer. The Developer may, at its
option and at its cost, obtain coverage in excess of such
amounts or endorsements to such standard coverage ALTA policy.
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K. [ §211] Commencement of Lease
In the event that the Developer exercises its option
to lease the Conveyance Parcels, the commencement of such lease
shall occur within the time set forth in the Schedule of
Performance. The parties shall execute the "Lease" attached
hereto as Attachment No. 5 and incorporated herein; provided,
however, that the Agency shall insert such provisions in the
Lease as are necessary or appropriate to implement the Scope of
Development which is mutually agreed upon (as set forth in
Section 302 hereof) . The Lease shall grant the Developer an
option to purchase the Conveyance Parcels at their fair market
value at any time during the term of the Lease. The Agency
shall deliver possession of the Conveyance Parcels to the
Developer immediately upon execution of such Lease, subject to
the terms contained in such document.
L. [ §212 ] Taxes and Assessments
Ad valorem taxes and assessments, if any, on the
Conveyance parcels levied, assessed or imposed for any period
commencing prior to the applicable Conveyance of title or
possession, shall be borne by the Agency, and any of such taxes
and assessments imposed after the applicable Conveyance of
title to or possession of the Conveyance Parcels shall be borne
by the Developer. The Agency shall use good faith efforts to
request and obtain from the Orange County Tax Assessor separate
property tax assessments for Parcels 1A, 1B, 2 and 3.
M. [ §213 ] Occupants of the Site
Possession of the Conveyance Parcels shall be
delivered to the Developer and title shall be conveyed to it
with no occupants or rights of possession by others, except
pursuant to any approved title exceptions.
N. [ §214) Condition of the Site
1. The Agency has not received any notice or
communication from any government agency having jurisdiction
over the Conveyance Parcels notifying the Agency of the
presence of surface or subsurface zone Hazardous Materials or
Hazardous Materials Contamination (as those terms are defined
herein) in, on, or under the Conveyance Parcels, or any portion
thereof.
2. As soon as possible following the execution of
this Agreement, the Agency and the Developer shall jointly
cause the environmental condition of the Conveyance Parcels to
be investigated, with the cost of such investigation to be
borne equally by the parties. Such investigation shall include
such activities as the environmental expert or consultant (the
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"Environmental Consultant" ) deems necessary or appropriate to
determine the environmental condition of the Conveyance Parcels
Parcels, but, in any case, including preparation of at least a
"Phase 1" report for the entire Conveyance Parcels. The Agency
shall allow the Environmental Consultant to conduct such
investigation. The parties shall jointly cause the Conveyance
Parcels to be restored to its condition prior to any such
testing or investigation. The Developer shall deliver to the
Agency a copy of all reports and test results produced by the
Environmental Consultant within ter. (10) days of its receipt of
such materials.
If the Environmental Consultant finds that the
projected cost of all activities necessary to correct or remove
any hazardous waste, materials or contamination in, on or under
the Conveyance Parcels found in its investigation, including
the cost of investigation by the Environmental Consultant (the
"Remediation Cost" ) exceeds Fifty Thousand Dollars ($50,000) ,
then either party may terminate this Agreement, within thirty
(30) days after notice of the projected Remediation Cost, by
written notice to the other party; provided, however, that if
one of the parties, at its option, agrees to pay the excess of
the actually incurred Remediation Cost over Fifty Thousand
Dollars ($50,000) , the other party may not terminate this
Agreement.
If the Environmental Consultant finds that the
projected Remediation Cost is Fifty Thousand Dollars ($50,000)
or less, then the Agency shall be required to fund the
Remediation Cost, not to exceed Fifty Thousand Dollars
($50,000) . If during the course of such remediation work the
Environmental Consultant gives notice to the parties that the
projected Remediation Cost exceeds Fifty Thousand Dollars
($50,000) , then either party may terminate this Agreement in
the manner specified in the preceding paragraph; provided,
however that if one of the parties, at its option, agrees in
writing to pay the excess of the actually incurred Remediation
Cost over Fifty Thousand Dollars ($50,000) , the other party may
not terminate this Agreement.
If the parties cause the Remediation to be performed,
the Developer and the Agency shall agree to the scope and
nature of the Remediation and the parties shall cause the
Remediation to occur in conformance with such mutually agreed
upon scope and plan.
3. Except as otherwise provided herein, the physical
condition, possession or title of the Conveyance Parcels is and
shall be delivered from Agency to Developer in an "as-is"
condition, with no warranty expressed or implied by Agency as
to the presence of Hazardous Materials, Hazardous Materials
Contamination or the condition of the soil, its geology, the
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presence of known or unknown seismic faults, or the suitability
of the Conveyance Parcels for the development purposes intended
hereunder. However, the Conveyed Parcels shall be delivered to
the Developer upon the Conveyance, free and clear of all trash,
improvements and large rocks (except those brought upon the
Conveyed Parcels during Developer' s lease or occupation
thereof) . If the physical condition, including without
limitation the soils condition, of any or all of the Conveyance
Parcels is not in all respects suitable for the use or uses to
which the Conveyance Parcels will he put, then Developer by its
exercise of the Option knowingly and voluntarily agrees that it
shall accept Conveyance of the Conveyance Parcels and it is the
sole responsibility and obligation of Developer to place the
Conveyance Parcels in all respects in a condition entirely
suitable for the development, and occupancy intended
hereunder. The Developer shall specifically be solely
responsible for any damage caused by and for the completion of
remediation of the presence of Hazardous Materials in, on, or
under the Conveyance Parcels, including contaminated soils or
groundwater (If any Hazardous Substance is discovered on the
Conveyance Parcels subsequent to the close of Escrow, the
Developer shall be solely responsible for its removal,
management or other acts required by any applicable laws, court
or government agency) .
4. Upon the Conveyance of the Conveyance Parcels,
Developer, including any and all of its successors in interest,
agrees to and shall indemnify, defend, and hold the Agency and
the City and their officers, employees, representatives and
agents harmless from and against all expenses (including,
without limitation, reasonable attorneys' fees and
disbursements) , losses, or liabilities suffered by Agency or
City by reason of governmental action or third party claims
arising out of such Hazardous Materials, waste, or
contamination, exacerbation, movement, release, or Hazardous
Materials Contamination of the Conveyance Parcels, except those
arising from the Agency' s breach of its representation set
forth in the first sentence of this Section 214 or the
negligence or wrongful acts of Agency or City in their
ownership or operation of the Conveyance Parcels. With the
exception of the above matters only, and upon the Conveyance of
the Conveyance Parcels, the Developer shall assume all
responsibility for subsurface zone conditions and soils
conditions in, on or under the Conveyance Parcels, and for any
rehabilitation necessary for the provision of the Developer
Improvements; and the Agency makes no other representations or
warranties concerning the Conveyance Parcels, its suitability
for the use intended by the Developer, or the surface or
subsurface conditions of the Conveyance Parcels; and if the
soil conditions of the Conveyance Parcels are not in all
respects entirely suitable for the use or uses to which the
Conveyance Parcels will be put, then it is the sole
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responsibility and obligation of Developer to take such action
as may be necessary to place the Conveyance Parcels in a
condition entirely suitable for the development of the
Conveyance Parcels. This is expressly agreed between the
Parties to be a material term of this Agreement.
Nothing in this Section 214 is intended to waive any
claim or right the Developer may have against any person or
entity, other than the Agency or the City, relating to the
physical condition of the Conveyance Parcels.
S. Notwithstanding the obligation of Developer to
indemnify Agency pursuant to Paragraph 4 of this Section 214 or
any other obligations of the Developer pursuant to this
Agreement, if the Environmental Consultant or any government
agency identifies the presence of Hazardous Materials or
Hazardous Materials Contamination on the Conveyance Parcels,
Developer shall, upon the Conveyance of the Conveyance Parcels,
at its sole cost and expense, promptly take (i) all actions
required by any federal, state or local governmental agency or
political subdivision or any Govern.-nental Requirements with
respect to the entire Conveyance Parcels, and (ii) all actions
necessary to make full economic use of the Conveyance Parcels
for the purposes described in this Agreement, which actions,
requirements or necessity arise from the presence upon, about
or beneath the Conveyance Parcels of any Hazardous Materials or
Hazardous Materials Contamination regardless of when such
Hazardous Materials or Hazardous Materials Contamination were
introduced to the Conveyance Parcels and regardless of who is
responsible for introducing such Hazardous Materials or
Hazardous Materials Contamination to the Conveyance Parcels
(the "Conveyance Parcels Remediation" ) . The Conveyance Parcels
Remediation shall include, but not be limited to, investigation
of the environmental condition of the Conveyance Parcels, the
preparation of any feasibility studies or reports and the
performance of any cleanup, remedial, removal or restoration
work required. Upon the Conveyance, Developer shall take all
actions necessary to promptly restore the Conveyance Parcels to
an environmentally sound condition for uses contemplated by
this Agreement, notwithstanding any lesser standard of
remediation allowable under applicable Governmental
Requirements. Developer' s obligations under this Paragraph 5
of this Section 214 shall be referred to as the "Conveyance
Parcels Remediation" and shall survive the issuance of the
Certificate of Completion.
6. The Developer shall take all necessary
precautions to prevent the release of any Hazardous Materials
into the environment. Such precautions shall include
compliance with all Governmental Requirements with respect to
Hazardous Materials. In addition, the Developer shall install
and utilize such equipment and implement and adhere to such
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procedures as are consistent with the highest standards as
respects the disclosure, storage, use, removal and disposal of
Hazardous Materials.
7. After the Conveyance, the Developer shall notify
the Agency, and provide to the Agency a copy or copies, of the
following environmental permits, disclosures, applications,
entitlements or inquiries relating to the Conveyance Parcels:
notices of violation, notices to comply, citations, inquiries,
clean-up or abatement orders, cease and desist orders, reports
filed pursuant to self-reporting requirements and reports filed
or applications made pursuant to any Governmental Requirement
relating to Hazardous Materials and underground tanks, and the
Developer shall report to the Agency, as soon as possible after
each incident, any unusual, potentially important incidents,
including but not limited to, the following:
(a) All required reports of releases of Hazardous
Materials, including notices of any release of
Hazardous Materials as required by any Governmental
Requirement;
(b) All fires;
(c) All instances where asbestcs has been or may be
disturbed by repair work, tenant improvements or other
activities in buildings containing asbestos;
(d) All notices of suspension, of any permits;
(e) All notices of violation from Federal, State or local
environmental authorities;
(f) All orders under the State Hazardous Waste Control Act
and the State Hazardous Substance Account Act and
corresponding federal statutes, concerning
investigation, compliance schedules, clean up, or
other remedial actions;
(g) All orders under the Porter-Cologne Act, including
corrective action orders, cease and desist orders, and
clean-up and abatement orders;
(h) Any notices of violation from OSHA or Cal-OSHA
concerning employees' exposure to Hazardous Materials;
(i) All complaints and other pleadings filed against the
Developer and/or the Agency relating to the
Developer' s storage, use, transportation, handling or
disposal of Hazardous Materials on the Conveyance
Parcels.
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In the event of a release of any Hazardous Materials into the
environment, the Developer shall, as soon as possible after the
release, furnish to the Agency a copy of any and all reports
relating thereto and copies of all correspondence with
governmental agencies relating to the release. Upon request of
the Agency, the Developer shall furnish to the Agency a copy or
copies of any and all other environmental entitlements or
inquiries relating to or affecting the Conveyance Parcels
including, but not limited to, all permit applications, permits
and reports including, without limitation, those reports and
other matters which may be characterized as confidential.
8. For the purposes of this Section 214, the
following terms shall have the meanings herein specified:
(a) The term "Hazardous Materials" shall mean
(i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Section 9601 et seg. ) , as amended from time to time,
and regulations promulgated thereunder; (ii) any "hazardous
substance" as defined by the Carpenter-Presley-Tanner Hazardous
Substance Account Act (California Health and Safety Code
Sections 25300 et seg. ) , as amended from time to time, and
regulations promulgated thereunder; (iii ) asbestos;
(iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline
(refined and unrefined) and their respective by-products and
constituents; and (vi) any other substance, whether in the form
of a solid, liquid, gas or any other form whatsoever, which by
any "Governmental Requirements" (as defined in Subparagraph (c)
of Paragraph 8 of this Section 214) either requires special
handling in its use, transportation, generation, collection,
storage, handling, treatment or disposal, or is defined as
"hazardous" or harmful to the environment.
(b) The term "Hazardous Materials Contamination"
shall mean the contamination (whether presently existing or
hereafter occurring) of the improvements, facilities, soil,
groundwater, air or other elements on, in or of the Conveyance
Parcels by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements
on, in or of any other property as a result of Hazardous
Materials at any time (whether before or after the date of this
Agreement) emanating from the Conveyance Parcels.
(c) The term "Governmental Requirements" shall
mean all laws, ordinances, statutes, codes, rules, regulations,
orders and decrees of the United States, the state, the county,
the city, or any other political subdivision in which the
Conveyance Parcels is located, and of any other political
subdivision, agency or instrumentality exercising jurisdiction
over the Agency, the Developer or the Conveyance Parcels.
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0. [ §215] Preliminar Work
Prior to the Conveyance, representatives of Developer
shall have the right of access to all portions of the
Conveyance Parcels at all reasonable times for the purpose of
obtaining data and making surveys and tests necessary to carry
out this Agreement, including the investigation of the
environmental condition of the Conveyance Parcels pursuant to
Section 214 hereof. Any preliminary work undertaken on the
Conveyance Parcels by Developer prior to Conveyance of title
thereto shall be done only after written consent of the Agency
Executive Director, which consent shall not be unreasonably
withheld, and at the sole expense of Developer.
The Developer shall save and protect the Agency and
the City against any claims resulting from all preliminary
work, access or use of the Conveyance Parcels undertaken
pursuant to this Section 215. Copies of data, surveys and
tests obtained or made by the Developer on the Conveyance
Parcels pursuant to this Section 215 shall be filed with the
Agency within fifteen ( 15) days after receipt by the
Developer. Any preliminary work by the Developer shall be
undertaken only after securing any necessary permits from the
appropriate governmental agencies.
P. [ §216] Zoning of the Site
The Agency and the Developer shall be jointly
responsible to make appropriate application to the City of
Huntington Beach to obtain any zoning change for the Conveyance
Parcels or other land use entitlements which are necessary to
construct the Developer Improvements on the Conveyance
Parcels. The Developer shall further be responsible for
satisfying all provisions of the California Subdivision Map Act
(Government Code Section 66410, et peg. ) , obtaining a
conditional use permit and building permits, as required, and
satisfying all other local enactments pursuant thereto
applicable with respect to the assembly and development of the
Conveyance Parcels. The Developer shall be responsible for the
cost of all documentation and compliance costs required
pursuant to the California Environmental Quality Act (Public
Resources Code Section 21000, et seq. ) .
Q. [ §217] Relocation
The Agency agrees to perform all relocation
obligations, at its sole cost, which are required by law as a
result of the execution of this Agreement and the construction
of the Developer Improvements.
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R. [ §218] Condominium Conversion
The Developer agrees not to convert the improvements
constructed on the Conveyance Parcels to actual condominium use
and not to sell individual condominium units on the Conveyance
Parcels for the life of the Redevelopment Plan except upon the
prior consent of the Agency, which consent shall not
unreasonably be withheld.
S. [ §219] Submission of Evidence of Financing
and Loan Closing
As required in this Agreement and within the time
established therefor in the Schedule of Performance (Attachment
No. 3) , the Developer shall submit to the Agency evidence that
the Developer has obtained sufficient equity capital and
evidence of financing necessary to undertake the development of
the Conveyance Parcels in accordance with this Agreement. The
Developer shall close said financing prior to or concurrently
with the Conveyance. The Agency shall approve or disapprove
such evidence of financing within the time set forth in the
Schedule of Performance. Approval shall not be unreasonably
withheld or conditioned. If the Agency shall reasonably
disapprove any such evidence of financing, the Agency shall do
so by written notice to the Developer stating the reasons for
such disapproval and the Developer shall promptly submit to the
Agency new evidence of financing. The Agency shall approve or
disapprove such new evidence of financing in the same manner
and within the same times established in this Section 219 for
the approval or disapproval of the evidence of financing as
initially submitted to the Agency.
Such evidence of financing shall include the following:
1. A copy of the evidence of loan approval obtained
by the Developer for the mortgage loan or loans for financing
to fund the construction of the applicable Developer
Improvements; and
2. A copy of the contract between the Developer and
one or more general contractors for the construction of the
applicable Developer Improvements, certified by the Developer
to be a true and correct copy thereof; and
3. A financial statement and/or other documentation
satisfactory to the Agency as evidence of other sources of
capital sufficient to demonstrate that the Developer has
adequate funds to cover the difference, if any, between
construction and completion costs minus financing authorized by
mortgage loans.
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T. [ §220] First Right of Refusal to _Interim Lease.
The Developer shall have the first right of refusal to
enter into an interim lease of the Site for a term which would
expire upon the earlier of (a) the Conveyance (as to the
Conveyance Parcels only) or (b) ninety (90) days notice from
the Developer to the Agency.
The Agency agrees to give .he Developer written notice
of its intent to lease the Site, or any portion thereof. Such
notice shall include the exact and complete terms of the
proposed lease. If the Agency has received a bona fide offer
from a third party, such notice shall include a copy of such
offer which has been executed by the third party. For a period
of thirty (30) days after such notice is sent, the Developer
shall have the right to give written notice to the Agency of
the Developer' s desire to enter into a lease of the applicable
portion of the Site upon the same terms set forth in the
notice. In such event the Agency and Developer shall enter
into an interim lease of the applicable portion of the Site
substantially in the form of the Interim Lease which is
attached hereto as Attachment No. 6 and incorporated herein by
reference.
In the event the Developer declines or fails to
exercise its right to lease the applicable portion of the Site
within such thirty (30) day period, the Agency may lease the
applicable portion of the Site to a third party upon the terms
and conditions set forth in the Agency' s notice. If the Agency
later modifies the terms of any offer to lease the Site or
portions thereof, then the Developer' s right of first refusal
as set forth herein shall reapply to such revised lease
proposal.
III . ( §300] DEVELOPMENT OF THE CONVEYANCE PARCELS
A. [ §301 ] Development of the Site by the Developer
1. [ §302 ] Scope of Development
The Conveyance ParcelE shall be developed as
provided in the Scope of Development which shall be mutually
agreed upon by the Developer and the Agency. The Agency shall
not withhold its approval or agreement as to any type of
development proposed by the Developer which is legally and
economically feasible. The Scope of Development shall be
agreed upon prior to and as a condition of the Conveyance of
the Conveyance Parcels to the Developer.
In the event that the Scope of Development agreed
upon by the parties requires that a single room occupancy/
living units be constructed, the Scope of Development shall
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require the development to be in accordance with the
requirements for single room occupancy/living units as set
forth in Section 9220. 15 of the City Municipal Code (or
successor section) .
The Developer shall commence and complete
construction of such improvements (the "Developer
Improvements" ) by the respective times established therefor in
the Schedule of Performance (Attachment No. 3) subject to
Section 503 of this Agreement. The development shall include
any plans and specifications submitted to City and/or Agency
for approval, and shall incorporate or show compliance with all
applicable Mitigation measures.
2. ( §303 ) Site Plan
By the respective times set forth therefor in the
Schedule of Performance (Attachment No. 3 ) , the Developer shall
prepare and submit to the Agency for its approval Design
Drawings and a Conveyance Parcels Plan and related documents
containing the overall plan for development of the Conveyance
Parcels in sufficient detail to enable the Agency to
effectively evaluate the proposal for relationship of
structures to landscape, physical and environmental
considerations and conformity to the requirements of this
Agreement. Approval by the Agency shall be required in
addition to all City approvals; provided, however, that such
Agency approval shall be based upon substantially the same
standards and scope of review as the approval of the City. The
Conveyance Parcels shall be developed as established in this
Agreement and such documents except as changes may be mutually
agreed upon between the Developer and the Agency. Any such
changes shall be within the limitations of the Scope of
Development. The parties understand that the City is
considering the realignment of Gothard Street through a portion
of the Conveyance Parcels, and such realignment may necessitate
changes to the Conveyance Parcels Plan and the design of the
Developer Improvements. The Agency agrees to reimburse the
Developer to a maximum of Five Thousand Dollars ($5,000) for
its reasonably incurred costs of changing such Conveyance
Parcels Plan and design in the event that the City makes a
final decision to realign Gothard Street through Parcel 1A.
Such costs shall include the costs of new architectural and
engineering plans, and other plans which are required to be
changed as a result of such realignment. Any costs of redesign
due to the City' s final decision to realign Gothard Street
through Parcels 1B, 2 or 3 shall be borne by the Developer.
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3 . ( §304] Construction Drawings and Related
Documents
By the time set forth therefor in the Schedule of
Performance (Attachment No. 3) , the Developer shall prepare and
submit to the City construction drawings, landscape plans, and
related documents for development of the Conveyance Parcels for
building permit(s) .
During the preparation of all drawings and plans,
staff of the Agency, City, and the Developer shall hold regular
progress meetings to coordinate the preparation of, submission
to, and review of drawings, plans and related documents by the
Agency. The staff of Agency, City, and the Developer shall
communicate and consult informally as frequently as is
necessary to insure that the formal submittal of any documents
to the Agency can receive prompt and speedy consideration. The
Developer shall be obligated to obtain all City approvals
required for the construction of the Developer Improvements.
4. t §305] Approval_ of Plans1Draw_ ings,_ and
Related Documents -
The Agency and the City shall have the right of
planning review, including plan check, of all plans and
submissions, including any changes therein.
During each stage of the processing for Developer
Improvements, the Agency and the City shall have the right to
require additional information and shall advise the Developer
if any submittal of plans or drawings is not complete or not in
accordance with City/Agency procedures. If the Agency or the
City determines that such a submittal is not complete or not in
accordance with procedures, such tender shall not be deemed to
constitute a submittal for purposes of satisfying the Schedule
of Performance (Attachment No. 3) .
If the Developer desires to make any substantial
changes in the construction plans after their approval by the
Agency and the City, the Developer :hall submit the proposed
change to the Agency and the City for their approval. If the
construction plans, as modified by the proposed change, conform
to the requirements of Section 304 of this Agreement and the
Scope of Development, the Agency and the City will approve or
reject the proposed change and notify the Developer in writing
within thirty (30) days after submission to the Agency and the
City. Such change in construction plans shall, in no event, be
deemed approved by the Agency or the City without such an
actual approval.
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5. 1 §3061 Cost of Construction
Except as otherwise provided herein, all the
costs of site preparation, planning, designing and constructing
the Developer Improvements and developing the Conveyance
Parcels and constructing all improvements thereon shall be
borne solely by the Developer. The Developer shall also bear
all costs related to discharging the duties of the Developer
set forth in this Agreement. The Developer assumes the
responsibility to construct and shall let contracts for or
cause to be constructed all off-site improvements developed
pursuant to this Agreement, except for those improvements which
the Agency elects to accomplish. If the Developer Improvements
do not include a single room occupancy housing project (as
defined in Section 402 hereof) , the Agency shall be responsible
for payment of the following fees imposed by the City:
inspection and plan check fees, plumbing permit, mechanical
permit, electrical permit, fire permit, sewer, water and
drainage fees imposed by the City Public Works Department, and
traffic fees imposed by the City Public Works Department ( "City
Fees" ) ; provided, however, that Agency' s obligation hereunder
shall not exceed the sum of One Hundred Thousand Dollars
($100,000) , and Developer shall be responsible for payment of
any amount of City Fees over and above that sum. Developer
shall be solely responsible for the payment of all other fees
and charges imposed as a result of the development of the
Developer Improvements, including without limitation school
fees and county sewer fees.
The Agency agrees, upon request therefor by the
Developer, to consider, but in no way is obligated, to issue or
participate in the issuance of multi-family housing bonds
( "Bonds") to assist in financing of the Project. For any such
financing to proceed, it is understood that: (i) the entire
cost of such financing, including without limitation costs of
issuance, debt service, and financial advisement of the Agency,
shall be borne by the Developer; (ii) the bonds shall have a
rating of "A" or better from Moody' s or Standard and Poor' s;
and (iii) neither the Agency nor the City shall have any
liability, contingent or otherwise, concerning or with respect
to such bonds.
6. [ §307] Construction Schedule
The Developer shall promptly begin and thereafter
diligently prosecute to completion the construction of the
Developer Improvements, with all construction commencing and
being completed within the times specified therefor in the
Schedule of Performance (Attachment No. 3) , subject to
Section 503 of this Agreement.
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7. 1 §3081 Bodily Injury and Property Damage
Insurance
The Developer shall defend, indemnify, assume all
responsibility for and hold the Agency, its officers and
employees, harmless from all claims or suits for, and damages
to, property and injuries to persons, including accidental
death (including reasonable attorneys fees and costs) , which
may be caused by any of the Developer' s activities under this
Agreement, whether such activities or performance thereof be by
the Developer or anyone directly or indirectly employed or
contracted with by the Developer and whether such damage shall
accrue or be discovered before or after termination of this
Agreement. The Developer shall take out and maintain during
the life of this Agreement, a comprehensive liability policy in
the amount of One Million Dollars ($1,000,000) combined single
limit policy, including contractual liability, as shall protect
the Developer, City and Agency from claims for such damages.
The Developer shall furnishea certificate of
insurance countersigned by an authorized agent of the insurance
carrier on a form of the insurance carrier setting forth the
general provisions of the insurance coverage. This
countersigned certificate shall name the City and the Agency
(and their respective officers, agents, and employees) as
additional insureds under the policy. The certificate by the
insurance carrier shall contain a statement of obligation on
the part of the carrier to notify City and the Agency of any
material change, cancellation or termination of the coverage at
least thirty (30) days in advance of the effective date of any
such material change, cancellation or termination. Coverage
provided hereunder by the Developer shall be primary insurance
and not contributing with any insurance maintained by the
Agency or City, and the policy shall contain such an
endorsement. The insurance policy or the certificate of
insurance shall contain a waiver of subrogation for the benefit
of the City and the Agency. The required certificate shall be
furnished by the Developer at the time set forth therefor in
the Schedule of Performance (Attachment No. 3) .
The Developer shall also furnish or cause to be
furnished to the Agency evidence satisfactory to the Agency
that any contractor with whom it has contracted for the
performance of work on the Conveyance Parcels or otherwise
pursuant to this Agreement carries workers' compensation
insurance as required by law.
The obligations set forth in this Section 308
shall remain in effect only until one year following issuance
of a final Certificate of Completion has been furnished for all
of the Developer Improvements as hereafter provided in Section
315 of this Agreement.
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8. [ §309] City and Other Governmental Agency
Permits
Before commencement of construction or
development of any buildings, structures or other works of
improvement upon the Conveyance Parcels or within the Project
Area, the party so obligated by Section 306 hereof shall take
all actions necessary and proper to secure or cause to be
secured any and all permits which may be required by the City
or any other governmental agency affected by such construction,
development or work.
9. [ §310] Rights of Access
For the purpose of assuring compliance with this
Agreement, representatives of the Agency and the City shall
have the right of access to all portions of the Conveyance
Parcels without charges or fees, at normal construction hours
during the period of construction for the purposes of this
Agreement, including, -but not limited to, the inspection of the
work being performed in constructing the Developer
Improvements, so long as they comply with all safety rules.
Such representatives of the Agency or the City shall be those
who are so identified in writing by the Executive Director of
the Agency. The Agency shall indemnify and hold the Developer
harmless from any bodily injury or related damages arising out
of the activities of the Agency and the City as referred to in
this Section 310.
The Developer and the Agency agree to cooperate
in placing and maintaining on the Conveyance Parcels during
construction of the Developer Improvements one sign indicating
the respective roles of the Developer and the Agency in the
Project. The cost of the sign shall be borne by the Developer.
10. [ §311] Local State and Federal Laws
The Developer shall carry out the construction of
the Developer Improvements in conformity with all applicable
laws, including all applicable federal and state labor
standards; provided, however, Developer and its contractors,
successors, assigns, transferees, and lessees do not waive
their rights to contest any such laws, rules or standards.
11. [ §312 ] - Antidiscrimination Durin2 Construction
The Developer, for itself and its successors and
assigns, agrees that in the construction of the Developer
Improvements provided for in this Agreement, the Developer will
not discriminate against any employee or applicant for
employment because of race, color, creed, religion, age, sex,
marital status, handicap, national origin or ancestry.
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B. [ §313 ] Taxes, Assessments, Encumbrances and Liens
The Developer shall pay prior to delinquency all ad
valorem taxes and assessments on the Conveyance Parcels. Prior
to issuance of a Certificate of Completion pursuant to
Section 315, except for encumbrances allowed pursuant to this
Agreement, the Developer shall not place on the Conveyance
Parcels or any part thereof any mortgage, trust deed,
encumbrance or lien. The Developer shall remove or have
removed any levy or attachment made on any of the Conveyance
Parcels or any part thereof, or assure the satisfaction thereof
within a reasonable time but in any event prior to a sale
thereunder. Nothing herein contained shall be deemed to
prohibit the Developer from contesting the validity or amounts
of any tax assessment, encumbrance or lien, nor to limit the
remedies available to the Developer in respect thereto.
C. [ §314] Prohibition Against Transfer of the Site,
the Buildings or Structures Thereon and
Assignment of Agreement
The Developer shall not, except as permitted by this
Agreement (including without limitation Section 107) , without
prior written approval of the Agency, hake any total or partial
sale, transfer, conveyance, assignment or lease of the whole or
any part of the Conveyance Parcels or of the buildings or
structures on the Conveyance Parcels. This prohibition shall
not be deemed to prevent construction loans allowable pursuant
to this Agreement, the granting of temporary or permanent
easements or permits to facilitate the development of the
Conveyance Parcels or to prohibit or restrict the leasing of
any part or parts of a building or structure for occupancy for
a term commencing upon completion.
D. [ §315] Certificate of Completion
Promptly after completion of all construction and
development required by this Agreement to be completed by the
Developer upon the Conveyance Parcels in conformity with this
Agreement, the Agency shall furnish the Developer with a
Certificate of Completion upon written request therefor by the
Developer. Such Certificate shall be substantially in the form
of Attachment No. 7 hereto. The Agency shall not unreasonably
withhold any such Certificate of Completion. Such Certificate
of Completion shall be a conclusive determination of
satisfactory completion of the construction required by this
Agreement upon the Conveyance Parcels and the Certificate of
Completion shall so state. After recordation of such
Certificate of Completion, any party then owning or thereafter
purchasing, leasing or otherwise acquiring any interest therein
shall not (because of such ownership, purchase, lease or
acquisition) , incur any obligation or liability under this
Agreement except that such party shall be bound by the
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covenants contained in the "Declaration of Covenants,
Conditions and Restrictions" (Attachment No. 9) , Section 402 of
this Agreement (if these requirements are applicable) , and
other documents establishing covenants on the Conveyance
Parcels in accordance with the provisions of this Agreement.
A Certificate of Completion of construction for the
entire improvement and development of the Conveyance Parcels
shall be in such form as to permit it to be recorded in the
Recorder' s Office of Orange County.
If the Agency refuses or fails to furnish a
Certificate of Completion for the Developer Improvements after
written request from the Developer, the Agency shall, within
thirty (30) days of written request for a Certificate of
Completion, provide the Developer with a written statement of
the reasons the Agency has refused or failed to furnish a
Certificate of Completion. The statement shall also contain
Agency' s opinion of the actions that the Developer must take to
obtain a Certificate of Completion. If the reason for such
refusal is confined to the immediate availability of specific
items of materials for landscaping, the Agency will issue its
Certificate of Completion upon the posting of a bond or an
unconditional letter of credit (in form and substance
acceptable to the Agency and its legal counsel) by the
Developer with the Agency in an amount representing a fair
value of the work not yet completed.
Such Certificate of Completion shall not constitute
evidence of compliance with or satisfaction of any obligation
of the Developer to any holder of any mortgage, or any insurer
of a mortgage securing money loaned to finance the
improvements, or any part thereof. Such Certificate of
Completion is not a notice of completion as referred to in the
California Civil Code Section 3093.
E. [ 6316] Mortgage, Deed of Trust, Sale and Lease-Back
Financing; Rights of Holders
1. [ 53171 No Encumbrances -Except Mortgages, Deeds
of Trust, or Sale and Lease-Back for
Development
Mortgages, deeds of trust and sales and
lease-backs are to be permitted before completion of the
construction of the Developer Improvements, but only for the
purpose of securing loans of funds to be used for the
construction of the Developer Improvements, and any other
purposes necessary and appropriate in connection with the
Construction required under this Ag-reement. Such encumbrances
shall be subordinate to the Agency encumbrances and liens
created under this Agreement. The Developer shall notify the
Agency in advance of any mortgage, deed of trust or sale and
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lease-back financing, if the Developer proposes to enter into
the same before completion of the Developer Improvements. The
words "mortgage" and "trust deed" as used hereinafter shall
include sale and lease-back. The Developer shall not enter
into any such conveyance for financing or refinancing without
the prior written approval of the Agency, which approval Agency
agrees to give if any such conveyance for financing is given to
a responsible financial or lending institution or other
acceptable person or entity.
2. [ §318] Holder Not Obligated to Construct
Improvements
The holder of any mortgage or deed of trust
authorized by this Agreement shall not be obligated by the
provisions of this Agreement to construct or complete the
Improvements or to guarantee such construction or completion;
nor shall any covenant be construed so to obligate such
holder. Nothing in this Agreement shall be deemed to construe,
permit or authorize any such holder to devote the Conveyance
Parcels to any uses or to construct any improvements thereon,
other than those uses or improvements provided for or
authorized by this Agreement.
3 . [ §319] Notice of Default to Mortgagee or Deed
of Trust Holders; Right to Cure
With respect to any mortgage or deed of trust
granted by Developer as provided herein, whenever the Agency
shall deliver any notice or demand to Developer with respect to
any breach or default by the Developer in completion of the
Developer Improvements the Agency may at the same time deliver
to each holder of record of any mortgage or deed of trust
authorized by this Agreement a copy of such notice or demand.
Each such holder shall (insofar as the rights of the Agency are
concerned) have the right, at its option, within thirty (30)
days after the receipt of the notice, to cure or remedy or
commence to cure or remedy any such default and to add the cost
thereof to the mortgage debt and the lien of its mortgage.
Nothing contained in this Agreement shall be deemed to permit
or authorize such holder to undertake or continue the
construction, rehabilitation or completion of the Developer
Improvements (beyond the extent necessary to conserve or
protect the construction already made) without first having
expressly assumed the Developer' s obligations to the Agency by
written agreement satisfactory to the Agency. The holder, in
that event, must agree to complete, in the manner provided in
this Agreement, the Developer Improvements to which the lien or
title of such holder relates, and submit evidence satisfactory
to the Agency that it has the qualifications and financial
responsibility necessary to perform such obligations. Any such
holder properly completing such construction shall be entitled,
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upon compliance with the requirements of Section 315 of this
Agreement, to a Certificate of Completion.
4. [ §320] Right of t_he_Agency to Cure Mortgage or
Deed of Trust Default
In the event of a mortgage or deed of trust
default or breach by the Developer prior to the completion of
the Developer Improvements or any part thereof and the holder
of any first mortgage or first deed of trust has not exercised
its option to construct, the Agency may cure the default. In
such event, the Agency shall be entitled to reimbursement from
the Developer of all proper costs and expenses associated with
and attributable to the curing of the first mortgage or first
deed of trust default or breach of this Agreement by the
Developer and incurred by the Agency in curing such default.
The Agency shall also be entitled to a lien upon the Conveyance
Parcels to the extent of such incurred costs and
disbursements. Any such lien shall be subject to the prior
construction financing mortgages or deeds of trust.
IV. [ §400] USE OF THE CONVEYANCE PARCELS
A. [ §401 ] Use In Conformance with Plan and Agreement
The Developer covenants and agrees for itself, its
successors, its assigns and every successor ir. interest to the
Conveyance Parcels or any part thereof that, following the
Conveyance, during construction and thereafter, the Developer,
such successors and such assignees, shall use, operate and
maintain the Conveyance Parcels in conformity with this
Agreement and shall devote the Conveyance Parcels to the uses
specified in the Redevelopment Plan and this Agreement for the
periods of time specified therein.
B. ( §402 ] Single Room Occupancy Housing
In the event that the Developer Improvements required
to be constructed by the Scope of Development include a single
room occupancy housing project, in conformance with Section
9220.15 of the City Municipal Code, (a) the Developer shall
comply with the Affordable Housing Restrictions set forth in
Attachment No. 8 which is incorporated herein by reference, and
(b) the Agency shall make available to Developer the sum of Six
Hundred Fifty Thousand Dollars ($650,000) from the Agency' s
Low- and Moderate-Income Housing Fund, in a time and manner to
be determined by the Agency in its reasonable discretion, to be
used for the construction of the Developer Improvements, in
accordance with the requirements of Health and Safety Code
Section 33334.2, et sere .
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C. [ §403 ] Rights of Access
The Agency, for itself and for the City and other
public agencies, at their sole risk and expense, shall have the
right to enter the Conveyance Parcels or any part thereof which
is owned or controlled by the Developer, at all reasonable
times for the purpose of construction, reconstruction,
maintenance, repair or service of any public improvements or
public facilities located on the Conveyance Parcels. Any such
entry shall be made only after reasonable notice to Developer.
Upon receipt of such notice, the Developer agrees to cooperate
with the Agency in making the Conveyance Parcels available for
inspection by the Agency and/or City. Developer acknowledges
and agrees that in the event that if for any reason the
Developer fails to consent to such entry or inspection, the
Agency may obtain an administrative inspection warrant or take
such other legal actions as may be necessary to gain entry to
and inspect the Conveyance Parcels. Agency shall indemnify and
hold Developer harmless from any costs, claims, damages or
liabilities pertaining to any entry.
D. [ §404] Effect of Violation of the Terms and
Provisions of this Agreement After
Completion_of Construction
The covenants established in this Agreement and the
deeds shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the
Agency, its successors and assigns, as to those covenants which
are for its benefit. The Developer shall execute, acknowledge
and deliver to the Agency a "Declaration of Covenants,
Conditions and Restrictions, " in the form of Attachment No. 9
hereto and incorporated herein (the "Declaration" ) , which sets
forth all of the requirements of this Section IV of the
Agreement in recordable form. The Developer consents to the
recording of the Declaration in the official records of orange
County, California.
The Agency is deemed the beneficiary of the terms and
provisions of this Agreement and of the covenants running with
the land, for and in its own rights and for the purposes of
protecting the interests of the community and other parties,
public or private, in whose favor and for whose benefit this
Agreement and the covenants running with the land have been
provided. The Agreement and the covenants shall run in favor
of the Agency, without regard to whether the Agency has been,
remains or is an owner of any land or interest therein in the
Conveyance Parcels or in the Project Area. The Agency shall
have the right, if the Agreement or covenants are breached, to
exercise all rights and remedies, and to maintain any actions
or suits at law or in equity or other proper proceedings to
enforce the curing of such breaches to which it or any other
beneficiaries of this Agreement and covenants may be entitled.
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After issuance of a Certificate of Completion for all
of the Developer Improvements, all of the terms, covenants,
agreements and conditions set forth in this Agreement relating
to the Conveyance Parcels shall cease and terminate as to that
portion of the Conveyance Parcels for which the Certificate of
Completion is issued, excepting only the provisions listed
below which shall survive as follows:
(a) Sections 310 and 401 to 403, inclusive, relating
to Uses, Maintenance and Access.
(b) Section 308 (relating to indemnification and
insurance) shall remain in effect in accordance with the
terms and conditions set forth therein.
(c) Sections 600 to 607 (relating to rights and
remedies) shall remain in effect to the extent necessary to
enforce other provisions of this Agreement.
(d) Section 704 (relating to release of claims) .
(e) Declaration of Covenants, Conditions and
Restrictions (Attachment No. 9) .
F. 1 §4051 Nondiscrimination
The Developer covenants by and for itself and any
successors in interest that there shall be no discrimination
against or segregation of any person or group of persons on
account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Conveyance
Parcels, nor shall the Developer itself or any person claiming
under or through it establish or permit any such practice or
practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Conveyance
Parcels. The foregoing covenants shall run with the land.
The Developer shall refrain from restricting the
rental, sale or lease of the property on the basis of race,
color, creed, religion, sex, marital status, national origin or
ancestry of any person. All such deeds, leases or contracts
shall contain or be subject to substantially the following
nondiscrimination or nonsegregation clauses:
(a) In deeds: "The grantee herein covenants by
and for himself or herself, his or her heirs, executors,
administrators and assigns, and all persons claiming under or
through them, that there shall be no discrimination against or
segregation of, any person or group of persons on account of
race, color, creed, religion, sex, marital status, national
origin or ancestry in the sale, lease, sublease, transfer, use,
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occupancy, tenure or enjoyment of the land herein conveyed, nor
shall the grantee himself or herself or any person claiming
under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the
land herein conveyed. The foregoing covenants shall run with
the land."
(b) In leases: "The lessee herein covenants by
and for himself or herself, his or her heirs, executors,
administrators and assigns, and all persons claiming under or
through him or her, and this lease is made and accepted upon
and subject to the following conditions:
"There shall be no discrimination against or
segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, ancestry or
national origin in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the premises herein leased
nor shall the lessee himself or herself, or any person claiming
under or through him or her, establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants or vendees in the
premises herein leased. "
(c) In contracts: "There shall be no
discrimination against or segregation of, any person, or group
of persons on account of race, color, creed, religion, sex,
marital status, ancestry or national origin, in the sale,
lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the premises, nor shall the transferee himself or herself or
any person claiming under or through him or her, establish or
permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the premises. "
The covenants established in this Agreement and the
deeds of conveyance for the Conveyance Parcels shall, without
regard to technical classification and designation, be binding
for the benefit and in favor of the Agency, its successors and
assigns, the City and any successor in interest to the
Conveyance Parcels, together with any property acquired by the
Developer pursuant to this Agreement, or any part thereof. The
covenants against discrimination shall remain in effect in
perpetuity.
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V. [ §500] GENERAL PROVISIONS
A. [ §501] Notices, Demands and Communications Between
the Parties
Written notices, demands and communications between
the Agency and the Developer shall be sufficiently given if
delivered by hand (and a receipt therefor is obtained or is
refused to be given) or dispatched by registered or certified
mail, postage prepaid, return receipt requested, to the
principal offices of the Agency and the Developer. Such
written notices, demands and communications may be sent in the
same manner to the Agency and the Eeveloper at the addresses
provided pursuant to Sections 105 and 106 and to such other
addresses as either party may from time to time designate by
mail as provided in this Section 501.
Any written notice, demand or communication shall be
deemed received immediately if delivered by hand and shall be
deemed received on the third day from the date it is postmarked
if delivered by registered or certified mail.
B. [ §502] Conflicts of_.Interest
No member, official or employee of the Agency shall
have any personal interest, direct or indirect, in this
Agreement, nor shall any member, official or employee
participate in any decision relating to the Agreement which
affects his personal interests or the interests of any
corporation, partnership or association in which he is directly
or ,indirectly interested. The Developer warrants that it has
not paid or given, and will not pay or give, any third party
any money or other consideration for obtaining this Agreement.
C. [ §503 ] Enforced Delay; Extension of Times of
Performance -'
In addition to specific provisions of this Agreement,
performance by either party hereunder shall not be deemed to be
in default, and all performance and other dates specified in
this Agreement shall be extended, where delays or defaults are
due to: war; insurrection; strikes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of Cod; acts of the public
enemy; epidemics; quarantine restrictions; freight embargoes;
lack of transportation; governmental restrictions or priority;
litigation; unusually severe weather; inability to secure
necessary labor, materials or tools; delays of any contractor,
subcontractor or supplier; acts or omissions of the other
party; acts or failures to act of the City of Huntington Beach
or any other public or governmental agency or entity (other
than the acts or failures to act of the Agency or the City of
Huntington Beach, other than in respect to the zoning of -the
Conveyance Parcels to allow development of the Developer
12/30/92
6594u/2460/049 -34-
Improvements) ; or any other causes beyond the control or
without the fault of the party claiming an extension of time to
perform. Notwithstanding anything to the contrary in this
Agreement, an extension of time for any such cause shall be for
the period of the enforced delay and shall commence to run from
the time of the commencement of the cause, if notice by the
party claiming such extension is sent to the other party within
thirty (30) days of the commencement of the cause. Any
requests for extension shall be in writing. Times of
performance under this Agreement may also be extended in
writing by the mutual agreement of Agency and Developer.
Notwithstanding the foregoing portion of this Section
503, the Developer is not entitled pursuant to this Section 503
to an extension of time to perforn because of past, present, or
future difficulty in obtaining suitable temporary or permanent
financing for the construction of the Developer Improvements
(including without limitation the issuance of the Bonds) .
D. [ §504] Nonliabilityof Officials and Employees_of
the Agency
No member, official or employee of the Agency or the
City shall be personally liable to the Developer, or any
successor in interest, in the event of any default or breach by
the Agency (or the City) or for any amount which may become due
to the Developer or its successors, or on any obligations under
the terms of this Agreement.
VI . [ §600] DEFAULTS AND REMEDIES
A. [ §601 ] Defaults -- General
Subject to the extensions of time set forth in
Section 503, failure or delay by either party to perform any
term or provision of this Agreement constitutes a default under
this Agreement. The party who so fails or delays must
immediately commence to cure, correct, or remedy such failure
or delay, and shall complete such cure, correction or remedy
with diligence.
The injured party shall give written notice of default
to the party in default, specifying the default complained of
by the injured party. Except as repaired to protect against
further damages, the injured party may not institute
proceedings for damages or specific performance against the
party in default until thirty (30) days after giving such
notice or, provided that the party is proceeding with diligence
to cure, such greater time as may be necessary to qure given
the nature of the default. Failure or delay in giving such
notice shall not constitute a waiver of any default, nor shall
it change the time of default.
12/30/92
6594u/2460/049 -35-
B. [ §602 ] Le al Actions
1. [ §603 ] Institution of Legal Actions
In addition to any other rights or remedies and
subject to the restrictions in Section 601, either party may
institute legal action to cure, correct or remedy any default,
to recover damages for any default, or to obtain any other
remedy consistent with the purpose of this Agreement. Legal
actions must be instituted in the Saperior Court of the County
of Orange, State of California, in an appropriate municipal
court in that county, or in the Federal District Court in the
Central District of California (or such other Federal District
Court which is closest to the City of Huntington Beach) .
2 . [ §604] Applicable Law
The laws of the State of California shall govern
the interpretation and enforcement of this Agreement.
3. [ §605] Acceptance_of Service of Process
In the event that any legal action is commenced
by the Developer against the Agency, service of process on the
Agency shall be made by personal service upon the Director or
in such other manner as may be provided by law.
In the event that any legal action is commenced
by the Agency against the Developer, service of process on the
Developer shall be made by personal service upon a corporate
officer of the Developer and shall be valid whether made within
or without the State of California or in such other manner as
may be provided by law.
C. [ §606] Rights and Remedies Are Cumulative
Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are
cumulative, and the exercise by either party of one or more of
such rights or remedies shall not preclude the exercise by it,
at the same or different times, of any other rights or remedies
for the same default or any other default by the other party.
D. [ §607 ] Inaction Not a Waiver of Default
Any failures or delays by either party in asserting
any of its rights and remedies as to any default shall not
operate as a waiver of any default or of any such rights or
remedies, or deprive either such party of its right to
institute and maintain any actions or proceedings which it may
deem necessary to protect, assert or enforce any such rights or
remedies.
12/30/92
6594u/2460/049 -36-
E. [ §60$] Remedies and Rights of Termination Prior to
Conveyance
1. [ §609] Damages
If either party defaults with regard to any of
the provisions of this Agreement, the non-defaulting party
shall serve written notice of such default upon the defaulting
party. If the default is not cured within thirty (30) days
after service of the notice of default as set forth in
Section 601, the defaulting party shall be liable to the other
party for any damages caused by such default, except as
provided in Section 611 herein.
2. [§610] Specific Performance
Subject to the applicable cure provisions
contained in Section 601 herein, if either party defaults under
any of the provisions of this Agreement, the non-defaulting
party shall serve written notice of such default upon the
defaulting party. If the default is not cured by the
defaulting party within thirty (30) days of service of the
notice of default as set forth in Section 601, the
non-defaulting party at its option may thereafter (but not
before) seek specific performance of terms of this Agreement.
3 . [ §611 ] Termination by the Agency
Prior to Conveyance
In the event that prior to the Conveyance:
(a) The Developer (or any successor in interest)
assigns or attempts to assign the Agreement or any rights
therein in violation of Section 107 of this Agreement; or
(b) There is a change in the ownership of the
Developer contrary to the provisions of Section 107 hereof; or
(c) The Developer does not submit certificates
of insurance, construction plans, drawings and related
documents as required by this Agreement, in the manner and by
the dates respectively provided in this Agreement therefor and
such default or failure shall not be cured within thirty (30)
days after the date of written demand therefor by the Agency; or
(d) The parties cannot agree upon a Scope of
Development, despite Agency' s reasonable efforts to do so; or
(e) The Developer has failed to exercise the
Option in the manner and within the time set forth herein; or
12/30/92
6594u/2460/049 -37-
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(f) The Developer is otherwise in default under
this Agreement and has not cured or commenced to cure such
default within the time period set forth in Section 601 herein;
then, at the option of the Agency, thirty (30) days after
written notice thereof is delivered to the Developer, this
Agreement shall be terminated, and thereafter neither party
shall have any further rights against the other under this
Agreement.
F. [ §612 ] Remedies of the Parties for Default After
Conveyance
1. [ §613 ] Termination and Damages
After the Conveyance, if the Developer or the
Agency defaults with regard to any of the provisions of this
Agreement, the nondefaulting party shall serve written notice
of such default upon the defaulting party. If the default is
not cured by the defaulting party within the time set forth in
Section 601 hereof, the defaulting party shall be liable to the
other party for any damages caused by such default.
2. [ §614] Action for Specific Performance
After the Conveyance, if either the Developer or
the Agency defaults under any of the provisions of this
Agreement the nondefaulting party shall serve written notice of
such default upon the defaulting party. If the default is not
cured by the defaulting party within the time set forth in
Section 601 hereof, the nondefaulting party at its option may
institute an action for specific performance of the terms of
this Agreement.
VII . [ §700] SPECIAL PROVISIONS
A. [ §701 ] Real Estate Commissions
Each of the Agency and the Developer represents to the
other party that it has not engaged the services of any finder
or broker and that it is not liable for any real estate
commissions, broker' s fees, or finder' s fees which may accrue
by means of the Developer' s acquisition of the Conveyance
Parcels, and agrees to hold harmless the other party from such
commissions or fees as are alleged to be due from the party
making such representations.
B. [ §702] Successors In Interest
The terms, covenants, conditions and restrictions of
this Agreement shall extend to and shall be binding upon- and
12/30/92
6594u/2460/049 -38-
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inure to the benefit of the heirs, executors, administrators,
successors and assigns of the Developer.
C. [ §703 ) Memorandum of Agreement
The Agency and the Developer agree to execute and
acknowledge a short form memorandum of this Agreement in the
form of the "Memorandum of Agreement" attached hereto as
Attachment No. 10 and incorporated herein. At the sole
discretion of the Agency, the Memorandum of Agreement may be
recorded by the Agency in the official records of Orange
County, California. The Memorandum of Agreement shall be for
recording purposes only and shall not modify any of the terms
of this Agreement.
D. [ §704] Release of Claims
Each party (the Developer and the Agency) , on behalf
of itself and its officers, partners, successors, assignees and
representatives, fully releases and discharges the other party
and its officers, employees, agents, successors and
representatives from all and any manner of rights, demands,
liabilities, obligations, claims, or cause of actions, in law
or equity, of whatever kind or nature, whether known or
unknown, whether now existing or hereinafter arising, which
arise from or relate in any manner to the Conveyance Parcels
and the ownership, acquisition and development thereof, except
for the obligations contained in this Agreement. The Developer
acknowledges and agrees that the Developer shall not be
entitled to any benefits for displacement or relocation
pursuant to Government Code Section 7260, et seq. , or other
applicable statutes, and that this Agreement fully satisfies
any rights the Developer may have for owner participation with
respect to the Plan. The Developer further acknowledges and
agrees that if the Developer fails to exercise the Option in
the manner and within the time set forth in this Agreement, the
Developer shall have no rights with respect to the Conveyance
Parcels or the Conveyance Parcels or this Agreement.
Developer and the Agency have been advised by their
respective attorneys and have read and understood the
provisions of Section 1542 of the California Civil Code, which
provides:
"A general release does not extend to
claims which the creditor does not know or
suspect to exist in his favor at the time of
executing the release, which if known by him
must have materially affected his settlement
with the debtor. "
12/30/92
6594u/2460/049 -39-
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ATTACHMENT NO. 1
Page 2 of 2
ATTACHMENT NO. 2
LEGAL DESCRIPTION
That certain real property located in the Cities of
Huntington Beach and Westminster, County of Orange, State of
California, and described as Lots 1, 2 and 3 of Parcel Map No.
90-327.
12/30/92
6594u/2460/049 ATTACHMENT NO. 2
ATTACHMENT 110. 3
SCHEDULE OF PERFORMkNCE
I . GENERAL PROVISIONS
1. Execution of Agreement Within thirty (30) days after
Sy Agency. The Agency the date of execution and sub-
shall approve and execute mission of five (5) copies of
this Agreement and shall this Agreement by the
deliver one (1) copy Developer.
thereof to the Developer.
2. Submission of Preliminary At least ninety (90) days
Site Plan. Developer sub- prior to developer' s exercise
mits its Preliminary of the Option.
Conveyance Parcels
Plan to City and the
Agency.
3. Agency/City Review of Site Within sixty (60) days
Plan. The Agency/City shall after submittal by Developer.
approve or disapprove the
Preliminary Conveyance
Parcels and Grading Plan.
4. Submission of Complete Site Within thirty (30) days
Flan -Application. Developer after Agency/City approval
submits full and complete of Preliminary Conveyance
Conveyance Parcels Plan Parcels and Grading Plan.
application to City Grading Plan.
and the Agency.
S. CEQA Documentation. Within sixty (60) days
Agency shall prepare after approval of Preliminary
required documentation Conveyance Parcels Plan ( Item
pursuant to California 3) by Agency/City.
Environmental Quality Act.
6. Public Review of CE A Within sixty (60) days of
Documentation. Agency completion of Item No. 5.
shall circulate or provide
public notice of CEQA
documentation, if any, for
public review/comments.
12/30/92 ATTACHMENT NO. 3
6594u/2460/049 Page 1 of 4
7. Review of Final Site Plan. Within sixty (60) days of
Planning Commission Hearing submission of complete site
and City Council Hearing, plan application.
Agency/City to review Final
Conveyance Parcels Plan and
Planning Commission and
City Council to approve the
concept development plan and,
if applicable, Certification
of the EIR described in
Item No. 5.
II . CONSTRUCTION DOCUMENTS AND BUILDING PERMIT
B. Parcel Map. Developer is to Within sixty (60) days
prepare and Agency is to from Planning Commission
process or caused to be and City Council
processed the Subdivision approval.
Map.
9. Submission of Complete Within one hundred twenty
Construction Drawings and (120) days from Planning
Landscaping_Plan. Developer Commission and City Council
shall submit to the City approval (Item 7 above) .
complete Construction
(working) Drawings and a
Landscaping Plan, Sign
Program, and Finish Grading
Plan. Landscaping Plan and
final Sign Program shall be
completed and approval
obtained by Developer prior
to completion of the Developer
Improvements.
10. City Review of Complete Within sixty (60) days
Drawings-- and Plans. The after submittal.
Agency/City shall review
the Complete Construction
(working) Drawings, the
Preliminary Landscaping Plan,
Preliminary Sign Program,
and Finish Grading Plan and
provide comments.
11. Revisions, if any. Developer Within thirty (30) days after
shall prepare revised receipt of City' s comments.
Construction (working)
Drawings as necessary, and
submit them to City for
review.
12/30/92 ATTACIDIENT NO. 3
6594u/2460/049 Page 2 of 4
12. Final Review and Complete Within thirty (30) days after
Drawings. The City/Agency submittal by Developer.
shall approve the revisions
submitted by the Developer
provided that the revisions
necessary to accommodate the
City' s comments have been
made; said approvals
constitute the last City and
Agency approvals required in
order for the Developer to
pull building permits.
13. Developer Bids Drawings and Within one hundred eighty
Obtains Construction (180) days after approval
Financing. of construction drawings by
all applicable governmental
authorities.
III . SITE CONVEYANCE
14. Exercise of Option. Within ten (10) years after
Developer shall exercise Agency execution of this
option for conveyance of Agreement.
the Conveyance Parcels.
15. Opening of Escrow. The Within thirty (30) days after
parties shall open escrow Developer exercises its option
for the sale of the to purchase the
Conveyance Parcels. Conveyance Parcels.
16. Conve ante Sale. Agency Within ninety (90) days after
conveys fee title to the Developer exercises its option
Conveyance Parcels to to purchase the
Developer by the Conveyance Parcels.
Grant Deed.
17. Lease. Agency conveys Within ninety (90) days after
possession to the Conveyance Developer exercises its
Parcels to Developer by the option to Lease the
Lease. Ccnveyance Parcels.
IV. CONSTRUCTION PHASE
18. Commencement of Grading and Within forty-five (45) days
Construction. Developer after the Conveyance.
shall commence construction
of' the Developer Improve-
ments.
12/30/92 ATTACHMENT NO. 3
6594u/2460/049 Page 3 of 4
19 . Completion of Construction. The Developer is to use due
Developer shall complete diligence to complete the
construction of all of the project within eighteen (18)
Developer Improvements. months after commencement of
the Developer Improvements;
however, provided the
Developer may request up to
three (3 ) one (1) month
extensions to be granted
by the Executive Director
of the Redevelopment Agency.
Approval for such three
extensions (but no other
extensions) is not to be
unreasonably withheld.
12/30/92 ATTACHMENT NO. 3
6594u/2460/049 Page 4 of 4
k !
ATTAMIENT NO. 4
RECORDING REQUESTED BY: )
AND WHEN RECORDED MAIL TO: )
The Redevelopment Agency of }
the City of Huntington Beach )
2000 Main Street }
P.O. Box I90 )
Huntington Beach, CA 92648 }
Attn: Director }
}
The undersigned Grantor declares:
Documentary transfer tax is
THE REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH
By-
Its-
Dated: 19
GRANT DEED
For valuable consideration; receipt of which is hereby acknowledged,
the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic, of the State of California, herein called "Grantor"
acting to carry out the Redevelopment Plan, herein called "Redevelopment Plan"
for the Huntington Center Redevelopment Project, herein called "Project",
under the Community Redevelopment Law of California, hereby grants to ORIN G.
BERGE, JR. , a married man, herein called "Grantee," the real property
hereinafter referred to as the "Property", described in Exhibit A attached
hereto and incorporated herein, subject to the existing easements,
restrictions and covenants or record described there.
1. Grantor excepts and reserves from the conveyance herein
described all interest of the Grantor in oil, gas, hydrocarbon substances and
minerals of every kind and character lying more than 500 feet below the
surface, together with the right to drill into, through, and to use and occupy
all parts of the Property lying more than 500 feet below the surface thereof
for any and all purposes incidental to the exploration for and production of
oil, gas, hydrocarbon substances or minerals from said site or other lands,
but without, however, any right to use either the surface of the Property or
any portion thereof within 500 feet of the surface for any purpose or purposes
whatsoever.
2. The Property is conveyed in accordance with and subject to the
Redevelopment Plan which was approved and adopted by Ordinance No. 2743 of the
12/30/92 ATTACHI-i£NT NO. 4
6594u/2460/049 Page 1 of 4
City Council of the City of Huntington Beach, and a Disposition and
Development Agreement entered into between Grantor and Grantee dated
(the "DDA"), a copy of which is on file with the Grantor at
its offices as a public record and which is incorporated herein by reference.
3. The Grantee shall devote the Property only to the development
permitted and the uses specified in the applicable provisions of the
Redevelopment Plan for the Project (or any amendments thereof approved
pursuant to paragraph 10 of this Grant Deed), and this Grant Deed, whichever
document is more restrictive.
4. The Property is conveyed to Grantee at a purchase price, herein
called "Purchase Price", determined in accordance with the uses permitted.
Therefore, Grantee hereby covenants and agrees for itself, its successors, its
assigns, and every successor in interest to the Property that the Grantee,
such successors and such assigns, shall develop, maintain, use and operate the
Property only as follows:
(a) Grantee shall develop the Property for
(b) Grantee shall maintain the improvements on the Property in
conformity with the Huntington Beach Municipal Code and shall keep the
Property free from any accumulation of debris or waste materials. Grantee
shall also maintain the required landscaping in a healthy condition.
If, at any time, Grantee fails to maintain the said
landscaping, and said condition is not corrected after expiration of five (5)
days from the date of written notice from the Grantor, either the Grantor, or
the City of Huntington Beach may perform the necessary maintenance and Grantee
shall pay such costs as are reasonably incurred for such maintenance,
(c) Grantee shall only sell, transfer or convey the Property as
a whole and is not permitted to subdivide the Property for the duration of the
Redevelopment Plan without the prior approval of the Grantor, or the City of
Huntington Beach if the Agency is no longer in existence at the date of
request for approval.
S. For a period of from the date of the recordation
of the Grant Deed:
The Grantee shall not place or suffer to be placed on the
Property any lien or encumbrance other than mortgages, deeds of trust, or any
other form of conveyance required for financing of the the construction of the
Improvements on the Property, and any other expenditures necessary and
appropriate to develop the Property pursuant to the DD;,. The Grantee shall
not enter into any such conveyance for financing without prior written
approval of Grantor. No approval will be given for a conveyance of the
property to finance the construction or improvements on real property other
than the real property described in Exhibit A hereto.
6. The Grantee agrees for itself and any successor in interest not
to discriminate upon the basis of race, color, creed or national origin in the
sale, lease, or rental or in the use or occupancy of the Property hereby
12/30/92 ATTACHMENT NO. 4
6594u/2460/049 Page 2 of 4
conveyed or any part thereof. Grantee covenants by and for itself, its
successors, and assigns, and all persons claiming under or through them that
there shall be no discrimination against or segregation of, any person or
group of persons on account of race, color, creed, religion, sex, marital
status national origin or ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure, or enjoyment of the Property, nor shall the Grantee
itself or any person claiming under or through it, establish or permit any
such practice or practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants, lessees,
sub-tenants, sublessees, or vendees in the Property. The foregoing covenants
shall run with the land.
7. No violation or breach of 'the covenants, conditions,
restrictions, provisions or limitations contained in this Grant Deed shall
defeat or render invalid or in any way impair the lien or charge of any
mortgage or deed of• trust or security interest permitted by paragraph 5 of
this Grant Deed; provided, however, that any subsequent owner of the Property
shall be bound by such remaining covenants, conditions, restrictions,
limitations and provisions, whether such owner's title was acquired by
foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise.
S. All covenants contained in this Grant Deed shall be covenants
running with the land. Grantee's obligation to develop the Improvements on
the Property shall terminate and shall become null and void upon recordation
of a Certificate of Completion issued by Grantor for the Developer
Improvements as defined in the DDA. The covenants contained in paragraphs 3,
4, and 5 shall continue in effect for fifty (50) years from the date of
recordation of this Grant Deed. Every covenant contained in this Grant Deed
against discrimination contained in paragraph 6 of this Grant Deed shall
remain in effect in perpetuity.
9. All covenants without regard to technical classification or
designation shall be binding for the benefit of the Grantor, and such
covenants shall run in favor of the Grantcr for the entire period during which
such covenants shall be in force and effect, without regard to whether the
Grantor is or remains an owner of any land or interest therein to which such
covenants relate. The Grantor, in the event of any breach of any such
covenants, shall have the right to exercise all the rights and remedies and to
maintain any actions at law or suits in equity or other proper proceedings to
enforce the curing of such breach.
10. Both before and after recordation of a Certificate of
Completion, both Grantor, its successors and assigns, and Grantee and the
successors and assigns of Grantee in and to all or any part of the fee title
to the Property shall have the right to ccnsent and agree to changes in, or to
eliminate in whole or in part, any of the covenants, easements or restrictions
contained in this Grant Deed without the consent of any tenant, lessee,
easement holder, licenses, mortgagee, trustee, beneficiary under a deed of
trust or any other person or entity having any interest less than a fee in the
Property. The covenants contained in this Grant Deed, without regard to
technical classification shall not benefit or be enforceable by any owner of
any other real property within or outside the Project Area, or any person or
entity having any interest in any other such realty. Any amendments to the
12/30/92 ATTACIIENT NO. 4
6594u/2460/049 Page 3 of 4
V
Redevelopment Plan which change the uses or development permitted on the
Property, or otherwise change any of the restrictions or controls that apply
to the Property, shall require the written consent of Grantee or the
successors and assigns of Grantee in and to all or any part of the fee title
to the Property, but any such amendment shall not require the consent of any
tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary
under a deed of trust or any other person or entity having any interest less
than a fee in the Property.
IN WITNESS WHEREOF, the Grantor and Grantee have caused this
instrument to be executed on their behalf by their respective officers
hereunto duly authorized, this day of 19
GRANTOR:
THE REDEVELOPMENT AGENCY OF THE CITY
OF HU14TINGTON BEACH, a public body
corporate and politic
By:
Chairman
By:
Executive Director
By:
Deputy Executive Director/
Economic Development
ATTEST:
Secretary
APPROVED AS TO FORM
Agency Counsel
The undersigned Grantee accepts title subject to the covenants
hereinabove set forth.
GRA?TTEE:
By:
Orin G. Berge, Jr.
12/30/92 ATTACHMENT NO. 4
6594u/2460/049 Page 4 of 4
STATE OF CALIFORNIA }
} ss.
COUNTY OF ORANGE )
On this day of 199 , before
me, the undersigned, a Notary Public in and for said State,
personally appeared ,
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument as the
Chairman of the Redevelopment Agency of the City of Huntington
Beach and acknowledged to me that the Redevelopment Agency of
the City of Huntington Beach executed it.
Signature of Notary Public
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE
On this day of , 199_, before
me, the undersigned, a Notary Public in and for said State,
personally appeared ,
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument as the
Executive Director and Deputy Executive Director of the
Redevelopment Agency of the City of Huntington Beach and
acknowledged to me that the Redevelopment Agency of the City of
Huntington Beach executed it.
Signature of Notary Public
12/30/92
6594u/2460/049 ATTACHMENT 110. 4
STATE OF CALIFORNIA }
5S.
COUNTY OF ORANGE )
On 19_, before me, the undersigned, a
Notary Public in and for said State, personally appeared Orin
G. Berge, Jr. , personally known to me or proved to me on the
basis of satisfactory evidence to be the person who executed
the within instrument.
WITNESS my hand and official seal.
12/30/92
6594u/2460/049 ATTACMENT NO. 4
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
[TO BE INSERTED)
12/30/92
6594u/2460/049 ATTACHATENT NO. 4
r
ATTACHMENT NO. 5
r
GROUND LEASE
WITH OPTION TO PURCHASE
By and Between
THE REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH,
AGENCY
and
ORIN G. BERGE, JR. ,
LESSEE
GROUND LEASE WITH OPTION TO PURCHASE
This GROUND LEASE WITH OPTION TO PURCHASE (the "Lease") is
made as of , 19_ by and between the REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body corporate
and politic (the "Agency" or "Lessor" ) , and ORIN C. BERGE, JR. ,
a married man (the "Lessee" ) .
Section 1. SUBJECT OF LEASE.
1.1. Purpose of the Lease. The purpose of this Lease is
to effectuate the Redevelopment Plan ( "Redevelopment Plan" ) for
the Huntington Center Redevelopment Project (the "Redevelopment
Project" ) which was approved and adopted by the City Council of
the City of Huntington Beach by Ordinance No. 2743, and the
Disposition and Development Agreement between the Agency and
the Developer dated , 1992, (the "DDA" ) by
providing for the lease of the 'Conveyance Parcels" (as
hereinafter defined) within the Redevelopment Project area to
Lessee and the development and operation thereon of certain
improvements to be mutually agreed upon by the Agency and
Lessee. The DDA, which is available in the offices of the
Agency as a public record, is incorporated herein by reference
and made a part hereof as though fully set forth herein.
1.2 . The Redevelopment Plan. As of the "Commencement
Date" (as hereinafter defined) , the "Conveyance Parcels" (as
hereinafter defined) is in compliance with the Redevelopment
Plan for the Redevelopment Project.
Section 2. LEASE OF THE SITE.
Agency, for and in consideration of the rents, covenants
and agreements hereinafter reserved and contained on the part
of Lessee to be paid, kept, performed and observed by Lessee,
hereby leases to Lessee, and Lessee hereby leases from Agency,
that certain real property within the Redevelopment Project
area shown on the "Conveyance Parcels Map" attached hereto as
Exhibit "A" and incorporated herein by this reference, and
having the legal description in the "Conveyance Parcels
Description" attached hereto as Exhibit "B" and incorporated
herein by this reference. The Conveyance Parcels consists of
these parcels of real property which the parties have
determined, pursuant to Section 201 of the DDA, are not
proposed for the realignment of Cothard Street. Except as
expressly provided to the contrary in this Lease, reference to
the Conveyance Parcels is to the described land, exclusive of
any improvements now or hereafter located on the land,
notwithstanding that any such improvements may or shall be
construed as affixed to and as constituting part of the real
property.
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Section 3 . LEASE TERM.
3 . 1. Initial Term. Lessee shall lease the Conveyance
Parcels from Agency and Agency shall lease the Conveyance
Parcels to Lessee for a term commencing on , 19
(the "Commencement Date" ) and continuing for a period of Forty
(40) [or fifty-five (55) years if required by Section 201(b) of
the DDA] years thereafter (the "Term" ) , unless sooner
terminated as provided for herein. The term "Lease Year" shall
mean a period commencing on the Commencement Date or an
anniversary thereof and continuing for one full calendar year
thereafter.
Section 4. USE AND DEVELOPMENT OF THE SITE.
4. 1. Development of the Site and Construction of
Improvements. Lessee shall construct upon the Conveyance
Parcels, in accordance with the "Scope of Development" to the
DDA and within the time and in accordance with the other terms,
covenants and conditions of the .DDA and plans, drawings and
specifications approved by Agency pursuant thereto, [Describe
Improvements Here]
4.2 . Use of the Site. Lessee covenants and agrees for
itself, its successors and assigns, as follows: During the
Term, the Conveyance Parcels shall be devoted to any legally
permitted use.
4.3 . Management. Lessee shall manage or cause the
Conveyance Parcels and the Improvements to be managed in a
prudent and business-like manner, consistent with
first-class
projects in Orange County, California.
Lessee may contract with a management company or manager,
which subject to Section 27. 14 hereof may be an affiliate of
Lessee, to operate and maintain the Conveyance Parcels and the
Improvements in accordance with the terms of this Lease;
provided, however, that the selection and hiring of such
management company shall be subject to approval by Agency, or
its Executive Director or the City Manager of the City.
Subject to obtaining approval of the Agency, Lessee may act as
manager. Approval of a management company or manager by Agency
shall not be unreasonably withheld. If, at any time, the
management company is not performing to the reasonable
satisfaction of the Agency, or its Executive Director or the
City Manager of the City, and said condition is not corrected
after expiration- of ninety (90) days from the date of written
notice from the Agency, the Agency may direct the Lessee to,
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and the Lessee shall, terminate immediately the management
contract. Notwithstanding the above, Lessee shall use its best
efforts to correct any defects in management at the earliest
feasible time and, if necessary, to replace the management
company prior to the elapsing of such time period.
4.4. Only Lawful Uses Permitted. Lessee shall not use the
Conveyance Parcels or the Improvements for any purpose that is
in violation of any law, ordinance or regulation of any
federal, state, county or local governmental agency, body or
entity. Furthermore, Lessee shall not maintain or commit any
nuisance, as now or hereafter defined by any applicable
statutory or decisional law, on the Conveyance Parcels or the
Improvements, or any part thereof.
Section 5. RENT.
5.1 Net Lease. It is the intent of the parties hereto
that the rent provided herein shall be absolutely net to Agency
and that Lessee shall pay all costs, charges and expenses of
every kind and nature against the Conveyance Parcels and the
Improvements which may arise or become due during the Term and
which, except for execution hereof, would or could have been
payable by Agency.
5.2. Base Rent.
(a) Subject to Section 5.3 and paragraph (b) below,
Lessee agrees to pay in advance, on the Commencement Date and
thereafter on the first day of each month during each "Lease
Year" (as hereinafter defined) , "Base Rent" in the following
amounts:
Years 1-5 $8,860
Years 6-10 $12, 400
Years 11-15 $17,365
Years 16-20 $24,310
Years 21-25 $34,035
Years 26-End 10% of fair market
value as determined
by appraisal
If less than the entire "Conveyance Parcels", as defined in
the DDA, is conveyed to Lessee herein, the amount of rent shall
be prorated based upon the ratio of the area of the conveyed
parcels to the area of the "Conveyance Parcels" as defined in
the DDA. As used herein, a "Lease Year" shall consist of
twelve (12) consecutive calendar months ending on the
anniversary (the "Anniversary Date" ) of (i ) the day immediately
preceding the Commencement Date, or (ii) if the Commencement
Date is other than the first day of a calendar month, the last
day of the calendar month in which the Commencement Date--
occurs; provided, however, that the first Lease Year shall
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t + !
commence on the Commencement Date and end on the Anniversary
Date, regardless of whether such period equals or exceeds
twelve (12) consecutive calendar months, and the last Lease
Year shall end on the anniversary of the day immediately
preceding the Commencement Date, regardless of whether such
anniversary is the Anniversary Date.
(b) Effective as of the date which is the
twenty-fifth (25th) anniversary of the Commencement Date and
every fifth (5th) anniversary thereafter, the amount of Ease
Rent payable in the next five Lease Years shall be established
at the fair rental value of the Conveyance Parcels, in the
manner set forth herein. The fair annual rental value of the
Conveyance Parcels shall be ten percent (10%) of the fair
market value of the Conveyance Parcels. Prior to such
anniversary dates the parties shall attempt to agree upon the
fair market value of the Conveyance Parcels. If the parties
are unable to agree, the Agency shall obtain an appraisal of
the fair market value of the Conveyance Parcels from an M.A. I .
appraiser, at the sole expense of the Agency, and shall deliver
the results of such appraisal to the Lessee within fifteen (15)
days of the Agency' s receipt thereof. In determining fair
market value or fair rental value, the appraisal shall be based
upon the restrictions imposed upon the Conveyance Parcels by
this Lease, the DDA, and other sources, and the use to which
the Conveyance Parcels is actually being put, rather than the
highest and best use for the Conveyance Parcels. If the Lessee
does not object in writing to such result within thirty (30)
days of its receipt thereof, such appraised value shall
conclusively be deemed the fair market value of the Conveyance
Parcels. If the Lessee objects, in writing, within such thirty
(30) day period to the Agency' s appraisal, the Lessee may, at
its own expense, obtain an appraisal from an M.A. I . appraiser
of its choice, and deliver the results of such appraisal to the
Agency. If the results of the higher of the two appraisals is
no more than ten percent (10%) higher than the determination of
the lower of the two appraisals, the fair market value shall be
deemed the average of the two appraisals. If the appraisals
are more than ten percent (10*;) apart in their determinations
of value, the two appraisers shall select a third M.A. I.
appraiser who shall conduct an independent appraisal of the
Conveyance Parcels. The results of the third appraiser' s
appraisal shall be conclusively deemed the fair market value of
the Conveyance Parcels; provided, however, that if the third
apprisal is the highest or the lowest of the three appraisals,
the fair market value shall be the average of the first and
second appraisals. The costs of the third appraiser, if any,
shall be borne equally by the parties.
5.3 Payment of Rent. All rent that becomes due and
payable pursuant to this Lease shall be paid to the Agency at
the address of the Agency listed in Section 27.7 or such--other
place as the Agency may from time to time designate by written
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notice to the Lessee without notice or demand, and without
setoff, counterclaim, abatement, deferment, suspension or
deduction. Except as expressly provided herein, under no
circumstances or conditions, whether now existing or hereafter
arising, or whether beyond the present contemplation of the
parties, shall the Agency be expected or required to make any
payment of any kind whatsoever or to perform any act or
obligation whatsoever or be under any obligation or liability
hereunder or with respect to the Conveyance Parcels.
5.4. Delinquent Rent. Lessee hereby acknowledges that
late payment by Lessee to Agency of rent and other sums due
hereunder will cause Agency to incur costs not contemplated by
this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges. Accordingly, if
any installment of rent shall not be received by Agency or
Agency' s designee within ten (10) days after notice to Lessee
from Agency that such amount is due, or any other sum due from
Lessee hereunder shall not be received by Agency or Agency's
designee within ten (10) days after notice to Lessee from
Agency that such amount is due, Lessee shall pay to Agency
a late charge equal to five percent (5%) of such overdue
amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Agency
will incur by reason of late payment by Lessee. Acceptance of
such late charge by Agency shall in no event constitute a
waiver of Lessee' s default with respect to such overdue amount,
nor prevent Agency from exercising any of the other rights and
remedies granted hereunder.
Section 6. [ Intentionally omitted]
Section 7. UTILITIES AND TAXES.
7. 1 Utilities. Lessee shall pay or cause to be paid all
charges for gas, electricity, water and other utilities
furnished to the Conveyance Parcels and the Improvements and
all sewer use charges, hookup or similar charges or assessments
for utilities levied against the Conveyance Parcels and the
Improvements for any period included within the Term.
7.2 Real Estate Taxes.
(a) As used herein, the term "real estate taxes"
shall mean all real estate taxes, .assessments for improvements
to the Conveyance Parcels, municipal or county water and sewer
rates and charges which shall be levied against the Conveyance
Parcels or the Improvements, or any interest therein, and which
become a lien thereon and accrues during the Term.
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(b) Lessee shall pay or cause to be paid, before any
fine, penalty, interest or cost may be added thereto for the
nonpayment thereof, all real estate taxes levied against any
and all interests in the Conveyance Parcels and any
Improvements during the Term. Lessor shall use best reasonable
efforts to cause the Conveyance Parcels to be assessed as a
separate parcel.
(c) Any real estate taxes which are payable by Lessee
hereunder shall be prorated between Agency and Lessee as of the
Commencement Date and then again at the expiration or earlier
termination of the Term.
(d) Lessee shall have the right to contest the amount
or validity of any real estate taxes, in whole or in part, by
appropriate administrative and legal proceedings, without any
costs or expense to Agency, and Lessee may postpone payment of
any such contested real estate taxes pending the prosecution of
such proceedings and any appeals so long as such proceedings
shall operate to prevent the collection of such real estate
taxes and the sale of the Conveyance Parcels and any
Improvements to satisfy any lien arising out of the nonpayment
of the same, and Lessee furnishes a bond to Agency securing the
payment of the same in the event a decision in such contest
shall be adverse to Lessee.
7.3 Personal Property. Lessee covenants and agrees to pay
before delinquency all personal property taxes, assessments and
liens of every kind and nature upon all personalty as may be
from time to time situated within the Conveyance Parcels and
any Improvements.
Section 8. OWNERSHIP OF IMPROVEMENTS,
FIXTURES AND FURNISHINGS.
8. 1. OwnershiR During Term. All Improvements constructed
on the Conveyance Parcels by Lessee as permitted by this Lease
shall, during the Term, be and remain the property of Lessee;
provided, however, that Lessee shall have no right to waste the
Improvements, or to destroy, demolish or remove the
Improvements except as otherwise permitted pursuant to this
Lease; and provided further that Lessee' s rights and powers
with respect to the Improvements are subject to the terms and
limitations of this Lease. Agency and Lessee covenant for
themselves and all persons claiming under or through them that
the Improvements are real property.
8.2. Ownership at Termination. Upon termination of this
Lease, whether by expiration of the Term or otherwise, all
Improvements, fixtures and furnishings shall, without
compensation to Lessee, then become Agency' s property, free and
clear of all claims to or against them by Lessee or any-third
person, firm or entity.
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Section 9. INDEMNIFICATION: FAITHFUL PERFORMANCE.
Lessee shall not suffer or permit any liens to be enforced
against the fee simple estate in reversion of Agency as to the
Conveyance Parcels and Improvements, nor against Lessee' s
leasehold interest therein by reason of work, labor, services
or materials supplied or claimed to have been supplied to
Lessee or anyone holding the Conveyance Parcels and the
Improvements, or any part thereof, through or under Lessee, and
Lessee agrees to defend, indemnify and hold Agency harmless
against such liens. If any such lien shall at any time be
filed against the Conveyance Parcels or any Improvements,
Lessee shall, within thirty (30) days after notice to Lessee of
the filing thereof, cause the same to be discharged of record;
provided, however, that Lessee shall have the right to contest
the amount or validity, in whole or in part, of any such lien
by appropriate proceedings but in such event, Lessee shall
notify Agency and promptly bond such lien in the manner
authorized by law with a responsible surety company qualified
to do business in the State of California or provide other
security acceptable to Agency. Lessee shall prosecute such
proceedings with due diligence. Nothing in this Lease shall be
deemed to be, nor shall be construed in any way to constitute,
the consent or request of Agency, express or implied, by
inference or otherwise, to any person, firm or corporation for
the performance of any labor or the furnishing of any materials
for any construction, rebuilding, alteration or repair of or to
the Conveyance Parcels, the Improvements, or any part thereof.
Prior to commencement of construction of the Improvements on
the Conveyance Parcels, or any repair or alteration thereto,
Lessee shall give Agency not less than thirty (30) days advance
notice in writing of intention to begin said activity in order
that nonresponsibility notices may be posted and recorded as
provided by State and local laws.
Section 10. MAINTENANCE AND REPAIR.
Lessee agrees to assume full responsibility for the
management, operation and maintenance of the Improvements and
the Conveyance Parcels throughout the Term without expense to
Agency, and to perform all repairs and replacements necessary
to maintain and preserve the Improvements and the Conveyance
Parcels in a clean and safe condition reasonably satisfactory
to Agency and in compliance with all applicable laws. Lessee
agrees that Agency shall not be required to perform any
maintenance, repairs or services or to assume any expense in
connection with the Improvements and the Conveyance Parcels.
Lessee hereby waives all rights to make repairs or to cause any
work to be performed at the expense of Agency as provided for
in Section 1941 and 1942 of the California Civil Code.
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SECTION 11. EN'JIRONMENTAL MATTERS.
11. 1 Definitions. For the purposes of this Lease, unless
the context otherwise specifies or requires, the following
terms shall have the meanings herein specified:
(a) The term "Hazardous Materials" shall mean (i) any
"hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Section 9601 et seg. ) , as amended from time to time,
and regulations promulgated thereunder; (ii) any "hazardous
substance" as defined by the Carpenter-Presley-Tanner Hazardous
Substance Account Act (California Health and Safety Code
Sections 25300 et seg. ) , as amended from time to time, and
regulations promulgated thereunder; (iii ) asbestos;
(iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline
(refined and unrefined) and their respective by products and
constituents; and (vi ) any other substance, whether in the form
of a solid, liquid, gas or any other form whatsoever, which by
any "Governmental Requirements" (as defined in Subparagraph c
of this Section 11. 1) either requires special handling in its
use, transportation, generation, collection, storage, handling,
treatment or disposal, or is defined as "hazardous" or harmful
to the environment.
(b) The term "Hazardous Materials Contamination" shall
mean the contamination (whether presently existing or hereafter
occurring) of the improvements, facilities, soil, groundwater,
air or other elements on, in or of the Conveyance Parcels by
Hazardous Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements on, in or
of any other property as a result of Hazardous Materials at any
time (whether before or after the Date of Lease) emanating from
the Conveyance Parcels.
(c) The term "Governmental Requirements" shall mean all
past, present and future laws, ordinances, statutes, codes,
rules, regulations, orders and decrees of the United States,
the state, the county, the city, or any other political
subdivision in which the Conveyance Parcels is located, and any
other state, county city, political subdivision, agency,
instrumentality or other entity exercising jurisdiction over
Agency, Lessee or the Conveyance Parcels.
11.2 Site Evaluation. Lessee acknowledges that, prior to
the execution of this Lease, it has performed a thorough and
comprehensive site evaluation of the Conveyance Parcels (the
"Conveyance Parcels Evaluation" ) and that it has determined
that there is no Hazardous Materials Contamination of the
Conveyance Parcels as of the Commencement Date of this Lease.
Accordingly, Lessee assumes any and all responsibility and
Liabilities (as defined in Section 11.4 of this Lease) -for all
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Hazardous Materials Contamination, whether presently existing
or occurring during the Term of this Lease or extension thereof.
11.3 Underground Stora a Tanks.
(a) Maintenance and Repair of Tanks. Lessee shall
maintain, repair and/or replace throughout the Term any
existing and future underground storage tanks and oil
receptacles, including all associated piping, pumps and other
equipment, located on or under the Conveyance Parcels (the
"Tanks") as required by any Governmental Requirements relating
to underground storage tanks or oil receptacles.
(b) New Tanks. Lessee shall comply with the following
when replacing any Tank(s) ;
(1) Prior to installing a Tank, Lessee shall secure
the written approval of Agency. The request for
approval shall include a copy of the design plans
for the tank, showing the proposed location, size
and contents of the Tank.
(2) Lessee shall comply with all Governmental
Requirements relating to the installation,
construction and operation of Tanks.
(c) Spills and Leaks. With regard to any known or
suspected Hazardous Materials Contamination or any actual or
threatened spill, leak or release of any Hazardous Materials
(collectively a "Release" ) , Lessee shall comply with the
following:
(1) All relevant information regarding a Release on
the Conveyance Parcels must be immediately
forwarded to Agency, along with proposed remedial
measures. Lessee shall report all Releases to
the applicable
federal, state and local agencies in accordance
with Governmental Requirements, and a copy of all
such reports shall be sent to Agency.
(2) The contaminated air, surface and subsurface
environment must be cleaned-up both to the level
required by all applicable Governmental
Requirements and in accordance with the
requirements of this Lease.
(3) All Tanks that have leaked are to be removed
according to Governmental Requirements and this
Lease. Any replacement of any Tank(s) shall be
consistent with the requirements of this Lease
for new Tanks.
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A./
(d) Vacating_the_Premises with Underground Containers.
Upon vacating the Premises with aTTank(s) , Lessee shall provide
for the final disposition of the Tank(s) . The method of final
disposition shall be either abandonment-in-place or removal of
the Tank. All actions taken by Lessee shall be in accordance
with applicable Governmental Requirements and this Lease,
including, but not limited to:
11.4 Indemnification. Lessee shall save, protect, defend,
indemnify and hold harmless Agency and its officers, directors,
shareholders, employees and agents from and against any and all
liabilities, suits, actions, claims, demands, penalties,
damages (including, without limitation, penalties, fines and
monetary sanctions) , losses, costs or expenses (including,
without limitation, consultants' fees, investigation and
laboratory fees, reasonable attorneys' fees and remedial- and
response costs) (the forgoing are hereinafter collectively
referred to as "Liabilities" ) which may now or in the future be
incurred or suffered by Agency and its officers, directors,
shareholders, employees or agents by reason of, resulting from,
in connection with, or arising in any manner whatsoever as a
direct or indirect result of (1) the presence on or under, or
escape, seepage, leakage, spillage, discharge, emission or
release from the Conveyance Parcels of any Hazardous Materials
or Hazardous Materials Contamination, (2) the environmental
condition of the Conveyance Parcels, (3) the Liabilities
incurred under any Governmental Requirements relating to
Hazardous Materials, (4) the performance by Lessee of any acts,
including, but not limited to, the performance of any act
required by this Lease, (5) the performance by the Agency of
any act required to be performed by the Lessee under this
Lease, and (6) any other cause. Lessee' s obligations under
this Section 11.4 shall survive the expiration of this Lease.
11.5 Duty to Prevent Hazardous Material_Contamination.
Lessee shall take all necessary precautions to prevent the
release of any Hazardous Materials into the environment. Such
precautions shall include compliance with all Governmental
Requirements with respect to Hazardous Materials. In addition,
Lessee shall install and utilize such equipment and implement
and adhere to such procedures as are consistent with the
highest standards generally applied by
as respects the disclosure, storage, use, removal and disposal
of Hazardous Materials.
11.6 Obligation of Tenant of Remediate Premises.
Notwithstanding the obligation of Lessee to indemnify Agency
pursuant to Section 11.4 of this Lease, Lessee shall, at its
sole cost and expense, promptly take (i) all actions required
by any federal, state or local governmental agency or political
subdivision or any Governmental Reclairements and (ii) all
actions necessary to make full economic use of the Conveyance
Parcels for the purposes contemplated by this Lease and the
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DDA, which requirements or necessity arise from the presence
upon, about or beneath the Conveyance Parcels of any Hazardous
Materials or Hazardous Materials Contamination no matter when
occurring. Such actions shall include, but not be limited to,
the investigation of the environmental condition of the
Conveyance Parcels, the preparation of any feasibility studies
or reports and the performance of any cleanup, remedial,
removal or restoration work. Lessee shall take all actions
necessary to promptly restore the Conveyance Parcels to an
environmentally sound condition for the uses contemplated by
this Lease and the DDA notwithstanding any lesser standard of
remediation allowable under applicable Governmental
Requirements.
Lessee shall nevertheless obtain the Agency' s written
approval prior to undertaking any activities required by this
Section 11.6 during the Term of this Lease, which approval
shall not be unreasonably withheld so long as such actions
would not adversely affect the Conveyance Parcels or be harmful
to any other person or property. The Agency' s obligations
under this Section 11. 6 shall survive the expiration of this
Lease.
11.7 Right of Entry. Notwithstanding any other term or
provision of this Lease, Lessee shall permit the Agency or its
agents or employees to enter the Conveyance Parcels at any
time, without prior notice, to inspect, monitor and/or take
emergency or long-term remedial action with respect to
Hazardous Materials and Hazardous Materials Contamination on or
affecting the Conveyance Parcels, or to discharge Lessee' s
obligations hereunder with respect to such Hazardous Materials
and Hazardous Materials Contamination when Lessee has failed to
do so. All costs and expenses incurred by the Agency in
connection with performing Lessee' s obligations hereunder shall
be reimbursed by Lessee to the Agency within ten (10) days of
Lessee' s receipt of written request therefor.
11.8 Store or Handling of Hazardous Materials. Lessee,
at its sole cost and expense, shall comply with all
Governmental Requirements for the storage, use, transportation,
handling and disposal of Hazardous Materials. In the event
Lessee does store, use, transport, handle or dispose of any
Hazardous Materials, Lessee shall notify Agency in writing at
least ten (10) days prior to their first appearance on the
Conveyance Parcels and Lessee' s failure to do so shall
constitute a material default under this Lease. in addition to
the foregoing, Lessee shall, prior to the taking possession of
the Conveyance Parcels and upon Agency' s request thereafter,
complete a Hazardous Materials questionnaire prepared by
Agency. Lessee shall conduct all monitoring activities
required or prescribed by applicable Governmental Requirements,
and shall, at its sole cost and expense, comply with all--
posting requirements of Proposition 65 or any other similarly
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enacted Governmental Requirements. In addition, in the event
of any complaint or governmental inquiry, or if otherwise
deemed necessary by the Agency in its reasonable judgment, the
Agency may require Lessee, at Lessee' s sole cost and expense,
to conduct specific monitoring or testing activities with
respect to Hazardous Materials on the Conveyance Parcels.
Lessee' s monitoring programs shall be in compliance with
applicable Governmental Requirements, and any program related
to the specific monitoring of or testing for Hazardous
Materials on the Conveyance Parcels, shall be satisfactory to
Agency, in Agency' s reasonable discretion. Lessee shall
further be solely responsible, and shall reimburse Agency, for
all costs and expenses incurred by Agency arising out of or
connected with the removal, clean-up and/or restoration work
and materials necessary to return the Conveyance Parcels and
any property adjacent to the Conveyance Parcels affected by
Hazardous Materials emanating from the Conveyance Parcels to
their condition existing at the time of the Lessee' s Conveyance
Parcels Evaluation. Lessee' s obligations hereunder shall
survive the termination of this Lease.
11.9 Environmenta_1_Inctui.ries. Lessee shall notify Agency,
and provide to Agency a copy or ccpies, of the following
environmental permits, disclosures, applications, entitlements
or inquiries relating to the Premises: Notices of violation,
notices to comply, citations, inquiries, clean-up or abatement
orders, cease and desist orders, reports filed pursuant to
self-reporting requirements and reports filed or applications
made pursuant to any Governmental Requirement relating to
Hazardous Materials and underground tanks, and Lessee shall
report to the Agency, as soon as possible after each incident,
any unusual, potentially important incidents, including but not
limited to, the following:
(a) All required reports of releases of Hazardous
Materials, including notices of any release of
Hazardous Materials as required by any Governmental
Requirement;
(b) All fires;
(c) All instances where asbestos has been or may be
disturbed by repair work, tenant improvements or other
activities in buildings containing asbestos;
(d) All notices of suspension of any permits; -
(e) All notices of violation from Federal, State or local
environmental authorities;
(f) All orders under the State Hazardous Waste Control Act
and the State Hazardous Substance Account Act -and
corresponding federal statutes, concerning
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investigation, compliance schedules, clean up, or
other remedial actions;
(g) All orders under the Porter-Cologne Act, including
corrective action orders, cease and desist orders, and
clean-up and abatement orders;
(h) Any notices of violation from OSHA or Cal-OSHA
concerning employees' exposure to .Hazardous Materials;
(i) All complaints and other pleadings filed against
Lessee and/or Agency relating to Lessee' s storage,
use, transportation, handling or disposal of Hazardous
Materials on the Conveyance Parcels.
In the event of a release of any Hazardous Materials into the
environment, Lessee shall, as soot, as possible after the
release, furnish to the Agency a copy of any and all reports
relating thereto and copies of all correspondence with
governmental agencies relating to the release. Upon request of
the Agency, Lessee shall furnish to the Agency a copy or copies
of any and all other environmental entitlements or inquiries
relating to or affecting the Conveyance Parcels including, but
not limited to, all permit applications, permits and reports
including, without limitation, those reports and other matters
which may be characterized as confidential.
Section 12 ; ALTERATION OF IMPROVEMENTS.
Lessee shall not make or permit to be made any structural
alteration of, addition to or change in the Improvements, nor
demolish all or any part of the Improvements without the prior
written consent of Agency; provided, however, that the
foregoing shall not prohibit or restrict the repair and/or
replacement of the Improvements by Lessee. In requesting such
consent Lessee shall submit to Agency detailed plans and
specifications of the proposed work and an explanation of the
need and reasons therefor.
This provision shall not limit or set aside any obligation
of Lessee under this Lease to maintain the Improvements and the
Conveyance Parcels in a clean and safe condition, including
structural repair and restoration of damaged Improvements.
Agency shall not be obligated by this Lease to make any
improvements to the Conveyance Parcels or to assume any expense
therefor.
Lessee shall not commit or suffer to be committed any waste
or impairment of the Conveyance Parcels or the Improvements, or
any part thereof, except as otherwise permitted pursuant to
this Lease. Lessee agrees to keep the Conveyance Parcels and
the Improvements clean and clear of refuse and obstructions,
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and to dispose of all garbage, trash and rubbish in a manner
satisfactory to Agency.
Section 13. DAMAGE OR DESTRUCTION.
Lessee agrees to give notice to Agency of any fire or other
damage (collectively "casualty") that may occur on the
Conveyance Parcels within ten (10) days of such fire or
damage. In the event of such casualty Lessee agrees, to the
extent of any insurance proceeds available therefor, to make or
cause to be made full repair of such casualty, or Lessee
agrees, to the extent of any insurance proceeds available
therefor, to clear and remove from. the Conveyance Parcels all
debris resulting from such casualty and rebuild the
Improvements in accordance with plans and specifications
previously submitted to Agency and approved in writing in order
to replace in kind and scope the Improvements which existed
prior to such damage. In the event of a casualty in which the
Improvements are not required to be repaired, restored or
rebuilt by Lessee pursuant to the terms of this Section 13, and
provided Lessee does not nevertheless elect to repair, restore
or rebuild the Improvements although Lessee has no obligations
to do so, Agency may terminate this Lease.
Section 14. SALE, ASSIGNMENT SUBLE'ASE OR OTHER TRANSFER.
14. 1. Agency Right of First Refusal. Agency shall have
the right of first refusal to acquire this Lease and the
Improvements on the Conveyance Parcels, or any interest therein.
Lessee agrees to give Agency written notice of intent to
sell, assign, sublease or otherwise transfer this Lease or any
interest herein (excluding "Permitted Encumbrances" as defined
in Section 15 hereof) , including the Improvements ( "Notice of
Sale") . The Notice of Sale to Agency shall include the exact
and complete terms of any offer to sell, assign, sublease or
transfer by Lessee. If Lessee has received a bona fide offer
from a third party, the Notice of Sale shall include such bona
fide offer, duly executed by such third party.
For a period of thirty (30) days after receipt by Agency of
the Notice of Sale, Agency shall have the right to give written
notice to Lessee of Agency' s exercise of Agency' s right to
acquire this Lease, or the interest proposed to be sold,
assigned, subleased or transferred on the same terms set forth
in the Notice of Sale.
In the event Agency declines or fails to exercise its right
of first refusal within thirty (30) days after receipt of the
Notice of Sale, and thereafter Lessee modifies the terms of any
offer or proposed sale, assignment, sublease or transfer by
changing the price or other consideration, the interest rate,
or the amount of down payment by more than five percent
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or by otherwise materially changing the terms and conditions of
the offer or proposed sale, assignment, sublease or transfer,
then Agency' s right of first refusal shall reapply to said
transaction as of the occurrence of any of the aforementioned
events.
14.2. Right to Transfer. Except for leases of particular
dwelling units to tenants, Lessee shall not sell, assign,
sublease, refinance the loans secured by the Permitted
Encumbrance(s) (as defined in Section 15 hereof) of, or
otherwise transfer this Lease or any right therein, nor make
any total or partial sale, assignment, sublease, refinancing or
transfer in any other mode or form of the whole or any part of
the Conveyance Parcels or the Improvements (each of which
events is referred to in this Agreement as an "Assignment" ) ,
without prior written approval of Agency, which approval- shall
not be unreasonably withheld as more particularly set forth
below in this Section 14.2. In the case of a refinancing of
the loan(s) secured by Permitted Encumbrance(s) , the prior
written approval of the Agency shall be limited to verifying
that the interest rate (including points and other fees)
payable by Lessee pursuant to such refinancing does not exceed
the market rate for similar loans at the time of such
refinancing. Notwithstanding anything else herein contained,
the term "Assignment" shall not be deemed to include the
obtaining of the "Construction Loan", the "Permanent Loan" and
any "Capital Improvement Loan( s)" (all as hereinafter defined) ,
but shall be deemed to include all refinancings thereof and any
other loans approved by Agency. Any purported assignment
without the prior written consent of Agency shall render this
Lease absolutely null and void and shall confer no rights
whatsoever upon any purported assignee or transferee. The
approval of Agency to any Assignment shall not be unreasonably
withheld if the proposed purchaser, assignee, sublessee or
transferee has reasonably demonstrated to the Agency, at least
thirty (30) days prior to the effective date of such
Assignment, such proposed purchaser' s, assignee' s, sublessee' s
or transferee' s financial capability and overall competence and
experience to constrict and operate the Improvements. Review
of experience in opelting similar projects shall not be
required with respect to institutional lenders providing
financing pursuant to Section 15 hereof so long as the original
Lessee (or a successor that has been expressly approved in
writing by the Agency) remains responsible for operating the
Improvements and performing as Lessee pursuant to this Lease.
Approval by Agency of any sale, assignment, sublease or
transfer shall be conditioned upon such purchaser, assignee,
sublessee or transferee agreeing in writing to assume the
rights and obligations thereby sold, assigned, subleased or
transferred, and to keep and perform all covenants, conditions
and provisions of this Lease which are applicable to the rights
acquired. -
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In the absence of specific written agreement by Agency, no
such sale, assignment, sublease or transfer of this Lease or
the Conveyance Parcels or the Improvements (or any portion
thereof) , or approval by Agency of any such sale, assignment,
sublease or transfer shall be deemed to relieve Lessee or any
other party from any obligation under this Lease.
Lessee shall only sell, assign, sublease or transfer the
Conveyance Parcels and the Improvements as a whole and is not
permitted to subdivide the Conveyance Parcels and the
Improvements for the duration of this Lease without the prior
written approval of Agency.
Notwithstanding anything else contained in this Section 14,
this Lease may be assigned, without the consent of Agency, to
the purchaser at any foreclosure sale, whether judicial or
non-judicial, or to the beneficiary or mortgagee under any
Permitted Encumbrance (as defined in Section 15) , pursuant to
foreclosure or similar proceedings, or pursuant to an
assignment or other transfer of this Lease to such beneficiary
or mortgagee in lieu thereof, and may thereafter be assigned by
such beneficiary or mortgagee without Agency' s consent, and any
such purchaser, beneficiary, mortgagee or assignee shall be
liable to perform the obligations herein imposed on Lessee,
other than as set forth in Sections 15 and 16 of this Lease,
only for and during the period that such purchaser,
beneficiary, mortgagee or assignee is in possession or
ownership of the leasehold estate created hereby.
14.3 . Lessee Right of First Refusal. Lessee shall have
the right of first refusal to acquire Agency' s fee interest in
the Conveyance Parcels, Agency' s interest as lessor in this
Lease and Agency' s reversionary interest in the Improvements on
the Conveyance Parcels (collectively the "Agency' s Interest" ) ,
or any interest therein. Such right of first refusal shall not
apply to any transfer of the Agency' s Interest (1) to the City
of Huntington Beach, or (2) for no monetary consideration or
tangible financial assets.
Agency agrees to give Lessee written notice of intent to
sell, assign or otherwise transfer the Agency' s Interest, or
any interest herein. The Notice of Sale to Lessee shall
include the exact and complete terms of any offer to sell,
assign, or transfer by Agency. If Agency has received a bona
fide offer from a third party, the Notice of Sale shall include
such bona fide offer, duly executed by such third party.
For a period of thirty (30) days after receipt by Lessee of
the Notice of Sale, Lessee shall have the right to give written
notice to Agency of Lessee' s exercise of Lessee' s right to
acquire the Agency' s Interest, or the interest proposed to be
sold, assigned or transferred on the same terms set forth in
the Notice of Sale.
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In the event Lessee declines or fails to exercise its right
of first refusal within thirty (30) days after receipt of the
Notice of Sale, and thereafter Agency modifies the terms of any
offer or proposed sale, assignment, sublease or transfer by
changing the price or other consideration, the interest rate,
or the amount of down payment by more than five percent (5%) ,
or by otherwise materially changing the terms and conditions of
the offer or proposed sale, assignment or transfer, then
Lessee' s right of first refusal shall reapply to said
transaction as of the occurrence of any of the aforementioned
events.
Section 15. FINANCING.
Lessee may, at any time and from time to time during the
Term, upon prior written notice to the Agency and subject to
the requirements of Sections 5.3 and 14.2 hereof, mortgage,
pledge, hypothecate or otherwise encumber to a federally or
state chartered bank or savings and loan, a life insurance
company, a mortgage company, a pension fund, investment trust
or similar institutional lender (herein called "Lender") by
deed of trust or mortgage or other security instrument all or
any portion of Lessee' s right, title and interest pursuant to
this Lease and the leasehold estate hereby to secure financing
of the construction of the Improvements, including off-site
improvements (the "Construction Loan" ) , to secure a permanent
loan for the Improvements ( "Permanent Loan" ) , and, following
thirty (30) days prior written notice to Agency (which notice
shall include an itemization of and budget for the capital
improvements to be financed) , to secure financing of capital
improvements to the Improvements ( "Capital Improvement
Loans)") . The encumbrances securing the Construction Loan,
Permanent Loan and the Capital Improvement Loan(s) , together
with refinancing of the Permanent Loan and the Capital
Improvement Loan( s) approved by the Agency pursuant to
Section 14.2, and any other loan or encumbrance approved by the
Agency pursuant to this Lease shall be deemed to be "Permitted
Encumbrances. "
The proceeds of the Permanent Loan shall be used solely to:
(i) pay the Construction Loan in full;
(ii) pay any costs of construction of the
Improvements which were not financed by the Construction Loan;
and
(iii) pay the costs of obtaining the Permanent Loan.
There shall be included in costs of construction of the
Improvements interest on the Construction Loan, fees (including
but not limited to legal fees) -and costs incurred in obtaining
the Construction Loan. Lessee shall submit to the Agency prior
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to the funding of the Permanent Loan a statement certified by
an officer of the Lessee stating:
(a) the amount of the Construction Loan;
(b) the costs of construction of the Project not
financed by the Construction Loan; and
(c) the costs of obtaining the Permanent Loan.
The Lessee shall also provide to the Agency such evidence as
the Agency may reasonably require of the amounts of items
(a) through (c) above. If the amount of the Permanent Loan
complies with the requirements set forth above, then the Agency
agrees to provide to Lessee such statement as the Lender making
the Permanent Loan may require evidencing the Agency' s
satisfaction that the amount of the Permanent Loan satisfies
the requirements herein provided for with respect to the
maximum amount of the Permanent Loan, provided that the Agency
shall have no liability under said statement other than the
Agency' s acknowledgment that the amount of the Permanent Loan
meets the requirements here and above set forth.
The proceeds of any Capital Improvement Loan(s) shall be
used solely to pay (i ) the costs of construction of capital
improvements to the Improvements, and (ii ) the costs of
obtaining the Capital Improvement Loan(s) .
Agency and Lessee acknowledge and agree that except as
provided in Section 16 hereof neither Agency' s interest or fee
owner of the Conveyance Parcels (including its reversionary
interest therein and in the Improvements) nor Agency' s right to
receive Base Rent hereunder shall be subordinate to any
Permitted Encumbrance or any other lien, mortgage, deed of
trust, pledge or other encumbrance of Lessee' s leasehold
interest hereunder; provided, however, that if Lessee' s lender
requires Lessee to obtain the subordination of Agency' s
interest to its lien of the Permitted Encumbrance, the Agency
shall consider and shall not unreasonably withhold its consent
to such subordination.
Section 16. RIGHTS AND DUTIES OF LESSEE' S MORTGAGEES.
16. 1. Lessee' s Right to Hypothecate. Notwithstanding any
provision of this Lease to the contrary, Lessee' s right to
execute, acknowledge and deliver a Permitted Encumbrance shall
be solely upon Lessee' s leasehold estate and shall be subject
to all terms, covenants and conditions contained herein and
provided further, that Lessee shall, at Lessee' s expense, cause
to be recorded for Agency' s benefit in the Office of the
Recorder of Orange County, California, a written Request for
Notice of Default and for a copy of any Notice of Sale under
such Permitted Encumbrance as provided by the statutes of the
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State of California. Any notice to be given to Agency pursuant
to this Section 16 may be delivered to Agency, or sent to it by
United States registered or certified mail with postage paid at
its address set forth in Section 27.7 hereof or at such other
address as Agency may specify by written notice to the
encumbrancers of Lessee' s leasehold interest pursuant to
Permitted Encumbrances ("Lessee' s Mortgagees)") . Except as
provided herein, the right of any Lessee' s Mortgagee shall be
subject to all of the terms and provisions of this Lease as the
same may from time to time be amended. Except as otherwise
specifically provided herein, any purchaser of Lessee' s
leasehold estate upon foreclosure or under power of sale shall
succeed to all rights of Lessee hereunder, and shall be liable
for performance of all provisions hereof to be performed by
Lessee and accruing during the period of its holding of such
leasehold estate. Neither this Lease nor any of the terms
hereof may be amended, modified, changed or cancelled without
the prior written consent of Lessee' s Mortgagee. The
provisions of this Section 16. 1 are for the benefit of and are
to be enforceable by any Lessee' s Mortgagee.
16.2 Notice to and Service on Lessee' s Mortgage. Agency
shall mail to Lessee's Mortgagee should Lessee incur any
Permitted Encumbrance, a duplicate copy of any and all notices
Agency may from time to time give to or serve on Lessee
pursuant to or relating to this Lease. Lessee shall at all
times keep Lessor informed in writing of the name and mailing
address of Lessee' s Mortgagee and any changes in the mailing
address of Lessee' s Mortgagee. Any notices or other
communications permitted by this or any other Section of this
Lease or by law to be served on or given to Lessee' s Mortgagee
by Agency shall be deemed duly served on or given to Lessee' s
Mortgagee when deposited in the United States mail, first-class
postage prepaid, addressed to Lessee' s Mortgagee at the last
mailing address for Lessee' s Mortgagee furnished in writing to
Agency by Lessee or Lessee' s Mortgagee.
16.3 Rights of Lessee' s Mortgagee. Should Lessee incur
any Permitted Encumbrance, the Lessee' s Mortgagee having such
Permitted Encumbrance shall have the right, without further
consent of Agency, at any time during the Term to:
(1) Do any act or thing required of Lessee under this
Lease, and any such act or thing done and performed by
Lessee' s Mortgage shall be as effective to prevent a
forfeiture of Lessee' s rights under this Lease as if
done by Lessee himself;
(2) Transfer, convey or assign the right, title and
interest of Lessee in and to the leasehold estate
created by this Lease to any purchaser at any
foreclosure sale, whether the foreclosure is conducted
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pursuant to court order or pursuant to a power of sale
contained in the Permitted Encumbrance;
(3) Acquire and succeed to the right, title and interest
of Lessee under this Lease by virtue of any
foreclosure proceeding, whether the foreclosure is
conducted pursuant to a court order or pursuant to a
power of sale contained in the Permitted Encumbrance,
or by virtue of a transfer in lieu of foreclosure
( "Foreclosure" ) ; and
(4) After Lessee' s Mortgagee has acquired Lessee' s right
in the leasehold estate by Foreclosure and paid all
accrued delinquent rent to Agency, reduce all rents
(specifically excluding Lessee' s obligations to pay
for utilities, real estate taxes and personal property
taxes pursuant to Section 7 of this Lease) due
hereunder as follows:
(i) Reduce all rents due under this Lease,
including the Base Rent, to One Dollar ($1.00)
per year for a period of one year following the
Foreclosure;
(ii) Reduce all rents due under this Lease,
including the Base Rent, to twenty-five percent
(25%) of the rent due for the second (2nd) year
following the Foreclosure;
(iii) Reduce all rents due under this Lease,
including the Base Rent, to fifty percent (507.)
of the rent due for the third (3rd) year
following the Foreclosure.
(iv) Notwithstanding anything provided in this
subsection 16.3(4) , if Lessee' s Mortgagee assigns
the leasehold estate to a third party, then said
third party shall be liable for the full amount
of said Base Rent to the extent, and only to the
extent, the same accrues following such
assignment.
16.4 Right of Lessee' s Mortgagee to Cure Defaults. Should
Lessee incur a Permitted Encumbrance, before Agency may
terminate this Lease because of any default under or breach of
this Lease by Lessee, Agency must given written notice of the
default or breach to Lessee' s Mortgagee, provided Lessee has
complied with the requirements of Section 16.2 hereof for
notice to and service on such Lessee' s Mortgagee, and afford
Lessee' s Mortgagee the opportunity after service of such notice
to:
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(1) Cure the breach or default (including the payment of
all accrued delinquent rent) within sixty (60) days
where the default can be cured by the payment of money
to Agency or some other person;
(2) Cure the breach or default within one hundred eighty
(180) days where the breach or default must be cured
by something other than the payment of money and can
be cured within that time; or
(3 ) Cure the breach or default in such reasonable time as
may be required where something other than money is
required to cure the breach or default and cannot be
performed within one hundred eighty (180) days,
provided that acts to cure the breach or default are
commenced within that time period after service of
notice of default on Lessee' s Mortgagee by Agency and
are thereafter diligently continued by Lessee' s
Mortgagee.
16.5 Foreclosure in Lieu of Curin2 Default.
Notwithstanding any other provision of this Lease, Lessee' s
Mortgagee under a Permitted Encumbrance may forestall
termination of this Lease by Agency for a default under or
breach of this Lease by Lessee by commencing proceedings to
foreclose such Permitted Encumbrance on the leasehold estate
created by this Lease. The proceedings so commenced may be for
foreclosure of the Permitted Encumbrance by order of court or
for foreclosure of the Permitted Encumbrance under a power of
sale contained in the instrument creating the Permitted
Encumbrance. The proceedings shall not, however, forestall
termination of this Lease by Agency for the default or breach
by Lessee unless:
(1) They are commenced within sixty (60) days after
service on Lessee' s Mortgagee of the notice described
in Section 16.2 of this Lease;
(2) They are, after having been commenced, diligently
pursued in the manner provided by law; and
(3) Lessee' s Mortgagee keeps and performs all of the
terms, covenants and conditions of this Lease
(including the payment of past due' rent under this
Lease) requiring the payment or expenditure of money
by Lessee until the foreclosure proceedings are
complete or are discharged by redemption,
satisfaction, payment or conveyance of the leasehold
estate to Lessee' s Mortgagee. 1
16.6 Assignment Without Consent on Foreclosure. Provided
that Lessee Mortgagee under any Permitted Encumbrance of this
Lease gives written notice of transfer to Agency setting forth
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the name and address of the transferee as well as the effective
date of the transfer, the written consent of Agency shall not
be required for transfer of Lessee' s right, title and interest
under this Lease to:
(1) Any purchaser at a foreclosure sale of the Permitted
Encumbrance, whether the foreclosure is conducted
pursuant to a court order or pursuant to a power of
sale in the instrument creating the Permitted
Encumbrance; or
(2) A purchaser from Lessee' s Mortgagee after foreclosure
where Lessee' s Mortgagee was the purchaser of Lessee' s
interest at the foreclosure sale of the Permitted
Encumbrance, or acquired Lessee' s interest by transfer
in lieu of foreclosure, and Lessee' s Mortgagee is a
Lender.
16.7. New Lease to Lessee' s Mortgagee. Notwithstanding
any other provision of this Lease, should this Lease terminate
because of the insolvency or bankruptcy of Lessee or because of
any default under or breach of this Lease by Lessee, Agency
shall promptly execute and deliver a new Lease for the
Conveyance Parcels to Lessee' s Mortgagee under a Permitted
Encumbrance, provided:
(1) A written request for the new Lease is served on
Agency by Lessee' s Mortgagee within thirty (30) days
after service on Lessee' s Mortgagee of the notice
described in Section 16.2 of this Lease.
(2) The new Lease is for a tern ending on the same date
the Term would have ended had not this Lease been
terminated, provides for the payment of unpaid rent
accrued prior to the Foreclosure as provided in
Subsection (3) hereof and rent thereafter at the same
rate that would have been payable under this Lease
during the remaining Term had this Lease not been
terminated, except for the rent reduction provided for
in Section 16.3, and contains the same terms,
covenants, conditions and provisions as are contained
in this Lease.
(3) Lessee' s Mortgagee, on execution of the new Lease by
Agency, shall pay any and all sums that would at the
time of the execution of the new Lease be due under
this Lease but for its termination (including the
payment of past due rent under this Lease) and shall
otherwise fully cure, or agree in writing to cure as
provided in Section 16.4 of this Lease, any other
defaults under or breaches of this Lease committed by
Lessee that can be cured, and which defaults are
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specified in the notice described in Section 16.2 of
this Lease.
(4) Lessee' s Mortgagee, on execution of the new Lease,
shall pay all reasonable costs and expenses, including
reasonable attorney' s fees and court costs, incurred
in terminating this Lease, recovering possession of
the Conveyance Parcels from Lessee and preparing the
new Lease. Said costs and expenses shall not be
deemed to be Operating Expenses.
(5) The new Lease shall be subject to all existing
subleases under which the sublessees.
(6) The new Lease shall:
(a) Extend the time for performance of any
unperformed acts required by this Lease for such
period as is equal to the delay in performance of
the act caused by Lessee' s inability or failure
to perform the act and the time required to
terminate this Lease and execute a new Lease to
Lessee' s Mortgagee; and
(b) Excuse the performance of any act required by
this Lease that has already been performed by
Lessee' s Mortgagee, and any assignee of Lessee' s
Mortgagee as Lessee under the new Lease, shall be
liable for payment of all costs and expenses
incurred in the performance of any act required
by this Lease, whether performed before or after
execution of the new Lease, which is claimed as a
lien against the Conveyance Parcels.
16.8. No Merger of Leasehold and Fee Estates. Should
Lessee incur a Permitted Encumbrance, then there shall
thereafter, during the existence of the Permitted Encumbrance,
be no merger without the consent of Lessee' s Mortgagee under
such Permitted Encumbrance of the leasehold estate created by
this Lease and the fee estate in the Conveyance Parcels merely
because both estates have been acquired or become vested in the
same person or entity.
16.9. Lessee' s Mortgagee as Assignee of Lease. No
Lessee' s Mortgagee under any Permitted Encumbrance shall be
liable to perform the obligations of the Lessee under this
Lease unless and until such time as Lessee' s Mortgagee becomes
the owner of the leasehold estate created hereby and acquires
the right, title and interest of Lessee under this Lease
through foreclosure, transfer in lieu of foreclosure,
assignment or otherwise, and thereafter such Lessee' s Mortgagee
shall remain liable only so long as such Lessee' s Mortgagee
remains as the owner of the leasehold estate.
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16. 10. Lessee' s Mortgagee as Including_Subsequent
Security Holders. The term "Lessee' s Mortgagee as used in
this Lease shall mean not only the person, persons or entity
that loaned money to Lessee and is named as beneficiary,
mortgagee, secured party or security holder in the instrument
creating any Permitted Encumbrance, but also all subsequent
assignees and holders of the instrument and interest secured by
such instrument.
16. 11. Subordination of Rents. Any Lessee' s Mortgagee
under any Permitted Encumbrance who comes into possession of
the Conveyance Parcels pursuant to any power of sale or
remedies provided in such Permitted Encumbrance or foreclosure
of such Permitted Encumbrance, or deed or assignment in lieu
thereof, or any purchaser at a foreclosure or trustee' s sale,
in any judicial or non-judicial foreclosure of such Permitted
Encumbrance, shall take the Conveyance Parcels subject to
unpaid rent due under this-Lease which accrued prior to the
time such Lessee' s Mortgagee or purchaser came into possession
of the Conveyance Parcels.
16. 12. Agency' s Right to_ Cure Default. Lessee shall be
deemed to be in default under this Lease if there is a default
under the terms of any Permitted Encumbrance and Lessee shall
fail to cure such default within the period provided under the
instruments evidencing any such Permitted Encumbrance, or by
law. In the event of such default, including the nonpayment
of money under any such Permitted Encumbrance, Agency shall
have the right to cure the same during the period provided
under the terms of the Permitted Encumbrance, or by law, and
if not reimbursed by Lessee for all advances, costs and
expenses of Agency in connection with the curing of such
default within such period, Agency shall further have the right
to continue to keep and maintain any such Permitted Encumbrance
in good standing, and in which event Agency may, at its option,
upon the expiration of the original period within which said
nonpayment default is to be cured, declare Lessee to be in
default under this Lease. Agency shall be entitled to exercise
the remedies provided in this Lease for any default described
in this Section.
Section 17. INDEMNITY.
During the Term, Lessee agrees that Agency and City, their
agents, officers, representatives and employees, shall not be
liable for any claims, liabilities, penalties, fines or for any
damage to the goods, properties or effects of Lessee, its
sublessees or representatives, agents, employees, guests,
licensees, invitees, patrons or clientele or of any other
person whomsoever, nor for personal injuries to, or deaths of
any persons, whether caused by or resulting from any act or
omission of Lessee or its sublessees or any other person -on or
about the Conveyance Parcels and the Improvements, or in
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connection with the operation thereof, or from any defect in
the Conveyance Parcels or the Improvements. Lessee agrees to
indemnify and save free and harmless Agency and City and their
authorized agents, officers, representatives and employees
against any of the foregoing liabilities and any costs and
expenses incurred by Agency or City on account of any claim or
claims therefor. Lessee shall not be responsible for (and such
indemnity shall not apply to) any acts, errors or omissions of
Agency, City, or their respective agents, officers,
representatives or employees.
Section 18. INSURANCE.
18. 1. Insurance to be Provided by Lessee. During the
Term, Lessee, at its sole cost and expense, shall:
(a) raintain or cause to be maintained a policy or
policies of insurance against loss or damage to the
Improvements of all property of an insurable nature
located upon the Conveyance Parcels, resulting from
fire, lightning, vandalism, malicious mischief, and
such other perils ordinarily included in extended
coverage fire insurance policies. Such policy or
policies shall be required to provide coverage against
loss or damage resulting from flood and/or earthquake
only to the extent such coverage is available at
commercially reasonable rates and is required by any
lender making a loan to Lessee which is secured by the
Conveyance Parcels. Such insurance policy shall name
Agency as an additional insured and shall be
maintained in an amount not less than one hundred
percent (100%) of the full insurable value of the
Improvements, as defined herein in this Section 18.
(b) Maintain or cause to be maintained use and occupancy
or business interruption or rental income insurance
against the perils of fire, lighting, vandalism,
malicious mischief, and such other perils ordinarily
included in extended coverage fire insurance policies,
in an amount equal to not less than twelve (12)
months' rental under this Lease.
(c) Maintain or cause to be maintained public liability
insurance issued by a company with a Best' s rating of
not less than A, to protect against loss from
liability imposed by law for damages on account of
personal injury, including death therefrom, suffered
or alleged to be suffered by any person or persons
whomsoever on or bout the Conveyance Parcels and the
Improvements, or in connection with the operation
thereof, resulting directly or indirectly from any
acts or activities of Lessee or its sublessees,-- or any
person acting for Lessee, or under their respective
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control or direction, and also to protect against loss
from liability imposed by law for damages to any
property of any person occurring on or about the
Conveyance Parcels and the Improvements, or in
connection with the operation thereof, caused directly
or indirectly by or from acts or activities of Lessee
of its sublessees, or any person acting for Lessee, or
under their respective control or direction. Such
property damage and personal injury insurance shall
also provide for and protect against incurring any
legal cost in defending claims for alleged loss. Such
personal injury and property damage insurance shall be
maintained in full force and effect during the entire
term of this Lease in the amount of at
least Dollars ($ ) combined
single limit, naming Agency and City as additional
insureds. If the operation under this Lease results
in an increased or decreased risk in the reasonable
determination of Agency, then Lessee agrees that the
minimum limit hereinabove designated shall be changed
accordingly upon request by Agency. Lessee agrees
that provisions of this paragraph as to maintenance of
insurance shall not be construed as limiting in any
way the extent to which Lessee may be held responsible
for the payment of damages to persons or property
resulting from Lessee' s activities, activities of its
sublessees or the activities of any other person or
persons for which Lessee is otherwise responsible.
(d) Maintain or cause to be maintained worker' s
compensation insurance issued by a responsible carrier
authorized under the laws of the State of California
to insure employers against liability for compensation
under the workers' compensation laws now in force in
California, or any laws hereafter enacted as an
amendment or supplement thereto or in lieu thereof.
Such workers' compensation insurance shall cover all
persons employed by Lessee in connection with the
Conveyance Parcels and the Improvements and shall
cover full liability for compensation under any such
act aforesaid, based upon death or bodily injury
claims made by, for on behalf of any person incurring
or suffering injury or death in connection with the
Conveyance Parcels or the Improvements or the
operation thereof by Lessee.
16.2. Definition of "Full Insurable Value" . The term
"full insurable value as used in this Section 18 shall mean
the actual replacement cost (excluding the cost of excavation,
foundation and footings below the lowest floor and without
deduction for depreciation) of the Improvements, including the
cost of construction of the Improvements, architectural- and
engineering fees, and inspection and supervision. To ascertain
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the amount of coverage required, Lessee shall cause the full
insurable value to be determined from time to time by appraisal
by the insurer or, if no such appraisal is available, by an
appraiser mutually acceptable to Agency and Lessee, not less
often than once every three (3 ) years.
18.3. General Insurance Provisions. All liability
policies of insurance provided for in this Section 18 shall
name Lessee as the insured and Agency as an additional insured,
as their respective interests may appear. All property
casualty insurance policies shall include the interest of any
Lessee' s Mortgagee, and may provide that any loss is payable
jointly to Lessee and Lessee' s Mortgagee in which event such
policies shall contain standard mortgage loss payable clauses.
Lessee agrees to timely pay all premiums for such insurance
and, at its sole cost and expense, to comply and secure
compliance with all insurance requirements necessary for the
maintenance of such insurance.
Lessee agrees to submit policies of all insurance required
by this Section 18 of this Lease, or certificates evidencing
the existence thereof, to Agency on or before the effective
date of this Lease, indicating full coverage of the contractual
liability imposed by this Lease. At least thirty (30) days
prior to expiration of any such policy, copies of renewal
policies, or certificates evidencing the existence thereof,
shall be submitted to Agency.
All insurance provided for under this Section 18 shall be
effected under policies issued by insurers of recognized
responsibility, licensed or permitted to do business in the
State of California, approved by Agency.
All policies or certificates of insurance shall%
(i) provide that such policies shall not be cancelled or
limited in any manner without at least thirty (30) days prior
written notice to Agency; (ii) provide that such coverage is
primary and not contributing with any insurance as may be
obtained by the Agency and shall contain a waiver of
subrogation for the benefit of the City and the Agency; and
(iii) name the City, Agency, and their respective officers,
agents, and employees as additional insureds under such
policies.
18.4. Failure to Maintain Insurance. If Lessee fails or
refuses to procure or maintain insurance as required by this
Lease, Agency shall have the right, at Agency' s election, and
upon ten (10) days prior notice to Lessee, to procure and
maintain such insurance. The premiums paid by Agency shall be
treated as added rent due from Lessee, to be paid on the first
day of the month following the date on which the premiums were
paid. Agency shall give prompt notice of the payment of -such
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premiums, stating the amounts paid and the name of the
insured(s) .
18.5. Insurance Proceeds Resulting from Loss or Damage to
Improvements. All proceeds of insurance with respect to loss
or damage to the Improvements during the term of this Lease
shall be payable, under the provisions of the policy of
insurance, to Lessee, and said proceeds shall constitute a
trust fund to be used for the restoration, repair and
rebuilding of the Improvements in accordance with plans and
specifications approved in writing by Agency. To the extent
that such proceeds exceed the cost of such restoration, repair
or rebuilding, then such proceeds shall be apportioned between
Lessee and Agency as their interests may appear.
Notwithstanding the foregoing, within the period during
which there is an outstanding mortgage upon the Improvements,
such proceeds shall be payable in accordance with Section 18.3
of this Lease.
In the event this Lease is terminated by mutual agreement
of Agency and Lessee and said Improvements are not restored,
repaired or rebuilt, the insurance proceeds shall be jointly
retained by the Agency and Lessee and shall be applied first to
any payments due under this Lease from Lessee to Agency, second
to restore the Conveyance Parcels to a neat and clean
condition, and finally any excess shall be apportioned between
Lessee and Agency as their interests may appear; provided,
however, that within any period when there is an outstanding
mortgage upon the Improvements, such proceeds shall be applied
first to discharge the debt secured by the mortgage and then
for the purposes and in the order set forth above in this
paragraph.
The value of each interest for the purpose of apportioning
excess proceeds under this Section 18.5 shall be the fair
market value of such interests immediately prior to the
occurrence of the damage or destruction.
Section 19. EMINENT DOMAIN.
In the event that the Conveyance Parcels and/or the
Improvements or any part thereof shall be taken for public
purposes by condemnation as a result of any action or
proceeding in eminent domain, then, as between Agency and
Lessee (or mortgagee, if a mortgage is then in effect) , the
interests of Agency and Lessee (or mortgagee) in the award and
the effect of the taking upon this Lease shall be as follows:
(a) In the event of such taking of only a part of the
Conveyance Parcels, leaving the remainder of the
Conveyance Parcels in such location and in such -form,
shape and size as to be used effectively and
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practicably for the conduct thereon of the uses
permitted hereunder, this Lease shall terminate and
end as to the portion of the Conveyance Parcels so
taken as of the date title to such portion vests in
the condemning authority, but shall continue in full
force and effect as to the portion of the Conveyance
Parcels not so taken and from and after such date the
rental required by this Lease to be paid by Lessee to
Agency shall be reduced in the proportion which the
number of square feet so taken bears to the total
number of square feet in the Conveyance Parcels. A
taking of the Gothard Realignment Area shall be deemed
such a taking.
(b) In the event of taking of only a part of the
Conveyance Parcels, leaving the remainder of the
Conveyance Parcels in such location, or in such form,
shape or reduced size as to render the same not
effectively and practicably usable, for the conduct
thereon of the uses permitted hereunder, this Lease
and all right, title and interest thereunder shall
cease on the date title to the Conveyance Parcels or
the portion thereof so taken vests in the condemning
authority.
(c) In the event the entire Conveyance Parcels is so
taken, this Lease and all of the right, title and
interest thereunder, shall cease on the date title to
the Conveyance Parcels so taken vests in the
condemning authority.
(d) Promptly after a partial taking, at Lessee' s expense
and in the manner specified in provisions of this
Lease related to maintenance, repairs, alterations,
Lessee shall restore the Improvements, to the extent
of condemnation proceeds received by Lessee, so as to
place them in a condition suitable for the uses and
purposes for which the Conveyance Parcels was leased.
(e) In the event of any taking under subparagraphs (a) ,
(b) or (c) hereinabove, that portion of any award of
compensation attributable to the fair market value of
the Conveyance Parcels or portion thereof taken,
valued as subject to this Lease, shall belong to
Agency. That portion of any award attributable to the
fair market value of Lessee' s leasehold interest in
the Conveyance Parcels pursuant to this Lease shall
belong to Lessee. That portion of any award
attributable to the fair market value of the
Improvements or portion thereof taken shall belong to
Agency and Lessee, as their interests may appear,
except that in the event of a partial taking, where
the Lease remains in effect and Lessee is obligated to
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restore or repair the Improvements, then Lessee shall
be entitled to any portion of the award attributable
to severance damages to the remaining Improvements.
Said award shall be used for the restoration, repair
or rebuilding of the Improvements in accordance with
plans and specifications approved in writing by
Agency. To the extent that said award for severance
damages exceeds the cost of such restoration, repair
or rebuilding, then such award shall be apportioned
between Lessee and Agency as their interests may
appear. The value of each interest for the purpose of
apportionment under this Section shall be the fair
market value of such interests at the time of the
taking.
(f) Provided, however, that within the period during which
there is an outstanding mortgage on the Improvements,
the mortgagee shall be entitled to any portion of the
award attributable to the Improvements, to the extent
of its interest therein. The mortgagee may at its
option apply said portions of the award to restoration
of the Improvements or to reduction of the mortgage.
Any excess portion of the award attributable to the
condemnation of the Improvements shall be apportioned
between Lessee and Agency as their interests may
appear.
(g) Notwithstanding the foregoing provisions of this
Section, Agency may, in its discretion and without
affecting the validity and existence of this Lease,
transfer Agency' s interests in the Conveyance Parcels
in lieu of condemnation to any authority entitled to
exercise the power of eminent domain. In the event of
such transfer by Agency, Lessee (or mortgagee if a
mortgage is then in effect) and Agency shall retain
whatever rights they may have to recover from said
authority the fair market value of their respective
interests in the Improvements taken by the authority.
(h) All valuations to be made pursuant to this Section 19
shall be made by mutual agreement of Agency and
Lessee, or by arbitration pursuant to Section 27. 15 if
Agency and Lessee are unable to so agree.
Section 20. OBLIGATION TO REFRAIN FROM DISCRIMINATION.
There shall be no discrimination against or segregation of
any person or group of persons, on account of sex, marital
status, race, color, creed, religion, national origin or
ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the Conveyance Parcels and
the Improvements, and Lessee itself or any person claiming
under or through it shall not establish or permit any such
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�l
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees thereof
or any portion thereof, or in the providing of goods, services,
facilities, privileges, advantages and accommodation.
Lessee shall refrain from restricting the rental, sale or
lease of the Conveyance Parcels and the Improvements, or any
portion thereof, on the basis of sex, marital status, race,
color, creed, religion, ancestry or national original of any
person. All such deeds, leases or contracts shall contain or
be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In Leases:
"The lessee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming
under or through it, and this lease is made and accepted upon
and subject to the following conditions:
"That there shall be no discrimination against or
segregation of any person or group of persons, on
account of sex, marital status, race, color, creed,
religion, national origin, or ancestry, in the:
leasing, subleasing, transferring, use, occupancy,
tenure, or enjoyment of the premises herein leased nor
shall the lessee itself, or any person claiming under
or through it, establish or permit any such practice
or practices of discrimination or segregation with
reference to the selecticn, location, number, use, or
occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. "
(b) In Contracts:
"There shall be no discrimination against or segregation
of, any person or group of persons on account of sex, marital
status, race, color, creed, religion, national origin or
ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the premises, nor shall the
transferee itself or any person claiming under or through it,
establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use of occupancy of tenants, lessees,
subtenants, sublessees or vendees of the premises. "
Section 21. NONDISCRIMINATION IN EMPLOYMENT.
Lessee, for itself and its successors and assigns, agrees
that during the construction of the Improvements provided for
in this Lease, and during any work of repair or replacement,
Lessee will not discriminate against any employee or applicant
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for employment because of race, color, creed, religion, sex,
marital status, ancestry or national origin.
Section 22. LABOR STANDARDS.
Lessee shall comply, and require all contractors and
subcontractors employed pursuant to this Lease to comply with
all applicable labor standards provisions of the California
Labor Code and federal law, including payment of prevailing
wage for off-site work.
Section 23. COMPLIANCE WITH LAW.
Lessee agrees, at its sole cost and expense, to comply and
secure compliance with all the requirements now in force, or
which may hereafter be in force, of all municipal, county,
state and federal authorities, pertaining to the Conveyance
Parcels and the Improvements, as well as operations conducted
thereon, and to faithfully observe and secure compliance with,
in the use of the Conveyance Parcels and the Improvements all
applicable county and municipal ordinances and state and
federal statutes now in force or which may hereafter be in
force, and to pay before delinquency all taxes, assessments,
and fees, if any, assessor levied upon Lessee or the Conveyance
Parcels or the Improvements, including the land and any
buildings, structures, machines, appliances or other
improvements of any nature whatsoever, erected, installed or
maintained by Lessee or by reason of the business or other
activities of Lessee upon or in connection with the Conveyance
Parcels and the Improvements. The judgment of any court of
competent jurisdiction, or the admission of Lessee or any
sublessee or permittee in any action or proceeding against
them, or any of them, whether Agency be a party thereto or not,
that Lessee, sublessee or permittee has violated any such
ordinance or statute in the use of the Conveyance Parcels or
the Improvements shall be conclusive of that fact as between
Agency and Lessee, or such sublessee or permittee.
Section 24. ENTRY AND INSPECTION.
Agency reserves and shall have the right at all times, upon
forty-eight (48) hours prior notice to Lessee by the Executive
Director of Agency, to enter the Conveyance Parcels and the
Improvements for the purpose of viewing and ascertaining the
condition of the same, or to protect its interests in the
Conveyance Parcels and the Improvements or to inspect the
operations conducted thereon.
Section 25. RIGHT TO MAINTAIN.
In the event that the entry or inspection by Agency
pursuant to Section 24 hereof discloses that the Conveyance
Parcels or the Improvements are not in a decent, safe, and
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sanitary condition, Agency shall have the right, after thirty
(30) days written notice to Lessee .(except in case of
emergency, in which event no notice shall be necessary) , to
have any necessary maintenance work done for and at the expense
of Lessee and Lessee hereby agrees to pay promptly any and all
costs incurred by Agency in having such necessary maintenance
work done in order to keep the Conveyance Parcels and the
Improvements in a decent, safe and sanitary condition. The
rights reserved in this Section shall not create any
obligations or Agency or increase obligations elsewhere in this
Lease imposed on Agency.
Section 26. EVENTS OF DEFAULT AND REMEDIES.
26.1. Events of Default by Lessee.
(a) Lessee shall abandon or surrender the Conveyance
Parcels, or the Improvements; or
(b) Lessee shall fail or refuse to pay, within ten (10)
days of notice from Agency that the same is due, any
installment of rent or any other sum required by this
Lease to be paid by Lessee; or
(c) Lessee shall fail to perform any covenant or condition
of this Lease other than as set forth in subparagraphs
(a) or (b) above, and any such failure described above
shall not be cured within thirty (30) days following
the service on Lessee of a written notice from Agency
specifying the failure complained of or if it is not
practicable to cure or remedy such failure within such
thirty (30) day period, within such longer period as
shall be reasonable under the circumstances; or
(d) Lessee shall voluntarily file or have involuntarily
filed against it any petition under any bankruptcy or
insolvency act or law and the same shall not be
dismissed within sixty (60) days thereafter; or
(e) Lessee shall be adjudicated a bankrupt; or
(f) Lessee shall make a general assignment for the benefit
of creditors in violation of the terms of this Lease;
then such event shall constitute an event of default under this
Lease.
26.2. Remedies of Agency.
In the event of any such default as described in Section
26. 1, and subject to the rights of Lessee' s Mortgagee set forth
in Section 16, Agency may, at its option:
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(1) Correct or cause to be corrected said default and
charge the costs thereof (including costs
incurred by Agency in enforcing this provision)
to the account of Lessee, which charge shall be
due and payable within fifteen (15) days after
presentation by Agency of a statement of all or
part of said costs;
(2) Correct or cause to be corrected said default and
pay the costs thereof (including costs incurred
by Agency in enforcing this provision) from the
proceeds of any insurance; or in the event that
Lessee has obtained a faithful performance bond
indemnifying Agency, Agency may call upon the
bonding agent to correct said default or to pay
the costs of such correction performed by or at
the direction of Agency;
(3) Exercise its right to maintain any and all
actions at law or suits in equity compel Lessee
to correct or cause to be corrected said default;
(4) Have a receiver appointed to take possession of
Lessee' s interest in the Conveyance Parcels and
the Improvements, with power in said receiver to
administer Lessee' s interest in the Conveyance
Parcels and the Improvements, to collect all
funds available to Lessee in connection with its
operation and maintenance of the Conveyance
Parcels and the Improvements; and to perform all
other consistent with Lessee' s obligation under
this Lease as the court deems proper;
(5) Maintain and operate the Conveyance Parcels and
the Improvements, without terminating this Lease;
(6) With respect to a monetary default or material
non-monetary default, terminate this Lease by
written notice to Lessee of its intention to do
SO.
26.3. Right of Agency in the Event of Termination of
Lease. Subject to the rights of a Lessees Mortgagee as set
forth in Section 16 hereof, upon termination of this Lease
pursuant to Section 26.2, it shall be lawful for Agency to
re-enter and repossess the Conveyance Parcels and the
Improvements and Lessee, in such event, does hereby waive any
demand for possession thereof, and agrees to surrender and
deliver the Conveyance Parcels and the Improvements peaceably
to Agency immediately upon such termination in good order,
condition and repair, except for reasonable wear and tear.
Lessee agrees that upon such termination, title to all the
Improvements on the Conveyance Parcels shall vest in Agency.
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Even though Lessee has breached the Lease and abandoned the
Conveyance Parcels, this Lease shall continue in effect for so
long as Agency does not terminate Lessee' s right to possession,
and Agency may enforce all of its right and remedies under this
Lease, including, but not limited to, the right to recover the
rent as it becomes due under this Lease. No ejectment,
re-entry or other act by or on behalf of Agency shall
constitute a termination unless Agency gives Lessee notice of
termination in writing.
Termination of this Lease shall not relieve or release
Lessee from any obligation incurred pursuant to this Lease
prior to the date of such termination. Termination of this
Lease shall not relieve Lessee from the obligation to pay any
sum due to Agency or from any claim for damages against Lessee.
26.4. Damages. Damages which Agency recovers in the event
of default under this Lease shall be those which are then
available under applicable California case and statutory law to
lessors for leases in the State of California including, but
not limited to, any accrued but unpaid rent and the worth at
the time of award of the amount by which the unpaid rent for
the balance of the term of this Lease after the date of award
exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided.
26.5. Rights and Remedies are Cumulative. The remedies
provided by this Section 26 are not exclusive and shall be
cumulative to all other rights and remedies possessed by
Agency. The exercise by Agency of one or more such rights or
remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same
default or any other default by Lessee.
26.6 Limitation of Lessee' s Liability. Notwithstanding
anything to the contrary herein contained, following completion
of the construction of the Improvements, (i) the liability of
Lessee shall be limited to its interest in the Conveyance
Parcels and Improvements, and any rents, issues and profits
arising from any subleases of the Conveyance Parcels and
Improvements which are misapplied, or which have accrued but
are not yet due and payable, at the time of any default
hereunder and which are misapplied by Lessee when collected,
and, in addition, with respect to any obligation to hold and
apply insurance proceeds, proceeds of condemnation or other
monies hereunder, any such monies received by it to the extent
not so applied; (ii) no other assets of Lessee shall be
affected by or subject to being applied to the satisfaction of
any liability which Lessee may have to Agency or to another
person by reason of this Lease; and (iii) any judgment, order,
decree or other award in favor of Agency shall be collectible
only out of, or enforceable in accordance with, the terms of
this Lease by termination or other extinguishment of Lessee' s
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interest in the Conveyance Parcels and Improvements. As a
condition to protection under the provisions of this Section
26. 6, Lessee covenants not to collect more than one (1) month' s
rent in advance, exclusive of reasonable security deposits,
under the terms of any subleases of the Improvements that
Lessee may enter into.
Notwithstanding the foregoing, it is expressly understood
and agreed that the aforesaid limitation on liability shall in
no way restrict or abridge Lessee' s continued personal
liability for:
(1) fraud or willful or grossly negligent
misrepresentation made by Lessee in connection
with this Lease;
(2) misapplication of (i) proceeds of insurance and
condemnation or (ii) rentals received by Lessee
under subleases subsequent to the date Agency is
entitled to re-enter the Conveyance Parcels and
Improvements by reason of Lessee' s default
pursuant to the terms hereof and applicable law;
(3 ) the retention by Lessee of all advance rentals
and security deposits of sublessees not refunded
to or forfeited by such sublessees;
(4) the indemnification undertakings of Lessee under
Section 17; and
(5) waste by Lessee with respect to the Conveyance
Parcels or the Improvements.
Section 27. MISCELLANEOUS.
27 .1 Governing Law. The laws of the State of California
shall govern the interpretation and enforcement of this Lease.
27.2 Legal Actions. In addition to any other rights or
remedies, either party may institute legal action to cure,
correct or remedy any default, to recover damages for any
default, or to obtain any other remedy consistent with the
purpose of this Lease. Such legal actions must be instituted
in the Superior Court of Orange County, State of California, in
any other appropriate court in that County, or in the Federal
District Court in the Central District of California.
27.3 Acceptance of Service of Process. In the event that
any legal action is commenced by Lessee against Agency, service
of process on Agency shall be made by personal service upon the
Chairman or Executive Director of Agency, or in such other
manner as may be provided by law.
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In the event that any legal action is commenced by Agency
against Lessee, service of process on Lessee shall be made by
personal service upon Lessee or in such other manner as may be
provided by law, whether made within or without the State of
California.
27.4 Attorneys' Fees And Court Costs. In the event that
either Agency or Lessee shall bring or commence an action to
enforce the terms and conditions of this Lease or to obtain
damages against the other party arising from any default under
or violation of this Lease, then the prevailing party shall be
entitled to and shall be paid reasonable attorneys' fees and
court costs therefor.
27.5 Inspection of Books And Records. Agency has the
right (at Lessee' s office, not more than once during each
calendar year and upon not less than forty-eight (48) hours'
notice, and during normal business hours) to inspect the books
and records of Lessee pertaining to the Conveyance Parcels as
pertinent to the purposes of this Lease. Lessee also has the
right (at Agency' s office, upon not less than forty-eight (48)
hours' notice, and at all reasonable times) to inspect the
books and records of Agency pertaining to the Conveyance
Parcels as pertinent to the purposes of this Lease.
27.6 Interest. Any amount due Agency that is not paid
when due shall bear interest from the date such amount becomes
due until it is paid. Interest shall be at a rate equal to the
lesser of the discount rate established by the San Francisco
office of the Federal Reserve Bank, plus two percent (2%) , on
the first day of the month such amount becomes due and the
maximum rate permitted by applicable law.
27 .7 Notices. All notices, statements, demands, requests,
consents, approvals, authorizations, offers, agreements,
appointments or designations hereunder by either party to the
other shall be in writing and shall be sufficiently given and
served upon the other party, upon personal delivery or five (5)
days after deposit within California in the United States mail,
certified or registered mail, return receipt requested, postage
prepaid and addressed as follows:
Agency: Redevelopment Agency of the City of Huntington
Beach
2000 Main Street
Huntington Beach, California 92648
Attention: Executive Director
Lessee: Orin G. Berge, Jr.
18600 Main Street, Suite 280
Huntington Beach, California 92648
02/10/93 ATTACHMENT NO. 5
6596u/2460/049 Page 37 of 41
or to such other address as either party shall later designate
for such purposes by written notice to the other party.
27.8 Time is of the Essence. Time is of the essence in
the performance of the terms and conditions of this Lease.
27 .9 Non-Merger of Fee And Leasehold Estates. If both
Agency' s and Lessee s estates in the Conveyance Parcels or the
Improvements or both become vested in the same owner, this
Lease shall nevertheless not be destroyed by application of the
doctrine of merger except at the express election of Agency and
Lessee' s Mortgagee. The voluntary or other .surrender of this
Lease by Lessee, or a mutual cancellation thereof, shall not
work as a merger and shall, at the option of Agency, terminate
all or any existing sublease or subtenancies or may, at the
option of Agency, operate as an assignment to Agency of any or
all such existing subleases or subtenancies.
27. 10 Holding Over. The occupancy of the Conveyance
Parcels after the expiration of the term of this Lease shall be
construed to be a tenancy from month to month, and all other
terms and conditions of this Lease shall continue in full force
and effect.
27. 11 Conflict of Interest. No member, official or
employee of Agency shall have any personal interest, direct or
indirect, in this Lease nor shall any such member, official or
employee participate in any decision relating to the Lease
which affects his personal interests or the interests of any
corporation, partnership or association in which he is directly
or indirectly interested.
Lessee warrants that it has not paid or given, and will not
pay or give, any third party any money or other consideration
for obtaining this Lease.
27. 12 Non-Liability of Agency Officials And Em la ees. No
member, official or employee of Agency shall be personally
liable to Lessee, or any successor in interest, in the event of
any default or breach by Agency or for any amount which may
become due to Lessee or successor or on any obligations under
the terms of this Lease.
27. 13 Felationsh The relationship between the parties
hereto shall at all times be deemed to be that of landlord and
tenant. The parties do not intend nor shall this Lease be
deemed to create a partnership or joint venture,
27. 14 Transactions with Affiliates. Lessee shall have the
right to enter into transactions with subsidiaries, affiliates
and other related entities for the purpose of leasing space,
arranging the Construction Loan and the Permanent Loan,
providing cleaning, maintenance and repair services, insurance
02/10/93 ATTACHMENT NO. 5
6596u/2460/049 Page 38 of 41
policies and other purposes related to the use and development
of the Conveyance Parcels and the Improvements, provided that
all such costs, charges and rents are competitive with the
costs, charges, rent and other sums which would be paid by or
to, as the case may be, an unrelated third party.
27. 15 Waivers And Amendments. All waivers of the
provisions of this Lease must be in writing and signed by the
appropriate authorities of Agency or Lessee.
The waiver by Agency of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition, or any subsequent breach of
the same or any other term, covenant or condition herein
contained. The subsequent acceptan-ce of rent hereunder by
Agency shall not be deemed to be a waiver of any preceding
breach of Lessee of any term, covenant or condition of this
Lease, regardless of Agency' s knowledge of such preceding breach
at the time of acceptance of such rent. Failure on the part of
Agency to require or exact full and complete compliance with any
of the covenants or conditions of this Lease shall not be
construed as in any manner changing the terms hereof and shall
not prevent Agency from enforcing any provision hereof.
All amendments hereto must be in writing and signed by the
appropriate authorities of Agency and Lessee.
The Lessee' s Mortgagee permitted by this Lease shall not be
bound by any waiver or amendment to this Lease without Lessee' s
Mortgagee giving its prior written consent.
27. 16 Non-Merger With DDA. None of the terms, covenants or
conditions agreed upon in writing in the DDA and other
instruments between the parties to this Lease with respect to
obligations to be performed, kept or observed by Lessee or
Agency in respect to the Conveyance Parcels or any part thereof,
shall be deemed to be merged with this Lease until such time as
a Certificate of Completion issued by Agency is recorded.
27 .17 Duplicate_ Orkginals. This Lease is executed in five
(5) duplicate originals, each of which is deemed to be an
original. This Lease includes forty-one (41) pages.
27. 18 Severability. If any provision of this Lease or the
{ application thereof to any person or circumstances shall be
invalid or unenforceable to any extent, the remainder of this
Lease and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be
enforceable to the greatest extent permitted by law.
27. 19 Terminology. All personal pronouns used in this
Lease, whether used in the masculine, feminine, or neuter-
gender, shall include all other genders; the singular shall
02/10/93 ATTACHMENT NO. 5
6596u/2460/049 Page 39 of 41
include the plural, and vice versa. Titles of sections are for
convenience only, and neither limit nor amplify the provisions
of the Lease itself. Except for terms expressly defined in this
Lease, all terms shall have the same meaning as set forth in the
DDA.
27.20 Recordation. A short form memorandum of this Lease,
in the form attached hereto as Exhibit "C", shall be recorded at
or within one (1) day after the time the Lease is executed.
27.21 Binding Effect. This Lease, and the terms,
provisions, promises, covenants and conditions hereof, shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, legal representatives,
successors and assigns.
27.22 Estoppel Certificate. Each of the parties shall at
any time and from time to time upon not less than twenty (20)
days' prior notice by the other, execute, acknowledge and
deliver to such other party a statement in writing certifying
that this Lease is unmodified and is in full force and effect
(or if there shall have been Modifications that this Lease is in
full force and effect as modified and stating the
modifications) , and the dates to which the rent has been paid,
and stating whether or not to the best knowledge of the signer
of such certificate such other party is in default in performing
or observing any provision of this Lease, and, if in default,
specifying each such default of which the signer may have
knowledge, and such other matters as such other party may
reasonably request, it being intended that any such statement
delivered by Lessee may be relied upon by Agency or any
successor in interest to Agency or any prospective mortgagee or
encumbrancer thereof, and it being further intended that any
such statement delivered by Agency may be relied upon by any
prospective assignee of Lessee' s interest in this Lease or any
prospective mortgagee or encumbrancer thereof. Reliance on any
such certificate may not extend to any default as to which the
signer of the certificate shall have had no actual knowledge.
27.23 Force Majeure. The time within which Agency or
Lessee is obligated herein to perform any obligation hereunder,
other than an obligation that may be performed by the payment of
money, shall be extended and the performance excused when the
delay is caused by fire, earthquake or other acts of God,
strike, lockout, acts of public enemy, riot, insurrection or
other cause beyond the control of the applicable party.
27.24 Quiet Enjoyment. Landlord does..hereby covenant,
promise and agree to and with Tenant that Tenant, for so long as
it is not in default hereof, shall and may at all times
peaceable and quietly have, hold, use, occupy and possess the
Conveyance Parcels throughout the Term.
02/10/93 ATTACHMENT NO. 5
6596u/2460/049 Page 40 of 41
Section 28. OPTION TO PURCHASE.
In consideration of the Lessee' s execution of this Lease,
the Agency hereby grants the Lessee an exclusive and irrevocable
right and option (the "Option" ) to acquire the Conveyance
Parcels from the Agency at the price and upon the terms and
conditions set forth in this Section 28. The Option may be
exercised only by written notice thereof from the Lessee to the
Agency at any time during the term of this Lease, and shall be
effective only if the Lessee is not in default of this Lease or
the DDA. The Option shall automatically terminate if not so
exercised within the Term of this Lease. Upon Lessee' s exercise
of the Option, the Agency shall convey the Conveyance Parcels
and the Lessee shall acquire the Conveyance Parcels upon the
same terms and conditions as set forth in Sections 201 through
219 of the DDA. Upon the conveyance to Lessee of fee title to
the Conveyance Parcels, this Lease shall automatically terminate.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be executed by their lawfully authorized officers.
AGENCY:
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body
corporate and politic
Date: By:
Its:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Stradling, Yocca, Carlson &
Rauth, Agency Special Counsel
LESSEE:
Date: By:
Orin G. Berge, Jr. ,
02/10/93 ATTACHMENT NO. 5
6596u/2460/049 Page 41 of 41
EXHIBIT A
LEGAL DESCRIPTION
[To Be Attached]
02/10/93 Exhibit A
6596u/2460/049 ATTACHMENT NO. 5
�I
ATTACHMENT NO. 6
INTERIM GROUND LEASE
By and Between
THE REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH,
AGENCY
and
ORIN G. BERGE, JR. ,
LESSEE
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 1 of 41
�l
INTERIM GROUND LEASE
This INTERIM GROUND LEASE (the "Lease" ) is made as of
, 19 by and between the REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH, a public body corporate and politic
(the "Agency" or "Lessor") , and ORIN G. BERGE, JR. , a married
man (the "Lessee") .
Section 1. SUBJECT OF LEASE.
1.1. Purpose of the Lease. The purpose of this Lease is
to effectuate the Redevelopment Plan ( "Redevelopment Plan" ) for
the Huntington Center Redevelopment Project (the "Redevelopment
Project") which was approved and adopted by the City Council of
the City of Huntington Beach by Ordinance No. 2743, and the
Disposition and Development Agreenent between the Agency and
the Developer dated , 1992, (the "DDA") by
providing for the interim lease of the "Conveyance Parcels" (as
hereinafter defined) within the Redevelopment Project area to
Lessee and until such time as the Lessee decides to exercise
its option to acquire the Conveyance Parcels for the purpose of
developing and operating thereon certain improvements to be
mutually agreed upon by the Agency and Lessee. The DDA, which
is available in the offices of the Agency as a public record,
is incorporated herein by reference and made a part hereof as
though fully set forth herein.
1.2. The Redevelopment Plan. As of the "Commencement
Date" (as hereinafter defined) , the "Conveyance Parcels" (as
hereinafter defined) is in compliance with the Redevelopment
Plan for the Redevelopment Project.
Section 2. LEASE OF THE SITE.
Agency, for and in consideration of the rents, covenants
and agreements hereinafter reserved and contained on the part
of Lessee to be paid, kept, performed and observed by Lessee,
hereby leases to Lessee, and Lessee hereby leases from Agency,
that certain real property within the Redevelopment Project
area shown on the "Conveyance Parcels Map" attached hereto as
Exhibit "A" and incorporated herein by this reference, and
having the legal description in the "Conveyance Parcels
Description" attached hereto as Exhibit "B" and incorporated
herein by this reference. The parties understand that a
portion of the Conveyance Parcels is located within the
proposed realignment of Gothard Street ("Gothard Realignment
Area") , as depicted in the Conveyance Parcels Map. Except as
expressly provided to the contrary in this Lease, reference to
the Conveyance Parcels is to the described land, exclusive of
any improvements now or hereafter located on the land,
notwithstanding that any such improvements may or shall- be
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 2 of 41
construed as affixed to and as constituting part of the real
property.
Section 3. LEASE TERM.
3.1. Initial Term. Lessee shall lease the Conveyance
Parcels from Agency and Agency shall lease the Conveyance
Parcels to Lessee for a term commencing on , 19
(the "Commencement Date" ) and continuing for a period of ten
(10) years thereafter (the "Term" ) , unless sooner terminated as
provided for herein. The term "Lease Year" shall mean a period
commencing on the Commencement Date or an anniversary thereof
and continuing for one full calendar year thereafter.
1
3 .2. Earlier Termination. The term of this Lease shall
terminate upon the earlier of (a) the conveyance of the
Conveyance Parcels to Lessee pursuant to the DDA, (b) an event
of default as provided in Section 26 of this Lease, or (c)
thirty (30) days after notice of intent to terminate is
delivered by Lessee to Agency in the manner required by Section
27 .7 hereof.
Section 4. USE AND DEVELOPMENT OF THE SITE.
4.1. Development of the Site and Construction of
Improvements. Lessee may not construct upon the Conveyance
Parcels any permanent structures or buildings, or permit the
cultivation, planting or growing of crops or plants. Temporary
or movable improvements (the "Improvements" ) shall be permitted.
4.2. Use of the Site. During the Term, the Conveyance
Parcels shall be devoted to any Legally permitted uses.
4.3 . Management. Lessee shall manage or cause the
Conveyance Parcels and the Improvements to be managed in a
prudent and business-like manner, consistent with like projects
in Orange County, California.
Lessee may contract with a management company or manager,
which subject to Section 27.14 hereof may be an affiliate of
Lessee, to operate and maintain the Conveyance Parcels and the
Improvements in accordance with the terms of this Lease;
provided, however, that the selection and hiring of such
management company shall be subject to approval by Agency, or
its Executive Director or the City Manager of the City.
Subject to obtaining approval of the Agency, Lessee may act as
manager. Approval of a management company or manager by Agency
shall not be unreasonably withheld. If, at any time, the
management company is not performing to the reasonable
satisfaction of the Agency, or its Executive Director or the
City Manager of the City, and said condition is not corrected
after expiration of ninety (90) days from the date of written
notice from the Agency, the Agency may direct the Lessee to,
02/11/93 ATTACIVENT NO. 6
0591q/2460/049 Page 3 of 41
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Nevertheless, Developer and Agency do hereby assume all risks
for claims, known or unknown, heretofore or hereafter arising
from or relating to the Conveyance Parcels and the acquisition
and development thereof, except for the obligations contained
in this Agreement and to the matters released in this
Section 704, and do hereby waive all of their respective rights
under Section 1542 of the California Civil Code. This release
shall be effective whether or not the Developer exercises the
Option and whether or not the Conveyance actually occurs, and
shall survive the Conveyance and/or the termination of this
Agreement.
VIII . 1 §800] ENTIRE AGREEMENT, WAIVERS
This Agreement may be signed in counterparts, and is
executed in five (5) duplicate originals, each of which is
deemed to be an original. This Agreement includes pages 1
through 41 and Attachments 1 through 10, which constitute the
entire understanding and agreement of the parties.
This Agreement integrates all of the terms and
conditions mentioned herein or incidental hereto, and
supersedes all negotiations or previous agreements between the
parties or their predecessors in interest with respect to all
or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must
be in writing by the appropriate authorities of the Agency and
the Developer, and all amendments hereto must be in writing by
the appropriate authorities of the Agency and the Developer.
In any circumstance where under this Agreement either
party is required to approve or disapprove any matter, approval
shall not be unreasonably withheld.
IX. 1 §900) TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY
This Agreement, when executed by the Developer and
delivered to the Agency, must be authorized, executed and
delivered by the Agency on or before forty-five (45) days after
signing and delivery of this Agreement by Developer or this
Agreement shall be void, except to the extent that the
Developer shall consent in writing to a further extension of
time for the authorization, execution and delivery of this
Agreement. The date of this Agreement shall be the date when
it shall have been signed by the Agency_
12/30/92
6594u/2460/049 -40-
IN WITNESS WHEREOF, the Agency and the Developer have
signed this Agreement on the respective dates set forth below.
AGENCY:
THE REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH, a public
body corporate and politic
Dated: 1993 By:
Agenc Chai rnan
Dated: , 1993 By:
gency xecutive Director
Dated: , 1993 By: � c• z1271-
Deputy City Administrator/
Its Economic Development
ATTEST:
Agency Secretary
APrQ A TO FORM:
A&
Str lin , Y cca, Carlson & Rauth,
Agen y Speci i Counsel
Az�4j-Z—'—a= --
C' y Attor ey f • �,93
Agency General Counsel 3
DEVELO
Dated: �� .G� 1993 By:
12/30/92
6594u/2460/049 -41-
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No.61GO
State of eii 416
"u-A%-.- OPTIONAL SECTION*�
CAPACITY CLAIMED BY SIGNER
County of Nxa=C ' Though statuls does not require tN Notary 10
fill In the data below,doing so may prove
i invaluable b"Mons.root on the document
(?; before me by--,,CL 4 iSrh, �u 6�c G [�INDIVIDUAL
DATE NAME,TITLE OF OFFICER-E.G..JAW E DOE,NOX Y PUBLIC' .
/�rQ a r/ . �`n C' A n CORPORATE OFFICER(S)
P. appeared (7 r 1 'OF SIG i
• NAMEl5)OF SIGNER(S) TITLE(s)
tgpersonally known to me- he-baski-e -satisfactoTevidenL� ' [)PARTNERS) LIMITED
to be the person(6) whose name(k) e GENERAL
subscribed to the within instrument and ac- ❑ATTORNEY-INTACT
knowledged to me 1hat4x61 lthey executed ❑TRUSTEE(S)
OFFICIAL NOTARY SEAL the Same in -Izk i Ithetr.,authortzed [3GUARDIANNCONSERVATOR
LAURA A.NELSON capacity(ies), and that by-hi64otlmIr
NotuyORANGE�� signature(s)on the instrument the person(Is), OTHER:
My Comm.Explev JUL 08,1905 or the entity Upon behalf of which the
person(s)acted,executed the instrument. '
SIGNER IS REPRESENTING:
WITNESS my hand and official seat. 'WE OF PERSON(S)DA ENTrryPE%
6elz4- Ae'ae4
SIGNATURE of IWITART
OPTIONAL SECTION
THIS CERTIFICATE MUST BE ATTACHED TO TITLE OR TYPE OF DOCUMENT_,
THE DOCUMENT DESCRIBED AT RIGHT: �
.--t NUMBER OF PAGES 136 DATE OF DOCUMENT,_�.s�9,2 tl
T11wrgh the data requested hers Is not required Ay law,
it scald prevent fraudulent reattachment of Oils form. SIGNER(S)OTHER THAN NAMED ABOVE A,-L, [./T llbe tar rxr.r A.ff,2
61"2 NATIONAL NOTARY ASSOCIATION•8236 Remmet Ave.,P.O.Box 7184-Canoga Psrk CA 913M7184
r
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and the Lessee shall, terminate immediately the management
contract. Notwithstanding the above, Lessee shall use its best
efforts to correct any defects in management at the earliest
feasible time and, if necessary, to replace the management
company prior to the elapsing of such time period.
4.4 Only Lawful Uses Permitted. Lessee shall not use the
Conveyance Parcels or the Improvements for any purpose that is
in violation of any law, ordinance or regulation of any
federal, state, county or local governmental agency, body or
entity. Furthermore, Lessee shall not maintain or commit any
nuisance, as now or hereafter defined by any applicable
statutory or decisional law, on the Conveyance Parcels or the
Improvements, or any part thereof.
Section 5. RENT.
5. 1 Net Lease. It is the intent of the parties hereto
that the rent provided herein shall be absolutely net to Agency
and that Lessee shall pay all costs, charges and expenses of
every kind and nature against the Conveyance Parcels and the
Improvements which may arise or become due during the Term and
which, except for execution hereof, would or could have been
payable by Agency.
5.2 Base Rent.
(a) Subject to Section 5.3 and paragraph (b) below,
Lessee agrees to pay in advance, on the Commencement Date and
thereafter on the first day of each month during each "Lease
Year" (as hereinafter defined) , "Base Rent" in the amount
determined pursuant to this Section 5.2. As used herein, a
"Lease Year" shall consist of twelve (12) consecutive calendar
months ending on the anniversary (the "Anniversary Date") of
(i) the day immediately preceding the Commencement Date, or
(ii) if the Commencement Date is ether than the first day of a
calendar month, the last day of the calendar month in which the
Commencement Date occurs; provided, however, that the first
Lease Year shall commence on the Commencement Date and end on
the Anniversary Date, regardless of whether such period equals
or exceeds twelve (12) consecutive calendar months, and the
last Lease Year shall end on the anniversary of the day
immediately preceding the Commencement Date, regardless of
whether such anniversary is the Anniversary Date.
(b) Base Rent shall be
5.3 Payment of Rent. All rent that becomes due and
payable pursuant to this Lease shall be paid to the Agency at
the address of the Agency listed in Section 27. 7 or such other
place as the Agency may from time to time designate by written
notice to the Lessee without notice or demand, and without
setoff, counterclaim, abatement, deferment, suspension or
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 4 of 41
�1
deduction. Except as expressly provided herein, under no
circumstances or conditions, whether now existing or hereafter
arising, or whether beyond the present contemplation of the
parties, shall the Agency be expected or required to make any
payment of any kind whatsoever or to perform any act or
obligation whatsoever or be under any obligation or liability
hereunder or with respect to the Conveyance Parcels.
5.4 Delinquent Rent. Lessee hereby acknowledges that late
payment by Lessee to Agency of rent and other sums due
hereunder will cause Agency to incur costs not contemplated by
this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges. Accordingly, if
any installment of rent shall not be received by Agency or
Agency' s designee within ten (10) days after notice to Lessee
from Agency that such amount is due, or any other sum due from
Lessee hereunder shall not be received by Agency or Agency' s
designee within ten (10) days after notice to Lessee from
Agency that such amount is due, Lessee shall pay to Agency
a late charge equal to five percent (5%) of such overdue
amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Agency
will incur by reason of late payment by Lessee. Acceptance of
such late charge by Agency shall in no event constitute a
waiver of Lessee' s default with respect to such overdue amount,
nor prevent Agency from exercising any of the other rights and
remedies granted hereunder.
Section 6. RENTAL OF GOTHARD REALIGNMENT AREA.
6. 1 Use of Gothard Realignment Area. Lessee shall not
erect any permanent structures upon the Gothard Realignment
Area.
6.2 Termination of Gothard Realignment Area. Upon ninety
(90) days notice from the Agency to the Lessee as provided in
Section 27.7 hereof, this Lease shall be terminated with
respect to the Gothard Realignment Area only and the Gothard
Realignment Area shall be deleted from the Conveyance Parcels.
The Lessee shall have no further rights with respect to the
Gothard Realignment Area, and shall surrender to the Agency
possession of such area and any improvements and fixtures
thereon at such time. At such time the Base Rent shall be
proportionately reduced for the remaining portion of the
current rental period as of the date the Gothard Realignment
Area is surrendered.
Section 7. UTILITIES AND TAXES.
7. 1 Utilities. Lessee shall pay or cause to be paid all
charges for gas, electricity, water and other utilities ----
furnished to the Conveyance Parcels and the Improvements and
02/11/93 ATTACEMENT NO. 6
0591q/2460/049 Page 5 of 41
all sewer use charges, hookup or similar charges or assessments
for utilities levied against the Conveyance Parcels and the
Improvements for any period included within the Term.
7.2 Real Estate Taxes.
(a) As used herein, the term "real estate taxes"
shall mean all real estate taxes, assessments for improvements
to the Conveyance Parcels, municipal or county water and sewer
rates and charges which shall be levied against the Conveyance
Parcels or the Improvements, or any interest therein, and which
become a lien thereon and accrues during the Term.
(b) Lessee shall pay or cause to be paid, before any
fine, penalty, interest or cost may be added thereto for the
nonpayment thereof, all real estate taxes levied against any
and all interests in the Conveyance Parcels and any
Improvements during the Term.
(c) Any real estate taxes which are payable by Lessee
hereunder shall be prorated between Agency and Lessee as of the
Commencement Date and then again at the expiration or earlier
termination of the Term.
(d) Lessee shall have the right to contest the amount
or validity of any real estate taxes, in whole or in part, by
appropriate administrative and legal proceedings, without any
costs or expense to Agency, and Lessee may postpone payment of
any such contested real estate taxes pending the prosecution of
such proceedings and any appeals so long as such proceedings
shall operate to prevent the collection of such real estate
taxes and the sale of the Conveyance Parcels and any
Improvements to satisfy any lien arising out of the nonpayment
of the same, and Lessee furnishes a bond to Agency securing the
payment of the same in the event a decision in such contest
shall be adverse to Lessee.
7 .3 Personal Property. Lessee covenants and agrees to pay
before delinquency all personal property taxes, assessments and
liens of every kind and nature upon all personalty as may be
from time to time situated within the Conveyance Parcels and
any Improvements.
Section 8. OWNERSHIP OF IMPROVEMENTS,_
FIXTURES AND FURNISHINGS.
8. 1 Ownership-During Term. All Improvements constructed
on the Conveyance Parcels by Lessee as permitted by this Lease
shall, during the Term, be and remain the property of Lessee;
provided, however, that Lessee shall have no right to waste the
Improvements, or to destroy, demolish or remove the
Improvements except as otherwise permitted pursuant to this
Lease; and provided further that Lessee' s rights and pokers
02/11/93 ATTACF94ENT NO. 6
0591q/2460/049 Page 6 of 41
with respect to the Improvements are subject to the terms and
limitations of this Lease. Agency and Lessee covenant for
themselves and all persons claiming under or through them that
the Improvements are real property.
8.2 Ownership at Termination. Upon termination of this
Lease, whether by expiration of the Term or otherwise, all
Improvements, fixtures and furnishings shall, without
compensation to Lessee, then become Agency' s property, free and
clear of all claims to or against them by Lessee or any third
person, firm or entity. Lessee shall defend and indemnify
Agency against all liability and loss arising from any such
claims which arise from the acts or omissions of Lessee.
Section 9. INDEMNIFICATION: FAITHFUL PERFORMANCE.
Lessee shall not suffer or permit any liens to be enforced
against the fee simple estate in reversion of Agency as to the
Conveyance Parcels and Improvements, nor against Lessee' s
leasehold interest therein by reason of work, labor, services
or materials supplied or claimed to have been supplied to
Lessee or anyone holding the Conveyance Parcels and the
Improvements, or any part thereof, through or under Lessee, and
Lessee agrees to defend, indemnify and hold Agency harmless
against such liens. If any such lien shall at any time be
filed against the Conveyance Parcels or any Improvements,
Lessee shall, within thirty (30) days after notice to Lessee of
the filing thereof, cause the same to be discharged of record;
provided, however, that Lessee shall have the right to contest
the amount or validity, in whole or in part, of any such lien
by appropriate proceedings but in such event, Lessee shall
notify Agency and promptly bond such lien in the manner
authorized by law with a responsible surety company qualified
to do business in the State of California or provide other
security acceptable to Agency. Lessee shall prosecute such
proceedings with due diligence. Nothing in this Lease shall be
deemed to be, nor shall be construed in any way to constitute,
the consent or request of Agency, express or implied, by
inference or otherwise, to any person, firm or corporation for
the performance of any labor or the furnishing of any materials
for any construction, rebuilding, alteration or repair of or to
the Conveyance Parcels, the Improvements, or any part thereof.
Prior to commencement of construction of the Improvements on
the Conveyance Parcels, or any repair or alteration thereto,
Lessee shall give Agency not less than thirty (30) days advance
notice in writing of intention to begin said activity in order
that nonresponsibility notices may be posted and recorded as
provided by State and local laws.
Section 10. PIAINTENANCE AND REPAIR.
Lessee agrees to assume full responsibility for the ----
management, operation and maintenance of the Improvements and
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the Conveyance Parcels throughout the Term without expense to
Agency, and to perform all repairs and replacements necessary
to maintain and preserve the Improvements and the Conveyance
Parcels in a clean and safe condition reasonably satisfactory
to Agency and in compliance with all applicable laws. Lessee
agrees that Agency shall not be required to perform any
maintenance, repairs or services or to assume any expense in
connection with the Improvements and the Conveyance Parcels.
Lessee hereby waives all rights to make repairs or to cause any
work to be performed at the expense of Agency as provided for
in Section 1941 and 1942 of the California Civil Code.
SECTION 11. ENVIRONMENTAL MATTERS.
11. 1 Definitions. For the purposes of this Lease, unless
the context otherwise specifies or requires, the following
terms shall have the meanings herein specified:
(a) The term "Hazardous Materials" shall mean (i) any
"hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U. S.C. Section 9601 et seg. ) , as amended from time to time,
and regulations promulgated thereunder; (ii ) any "hazardous
substance" as defined by the Carpenter-Presley-Tanner Hazardous
Substance Account Act (California Health and Safety Code
Sections 25300 et seg. ) , as amended from time to time, and
regulations promulgated thereunder; (iii ) asbestos;
(iv) polychlorinated biphenyls; (v) petroleum, oil, gasoline
(refined and unrefined) and their respective byproducts and
constituents; and (vi ) any other substance, whether in the form
of a solid, liquid, gas or any other form whatsoever, which by
any "Governmental Requirements" (as defined in Subparagraph c
of this Section 11 . 1 ) either requires special handling in its
use, transportation, generation, collection, storage, handling,
treatment or disposal, or is defined as "hazardous" or harmful
to the environment.
(b) The term "Hazardous Materials Contamination" shall
mean the contamination (whether presently existing or hereafter
occurring) of the improvements, facilities, soil, groundwater,
air or other elements on, in or of the Conveyance Parcels by
Hazardous Materials, or the contamination of the buildings,
facilities, soil, groundwater, air or other elements on, in or
of any other property as a result of Hazardous Materials at any
time (whether before or after the Date of Lease) emanating from
the Conveyance Parcels.
(c) The term "Governmental Requirements" shall mean all
past, present and future laws, ordinances, statutes, codes,
rules, regulations, orders and decrees of the United States,
the state, the county, the city, or any other political
subdivision in which the Conveyance Parcels is located,- -and any
other state, county city, political subdivision, agency,
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instrumentality or other entity exercising jurisdiction over
Agency, Lessee or the Conveyance Parcels.
11 .2 Site Evaluation. Lessee acknowledges that it has
performed a thorough and comprehensive site evaluation of the
Conveyance Parcels (the "Conveyance Parcels Evaluation" ). and
that it has determined that there is no Hazardous Materials
Contamination of the Conveyance Parcels as of the Commencement
Date of this Lease. Accordingly, Lessee assumes any and all
responsibility and Liabilities (as defined in Section 11 .4 of
this Lease) for all Hazardous Materials Contamination, whether
presently existing or occurring during the Term of this Lease
or extension thereof.
11 .3 Underground Storage .Tanks.
(.a) Maintenance and Repair of Tanks. Lessee shall
maintain, repair and/or replace throughout the Term any
existing and future underground storage tanks and oil
receptacles, including all associated piping, pumps and other
equipment, located on or under the Conveyance Parcels (the
"Tanks" ) as required by any Governmental Requirements relating
to underground storage tanks or oil receptacles.
(b) New Tanks. Lessee shall comply with the following
when replacing any Tank( s) :
(1) Prior to installing a Tank, Lessee shall secure
the written approval of Agency. The request for
approval shall include a copy of the design plans
for the tank, showing the proposed location, size.
and contents of the Tank. .
(2) Lessee shall comply with all Governmental
Requirements relating to the installation,
construction and operation of Tanks.
(c) Spills and Leaks. With regard to any known or
suspected Hazardous Materials Contamination or any actual or
threatened spill, leak or release of any Hazardous Materials
(collectively a "Release" ) , Lessee shall comply with the
following:
( 1) All relevant information regarding a Release on
the Conveyance Parcels must be immediately
forwarded to Agency, along with proposed remedial
measures. Lessee shall report all Releases to
the applicable federal, state and local agencies
in accordance with Governmental Requirements, and
a copy of all such reports shall be sent to
Agency.
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(2) The contaminated air, surface and subsurface
environment must be cleaned-up both to the level
required by all applicable Governmental
Requirements and in accordance with the
requirements of this Lease.
(3 ) All Tanks that have leaked are to be removed
according to Governmental Requirements and this
Lease. Any replacement of any Tank(s) shall be
consistent with the requirements of this Lease
for new Tanks.
(d) Vacating the Premises with Underground Containers.
Upon vacating the Premises with a Tank( s) , Lessee shall provide
for the final disposition of the Tank(s) . The method of final
disposition shall be either abandonment-in-place or removal of
the Tank. All actions taken by Lessee shall be in accordance
with applicable Governmental Requirements and this Lease,
including, but not limited to:
11.4 Indemnification. Lessee shall save, protect, defend,
indemnify and hold harmless Agency and its officers, directors,
shareholders, employees and agents from and against any and all
liabilities, suits, actions, claims, demands, penalties,
damages (including, without limitation, penalties, fines and
monetary sanctions) , losses, costs or expenses (including,
without limitation, consultants' fees, investigation and
laboratory fees, reasonable attorneys' fees and remedial and
response costs) (the forgoing are hereinafter collectively
referred to as "Liabilities") which may now or in the future be
incurred or suffered by Agency and its officers, directors,
shareholders, employees or agents by reason of, resulting from,
in connection with, or arising in any manner whatsoever as a
direct or indirect result of (1) the presence on or under, or
escape, seepage, leakage, spillage, discharge, emission or
release from the Conveyance Parcels of any Hazardous Materials
or Hazardous Materials Contamination, (2) the environmental
condition of the Conveyance Parcels, (3) the Liabilities
incurred under any Governmental Requirements relating to
Hazardous Materials, (4) the performance by Lessee of any acts,
including, but not limited to, the performance of any act
required by this Lease, (5) the performance by the Agency of
any act required to be performed by the Lessee under this
Lease, and (6) any other cause. Lessee' s obligations under
this Section 11.4 shall survive the expiration of this Lease.
11.5 Duty to Prevent Hazardous Material Contamination.
Lessee shall take all necessary precautions to prevent the
release of any Hazardous Materials into the environment. Such
precautions shall include compliance with all Governmental
Requirements with respect to Hazardous Materials. In addition,
Lessee shall install and utilize such equipment and implement
and adhere to such procedures as are consistent with the
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highest standards generally applied by
as respects the disclosure, storage, use, removal and disposal
of Hazardous Materials.
11.6 Oblation of Tenant of Remediate Premises.
Notwithstanding the obligation of Lessee to indemnify Agency
pursuant to Section 11.4 of this Lease, Lessee shall, at its
sole cost and expense, promptly take (i) all actions required
by any federal, state or local governmental agency or political
subdivision or any Governmental Requirements and (ii) all
actions necessary to make full economic use of the Conveyance
Parcels for the purposes contemplated by this Lease and the
DDA, which requirements or necessity arise from the presence
upon, about or beneath the Conveyance Parcels of any Hazardous
Materials or Hazardous Materials Contamination no matter when
occurring. Such actions shall include, but not be limited to,
the investigation of the environmental condition of the
Conveyance Parcels, the preparation of any feasibility studies
or reports and the performance of any cleanup, remedial,
removal or restoration work. Lessee shall take all actions
necessary to promptly restore the Conveyance Parcels to an
environmentally sound condition for the uses contemplated by
this Lease and the DDA notwithstanding any lesser standard of
remediation allowable under applicable Governmental
Requirements.
Lessee shall nevertheless obtain the Agency' s written
approval prior to undertaking any activities required by this
Section 11.6 during the Term of this Lease, which approval
shall not be unreasonably withheld so long as such actions
would not adversely affect the Conveyance Parcels or be harmful
to any other person or property. The Agency' s obligations
under this Section 11.6 shall survive the expiration of this
Lease.
11.7 Right of Entry. Notwithstanding any other term or
provision of this Lease, Lessee shall permit the Agency or its
agents or employees to enter the Conveyance Parcels at any
time, without prior notice, to inspect, monitor and/or take
emergency or long-term remedial action with respect to
Hazardous Materials and Hazardous Materials Contamination on or
affecting the Conveyance Parcels, or to discharge Lessee' s
obligations hereunder with respect to such Hazardous Materials
and Hazardous Materials Contamination when Lessee has failed to
do so. All costs and expenses incurred by the Agency in
connection with performing Lessee' s obligations hereunder shall
be reimbursed by Lessee to the Agency within ten (10) days of
Lessee' s receipt of written request therefor.
11.8 Storage or Handling of Hazardous Materials. Lessee,
at its sole cost and expense, shall comply with all
Governmental Requirements for the storage, use, transportation,
handling and disposal of Hazardous Materials. In the event
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Lessee does store, use, transport, handle or dispose of any
Hazardous Materials, Lessee shall notify Agency in writing at
least ten (10) days prior to their first appearance on the
Conveyance Parcels and Lessee' s failure to do so shall
constitute a material default under this Lease. In addition to
the foregoing, Lessee shall, prior to the taking possession of
the Conveyance Parcels and upon Agency' s request thereafter,
complete a Hazardous Materials questionnaire prepared by
Agency. Lessee shall conduct all monitoring activities
required or prescribed by applicable Governmental Requirements,
and shall, at its sole cost and expense, comply with all
posting requirements of Proposition 65 or any other similarly
enacted Governmental Requirements. In addition, in the event
of any complaint or governmental inquiry, or if otherwise
deemed necessary by the Agency in its reasonable judgment, the
Agency may require Lessee, at Lessee' s sole cost and expense,
to conduct specific monitoring or testing activities with
respect to Hazardous Materials on the Conveyan-ce Parcels.
Lessee' s monitoring programs shall be in compliance with
applicable Governmental Requirements, and any program related
to the specific monitoring of or testing for Hazardous
Materials on the Conveyance Parcels, shall be satisfactory to
Agency, in Agency' s reasonable discretion. Lessee shall
further be solely responsible, and shall reimburse Agency, for
all costs and expenses incurred by Agency arising out of or
connected with the removal, clean-up and/or restoration work
and materials necessary to return the Conveyance Parcels and
any property adjacent to the Conveyance Parcels affected by
Hazardous Materials emanating from the Conveyance Parcels to
their condition existing at the time of the Lessee' s Conveyance
Parcels Evaluation. Lessee' s obligations hereunder shall
survive the termination of this Lease.
11.9 Environmental Inquiries. Lessee shall notify Agency,
and provide to Agency a copy or copies, of the following
environmental permits, disclosures, applications, entitlements
or inquiries relating to the Premises: Notices of violation,
notices to comply, citations, inquiries, clean-up or abatement
orders, cease and desist orders, reports filed pursuant to
self-reporting requirements and reports filed or applications
made pursuant to any Governmental Requirement relating to
Hazardous Materials and underground tanks, and Lessee shall
report to the Agency, as soon as possible after each incident,
any unusual, potentially important incidents, including but not
limited to, the following:
(a) All required reports of releases of Hazardous
Materials, including notices of any release of
Hazardous Materials as required by any Governmental
Requirement;
(b) All fires;
02/11/93 ATTACHMENT NO. 6
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(c) All instances where asbestos has been or may be
disturbed by repair work, tenant improvements or other
activities in buildings containing asbestos;
(d) All notices of suspension of any permits;
(e) All notices of violation from Federal, State or local
environmental authorities;
(f) All orders under the State Hazardous Waste Control Act
and the State Hazardous Substance Account Act and
corresponding federal statutes, concerning
investigation, compliance schedules, clean up, or
other remedial actions;
(g) All orders under the Porter-Cologne Act, including
corrective action orders, cease and desist orders, and
clean-up and abatement orders;
(h) Any notices of violation from OSHA or Cal-OSHA
concerning employees' exposure to Hazardous Materials;
(i) All complaints and other pleadings filed against
Lessee and/or Agency relating to Lessee' s storage,
use, transportation, handling or disposal of Hazardous
Materials on the Conveyance Parcels.
In the event of a release of any Hazardous Materials into the
environment, Lessee shall, as soon as possible after the
release, furnish to the Agency a copy of any and all reports
relating thereto and copies of all correspondence with
governmental agencies relating to the release. Upon request of
the Agency, Lessee shall furnish to the Agency a copy or copies
of any and all other environmental entitlements or inquiries
relating to or affecting the Conveyance Parcels including, but
not limited to, all permit applications, permits and reports
including, without limitation, those reports and other matters
which may be characterized as confidential.
Section 12. ALTERATION OF IMPROVEMENTS.
Lessee shall not make or permit to be made any structural
alteration of, addition to or change in the Improvements, nor
demolish all or any part of the Improvements without the prior
written consent of Agency; provided, however, that the
foregoing shall not prohibit or restrict the repair and/or
replacement of the Improvements by Lessee. In requesting such
consent Lessee shall submit to Agency detailed plans and
specifications of the proposed work and an explanation of the
need and reasons therefor.
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This provision shall not limit or set aside any obligation
of Lessee under this Lease to maintain the Improvements and the
Conveyance Parcels in a clean and safe condition, including
structural repair and restoration of damaged Improvements.
Agency shall not be obligated by this Lease to make any
improvements to the Conveyance Parcels or to assume any expense
therefor.
Lessee shall not commit or suffer to be committed any waste
or impairment of the Conveyance Parcels or the Improvements, or
any part thereof, except as otherwise permitted pursuant to
this Lease. Lessee agrees to keep the Conveyance Parcels and
the Improvements clean and clear of refuse and obstructions,
and to dispose of all garbage, trash and rubbish in a manner
satisfactory to Agency.
Section 13. DAMAGE OR DESTRUCTION.
Lessee agrees to give notice to Agency of any fire or other
damage (collectively "casualty" ) that may occur on the
Conveyance Parcels within ten (10) days of such fire or
damage. In the event of such casualty Lessee agrees, to the
extent of any insurance proceeds available therefor, to make or
cause to be made full repair of such casualty, or Lessee
agrees, to the extent of any insurance proceeds available
therefor, to clear and remove from the Conveyance Parcels all
debris resulting from such casualty and rebuild the
Improvements in accordance with plans and specifications
previously submitted to Agency and approved in writing in order
to replace in kind and scope the Improvements which existed
prior to such damage. In the event of a casualty in which the
Improvements are not required to be repaired, restored or
rebuilt by Lessee pursuant to the terms of this Section 13, and
provided Lessee does not nevertheless elect to repair, restore
or rebuild the Improvements although Lessee has no obligations
to do so, Agency may terminate this Lease.
Section 14. SALE ASSIGNMENT SUBLEASE OR OTHER TRANSFER.
14. 1 Agency Right of First Refusal. Agency shall have the
right of first refusal to acquire this Lease and the
Improvements on the Conveyance Parcels, or any interest therein.
Lessee agrees to give Agency written notice of intent to
sell, assign, sublease or otherwise transfer this Lease or any
interest herein (excluding "Permitted Encumbrances" as defined
in Section 15 hereof) , including the Improvements ("Notice of
Sale" ) . The Notice of Sale to Agency shall• include the exact
and complete terms of any offer to sell, assign, sublease or
transfer by Lessee. If Lessee has received a bona fide offer
from a third party, the Notice of Sale shall include such bona
fide offer, duly executed by such third party.
02/11/93 ATTACHMENT NO. 6
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For a period of thirty (30) days after receipt by Agency of
the Notice of Sale, Agency shall have the right to give written
notice to Lessee of Agency' s exercise of Agency' s right to
acquire this Lease, or the interest proposed to be sold,
assigned, subleased or transferred on the same terms set forth
in the Notice of Sale.
In the event Agency declines or fails to exercise its right
of first refusal within thirty (30) days after receipt of the
Notice of Sale, and thereafter Lessee modifies the terms of any
offer or proposed sale, assignment, sublease or transfer by
changing the price or other consideration, the interest rate,
or the amount of down payment by more than five percent (5%) ,
or by otherwise materially changing the terms and conditions of
the offer or proposed sale, assignment, sublease or transfer,
then Agency' s right of first refusal shall reapply to said
transaction as of the occurrence of any of the aforementioned
events.
14.2 Right_ to Transfer. Except for leases of particular
dwelling units to tenants, Lessee shall not sell, assign,
sublease, refinance the loans secured by the Permitted
Encumbrance(s) (as defined in Section 15 hereof) of, or
otherwise transfer this Lease or any right therein, nor make
any total or partial sale, assignment, sublease, refinancing or
transfer in any other mode or form of the whole or any part of
the Conveyance Parcels or the Improvements (each of which
events is referred to in this Agreement as an "Assignment" ) ,
without prior written approval of Agency, which approval shall
not be unreasonably withheld as more particularly set forth
below in this Section 14.2. In the case of a refinancing of
the loan(s) secured by Permitted Encumbrance(s) , the prior
written approval of the Agency shall be limited to verifying
that the interest rate (including points and other fees)
payable by Lessee pursuant to such refinancing does not exceed
the market rate for similar loans at the time of such
refinancing. Notwithstanding anything else herein contained,
the term "Assignment" shall not be deemed to include the
obtaining of the "Construction Loan", the "Permanent Loan" and
any "Capital Improvement Loan(s) " (all as hereinafter defined) ,
but shall be deemed to include all refinancings thereof and any
other loans approved by Agency. Any purported assignment
without the prior written consent of Agency shall render this
Lease absolutely null and void and shall confer no rights
whatsoever upon any purported assignee or transferee. The
approval of Agency to any Assignment shall not be unreasonably
withheld if the proposed purchaser, assignee, sublessee or
transferee has reasonably demonstrated to the Agency, at least
thirty (30) days prior to the effective date of such
Assignment, such proposed purchaser' s, assignee' s, sublessee' s
or transferee' s financial capability and overall competence and
experience to construct and operate the Improvements. Review
of experience in operating similar projects shall not be
02/11/93 ATTACHMENT NO. 6
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required with respect to institutional lenders providing
financing pursuant to Section 15 hereof so long as the original
Lessee (or a successor that has been expressly approved in
writing by the Agency) remains responsible for operating the
Improvements and performing as Lessee pursuant to this Lease.
Approval by Agency of any sale, assignment, sublease or
transfer shall be conditioned upon such purchaser, assignee,
sublessee or transferee agreeing in writing to assume the
rights and obligations thereby sold, assigned, subleased or
transferred, and to keep and perform all covenants, conditions
and provisions of this Lease which are applicable to the rights
acquired.
In the absence of specific written agreement by Agency, no
such sale, assignment, sublease or transfer of this Lease or
the Conveyance Parcels or the Improvements (or any portion
thereof) , or approval by Agency of any such sale, assignment,
sublease or transfer shall be deemed to relieve Lessee or any
other party from any obligation under this Lease.
Lessee shall only sell, assign, sublease or transfer the
Conveyance Parcels and the Improvements as a whole and is not
permitted to subdivide the Conveyance Parcels and the
Improvements for the duration of this Lease without the prior
written approval of Agency.
Notwithstanding anything else contained in this Section 14,
this Lease may be assigned, without the consent of Agency, to
the purchaser at any foreclosure sale, whether judicial or
non-judicial, or to the beneficiary or mortgagee under any
Permitted Encumbrance (as defined in Section 15) , pursuant to
foreclosure or similar proceedings, or pursuant to an
assignment or other transfer of this Lease to such beneficiary
or mortgagee in lieu thereof, and may thereafter be assigned by
such beneficiary or mortgagee without Agency' s consent, and any
such purchaser, beneficiary, mortgagee or assignee shall be
liable to perform the obligations herein imposed on Lessee,
other than as set forth in Sections 15 and 16 of this Lease,
only for and during the period that such purchaser,
beneficiary, mortgagee or assignee is in possession or
ownership of the leasehold estate created hereby.
14.3 Lessee Right of First Refusal. Lessee shall have the
right of first refusal to acquire Agency' s fee interest in the
Conveyance Parcels, Agency' s interest as lessor in this Lease
and Agency' s reversionary interest in the Improvements on the
Conveyance Parcels (collectively the "Agency' s Interest" ) , or
any interest therein. Such right of first refusal shall not
apply to any transfer of the Agency' s Interest (1) to the City
of Huntington Beach, or (2) for no nonetary consideration or
tangible financial assets.
02/11/93 ATTACHMENT NO. 6
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Agency agrees to give Lessee written notice of intent to
sell, assign or otherwise transfer the Agency' s Interest, or
any interest herein. The Notice of Sale to Lessee shall
include the exact and complete terns of any offer to sell,
assign, or transfer by Agency. If Agency has received a bona
fide offer from a third party, the Notice of Sale shall include
such bona fide offer, duly executed by such third party.
For a period of thirty (30) days after receipt by Lessee of
the Notice of Sale, Lessee shall have the right to give written
notice to Agency of Lessee' s exercise of Lessee' s right to '
acquire the Agency' s Interest, or the interest proposed to be
sold, assigned or transferred on the same terms set forth in
the Notice of Sale.
In the event Lessee declines or fails to exercise its right
of first refusal within thirty (30) days after receipt of the
Notice of Sale, and thereafter Agency modifies the terms of any
offer or proposed sale, assignment, sublease or transfer by
changing the price or other consideration, the interest rate,
or the amount of down payment by more than five percent (5%),
or by otherwise materially changing the terms and conditions of
the offer or proposed sale, assignment or transfer, then
Lessee' s right of first refusal shall reapply to said
transaction as of the occurrence of any of the aforementioned
events.
Section 15. FINANCING.
Lessee may, at any time and from time to time during the
Term, upon prior written notice to the Agency and subject to
the requirements of Sections 5.3 and 14.2 hereof, mortgage,
pledge, hypothecate or otherwise encumber to a federally or
state chartered bank or savings and loan, a life insurance
company, a mortgage company, a pension fund, investment trust
or similar institutional lender (herein called "Lender" ) by
deed of trust or mortgage or other security instrument all or
any portion of Lessee' s right, title and interest pursuant to
this Lease and the leasehold estate hereby to secure financing
of the construction of the Improvements, including off-site
improvements (the "Construction Loan") , to secure a permanent
loan for the Improvements ( "Permanent Loan" ) , and, following
thirty (30) days prior written notice to Agency (which notice
shall include an itemization of and budget for the capital
improvements to be financed) , to secure financing of capital
improvements to the Improvements ("Capital Improvement
Loans) " ) . The encumbrances securing the Construction Loan,
Permanent Loan and the Capital Improvement Loan(s) , together
with refinancing of the Permanent Loan and the Capital
Improvement Loan(s) approved by the Agency pursuant to
Section 14.2, and any other loan or encumbrance approved by the
Agency pursuant to this Lease shall be deemed to be "Permitted
Encumbrances."
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The proceeds of the Permanent Loan shall be used solely to:
(i) pay the Construction Loan in full;
(ii) pay any costs of construction of the
Improvements which were not financed by the Construction Loan;
and
(iii) pay the costs of obtaining the Permanent Loan.
There shall be included in costs of construction of the
Improvements interest on the Construction Loan, fees (including
but not limited to legal fees) and costs incurred in obtaining
the Construction Loan. Lessee shall submit to the Agency prior
to the funding of the Permanent Loan a statement certified by
an officer of the Lessee stating:
(a) the amount of the Construction Loan;
(b) the costs of construction of the Senior
Housing Project not financed by the Construction Loan; and
(c) the costs of obtaining the Permanent Loan.
The Lessee shall also provide to the Agency such evidence as
the Agency may reasonably require of the amounts of items
(a) through (c) above. If the amount of the Permanent Loan
complies with the requirements set forth above, then the Agency
agrees to provide to Lessee such statement as the Lender making
the Permanent Loan may require evidencing the Agency' s
satisfaction that the amount of the Permanent Loan satisfies
the requirements herein provided for with respect to the
Maximum amount of the Permanent Loan, provided that the Agency
shall have no liability under said statement other than the
Agency' s acknowledgment that the amount of the Permanent Loan
meets the requirements here and above set forth.
The proceeds of any Capital Improvement Loan(s) shall be
used solely to pay (i) the costs of construction of capital
improvements to the Improvements, and (ii) the costs of
obtaining the Capital Improvement Loan(s) .
Agency and Lessee acknowledge and agree that except as
provided in Section 16 hereof neither Agency' s interest or fee
owner of the Conveyance Parcels (including its reversionary
interest therein and in the Improvements) nor Agency' s right to
receive Base Rent hereunder shall be subordinate to any
Permitted Encumbrance or any other lien, mortgage, deed of
trust, pledge or other encumbrance of Lessee' s leasehold
interest hereunder; provided, however, that if Lessee' s lender
requires Lessee to obtain the subordination of the Agency' s
interest to the lien of its Permitted Encumbrance, the Agency
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shall consider and shall not unreasonably withhold its consent
to such subordination.
Section 16. RIGHTS AND DUTIES OF LESSEE' S MORTGAGEES.
16. 1 Lessee' s Right to Hypothecate. Notwithstanding any
provision of this Lease to the contrary, Lessee' s right to
execute, acknowledge and deliver a Permitted Encumbrance shall
be solely upon Lessee' s leasehold estate and shall be subject
to all terms, covenants and conditions contained herein and
provided further, that Lessee shall, at Lessee' s expense, cause
to be recorded for Agency' s benefit in the Office of the
Recorder of Orange County, California, a written Request for
Notice of Default and for a copy of any Notice of Sale under
such Permitted Encumbrance as provided by the statutes of the
State of California. Any notice to be given to Agency pursuant
to this Section 16 may be delivered to Agency, or sent to it by
United States registered or certified mail with postage paid at
its address set forth in Section 27.7 hereof or at such other
address as Agency may specify by written notice to the
encumbrancers of Lessee' s leasehold interest pursuant to
Permitted Encumbrances ("Lessee' s Mortgagee(s)") . Except as
provided herein, the right of any Lessee' s Mortgagee shall be
subject to all of the terms and provisions of this Lease as the
same may from time to time be amended. Except as otherwise
specifically provided herein, any purchaser of Lessee' s
leasehold estate upon foreclosure or under power of sale shall
succeed to all rights of Lessee hereunder, and shall be liable
for performance of all provisions hereof to be performed by
Lessee and accruing during the period of its holding of such
leasehold estate. Neither this Lease nor any of the terms
hereof may be amended, modified, changed or cancelled without
the prior written consent of Lessee' s Mortgagee. The
provisions of this Section 16. 1 are for the benefit of and are
to be enforceable by any Lessee' s Mortgagee.
16.2 Notice to and Service on Lessee' s Mortgage_ Agency
shall mail to Lessee' s Mortgagee should Lessee incur any
Permitted Encumbrance, a duplicate copy of any and all notices
Agency may from time to time give to or serve on Lessee
pursuant to or relating to this Lease. Lessee shall at all
times keep Lessor informed in writing of the name and mailing
address of Lessee' s Mortgagee and any changes in the mailing
address of Lessee' s Mortgagee. Any notices or other
communications permitted by this or any other Section of this
Lease or by law to be served on or given to Lessee' s Mortgagee
by Agency shall be deemed duly served on or given to Lessee' s
Mortgagee when deposited in the United States mail, first-class
postage prepaid, addressed to Lessee' s Mortgagee at the last
mailing address for Lessee' s Mortgagee furnished in writing to
Agency by Lessee or Lessee' s Mortgagee.
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16.3 Rights of Lessee' s Aortgagee. Should Lessee incur
any Permitted Encumbrance, the Lessee s Mortgagee having such
Permitted Encumbrance shall have the right, without further
consent of Agency, at any time during the Term to:
(1) Do any act or thing required of Lessee under this
Lease, and any such act or thing done and performed by
Lessee' s Mortgage shall be as effective to prevent a
forfeiture of Lessee' s rights under this Lease as if
done by Lessee himself;
(2) Transfer, convey or assign the right, title and
interest of Lessee in and to the leasehold estate
created by this Lease to any purchaser at any
foreclosure sale, whether the foreclosure is conducted
pursuant to court order or pursuant to a power of sale
contained in the Permitted Encumbrance;
(3) Acquire and succeed to the right, title and interest
of Lessee under this Lease by virtue of any
foreclosure proceeding, whether the foreclosure is
conducted pursuant to a court order or pursuant to a
power of sale contained in the Permitted Encumbrance,
or by virtue of a transfer in lieu of foreclosure
("Foreclosure") ; and
(4) After Lessee' s Mortgagee has acquired Lessee' s right
in the leasehold estate by Foreclosure and paid all
accrued delinquent rent to Agency, reduce all rents
(specifically excluding Lessee' s obligations to pay
for utilities, real estate taxes and personal property
taxes pursuant to Section 7 of this Lease) due
hereunder as follows:
(i) Reduce all rents due under this Lease,
including the Base Rent, to One Dollar ($1.00)
per year for a period of one year following the
Foreclosure;
(ii) Reduce all rents due under this Lease,
including the Base Rent, to twenty-five percent
(2501) of the rent due for the second (2nd) year
following the Foreclosure;
(iii) Reduce all rents due under this Lease,
including the Base Rent, to fifty percent (50%)
of the rent due for the third (3rd) year
following the Foreclosure.
(iv) Notwithstanding anything provided in this
subsection 16.3(4) , if Lessee' s Mortgagee assigns
the leasehold estate to a third party, then said
third party shall be liable for the full amount
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of said Base Rent to the extent, and only to the
extent, the same accrues following such
assignment.
16.4 Right of_ Lessee' s Mortgagee to Cure Defaults. Should
Lessee incur a Permitted Encumbrance, before Agency may
terminate this Lease because of any default under or breach of
this Lease by Lessee, Agency must given written notice of the
default or breach to Lessee' s Mortgagee, provided Lessee has
complied with the requirements of Section 16.2 hereof for
notice to and service on such Lessee' s Mortgagee, and afford
Lessee' s Mortgagee the opportunity after service of such notice
to:
(1) Cure the breach or default (including the payment of
all accrued delinquent rent) within sixty (60) days
where the default can be cured by the payment of money
to Agency or some other person;
(2) Cure the breach or default within one hundred eighty
(180) days where the breach or default must be cured
by something other than the payment of Money and can
be cured within that time; or
(3 ) Cure the breach or default in such reasonable time as
may be required where something other than money is
required to cure the breach or default and cannot be
performed within one hundred eighty (180) days,
provided that acts to cure the breach or default are
commenced within that time period after service of
notice of default on Lessee' s Mortgagee by Agency and
are thereafter diligently continued by Lessee' s
Mortgagee.
16.5 Foreclosure in Lieu of Curing Default.
Notwithstanding any other provision of this Lease, Lessee' s
Mortgagee under a Permitted Encumbrance may forestall
termination of this Lease by Agency for a default under or
breach of this Lease by Lessee by commencing proceedings to
foreclose such Permitted Encumbrance on the leasehold estate
created by this Lease. The proceedings so commenced may be for
foreclosure of the Permitted Encumbrance by order of court or
for foreclosure of the Permitted Encumbrance under a power of
sale contained in the instrument creating the Permitted
Encumbrance. The proceedings shall not, however, forestall
termination of this Lease by Agency for the default or breach
by Lessee unless:
(1) They are commenced within sixty (60) days after
service on Lessee' s Mortgagee of the notice described
in Section 16.2 of this Lease;
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(2) They are, after having been commenced, diligently
pursued in the manner provided by law; and
(3) Lessee' s Mortgagee keeps and performs all of the
terms, covenants and conditions of this Lease
(including the payment of past due rent under this
Lease) requiring the payment or expenditure of money
by Lessee until the foreclosure proceedings are
complete or are discharged by redemption,
satisfaction, payment or conveyance of the leasehold
estate to Lessee' s Mortgagee.
16.6 Assignment Without_Consent_ on Foreclosure. Provided
that Lessee s Mortgagee under any Permitted Encumbrance of this
Lease gives written notice of transfer to Agency setting forth
the name and address of the transferee as well as the effective
date of the transfer, the written consent of Agency shall not
be required for transfer of Lessee' s right, title and interest
under this Lease to:
(1) Any purchaser at a foreclosure sale of the Permitted
Encumbrance, whether the foreclosure is conducted
pursuant to a court order or pursuant to a power of
sale in the instrument creating the Permitted
Encumbrance; or
(2) A purchaser from Lessee' st Mortgagee after foreclosure
where Lessee' s Mortgagee was the purchaser of Lessee' s
interest at the foreclosure sale of the Permitted
Encumbrance, or acquired Lessee' s interest by transfer
in lieu of foreclosure, and Lessee' s Mortgagee is a
Lender.
16.7 New _Lease to Lessee' s Mortgagee. Notwithstanding any
other provision of this Lease, should this Lease terminate
because of the insolvency or bankruptcy of Lessee or because of
any default under or breach of this Lease by Lessee, Agency
shall promptly execute and deliver a new Lease for the
Conveyance Parcels to Lessee' s Mortgagee under a Permitted
Encumbrance, provided:
(1) A written request for the new Lease is served on
Agency by Lessee' s Mortgagee within thirty (30) days
after service on Lessee' s Mortgagee of the notice
described in Section 16.2 of this Lease.
(2) The new Lease is for a term ending on the same date
the Term would have ended had not this Lease been
terminated, provides for the payment of unpaid rent
accrued prior to the Foreclosure as provided in
Subsection (3 ) hereof and rent thereafter at the same
rate that would have been payable under this Lease
during the remaining Term had this Lease not been
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terminated, except for the rent reduction provided for
in Section 16.3 , and contains the same terms,
covenants, conditions and provisions as are contained
in this Lease.
(3) Lessee' s Mortgagee, on execution of the new Lease by
Agency, shall pay any and all sums that would at the
time of the execution of the new Lease be due under
this Lease but for its termination (including the
payment of past due rent under this Lease) and shall
otherwise fully cure, or agree in writing to cure as
provided in Section 16.4 of this Lease, any other
defaults under or breaches of this Lease committed by
Lessee that can be cured, and which defaults are
specified in the notice described in Section 16.2 of
this Lease.
(4) Lessee' s Mortgagee, on execution of the new Lease,
shall pay all reasonable costs and expenses, including
reasonable attorney' s fees and court costs, incurred
in terminating this Lease, recovering possession of
the Conveyance Parcels from Lessee and preparing the
new Lease. Said costs and expenses shall not be
deemed to be Operating Expenses.
(5) The new Lease shall be subject to all existing
subleases under which the sublessees.
(6) The new Lease shall:
(a) Extend the time for performance of any
unperformed acts required by this Lease for such
period as is equal to the delay in performance of
the act caused by Lessee' s inability or failure
to perform the act and the time required to
terminate this Lease and execute a new Lease to
Lessee' s Mortgagee; and
(b) Excuse the performance of any act required by
this Lease that has already been performed by
Lessee' s Mortgagee, and any assignee of Lessee' s
Mortgagee as Lessee under the new Lease, shall be
liable for payment of all costs and expenses
incurred in the performance of any act required
by this Lease, whether performed before or after
execution of the new Lease, which is claimed as a
lien against the Conveyance Parcels.
16.8 No Merger of Leasehold and Fee Estates. Should
Lessee incur a Permitted Encumbrance, then there shall
thereafter, during the existence of the Permitted Encumbrance,
be no merger without the consent of Lessee' s Mortgagee under
such Permitted Encumbrance of the leasehold estate created by
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this Lease and the fee estate in the Conveyance Parcels merely
because both estates have been acquired or become vested in the
same person or entity.
16.9 Lessee' s Mortgagee as Assignee of Lease. No Lessee' s
Mortgagee under any Permitted Encumbrance shall be liable to
perform the obligations of the Lessee under this Lease unless
and until such time as Lessee' s Mortgagee becomes the owner of
the leasehold estate created hereby and acquires the right,
title and interest of Lessee under this Lease through
foreclosure, transfer in lieu of foreclosure, assignment or
otherwise, and thereafter such Lessee' s Mortgagee shall remain
liable only so long as such Lessee' s Mortgagee remains as the
owner of the leasehold estate.
16. 10 Lessee' s Mortgagee as Including Subsequent Security
Holders. The term'Lessee' s Mortgagee ' as used in this Lease
shall mean not only the person, persons or entity that loaned
money to Lessee and is named as beneficiary, mortgagee, secured
party or security holder in the instrument creating any
Permitted Encumbrance, but also all subsequent assignees and
holders of the instrument and interest secured by such
instrument.
16. 11 Subordination of Rents. Any Lessee' s Mortgagee
under any Permitted Encumbrance who comes into possession of
the Conveyance Parcels pursuant to any power of sale or
remedies provided in such Permitted Encumbrance or foreclosure
of such Permitted Encumbrance, or deed or assignment in lieu
thereof, or any purchaser at a foreclosure or trustee' s sale,
in any judicial or non-judicial foreclosure of such Permitted
Encumbrance, shall take the Conveyance Parcels subject to
unpaid rent due under this Lease which accrued prior to the
time such Lessee' s Mortgagee or purchaser came into possession
of the Conveyance Parcels.
16. 12 Agency' s Right to Cure Default. Lessee shall be
deemed to be in default under this Lease if there is a default
under the terms of any Permitted Encumbrance and Lessee shall
fail to cure such default within the period provided under the
instruments evidencing any such Permitted Encumbrance, or by
law. In the event of such default, including the nonpayment
of money under any such Permitted Encumbrance, Agency shall
have the right to cure the same during the period provided
under the terms of the Permitted Encumbrance, or by law, and
if not reimbursed by Lessee for all advances, costs and
expenses of Agency in connection with the curing of such
default within such period, Agency shall further have the right
to continue to keep and maintain any such Permitted Encumbrance
in good standing, and in which even Agency may, at its option,
upon the expiration of the original period within which said
nonpayment default is to be cured, declare Lessee to be -in
default under this Lease. Agency shall be entitled to exercise
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the remedies provided in this Lease for any default described
in this Section.
Section 17. INDEMNITY.
During the Term, Lessee agrees that Agency and City, their
agents, officers, representatives and employees, shall not be
liable for any claitis, liabilities, penalties, fines or for any
damage to the goods, properties or effects of Lessee, its
sublessees or representatives, agents, employees, guests,
licensees, invitees, patrons or clientele or of any other
person whomsoever, nor for personal injuries to, or deaths of
any persons, whether caused by or resulting from any act or
omission of Lessee or its sublessees or any other person on or
about the Conveyance Parcels and the Improvements, or in
connection with the operation thereof, or from any defect in
the Conveyance Parcels or the Improvements. Lessee agrees to
indemnify and save free and harmless Agency and City and their
authorized agents, officers, representatives and employees
against any of the foregoing liabilities and any costs and
expenses incurred by Agency or City on account of any claim or
claims therefor. Lessee shall not be responsible for (and such
indemnity shall not apply to) any ants, errors or omissions of
Agency, City, or their respective agents, officers,
representatives or employees.
Section 18. INSURANCE.
18. 1 Insurance to be Provided by Lessee. During the Term,
Lessee, at its sole cost and expense, shall:
(a) Maintain or cause to be maintained a policy or
policies of insurance against loss or damage to the
Improvements of all property of an insurable nature
located upon the Conveyance Parcels, resulting from
fire, lightning, vandalism, malicious mischief, and
such other perils ordinarily included in extended
coverage fire insurance policies. Such policy or
policies shall be required to provide coverage against
loss or damage resulting from flood and/or earthquake
only to the extent such coverage is available at
commercially reasonable rates and is required by any
lender making a loan to Lessee which is secured by the
Conveyance Parcels. Such insurance policy shall name
Agency as an additional insured and shall be
maintained in an amount not less than one hundred
percent (100%) of the full insurable value of the
Improvements, as defined herein in this Section 18.
(b) Maintain or cause to be maintained use and occupancy
or business interruption or rental income insurance
against the perils of fire, lighting, vandalism;
malicious mischief, and such other perils ordinarily
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included in extended coverage fire insurance policies,
in an amount equal to not less than twelve (12)
months' rental under this Lease.
(c) Maintain or cause to be maintained public liability
insurance issued by a company with a Best' s rating of
not less than A, to protect against loss from
liability imposed by law for damages on account of
personal injury, including death therefrom, suffered
or alleged to be suffered by any person or persons
whomsoever on or bout the Conveyance Parcels and the
Improvements, or in connection with the operation
thereof, resulting directly or indirectly from any
acts or activities of Lessee or its sublessees, or any
person acting for Lessee, or under their respective
control or direction, and also to protect against loss
from liability imposed by law for damages to any
property of any person occurring on or about the
Conveyance Parcels and the Improvements, or in
connection with the operation thereof, caused directly
or indirectly by or from acts or activities of Lessee
of its sublessees, or any person acting for Lessee, or
under their respective control or direction. Such
property damage and personal injury insurance shall
also provide for and protect against incurring any
legal cost in defending claims for alleged loss. Such
personal injury and property damage insurance shall be
maintained in full force and effect during the entire
term of this Lease in the amount of at
least Dollars ($ ) combined
single limit, naming Agency and City as additional
insureds. If the operation under this Lease results
in an increased or decreased risk in the reasonable
determination of Agency, then Lessee agrees that the
minimum limit hereinabove designated shall be changed
accordingly upon request by Agency. Lessee agrees
that provisions of this paragraph as to maintenance of
insurance shall not be construed as limiting in any
way the extent to which Lessee may be held responsible
for the payment of damages to persons or property
resulting from Lessee' s activities, activities of its
sublessees or the activities of any other person or
persons for which Lessee is otherwise responsible.
(d) Maintain or cause to be maintained worker' s
compensation insurance issued by a responsible carrier
authorized under the laws of the State of California
to insure employers against liability for compensation
under the workers' compensation laws now in force in
California, or any laws hereafter enacted as an
amendment or supplement thereto or in lieu thereof.
Such workers' compensation insurance shall cover- all
persons employed by Lessee in connection with the
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Conveyance Parcels and the Improvements and shall
cover full liability for compensation under any such
act aforesaid, based upon death or bodily injury
claims made by, for on behalf of any person incurring
or suffering injury or death in connection with the
Conveyance Parcels or the Improvements or the
operation thereof by Lessee.
18.2 Definition of "Full Insurable Value" . The term "full
insurable value ' as used in this Section 18 shall mean the
actual replacement cost (excluding the cost of excavation,
foundation and footings below the lowest floor and without
deduction for depreciation) of the Improvements, including the
cost of construction of the Improvements, architectural and
engineering fees, and inspection and supervision. To ascertain
the amount of coverage required, Lessee shall cause the full
insurable value to be determined from time to time by appraisal
by the insurer or, if no such appraisal is available, by an
appraiser mutually acceptable to Agency and Lessee, not less
often than once every three (3) years.
18.3 General Insurance Provisions. All liability policies
of insurance provided for in this Section 18 shall name Lessee
as the insured and Agency as an additional insured, as their
respective interests may appear. All property casualty
insurance policies shall include the interest of any Lessee' s
Mortgagee, and may provide that any loss is payable jointly to
Lessee and Lessee' s Mortgagee in which event such policies
shall contain standard mortgage loss payable clauses. Lessee
agrees to timely pay all premiums for such insurance and, at
its sole cost and expense, to comply and secure compliance with
all insurance requirements necessary for the maintenance of
such insurance.
Lessee agrees to submit policies of all insurance required
by this Section 18 of this Lease, or certificates evidencing
the existence thereof, to Agency on or before the effective
date of this Lease, indicating full coverage of the contractual
liability imposed by this Lease. At least thirty (30) days
prior to expiration of any such policy, copies of renewal
policies, or certificates evidencing the existence thereof,
shall be submitted to Agency.
All insurance provided for under this Section 18 shall be
effected under policies issued by insurers of recognized
responsibility, licensed or permitted to do business in the
State of California, approved by Agency.
All policies or certificates of insurance shall:
(i) provide that such policies shall not be cancelled or
limited in any manner without at least thirty (30) days prior
written notice to Agency; (ii) provide that such coverage is
primary and not contributing with any insurance as may be
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obtained by the Agency and shall contain a waiver of
subrogation for the benefit of the City and the Agency; and
(iii) name the City, Agency, and their respective officers,
agents, and employees as additional insureds under such
policies.
18.4 Failure to Maintain Insurance. If Lessee fails or
refuses to procure or maintain insurance as required by this
Lease, Agency shall have the right, at Agency' s election, and
upon ten (10) days prior notice to Lessee, to procure and
maintain such insurance. The premiums paid by Agency shall be
treated as added rent due from Lessee, to be paid on the first
day of the month following the date on which the premiums were
paid. Agency shall give prompt notice of the payment of such
premiums, stating the amounts paid and the name of the
insured(s) .
18.5 Insurance Proceeds Resulting from Loss or Damage to
Improvements. All proceeds of insurance with respect to loss
or damage to the Improvements during the term of this Lease
shall be payable, under the provisions of the policy of
insurance, to Lessee, and said proceeds shall constitute a
trust fund to be used for the restoration, repair and
rebuilding of the Improvements in accordance with plans and
specifications approved in writing by Agency. To the extent
that such proceeds exceed the cost of such restoration, repair
or rebuilding, then such proceeds shall be apportioned between
Lessee and Agency as their interests may appear.
Notwithstanding the foregoing, within the period during
which there is an outstanding mortgage upon the Improvements,
such proceeds shall be payable in accordance with Section 18.3
of this Lease.
In the event this Lease is terminated by mutual agreement
of Agency and Lessee and said Improvements are not restored,
repaired or rebuilt, the insurance proceeds shall be jointly
retained by the Agency and Lessee and shall be applied first to
any payments due under this Lease from Lessee to Agency, second
to restore the Conveyance Parcels to a neat and clean
condition, and finally any excess shall be apportioned between
Lessee and Agency as their interests may appear; provided,
however, that within any period when there is an outstanding
mortgage upon the Improvements, such. proceeds shall be applied
first to discharge the debt secured by the mortgage and then
for the purposes and in the order set forth above in this
paragraph.
The value of each interest for the purpose of apportioning
excess proceeds under this Section 18.5 shall be the fair
market value of such interests immediately prior to the
occurrence of the damage or destruction.
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Section 19. EMINENT DOMAIN.
In the event that the Conveyance Parcels and/or the
Improvements or any part thereof shall be taken for public
purposes by condemnation as a result of any action or
proceeding in eminent domain, then, as between Agency and
Lessee (or mortgagee, if a mortgage is then in effect) , the
interests of Agency and Lessee (or mortgagee) in the award and
the effect of the taking upon this Lease shall be as follows:
(a) In the event of such taking of only a part of the
Conveyance Parcels, leaving the remainder of the
Conveyance Parcels in such location and in such form,
shape and size as to be used effectively and
practicably for the conduct thereon of the uses
permitted hereunder, this Lease shall terminate and
end as to the portion of the Conveyance Parcels so
taken as of the date title to such portion vests in
the condemning authority, but shall continue in full
force and effect as to the portion of the Conveyance
Parcels not so taken and from and after such date the
rental required by this Lease to be paid by Lessee to
Agency shall be reduced in the proportion which the
number of square feet so taken bears to the total
number of square feet in the Conveyance Parcels. A
taking of the Gothard Realignment Area shall be deemed
such a taking.
(b) In the event of taking of only a part of the
Conveyance Parcels, leaving the remainder of the
Conveyance Parcels in such location, or in such form,
shape or reduced size as to render the same not
effectively and practicably usable, for the conduct
thereon of the uses permitted hereunder, this Lease
and all right, title and interest thereunder shall
cease on the date title to the Conveyance Parcels or
the portion thereof so taken vests in the condemning
authority.
(c) In the event the entire Conveyance Parcels is so
taken, this Lease and all of the right, title and
interest thereunder, shall cease on the date title to
the Conveyance Parcels so taken vests in the
condemning authority.
(d) Promptly after a partial taking, at Lessee' s expense
and in the manner specified in provisions of this
Lease related to maintenance, repairs, alterations,
Lessee shall restore the Improvements, to the extent
of condemnation proceeds received by Lessee, so as to
place them in a condition suitable for the uses and
purposes for which the Conveyance Parcels was leased.
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(e) In the event of any taking under subparagraphs (a) ,
(b) or (c) hereinabove, that portion of any award of
compensation attributable to the fair market value of
the Conveyance Parcels or portion thereof taken,
valued as subject to this Lease, shall belong to
Agency. That portion of any award attributable to the
fair market value of Lessee' s leasehold interest in
the Conveyance Parcels pursuant to this Lease shall
belong to Lessee. That portion of any award
attributable to the fair market value of the
Improvements or portion thereof taken shall, belong to
Agency and Lessee, as their interests may appear,
except that in the event of a partial taking, where
the Lease remains in effect and Lessee is obligated to
restore or repair the Improvements, then Lessee shall
be entitled to any portion of the award attributable
to severance damages to the remaining Improvements.
Said award shall be used for the restoration, repair
or rebuilding of the Improvements in accordance with
plans and specifications approved in writing by
Agency. To the extent that said award for severance
damages exceeds the cost of such restoration, repair
or rebuilding, then such award shall be apportioned
between Lessee and Agency as their interests may
appear. The value of each interest for the purpose of
apportionment under this Section shall be the fair
market value of such interests at the time of the
taking.
(f) Provided, however, that within the period during which
there is an outstanding mortgage on the Improvements,
the mortgagee shall be entitled to any portion of the
award attributable to the Improvements, to the extent
of its interest therein. The mortgagee may at its
option apply said portions of the award to restoration
of the Improvements or to reduction of the mortgage.
Any excess portion of the award attributable to the
condemnation of the Improvements shall be apportioned
between Lessee and Agency as their interests may
appear.
(g) Notwithstanding the foregoing provisions of this
Section, Agency may, in its discretion and without
affecting the validity and existence of this Lease,
transfer Agency' s interests in the Conveyance Parcels
in lieu of condemnation to any authority entitled to
exercise the power of eminent domain. In the event of
such transfer by Agency, Lessee (or mortgagee if a
mortgage is then in effect) and Agency shall retain
whatever rights they may have to recover from said
authority the fair market value of their respective
interests in the Improvements taken by the authority.
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(h) All valuations to be made pursuant to this Section 19
shall be made by mutual agreement of Agency and
Lessee, or by arbitration pursuant to Section 27.15 if
Agency and Lessee are unable to so agree.
Section 20. OBLIGATION TO REFRAIN FROM DISCRIMINATION.
There shall be no discrimination against or segregation of
any person or group of persons, on account of sex, marital
status, race, color, creed, religion, national origin or
ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the Conveyance Parcels and
the Improvements, and Lessee itself or any person claiming
under or through it shall not establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees, or vendees thereof
or any portion thereof, or in the providing of goods, services,
facilities, privileges, advantages and accommodation.
Lessee shall refrain from restricting the rental, sale or
lease of the Conveyance Parcels and the Improvements, or any
portion thereof, on the basis of sex, marital status, race,
color, creed, religion, ancestry or national original of any
person. All such deeds, leases or contracts shall contain or
be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In Leases:
"The lessee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming
under or through it, and this lease is made and accepted upon
and subject to the following conditions:
"That there shall be no discrimination against or
segregation of any person or group of persons, on
account of sex, marital status, race, color, creed,
religion, national origin, or ancestry, in the
leasing, subleasing, transferring, use, occupancy,
tenure, or enjoyment of the premises herein leased nor
shall the lessee itself, or any person claiming under
or through it, establish or permit any such practice
or practices of discrimination or segregation with
reference to the selection, location, number, use, or
occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. "
(b) In Contracts:
"There shall be no discrimination against or segregation
of, any person or group of persons on account of sex, marital
status, race, color, creed, religion, national origin or
02/11/93 ATTACHMENT NO. 6
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%1
ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the premises, nor shall the
transferee itself or any person claiming under or through it,
establish or permit any such practice or practices of
discrimination or segregation with reference to the selection,
location, number, use of occupancy of tenants, lessees,
subtenants, sublessees or vendees of the premises. "
Section 21. NONDISCRIMINATION IN EMPLOYMENT.
Lessee, for itself and its successors and assigns, agrees
that during the construction of the Improvements provided for
in this Lease, and during any work of repair or replacement,
Lessee will not discriminate against any employee or applicant
for employment because of race, color, creed, religion, sex,
marital status, ancestry or national origin.
Section 22 . LABOR STANDARDS.
Lessee shall comply, and require all contractors and
subcontractors employed pursuant to this Lease to comply with
all applicable labor standards provisions of the California
Labor Code and federal law, including payment of prevailing
wage for off-site work.
Section 23 . COMPLIANCE WITH LAW.
Lessee agrees, at its sole cost and expense, to comply and
secure compliance with all the requirements now in force, or
which may hereafter be in force, of all municipal, county,
state and federal authorities, pertaining to the Conveyance
Parcels and the Improvements, as well as operations conducted
thereon, and to faithfully observe and secure compliance with,
in the use of the Conveyance Parcels and the Improvements all
applicable county and municipal ordinances and state and
federal statutes now in force or which may hereafter be in
force, and to pay before delinquency all taxes, assessments,
and fees, if any, assessor levied upon Lessee or the Conveyance
Parcels or the Improvements, including the land and any
buildings, structures, machines, appliances or other
improvements of any nature whatsoever, erdcted, installed or
maintained by Lessee or by reason of the business or other
activities of Lessee upon or in connection with the Conveyance
Parcels and the Improvements. The judgment of any court of
competent jurisdiction, or the admission of Lessee or any
sublessee or permittee in any action or proceeding against
them, or any of them, whether Agency be a party thereto or not,
that Lessee, sublessee or permittee has violated any such
ordinance or statute in the use of the Conveyance Parcels or
the Improvements shall be conclusive of that fact as between
Agency and Lessee, or such sublessee or permittee.
02/11/93 ATTACMENT NO. 6
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Section 24. ENTRY AND INSPECTION.
Agency reserves and shall have the right at all times, upon
forty-eight (48) hours prior notice to Lessee by the Executive
Director of Agency, to enter the Conveyance Parcels and the
Improvements for the purpose of viewing and ascertaining the
condition of the same, or to protect its interests in the
Conveyance Parcels and the Improvements or to inspect the
operations conducted thereon.
Section 25. RIGHT TO MAINTAIN.
In the event that the entry or inspection by Agency
pursuant to Section 24 hereof discloses that the Conveyance
Parcels or the Improvements are not in a decent, safe, and
sanitary condition, Agency shall have the right, after thirty
(30) days written notice to Lessee (except in case of
emergency, in which event no notice shall be necessary) , to
have any necessary maintenance work done for and at the expense
of Lessee and Lessee hereby agrees to pay promptly any and all
costs incurred by Agency in having such necessary maintenance
work done in order to keep the Conveyance Parcels and the
Improvements in a decent, safe and sanitary condition. The
rights reserved in this Section shall not create any
obligations or Agency or increase obligations elsewhere in this
Lease imposed on Agency.
Section 26. EVENTS OF DEFAULT AND REMEDIES.
26. 1 Events of Default by Lessee.
(a) Lessee shall abandon or surrender the Conveyance
Parcels, or the Improvements; or
(b) Lessee shall fail or refuse to pay, within ten (10)
days of notice from Agency that the same is due, any
installment of rent or any other sum required by this
Lease to be paid by Lessee; or
(c) Lessee shall fail to perform any covenant or condition
of this Lease other than as set forth in subparagraphs
(a) or (b) above, and any such failure described above
shall not be cured within thirty (30) days following
the service on Lessee of a written notice from Agency
specifying the failure complained of or if it is not
practicable to cure or remedy such failure within such
thirty (30) day period, within such longer period as
shall be reasonable under the circumstances; or
(d) Lessee shall voluntarily file or have involuntarily
filed against it any petition under any bankruptcy or
insolvency act or law and the same shall not be
dismissed within sixty (60) days thereafter; or
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 33 of 41
(e) Lessee shall be adjudicated a bankrupt; or
(f) Lessee shall make a general assignment for the benefit
of creditors in violaticn of the terms of this Lease;
then such event shall constitute an event of default under this
Lease.
26.2 Remedies of Agency.
In the event of any such default as described in Section
26. 1, and subject to the rights of Lessee' s Mortgagee set forth
in Section 16, Agency may, at its option:
(1) Correct or cause to be corrected said default and
charge the costs thereof (including costs
incurred by Agency in enforcing this provision)
to the account of Lessee, which charge shall be
due and payable within fifteen (15) days after
presentation by Agency of a statement of all or
part of said costs;
(2 ) Correct or cause to be corrected said default and
pay the costs thereof (including costs incurred
by Agency in enforcing this provision) from the
proceeds of any insurance; or in the event that
Lessee has obtained a faithful performance bond
indemnifying Agency, Agency may call upon the
bonding agent to correct said default or to pay
the costs of such correction performed by or at
the direction of Agency;
(3) Exercise its right to maintain any and all
actions at law or suits in equity compel Lessee
to correct or cause to be corrected said default;
(4) Have a receiver appointed to take possession of
Lessee' s interest in the Conveyance Parcels and
the Improvements, with power in said receiver to
administer Lessee' s interest in the Conveyance
Parcels and the Improvements, to collect all
funds available to Lessee in connection with its
operation and maintenance of the Conveyance
Parcels and the Improvements; and to perform all
other consistent with Lessee' s obligation under
this Lease as the court deems proper;
(5) Maintain and operate the Conveyance Parcels and
the Improvements, without terminating this Lease;
(6) With respect to a Monetary default or material
non-monetary default, terminate this Lease by
02/11/93 ATTACHMENT NO. 6
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%,W1
written notice to Lessee of its intention to do
SO.
26.3 Right of Agency in the Event of Termination of
Lease. Subject to the rights of a Lessee' s Mortgagee as set
forth in Section 16 hereof, upon termination of this Lease
pursuant to Section 26.2, it shall be lawful for Agency to
re-enter and repossess the Conveyance Parcels and the
Improvements and Lessee, in such event, does hereby waive any
demand for possession thereof, and agrees to surrender and
deliver the Conveyance Parcels and the Improvements peaceably
to Agency immediately upon such termination in good order,
condition and repair, except for reasonable wear and tear.
Lessee agrees that upon such termination, title to all the
Improvements on the Conveyance Parcels shall vest in Agency.
Even though Lessee has breached the Lease and abandoned the
Conveyance Parcels, this Lease shall continue in effect for so
long as Agency does not terminate Lessee' s right to possession,
and Agency may enforce all of its right and remedies under this
Lease, including, but not limited to, the right to recover the
rent as it becomes due under this Lease. No ejectment,
re-entry or other act by or on behalf of Agency shall
constitute a termination unless Agency gives Lessee notice of
termination in writing.
Termination of this Lease shall not relieve or release
Lessee from any obligation incurred pursuant to this Lease
prior to the date of such termination. Termination of this
Lease shall not relieve Lessee from the obligation to pay any
sum due to Agency or from any claim for damages against Lessee.
26.4 Damages. Damages which Agency recovers in the event
of default under this Lease shall be those which are then
available under applicable California case and statutory law to
lessors for leases in the State of California including, but
not limited to, any accrued but unpaid rent and the worth at
the time of award of the amount by which the unpaid rent for
the balance of the term of this Lease after the date of award
exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided.
26.5 Rights and Remedies are Cumulative. The remedies
provided by this Section 26 are not exclusive and shall be
cumulative to all other rights and remedies possessed by
Agency. The exercise by Agency of one or more such rights or
remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same
default or any other default by Lessee.
26.6 Limitation of Lessee' s_Liability. Notwithstanding
anything to the contrary herein contained, following completion
of the construction of the Improvements, (i ) the liability of
02/11/93 ATTACEDIENT NO. 6
0591q/2460/049 Page 35 of 41
Lessee shall be limited to its interest in the Conveyance
Parcels and Improvements, and any rents, issues and profits
arising from any subleases of the Conveyance Parcels and
Improvements which are misapplied, or which have accrued but
are not yet due and payable, at the time of any default
hereunder and which are misapplied by Lessee when collected,
and, in addition, with respect to any obligation to hold and
apply insurance proceeds, proceeds of condemnation or other
monies hereunder, any such monies received by it to the extent
not so applied; (ii) no other assets of Lessee shall be
affected by or subject to being applied to the satisfaction of
any liability which Lessee may have to Agency or to another
person by reason of this Lease; and (iii) any judgment, order,
decree or other award in favor of Agency shall be collectible
only out of, or enforceable in accordance with, the terms of
this Lease by termination or other extinguishment of Lessee' s
interest in the Conveyance Parcels and Improvements. As a
condition to protection Under the provisions of this Section
26.6, Lessee covenants not to collect more than one (1) month' s
rent in advance, exclusive of reasonable security deposits,
under the terms of any subleases of the Improvements that
Lessee may enter into.
Notwithstanding the foregoing, it is expressly understood
and agreed that the aforesaid limitation on liability shall in
no way restrict or abridge Lessee' s continued personal
liability for:
(1) fraud or willful or grossly negligent
misrepresentation made by Lessee in connection
with this Lease;
(2) misapplication of (i ) proceeds of insurance and
condemnation or (ii ) rentals received by Lessee
under subleases subsequent to the date Agency is
entitled to re-enter the Conveyance Parcels and
Improvements by reason of Lessee' s default
pursuant to the terms hereof and applicable law;
(3) the retention by Lessee of all advance rentals
and security deposits of sublessees not refunded
to or forfeited by such sublessees;
(4) the indemnification undertakings of Lessee under
Section 17; and
(5) waste by Lessee with respect to the Conveyance
Parcels or the Improvements.
Section 27. MISCELLANEOUS.
27. 1 Governing Law. The laws of the State of California
shall govern the interpretation and enforcement of this Lease.
02/11/93 ATTACHMENT 110. 6
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27.2 Legal Actions. In addition to any other rights or
remedies, either party may institute legal action to cure,
correct or remedy any default, to recover damages for any
default, or to obtain any other remedy consistent with the
purpose of this Lease. Such legal actions must be instituted
in the Superior Court of Orange County, State of California, in
any other appropriate court in that County, or in the Federal
District Court in the Central District of California.
27.3 Acceptance of Service of Process. In the event that
any legal action is commenced by Lessee against Agency, service
of process on Agency shall be made by personal service upon the
Chairman or Executive Director of Agency, or in such other
manner as may be provided by law.
In the event that any legal action is commenced by Agency
against Lessee, service of process on Lessee shall be made by
personal service upon Lessee or in such other manner as may be
provided by law, whether made within or without the State of
California.
27.4 Attorneys' Fees And Court Costs. In the event that
either Agency or Lessee shall bring or commence an action to
enforce the terms and conditions of this Lease or to obtain
damages against the other party arising from any default under
or violation of this Lease, then the prevailing party shall be
entitled to and shall be paid reasonable attorneys' fees and
court costs therefor.
27.5 Inspection of Books And Records. Agency has the
right (at Lessee' s office, not more than once during each
calendar year and upon not less than forty-eight (48) hours'
notice, and during normal business hours) to inspect the books
and records of Lessee pertaining to the Conveyance Parcels as
pertinent to the purposes of this Lease. Lessee also has the
right (at Agency' s office, upon not less than forty-eight (48)
hours' notice, and at all reasonable times) to inspect the
books and records of Agency pertaining to the Conveyance
Parcels as pertinent to the purposes of this Lease.
27 .6 Interest. Any amount due Agency that is not paid
when due shall bear interest from the date such amount becomes
due until it is paid. Interest shall be at a rate equal to the
lesser of the discount rate established by the San Francisco
office of the Federal Reserve Bank, plus two percent (2%) , on
the first day of the month such amount becomes due and the
maximum rate permitted by applicable law.
27. 7 Notices. All notices, statements, demands, requests,
consents, approvals, authorizations, offers, agreements,
appointments or designations hereunder by either party to the
other shall be in writing and shall be sufficiently given and
served upon the other party, upon personal delivery or five (5)
02/11/93 ATTACHI'•1ENT NO. 6
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days after deposit within California in the United States mail,
certified or registered mail, return receipt requested, postage
prepaid and addressed as follows:
Agency: Redevelopment Agency of the City of Huntington
Beach
2000 Main Street
Huntington Beach, California 92648
Attention: Executive Director
Lessee: Orin G. Berge, Jr.
18600 Main Street, Suite 280
Huntington Beach, California 92648
or to such other address as either party shall later designate
for such purposes by written notice to the other party.
27.8 Time is of the Essence. Time is of the essence in
the performance of the terms and conditions of this Lease.
27.9 Non-Merger of Fee And Leasehold Estates. If both
Agency' s and Lessee' s estates in the Conveyance Parcels or the
Improvements or both become vested in the same owner, this
Lease shall nevertheless not be destroyed by application of the
doctrine of merger except at the express election of Agency and
Lessee' s Mortgagee. The voluntary or other surrender of this
Lease by Lessee, or a mutual cancellation thereof, shall not
work as a merger and shall, at the option of Agency, terminate
all or any existing sublease or subtenancies or may, at the
option of Agency, operate as an assignment to Agency of any or
all such existing subleases or subtenancies.
27.10 Holding Over. The occupancy of the Conveyance
Parcels after the expiration of the term of this Lease shall be
construed to be a tenancy from month to month, and all other
terms and conditions of this Lease shall continue in full force
and effect.
27. 11 Conflict of Interest. No member, official or
employee of Agency shall have any personal interest, direct or
indirect, in this Lease nor shall any such member, official or
employee participate in any decision relating to the Lease
which affects his personal interests or the interests of any
corporation, partnership or association in which he is directly
or indirectly interested.
Lessee warrants that it has not paid or given, and will not
pay or give, any third party any money or other consideration
for obtaining this Lease.
27. 12 Non-Liability of Agency Officials And Employees. No
member, official or employee of Agency shall be personally
liable to Lessee, or any successor in interest, in the event of
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 3B of 41
v �1
any default or breach by Agency or for any amount which may
become due to Lessee or successor or on any obligations under
the terms of this Lease.
27.13 Relationship. The relationship between the parties
hereto shall at all times be deemed to be that of landlord and
tenant. The parties do not intend nor shall this Lease be
deemed to create a partnership or joint venture.
27. 14 Transactions with Affiliates. Lessee shall have the
right to enter into transactions with subsidiaries, affiliates
and other related entities for the purpose of leasing space,
arranging the Construction Loan and the Permanent Loan,
providing cleaning, maintenance and repair services, insurance
policies and other purposes related to the use and development
of the Conveyance Parcels and the Improvements, provided that
all such costs, charges and rents are competitive with the
costs, charges, rent and other sums which would be paid by or
to, as the case may be, an unrelated third party.
27. 15 Waivers And Amendments. All waivers of the
provisions of this Lease must be in writing and signed by the
appropriate authorities of Agency or Lessee.
The waiver by Agency of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition, or any subsequent breach of
the same or any other term, covenant or condition herein
contained. The subsequent acceptance of rent hereunder by
Agency shall not be deemed to be a waiver of any preceding
breach of Lessee of any term, covenant or condition of this
Lease, regardless of Agency' s knowledge of such preceding breach
at the time of acceptance of such rent. Failure on the part of
Agency to require or exact full and complete compliance with any
of the covenants or conditions of this Lease shall not be
construed as in any manner changing the terms hereof and shall
not prevent Agency from enforcing any provision hereof.
All amendments hereto must be in writing and signed by the
appropriate authorities of Agency and Lessee.
The Lessee' s Mortgagee permitted by this Lease shall not be
bound by any waiver or amendment to this Lease without Lessee' s
Mortgagee giving its prior written consent.
27. 16 Non-Merger With DDA. None of the terms, covenants or
conditions agreed upon in writing in the DDA and other
instruments between the parties to this Lease with respect to
obligations to be performed, kept or observed by Lessee or
Agency in respect to the Conveyance Parcels or any part thereof,
shall be deemed to be merged with this Lease until such time as
a Certificate of Completion issued by Agency is recorded.
02/11/93 ATTACMIENT NO. 6
0591q/2460/049 Page 39 of 41
27.17 Duplicate Originals. This Lease is executed in five
(5) duplicate originals, each of which is deemed to be an
original. This Lease includes forty-one (41) pages.
27. 18 Severability. If any provision of this Lease or the
application thereof to any person or circumstances shall be
invalid or unenforceable to any extent, the remainder of this
Lease and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be
enforceable to the greatest extent permitted by law.
27. 19 Terminology. All personal pronouns used in this
Lease, whether used in the masculine, feminine, or neuter
gender, shall include all other genders; the singular shall
include the plural, and vice versa. Titles of sections are for
convenience only, and neither limit nor amplify the provisions
of the Lease itself. Except for terms expressly defined in this
Lease, all terms shall have the same meaning as set forth in the
DDA.
27.20 Recordation. A short form memorandum of this Lease,
in the form attached hereto as Exhibit "C", shall be recorded at
or within one (1) day after the time the Lease is executed.
27.21 Binding Effect. This Lease, and the terms,
provisions, promises, covenants and conditions hereof, shall be
binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, legal representatives,
successors and assigns.
27.22 Estoppel Certificate. Each of the parties shall at
any time and from time to time upon not less than twenty (20)
days' prior notice by the other, execute, acknowledge and
deliver to such other party a statement in writing certifying
that this Lease is unmodified and is in full force and effect
(or if there shall have been modifications that this Lease is in
full force and effect as modified and stating the
modifications) , and the dates to which the rent has been paid,
and stating whether or not to the best knowledge of the signer
of such certificate such other party is in default in performing
or observing any provision of this Lease, and, if in default,
specifying each such default of which the signer may have
knowledge, and such other matters as such other party may
reasonably request, it being intended that any such statement
delivered by Lessee may be relied upon by Agency or any
successor in interest to Agency or any prospective mortgagee or
encumbrancer thereof, and it being further intended that any
such statement delivered by Agency stay be relied upon by any
prospective assignee of Lessee' s interest in this Lease or any
prospective mortgagee or- encumbrancer thereof. Reliance on any
such certificate may not extend to any default as to which the
signer of the certificate shall have had no actual knowledge.
02/11/93 ATTACIMENT NO. 6
0591q/2460/049 Page 40 of 41
27.23 Force Majeure. The time within which Agency or
Lessee is obligated herein to perform any obligation hereunder,
other than an obligation that may be performed by the payment of
money, shall be extended and the performance excused when the
delay is caused by fire, earthquake or other acts of God,
strike, lockout, acts of public enemy, riot, insurrection or
other cause beyond the control of the applicable party.
27.24 2uiet EnjoyMent. Agency does hereby covenant,
promise and agree to and with Tenant that Tenant, for so long as
it is not in default hereof, shall and may at all times
peaceable and quietly have, hold, use, occupy and possess the
Conveyance Parcels throughout the Term.
IN WITNESS WHEREOF, the parties hereto have caused this
Lease to be executed by their lawfully authorized officers.
AGENCY:
REDEVELOPMENT AGENCY OF THE CITY
OF HUNTINGTON BEACH, a public body
corporate and politic
Date: By:
Its:
ATTEST:
City Clerk
APPROVED AS TO FORM,
Stradling, Yocca, Carlson &
Rauth, Agency Special Counsel
LESSEE:
Date• By:
Orin G. Berge, Jr. ,
02/11/93 ATTACHMENT NO. 6
0591q/2460/049 Page 41 of 41
k
EXHIBIT A
LEGAL DESCRI?TION
[To Be Attached
Insert Description of Appropriate Parcels]
02/11/93 EXHIBIT A TO
0591q/2460/049 ATTACHMENT NO. 6
ATTACHMENT NO. 7
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
R [Space above for recorder. ]
CERTIFICATE OF COMPLETION FOR
CONSTRUCTION AND DEVELOPMENT
WHEREAS, a Disposition and Development Agreement was
entered into by and between the Redevelopment Agency of the
City of Huntington Beach, a public body corporate and politic
(the "Agency" ) and Orin G. Berge, Jr. , a married man (the
"Developer") , dated as of , a copy of which is on
file with the Agency as a public record at its offices at 2000
Main Street, Huntington Beach, California (the "DDA" ) , and is
incorporated herein by reference; and
WHEREAS, as referenced in said DDA, the Agency is required
to furnish the Developer with a Certificate of Completion upon
completion of construction, which certificate shall be in such
form as to permit it to be recorded in the Recorder' s Office of
Orange County; and
WHEREAS, such certificate shall be conclusive determination
of satisfactory completion of the construction required by the
DDA; and
WHEREAS, the Agency has conclusively determined that the
construction on the above described real property required by
the DDA has been satisfactorily completed.
NOW THEREFORE, the Agency certifies as follows:
1. As provided in said DDA, the Agency does hereby
certify that the construction has been fully and satisfactorily
performed and completed.
2. Nothing contained in this instrument shall modify in
any other way any other provisions of the DDA.
02/10/93 ATTACHMENT 110. 7
6596u/2460/049 Page 1 of 2
r
v
IN WITNESS WHEREOF, the Agency has executed this
certificate this day of , 199_.
THE REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINCTON BEACH, a public
body corporate and politic
By:
Its.-
ATTEST:
Agency Secretary
02/10/93 ATTACHMENT 140. 7
6596u/2460/049 Page 2 of 2
V �
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
All that certain land situated in the State of
California, County of Orange, City of Huntington Beach,
described as follows:
(To Be Inserted. )
02/10/93 EXHIBIT "A" TO
6596u/2460/049 ATTACHAZENT NO. 7
STATE OF CALIFORNIA )
ss.
COUNTY OF ORANGE )
On this day of 1991 before me,
the undersigned, a Notary Public in and for said State,
personally appeared ,
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument as
the (insert title of the
officer) of the Redevelopment Agency of the City of Huntington
Beach and acknowledged to me that the Redevelopment Agency of
the City of Huntington Beach executed it.
Signature of Notary Public
(SEAL)
02/10/93
6596u/2460/049 ATTACHPIENT NO. 7
ATTACHMENT NO. 8
AFFORDABLE HOUSING RESTRICTIONS
1. Code Requirements. For so long as the Developer
Improvements are in use as a housing development, but in no
event less than the life of the Redevelopment Plan, the
Developer shall operate the Developer Improvements in
compliance with all requirements of the City municipal code
pertaining to "single room occupancy/living units, " including
without limitation, the provisions of Section 9220. 15(a) .
2. Number of Units. The Developer covenants and
agrees to develop a total of the two hundred fifty (250)
multifamily housing units on the Conveyance Parcels in
conformance with the Scope of Development (Attachment No.
The Developer agrees to make available, restrict occupancy to,
and rent twenty-three (23) of the units to "Lower Income
Households, " and fifteen (15) additional units to "Very Low
Income Households, " all at an "Affordable Rent" (the
"Affordable Units") . The remaining units on the Conveyance
Parcels shall not be subject to the restrictions of this
Attachment No. 8.
"Very Low Income Household" shall mean a
household earning not greater than fifty percent (50%) of
Orange County median income, as determined by the United States
Department of Housing and Urban Development, as set forth in
Health and Safety Code Section 50105.
"Lower Income Household" shall mean a household
earning not greater than eighty percent (80%) of Orange County
median income, as determined by the United States Department of
Urban Development, as set forth in Health and Safety Code
Section 50079.5.
"Affordable Rent" shall have the meaning set
forth in Health and Safety Code Section 50053, as further
defined in subparagraph 5 of this Attachment No. B.
3. Duration of Affordability Requirements. The
Affordable Units shall be subject to the requirements of this
Attachment No. 8 for ( ) years, beginning on the
date of the issuance of a certificate of occupancy for the
Developer Improvements (the "Commencement Date") . The duration
of this requirement shall be known as the "Affordability
Period." All tenants residing in the Affordable Units during
the last two (2) years of the Affordability Period shall be
given notice at least once every six (6) months of the
expiration date of this requirement, and that the rent payable
on the Affordable Unit may be raised to a market rate rent at
the end of the Affordability Period.
02/10/93 ATTACHMENT NO. 8
6596u/2460/049 Page 1 of 4
4. Income of Tenants. Prior to the rental or lease
of any Affordable Unit to a tenant, and annually thereafter
within thirty (30) days of the anniversary date of the tenant' s
occupancy of the Affordable Unit, the Developer shall obtain a
completed "Income Computation and Certification Form, " in the
form of Exhibit "A" hereto or such other form as may be
provided by the Agency. The Developer shall ensure that each
tenant leasing an Affordable Unit is a Lower Income Household
or a Very Low Income Household, whichever is applicable, and
meets the eligibility requirements established for the
Affordable Unit. The Developer shall obtain an income
certification from the tenant of each Affordable Unit and shall
ensure that, to the best of the Developer' s knowledge, the
income of the tenant is truthfully set forth in the income
certification form. The Developer shall verify the income
certification of the tenant in one or more of the following
methods as specifically requested by the Agency:
( 1) obtain two (2) paycheck stubs from the tenant' s
two (2) most recent pay periods.
(2 ) obtain a true copy of an income tax return from
the tenant for the most recent tax year in which a return was
filed.
(3) obtain an income verification certification from
the employer of the tenant.
(4) obtain an income verification certification from
the Social Security Administration and/or the California
Department of Social Services if the tenant receives assistance
from such agencies.
(5) obtain an alternate form of income verification
reasonably requested by the Agency, if none of the above forms
of verification is available to the Developer.
A person or family who at the time of income
certification qualified as a Very Low Income Household or Lower
Income Household shall continue to be deemed so qualified,
until such time as the person or family' s income is
redetermined and the person or family is determined by the
Agency to no longer be so qualified, even if such person or
family' s income has subsequently increased to an amount above
the applicable income level . Upon the Agency' s determination
that the tenant is no longer qualified as a Very Low or Lower
Income Person or Household, the Developer shall cause the next
available unit to be rented by a Very Low or Lower Income
Person or Household, whichever is applicable, or held vacant
until a Very Low or Lower Income tenant can be obtained. In
addition, the Developer shall annually submit to the Agency a
certification of the number of Affordable Units actually
occupied by Lower Income Households and Very Low Income
02/10/93 ATTACHMENT NO. 8
6596u/2460/049 Page 2 of 4
Households, in the form of Exhibit, "A" hereto or such other
form as may be provided by the Agency.
S . Determination of Affordable Rent for the
Affordable Units. Each Affordable Unit shall be rented at an
'Affordable Rent" to be established by the Agency as provided
herein. The maximum monthly rental amount for the fifteen (15)
Affordable Units required to be rented to Very Low Income
Households shall be established at one-twelfth (1/12) of thirty
percent (30%) of fifty percent (50f) of Orange County median
income, as determined by the United States Department of
Housing and Urban Development. The maximum monthly rental
amount for the twenty-three (23 ) Affordable Units required to
be rented to Lower Income Households shall be established at
one-twelfth (1/12) of thirty percent (30;0) of sixty percent
(60%) of Orange County median income, as determined by the
United States Department of Housing and Urban Development. The
maximum monthly rental amount for each Affordable Unit shall be
based upon the actual family size of the tenant.
THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT
THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORM"JLA IS
NOT NECESSARILY EQUAL TO THE FAIR DLkRKET RENT AMOUNT OF THE
AFFORDABLE UNITS, AND MAY BE ESTABLISHED AT A PRICE WHICH IS
SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT.
Developer Initials:
The maximum monthly rental amount for the Affordable
Units shall be determined by the Agency not later than the
Commencement Date. The maximum monthly rental amount of the
Affordable Units shall be adjusted annually by the Agency by
the same formula set forth above.
6. Bonds. In the event the Bonds (as defined in
Section 306 hereof) are issued in connection with the
acquisition of a leasehold interest in, the development or use
of the Conveyance Parcels, the Developer shall strictly comply
with all covenants, conditions and requirements relating to the
duties of the Developer pursuant to such Bonds and such
agreements as are entered into in connection therewith.
7. Management and Maintenance. The Developer shall
hire a management company reasonably acceptable to the Agency
to manage the Project and to maintain the improvements on the
Conveyance Parcels and shall keep parking lots, lighting
fixtures, trash
02/10/93 ATTACHMENT NO. 8
6596u/2460/049 Page 3 of 4
v �
enclosures, and all areas which can be seen from the adjacent
streets free from any accumulation of debris or waste materials
by regularly scheduled maintenance. Agency review. of the
management company shall be limited to the experience,
technical ability, capital, adequacy of staffing, and
insurability of such company. The Agency shall act reasonably
in evaluating the management company proposed by the Developer,
and shall consider the experience, record of past management,
capital and principals of the company. Management and
maintenance shall be overseen by the Agency or its designee
and, after notice and opportunity to cure of not less than
ninety (90) days, the Agency or its designee may in its
reasonable discretion direct the Developer to and the Developer
shall, terminate employment of said management company and
shall hire a replacement management company acceptable to the
Agency.
If, at any time, said management company fails to
adequately maintain such areas, and such condition is not
corrected after expiration of ninety (90) days from the date of
written notice from the Agency, the Agency may (but shall not
be obligated to) perform the necessary maintenance and
Developer shall pay such costs as are reasonably incurred for
such maintenance.
Issuance of a Certificate of Completion by the Agency
shall not affect Developer' s obligations under this section.
02/10/93 ATTACHMENT N0. 8
6596u/2460/049 Page 4 of 4
ATTACMENT NO. 9
RECORDING REQUESTED BY )
AND WHEN RECORDED MAIL TO: )
}
}
[Space above for recorder.]
This Agreement is recorded at the request
and for the benefit of the Agency and is
exempt from the payment of a recording
fee pursuant to Government Code Section
6103.
REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH
By:
Its;
Dated: 19
DECLARATION OF COVENANTS, _CONDITIONS,
AND RESTRICTIONS
THIS DECLARATION OF COVENANTS, CONDITIONS, AND
RESTRICTIONS (the "Declaration") is entered into this day
of 199_, by and between the REDEVELOPMENT
AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body,
corporate and politic (the "Agency" ) , and ORIN G. BERGE, JR. , a
married man (the "Developer") , with reference to the following:
R E C I T A L S
A. The Developer is fee owner of record of that certain
real property (the "Property" ) located in the City of
Huntington Beach, County of Orange, State of California legally
described in the attached Exhibit "A" . The Property is the
subject of an Disposition and Development Agreement (the "DDA" )
for the development, operation and maintenance of a single room
occupancy housing project.
B. The Property is within the Huntington Center
Redevelopment Project Area (the "Project" ) in the City of
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 1 of 14
v �
Huntington Beach and is subject to the provisions of the
"Redevelopment Plan" for the Project adopted by Ordinance
No. 2433 by the City Council of the City of Huntington Beach.
C. The DDA provides for the execution and recordation of
this document. Except as otherwise expressly provided in this
Agreement, all terms shall have the same meanings as set forth
in the DDA.
NOW, THEREFORE, THE AGENCY AND THE DEVELOPER AGREE AS
FOLLOWS:
[Section 1 to be included if Scope of Development
requires Single Room Occupancy Housing]
1. Affordable Housing
A. Code Requirements. The Developer shall comply
with all requirements of the City Municipal Code pertaining to
Single Room Occupancy/Living Units, including without
limitation, the requirements of Section 9220. 15(19) .
B. Number of Units. The Developer covenants and
agrees to develop a total of two hundred fifty (250)
multifamily housing units on the Property (the "Affordable
Units" ) in conformance with the Scope of Development
(Attachment No. 7) . The Developer agrees to make available,
restrict occupancy to, and rent twenty-three (23) of the
Affordable Units to "Lower Income Households, " and fifteen (15)
additional Affordable Units to "Very Low Income Households, "
all at an "Affordable Rent. " The remaining units on the
Property shall not be subject to the provisions of this Section
1.
"Very Low Income Household" shall mean a
household earning not greater than fifty percent (50%) of
Orange County median income, as determined by the United States
Department of Housing and Urban Development, as set forth in
Health and Safety Code Section 50105.
"Lower Income Household" shall mean a household
earning not greater than eighty percent (80%) of Orange County
median income, as determined by the United States Department of
Urban Development, as set forth in Health and Safety Code
Section 50079.5.
"Affordable Rent" shall have the meaning set
forth in Health and Safety Code Section 50053, as further
defined in Section l(E) of this Declaration.
C. Duration of Affordability Requirements. The
Affordable Units shall be subject to the requirements of this
Declaration for a period of I ( ) years, beginning
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 2 of 14
v �
on the date of the issuance of a certificate of occupancy for
the Improvements (the ( "Commencement Date" ) . The duration of
this requirement shall be known as the "Affordability Period. "
All tenants residing in the Affordable Units during the last
two (2) years of the Affordability Period shall be given notice
at least once every six (6) months of the expiration date of
this requirement, and that the rent payable on the Affordable
Unit may be raised to a market rate rent at the end of the
Affordability Period.
D. Income of Tenants. Prior to the rental or lease
of any Affordable Unit to a tenant, and annually thereafter
within thirty (30) days of the anniversary date of the tenant' s
occupancy of the Affordable Unit, the Developer shall obtain a
completed income computation and certification form to be
provided by the Agency. The Developer shall ensure that each
tenant leasing an Affordable Unit is a Lower Income Household
or a Very Low Income Household, whichever is applicable, and
meets the eligibility requirements established for the
Affordable Unit. The Developer shall obtain an income
certification from the tenant of each Affordable Unit and shall
ensure that, to the best of the Developer' s knowledge, the
income of the tenant is truthfully set forth in the income
certification form. The Developer shall verify the income
certification of the tenant in one or more of the following
methods as specifically requested by the Agency:
(1) obtain two (2) paycheck stubs from the tenant' s
two (2 ) most recent pay periods.
(2) obtain a true copy of an income tax return from
the tenant for the most recent tax year in which a return was
filed.
(3 ) obtain an income verification certification from
the employer of the tenant.
(4) obtain an income verification certification from
the Social Security Administration and/or the California
Department of Social Services if the tenant receives assistance
from such agencies.
(5) obtain an alternate form of income verification
reasonably requested by the Agency, if none of the above forms
of verification is available to the Developer.
A person or family who at the time of income
certification qualified as a Very Low Income Household or Lower
Income Household shall continue to be deemed so qualified,
until such time as the person or family' s income is
redetermined and the person or family is determined by the
Agency to no longer be so qualified, even if such person or
family' s income has subsequently increased to an amount above
the applicable income level. Upon the Agency' s determination
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 3 of 14
that the tenant is no longer qualified as a Very Low or Lower
Income Person or Household, the Developer shall cause the
tenant to vacate the Affordable Unit as soon as possible
thereafter. The Developer shall [monthly/quarterly/annually]
submit to the Agency a certification of the number of
Affordable Units actually occupied by Very Low Income
Households and Lower Income Households, in the form of
Attachment No. 11 to the DDA or such other form as may be
provided by the Agency.
E. Determination of Affordable Rent for the
Affordable Units. Each Affordable Unit shall be rented at an
Affordable Rent" to be established by the Agency as provided
herein. The maximum monthly rental amount for the Affordable
Unit required to be rented to Very Low Income Households shall
be established at one-twelfth (1/12) of thirty percent (307.) of
fifty percent (5000) of Orange County median income, as
determined by the United States Department of Housing and Urban
Development. The maximum monthly rental amount for the
three (3) Affordable Units required to be rented to Lower
Income Households shall be established at one-twelfth (1/12) of
thirty percent (30 ) of sixty percent (60%) of Orange County
median income, as determined by the United States Department of
Housing and Urban Development. The maximum monthly rental
amount for each one-bedroom Affordable Unit shall be based upon
the actual family size of the tenant.
THE DEVELOPER UNDERSTANDS AND KNOWINGLY AGREES THAT
THE MAXIMUM RENTAL PRICE TO BE ESTABLISHED BY THIS FORMULA IS
NOT NECESSARILY EQUAL TO THE FAIR MJA.RKET RENT AMOUNT OF THE
AFFORDABLE UNITS, AND MAY BE ESTABLISHED AT A PRICE WHICH IS
SUBSTANTIALLY BELOW THE FAIR MARKET RENT AMOUNT.
Developer Initials;
The maximum monthly rental amount for the Affordable
Units shall be determined by the Agency not later than the
Commencement Date. The maximum monthly rental amount of the
Affordable Units shall be adjusted annually by the Agency by
the same formula set forth above.
2. Non-Discrimination
The Developer, on behalf of itself and its successors,
assigns, and each successor in interest to the Property or any
part thereof, hereby covenants and agrees:
(a) To use, devote, operate and maintain the Property
and each part thereof, for the purposes and the residential
uses specified in the DDA and in the Redevelopment Plan.
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 4 of 14
(b) Not to discriminate upon the basis of sex,
marital status, race, color, creed, religion, national origin,
or ancestry in the sale, lease, sublease, transfer or rental,
or in the use, occupancy, tenure, or enjoyment of the Property
or any improvements thereon, or of any part thereof. Each and
every deed, lease, and contract entered into with respect to
the Property shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
(1) In deeds: "The grantee herein covenants by
and for itself, it successors and assigns,
and all persons claiming under or through
them, that there shall be no discrimination
against or segregation of any person or
group of persons on account of sex, marital
status, race, color, creed, religion,•
national origin, or ancestry in the sale,
lease, rental, sublease, transfer, use
occupancy, tenure, or enjoyment of the land
herein conveyed, nor shall the grantee
itself or any persons claiming under or
through it, establish or permit any such
practice or practices of discrimination or
segregation with reference to the selection,
location, number, use or occupancy of
tenants, lessees, subtenants, sublessees, or
vendees in the land herein conveyed. The
foregoing covenants shall run with the land. "
(2) In leases: "The lessee herein covenants by
and for itself, its successors and assigns,
and all persons claiming under or through
them, and this lease is made and accepted
upon and subject to the following conditions:
That there shall be no discrimination
against or segregation of any person or
group of persons, on account of sex, marital
status, race, color, creed, religion,
national origin, or ancestry, in the
leasing, renting, subleasing, transferring,
use, occupancy, tenure, or enjoyment of the
land herein leased nor shall the lessee
itself, or any person claiming under or
through it, establish or permit such
practice or practices of discrimination or
segregation with reference to the selection,
location, number, use or occupancy of
tenants, lessees, sublessees, subtenants, or
vendees in the land herein leased. "
(3) In contracts: "There shall be no
discrimination against or segregation of,
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 5 of 14
any persons, or group of persons on account
of sex, marital status, race, color, creed,
religion, national origin, or ancestry in
the sale, lease, rental, sublease, transfer,
use, occupancy, tenure or enjoyment of the
land, nor shall the transferee itself or any
person claiming under or through it,
establish or permit any such practice or
practices of discrimination or segregation
with reference to the selection, location,
number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees
of the land. "
3 . Use Restrictions.
The Property shall be occupied, used and maintained as
follows:
a. Each dwelling unit shall be used only for
, with appurtenant
facilities, and for no other purposes.
b. No sign of any kind shall be displayed to the
public view on or from any unit without the approval of the
Agency. All signs otherwise permitted under this section shall
conform with all ordinances and other regulations of the City.
C. The Developer and the occupants shall not permit
or suffer anything to be done or kept upon said premises which
will increase the rate of insurance on any building, or on the
contents thereof, or impair the structural integrity thereof or
which will obstruct or interfere with the rights of other
occupants, or annoy them by unreasonable noises or otherwise,
nor shall any occupant commit or permit any nuisance on the
premises or fail to keep the premises free of rubbish,
clippings and trash or commit or suffer any illegal act to be
committed thereon. The Developer shall comply with all of the
requirements of all governmental authorities with respect to
the premises. If by reason of the occupancy or uses of the
premises the rate of insurance on the Property shall be
increased, the Developer shall become personally liable for the
additional insurance premiums.
d. There shall be no structural alteration,
construction or removal of any building, fence or other
structure on the Property (other than repairs or rebuilding
permitted herein) without the approval of the City or the
Agency and in accordance with the City Code.
e. The Developer shall not permit the parking,
storing or keeping of any vehicle except wholly within the
parking areas designated therefor. The Developer shall not
02/10/93 ATTACMENT NO. 9 Developer Initial
6596u/2460/049 Page 6 of 14
permit the parking, storing or keeping of any large commercial
type vehicle (dump truck, cement mixer truck, oil or gas truck,
etc. ) , or any recreational vehicle (camper unit, camper shell
detached from a private passenger vehicle, motor home, trailer,
boat trailer, mobile home or other similar vehicle) , boats over
twenty (20) feet in length or any vehicle other than a private
passenger vehicle upon any portion of the Property, including
parking spaces. The Developer shall not permit major repairs
or major restorations of any motor vehicle, boat, trailer,
aircraft or other vehicle to be conducted upon any portion of
the Property, including parking spaces, except for emergency
repairs thereto and then only to the extent necessary to enable
movement thereof to a proper repair facility. No inoperable
vehicle shall be stored or kept anywhere on the Property. The
Developer shall have the right to remove, at the tenant' s
expense, any vehicle parked, stored or kept in violation of the
provisions of this Declaration. In addition, all provisions of
the Huntington Beach Municipal Code, including amendments
thereto, shall apply.
5. Occupancy.
Occupancy of each dwelling unit, if any, shall be
restricted to occupancy standards set forth in the Huntington
Beach Municipal Code or state standards, as are effective or as
may be effective or amended. Any lease or rental agreement
covering an apartment shall provide that the terms of the lease
or rental agreement shall be subject in all respects to the
provisions of this Declaration of Conditions, Covenants and
Restrictions and that any failure by the lessee to comply with
the terms of such documents shall be a default under the lease
or rental agreement. All leases and rental agreements shall be
in writing. All prospective tenants/occupants of the Property
shall make application through the Developer.
6. Ins e�ction.
To the extent permitted by law, the City of Huntington
Beach and the Agency shall have the right of entry, at
reasonable hours and upon no less than seventy-two (72) hours
advance notice, onto the Property to inspect for the need for
repairs or maintenance. Entry onto the Property or into any
unit for other than emergency repairs may be made only after
such advance notice and request for entry. If request for
entry is denied or the Property or applicable unit is
unoccupied, the City or Agency may apply for an appropriate
warrant or other order from a court of appropriate jurisdiction.
7. Alcohol.
No alcoholic beverages or controlled substances shall
be permitted to be consumed in public view anywhere on or about
the Property.
02/10/93 ATTACHMENT NO. 9 Developer Initial
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8. Subdivision.
The Developer shall not further subdivide the Property
nor offer it for sale as a "timeshare" project nor convert the
Property to condominium or stock cooperative ownership without
compliance with applicable City ordinances and approval of the
Agency.
9. Exterior Maintenance.
The exterior areas of the Property shall be kept free
of rubbish, debris and other unsightly or unsanitary materials.
a. Project Improvement, Maintenance and Repair
(1) Land Use Areas and Improvements
(a) Exterior yard areas and parking areas
shall be kept free of deterioration, including:
(i) Potholes
(ii ) Cracks in asphalt so as to become
uneven, unsightly surface
conditions
(iii) Weeds growing through asphalt.
(b) Perimeter fencing, landscaping and
irrigation system shall be routinely inspected and maintained
in good condition.
b. Each occupant of the Property shall have the
affirmative obligation to prevent what might be considered a
fire hazard or a condition dangerous to the public health,
safety and general welfare; or constitute an unsightly
appearance or otherwise detract from the aesthetic and property
values of neighboring dwelling units and properties. The
following minimum performance standards for the maintenance of
buildings, yards, and landscaping shall be adhered to by the
Developer:
(1) Landscaping on the Property shall be absent
of the following:
(a) Lawns with grasses in excess of six (6)
inches in height.
(b) Untrimmed hedges.
(c) Trees, shrubbery, lawns and other plant
life dying from lack of water or other
necessary maintenance.
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 8 of 14
(d) Trees and shrubbery grown uncontrolled
without proper pruning.
(e) Vegetation so overgrown as to be likely
to harbor rats or vermin.
(f) Dead, decayed or diseased trees, weeds
and other vegetation.
(g) Inoperative irrigation system(s) .
(2) Yard areas shall be maintained so as to be
absent of the following:
(a) Broken or discarded furniture,
appliances and other household
equipment stored in yard areas for
periods exceeding one (1) week.
(b) Packing boxes, lunber, trash, dirt and
other debris stored in yards for
unreasonable periods in areas visible
from public property or neighboring
properties.
(c) Unscreened trash cans, bins or
containers stored for unreasonable
periods in areas visible from public
streets and common areas.
(3) No building, wall or fence may be left in an
unmaintained condition so that any of the following exist:
(a) Buildings abandoned, boarded up,
partially destroyed or left
unreasonably in a state of partial
construction.
(a) Unpainted buildings or buildings with
peeling paint in such a condition as
to:
i . Cause dry rot, warping and termite
infestation; or
ii. Constitute an unsightly appearance
that detracts from the aesthetic
or property values of neighboring
properties.
(c) Broken windows, constituting hazardous
conditions and/or inviting trespassers
and malicious mischief.
02/10/93 ATTACIDIENT NO. 9 Developer Initial
6596u/2460/049 Page 9 of 14
(d) Damaged garage doors that may become
inoperative or unsafe to operate.
(e) Graffiti remaining on any portion of
the property for a period exceeding
five (5) days.
(f) Building interiors and exteriors shall
be maintained to meet standards of
similar residential property in the
City of Garden Grove.
10. Agency and City Right of Review and Enforcement
The City of Huntington Beach ( "City") and the Agency
shall be made parties to this Declaration for the limited
purpose as specified herein as follows:
a. Changes or amendments to this Declaration must be
submitted for City and Agency review and approval.
b. In the event of inaction by the Developer, the
City and Agency are hereby granted expedient power to enforce
all provisions of this Declaration including, but not limited
to, the maintenance of the Improvements and all yards, `
buildings and landscaping areas within the Property.
C. The City and Agency are hereby granted the
express power to enforce all laws and ordinances of the State
of California and/or the City of Huntington Beach on yards,
structures, and private parking areas within the Property.
Nothing within this Declaration, however, shall be construed as
imposing an obligation or requiring the City or Agency to
enforce any provision thereof.
d. The City and the Agency shall be given prior
written notice of any proposed amendment to this Declaration.
Such notice shall be given by mailing a copy of the precise
language of the proposed amendment to the City of Huntington
Beach, c/o City Clerk, together with a letter of transmittal
explaining the proposed change in General terms. The City and
the Agency shall have an opportunity to review and comment upon
the proposed amendment for a period of not less than forty-five
(45) days prior to the effective date of any such proposed
amendment. If the City or Agency fail to respond within
forty-five (45) days, the proposed change(s) and amendment(s)
shall be deemed disapproved, unless that time period is
extended by mutual agreement of all parties.
02/10/93 ATTACMIENT NO. 9 Developer Initial
6596u/2460/049 Page 10 of 14
1
V
11. City of Huntington Beach Pi ht o£ Entry for Code
Enforcement Repair and Traffic Regulation
(a) Right of Entry. To the extent permitted by
law, Developer hereby acknowledges and intends and thus grants
to the City, through the City' s duly authorized agents or
employees, the right to enter upon the Property for the
following purposes:
(1) Inspection, maintenance and repair of
the Property.
(2) Enforcement of local traffic and/or
parking regulations.
(b) Reimbursements of City Expenditures. • All
costs and expenses incurred by the City arising out of its
inspection, maintenance and repair of the Property, as provided
hereinabove ( "City Maintenance Costs" ) , shall be charged as an
expense of the Developer and shall be paid within ten (10) days
of receipt of an invoice for same.
(c) Assessments and Lien Rights of the City. If
City Maintenance Costs are not paid within thirty (30) days
from the date due, said unpaid costs and expenses shall become
a special assessment against the Property and, upon
confirmation by the City Council, shall be collected in the
same manner as real property taxes and shall be subject to the
same penalties, procedures and sale in case of delinquency as
is provided for real property taxes.
12. Mo_rtgage_Protection
Notwithstanding any and all provisions elsewhere in
this Declaration to the contrary, in order to induce lenders
and investors to participate in the financing of the
Improvements, the following provisions are added hereto, and to
the extent these added provisions conflict with any other
provisions of this Declaration, these added provisions shall
control:
(a) Any first mortgagee or third party foreclosure
purchaser who comes into possession or who obtains title to the
Property pursuant to the remedies provided in the mortgage or
foreclosure of the mortgage, or by deed or assignment in lieu
of foreclosure, will not be liable for such Property' s unpaid
charges which accrue prior to such possession or acquisition of
title. The assessment liens provided for herein shall be
subordinate to the lien or equivalent security interest of any
first mortgage recorded prior to the date any such charges
become due. Such subordination shall apply only to assessments
which accrue prior to a sale or transfer of such Property
pursuant to a decree of foreclosure or trustee' s sale. Such
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 11 of 14
sale or transfer shall not relieve such Property from liability
for any assessments thereafter becoming due or from the lien of
any such subsequent assessment.
(b) First mortgagees shall have the right to examine
the books and records of the Developer during normal business
hours.
(c) In the event of substantial damage to or
destruction of the Property or any portion thereof, the
mortgagee of any first mortgage on the Property shall be
entitled to timely written notice of any such damage or
destruction, and no provision in this Declaration shall be
interpreted to entitle the Developer or any other party to
priority over any rights of the first mortgagee of the Property
pursuant to its mortgage in the case of a distribution to such
Developer of insurance proceeds or condemnation awards for
losses to or a taking of the Property.
(d) The Developer shall, upon the request of any
first mortgagee, transmit to such mortgagee an annual audited
financial statement of the Property within ninety (90) days
following the end of any fiscal year.
(e) If the Property or portion thereof is made the
subject matter of any condemnation or eminent domain proceeding
or is otherwise sought to be acquired by a condemning
authority, then the mortgagee of any first mortgage will be
entitled to timely written notice of any such proceeding or
proposed acquisition, and no provision in this Declaration
shall be interpreted to entitle the Developer or any other
party to priority over such mortgagee with respect to the
distribution to such lot of the proceeds of any award or
settlement.
(f) As used in this Section 12, "first mortgagee"
means any mortgagee under a mortgage which is a first lien of
record made in good faith and for value, or a junior lien of
record made in good faith and for value by the City, the Agency
or an institutional lender in order to assist in the financing
of the construction of the Improvements.
13 . Miscellaneous Provisions
a. If any provision of this Declaration or portion
thereof, or the application to any person or circumstances,
shall to any extent be held invalid, inoperative or
unenforceable, the remainder of this Declaration, or the
application of such provision or portion thereof to any other
persons or circumstances, shall not be affected thereby; it
shall not be deemed that any such invalid provision affects the
consideration for this Declaration; and each provision of this
Declaration shall be valid and enforceable to the fullest
extent permitted by law.
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 12 of 14
b. This Declaration shall be construed in accordance
with the laws of the State of California.
C. In the event action is instituted to enforce any
of the provisions of this Declaration, the prevailing party in
such action shall be entitled to recover from the other party
thereto as part of the judgment, reasonable attorney' s fees and
costs.
d. The Developer shall be required to take all
reasonable steps necessary to insure that each tenant and all
assignees, and transferors have knowledge of all terms and
conditions of this Declaration.
14. Runs with the Land
The covenants and agreements established in this
Declaration shall, without regard to technical classification ,
and designation, be binding on the Developer and any successor
in interest to the Property, or any part thereof, for the
benefit of and in favor of the Agency, its successor and
assigns, and the City of Huntington Beach. The covenants
contained in paragraphs 2(a) and 4 through 13 of this Agreement
shall remain in effect for the Affordability Period. The
covenants against discrimination contained in paragraphs 2b and
3 shall remain in effect in perpetuity. The covenants in
paragraph 1 shall remain in effect for so long as the
Improvements are used, in whole or in part, for housing
purposes or until the expiration of the Redevelopment Plan,
whichever occurs last, but in no event less than a period of
fifty (50) years, beginning on the date of the issuance of a
certificate of occupancy for the Improvements.
IN WITNESS WHEREOF, the Agency and the Developer have
executed this Declaration of Conditions, Covenants and
Restrictions.
AGENCY:
REDEVELOPMENT AGENCY OF THE
CITY OF HUNTINGTON BEACH, a
public body corporate and
politic
Dated: By:
Chairman
Dated: By:
Executive Director
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 13 of 14
Dated: By:
Deputy City Administrator/
Economic Development
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Stradling, Yocca, Carlson & Rauth,
Agency Special Counsel
DEVELOPER:
Dated: By:
Orin G. Berge, Jr.
02/10/93 ATTACHMENT NO. 9 Developer Initial
6596u/2460/049 Page 14 of 14
EXHIBIT A
CERTIFICATION OF ELIGIBILITY
Part I -- General Information
1. Project Name 2. Project Location
3 . Name of Lender 4. Landlord' s Name
Part II -- Unit Information
7. Unit S. Number of 9. Monthly 10. Number of
Address Bedrooms Payment Occupants
Part III -- Affidavit of Renter
I , and I , as
applicants for rental of a Low and Moderate Income Unit in the
above-described Project, do hereby represent and warrant as
follows:
A. (My/Our) adjusted income (anticipated total annual income)
does not exceed fifty percent (50%) of the median gross
income for the Orange County Metropolitan Statistical Area
as such income levels are established and amended from time
to time pursuant to Section 8 of the United States Housing
Act of 1937 and published by the State Department of
Housing and Community Development in the California
Administrative Code. ( I/We) understand that the applicable
median gross income is $ The following
computation includes all income ( I/we) anticipate receiving
for the 12-month period beginning on the date ( I/we)
execute a rental agreement for a Low or Very Low Unit or
the date on which ( I/we) will initially occupy such unit,
whichever is earlier.
02/10/93 EXHIBIT "A"
6596u/2460/049 Page 1 of 6
1. For the renter and all family members include:
(a) amount of wages, salaries, overtime pay,
commissions, fees, tips and bonuses, and
payments in lieu of earnings, such as
unemployment and disability compensation,
worker' s compensation and severance pay
(before payroll deductions)
(b) net income from business or-profession or
rental of property (without deduction for
repayment of debts or expansion of
business)
(c) interest and dividends
(d) periodic receipts such as social security,
annuities, pensions, retirement funds,
insurance policies, disability or death
benefits, alimony, child support, regular
contributions or gifts from persons not
occupying the unit
(e) public assistance allowance or grant plus
excess of maximum allowable for shelter or
utilities over the actual allowance for
such purposes
(f) regular and special pay and allowances of
a member of armed services (whether or not
living in the dwelling) who is head of the
family or spouse
Subtotal (a) - (f)
Less: portion of above items which
are income of a family member who is
less than 18 years old or a full-time
student ( )
Total Eligible Income
Note: The following items are not considered income: casual
or sporadic gifts; amounts specifically for or in reimbursement
of medical expenses; lump sum payment such as inheritances,
insurance payments, capital gains and settlement for personal
or property losses; educational scholarships paid directly to
the student or educational institution; government benefits to
a veteran for education; special pay to a serviceman head of
family away from home and under hostile fire; foster child care
02/10/93 EXHIBIT "A"
6596u/2460/049 Page 2 of 6
payments; value of coupon allotments for purpose of food under
Food Stamp Act of 1964 which is in excess of amount actually
charged the eligible household; relocation payments under
Title II of Uniform Relocation Assistance and Real Property
Acquisition Policies Act of 1970; payments received pursuant to
participation in the following programs: VISTA, Service
Learning Programs, and Special Volunteer Programs, SCORE, ACE,
Retired Senior Volunteer Program, Foster Grandparent Program,
Older American Community Services Program, and National
Volunteer Program to Assist Small Business Experience.
2. As of the first day of occupancy of the unit which ( I/we)
propose to rent (a) either (myself/ourselves) or at least
one other occupant of the unit is not an individual
enrolled as a full-time student during each of five (5)
calendar months during the calendar year in which occupancy
of the unit begins at an educational institution which
normally maintains a regular faculty and curriculum and
normally has a regularly enrolled body of students in
attendance and is not an individual pursuing a full-time
course of institutional on farm training under the
supervision of an accredited agent of such an educational
organization or of a state or political subdivision thereof
or (b) if all of the occupants of the unit will be
individuals described in (a) , either (myself/ourselves) or
one other occupant of the unit is a husband or wife
entitled to make a single return jointly of Federal income
taxes.
3 . This affidavit is made with the knowledge that it will be
relied upon by the Landlord to determine maximum income for
eligibility and (I/we) warrant that all information set
forth in this Part III is true, correct and complete and
based upon information ( I/we) deem reliable and that the
estimate contained in paragraph 1 is reasonable and based
upon such investigation as the undersigned deemed necessary.
4. (I/We) will assist the Landlord in obtaining any
information or documents required to verify the statements
made in this Part III and have attached hereto copies of
federal income tax returns for the past two years.
S. (I/We) acknowledge that (I/we) have been advised that the
making of any misrepresentation or misstatement in this
affidavit will constitute a material breach of (my/our)
agreement with the Landlord to rent the unit and will
additionally enable the Redevelopment Agency of the City of
Huntington Beach to initiate and pursue all applicable
legal and equitable remedies with respect to the unit and
to me/us.
02/10/93 EXHIBIT "A"
6596u/2460/049 Page. 3 of 6
( I/We) do hereby swear under penalty of perjury that the
foregoing statements are true and correct.
Date Applicant
I
SUBSCRIBED AND SWORN to before me this day of
(Notary Seal)
Notary Public in and for the
State of
My Cower ission Expires:
02/10/93 EXHIBIT "A"
6596u/2460/049 Page 4 of 6
V �
INCOME VERIFICATION
(for employed persons)
The undersigned employee has applied for rented of a
dwelling unit located in a redevelopment housing project in the
City of Huntington Beach. Every income statenent of a
prospective purchaser must be stringently verified. Please
indicate below the employee' s current annual income from wages,
overtime, bonuses, commissions or any other form of
compensation received on a regular basis.
Annual wages
Overtime
Bonuses
Commissions
Total current
income
I hereby certify that the statements above are true and
complete to the best of my knowledge.
Signature Date Title
I hereby grant permission to disclose my income to the Agency
and , the Project Cperator, in connection with
my proposed rental of a dwelling unit located in their project.
Signature Date
Please send to:
02/10/93 EXHIBIT "A"
6596u/2460/049 Page 5 of 6
CERTIFICATION OF CONTINUING PROCRAM COMPLIANCE
The undersigned, , being duly
authorized to execute this certificate on behalf of Pacific
Coast Corporation, a California corporation (the "Developer" ) ,
hereby represents and warrants that:
1. He has read and is thoroughly familiar with the
provisions of the Disposition and Development ( "DDA" ) by and
between the Redevelopment Agency of the City of Huntington
Beach (the "Agency") and (the Developer) , of which this
certification is an attachment.
2. As of the date of this certificate, the following
percentages of completed residential units in the Project (i )
are occupied by Low Income Households and Very Low Income
Households (as such terms are defined in the DDA or (ii ) are
currently vacant and being held available for such occupancy
and have been so held continuously since the date a Low or Very
Low Income Household vacated such unit, as indicated:
Occupied by Low
Income Tenants: % Unit Nos. :
Occupied by Very Low Income
Tenants: % Unit Nos. :
Held vacant for occupancy
continuously since last
occupied by Low or Very Low
Income Tenants: % Unit Nos. :
By:
Orin G. Berge, Jr.
02/10/93 EXHIBIT "A"
6596u/2460/049 Page 6 of 6
ATTACHMENT 140. 10
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
RECORDING REQUESTED BY AND )
WHEN RECORDED RETURN TO: }
)
Redevelopment Agency of the }
City of Huntington Beach )
2000 Main Street )
Huntington Beach, CA 92648 )
(Space above for Recorder' s use. )
MEMORANDUM OF DISPOSITION AND DEVELOPMENT AGREEMENT
This Memorandum of Disposition and Development Agreement
( "Memorandum") , dated for identification purposes as
of , 19_, is entered into by and between the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public
body corporate and politic ( "Agency") and ORIN G. BERGE, JR. , a
married man ( "Developer" ) .
1. Disposition and Development Agreement. Agency and
Developer have executed a Disposition and Development Agreement
(the "Agreement" ) dated for identification purposes as of
19_, which concerns and is binding upon the
current and future owners of that certain real property located
in the City of Huntington Beach, County of Orange, State of
California, more fully described in the Exhibit "A" attached
hereto and incorporated herein by this reference. All of the
terms, conditions, provisions and covenants of the Agreement
are incorporated in this Memorandum by reference as though
written out at length herein, and the Agreement and this
Memorandum shall be deemed to constitute a single instrument or
document.
2. Purpose of Memorandum. This Memorandum is prepared for
recordation purposes only, and in no way modifies the terms,
conditions, provisions and covenants of the Agreement. In the
event of any inconsistency between the terms, conditions,
provisions and covenants of this Memorandum and the Agreement,
the terms, conditions, provisions and covenants of the
Agreement shall prevail.
02/10/93 ATTACHMENT NO. 10
6596u/2460/049 Page 1 of 3
The parties have executed this Memorandum on the dates
specified immediately adjacent to their respective signatures.
DEVELOPER:
Executed 19_ By:
Orin G. Berge, Jr.
ACE14CY:
REDEVELOPMENT AGENCY OF THE CITY OF
HUNTINGTON BEACH, a public body
corporate and politic
Executed 19� By:
Chairman
Executed 19� By:
Executive Director
Executed 19� By:
Assistant City Manager/
Redevelopment
ATTEST:
Agency Secretary
02/10/93 ATTACIDIENT 110. 10
6596u/2460/049 Page 2 of 3
APPROVED AS TO FORM:
Stradling, Yocca, Carlson & Rauth
Agency Special Counsel
City Attorney
Agency General Counsel
02/10/93 ATTACHMENT NO. 10
6596u/2460/049 Page 3 of 3
EXHIBIT A
LEGAL DESCRIPTION
[To Be Inserted]
02/10/93 ATTACHMENT NO. 10 `
6596u/2460/049