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HomeMy WebLinkAboutPierside Pavillion, LLC - Gary and Catherine Daichendt - 2009-07-06 PIERSIDE PAVILION LLC 300 Pacific Coast Highway, Suite 119 Huntington Beach, CA 92648 2016 Mr. Fred Wilson Executive Director Successor Agency to the Redevelopment Agency of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Re: Owner Participation Agreement between the Successor Agency of the Redevelopment Agency of the City of Huntington Beach (as successor to the Redevelopment Agency of the City of Huntington Beach), as "Agency,"and Pierside Pavilion, LLC, as "Participant,"dated July 6, 2009, as amended by the First Amendment to the Owner Participation Agreement between Agency and Participant dated May 5, 2011. ("Agreement's; Pierside Pavilion Project ("Project' Dear Mr. Wilson: As you are aware, we have completed Phase One and commenced Phase Two of the Project in accordance with the terms of the Agreement(executed on May 5, 2011) and our work on Phase Two is ongoing. As part of that work, we are currently redesigning the approximately 28,400 square foot addition that is planned to be part of Phase Two and will require an extension of time for completion beyond the "Schedule of Performance" (as defined in the Agreement). Pursuant to our meeting last week, this Letter serves to confirm our recent understanding and addendum to the Agreement regarding the mutually agreed upon extension of the Schedule of Performance with respect to the completion of Phase Two. Subject to Sections 306 and 604 of the Agreement, and provided Participant obtains all necessary permits, approvals and entitlements for any applicable portion of Phase Two on terms acceptable to Participant in its sole discretion, Participant agrees to: (a) commence the construction of the addition described above by September, 2019, and (b) complete it within two (2) years after we commence its construction. In addition to the terms, conditions, commitments, and obligations provided for in the Agreement of May 5, 2011, and in addition to the extension of time by this Letter for Project completion as stated above, Pierside Pavilion LLC will also provide the City with certain real property and building improvements maintenance, including: steam cleaning (and other cleaning) quarterly to the base of the exterior walls of the building and sidewalks and walkways abutting and within 25 feet of the entire perimeter of the Pierside Pavilion LLC Property; cleaning and maintaining quarterly the news racks and trashcans located within 25 feet of the entire perimeter of the Pierside Pavilion LLC Property, by removing stickers, cleaning, and performing other maintenance as necessary. SDH\30241-0081\542300.3 5/2/2016 The signatures below represent a mutual understanding between Pierside Pavilion LLC and the City of Huntington Beach that the Agreement dated May 5, 2011 is hereafter addended to include the extension of time and performance obligations contained in this Letter. Acknowledged and Agreed: PIERSID AVILION, LLC SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Gary Daiche dt, Manager By: k1lig, "Participant" Fre rpnot, Executive Director "Agency" Receive and File Cmaw Cn h C��rk 6r co. CNIJ SDM 30241-0081\542300.3 5/2/2016 Council/Agency Meeting Held: 2h 17� /�A Deferred/Continued to: *App v d ❑ Conditi Hall A proved ❑ Denied City Jerk Signat e Council Meeting Date: September 17, 2012 Department ID Number: ED 12-35 CITY OF HUNTINGTON BEACH REQUEST FOR SUCCESSOR AGENCY ACTION SUBMITTED TO: Chair and Successor Agency Board Members SUBMITTED BY: Fred A. Wilson, Executive Director PREPARED BY: Bob Hall, Deputy Executive Director SUBJECT: Approve and authorize execution of the Second Amendment to the Owner Participation Agreement (OPA) with Pierside Pavilion, LLC Statement of Issue: A Second Amendment to the Owner Participation Agreement (OPA) is recommended for approval between the Successor Agency (Agency) and Pierside Pavilion, LLC (Participant). The purpose of this OPA is to provide for the continued redevelopment of the site located at 300 Pacific Coast Highway in Downtown Huntington Beach. Financial Impact: Not Applicable Successor Agency Recommended Action: Motion to: Approve and authorize the Chair and Agency Secretary to execute "Second Amendment to the Owner Participation Agreement" with Pierside Pavilion, LLC. Including Exhibit A "Second Amendment to Agreement Affecting Real Property." Alternative Action(s): Do not approve the Agreement and direct staff as necessary. Analysis: In 1985, a Disposition and Development Agreement (DDA) between the Redevelopment Agency and Huntington Pacifica I was approved for property owned by the City in the downtown area located between Main Street and Second Street, Walnut Avenue and Pacific Coast Highway. The DDA was amended several times over the years. In 1992, Pierside Pavilion, LLC (Participant) purchased the commercial portion of the site located at 300 Pacific Coast Highway. On July 6, 2009, the Agency approved the terms of an Owner Participation Agreement (OPA), which supersedes and terminates the Second Amended DDA and permitted the Participant to convert the theater space into office use and provide for the continued two phased redevelopment of the site. In October 13, 2009, the Planning Commission approved the conversion of the theater into office space. The OPA was amended in May 2011 to reflect the revised square footage and uses of the building. Item 19. - 1 xB -904- REQUEST FOR COUNCIL ACTION MEETING DATE: 9/17/2012 DEPARTMENT ID NUMBER: ED 12-35 The Participant has submitted a new Conditional Use Permit, Entitlement Application and Coastal Development Permit for Phase II of the project, consisting of a new building. A proposed Second Amendment to the OPA is recommended to allow for additional square footage, over the 120,000 square feet in the current OPA. The recommended amendment provides flexibility for the Planning and Building Department to process future amendments without requiring an amended to the OPA. The Second Amendment to the OPA proposes square footage between the three different uses of Phase II and maintains that Phase II will not exceed 45,000 square feet of new gross floor area (approximately 35,000 square feet in new building and 10,000 to the existing building). The subject site will not exceed more than 140,000 square feet as follows: (a) Retail — up to 30,000 square feet of Gross Floor Area; and/or (b) Restaurant — up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or (c) Office — up to 81,000 square feet of Gross Floor Area. Environmental Status: Environmental is being completed as part of the Planning application and consists of a Mitigated Negative Declaration. Strategic Plan Goal: Enhance economic development Attachment(s): 1 Second Amendment to the Owner Participation Agreement with Pierside Pavilion, LLC HB -905- Item 19. - 2 ATTACHMENT # 1 This Document was electronically recorded by City of Huntington Beach PLEASE COMPLETE THIS INFORMATION Recorded in Official Records, Orange County RECORDING REQUESTED BY: Tom Daly, Clerk-Recorder IIIII I I(IIIII III IIIII IIIII II111111N 1111111111111111111111111111 I(III III 2012000558415 12:47pm 09/24/12 AND WHEN RECORDED (HAIL TO: 37 402 A17 10 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 City of Huntington Beach Attn: Joan' L. Flynn City Clerk ' s Office P. 0. Box 190 Huntington Beach, CA 92648 THIS SPACE FOR RECORDER'S USE ONLY TITLE OF DOCUMENT: SECOND AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT (Pierside Pavilion, LLC) This document Is solely for Me ofkW business of the City of Huntington Beach,as contemplated under G3overmont Code Sec.6103 and should b9 recorded fres of charge. K THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION (Additional recording fee applies) SECOND AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT This SECOND AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT ("Second Amendment") is dated as of N,�T c/�'1®EYE_ 2012, and is entered into by and between the SUCCESSOR AGENCY TO REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency") and PIERSIDE PAVILION, LLC, a California limited liability company ("Participant"). RECITALS A. Participant is the owner of certain real property (designated as the "Commercial Portion of the Site") located within the Merged Redevelopment Project Area of the City of Huntington Beach, California, which real property is more particularly described in the "OPA" referenced below. B. The Agency's predecessor-in-interest, the Redevelopment Agency of the City of Huntington Beach, and Participant entered into that certain Owner Participation Agreement dated as of July 6, 2009, as amended by that certain First Amendment to Owner Participation Agreement dated as of May 16, 2011 (collectively, the "OPA"), pertaining to the two phased redevelopment of the Commercial Portion of the Site (designated in the OPA as Phase One and Phase Two) with a cumulative total of 120,000 square feet of mixed retail, restaurant and office uses upon the completion of Phase Two, in accordance with the terms and conditions of the OPA. C. In connection with the OPA, the Agency's predecessor-in-interest, the Redevelopment Agency of the City of Huntington Beach, and Participant entered into that certain Agreement Affecting Real Property dated as of July 6, 2009 and recorded as Document No. 2009000476647 on September 4, 2009, as amended by that certain First Amendment To Agreement Affecting Real Property dated as of May 16, 2011 and recorded as Document No. 2011000262643 on May 26, 2011 (collectively, the"AARP"). D. The OPA and AARP currently establish the cumulative maximum square footage upon the completion of Phase Two as follows: Retail —up to 31,000 square feet of Gross Floor Area Restaurant—up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas Office—up to 63,000 square feet of Gross Floor Area Notwithstanding the foregoing, upon the completion of Phase.Two, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 120,000 Gross Floor Area. 2nd Amend to OPA(final) August 8,2012 Page 1 of 7 E. Participant is now in the process of procuring entitlements for Phase Two. In conjunction with that procurement, Participant now seeks, and the Agency has agreed to allow, certain modifications to the OPA and AARP as follows (collectively, the "Changes"): to change the maximum square footages for retail, restaurant, and office as follows: (a) retail—up to 30,000 square feet of Gross Floor Area; (b) restaurant—up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas; and (c) office — up to 81,000 square feet of Gross Floor Area; provided, however, that upon completion of Phase Two, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 140,000 square feet. F. Agency and Participant have agreed to modify the terms of the OPA and AARP, as necessary to effect the Changes. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged,the parties agree as follows: 1. Recitals. The Recitals referenced above are hereby incorporated by reference into this Second Amendment and adopted by the parties to this Second Amendment as true and correct. 2. Defined Terms. Capitalized terms used in this Second Amendment shall have the meaning given them in the OPA unless specifically provided otherwise herein. 3. Modifications to Section 301.2 of the OPA. a. The third paragraph of Section 301.2 of the OPA is deleted in its entirety and replaced with the following text: "Phase Two shall consist of the expansion of the Commercial Portion of the Site to add not more than 45,000 square feet of new Gross Floor Area (approximately 10,000 to the existing building and approximately 35,000 in a new building) on the Commercial Portion of the Site developed in accordance with and pursuant to all of the terms and conditions of this Agreement, any conditional use permit or other entitlement issued or approved by the City, and all then applicable federal, state and local laws, rules, regulations and guidelines. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase Two shall be as follows: (a) Retail—up to 30,000 square feet of Gross Floor Area. (b) Restaurant—up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 81,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 140,000 Gross Floor Area." 2nd Amend to OPA(final) August 8,2012 Page 2 of 7 b. All other provisions of Section 301.2 of the OPA shall remain the same. 4. Modification to Section 401()(3)(B) of the OPA. Section 400(c)(3)(B) of the OPA is deleted in its entirety and replaced with the following text: ,,B. Following Phase Two i. Retail - up to 30,000 square feet of Gross Floor Area. ii. Restaurant — up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas. iii. Office—up to 81,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon Completion of Phase Two, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 140,000 square feet." 5. Modification to the Agreement Affecting Real Property Attachment No. 3 to the OPA). a. The following language in Section 1(c)(3)(B) of the Agreement Affecting Real Property is deleted in its entirety: "Following Phase Two (i) Retail—up to 31,000 square feet of Gross Floor Area. (i i) Restaurant—up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—up to 63,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Property shall not exceed 120,000 Gross Floor Area." The following language shall replace the language deleted in Section 1(c)(3)(B) of the Agreement Affecting Real Property as referenced above: "Following Phase Two (i) Retail—up to 30,000 square feet of Gross Floor Area. 2nd Amend to OPA(final) August 8,2012 Page 3 of 7 (ii) Restaurant—up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—up to 81,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Property shall not exceed 140,000 Gross Floor Area." b. Agency and Participant shall execute a Second Amendment to Agreement Affecting Real Property in the form attached hereto as Exhibit A concurrently with the execution of this Second Amendment. The Second Amendment to Agreement Affecting Real Property shall then be recorded by Agency no later than five (5) business days from full execution of this Second Amendment. 6. Modification to the Scope of Development(Attachment No. 5 to the OPA). a. The third and fourth paragraphs of Section III of the Scope of Development are deleted in their entirety and replaced with the following text: "Phase Two shall consist of the expansion of the Commercial Portion of the Site to add not more than 45,000 square feet of new Gross Floor Area (approximately 10,000 to the existing building and approximately 35,000 in a new building) on the Commercial Portion of the Site developed in accordance with and pursuant to all of the terms and conditions of this Agreement, any conditional use permit or other entitlement issued or approved by the City, and all then applicable federal, state and local laws, rules, regulations and guidelines. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase Two shall be as follows: (a) Retail—up to 30,000 square feet of Gross Floor Area. (b) Restaurant— up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 81,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 140,000 Gross Floor Area." b. All other provisions of the Scope of Development shall remain the same. 7. Binding on Successors and Assigns. This Second Amendment and all of the terms and conditions herein shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties. 2nd Amend to OPA(final) August 8,2012 Page 4 of 7 8. OPA in Full Force and Effect. Except as otherwise expressly modified herein, the terms and conditions of the OPA shall remain unmodified and in full force and effect. 9. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Second Amendment. 10. Third Party Beneficiaries. The parties to this Second Amendment acknowledge and agree that the provisions of this Second Amendment are for the sole benefit of Agency and Participant, and not for the benefit, directly or indirectly, of any other person or entity, except the City of Huntington Beach. 11. Counterparts, Effectiveness of this Second Amendment. This Second Amendment may be executed in counterpart originals, each of which is deemed to be an original. This Second Amendment shall not be effective unless and until it has been executed by Participant and Agency. The Effective Date of this Second Amendment shall be deemed to be the date this Second Amendment is executed by Agency. SIGNATURES ON NEXT PAGES SPACE LEFT INTENTIONALLY BLANK 2nd Amend to OPA(final) August 8,2012 Page 5 of 7 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH(Agency) Date: September 20, 2012 By:1 Donald F. Hansen, Jr. Chair E ATTEST: Ag cy Secre ary REVIEWED AND APPROVED REVIEWED AND APPROVED AS TO FORM: AS TO FORM: Agency General Counsel Agency Special Counsel By: M k .A - 46 By: "s Jennifer McGrath Kane, Ballmer& e kman REVIE D Ex#uVvj Director INITIATED AND REVIEWED Deputy Executi Director SIGNATURES CONTINUED ON NEXT PAGE 2nd Amend to OPA(final) August 8,2012 Page 6 of 7 PIERSIDE PAVILION, LLC (Participant) Date: a- By: Name: 1- Its: A�r►,a�,zc�� Date: By: Name: Its: 2nd Amend to OPA vl July 24,2012 Page 7of7 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ss COUNTY OF ORANGE ) On September 20, 2012, before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Donald F. Hansen, Jr. who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L. ESPARZA WITNESS my hand and official seal. Commission# 1857021 z `m Notary Public -California z z ' Orange County My Comm. Expires Au 4,2013 (Seal) (Notary Signat e) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ,�� "" � County of �f5wll�� On - /0 2L/2before me, L- OS R Z_o4 �&K, Date Here Insert Name and Title of the Officer personally appeared �(�.5 �A/C Jw- Name(s)of Signer(s) who proved to me on the basis of satisfactory evidence to be the person whose name is aye subscribed to the within instrument and acknowledged to me that executed the same in is heir authorized capacity�41 and that by(5ltr signature on the instrument the person(.s'j, or the entity upon behalf of which the person�4 acted, executed the instrument. P. L.ESPARZA _ Commission # 1857021 1 certify under PENALTY OF PERJURY under the laws a _m Notary Public-California z : y of the State of California that the foregoing paragraph is Z ' orange County ' true and correct. My Comm. Expires Aug 4,2013 WITNESSryand o fic4xa�� Signature Place Notary Seal Above Signature o tary Public OPTIONAL Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): ❑ Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General _ _ ❑ Partner—❑ Limited ❑ General _ ❑ Attorney in Fact • ❑Attorney in Fact • ❑ Trustee Top of thumb here ❑Trustee Top of thumb here ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: 02007 National Notary Association•9350 De Soto Ave.,P.O.Box 2402•Chatsworth,CA 91313-2402•www.NationalNotaryorg Item#5907 Reorder:Call Toll-Free 1-800-876-6827 Eyhi bi t "A" This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder 111111i111111111111111111111111111111111111111111111111111111111 IIIINO FEE 2012000558177 11:05am 09/24/12 OFFICIAL BUSINESS 37 402 A17 11 0.00 0.00 0.00 0.00 30.00 0.00 0.00 0.00 Document entitled to free recording per Government Code Section 6103 Recording Requested by and When Recorded Return to: CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development Space above this line for Recorder's use only SECOND AMENDMENT TO AGREEMENT AFFECTING REAL PROPERTY This SECOND AMENDMENT TO AGREEMENT AFFECTING REAL PROPERTY (this "Second Amendment"), dated as of /j' , 2012, is entered into by and between the SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency") and PIERSIDE PAVILION, LLC, a California limited liability company ("Participant"). Participant owns fee title to that certain real property (the "Property") located in the City of Huntington Beach, County of Orange, State of California, legally described in the "Legal Description' attached hereto and incorporated herein as Exhibit A and depicted on the "Site Map" attached hereto and incorporated herein as Exhibit B, which Property is described as the "Property" in the OPA referred to herein below. .The Property is within the Main-Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan') is incorporated herein by reference and made a part hereof as though fully set forth herein. The Merged Redevelopment Project area is located in the City of Huntington Beach (the "City"). In furtherance of the Redevelopment Plan, Agency and Participant have entered into that certain Owner Participation Agreement dated as of July 6, 2009, First_Amendment to Owner Exh A 2nd Amend to AARP(final) August 8,2012 This doosnent is suety for to officW budnem of the City of Hundngton Page 1 of 5 Beech,as contemplated under Gammtent Coda Sec.6103 wW shwA be recorclod fte cf chargs, Participation Agreement dated May 16, 2011, and a Second Amendment to Owner Participation Agreement dated �14! , 2012 (collectively, the "OPA"), which are incorporated herein by this reference. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the OPA. In accordance with the Second Amendment to Owner Participation Agreement, the Agency agreed to change the maximum square footages for retail, restaurant, and office on the Commercial Portion of the Site, as more particularly set forth in the Second Amendment to Owner Participation Agreement. As part of the Second Amendment to Owner Participation Agreement, the Agency and Participant agreed to modify the terms of the Agreement Affecting Real Property, recorded in the Office of the Orange County Recorder on September 4, 2009, as Document No. 2009000476674, as amended by that certain First Amendment to Agreement Affecting Real Property, recorded in the Office of the Orange County Recorder on May 26, 2011, as Document No. 2011000262643 (collectively, the "Agreement Affecting Real Property") to effect the changes in the maximum square footages for retail, restaurant and office as covenants running with the land. This Second Amendment is entered into and recorded in accordance with the Redevelopment Plan and the OPA, as modified by the Second Amendment to Owner . Participation Agreement. NOW, THEREFORE, AGENCY AND PARTICIPANT AGREE AS FOLLOWS: 1. The following language in Section 1(c)(3)(B) of the Agreement Affecting Real Property is deleted in its entirety: "Following Phase Two (i) Retail—up to 31,000 square feet of Gross Floor Area. (ii) Restaurant—up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas. (in) Office—up to 63,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Property shall not exceed 120,000 Gross Floor Area." The following language shall replace the language deleted in Section 1(c)(3)(B) of the Agreement Affecting Real Property: "Following Phase Two (i) Retail—up to 30,000 square feet of Gross Floor Area. Exh A 2nd Amend to AARP(final) August 8,2012 Page 2 of 5 (ii) Restaurant—up to 38,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—up to 81,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Property shall not exceed 140,000 Gross Floor Area." 2. This Second Amendment and all of the terms and conditions herein shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties. 3. Aareement Affecting Real Property in Full Force and Effect. Except as otherwise expressly modified herein, the terms and conditions of the Agreement Affecting Real Property shall remain unmodified and in full force and effect. 4. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this Second Amendment. 5. Third Party Beneficiaries. The parties to this Second Amendment acknowledge and agree that the provisions of this Second Amendment are for the sole benefit of Agency and Participant, and not for the benefit, directly or indirectly, of any other person or entity. 6. Counterparts; Effectiveness of this Second Amendment. This Agreement may be executed in counterpart originals, each of which is deemed to be an original. This Second Amendment shall not be effective unless and until it has been executed by Participant and Agency. The Effective Date of this Second Amendment shall be deemed to be the date this Second Amendment is executed by Agency. SIGNATURES ON NEXT PAGES SPACE LEFT INTENTIONALLY BLANK Exh A 2nd Amend to AARP(final) August 8,2012 Page 3 of 5 SUCCESSOR AGENCY TO REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Agency) 3 � - - -_ Date: September 20, 2012 Donald F. Hansen, Jr. , Chai REVIEWED AND APPROVED AS TO FORM: Agency General Counsel SIGNATURES CONTINUED ON NEXT PAGE Exh A 2nd Amend to AARP(final) August 8,20I2 Page 4 of 5 PIERSIDE PAVILION, LLC (Participant) Date: �� /a _ By: Name: Its: Ac.,f Li o-ac 4 A4o„ r Date: By: Name: Its: Exh A 2nd Amend to AARP vl July 24,2012 Page 5 of 5 ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On September 20, 2012 before me, P. L. Esparza, Notary Public, personally appeared Donald F. Hansen, Jr., who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P. L. ESPARZA WITNESS my hand and official seal. Commission# 1857021 Z Notary Public-California Z z Orange County M Comm.Expires Aug4,2013 (Seal) (Notary Sig ature) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of t ,e,4^j 5 E" On�i�%. JO c>?O/� before me, Date- Here In ert Name and Title the Officer personally appeared _ �L- ' /CH a1�7� Names)of Signers) , who proved to me on the basis of satisfactory evidence to be the person whose name )s aye subscribed to the within instrument and acknowledged to me that (�V ►ey executed the same it F:ii /he#their authorized capacityps), and that by Jiis heir signature on the instrument the person), or the entity upon behalf of which the person) acted, executed the instrument. P. L. ESPARZA I certify under PENALTY OF PERJURY under the laws Commission# 1857021 of the State of California that the foregoing paragraph is Z:`+d. Notary Public-California true and correct. Z Orange County My Comm.Expires Au 4,2013+ WITNES y Anaoffici eal. ` r Signature Place Notary Seal Above Signature otary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): ❑Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General _ _ ❑ Partner—❑ Limited ❑ General ❑ Attorney in Fact • ❑Attorney in Fact • ❑ Trustee Top of thumb here ❑Trustee Top of thumb here ❑ Guardian or Conservator ❑ Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: 02007 National Notary Association•9350 De Soto Ave.,PO.Box 2402-Chatsworth,CA 91313-2402•www.NationaiNotary.org Item#5907 Reorder:Call Toll-Free 1-800-876-6827 EXHIBIT A LEGAL DESCRIPTION [behind this page] F' 7 e R{{ :F LOT 1 OF TRACT NO. 13722,AS SHOWN ON A MAP FILED IN BOOK 636,PAGES 38 TO 41 INCLUSIVE OF MISCELLANEOUS MAPS,RECORDS OF ORANGE COUNTY, x CALIFORNIA. n EXCEPTING FROM A PORTION OF SAID LAND,AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL OIL,OIL RIGHTS,MINERALS,MINERAL RIGHTS, ;> NATURAL GAS RIGHTS,AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN,LOCATED WITHIN OR UNDER,AS RESERVED IN THE DEED FROM BETTY HOLT WEAVER AND OTHERS,RECORDED AUGUST 15,1985 AS DOCUMENT NO. 85- 305251 IN OFFICIAL RECORDS OF ORANGE COUNTY. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL,GAS AND OTHER HYDROCARBON SUBSTANCES BELOW A DEPTH OF 500 FEET,BUT WITHOUT THE Y RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM AAFKE k ROMPLEMAN,A MARRIED WOMAN,RECORDED AUGUST 10, 1960 IN BOOK 5367, PAGE 297 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL, GAS,MINERALS I AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM ¢ ELSIE M.BAKRE SMITH,A MARRIED WOMAN,RECORDED MARCH 14,1961 IN BOOK 5655,PAGE 693 OF OFFICIAL RECORDS_ F Y ALSO EXCEPTING FROM A PORTION OF SAID LAND ALL OIL,GAS, HYDROCARBONS AND MINERALS BELOW A DEPTH OF 500 FEET,FROM THE SURFACE OF SAID LAND,WITHOUT,HOWEVER,ANY RIGHT OF SURFACE ENTRY AS RESERVED BY CALIFORNIA RESORTS INTERNATIONAL,INC.,IN A DEED RECORDED MARCH 13, 1989 AS INSTRUMENT NO. 89-127442 OF OFFICIAL RECORDS. e • S 3 } 2 i i P SD1i130241.0004\399679.2 42S201 I Item 19. - 21 HB -924- EXHIBIT B SITE MAP [behind this page] i j i 11 _.Q. Cal k pa,raa i � 1 wr ae.r }• �• � • c E a.6 1�P w► /•R o !!R 1R om f. NAM. >b A!il,M N07C J1•PRL ` am .AMMSEWS m I& ! I f 1Mr 1LA. �926 Qs. d11°I•t$P,ClNGCZ iCOV"W'•'ees6s ���J p 4 k k l �1 k S i F t x 3 A a :i r a k �i t SDIM0241.00DA3996792 CUM I s HB -925- Item 19. - 22 Council/Agency Meeting Held: 6 �� Deferred/Continued to: *App ve8d ❑ Conditionally Approved ❑ Denied ity CI k's Sign tune Council Meeting Date: May 16, 2011 Department ID Number: ED 11-22 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman and Agency Members SUBMITTED BY: Fred A. Wilson, Executive Director PREPARED BY: Stanley Smalewitz, Deputy Executive Director/Director of Economic Development SUBJECT: Approve and authorize execution of the First Amendment to the Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavilion, LLC; and, waive the thirty (30) day review requirement Statement of Issue: A First Amendment to the Owner Participation Agreement (OPA) has been negotiated between the Redevelopment Agency and Pierside Pavilion, LLC for the site located at 300 Pacific Coast Highway in Downtown Huntington Beach. The purpose of this First Amendment to the OPA is to increase the office square footage by 4,000 square feet while maintaining the maximum square footage of 90,000 square feet allowed on site. Financial Impact: Not Applicable Redevelopment Agency Recommended Action: Motion to: A) Waive the thirty (30) day review requirement pursuant to Resolution No. 214 for review of the Owner Participation Agreements (OPA); and, B) Approve the "First Amendment to the Owner Participation Agreement" (OPA); and, C) Authorize the Chairman and Agency Clerk to execute any other related documents to process this Amendment. Alternative Action(s): Do not approve the Amendment and provide direction to staff. HB -1 7- Item 7. - 1 REQUEST FOR COUNCIL ACTION MEETING DATE: 5/16/2011 DEPARTMENT ID NUMBER: ED 11-22 Analysis: Pierside Pavilion, LLC (Owner) approached the City in December 2005 and requested a modification of the Grant Deed to eliminate the requirement of a six-plex theater and convert to office use due to the market demand. Subsequently, on July 6, 2009, the Agency approved the terms of an Owner Participation Agreement (OPA) to allow the Participant to convert the theater space into office use and provide for a two phased redevelopment of the site. The Owner is now proposing additional office space for an advertising creative firm called Grupo Gallegos. The First Amendment to the OPA proposes that the office space `will increase by 4,000 square feet in Phase One, which will add 75 employees to the daytime downtown workforce. The allowed square footage is capped at 90,000 square feet for Phase One. The OPA permits for flexibility within the three different types of uses, but maintains that the site can not exceed 90,000 square feet. The existing terms state that, upon completion of Phase One, the site will consist of not more than 90,000 gross square feet as follows: (a) Retail — up to 19,000 square feet of Gross Floor Area; and/or (b) Restaurant — up to 29,000 square feet of Gross Floor,Area, including any outdoor dining areas; and/or (c) Office — up to 51,000 square feet of Gross Floor Area. The First Amendment to the OPA proposes a minor change of square footage for the office space in Phase One, and maintains that the subject site will not exceed more than 90,000 gross square feet as follows: (a) Retail — up to 19,000 square feet of Gross Floor Area; and/or (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or (c) Office — up to 55,000 square feet of Gross Floor Area. The Owner has submitted a Planning Entitlement Application to modify the additional 4,000 square feet of office use. The proposed increase in office space is a less intensive use than retail and/or restaurant space, and will not require additional parking. Pursuant to Resolution No. 214 adopted by the Agency in June 1991, the Agency requested that all Owner Participation Agreements (OPA) and Disposition and Development Agreements (DDA) be forwarded copies at least thirty (30) days prior to any required action by the Agency; unless by a majority vote, such members waive this requirement. However, this First Implementation Agreement is considered minor and the Agency is requested to waive this requirement. Environmental Status: Phase One is categorically exempt pursuant to section 15302 of the California Environmental Quality Act because it involves the replacement of a commercial structure (theater) with a new structure (including tenant improvements) of Item 7. - 2 HB -1 58-- REQUEST FOR COUNCIL ACTION MEETING DATE: 5/16/2011 DEPARTMENT ID NUMBER: ED 11-22 approximately the same size and in the same location on the site. Phase Two will be analyzed as part of a future project proposal. Strategic Plan Goal: Enhance Economic Development Attachment(s): No 1. First Amendment to the Owner Participation Agreement H -1 -- Item 7. - 3 ATTACHMENT # 1 JL- Item 7. _ 4 uo -160- FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT This FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT ("First Amendment") is dated as of /Y14V J6 , 2011, and is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH ("Agency") and PIERSIDE PAVILION, LLC, a California limited liability company("Participant"). RECITALS A. Participant is the owner of certain real property (designated as the "Commercial Portion of the Site") located within the Merged Redevelopment Project Area of the City of Huntington Beach, California (the "City"), which real property is more particularly described in the "OPA" referenced below. B. The Agency and Participant entered into that certain Owner Participation Agreement dated as of July 6, 2009 (the "OPA"), pertaining to the two phased redevelopment of the Commercial Portion of the Site (designated in the OPA as Phase One and Phase Two) with up to 90,000 square feet of mixed retail, restaurant and office uses to be completed as part of Phase One, in accordance with the terms and conditions of the OPA. C. The OPA currently (1) contemplates the conversion of the former six-plex movie theater on the Commercial Portion of the Site to not more than 30,000 square feet of new office use and (2) establishes the maximum square footage for each use in Phase One of the Commercial Portion of the Site, as follows: Retail - up to 19,000 square feet of Gross Floor Area Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. Office—up to 51,000 square feet of Gross Floor Area Notwithstanding the foregoing, upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet." D. Participant now seeks, and the Agency has agreed, to (1) provide for the conversion of the former six-plex movie theater new office use and (2) allow an increase in the maximum area for office use in Phase One to 55,000 square feet of Gross Floor Area (collectively the "Changes"); provided, however, that upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet. E. Agency and Participant have agreed to modify the,terms of the OPA, as necessary to effect the Changes. Page 1 of 10 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties agree as follows: 1. Recitals. The Recitals and attachments referenced above are hereby incorporated by reference into this First Amendment and adopted by the parties to this First amendment as true and correct. 2. Defined Terms. Capitalized terms used in this First Amendment shall have the meaning given them in the OPA unless specifically provided otherwise herein. 3. Modifications to Section 301.1 of the OPA. a. The first sentence of Section 301.1 of the OPA is deleted in its entirety and replaced with the following text: "Phase One shall consist of the conversion of the six-plex movie theater on the Commercial Portion of the Site new office use, subject to the limitations set forth in this Section 301.1 below." b. The third sentence of Section 301.1 of the OPA is deleted in its entirety and replaced with the following text: "The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase One shall be as follows: (a) Retail -up to 19,000 square feet of Gross Floor Area (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 55,000 square feet of Gross Floor Area" C. All other provisions of Section 301.1 of the OPA shall remain the same. 4. Modification to Section 401(c)(3)(A) of the OPA. Section 400 (c)(3)(A) of the OPA is deleted in its entirety and replaced with the following text: "(3) Use the Commercial Portion of the Site only for the following mix of uses: A. Following Phase I i. Retail - up to 19,000 square feet of Gross Floor Area. ii. Restaurant —up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. Page 2of10 iii. Office—up to 55,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet." 5. Modification to the Agreement Affecting Real Property(Attachment No. 3 to the OPA). a. Section 1(c)(3)(A) of the Agreement Affecting Real Property is deleted in its entirety and replaced with the following text: "(3) Use the Property only for the following mix of uses: A. Following Phase I i. Retail -up to 19,000 square feet of Gross Floor Area. ii. Restaurant—up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. iii. Office—up to 55,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet." b. Agency and Participant shall execute a First Amendment to Agreement Affecting Real Property in the form attached hereto as Exhibit A concurrently with the execution of this First Amendment. The Amendment to Agreement Affecting Real Property shall then be recorded by Agency no later than five (5)business days from full execution of this First Amendment. 6. Modification to the Scope of Development(Attachment No. 5 to the OPA). a. The first sentence of Section Il of the Scope of Development is deleted in its entirety and replaced with the following text: "Phase One shall consist of the conversion of the six-plex movie theater on the Commercial Portion of the Site to new office use in accordance with and pursuant to all of the terms and conditions of Entitlement Plan Amendment 07-01 ("EPA No. 07- 01") as approved by the City." b. The third sentence of Section II of the Scope of Development is deleted in its entirety and replaced with the following text: "The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase I shall be as follows: (a) Retail -up to 19,000 square feet of Gross Floor Area. Page 3 of 10 (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 55,000 square feet of Gross Floor Area." C. All other provisions of the Scope of Development shall remain the same. 7. Binding on Successors and Assigns. This First Amendment and all of the terms and conditions herein shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties. 8. OPA in Full Force and Effect. Except as otherwise expressly modified herein, the terms and conditions of the OPA shall remain unmodified and in full force and effect. 9. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this First Amendment. 10. Third Party Beneficiaries. The parties to this First Amendment acknowledge and agree that the provisions of this First Amendment are for the sole benefit of Agency and Participant, and not for the benefit, directly or indirectly, of any other person or entity. 11. Effectiveness of this First Amendment. This First Amendment shall not be effective unless and until it has been executed by Participant and Agency. The Effective Date of this First Amendment shall be deemed to be the date this First Amendment is executed by Agency. SIGNATURES ON NEXT PAGE SPACE LEFT INTENTIONALLY BLANK Page 4 of 10 REDEV OPME AGENCY OF THE CITY OF,A G BEACH (Agency) By: Chai an Dat Ma 25, 2011 ATTEST: CA ncy Secretary REVIEWED AND APPROVED AS TO FORM: Agency General Counsel y Jennifer cGrath REV WED Ive c t ve Director INITIATED AMD REVIEWED Deputy Executive 900dor SIGNATURES CONTINUED ON NEXT PAGE Page 5 of 10 APPROVED AS TO FORM: KANE, BALLMER& BERKMAN Agency Special Counsel By: Susan Y. Cola COUNTERPART PARTICIPANT: PIERSIDE PAVILION, LLC a California limited liability company(Participant) By: _ �---'� Date: Name: 61e, f-A e Title: By: Date: Name: Title: Page 6 of 10 APPROVED AS TO FORM: KANE,BALLMER&BERKMAN Agency Speci I Counsel COUNTERPART By: Qt vl Susan Y.Cola PARTICIPANT: PIERSIDE PAVILION,LLC a California limited liability company(Participant) By: Date: Name: Title: By: Date: Name: Title: Page 6 of 10 This Document was electronically recorded by City of Huntington Beach Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder OFFICIAL BUSINESS Illllllllll II�! 11111111111111111111111111111111111111 NO FEE Document entitled to free 2011000262643 11:38am 05/26/11 recordingper Government 66 406 A17 10 p 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 Code Section 6103 Recording Requested by and When Recorded Return to: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Clerk Space above this line for Recorder's use only FIRST AMENDMENT TO AGREEMENT AFFECTING REAL PROPERTY This FIRST AMENDMENT TO AGREEMENT AFFECTING REAL PROPERTY (this "First Amendment"), dated as of M/4 y 16 , 2011, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and PIERSIDE PAVILLION, LLC, a California limited liability company("Participant"). Participant owns fee title to that certain real property(the "Property") located in the City of Huntington Beach, County of Orange, State of California, legally described in the "Legal Description" attached hereto and incorporated herein as Exhibit A and depicted on the "Site Map" attached hereto and incorporated herein as Exhibit B, which Property is described as the "Property"in the OPA referred to herein below. The Property is within the Main-Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. The Merged Redevelopment Project area is located in the City of Huntington Beach (the "City"). In furtherance of the Redevelopment Plan, Agency and Participant have entered into that certain Owner Participation Agreement dated as of July 6, 2009 (the "OPA"), and First Amendment to OPA, dated f?'& , 2011, which are incorporated herein by this reference. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the OPA. This dwxrsent is 30149y for the ottdclaf o9 ft Clty of Hunfington 93 cOntOmplated under Gommient Code Sec,6103 and Should bs read tea of dmr9a, The OPA contemplated the conversion of the former six-plex movie theater on the Commercial Portion of the Site to not more than 30,000 square feet of new office use and (2) established the maximum square footage for each use in Phase One of the Commercial Portion of the Site, as follows: Retail - up to 19,000 square feet of Gross Floor Area Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. Office—up to 51,000 square feet of Gross Floor Area In accordance with the First Amendment to OPA, the Agency agreed, to (1) provide for the conversion of the former six-plex movie theater to new office use and (2) allow an increase in the maximum area for office use in Phase One to 55,000 square feet of Gross Floor Area (collectively the"Changes"); provided,however, that upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet("Changes"). As part of the First Amendment to OPA, the Agency and Participant agreed to modify the terms of the Agreement Affecting Real Property, recorded in the Office of the Orange County Recorder on September 4, 2009, as Document No. 2009000476674, to effect the Changes as covenants running with the land. This First Amendment is entered into and recorded in accordance with the Redevelopment Plan and the OPA, as modified by the First Amendment to OPA. NOW, THEREFORE, AGENCY AND PARTICIPANT AGREE AS FOLLOWS: 1. Section 1(c)(3)(A) of the Agreement Affecting Real Property is deleted in its entirety and replaced with the following text: A. Following Phase One i. Retail -up to 19,000 square feet of Gross Floor Area. ii. Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. iii. Office—up to 55,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon Completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet." 2. This First Amendment and all of the terms and conditions herein shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties. 2. This First Amendment and all of the terms and conditions herein shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of the parties. 3. Agreement Affecting Real Property in Full Force and Effect. Except as otherwise expressly modified herein, the terms and conditions of the Agreement Affecting Real Property shall remain unmodified and in full force and effect. 4. Further Assurances. The parties agree to execute such other documents and to take such other action as may be reasonably necessary to further the purposes of this First Amendment. 5. Third Party Beneficiaries. The parties to this First Amendment acknowledge and agree that the provisions of this First Amendment are for the sole benefit of Agency and Participant, and not for the benefit,directly or indirectly,of any other person or entity. 5. Effectiveness of this First Amendment. This First Amendment shall not be effective unless and until it has been executed by Participant and Agency. The Effective Date of this First Amendment s 11 be deemed to be the date this First Amendment is executed by Agency. RE LOPMEN GENCY OF THE Y F T TON BEACH (Age Date: May 25, 2011 Ch ' an ,---A- ST: r 1. �,,- �`• A y Secretal VIEWED AND APPROVED AS TO FORM: _Agocy General Counsel APPROVED AS TO FORM: Kane,Ballmer&Berkman Agency pecial C un PIERSIDE PAVILION, LLC (Participant) Date: i I j By: Name: Its: Date: By: Name: Its: State of California ) County of-Ar-aog&Vl/& � On 51 q , 2011 before me,�, �' 14h816 —(here insert name of the officer),Notary Public, personally appeared �' r�fJrGh�;� o proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WI Yhanclaudafficy STEFFANEE NEEB Commission* 1797923 L - Notary Public -California soma Clara county Signature of Notary Public hwComm. fOy1Q3012 [Seal] State of California ) County of Orange ) On , 2011 before me, (here insert name of the officer),Notary Public,personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public [Seal] ACKNOWLEDGMENT STATE OF CALIFORNIA ) ) ss COUNTY OF ORANGE ) On May 25, 2011 before me, P. L. Esparza, Notary Public, personally appeared Joan L. Flynn and Joe Carchio who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within.instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. P.L.ES+PARZA WITNESS m hand d official l. Commission# 1857021 my an o sea •a Notary Public-'California Orange County M1 Comm.Ex Tres Aug4,2013 - - - - - - - - - - - - - - -- (Seal) (Notary Sign ure) EXHIBIT A LEGAL DESCRIPTION [behind this page] SDH`30241.0004\399679.2 4/28/2011 LOT 1 OF TRACT NO. 13722,AS SHOWN ON A MAP FILED IN BOOK 636, PAGES 38 TO 41 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM A PORTION OF SAID LAND,AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL OIL, OIL RIGHTS,MINERALS,MINERAL RIGHTS, NATURAL GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN, LOCATED WITHIN OR UNDER,AS RESERVED IN THE DEED FROM BETTY HOLT WEAVER AND OTHERS, RECORDED AUGUST 15,1985 AS DOCUMENT NO. 85- 30525 E IN OFFICIAL RECORDS OF ORANGE COUNTY. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM AAFKE = ROMPLEMAN,A MARRIED WOMAN, RECORDED AUGUST 10, 1960 IN BOOK 5367, PAGE 297 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND, ALL OIL, GAS, MINERALS _ AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM ELSIE M. BAKRE SMITH,A MARRIED WOMAN,RECORDED MARCH 14,1961 IN BOOK 5655,PAGE 693 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND ALL OIL, GAS, HYDROCARBONS AND MINERALS BELOW A DEPTH OF 500 FEET, FROM THE SURFACE OF SAID LAND, WITHOUT,HOWEVER,ANY RIGHT OF SURFACE ENTRY AS RESERVED BY CALIFORNIA RESORTS INTERNATIONAL,INC.,IN A DEED RECORDED MARCH 13, 1989 AS INSTRUMENT NO. 89-127442 OF OFFICIAL RECORDS. SDH\30241.0004\399679.2 4/28/2011 EXHIBIT B SITE MAP [behind this page] SDH\30241.0004\399679.2 4/28/2011 T � Y{ � Z, 1 _ r•a ta0' ! b ) 1 ° 1, f Q ) •1•f• 1,1 1 fig a r A a •► AA f•J1 a Q W fill, o a{' Ml M.M.2�•Jd..�,p AA M—♦ASCSSM's aKC=s .fssFssM•s MW rRn il"It r r IIIL11 810-f7 IV 10 Irm. lM fs n W PAS j SDH00241.0004\399679.2 4/28/2011 P 'ierside Pav 'il 'ion First Amendment COMMUNICATION City Coun Kft" Mft ozz May 16 , AWXW IWM No. c i i F [ � i i } t 5 _ iy � lily ♦ ���r �. 42 'N . Proposal The Property owner is proposing additional office space on the second floor Office space is proposed to increase by 4 , 000 square feet in Phase One The Property owner has submitted a Planning Entitlement Application to modify the additional 4 , 000 square feet of office use . Current OPA o The allowed square footage is capped at 90,000 square feet for Phase One . o The OPA permits for flexibility within the three different types of uses . o Site can consist of not more than 90 , 000 SF as follows : o (a) Retail - up to 19,000 sf of gross floor area; and /or • (b) Restaurant - up to 29,000 sf of gross floor area, including any outdoor dining areas ; and / or • (c) Office - up to 51 ,000 sf of gross floor area. Proposed Amendment o The First Amendment to the OPA proposes a minor change of square footage for the office space in Phase One o Maintains that the subject site will not exceed more than 90 , 000 sf as follows : • (a) Retail - up to 19,000 sf of gross floor area; and /or • (b) Restaurant - up to 29 ,000 sf of gross floor area, including any outdoor dining areas ; and /or • (c) Office - up to 55 ,000 sf of gross floor area. Questions z C Council/Agency Meeting Held: Deferred/Continued to: A r ved o Tonal y o nie Cit rk S' gnatur Council Meeting Date: 7/6/2009 Department D Number: ED 09-37 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Chairman and Redevelopment ncy Board Members SUBMITTED BY: Fred A. Wilson, Executive Dir PREPARED BY: Bob Hall, Deputy City Administ torjsw� Stanley Smalewitz, Deputy Executive Director', SUBJECT: Approve the Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavilion, LLC Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: An Owner Participation Agreement (OPA) has been negotiated between the Redevelopment Agency ("Agency") and Pierside Pavilion, LLC ("Participant'). The purpose of this OPA is to provide for the continued redevelopment of the site located at 300 Pacific Coast Highway in Downtown Huntington Beach. Funding Source: None Recommended Action: Motion to: Approve the Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach (Agency) and Pierside Pavilion, LLC (Participant). Alternative Action(s): Do not approve the OPA and provide direction to staff. REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 7/6/2009 DEPARTMENT ID NUMBER: ED 09-37 Analysis: On August 19, 1985, a Disposition and Development Agreement (DDA) between the Redevelopment Agency and Huntington Pacifica I, was approved for property owned by the City in the downtown area located between Main Street and Second Street, Walnut Avenue and Pacific Coast Highway. The DDA was amended by an Implementation Agreement in February 1986 to modify the scope of the project. On August 26, 1988 Agency and California Resorts (Huntington Pacifica I's successor-in- interest), entered into a Second Amended and Restated DDA. This agreement required the developer to build a mixed-use project with an entertainment/commercial center 1,750 seat, six-plex movie theater, 23,575 square feet of commercial space, 15,925 square feet of office space, 10,000 square feet of restaurant, and a 3,000 square foot nightclub. In 1992, Pierside Pavilion, LLC (Participant) purchased the commercial portion of the site located at 300 Pacific Coast Highway. The Participant has approached the city and requested the ability to modify the grant deed requiring the six-plex theater due to the changes in the market. Participant has been discussing the need for modification since December 2005. The Participant officially submitted their Planning Entitlement application to convert theater into office space on January 11, 2007. The movie theater business has changed and a six-plex theater is no longer financially feasible, due to the limited number of screens and because the theater is not state-of-the-art with stadium seating, sound, and projector equipment. The theater has been in operation by two different owners since 1992. Pierside Cinema (Edwards Theater), was the first operator from 1992 to 2001. In 2001, Pierside Pavilion Theaters took over and officially closed the movie operation in October 2006. As a result, the Agency and Participant have agreed to terms of an Owner Participation Agreement (OPA), which supersedes and terminates the Second Amended DDA and permits the Participant to provide for the continued redevelopment of the site, and reduces materially Agency's current obligation to provide offsite parking for the site. The OPA terms are: • Conversion of the six-plex movie theater consisting of approximately 30,000 square feet to a mix of restaurant, retail and office use (Phase One). Participant agrees to obtain entitlements and complete Phase One within 18 months. Upon completion of Phase One, the site will consist of no more than 90,000 square feet as follows: (a) Retail — up to 19,000 square feet of Gross Floor Area; and/or (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or (c) Office — up to 51,000 square feet of Gross Floor Area. These gross totals permit flexibility within the three categories. The DDA currently permits a distribution of uses as follows: (a) Retail — 12,834 square feet of Gross Floor Area; (b) Restaurant — 22,291 square feet of Gross Floor Area (includes dining area and night club); (c) Office - 20,623 square feet of Gross Floor Area; and (d) Theater—26,000 square feet of Gross Floor Area .2. 6/24/2009 2:48 PM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 7/6/2009 DEPARTMENT ID NUMBER: ED 09-37 • Phase Two as contemplated by the OPA allows for the development of an additional 30,000 square feet subsequent to the adoption of the revised Downtown Specific Plan by the City Council and Coastal Commission. The Participant agrees to obtain all necessary permits, approval and entitlements within two years of all regulatory approvals and commence construction within five years of City and Coastal Commission approval. As a result of Phase Two, the maximum square footage of the building shall not exceed 120,000 square feet as follows: (a) Retail — up to 31,000 square feet of Gross Floor Area; and/or (b) Restaurant — up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or (c) Office — up to 63,000 square feet of Gross Floor Area. • The Agency shall continue to make available up to 150 parking spaces in the Main Promenade Parking Structure for the site regardless of whether Phase One or Two is completed. Currently, the DDA requires that 624 offsite spaces at the Main Promenade Parking Structure are provided for the existing Pierside uses. As a result of the OPA's decrease in intensity in uses, the Agency will be required to provide less parking spaces offsite. • The Agency will make available up to 300 parking spaces in the Main Promenade Parking Structure for required off-site parking for Phase Two. However, the spaces are not marked or limited to Pierside parking. It is open to the public, as it currently operates. • Participant and Agency will work together to recruit desired retail/restaurant tenants. OPA incorporates a list of preferred uses and tenants that would potentially benefit the project and adjacent property (Attachment No. 4 of the OPA). Given the demographics and market demand, local residents, as well as tourists, could support the proposed tenant types and uses. • The OPA incorporates no new liquor licenses that allow for offsite consumption (no liquor stores) sales. Strategic Plan Goal: Enhance Economic Development. Environmental Status: Phase One is categorically exempt pursuant to section 15302 of the California Environmental Quality Act because it involves the replacement of a commercial structure (theater) with a new structure (including tenant improvements) of approximately the same size and in the same location on the site. Phase Two will be analyzed as part of a future project proposal, if any. -3- 6/24/2009 2:48 PM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 7/6/2009 DEPARTMENT ID NUMBER: ED 09-37 Attachment(s): City Clerk's, Page Number No. Desciription 1. Owner Participation Agreement by and between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavilion, LLC 2. PowerPoint Presentation -4- 6/24/2009 2:48 PM ATTACHMENT # 1 OWNER PARTICIPATION AGREEMENT by and between REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, and PIERSIDE PAVILION,LLQ Participant OPA 9 TABLE OF CONTENTS Page ARTICLE 100 SUBJECT OF AGREEMENT......................................................:....................... I § 101 Purpose of the Agreement.................................................................................... 1 § 102 The.Redevelopment Plan ......................:...........................................................2 § 103 The Redevelopment Project Area......................................................................... 2 § 104 The Site.................................................................................................................2 § 105 Parties to the Agreement. .......... ................ ...................................................2 § 105.1 Agency........................................................................... .....................2 § 105.2 Participant....................................................................:...........................3 ARTICLE 200 TERMINATION OF SECOND AMENDED DDA AS TO COMMERCIAL PORTIONOF THE SITE....................................................................................3 ARTICLE 300 DEVELOPMENT OF THE COMMERCIAL PORTION OF THE SITE...........4 §301 Scope of Development..........................................................................................4 § 301.1 Phase One.....................................:.............................................................4 § 301.2 Phase Two.............................................................................. .................5 § 301.3 Restrictions on Bars and Nightclubs.........................................................6 §.102 Entitlements................................ ,............... ......................................................6 §3.03 Intentionally Omitted...........................................................................................7 §304 Construction Drawings and Related Documents..................................................7 § 305 Cost of Development...........................................................................................7 §306 Schedule of Performance................................................ ......... ........ ........7 §307 Indemnification and Insurance........................................................................:......8 §308 City and Other Governmental Permits..................................................................9 §309 Intentionally Omitted............................ ......... ...................................................9 §310 Local, State and Federal Laws.............................................:...............................9 § 311 Nondiscrimination during Construction............................................................ 10 312 Disclaimer of Responsibility by the Agency......... ....... ............. .... . ...... 10 §313 Land Use Requirements.................. ........................................................... ... I I ARTICLE 400 USE OF THE COMMERCIAL PORTION OF THE SITE.....................:......... 11 §401 Uses.... . . .................... ........ .......................................... ....4....... ..... 11 §402 Obligation to Refrain from Discrimination........................................................ 15 §403 Form of Nondiscrimination and Nonsegregation Clauses................................. 16 §404 Agreement Affecting Real Property................................................................... 17 §405 Effect and Duration of Covenants...................................................................... 17 i ARTICLE 500 DEFAULTS,REMEDIES AND TERMINATION........................................... 17 § 501 Default.......... ................................ . ............ ............................................. 17 §502 Notice..................................... ... .. ..... .................................................. . 18 § 503 Cure Period......................................................................................................... 18 § 504 Rights and Remedies............................ .......................................................... 18 ARTICLE 600 GENERAL PROVISIONS.......... ................................................. ................19 §601 Notices,Demands and Communications between the Parties........................... 19 §602 Conflict of Interest......................... .... .......................................................... 19 §603 Nonliability of City and Agency Officials and Employees................................ 19 §604 Unavoidable Delay in Performance for Causes beyond Control,of Party..........20 §605 Inspection of Books and Records.......... ..........................................................20 §606 Participant's Warranties.....................................................................................21 §607 Relationship of the Parties, ....... .. ..., . . . ............................................ 21 §608 Interpretation of Agreement ....................:............................................................22 §609 Authorized Representative of Agency ...............................................................22 §610 Waivers..............................................................................................................22 §611 Time of the Essence..............................................................................................22 § 612 Attorneys' F ees and Costs......................................:...........................................22 § 613 Severability .........................................................................................................22 § 614 Non-exclusivity...............................................................................................,...23 §615 Complete Agreement;Non-Merger....................................................... ..........23 §616 Terminology...................................................................................................:...23 § 617 Necessity for a Writing......................................................................................23 §618 Third Party Beneficiaries.......................:...........................................................23 §619 Authority to Sign............,..................................................._..................................23 §620 Incorporation by Reference.......................................................,........ ...............24 ARTICLE 700 SPECIAL PROVISIONS....................................................................................24 §701 Intentionally Omitted.........................................................................................24 §702 Off-Site Parking.................................................................................................24 ARTICLE 800 COMPOSITION OF AGREEMENT...:.............................................................25 ARTICLE 900 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY....................25 ii 15 ATTACHMENTS ATTACHMENT NO. 1 - MAP OF THE SITE ATTACHMENT NO.2 - LEGAL DESCRIPTION OF THE SITE ATTACHMENT NO. 3 - FORM OF AGREEMENTAFFECTING REAL PROPERTY ATTACHE NO.4 - LIST OF PREFERRED TENANT/SUBTENANT TYPES ATTACHMENT NO.5 - SCOPE OF DEVELOPMENT ATTACI3MENT NO. 6 - SCHEDULE OF PERFORMANCE ATTACHMENT NO.7 - .ANTICIPATED PHASE TWO PROCESSING TIMES ATTACHMENT NO. 8 - LEASE PROVISIONS FOR BENEFIT OF AGENCY AND CITY iii OWNER PARTICIPATION AGREEMENT This OWNER PARTICIPATION AGREEMENT (this "Agreement') dated as of tZ L V 06 ,2009,is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"),and PIERSIDE PAVILION,LLC,a California limited liability company("Participant"). ARTICLE 100 SUBJECT OF AGREEMENT § 101 Purpose of the Agreement The Agency and California Resorts, a general partnership, Participant's predecessor-in- interest to the hereinafter defined Site,entered into that certain Second Amended and Restated Disposition and Development Agreement as of August 26, 1988("Second Amended DDA"). The purpose of the Second Amended DDA was to effectuate the Redevelopment Plan for the Main-Pier Redevelopment Project Area by providing for the disposition of the Site and the development of certain commercial,residential and related improvements(referred to in the Second Amended DDA as the"Project"). Participant acquired the hereinafter defined Commercial Portion of the Site in 2002. In accordance with Section 415 of the Second Amended DDA,the Agency issued a Release of Construction Covenants (Certificate of Completion) for the Project, which was recorded on September 26,2002 as Document No.20020826749. Since the execution of the Second Amended DDA,there have been market changes with respect to the Commercial Portion of the Site, the Project and other areas in the vicinity of the Project. Subject to all of the terms and conditions of this Agreement,the Agency and Participant agree to certain changes in the use of the Commercial Portion of the Site as set forth in this Agreemeent. The purpose of this Agreement is to effectuate the public purposes of the Agency by providing for the continued redevelopment of the Commercial Portion of the Site, confirm and approve the acquisition of the Commercial Portion of the Site by Participant, and supersede and terminate the Second Amended DDA in its entirety as to the Commercial Portion of the Site. The fulfillment generally of this Agreement is in the vital and best interests of the City of Huntington Beach(the"City")and the health,safety,and welfare of its residents,and in accord with the public purposes and provisions of applicable federal,state and local laws and requirements, Among other things,the termination of the Second Amended DDA as to the Commercial Portion of the Site and entering into this Agreement(a)permits the redevelopment of the Commercial Portion of the Site, and (b) reduces materially Agency's current obligation to provide off-.site parking for the Commercial Portion of the Site. OPA 9 1 § 102 The Redevelopment Plan This Agreement is made in accordance with and subject to the redevelopment plan for the Main-Pier Redevelopment Project,which was approved and adopted by Ordinance No.2578.of the City Council of the City of Huntington Beach,amended by Ordinance No.2634,and merged with certain other redevelopment projects in the City by the :adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project(the "Redevelopment Plan')is incorporated herein.by reference and made a part hereof as though fully set forth herein. § 103 The Redevelopment Project Area The Merged Redevelopment Project area is located in the City. The exact boundaries of such Project area are specifically and legally described in the Redevelopment Plan and Ordinance No. 3343. § 104 The Site The"Site"is that certain real property illustrated and designated as such on the"Map of the Site"{which is attached hereto and incorporated herein as Attachment No. 1)and having the legal description set forth in the"Legal Description of the Site"(which is attached hereto and incorporated herein as Attachment No.2). The Site is.located within the Merged Redevelopment Project Area. The"Commercial Portion of the Site"is that certain real property illustrated and designated as such on the"Map of the Site"(which is attached hereto and incorporated herein as Attachment No. 1)and having the legal description set forth in the"Legal Description of the Site"(which is attached hereto and incorporated herein as Attachment No.2). Participant represents and warrants to Agency that Participant currently holds fee title to the entire Commercial Portion of the Site. Participant shall defend and indemnify and hold the Agency harmless from any and all alleged damages,liabilities, costs and expenses(including reasonably reasonable attorneys'fees and costs of litigation)incurred by the Agency as a result of the intentionally or unintentionally falsity of any portionof the foregoing representation and warranty. § 105 Parties to the Agreement § 105.1 Agency Agency is a publicbody,corporate and politic,exercising governmental functions and powers and organized and existing under Part 1 of Division 24 of the California Health and Safety Code (California Health and Safety Code Section 33000 et seq.). The principal office of Agency is located at City Hall,2000'Main Street,Huntington Beach, California 92648. OPA 9 2 Q' "Agency" as used in this Agreement, includes the Redevelopment Agency of the City of Huntington Beach,and any assignee of or successor to its rights,powers and responsibilities. § 105.2 Participant Participant is a California limited liability company. Participant represents and warrants to Agency that Participant is the lawful successor-in-interest to all right, title and interest in the Commercial Portion of the Site and in the Second Amended DDA relating to the Commercial Portion of the Site. Participant shall defend and indemnify and hold the Agency harmless from any i and all alleged damages,liabilities,costs and expenses(including reasonably reasonable attorneys' fees and costs of litigation)incurred by the Agency as a result of the intentionally or unintentionally falsity of any portion of the foregoing representation and warranty. The Agency hereby approves of the acquisition of the Commercial Portion of the Site by i Participant to the extent any such approval is or was required. i The principals of Participant are Gary Daichendt and Catherine Daichendt,as trustees of the Daichendt Family Revocable Trust established July 11, 1997. The principal office of Participant is located at 300 Pacific Coast Highway, Suite 119, Huntington Beach,California 92648. Wherever the term"Participant"is used herein,such term shall also include any permitted assignee or successor in interest as herein provided. ARTICLE 200 TERMINATION OF SECOND AMENDED DDA AS TO COMMERCIAL, PORTION OF THE SITE This Agreement is intended to and does supersede and replace the Second Amended DDA in its entirety as to the Commercial Portion of the Site only. The Agency and Participant each hereby respectively represent and warrant to the other that they have not assigned,transferred,conveyed,or hypothecated any of their respective rights,remedies,and obligations under the Second Amended DDA as to the Commercial Portion of the Site. Each party hereto shall defend and indemnify and hold the other party harmless from any and all alleged damages, liabilities, costs and expenses (including reasonably reasonable attorneys'fees and costs of litigation)incurred by the other as a I result of the intentionally or unintentionally falsity of any portion of the foregoing representation and warranty. The parties agree that upon the"Effective Date"of this.Agreement(as defined below),the Second Amended DDA shall be terminated,canceled and voided in its entirety as to the Commercial Portion of the Site only. As of the.Effective Date,all covenants,terms and conditions set forth in the Second Amended DDA as to the Commercial Portion of the Site only shall be forever relinquished, released and discharged without need of further act or document From and after the Effective Date, OPA 9 3 i all of the rights and obligations between Agency.and Participant with respect to the Commercial Portion of the Site only shall be as set forth herein and the Agreement Affecting Real Property. The Second Amended DDA remains in full force and effect as to the remainder of the Site, enforceable in accordance with its terms. Nothing herein is intended to or does modify or change the Second Amended DDA as to the remainder of the Site. The"Effective Date"of this Agreement shall be the date on which both of the following have occurred: (a) both parties have duly executed this Agreement; and (b) both parties have duly executed the Agreement Affecting Real Property(Attachment No.3)and the Agreement Affecting Real Property has been recorded against title to the Commercial Portion of the Site as required by this Agreement. i ARTICLE 300 DEVELOPMENT OF THE COMMERCIAL PORTION OF THE SITE §301 Scope of Development As a material part of the consideration for this Agreement,Participant covenants and agrees for itself,its successors,its assigns and every successor in interest to the Commercial Portion of the Site or any part thereof,that Participant,its successors and assignees shall redevelop the Commercial i Portion of the Site subject to the terms and conditions of this Agreement and shall commence and complete such redevelopment within the times established therefor in the Schedule of Performance. Subject to the terms and conditions of this Agreement,the Commercial Portion of the Site shall be 4 redeveloped in accordance with and within the limitations established in this Agreement(including, without limitation,the Scope of Development)and the Redevelopment Plan. The redevelopment of the Commercial Portion of the Site shall be subject to all applicable federal,state and local laws, rules,regulations and guidelines. Subject to the terms and conditions of this Agreement,Participant shall redevelop, or cause to be redeveloped, the Commercial Portion of the Site in two phases ("Phase One"and"Phase Two")in accordance with and within the limitations established therefor in this Agreement and the Agreement Affecting Real Property. § 301.1 Phase One Phase One shall consist of the conversion of the six-plex movie theater on the Commercial Portion of the Site to not more than 30,000 square feet of new office use in accordance with and pursuant to all of the terms and conditions of Entitlement Plan Amendment 07-01 ("EPA No.07- 01")as approved by the City. Participant agrees to use commercially reasonable efforts to obtain entitlements for and complete the Phase One development. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase One shall be as follows: (a) Retail—up to 19,000 square feet of Gross Floor Area. OPA 9 4 I (b) Restaurant—up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 51,000 square feet of Gross Floor Area. "Gross Floor Area"as used in this Agreement shall mean the total enclosed area of all floors of a building measured to the outside face ofthe structured members in exterior walls,and including halls,stairways,elevators shafts at each floor level,service and mechanical equipment rooms,and habitable basement or attic areas,but excluding area for vehicle parking and loading. Notwithstanding the foregoing,upon the completion of Phase One,the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet. To the extent permitted by the City and any other governmental agency having jurisdiction over the Commercial Portion of the Site, Phase One or Phase Two, and subject to any and all applicable laws, rules, regulations, or policies of the same, the Agency does not object to the expansion of Participant's merchant cart program which might remain in effect throughout and following the completion of Phase Two. Except for uses that as of the date of this Agreement are open for business to the general public and are permitted by City approved entitlements,subject to the restrictions set forth in Section 301.3 below,"Restaurant"as used in this Agreement shall mean a use operated and maintained as a bona fide sit down eating establishment serving a sit down full dinner menu every day the establishment is open for business until at least one hour before closing and making actual and substantial sales of such full dinner menu. §301.2 Phase Two Phase Two is contemplated as,a future addition to the Commercial Portion of the Site that shall comply with.all then applicable federal,state and local laws,rules,regulations and guidelines. As of the date of this Agreement,the Downtown Specific Plan and the Downtown Parking Master Plan are in the process of being updated and amended and may be merged into one document (collectively, the "Updated Plans"). Participant agrees that there can be.no submission of any application to the City for Phase Two improvements prior to adoption by the City and the Local Coastal Commission of the Updated Plans. Subject to Sections 306 and 604 below,Participant agrees to use commercially reasonable efforts to submit to the City an application for the Phase Two improvements within two(2)years following the date the City and Local Coastal Commission adopt the Updated Plans. Ifthe City and Local Coastal Commission adopt the Updated Plans and Participant obtains all necessary permits, approvals and entitlements for Phase Two on terms acceptable to Participant in its sole discretion, Participant agrees(subject to Sections 306 and 604 below)to use commercially reasonable efforts to commence the Phase Two development within five (5) years following City and Local Coastal OPA 9 5 J Commission adoption of the Updated Plans and to complete the Phase Two development within two (2)years following commencement of construction of Phase Two. Phase Two shall consist of the expansion of the Commercial Portion of the Site to add not more than 30,000 square feet of new Gross Floor Area on the Commercial Portion of the Site developed in accordance with and pursuant to all of the terms and conditions of this Agreement,any conditional use permit or other entitlement issued or approved by the City,and all then applicable federal, state and local laws, rules, regulations and guidelines. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase Two.shall be as follows: (a) Retail—up to 31,000.square feet of Gross Floor Area. (b) Restaurant—up to 41,000 square feet of Gross Floor Area,including any outdoor dining areas, (c) Office up to 63,000 square feet of Gross Floor Area; Notwithstanding the.foregoing,upon the completion of Phase Two,the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 120,000 Gross Floor Area. § 301.3 Restrictions on Bars and Nightclubs Notwithstanding the type of liquor license that might be obtained or maintained by any establishment on the Commercial Portion of the Site,bars and nightclub uses(including,without limitation,any bar or nightclub use within a Restaurant)are restricted to the sale of beer,wine and distilled spirits for consumption on the licensed premises only (i.e., no sale of beer, wine and distilled spirits for consumption off the licensed premises). The foregoing shall not apply to any establishment that is open for business as of the date of this Agreement to the extent such establishment has (a) a license permitting the sale of beer, wine and/or distilled spirits for consumption off the licensed premises or (b) the right under its leaselsublease to such sales (provided, however, that to the extent that such tenant's leaselsubtenant's sublease requires Participant's consent (as landlord or sublandlord) for such sales for off-premise consumption, Participant agrees to withhold such consent). §302 Entitlements Subject to the Schedule of Performance(Attachment No.6)and Sections 306 and 604 below, Participant shall diligently prepare,submit to the City and any other governmental agency having jurisdiction over the Commercial Portion of the Site for the City's and such governmental agency's approval,and thereafter use commercially reasonable efforts to process any and all applications for all required entitlements,or amendments thereto,required for the development and construction of Phase One and Phase Two. Subject to the Schedule of Performance (Attachment No. 6) and OPA 9 6 Sections 306 and 604 below,Participant shall prepare,submit and process all such applications in a timely fashion. Subject to Sections 306 and 604 below, Participant shall use commercially reasonable efforts to complete Phase One within eighteen(18)months after the date all permits and entitlements have been obtained with all applicable appeals periods having lapsed.The Commercial Portion of the Site shall be developed as established in such approved entitlements,except.for such changes as may be mutually agreed upon in writing between Participant and the City and which are within the limitations and requirements of this Agreement. §303 Intentionally Omitted §304 Construction Drawings and Related Documents IfParticipant obtains all appropriate permits and entitlements for Phase One,then,subject to the Schedule of Performance(Attachment No.6)and Sections 306 and 604 below,Participant shall diligently prepare,submit to the City for the City's approval,and thereafter process construction drawings and related documents as required for City approval for the development and construction of Phase Two(collectively called the"Drawings"). Drawings shall include,without limitation,floor plans,roof plans,elevations and project sections,tabulation of areas and uses,elevations of major public spaces,graphics and signage plans,lighting plans and a preliminary parking analysis. §305 Cost of Development Except as expressly set forth in Section 702,below,the cost of redeveloping the Commercial Portion of the Site (including, without limitation, all conditions of approval, infrastructure, dedications and mitigation measures related to approval of entitlements,and all demolition,grading, excavation and site improvement and remediation)shall be borne solely by Participant. § 306 Schedule of Performance Each party to this Agreement shall perform the obligations to be performed by such party pursuant to this Agreement within the respective times provided in the Schedule of Performance (Attachment No.6),and if no such time is provided,within a reasonable time. Participant shall perform or cause to be performed all design and construction work diligently, continuously and without interruption strictly in accordance with the Schedule of Performance. Participant small commence or cause the commencement of the development and construction of Phase One and Phase Two within the times provided therefor in the Schedule of Performance. Participant shall perform or cause to be performed all design and construction work in a good and workmanlike manner and in accordance with sound engineering and construction practices. Except for"Unavoidable Delays"(as defined in Section 604 below), after Participant commences the Phase One work or the Phase Two work,respectively,Participant shall not cause or OPA 9 7 permit cessation of work on Phase One or Phase Two,as applicable,for a period in excess of thirty (30)consecutive business days,without the prior written consent of the Agency Executive Director. The Schedule of Performance and any other times for performance under Section 301 and/or 302 above may be extended from time to time as mutually agreed.m.writing by the Participant and the Agency Executive Director, each in their sole and absolute discretion. Notwithstanding the foregoing,Participant shall have the right to unilaterally:extend the dates for the performance of Participant's obligations under this Agreement for consecutive periods of one(1)year each for up to three(3)years upon payment to Agency of the amount of Fifty Thousand Dollars($50,000.00)for each one(1)year extension, 307 Indemnification and Insurance a. Participant agrees to and shall defend,indemnify and hold harmless the Agency,the City and their officers,employees,agents,contractors and consultants from and against all claims, liability, loss, damage, costs or expenses (including reasonable attorneys' fees and court costs) directly or indirectly arising from,caused by or based on the Participant's renovation,development construction,use or operation of the Commercial Portion of the Site or any portion thereof or any improvements thereon or any of Participant's activities under this Agreement,whether such actions or inactions thereof be by Participant or anyone directly or indirectly employed or contracted with by Participant. The indemnities set forth in this Section shall survive termination of this Agreement. Participant shall not be responsible for(and such indemnity shall not apply to)property.damage or bodily injury to the extent caused by the negligence or willful misconduct of the Agency. b. Prior to commencement-of any Phase One work.or Phase Two work,as applicable, (preliminary or otherwise)or any portion thereof,Participant shall furnish,or cause to be furnished, to Agency duplicate originals or appropriate certificates[except as to the naming of the Agency,the City and their officers,employees,agents,contractors and consultants as additional insureds which shall require Participant to furnish,or cause to be furnished,to Agency appropriate endorsement(s)to the insurance policies adding the Agency,the City and their officers,employees,agents,contractors and consultants as additional insureds]of personal injury and property damage insurance policies in an amount not less than Five Million Dollars($5,000,000)combined single limit,naming Agency, the City and their officers,employees,agents,.contractors and consultants as additional insureds,or a combination of functionally equivalent policies,including umbrella coverage. Any such policy shall be primary and not contributing to policies carried by the Agency or the City,shall have a deductible of not more than Fifty Thousand Dollars($50,000),and be issued by a carrier or carriers having an A.M.Best hating not less than B+;VU. Such policies shall be maintained in full force and effect at all times during the course of any construction of the Phase One work or Phase Two work, as applicable. OPA 0 8 § 308 City and Other Governmental Permits Before commencement of renovation,development or construction of any building,structure or other work of improvement upon the Commercial Portion of the Site or any portion thereof, Participant shall,at its own expense,secure,or cause to be secured,any and all permits which may be required by the City or any other governmental agency having jurisdiction over such renovation, construction,development or work. This Agreement shall not be construed to limit in any manner(i) the right or the authority of the City,or any other governmental agency hawing jurisdiction,to require public improvements,dedications,exactions or other conditions of approval in connection with the development of the Commercial Portion of the Site or any portion thereof;or(ii) Participant's responsibility to pay for the cost of complying therewith,except as expressly provided in Section 702,below,related to 300 parking spaces in the hereinafter defined Parking Structure. §309 Intentionally Omitted § 310 Local, State and Federal Laws Participant shall carry out renovation,development,construction(as defined by applicable law)and operation of the Commercial Portion of the Site,including,without limitation,any and all public works(as defined by applicable law),if any,in conformity with all applicable local,state and federal laws,including,without limitation,all applicable federal and state labor laws(including; without limitation,any applicable requirement to pay state prevailing wages). Participant hereby agrees that,to the extent required by Labor Code Sections 1726 and 1781(ifapplicable),as the same may be enacted,adopted or amended from time to time,or any other provision of law(a) Participant shall have the obligation to provide any and all applicable disclosures,representations,statements, rebidding, and/or identifications; and (b) Participant shall have the obligation to provide and maintain any and all bonds which may be required under the Civil Code to secure the payment of contractors(including the payment of wages to workers performing any public work). Participant shall indemnify,protect,defend and hold harmless the Agency,City and their respective officers, employees,contractors and agents,with counsel reasonably acceptable to Agency and City,from and against any and all loss,liability,damage,claim,cost,expense,and/or"increased costs"(including labor costs, penalties, reasonable attorneys fees, court and litigation costs, and fees of expert witnesses) which, in connection with the renovation, development, construction (as defined by applicable law)and/or operation of the Commercial Portion of the Site,including,without limitation, any and all public works(if any)(as defined by applicable law),results or arises in any way from any of the following:(1)the noncompliance by Participant of any applicable local,state and/or federal law,including,without limitation,any applicable federal and/or state labor laws(including,without limitation,if applicable,the requirement to pay state prevailing wages);(2)the implementation of Chapter 8044,Statutes of 2003 to the extent applicable;(3)the implementation of Sections 1726 and 1781 of the Labor Code,as the same may be enacted,adopted or amended from time to time,or any other similar law to the extent applicable;(4)failure by Participant to provide any required disclosure representation, statement, rebidding and/or identification which may be required by Labor Code i OPA 9 9 i Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time,or any other provision of law to the extent applicable; and/or(5) failure by Participant to provide and maintain any and all bonds to secure the payment of contractors(including the payment of wages to workers performing any public work)which may be required by the Civil Code,Labor Code Section 1781,as the same may be enacted,adopted or amended from time to time,or any other provision of law to the extent applicable. Participant hereby expressly acknowledges and agrees that neither City nor Agency has ever previously affirmatively represented to the Participant or its contractor(s)for the Commercial Portion of the Site in writing or otherwise,that the work to be covered by the bid or contract is not a`Public work,"as defined in Section 1720 of the Labor Code. It is agreed by the parties that,in connection with the renovation,development,construction(as defined by applicable law)and operation of the Commercial Portion of the Site,including,without limitation,any public work (as defined by applicable law), if any,Participant shall bear all risks of payment or non- payment of state prevailing wages and/or the implementation of Chapter 804,Statutes of 2003 and/or Labor Code Sections 1726 and 1781,as the same may be enacted,adopted or amended from time to time, and/or any other provision of law. "Increased costs" as used in this Section shall.have the meaning ascribed to it in Labor Code Section 1781,as the same may be enacted,adopted or amended from time to time.The foregoing indemnity shall survive termination of this Agreement. §311 Nondiscrimination during Construction Participant for itself and its successors and assigns agrees that in the renovation,development and/or construction of any improvements on the Commercial Portion of the Site,Participant shall not discriminate against any employee or applicant for employment because of sex,marital status,race, color,creed,religion,national origin or ancestry. §312 Disclaimer of Responsibility by the Agency Agency neither undertakes nor assumes nor will have any responsibility or duty to Participant or to any third party to review,inspect,supervise,pass judgment upon or inform Participant or any third party of any matter mi connection with the development or construction of the improvements on the Commercial Portion of the Site, whether regarding the'quality,adequacy or suitability of the plans,any labor,service,equipment or material furnished to the Commercial Portion of the Site,any person furnishing the same,or otherwise. Participant and all third parties shall rely upon its or their own judgment regarding such matters,and any review,inspection,supervision,exercise of judgment or information supplied to Participant or to any third party by Agency in connection with such matter is for the public purpose of redeveloping the Commercial Portion of the Site,and neither Participant nor any third party is entitled to rely thereon. Agency shall not be responsible for any of the work of construction,improvement or development of the Commercial Portion of the Site. OPA 9 10 § 313 Land Use Requirements it is the responsibility of Participant, at Participant's sole cost and expense, to exert commercially reasonable efforts to ensure that zoning of the Commercial Portion of the Site and all applicable entitlements will permit the development and construction of Phase One and Phase Two and the use, operation and maintenance of Phase One and Phase Two in accordance with the provisions of this Agreement;provided,however,that the failure to obtain:such zoning and other applicable entitlements shall not be deemed a breach of this Agreement.so;long as Participant has exerted commercially reasonable efforts to obtain them on terms and conditions acceptable to Participant in its sole discretion. Nothing contained herein shall be deemed to entitle Participant to any City permit or other City approval necessary for the development of the Commercial Portion of the Site,or waive any applicable City requirements relating thereto. This Agreement does not:(a) grant any land use entitlement to Participant;(b)supersede,nullify or amend any condition which may be imposed by the City in connection with approval of the development described herein; (c) guarantee to Participant or any other party any profits from the development of the Commercial Portion of the Site; or (d) amend any City laws, codes or rules. This is not a Development Agreement as provided in Government Code Section 65864. ARTICLE 400 USE OF THE COMMERCIAL PORTION OF THE SITE §401 Uses Participant hereby covenants and agrees on behalf of itself and any successors and assigns in the Commercial Portion of the.Site or any portion thereof.or any improvements.thereon or any. interest therein that Participant and such successors and assigns shall, at Participant's or such successor's and assign's sole cost and expense: a. Develop and construct improvements on the Commercial Portion of the Site solely in accordance with the Redevelopment Plan,this Agreement(including,without limitation,the Scope of Development and the Schedule of Performance),the Agreement Affecting Real Property,and any City-approved entitlements. b. Use the Commercial Portion of the Site,or cause the Commercial Portion of the Site to be used,solely in accordance with the Redevelopment Plan,this Agreement(including,without limitation,the Scope of Development and the Schedule of Performance),the Agreement Affecting Real Property,and any City-approved entitlements. C. Comply with the following additional requirements and restrictions with regard to the Commercial Portion of the Site: (1) Retail/Restaurant Uses. OPA 9 11 t1. A. In the event a vacancy is expected to become available for any retail or restaurant tenant/subtenant on the Commercial Portion of the Site (regardless of whether such vacancy exists due to development of new retail/restaurant use permitted by this Agreement, termination of an existing lease or sublease, or otherwise),Participant shall provide reasonable written notice to Agency and provide reasonable opportunity for Agency to recruit desirable proposed retail or restaurant tenants similar to those listed on the preferred list of retail/restaurant tenants/subtenants types attached to this Agreement as.Attachment No.4. B. The Agency shall have the right to recommend tenants/subtenants as appropriate for the economic benefit and vitality of Downtown. The Agency will not be involved in negotiations between a potential tenant/subtenant. Participant shall notify the Agency in writing within at least five(5)business days after receiving any notice of vacancy in the Commercial Portion of the Site(either a lease or a sublease)and within at least five(5)business days after the date a tenant/subtenant has been selected. The Agency's sole and exclusive remedy for the Participant's failure to provide either of the notices required in the preceding sentence shall be payment to the Agency by Participant of$100 per failure. Such payment shall be made within ten (10) days following written request therefore from the Agency to Participant. If full payment is not received by the Agency within twenty(20)calendar days after written notice from the Agency to Participant,or the next business day if the twentieth(20d)day falls on a weekend or holiday,(1)Participant shall pay to Agency a late charge of ten percent(10%)which shall be applied to any outstanding amount due but unpaid;and(2)one and a half percent(1 Moo)penalty will be added for each thirty(30)day period that the payment is due but unpaid. Until such payment/charge/penalty is/are made,it/they shall constitute a lien against the Commercial Portion of the Site pursuant to Civil Code Section 2881. C. Participant shall have final approval of the tenant selection. The uses of tenants selected by Participant must be consistent with EPA No.70-01. (2) Office Use. All new office uses constructed on the Commercial Portion of the Site after the date of this Agreement(including,without limitation,any office space added by Phase One or Phase Two)shall meet all City requirements. (3) Use the Commercial Portion of the Site only for the following mix of uses: A. Following Phase One (i) Retail—Up to 19,000 square feet of Gross Floor Area. (ii) Restaurant—Up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—Up to 5 1,000 square feet of Gross Floor Area. OPA 9 12 y` 's J ^�I Notwithstanding the foregoing,upon the completion of Phase One,the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet. B. Following Phase Two (i) .Retail—up to 31,000 square feet of Gross Floor Area. (ii) Restaurant— up to 41,000 square feet of Cross Floor Area, including any outdoor dining areas. (iii) Office—up to 63,000 square feet of Gross Floor Area. Notwithstanding the foregoing,upon the completion of Phase Two,the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 120,000 Gross Floor Area. (4) Restrictions on Bars and Nightclubs. Notwithstanding the type of liquor license that might be obtained or maintained by any establishment on the Commercial Portion of the Site, bars and nightclub uses (including, without limitation, any bar or nightclub use within a Restaurant) are restricted to the sale of beer, wine and distilled spirits for consumption on the licensed premises only (i.e.,no sale of beer, wine and distilled spirits for consumption off the licensed premises). The foregoing shall not apply to any establishment that is open for business as of the date of this Agreement to the extent such establishment has(a)a license permitting the sale of beer,wine and/or distilled spirits for consumption off the licensed premises or(b)the right under its lease/sublease to such sales(provided,however,that to the extent that such tenant's lease/subtenant's sublease requires Participant's consent(as landlord or sublandlord)for such:sales for off-premise consumption,Participant agrees to withhold such consent). d. (1) Maintain, repair and operate the Commercial Portion of the Site and all improvements constructed or to be constructed thereon(including landscaping,lighting and signage), or cause the Commercial Portion of the Site and all such improvements to be maintained free of debris,waste and graffiti,and in compliance with the terms of the Redevelopment Plan,the City of Huntington Beach Municipal Code,and the following: A. All improvements on the Commercial Portion of the Site shall be maintained in good condition in accordance with the custom and practice generally applicable to comparable improvements in Orange County,and in conformance and compliance with all plans, drawings and related documents approved by the City, all conditions of approval of land use entitlements adopted by the City or the City Planning Commission,including painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline. B. Landscape maintenance shall include, without limitation, watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road OPA 9 13 visibility,and irrigation coverage;replacement,as needed,of all plant materials;control of weeds in all planters,.shrubs,lawns,ground covers,or other planted areas;and staking for support of trees. C: Clean-up maintenance shall include,without iimitatiati,maintenance of all sidewalks,paths and other paved areas in a clean and weed free condition;maintenance of all such areas clear of dirt,mud,trash,debris or other matter which is unsafe or unsightly;removal of all trash,litter and other debris from improvements and landscaping;clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings,weeds,leaves and other debris are properly disposed of by maintenance workers; and cleaning following special events that may not specifically occur during regular business hours. (2) if the Agency gives written notice to Participant that the maintenance or condition of the Commercial Portion of the Site or any portion thereof or any improvements thereon does not comply with this Agreement,Participant•shall correct,remedy or cure the deficiency within thirty(30)days following the submission of such notice(provided that if the correction,remedy or cure cannot reasonably be completed within 30 days,Participant shall have up to ninety(90)days to correct,remedy or cure such deficiency so long as Participant diligently prosecutes such correction, remedy or cure to completion),unless the notice states that the deficiency is an urgent matter relating to public health and safety in which case Participant shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time but not more than five(5) .days following the submission of such notice. In the event Participant fails to maintain the Commercial Portion of.the Site or any portion thereof or any improvements thereon in accordance with this Agreement and fails to cure any deficiencies within the applicable period described above,the Agency shall have, in addition to any other rights and remedies hereunder,the right to maintain the Commercial Portion of the Site and the improvements thereon,or portion thereof,or to contract for the correction of any deficiencies,and Participant shall be responsible for payment of all such costs incurred by the Agency. Until paid, such costs shall accrue interest at the lesser of(i)the"prime"lending rate of Bank of America or(ii)the maximum rate then allowed by law,and such costs and interest shall constitute a lien upon the Commercial Portion of the Site pursuant to Civil Code Section 2881. e. Subject to Section 702, below, comply with any and all parking requirements (including,without limitation,providing any and all parking and/or paying any in-lieu parking fees) required by all then current parking plans,regulations,rules,laws,or other requirements of the City, or of any other governmental agency having jurisdiction over the Commercial Portion of the Site. £ Comply with and use any City-approved-valet parking plan approved from time to time for the Downtown with respect to the days such valet parking plan is required to be implemented (the pricing, valet parking contractor and manner of operation shall be at the sole discretion of Participant). Without limiting the generality of the foregoing,if valet parking is used to satisfy parking requirements, the valet parking shall be in operation at times in which the peak parking times are experienced in the downtown area, including peak summer hours and special events,as determined by any City-approved Parking Management Plan or Downtown Master Plan,as OPA 9 14 �j either may be amended from time to time,or as determined by any future parking plan or master plan which governs the Commercial Portion of the Site.Agency will provide a maximum of sixty(60) days to Participant to comply with and use any newly adopted-City-approved valet parking plan,as amended from time to time. Agency will provide Participant with thirty (30) days notice to implement said newly-adopted plan, as well as an annual calendar of those days when the valet parking plan will be implemented. g. Participant shall ensure that all "New LeasesfSubleases" (and any existing lease/sublease as required below in this subsection g.)contain the express provisions for the benefit of the Agency and City set forth in Attachment No.8 hereto. Agency and/or Participant shall have the right,but not the obligation as landlord or sublandlord to diligently and in good faith enforce the provisions added pursuant to this subsection g. (but in no event shall such right be construed to require Participant to terminate any lease or institute legal proceedings). Participant shall not be in default hereunder if Participant is in compliance with Participant's obligations under this subsection g.,but a tenant or subtenant defaults on any provision added pursuant to this subsection g., and Participant(as landlord or sublandlord thereunder)diligently and in good faith attempts to enforce a cure of such default(but in no event shall Participant be required to terminate any lease or institute legal proceedings). Participant shall,as may be requested by the Agency from time to time,provide evidence reasonably satisfactory to the Agency Executive Director,that Participant is in compliance with Participant's obligations under this subsection g. "New Leases/Subleases"as used herein shall mean: (A) any lease or sublease pertaining to any portion of the Commercial Portion of the Site entered into after the Effective Date;and(B)any existing lease or sublease pertaining to any portion of the Commercial Portion of the Site modified or amended in any way after the Effective Date. As to any existing lease or sublease pertaining to any portion of the Commercial Portion of the Site for which Participant(as landlord or sublandlord thereunder)has the right to consent to any change in use of the lease/subleased property,Participant agrees to condition its consent to the change in use on the applicable tenant/subtenant agreeing to modify its lease or sublease to include the provisions of this subsection g. "New Lease/Sublease' as used herein shall mean any one of the New Leases/Subleases. §402 Obligation to Refrain from Discrimination The Participant covenants and agrees for itself,its successors,its assigns and every successor in interest to the Commercial Portion of the Site or any part thereof, that there shall be no discrimination against or segregation of any person,or group of persons,on account ofrace,religion, creed, color,national origin, sex, sexual orientation, disability, marital status, age or any other protected classification in the sale,lease,sublease,transfer,use,occupancy,tenure or enjoyment of the Commercial Portion of the Site nor shall Participant itself or any person claiming,under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Commercial Portion of the Site. OPA 9 15 �" o § 403 Form of Nondiscrimination and Nonsegregation Clauses Participant,on behalf of itself and its successors,assigns,and each successor in interest to the Commercial Portion of the Site or any part thereof,hereby covenants and agrees that Participant,and its successors or assigns, shall refrain from restricting the rental, sale or lease of the Commercial Portion of the Site on the basis of race,religion,creed,color,national origin,sex,sexual orientation, disability,marital status,age or any other protected classification. All deeds,leases or contracts shall contain or be subject to substantially the fallowing nondiscrimination or nonsegregation clauses: a. In deeds: "The Participant 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 ofpersons on account of any basis listed in subdivision(a)or(d).of Section 12955 of the Government Code,as those bases are defined in Sections 12926, 12926.1,,subdivision (m)and paragraph(1)of subdivision(p)of Section.12955,and Section 12955.2 of the Government Code,in the sale,lease,sublease,transfer, use,occupancy,tenure,or enjoyment of the premises herein conveyed,nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection,location,number,use or occupancy of tenants,lessees,subtenants,sublessees,or vendees in the premises herein 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: That there shall be no discrimination against or segregation of any person or group of persons,on account of any basis listed in subdivision(a)or(d)of Section 12955 of the Government Code,as those bases are defined in Sections 12926, 12926.1,subdivision(m)and paragraph(1)of subdivision(p) of Section 12955, and Section 12955.2 of the Government Code, 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 any basis listed in subdivision(a)or(d)of Section 12955 of the Government Code,as those bases are defined in Sections 12926, 12926.1, subdivision(m) and paragraph(1)of subdivision(p)of Section 12955,and Section 12955.2 ofthe Government Code,in the sale,lease, sublease, transfer,use,occupancy,tenure,or enjoyment of the land, nor shall the transferee itself or any person claiming under or through him or her,establish or permit any such OPA 9 16 5 ,o. practice or practices of discrimination or segregation with reference to the selection, location, number,use,or occupancy,of tenants,lessees,sublessees,subtenants,or vendees of the land," §404 Agreement Affecting Real Property As a material part of the consideration for this Agreement,Participant covenants and agrees for itself,its successors,its assigns and every successor in interest to the Commercial Portion ofthe Site or any part thereof,that concurrently with the execution of this Agreement,Participant shall execute in.recordable form the Agreement Affecting Real Property in substantially the form appended to this Agreement as Attachment No.3 and incorporated herein by this reference. Agency shall cause the Agreement Affecting Real Property to be recorded against the Commercial Portion of the Site. Participant shall use commercially reasonable efforts to obtain.and cause to be recorded(as applicable),at Participant's sole cost and expense,any instruments.necessary and/or appropriate to subordinate (to the reasonable satisfaction of Agency Executive Director) to the Agreement Affecting Real Property any deeds of trust,mortgages,security instruments,or other liens,providing a security interest in the Commercial Portion of the Site which have priority over the Agreement Affecting Real Property. As a material part of the consideration for this Agreement,Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Commercial Portion of the Site or any part thereof,that Participant shall not undertake any work for Phase One on the Commercial Portion of the Site(preliminary or otherwise)or any portion thereof until the Agreement Affecting Real Property has been recorded. §405 Effect and Duration of Covenants The covenants established in this Agreement and the Agreement Affecting Real Property shall,without regard to technical classification and designation,be binding on Participant and any successor in interest to the Commercial Portion of the Site and any improvements thereon,or any pant thereof,for the benefit and in favor of Agency,its successors;and assigns,and the City. The covenants against discrimination shall remain in effect in perpetuity. All other covenants contained in this Agreement and the Agreement Affecting Real Property shall remain in effect pursuant to the applicable provisions hereof and thereof until September 6,2034. ARTICLE 500 DEFAULTS,REMEDIES AND TERMINATION §501 Default Each of the following shall constitute an Event of Default under this Agreement: a. Failure or delay by a party to perform any term or provision of this Agreement within the time provided herein,as such times may be extended pursuant to Section 604 of this Agreement. b. Breach of any covenant,warranty or agreement contained in this Agreement. OPA 9 17 Subject to the extensions of time set forth in Section 604,the party who fails to perform or delays performance of any term or provision of this Agreement shall immediately commence to cure, correct or remedy such failure.or delay and shall complete such cure,correction or remedy with all due diligence. §.502 Notice If an Event of Default under this Agreement occurs,the injured party shall give written notice (a"Default Notice") of the Event of Default to the party in default, specifying the nature of the default. Failure or delay in giving such notice shall not constitute a waiver of any default,nor shall it change the time of default,nor shall it operate.as a waiver of any rights or remedies of the injured party;but the injured party shall have no right to exercise any remedy hereunder prior to delivering the Default Notice as provided herein. Delays by either party in asserting any of its rights and remedies shall not deprive either party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect,assert or enforce any such rights or remedies. § 503 Cure Period With respect to defaults or events for which a specific cure period is provided elsewhere in this Agreement,the specific cure period in that Section shall be applicable in lieu of the cure periods provided in this Section 503 and in no event shall the cure periods set forth in this Section 503 be in addition to any other cure period set forth in this Agreement. The injured party shall have no right to exercise a right or remedy hereunder unless the. subject Event of Default continues uncured for a period of thirty(30)days after delivery of the Default Notice with respect thereto,or,where the default is of a nature which cannot reasonably be cured within such thirty(30)day period,the defaulting party fails to commence such cure with all due diligence or fails to proceed diligently to complete the same;provided,however,that(a)in no event shall the injured party be prevented from exercising its rights or remedies for more than ninety (90)days following delivery of the Default Notice. An Event of Default for failure to pay a sum of money is a default which can be cured within thirty(30)days. If the default is not cured within the time periods specified above,the non-defaulting party,at its option,may pursue such other rights and remedies as it may have at law or in equity. §504 Rights and Remedies Upon the occurrence of an Event of Default and the expiration of the applicable cure period provided herein or by law,the injured party shall have all rights and remedies against the defaulting party as may available at law or in equity to cure,correct or remedy any default,to obtain specific performance,to recover damages for any default,or to obtain any other remedy consistent with the purpose of this Agreement. Such rights and remedies are cumulative, and the exercise of one or more of such rights or remedies shall not preclude the exercise,at the same or different times,of any other rights or remedies for the same default or any other default by the defaulting party. OPA 9 18 ARTICLE 600 GENERAL PROVISIONS § 601 Notices,Demands and Communications between the Parties Formal notices, demands and communications between Agency and Participant shall be sufficiently given if dispatched by registered or certified mail, postage prepaid, return receipt requested,or by courier not affiliated with the sender at the cost of the sending party with written evidence of receipt,to the principal offices of Agency and of Participant as designated in Section 105 hereof.. Such written notices,demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate,by mail as provided in this Section. Any notices to be delivered by Participant under Section 40l.c.(i),above,may also be transmitted to Agency staff by.e-mail,but will only be deemed sufficiently given under this Section if and when transmitted by hard copy as required under this Section. § 602 Conflict of Interest To the extent prohibited by law,no member,official or employee of Agency shall have any personal interest, direct or indirect, in this Agreement nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation,partnership or association in which.he or she is directly or indirectly interested. Participant warrants that it has not paid or given,and will not pay or give,any third party any money or other consideration for obtaining this Agreement. §603 Nonliability of City and Agency Officials and Employees No member,official or employee of City or Agency shall be personally liable to Participant, or any successor in interest,in the event of any default or breach by Agency or for any amount which may become due to Participant or successor or on any obligations under the terms of this Agreement. Participant hereby waives and releases any claim it may have against any member, official or employee of the Agency or the City with respect to any default or breach by the Agency(or the City) or for any amount which may become due to Participant or its successors,or on any obligations, under the terms of this Agreement or any Conveyance Instrument. Participant makes such release with full knowledge of Civil Code Section 1542 and hereby waives any and all rights thereunder to the extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release,which if known by him must have materially affected his settlement with the debtor." OPA 9 19 i § 604 Unavoidable Delay in Performance for Causes beyond Control of Party For the purposes of any of the provisions of this Agreement,neither Agency nor Participant, as the case may be,nor any successors in interest,shall be considered in breach of,or default in,its obligations under this Agreement(excepting therefrom obligations to pay money)as a result of the delay in the performance of such obligations due to:acts of God,acts of the public enemy,acts of the Federal and State Governments, fires, floods, epidemics, quarantine restrictions, strikes, labor disputes,freight embargoes,or inability to obtain materiials or supplies or unusually severe weather or delays of contractors or subcontractors due to such causes("Unavoidable Dela );it being the purpose and intent of this provision that in the event of the occurrence of any such delay,the time or times for performance of the obligations of Agency or Participant, as the case may be, shall be extended for the period of the delay. Any extension of time for performance shall run from the date of commencement of the cause. Financial inability:shall not extend the time for performance,or excuse non-performance or untimely performance,of any obligation under this Agreement. If the City Building Department takes longer than thirty(30)days to approve or respond to any submission of building plans for Phase Two,Participant's time to complete Phase Two shall be extended with respect to each such submission by the greater of(i)three(3)months(ii)or the actual time taken by the Building Department to approve or comment on the applicable submission. For each submission that the City(excluding the Building Department's review of plans),the State of California or any other governmental agency or authority takes more than sixty(60)days to approve or respond to with respect to entitlement and plan processing set forth in Attachment No. 7, Participant's time to complete Phase Two shall be extended by the greater of(a)the actual delay or (b)six(6)months. In the event that (i) Participant has notified the Agency in writing that a proposed City condition of approval for Phase Two is objectionable because it results in a material,unforeseen increase in the cost of developing or operating Phase Two;and(ii)Participant has provided evidence reasonably acceptable to the Agency Executive Director that: (A)the objectionable condition of approval will result in a material,unforeseen increase in the cost of developing or operating Phase Two;and(B)Participant is diligently and in good faith cooperating with the Agency and City to identify and work out solutions to the objectionable condition of approval,then so long as Participant continues to diligently and in good faith cooperate with the Agency and City to identify and work out solutions to the objectionable condition of approval,the Agency Executive Director shall have the right (in his or her reasonable discretion) to extend in writing Participant's time to obtain entitlements for and commence and complete Phase Two. §605 Inspection of Books and Records Until construction of Phase Two development has been completed (as evidenced by the City's issuance of final certificate of occupancies for the Phase Two work),Agency has the right upon ten(10)business days' notice(excluding weekends and holidays)at all reasonable times to OPA 9 20 j inspect the books and records of Participant pertaining to the Commercial Portion of the Site as pertinent to the purposes of this Agreement. The books and records referred to in this Section 605 shall be maintained or made available in a single location in Orange County. § 606 Participant's Warranties The Participant hereby represents the following to Agency for the purpose of inducing Agency to enter into this Agreement and to consummate the transactions contemplated hereby,all of which shall be true as of the date hereof. a. The Participant has the legal power,right and authority to enter into this Agreement and the instruments and documents referenced herein to which the Participant is a party, to consummate the transactions contemplated hereby,to take any steps or actions contemplated hereby, and to perform its obligations hereunder. b. All requisite action has been taken by the Participant and all requisite consents have been obtained in connection with the entering into this .Agreement and the instruments and documents referenced herein to which the Participant is a party, and the.consummation of the transaction contemplated hereby, and the same are authorized by the Redevelopment Plan and comply with all applicable laws, statutes,ordinances,rules and governmental regulations. C. This Agreement is duly executed by the Participant,and all agreements,instruments and documents to be executed by the Participant pursuant to this Agreement:shall,at such time as they are required to be executed hereunder, be drily executed by the Participant,and each such agreement is,or shall be at such time as it is required to be executed hereunder,valid and legally binding upon the Participant and enforceable in accordance with its terms and the execution and delivery thereof shall not,with due notice or the passage of time,constitute a default under or violate the terms of any indenture,agreement or other instrument to which the Participant is a party. d. There is no pending or threatened litigation which,in the.reasonable opinion of the Participant,would prevent the Participant from performing its duties and obligations hereunder. e. Participant is not the subject of a bankruptcy proceeding. f. Participant is the current owner of fee title to the entire Commercial Portion of the Site. § 607 Relationship of the Parties Nothing contained in this Agreement shall be deemed or construed as creating a partnership, joint venture, or any other relationship between the parties hereto, or cause the Agency to be responsible in any way for the debts or obligations of Participant or any other party. OPA 9 21 I i §608 Interpretation of Agreement This Agreement has been negotiated at arm's length and between persons sophisticated and knowledgeable in the matters addressed in this Agreement. In addition,each party has been given the opportunity to consult with experienced and knowledgeable legal counsel. Accordingly,any rule of law(including Civil Code section 1654)or legal decision that would require interpretation of any ambiguities in this Agreement against the party that has draped it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose 4 and intent of the parties to this Agreement. §609 Authorized Representative of Agency Unless otherwise specified or the context requires otherwise,all references in this Agreement and its attachments to the Agency shall mean the Executive Director of the Agency or any officer or employee of the Agency to whom the Executive Director or the Board of the Agency delegates authority to perform,carry out and/or enforce this Agreement. § 610 'Waivers The waiver by Agency of any term,covenant,or condition herein contained shall not be a waiver of such term,covenant,or condition on any subsequent breach. §611 Time of the Essence Time is of the essence of this Agreement and each and all of its provisions in which performance is a factor. §612 Attorneys' Fees and Costs If any action or proceeding is brought by either party against the other under this Agreement, whether for interpretation,enforcement or otherwise,the prevailing party shall be entitled to recover all costs and expenses,including the.fees of its attorney and any expert witnesses in such action or proceeding. This provision shall also apply to any post udgment action by .either party,including without limitation efforts to enforce a,judgment. §613 Severability Any provision of this Agreement which shall prove to be invalid,void,or illegal shall in no way affect,impair,or invalidate any other provision hereof and such other provisions shall remain in full force and effect. OPA 9 22 } i i i i § 614 Non-exclusivity No remedy or election hereunder shall be deemed exclusive but shall,wherever possible,be cumulative with all other remedies at law or in equity. § 615 Complete Agreement;Non-Merger a. This Agreement, including any document or instrument incorporated herein by reference, contains a complete and final expression of the agreement between Agency and Participant,and there are no promises,representations,agreements,warranties,or inducements either express or implied other than as are set forth in this Agreement. Any and all previous discussions or agreements between Agency and Participant with respect to the premises,whether oral or written,are superseded by this Agreement. b. None of the terms,covenants,agreements or conditions set forth in this Agreement shall be deemed to be merged with any other document. §616 Terminology When the context so requires when used in this Agreement,the masculine gender shall be deemed to include the feminine and neuter gender and the neuter gender shall be deemed to include the masculine and feminine gender. When the context to requires when used in this Agreement,the singular shall be deemed to include the plural. The paragraph and section headings have been used for convenience only,and shall not be used in the interpretation hereof. §617 Necessity for a Writing No amendment,change,or addition to,or waiver of termination of,this Agreement or any part hereof shall be valid unless in writing and signed by both Agency and Participant. §618 Third Party Beneficiaries The parties to this Agreement acknowledge and agree that the provisions of this Agreement are for the sole benefit of Agency, Participant and the City, and not for the benefit, directly or indirectly,of any other person or entity,except as otherwise expressly provided herein. §619 Authority to Sign The individual executing this Agreement on behalf of Participant hereby represents that he has full authority to do so and to bind Participant to perform pursuant to the terms and conditions of this Agreement. OPA 9 23 �j . §620 Incorporation by Reference Each of the attachments and exhibits attached hereto is incorporated herein by this reference. ARTICLE 700 SPECIAL PROVISIONS §701 Intentionally Omitted §702 Off-Site Parking. a. In accordance with Section U.I.and Section III.A of the Scope of Development of the Second Amended DDA,the Agency was required to provide any off-site parking spaces which were required to serve the development contemplated under the Second Amended DDA on the Commercial.Portion of the Site. Two hundred ninety-seven(297)parking spaces are provided on- site to serve such development. The Agency previously funded$5.1 million in development costs for 624 parking spaces in a public parking garage located on the east side of Main Street:between Walnut and Olive Streets in Huntington Beach("Parking Structure"). The costs incurred by the Agency for the 624 parking spaces were identified in a summary report prepared pursuant to California Health and Safety Code Section 33433 in conjunction with the Second Amended DDA. b. It is estimated by the parties that,after completion of Phase One and Phase Two as contemplated by this Agreement,rather than 624 parking spaces,only up to 300 parking spaces in the Parking Structure would need to continue to be counted as being available for the Commercial Portion of the Site to meet the City's parking code requirements, C. Participant acknowledges and agrees,on behalf of Participant and its successors and assigns,that(1)to the extent Participant has any right to claim the ability to count 324 spaces in the Parking Structure as being available to meet the City's parking requirements for the Commercial Portion of the Site,Participant,on behalf of itself and its successors and assigns,shall be deemed to have waived and relinquished any such right;and(2)the 324 spaces can be committed by the City,in the City's sole discretion, for existing or new parking demand in accordance with City rules, regulations,laws,and policies. The parties intend that regardless of whether Phase One or Phase Two is completed,the Agency shall continue to make available up to 150 spaces in the Parking Structure for the Commercial Portion of the Site to meet the City's parking code requirements. d. Agency shall continue to make available up to 300 parking spaces in the Parking Structure for required off-site parking to the extent any such parking spaces are required as part of any regulatory approval for the Commercial Portion of the Site(including without limitation,Phase One or Phase Two)or following completion of Phase Two for any modification to the uses on the Commercial Portion of the Site which is consistent with the use and square footage restrictions in Section 401(c)(3). "Phase Two Development'Events"shall collectively mean both(a)construction OPA 9 24 J of Phase Two development has commenced within five.(5)years following City and Local Coastal Commission adoption of the Updated Plans;and(b).construction of Phase Two development has been completed within two (2)years following commencement of construction of Phase Two, in both cases subject to extension pursuant to Sections 306 and 604 above. In the event both Phase Two Development Events have not occurred within the time periods set forth above(as extended,if applicable),then Participant,on behalf of itself and its successors and assigns(1)acknowledges and agrees that only 150 spaces in the Parking Structure shall continue to be counted as being available for the Commercial Portion of the Site;(2)waives and relinquishes any right Participant or its successors or assigns may have to claim more than 150 spaces in the Parking Structure; and(3)acknowledges and agrees that all spaces in excess of 150 parking spaces in the Parking Structure would then be available to be committed by the City,in the City's sole discretion, for existing or new parking demand in accordance with City rules,regulations,laws,and policies. e. The parties agree that neither the City nor the Agency is providing any assistance,or bearing any financial responsibility for Phase One or Phase Two. ARTICLE 800 COMPOSITION OF AGREEMENT This Agreement may be executed in duplicate originals,each of which is deemed to be an original. ARTICLE 900 TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY This Agreement shall not take effect unless and until it is approved,executed and delivered by the Agency. This.Agreement,when executed by Participant and delivered to the Agency,must be authorized, executed and delivered by the Agency within sixty (60) days thereafter, or this Agreement may be terminated by Participant on written notice to the Agency. The date of this Agreement shall be the date first written above in the introductory paragraph of this Agreement. [remainder of page left blank] [signature on following page] OPA 9 25 r� � REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Agency) Date: July 07, 2009 ChairmaNO ATTEST: gency Secretary REVIEWED AND REVIEW E APPROVED AS TO FORM: Agency General Counsel Execu e Director V►vl INITIATED AND REVIEWED. IV� Deputy Executives irector APPROVED AS TO FORM: Kane, Ballmer& Berkman Agency Special Counsel [Signatures continue on following page] 26 PIERSIDE Pay. N,LLC (Participant) Date: S-1 $ :o g By: Name: itS: Q(-1 n G.M Q a. 1. By: Name: Its' 27 ATTACHMENT NO. 1 4, r x s AAAMV, ALr. LOT . 153rn I Ac. P.x ers-LI T00' 1 �`. i s . 23 rei sl a ei a(,s1 sir 1 ;, 1 '— I i �. r � i �( ► �' i i i ..'i 1 1 1 At 14401 A *► O �. PACIFIC COAST NIAMY a, Z P. M. eJ9 0.0 o aie Aa O + P• � �H 4S' to V A. S. is 11 + H + lt CR1Yry NLWfINCTl�V aEAf3/ N.M. 3-36 NOTE — ASSESSOR'S BLOCK A ASSESSOR'S AMP 31 fMs TRACT A fJT22 K.M. 636 Jd to 41 Inc. PARCEL NLAMERS BOOK 024 PACE IS TRACT NO. 16406 M.M. 670-41 to 50 im. SNOWN IN CIRCLES COUNTY OF ORANGE ATTACHMENT NO. 2 LOT I OF TRACT NO. 13722,AS SHOWN ON A MAP FILED IN BOOK 636,PAGES 38 TO 41 INCLUSIVE OF MISCELLANEOUS MAPS,RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM A PORTION OF SAID LAND,AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL OIL,OIL RIGHTS,MINERALS,MINERAL RIGHTS, NATURAL GAS RIGHTS,AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN,LOCATED WITHIN OR UNDER,AS RESERVED IN THE DEED FROM BETTY HOLT WEAVER AND OTHERS,RECORDED AUGUST 15, 1985 AS DOCUMENT NO. 85- 305251 IN OFFICIAL RECORDS OF ORANGE COUNTY. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL,GAS AND OTHER HYDROCARBON SUBSTANCES BELOW A DEPTH OF 500 FEET,BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM AAFKE ROMPLEMAN,A MARRIED WOMAN,RECORDED AUGUST 10, 1060 IN BOOK 5367, PAGE 297 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL,GAS,MINERALS AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM ELSIE M. BAKRE SMITH,A MARRIED WOMAN,RECORDED MARCH 14, 1961 IN BOOK 5655,PAGE 693 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND ALL OIL,GAS, HYDROCARBONS AND MINERALS BELOW A DEPTH OF 500 FEET FROM THE SURFACE OF SAID LAND,WITHOUT,HOWEVER,ANY RIGHT OF SURFACE ENTRY AS RESERVED BY CALIFORNIA RESORTS INTERNATIONAL,INC.,IN A DEED RECORDED MARCH 13,1989 AS INSTRUMENT NO. 89-127442 OF OFFICIAL RECORDS. SDH130241.00041375961.15/1 8/2009 ATTACHMENT NO. 3. Recorded in Official Records, Orange County Tom Daly, Clerk-Recorder ` 19s11911911s911s1lAIBIIII� ASIIlo�IIIVI011��IG111091I1110111991 �I OFFICIAL BUSINESS N0 FEE Document entitled to free 2009000476647 0$:03am 09/04/09 recording per Government 100 286 Al 16 Code Section 6103 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Recording Requested by and When Recorded Return to: REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: Agency Clerk Space above this line for Recorder's use only AGREEMENT AFFECTING REAL PROPERTY 1 This AGREEMENT AFFECTING REAL PROPERTY (this "Agreement"), dated as of July 06 , 2009, is entered into by and between the REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH, a public body, corporate and politic ("Agency"), and PIERSIDE PAVILLION, LLC, a California limited liability company ("Participant"). Participant owns fee title to that certain real property (the "Property") located in the City of Huntington Beach, County of Orange, State of California, legally described in the "Legal Description" attached hereto and incorporated herein as Exhibit A and depicted on the "Site Map" attached hereto and incorporated herein as Exhibit B, which Property is described as the "Property" in the OPA referred to hereinbelow. The Property is within the Main-Pier Redevelopment Project, which was approved and adopted by Ordinance No. 2578 of the City Council of the City of Huntington Beach, amended by Ordinance No. 2634, and merged with certain other redevelopment projects in the City by the adoption of Ordinance No. 3343 on December 16, 1996 to form the Huntington Beach Redevelopment Project (the "Merged Redevelopment Project"). The Redevelopment Plan for the Merged Redevelopment Project (the "Redevelopment Plan") is incorporated herein by reference and made a part hereof as though fully set forth herein. The Merged Redevelopment Project area is located in the City of Huntington Beach (the "City"). In furtherance of the Redevelopment Plan, Agency and Participant have entered into that certain Owner Participation Agreement dated as of July 06 , 2009 (the "OPA") which is incorporated herein by this reference. Any capitalized term not otherwise defined herein shall have the meaning ascribed to such term in the OPA. 34533 Page 1 of 10 Pursuant to the OPA, Participant has agreed to use commercially reasonable efforts to renovate, revitalize, and refurbish the Property in two phases as more particularly described in the Scope of Development therein. The Agency is agreeable to such change in the use of the Property as set forth in the OPA. This Agreement is entered into and recorded in accordance with the Redevelopment Plan and the OPA. NOW, THEREFORE, AGENCY AND PARTICIPANT AGREE AS FOLLOWS: 1. Use of the Property. Participant hereby covenants and agrees on behalf of itself and any successors and assigns in the Property or any portion thereof or any improvements thereon or any interest therein that Participant and such successors and assigns shall, at Participant's or such successor's and assign's sole cost and expense: a. Develop and construct improvements on the Property solely in accordance with the Redevelopment Plan, the OPA (including, without limitation, the Scope of Development and the Schedule of Performance), this Agreement, and any City-approved entitlements. b. Use the Property, or cause the Property to be used, solely in accordance with the Redevelopment Plan, the OPA (including, without limitation, the Scope of Development and the Schedule of Performance),this Agreement, and any City-approved entitlements. C. Comply with the following additional requirements and restrictions with regard to the Property: (1) Retail/Restaurant Uses. A. In the event a vacancy is expected to become available for any retail or restaurant tenant/subtenant on the Property (regardless of whether such vacancy exists due to development of new retail/restaurant use permitted by the OPA or this Agreement, termination of an existing lease or sublease, or otherwise), Participant shall provide reasonable written notice to Agency and provide reasonable opportunity for Agency to recruit desirable proposed retail or restaurant tenants similar to those listed on the preferred list of retail/restaurant tenants/subtenants types attached to the OPA as Attachment No. 4. B. The Agency shall have the right to recommend tenants/subtenants as appropriate for the economic benefit and vitality of Downtown. The Agency will not be involved in negotiations between a potential tenant/subtenant. Participant shall notify the Agency in writing within at least five (5) business days after receiving any notice of vacancy in the Property (either a lease or a sublease) and within at least five (5) business days after the date a tenant/subtenant has been selected. The Agency's sole and exclusive remedy for the Participant's failure to provide either of the notices required in the preceding sentence shall be payment to the Agency by Participant of$100 per failure. Such payment shall be made within ten (10) days following written request therefore from the Agency to Participant. If full payment is not received by the Agency within twenty (20) calendar days after written notice from the Agency to Participant, or the next 34533 Page 2 of 10 business day if the twentieth (20th) day falls on a weekend or holiday, (1) Participant shall pay to Agency a late charge of ten percent (10%) which shall be applied to any outstanding amount due but unpaid; and (2) one and a half percent (1 1/2%) penalty will be added for each thirty (30) day period that the payment is due but unpaid. Until such payment/charge/penalty is/are made, it/they shall constitute a lien against the Property pursuant to Civil Code Section 2881. C. Participant shall have final approval of the tenant selection. The uses of tenants selected by Participant must be consistent with EPA No. 70-01. (2) Office Use. All new office uses constructed on the Property after the date of the OPA (including, without limitation, any office space added by Phase One or Phase Two) shall meet all City requirements. (3) Use the Property only for the following mix of uses: A. Following Phase One (i) Retail—Up to 19,000 square feet of Gross Floor Area. (ii) Restaurant — Up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—Up to 51,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase One, the total Gross Floor Area on the Property shall not exceed 90,000 square feet. B. Following Phase Two (i) Retail—up to 31,000 square feet of Gross Floor Area. (ii) Restaurant — up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas. (iii) Office—up to 63,000 square feet of Gross Floor Area. Notwithstanding the foregoing, upon the completion of Phase Two, the total Gross Floor Area on the Property shall not exceed 120,000 Gross Floor Area. "Gross Floor Area" as used in this Agreement shall mean the total enclosed area of all floors of a building measured to the outside face of the structured members in exterior walls, and including halls, stairways, elevators shafts at each floor level, service and mechanical equipment rooms, and habitable basement or attic areas, but excluding area for vehicle parking and loading. Except for uses that as of the date of the OPA are open for business to the general public and are permitted by City approved entitlements, subject to the restrictions set forth in Section 34533 Page 3 of 10 301.3 of the OPA, "Restaurant" as used in this Agreement shall mean a use operated and maintained as a bona fide sit down eating establishment serving a sit down full dinner menu every day the establishment is open for business until at least one hour before closing and making actual and substantial sales of such full dinner menu. (4) Restrictions on Bars and Nightclubs. Notwithstanding the type of liquor license that might be obtained or maintained by any establishment on the Property, bars and nightclub uses (including, without limitation, any bar or nightclub use within a Restaurant) are restricted to the sale of beer, wine and distilled spirits for consumption on the licensed premises only (i.e., no sale of beer, wine and distilled spirits for consumption off the licensed premises). The foregoing shall not apply to any establishment that is open for business as of the date of the OPA to the extent such establishment has (a) a license permitting the sale of beer, wine and/or distilled spirits for consumption off the licensed premises or (b) the right under its lease/sublease to such sales (provided, however, that to the extent that such tenant's lease/subtenant's sublease requires Participant's consent (as landlord or sublandlord) for such sales for off-premise consumption, Participant agrees to withhold such consent). d. (1) Maintain, repair and operate the Property and all improvements constructed or to be constructed thereon (including landscaping, lighting and signage), or cause the Property and all such improvements to be maintained free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan, the City of Huntington Beach Municipal Code, and the following: A. All improvements on the Property shall be maintained in good condition in accordance with the custom and practice generally applicable to comparable improvements in Orange County, and in conformance and compliance with all plans, drawings and related documents approved by the City, all conditions of approval of land use entitlements adopted by the City or the City Planning Commission, including painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline. B. Landscape maintenance shall include, without limitation, watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. C. Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed-free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping; clearance and cleaning of all areas maintained prior to the end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers; and cleaning following special events that may not specifically occur during regular business hours. 34533 Page 4 of 10 (2) If the Agency gives written notice to Participant that the maintenance or condition of the Property or any portion thereof or any improvements thereon does not comply with this Agreement, Participant shall correct, remedy or cure the deficiency within thirty (30) days following the submission of such notice (provided that if the correction, remedy or cure cannot reasonably be completed within 30 days, Participant shall have up to ninety (90) days to correct, remedy or cure such deficiency so long as Participant diligently prosecutes such correction, remedy or cure to completion), unless the notice states that the deficiency is an urgent matter relating to public health and safety in which case Participant shall cure the deficiency with all due diligence and shall complete the cure at the earliest possible time but not more than five (5) days following the submission of such notice. In the event Participant fails to maintain the Property or any portion thereof or any improvements thereon in accordance with this Agreement and fails to cure any deficiencies within the applicable period described above, the Agency shall have, in addition to any other rights and remedies hereunder, the right to maintain the Property and the improvements thereon, or portion thereof, or to contract for the correction of any deficiencies, and Participant shall be responsible for payment of all such costs incurred by the Agency. Until paid, such costs shall accrue interest at the lesser of (i) the "prime" lending rate of Bank of America or (ii) the maximum rate then allowed by law, and such costs and interest shall constitute a lien upon the Property pursuant to Civil Code Section 2881. e. Subject to Section 702 of the OPA, comply with any and all parking requirements (including, without limitation,providing any and all parking and/or paying any in-lieu parking fees) required by all then current parking plans, regulations, rules, laws, or other requirements of the City, or of any other governmental agency having jurisdiction over the Property. f. Comply with and use any City-approved valet parking plan approved from time to time for the Downtown with respect to the days such valet parking plan is required to be implemented (the pricing, valet parking contractor and manner of operation shall be at the sole discretion of Participant). Without limiting the generality of the foregoing, if valet parking is used to satisfy parking requirements, the valet parking shall be in operation at times in which the peak parking times are experienced in the downtown area, including peak summer hours and special events, as determined by any City-approved Parking Management Plan or Downtown Master Plan, as either may be amended from time to time, or as determined by any future parking plan or master plan which governs the Property. Agency will provide a maximum of sixty (60) days to Participant to comply with and use any newly adopted City-approved valet parking plan, as amended from time to time. Agency will provide Participant with thirty (30) days notice to implement said newly- adopted plan, as well as an annual calendar of those days when the valet parking plan will be implemented. g. Participant shall ensure that all "New Leases/Subleases" (and any existing lease/sublease as required below in this subsection g.) contain the express provisions for the benefit of the Agency and City set forth in Attachment No. 8 to the OPA. Agency and/or Participant shall have the right, but not the obligation as landlord or sublandlord to diligently and in good faith enforce the provisions added pursuant to this subsection g. (but in no event shall such right be construed to require Participant to terminate any lease or institute legal proceedings). Participant shall not be in default hereunder if Participant is in compliance with Participant's obligations under this subsection g., but a tenant or subtenant defaults on any provision added pursuant to this 34533 Page 5 of 10 subsection g., and Participant (as landlord or sublandlord thereunder) diligently and in good faith attempts to enforce a cure of such default (but in no event shall Participant be required to terminate any lease or institute legal proceedings). Participant shall, as may be requested by the Agency from time to time, provide evidence reasonably satisfactory to the Agency Executive Director, that Participant is in compliance with Participant's obligations under this subsection g. "New Leases/Subleases" as used herein shall mean: (A) any lease or sublease pertaining to any portion of the Commercial Portion of the Site entered into after the Effective Date; and (B) any existing lease or sublease pertaining to any portion of the Commercial Portion of the Site modified or amended in any way after the Effective Date. As to any existing lease or sublease pertaining to any portion of the Commercial Portion of the Site for which Participant (as landlord or sublandlord thereunder) has the right to consent to any change in use of the lease/subleased property, Participant agrees to condition its consent to the change in use on the applicable tenant/subtenant agreeing to modify its lease or sublease to include the provisions of this subsection g. "New Lease/Sublease" as used herein shall mean any one of the New Leases/Subleases. 2. Obligation to Refrain from Discrimination. The Participant covenants and agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that there shall be no discrimination against or segregation of any person, or group of persons, on account of race, religion, creed, color, national origin, sex, sexual orientation, disability, marital status, age or any other protected classification in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall Participant itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. 3. Form of Nondiscrimination and Nonsegregation Clauses. Participant, on behalf of itself and its successors, assigns, and each successor in interest to the Property or any part thereof, hereby covenants and agrees that Participant, and its successors or assigns, shall refrain from restricting the rental, sale or lease of the Property on the basis of race, religion, creed, color, national origin, sex, sexual orientation, disability, marital status, age or any other protected classification. All deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: a. In deeds: "The Participant 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." 34533 Page 6 of 10 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: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, 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 any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph(1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself 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 of the land." 4. Appurtenant Nature. All conditions, covenants and restrictions contained in this Agreement shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by the Agency, its successors and assigns, and the City and its successors and assigns, against the Participant, its successors and assigns, to or of the Property or the improvements thereon or any portion thereof or any interest therein, and any party in possession or occupancy of said Property or portion thereof for the terms stated herein. The Agency and the City shall be deemed the beneficiaries of the covenants, conditions and restrictions of this Agreement both for and in their own rights and for the purposes of protecting the interests of the community. The covenants, conditions, and restrictions shall run in favor of the Agency and the City, without regard to whether the Agency or City has been, remains, or is an owner of any land or interest therein in the Property. 5. Remedies. The Agency and the City shall each have the right, in the event of any breach of any agreement or covenant herein, to exercise all rights and remedies, and to maintain any actions at law or suit in equity or other proper proceedings to enforce the curing of such breach of agreement or covenant. 6. Term. The covenants set forth in Sections 2 and 3 shall remain in effect in perpetuity. Every other covenant and condition and restriction contained in this Agreement shall remain in effect for twenty (20) years from the date of this Agreement. 7. Notice and Cure Period. Prior to exercising any remedies hereunder, the Agency shall give the Participant notice of such default. If the default is reasonably capable of being cured within 34533 Page 7 of 10 thirty (30) days, the Participant shall have such period to effect a cure prior to exercise of remedies by the Agency and/or the City (unless a shorter time period is provided herein). If the default is such that it is not reasonably capable of being cured within thirty (30) days, and the Participant (a) initiates corrective action within said period, and (b) diligently, continually, and in good faith works to effect a cure as soon as possible, then the Participant shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by the Agency and/or the City (unless a shorter time period is provided herein). In no event shall the Agency or the City be precluded from exercising remedies if the Property becomes or is about to become materially jeopardized by any failure to cure a default or the default is not cured within ninety (90) days after the first notice of default is given(unless a shorter time period is provided herein). 8. Enforcement. If a violation of any of the covenants or provisions of this Agreement remains uncured after the cure period set forth herein, the Agency, the City, and their respective successors and assigns, without regard to whether the Agency, the City, or their respective successors and assigns is an owner of any land or interest therein to which these covenants relate, may institute and prosecute any proceedings at law or in equity to abate, prevent or enjoin any such violation or attempted violation or to compel specific performance by the Participant of its obligations hereunder. No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the right of any party entitled to enforce the provisions hereof or to obtain relief against or recover for the continuation or repetition of such breach or violations or any similar breach or violation hereof at any later time. 9. Counterparts. This Agreement may be executed by each party on a separate signature page, and when the executed signature pages are combined, shall constitute one single instrument. 10. Termination of Deed Restrictions. Effective on the recordation of this Agreement, the covenants, conditions and restrictions set forth in the Grant Deed recorded on June 7, 1989, as Instrument No. 89-299276 of Official Records of Orange County, California, shall be terminated and of no further force or effect as to the Property. REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (Agency) Irate: august 25, 2009 � G -hairman ATTEST: r -F. Agency Secretary 34533 Page 8 of 10 REVIEWED AND APPROVED AS TO FORM: Agency General Counsel APPROVED AS TO FORM: Kane, Ballmer& Berkman Agency Special Counsel [signatures continue on following page] AARP execution version Page 9 of 10 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of(Ad,'6C On .ST 0 before me, C� Date Here Insert Name an Title of the Officer personally appeared —Z2Zf 6A Name(s)of Signer(s) who proved to me on the basis of satisfactory evidence to be the persore whose name04640subscribed to the within instrument and acknowledged to me that h Ee executed the same in bi&4he eir uthorized capacity es , and that by " f lei 5ignature�on the instrument the perso s , or the entity upon behalf of which the person acted, executed the instrument. P. L. ESPARZA Commission# t857021 Z I certify under PENALTY OF PERJURY under the laws z. Notary Public-California Z = Orange County > of the State of California that the foregoing paragraph is M Comm.Expires Aug4,2013+ true and correct. WITNESS my-hand o ici 4Notar Signature Place Notary Seal Above Signature lic OPTIONAL Though the information below is not required by law,it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: A�� — — its 40a�t� Document Date: ��L _ Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: Signer's Name: ❑ Individual ❑ Individual ❑ Corporate Officer—Title(s): ❑Corporate Officer—Title(s): ❑ Partner—❑ Limited ❑ General _ ❑ Partner—❑ Limited ❑ General ❑ Attorney in Fact - • - ❑Attorney in Fact • ❑ Trustee Top of thumb here ❑Trustee Top of thumb here ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑ Other: Signer Is Representing: Signer Is"Representing: ©2007 National Notary Association•9350 De Soto Ave.,P.O.Box 2402•Chatsworth,CA 91313-2402•www.NationalNotary.org Item#5907 Reorder:Call Toll-Free 1-800-876-6827 PIERSIDE PAVILION, LLC (Participant) Date: 3 - 5 By: Name: Gard Nichendt Its: P r i n a 1 /7 Date: � By: Name: Catherine Dai chendt Its: Principal SEE ATTACHED AC•K I<WVLEDGM'ENT 34533 Page 10 of 10 � � �# e � . �erllppeer:rt who P, tQ '�n t.I ttas�s f g�1.1aI.t sf etc ; v ence tc tze#h per €an{ th i e t me smear ubcr�be tv tttevttttn �s rrien# tcl sc}ct7atvlerged 1.# >txe#hat { executed # i:e st to tt1#hetr au#bcrtzerJpec�#jr(tes}, ni#he#by ts; r#hetrHn #urs eri #[ trd #rumn# 1. persons yr the ehftty u, n1 .1.behalf of whirl the person } c# cu# d ft tns1.#rL i certify under OENALTY"OP PER UR�Y udder the i�v,�s of Wt�e.� a#€� cif� l�fc�rn��#hat Whe>t�re Laing prreptt I tru%e and correct lr'�tTt lE s' ti har ri and<aflic ibi>�I.eal A f atC)1 iEiY TaUEea E, 3rP;�1R CsF+AtuCJ�3tJfA " k4tca �n erg#rs �z, �� 2�sF .. ' I F ,. C ::.1. 9 ;.:i r . . .,. mitt;.' # ;to ftA ..... � 12 �..' " � EXHIBIT A LEGAL DESCRIPTION [behind this page] LOT 1 OF TRACT NO. 13722,AS SHOWN ON A MAP FILED IN BOOK 63.6,PAGES 38 TO 41 INCLUSIVE OF MISCELLANEOUS MAPS,RECORDS OF ORANGE COUNTY, CALIFORNIA. EXCEPTING FROM A PORTION OF SAID LAND,AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL OIL, OIL RIGHTS,MINERALS,MINERAL RIGHTS, NATURAL GAS RIGHTS,AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN,LOCATED WITHIN OR UNDER,AS RESERVED IN THE DEED FROM BETTY HOLT WEAVER AND OTHERS,RECORDED AUGUST 15, 1985 AS DOCUMENT NO. 85- 30525 E IN OFFICIAL RECORDS OF ORANGE COUNTY. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM AAFKE ROMPLEMAN,A MARRIED WOMAN,RECORDED AUGUST 10, 1060 IN BOOK 5367, PAGE 297 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND,ALL OIL, GAS,MINERALS AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500 FEET, BUT WITHOUT THE RIGHT OF SURFACE ENTRY,AS RESERVED IN THE DEED FROM ELSIE M. BAKRE SMITH,A MARRIED WOMAN,RECORDED MARCH 14, 1961 IN BOOK 5655,PAGE 693 OF OFFICIAL RECORDS. ALSO EXCEPTING FROM A PORTION OF SAID LAND ALL OIL, GAS, HYDROCARBONS AND MINERALS BELOW A DEPTH OF 500 FEET FROM THE SURFACE OF SAID LAND, WITHOUT,HOWEVER,ANY RIGHT OF SURFACE ENTRY AS RESERVED BY CALIFORNIA RESORTS INTERNATIONAL,INC.,IN A DEED RECORDED MARCH 13, 1989 AS INSTRUMENT NO. 89-127442 OF OFFICIAL RECORDS. SM30241.00W75961.15/18/2009 EXHIBIT B SITE MAP [behind this page] t 103 PAL to=> >.= IOar s0l I ( t t 1 I ti L k @ NIMNAY a z 0 h-I H PG AOi o W P �N H tz t� AG W 044 00 NOTE - ASSESSOR'S BLOCK b ASSESSOR'S MAP PARCEL NLMERS BOOK 024 PAGE 15 .. "—SHOW IN CIRCLES COUNTY OF ORANGE City ®f Huntington Beach 2000 Main Street ® Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN ® CITY CLERK September 16, 2009 Gary and Catherine Daichendt 300 Pacific Coast Highway #119 Huntington Beach, CA 92648 Dear Mr. & Mrs. Daichendt-. Enclosed for your records in a copy of the fully executed Owner Participation Agreement (OPA) between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavilion, LLC. This document includes the conformed copy of the recorded Agreement Affecting Real Property as Attachment #3. Sincerely, Jiro Joan L. Flynn, CMC City Clerk JF-pe Enclosure: Agreement cc: Scott Howie at Dzida, Carey & Steinman Law Corporation G:followup:agrmtltr Sister Cities: Anjo, Japan ® Waitakere, New Zealand (Telephone-714-536-5227) ®Z I ®A CAREY DIANE P.CAREY / JAMES R.CAVANAUGH STEINMAN S J. DZIDA SCOTT COTT D.HOWIOWIE HELEN LUC O'BRIEN A LAW CORPORATION JAY R.STEINMAN Scott D.Howie Direct Dial: (949)399-0367 E-mail:showie@dcslaw.com Matter:30241-0004 August 11, 2009 BY 0VERNITE EXPRESS Patty Esparza Office of the City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Re: Pierside Pavilion Dear Patty: In accordance with Joan Flynn's letter dated July 8, 2009, enclosed are three (3) originals of the Agreement Affecting Real Property between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavilion, LLC. We would appreciate your returning conformed copies of the recorded Agreement Affecting Real Property to the undersigned and to Gary Daichendt as soon as possible. Thank you for your cooperation. Please call if you have any questions. Very truly yours, Scott D. Howie SDH:dhs Enclosures 377804.1 cc: Gary Daichendt (w/encl.) (By Email) Joe Daichendt(w/encl.) (By Email) Joan L. Flynn(w/encl.) (By Overnight Express) 3 PARK PLAZA,SUITE 750,IRVINE,CALIFORNIA 92614 TELEPHONE(949) 399-0360 ® FACSIMILE(949) 399-0361 ATTACHMENT NO. 4 C� ATTACHMENT NO. 4 PREFERRED TENANT TYPES The following restaurants are examples of, but are not limited to, the specific brands or types of restaurants or similar tenants that shall be considered acceptable for the Commercial Portion of the Site. Dean&DeLuca La Madeleine Bakery Cafe Bistro Noodles&Company Legal Sea Foods Counter Burger Open Sesame The Melting Pot Jerry's Famous Deli La Creperie The following retailers are examples of, but are not limited to, the specific brands or types retailers or similar tenants that shall be considered acceptable for the Commercial Portion of the Site. 77Kids GapKids Abercrombie&Fitch Hollister Adidas Lululemon Athietica American Eagle Outfitters Libellula Creations Anthropologie H&M Apple O&CO. BabyGap MAC Banana Republic OshKosh Bebe Puma Brighton Pumpkin Patch Inc. Charles David Sephora Crate and Barrel Sur La Table DSW The Body Shop Express Tiffany's Floyd's Barber Shop Urban Outfitters Inc. Free People Victoria's Secret Preferred Tenant Type.WLa . ATTACHMENT NO. 5 i i i I f I i ATTACHMENT NO. 5 SCOPE OF DEVELOPMENT I. General The Commercial Portion of the Site currently consists of one (1) three-story retail/commercial building, with approximately 79,500 square feet of gross leaseable area over two(2)levels of subterranean parking. Any improvements to be developed and constructed on the Commercial Portion of the Site shall consist of two phases, Phase One and Phase Two. Phase One and Phase Two shall both be developed and constructed to include, without limitation, any and all required landscaping and all other on-site and off-site improvements, including associated off-street parking, all in accordance with the City's General Plan, all project approvals and entitlements, and all governmental requirements. H. Phase One Phase One shall consist of the conversion of the six-plex movie theater on the Commercial Portion of the Site to not more than 30,000 square feet of new office use in accordance with and pursuant to all of the terms and conditions of Entitlement Plan Amendment 07-01 ("EPA No. 07-01") as approved by the City. Participant agrees to use commercially reasonable efforts to obtain entitlements for and complete the Phase One development. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase One shall be as follows: (a) Retail—up to 19,000 square feet of Gross Floor Area. (b) Restaurant—up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 51,000 square feet of Gross Floor Area. "Gross Floor Area" as used in this Agreement shall mean the total enclosed area of all floors of a building measured to the outside face of the structured members in exterior walls,and including halls, stairways,elevators shafts at each floor level, service and mechanical equipment rooms,and habitable basement or attic areas,but excluding area for vehicle parking and loading. Notwithstanding the foregoing, upon the completion of Phase One, the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 90,000 square feet. Except for uses that as of the date of this Agreement are open for business to the general public and are permitted by City approved entitlements, subject to the restrictions set forth in Section 301.3 of this Agreement, "Restaurant" as used in this Agreement shall mean a use soopeA Attachment No.5 Page 1 of 3 i7 operated and maintained as a bona fide sit down eating establishment serving a sit down full dinner menu every day the establishment is open for business until at least one hour before closing and making actual and substantial sales of such full dinner menu. III. Phase Two i .. Phase Two is contemplated as a future addition to the Commercial Portion of the Site that shall comply with all then applicable federal, state and local laws, rules, regulations and guidelines. As of the date of this Agreement,the Downtown Specific Plan and the Downtown Parking Master Plan are in the process of being updated and amended and may be merged into one document (collectively, the "Updated Plans'). Participant agrees that there can be no submission of any application to the City for Phase Two improvements prior to adoption by the City and the Local Coastal Commission of the Updated Plans. Subject to Sections 306 and 604 of this Agreement, Participant agrees to use commercially reasonable efforts to submit to the City an application for the Phase Two improvements within two (2) years following the date the City and Local Coastal Commission adopt the Updated Plans. If the City and Local Coastal Commission adopt the Updated Plans and Participant obtains all necessary permits,approvals and entitlements for Phase Two on terms acceptable to Participant in its sole discretion, Participant agrees (subject to Sections 306 and 604 of this Agreement) to use commercially reasonable efforts to commence the Phase Two development within five(5)years following City and Local Coastal Commission adoption of the Updated Plans and to complete the Phase Two development within two (2) years following commencement of construction of Phase Two. Phase Two shall consist of the expansion of the Commercial Portion of the Site to add not more than 30,000 square feet of new Gross Floor Area on the Commercial Portion of the Site developed in accordance with and pursuant to all of the terms and conditions of this Agreement, any conditional use permit or other entitlement issued or approved by the City, and all then applicable federal,state and local laws, rules, regulations and guidelines. The maximum square footage permitted for each use on the Commercial Portion of the Site upon completion of Phase Two shall be as follows: (a) Retail—up to 31,000 square feet of Gross Floor Area. (b) Restaurant—up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas. (c) Office—up to 63,000 square feet of Gross Floor Area. Notwithstanding the foregoing,upon the completion of Phase Two,the total Gross Floor Area on the Commercial Portion of the Site shall not exceed 120,000 Gross Floor Area. ScopeA Attachment No. 5 Page 2 of 3 IV. Restrictions on Bars and Nightclubs Notwithstanding the type of liquor license that might be obtained or maintained by any establishment on the Commercial Portion of the Site,bars and nightclub uses(including,without limitation, any bar or nightclub use within a Restaurant) are restricted to the sale of beer, wine and distilled spirits for consumption on the licensed premises only(i.e.,no sale of beer,wine and distilled spirits for consumption off the licensed premises). The foregoing shall not apply to any establishment that is open for business as of the date of this Agreement to the extent such establishment has (a) a license permitting the sale of beer, wine and/or distilled spirits for consumption off the licensed premises or (b) the right under its leasetsublease to such sales (provided, however, that to the extent that such tenant's lease/subtenant's sublease requires Participant's consent (as landlord or sublandlord) for such sales for off-premise consumption, Participant agrees to withhold such consent). Scope.v5 Attachment No. 5 Page 3 of 3 ATTACHMENT NO. 6 ATTACHMENT NO.6 SCHEDULE OF PERFORMANCE PHASE ONE 1. Entitlements. Participant shall obtain Participant agrees to use commercially entitlements for Phase One. reasonable efforts to obtain entitlements for Phase One but not earlier than the date the Agreement Affecting Real Property has been recorded in accordance with this A Bement. 2. Com_pletion of Construction. Participant shall use commercially Participant shall complete construction reasonable efforts to complete Phase One of Phase One. within eighteen (18) months after the date all permits and entitlements have been obtained with all applicable appeals periods having lapsed- PHASE TWO 1. Entitlements and Commencement of Subject to Sections 306 and 604 of this Construction. Participant shall obtain Agreement, Participant shall use entitlements for and commence commercially reasonable efforts to submit construction of Phase Two. to the City an application for Phase Two improvements within two (2) years following the date the City and Local Coastal Commission adopt the Updated Plans. If the City and Local Coastal Commission adopt the Updated Plans and Participant obtains all necessary permits, approvals and entitlements for Phase Two on terms acceptable to Participant is its sole discretion, Participant agrees (subject to Sections 306 and 604 of this Agreement)to use commercially reasonable efforts to commence Phase Two development within five (5) years following City and Local Coastal Commission adoption of the Updated Plans. soP.v5 Attachment No. 6 Page 1 of 2 Q. I I 2. Completion of Construction. Subject to Sections 306 and 604 of this Participant shall complete construction of Agreement, if the City and Local Coastal Phase Two. Commission adopt the Updated Plans and Participant obtains all necessary permits, approvals and entitlements for Phase Two on terms acceptable to Participant in its sole discretion, Participant agrees to use commercially reasonable efforts to complete the Phase Two development within two (2) years following commencement of construction of Phase Two. 1 sop.v5 Attachment No. 6 Page 2 of 2 i ATTACHMENT NO. 7 Q • S� ATTACHMENT NO. 7 ANTICIPATED PHASE TWO PROCESSING TIMES Preliminary Plan.Review Plan Application&Preparation 60 days City Development Assistance Team Review 30 days City Follow-up 30 days 4 months Entitlement Plan Review Plan&Application Prep 30 days City Review of Application 60 days Application Continuance 90 days 6 months Public Hearings Presentation Prep 30 days PC Study Session 30 days PC Hearing 30 days PC Hearing 30 days City Council Hearing 60 days 6 months Construction Documents Drawings Prep 60 days Application Prep 30 days First Plan Check 30 days Revisions 30 days Second Plan Check 30 days Revisions 30 days Third Plan Check 30 days Permits Issued 30 days 9 months Phase Two Processing v 1 ATTACHMENT NO. 8 ATTACHMENT NO. 8 1. Tenant acknowledges and agrees that this Lease, the Shopping Center and Tenant's use thereof are subject to that certain Agreement Affecting Real Property entered into by and between Landlord and the Redevelopment Agency of the City of Huntington Beach("Agency') dated cRQQ9, as amended from time to time ("Agreement Affecting Real Property'). 2. Unless Tenant's permitted use is a restaurant use,Tenant's premises shall.not be used as a bar or nightclub without the prior written consent of the Agency. I Notwithstanding the type of liquor license that might be obtained or maintained by any establishment on the Shopping Center, bars and nightclub uses (including, without.limitation, any bar or nightclub use within a restaurant) are restricted to the sale of beer,wine and distilled spirits for consumption on the licensed premises only (i.e., no sale of beer, wine and distilled spirits for consumption off the licensed premises). 4. Any improvements to be constructed by Tenant pursuant to this Lease shall be constructed in accordance with the Redevelopment Plan,the Agreement Affecting Real Property, and any City-approved entitlements. 5: Tenant.shall maintain all improvements which are the responsibility of Tenant under this Lease free of debris, waste and graffiti, and in compliance with the terms of the Redevelopment Plan,the City of Huntington Beach Municipal Code,and the following: (A) All improvements shall be maintained in good condition in accordance with the custom and practice generally applicable to comparable improvements in Orange County,and in conformance and compliance with all plans, drawings and related documents approved by the City,all conditions of approval of land use entitlements adopted by the City or the City Planning Commission,including painting and cleaning of all exterior surfaces of all private improvements and public improvements to the curbline. (B) Landscape maintenance .(if any) shall include_, without limitation, wateringLurigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning, trimming and shaping of trees and shrubs to maintain a natural and healthy appearance, road visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (C) Clean-up maintenance shall include, without limitation, maintenance of all sidewalks, paths and other paved areas in a clean and weed-free condition; maintenance of all such areas clear of dirt,mud,trash, debris or other matter which is unsafe or unsightly;removal of all trash,litter and other debris from improvements and landscaping;clearance and cleaning of all areas maintained prior to the.end of each day on which maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers; and :cleaning following special events that may not specifically occur during regular business hours. Attachment No 8.v2 Page 1 of 2 Q . 6. Tenant 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 any basis listed in subdivision(a)or(d)of Section 12955 of the Goverment Code,as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision(p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing,transferring, use, occupancy,tenure, or enjoyment of the premises herein leased nor shall Tenant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number,use,or occupancy,of tenants,lessees,sublessees,subtenants,or vendees in the premises herein leased. 7. Tenant acknowledges that the terms of Sections 1 through 6 above are for the express benefit of the Agency and City and may not be terminated,waived,modified,or amended in any way without the express written consent of the Agency and City. Attachment No 8.v2 Page 2 of 2 ATTACHMENT #2 iF 771 Perside Pavilion Owner Participation Agreement July 6, 2009 History • Property owned by the City, located between 3,d and Main Streets between Walnut and PCH • Change of ownership • Second amended agreement and residential units (Pier Colony) and included 1,750 seat theater 1 History continued ® In 1992 Pierside Pavilion, LLC (Current owners) purchased the commercial portion of the property ® The owners approached the City to modify grant deed to eliminate six-plea theater due to market trends Purpose of Proposed ®P ® The City and Pierside Pavilion LLC, have agreed to terms presented in the OPA ® OPA allows for the continued redevelopment of the site ® Permits the conversion of theaters to office space ® Increase square footage of Gross Floor Area from 78,748 to 90,000 square feet . Development may occur in two phases 2 Existing Use ® The existing agreement allows 78,748 square footage as follows: ® Retail — 12,834 square feet of Gross Floor Area ® Restaurant — 22,291 square feet of Gross Floor Area (includes dine and night club) ■ Office - 20,623 square feet of Gross Floor Area ■ Theater — 26,000 square feet of Gross Floor Area Phase One Upon completion, the site will consist of no more than 90,000 square feet as follows: ® (a) Retail — up to 19,000 square feet of Gross Floor Area; and/or ® (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or ® (c) Office — up to 51,000 square feet of Gross Floor Area. 3 Phase Two ® Phase Two allows for the potential development of 30,000 square feet subsequent to the adoption of the Downtown specific Plan by the City Council and Coastal Commission • Maximum square footage of the building shall not exceed 120,000 square feet as follows: ® (a) Retail — up to 31,000 square feet of Gross Floor Area; and/or ® (b) Restaurant— up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or . (c) Office— up to 63,000 square feet of Gross Floor Area. Parking . Existing parking code requires 920 spaces be provided for the existing uses . 296 onsite and 624 offsite (Main Promenade) ® Due to the decrease in intensity in uses Agency will make available up to 150 parking offsite spaces in the Main Promenade Parking Structure 4 Conclusion ■ OPA includes a list of preferred uses and tenants that can support residents as well as visitors ■ Change of use and increase in Gross Floor Area can maximize land use to enhance economic development for the owner, City and the community z 5 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Pierside Pavilion OPA COUNCIL MEETING DATE: July 6, 2009 RCA ATTACHMENTS STATUS ' Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached Not Applicable ❑ Contract/Agreement (w/exhibits if applicable) Attached (Signed in full by the City Attorney) Not Applicable ❑ Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial' Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Deputy City Administrator Initial City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: RCA Author: Punongbayan x5183 Ross, Rebecca From: Surf City Pipeline [noreply@user.govoutreach.com] Sent: Monday, July 06, 2009 9:21 AM To: CITY COUNCIL; agendaalerts@surfcity-hb.org Subject: Surf City Pipeline: Comment on an Agenda Item (notification) Request# 1296 from the Government Outreach System has been assigned to Johanna Stephenson. Request type: Compliment Request area: City Council - Comment on Agenda Items Citizen name: Cari Swan Description: From: cswan [mailto:cswan@wallcon.net] Sent: Friday, July 03, 2009 12:13 PM To: CITY COUNCIL Cc: 'Joe Daichendt'; 'Gary Daichendt'; 'Cathy Edman'; AdamsAssoc@socal.rncom; 'Jay LaRue'; 'Sara Alex' Subject: Pierside Pavilion, 300 Pacific Coast Highway - 7/6 City Council Mtg. Dear Mayor Bohr and Members of the City Council, Attached to this email are several letters from current tenants in the Pierside Pavilion building as well as a letter from Wallcon principal, Dave Walling. The letters provide support for the proposed renovations and theater-to-office conversion which are part of the Owner Participation Agreement(OPA)that is on the agenda for Monday's Council meeting. As I believe all of the council members are aware, this agreement has been many years in process. The entire team who have worked very hard to reach this point are looking forward, with great optimism, to approval of this agreement and being able to move ahead with plans for this iconic building in downtown Huntington Beach. We look forward to your support and should you have any questions, feel free to contact me or any of the ownership/management team (above). Cari Swan, Business Development Manager Wallcon, Inc. P.O. Box 7755 Huntington Beach, CA 92615 FAX: 714.374.2216 Ph: 714.374.2266 ext. 23, Cell: 714.287.6779 "Vision of Excellence" www.wallcon.net Expected Close Date: 07/07/2009 Click here to access the request Note: This message is for notification purposes only. Please do not reply to this email. Email replies are not monitored and will be ignored. La M 114 v Ki , I Floss, Rebecca From: Dapkus, Pat Sent: Monday, July 06, 2009 9:39 AM To: cswan Subject: RE: Pierside Pavilion, 300 Pacific Coast Highway- 7/6 City Council Mtg. Your email did not include the attachments you mention. From: cswan [mailto:cswan@wallcon.net] Sent: Friday, July 03, 2009 12:13 PM To: CITY COUNCIL Cc: 'Joe Daichendt'; 'Gary Daichendt'; 'Cathy Edman'; AdamsAssoc@soca1.rr.com; 'Jay LaRue'; 'Sara Alex' Subject: Pierside Pavilion, 300 Pacific Coast Highway - 7/6 City Council Mtg. Dear Mayor Bohr and Members of the City Council, Attached to this email are several letters from current tenants in the Pierside Pavilion building as well as a letter from Wallcon principal, Dave Walling. The letters provide support for the proposed renovations and theater-to-office conversion which are part of the Owner Participation Agreement (OPA)that is on the agenda for Monday's Council meeting. As I believe all of the council members are aware, this agreement has been many years in process. The entire team who have worked very hard to reach this point are looking forward, with great optimism, to approval of this agreement and being able to move ahead with plans for this iconic building in downtown Huntington Beach. We look forward to your support and should you have any questions, feel free to contact me or any of the ownership/management team (above). Carl Swan, Business Development Manager WAfte4w, W. P.O. Box 7755 Huntington Beach, CA 92615 FAX: 714.374.2216 Ph: 714.374.2266 ext. 23, Cell: 714.287.6779 "Vision of Excellence" www.wallcon.net 1 Ross, Rebecca From: cswan [cswan@wallcon.net] Sent: Monday, July 06, 2009 4:14 PM To: Van Dorn, Kay; city.clerk@surfcity-hb.org; Esparza, Patty Subject: FW: Pierside Pavilion OPA-Additional Community Support In addition to my previous email. Thanks you! Carl Swan, Business Development Manager Wfte4w, I#w,. P.O. Box 7755 Huntington Beach, CA 92615 FAX: 714.374.2216 Ph: 714.374.2266 ext.23, Cell: 714.287.6779 "Vision of Excellence" www.wallcon.net From: cswan [mailto:cswan@wallcon.net] Sent: Monday, July 06, 2009 2:30 PM To: 'Dapkus, Pat' Cc: 'Gary Daichendt'; 'Joe Daichendt'; 'Mike Adams'; 'Cathy Edman'; 'danielcapital@aol.com' Subject: Pierside Pavilion OPA - Additional Community Support Hi Pat, Wasn't sure of the most reliable way to get this info. into the hands of Council Members before tonight, so I'm emailing you and perhaps you could forward or print as appropriate. Another community member has voiced his support of our project, Steve Daniel, owner of Rocky Mountain Chocolate Factory. He requested that I drop an email on his behalf(he is copied above), as he has been extremely busy due to the 4th of July holiday trade. He mentioned to me on the phone today that he has spoken personally with a few council members to let them know he support our project and the pending agreement with the city. He believes, like many other downtown business owners, that we need to move forward with the building improvements and filling the building with tenants to bring additional trade to the surrounding downtown businesses. Thank you for you help to distribute this information Pat. Regards, Cari Swan, Business Development Manager dVdk4w, I"aa. P.O. Box 7755 Huntington Beach, CA 92615 FAX: 714.374.2216 Ph: 714.374.2266 ext. 23, Cell: 714.287.6779 "Vision of Excellence" www.wallcon.net 1m MKA I'1 i Num"Newrd seem"®SPOW June 30, 2009 Mayor Keith Bohr City of Huntington Beach - City Council 2000 Main Street Huntington Beach, CA 92648 Dear Mayor Bohr and City Council Members: As a long time business owner in Downtown Huntington Beach, I would,like to offer my support of the Future Development of Pierside Pavilionat 306 Pacific:Coast Highway. Joe Daichendt and Theory R have proposed,a great:plan"for th'6 property and I think it will be a great addition to Downtown Community. 'l am very excited about the prospect of having a new development on the property. The,office building will bring in a much needed base of new employees t'o the area that will be enjoying the local shops and restaurants adding growth to our economy. Thank you for your consideration of this project and we look forward to seeing it through fruition. Sincerely, Aaron Pai Pierside Pavilion 300 PACIFIC COAST HIGHWAY,SUITE 408 HUNTINGTON BEACH,CALIFORNIA 92648 PHONE 714.374-2373 FAX 714-536-5065 WWW.hsssurf.com June 23, 2009 Mayor Keith Bohr City of Huntington Beach - City Council 2000 Main Street Huntington Beach, CA 92648 Dear Mayor Mohr and City Council Members: As business owners in Downtown Huntington Beach since 1990, we would like to offer our support of the Future Development of Pierside Pavilion at 300 Pacific Coast Highway. ,Joe Daichendt and Theory R have proposed an excellent plan for the property improvement and we think it will be a great addition to Downtown Community. The future Pierside Pavilion building will allow room for us to continue to expand here in Huntington Beach without having to relocate out of the area and provide a much updated facility. In addition, the new office. building will bring in a much needed base of new employees to the area that will be enjoying the local shops and restauran s adding growth to our economy. Thank you for your consideration of this project and we look forward to seeing it through fruition, Sincerely, r Jonno Wells C HO S,irrfline/Wavetrak, Inc. t a P. 714.374.0556 F 714.374.5124 skyhill � Skyhill Financial, Inc. June 27, 2009 Mayor Keith Bohr City of Huntington Beach-City Council 2000 Main Street Huntington Beach, CA 92648 Dear Mayor Bohr and City Council Members: As business owners in approximately 7000 square feet of office space in Downtown Huntington Beach,we would like to offer our support of the Future Development of Pierside Pavilion at 300 Pacific Coast Highway. Joe Daichendt and Theory R have proposed a wonderful plan for the property and we think it will be a great addition to Downtown Community. We are very excited about the prospect of having a new development on the property. The future Pierside Pavilion building will allow room for us to grow our businesses here in Huntington Beach without having to relocate out of the area. We plan on growing another 25%in the coming year and like to seek qualified individuals who live in the immediate area of their work. This development would be an ideal opportunity to hire and retain more motivated individuals who are seeking the advantages of living next to their workplace. Thank you for your consideration of this project and we look forward to seeing it through fruition. Pkv , Skyhill Financial, Inc. Pierside Pavilion Page 1 of 1 N S i{ t ' June 30,2009 Mayor Keith Bohr and Members of the City Council t 2000 Main Street Huntington Beach,CA 92648 i t Ref: Pierside Pavilion Renovations, 300 Pacific Coast Highway i Dear Mayor Bohr and Members of the City Council, I l am writing in support of the proposed renovations and theater-to-office conversion of the Pierside Pavilion building. Wallcon,Inc. serves as construction managers to the property owner for the Pierside building as well as several other retail developments for the ownership. In addition,we are a tenant in the Pierside Pavilion building. We have worked side by side with the ownership for(7)years in order to develop,plan and obtain approval from the city to move forward with building renovations. y As a resident of Huntington Beach,along with other employees of Wallcon, I am also anxious to see the I Pierside Pavilion Building be restored to a vibrant focal-point of downtown business. 1 am hopeful that the Council will approve the pending agreement between the City and Ownership so 1 that the long-needed renovations may begin to unfold and provide an added tenant base to this "landmark"building. i Sincerely, I i Dave Walling Wallcon,Inc. 3 s i 3 Wallcon.Inc. P.O.Box 7755 Huntington Beach,CA 615-7755 License#667677 CITY OF HUNTINGTON BEACH Interdepartmental Memo TO: Honorable Mayor and Member of the City Council VIA: Fred A. Wilson, City Adminis r FROM: Stanley Smalewitz, Director of conomic Development/445 DATE: July 6, 2009 SUBJECT: Late Communication — Administrative Item 17 — Pierside Pavilion Owner Participation Agreement (OPA) To clarify the staff report regarding the proposed OPA between the Redevelopment Agency of Huntington Beach and Pierside Pavilion, LLC (Participant) which allows for the continued redevelopment of the property located on 300 Pacific Coast Highway. The current property owner (Participant) purchased the commercial portion of the property in 2002, not 1992 as stated in the report. If approved, the OPA for Phase I, does not increase the Gross Building Area, but maintains the existing building area; however the net leasable square feet may change within the given area due to how the theater space is ultimately configured. In addition, on the bottom of page two of the staff report, it provides the current permitted uses; however under the CUP No. 90-37/CDP No.90/21 the accurate entitlement for the permitted uses are as follows: Use Square Footage/Seats Spaces Required Theater 1,750 seats 583 Retail 14,459 sq. ft. 72 **Restaurant 23,773 sq. ft. 238 Office 16,000 sq. ft. 53 *Parking ratio for theater is determined by number of seats, not square footage. **3,500 sq. ft. of the permitted restaurant use is night club use Attached is the revised PowerPoint for the presentation which incorporates the changes noted above. �Q # f q I 116A ED 09-37 Late Communication -1- 7/6/2009 2:31:00 PM 0h, Y 0 "AY An y. Pierside Pavilion ®Weer Participation Agreement July 6, 2009 H o sto ry . The Redevelopment Agency and Huntington Pacifica I (Developer) jointly acquired the property located between 3rd and Main Streets between Walnut and PCH 1985 - The Agency and Developer entered into a Development and Disposition Agreement (DDA) ® 1986 — First Amended DDA with Developer ® 1988 - Successor-in-interest California Resorts ® The Agency entered into a Second Amended DDA which changed the scope of development to include residential units (Pier Colony) and 1,750 seat theater 1 History continued ® In 2002 Pierside Pavilion, LLC (Current owners) acquired the commercial portion of the property The owners approached the City and Agency to modify grant deed to eliminate six-plex theater due to market trends Proposed OPA ® The Agency and Pierside Pavilion LLC, have agreed to terms presented in the OPA ® OPA allows for the continued redevelopment of the site • Permits the conversion of theaters to office space and commercial retail/restaurant ® Development may occur in two phases • The Schedule of Performance may be extended upon payment to the Agency in the amount of $50,0 0 for one year, up to three years 2 Existing Use . The existing CUP/CDP allows for the following square footage and mix of uses ® Retail — 14,459 square feet of Gross Floor Area • Restaurant — 23,773 square feet of Gross Floor Area (includes night club) ® Office - 16,000 square feet of Gross Floor Area ® Theater — 1,750 seats Parking . Due to the decrease in intensity in uses Agency will make available up to 150 parking offsite spaces in the Main Promenade Parking Structure ® The Agency will make available up to 300 parking spaces in the Main Promenade Parking Structure for required off-site parking for Phase Two. 3 Phase One Upon completion, the site will consist of no more than 90,000 square feet and the mix of uses will change as follows: ® (a) Retail — up to 19,000 square feet of Gross Floor Area; and/or ® (b) Restaurant — up to 29,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or ® (c) Office — up to 51,000 square feet of Gross Floor Area. Phase Two ® Phase Two allows for the potential development of 30,000 square feet subsequent to the adoption of the Downtown Specific Plan by the City Council and Coastal Commission ■ Maximum square footage of the building shall not exceed 120,000 square feet as follows: ® (a) Retail— up to 31,000 square feet of Gross Floor Area; and/or ® (b) Restaurant— up to 41,000 square feet of Gross Floor Area, including any outdoor dining areas; and/or ® (c) Office— up to 63,000 square feet of Gross Floor Area. 4 Conclusion • OPA includes a list of preferred tenants that can support residents as well as visitors • Any change in entitlements for either Phase One or Phase Two must go through the Planning Department • Change of use will maximize land use to enhance economic development for the owner, City and the community 5 Subject: Pierside Pavilion 1) Why has the original DDA and amendments not been available for review? 2) What was the original agreement between the developer of Pierside Pavilion and the HB Redevelopment Agency? 3) The Agency placed a deed restriction against the property to assure continued use of the theatres. There are many theatre operators in Southern California that will rent these theatres at a lower rent level than new state-of-the-art theatres. Why has the Agency not encouraged or assisted the owner to keep these theatres open? 4) It appears that the Agency is relieving ownership of the Deed Restriction, the only significant bargaining chip the Agency possesses. In return, the Agency is allowing Ownership to expand the building by 65%, give up plaza open space, and allow 19,000 sf of more bar and restaurant space. It does not appear Ownership must build more space, and now may sell the property without the Deed Restriction. This appears to be a bad deal for the city. Is there anything the city is contracted to receive from the Ownership? 5) When the current Ownership purchased the property, with the Deed Restriction in place, the purchase price was lower because the theatres were required to stay in operation. At the time the current owners purchased the property, they understood the Theaters had to remain open, were not state-of-the-art theatres, and knew the rent they would receive would be lower than office, retail, or restaurant space. Why should the current Ownership benefit from closing the theatres? RECEIVED FROM AS PUBLIC RECORD F01 C IL MEETM OF D® U YP&RK OFFICE JOAN L FLYNN,CITY CLERIC City ®f Huntington Beach 4 2000 Main Street e Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK July 8, 2009 Gary and Catherine Daichendt 300 Pacific Coast Highway#119 Huntington Beach, CA 92648 Dear Mr. & Mrs. Daichendt: Enclosed please find three originals of the Agreement Affecting Real Property between the Redevelopment Agency of the City of Huntington Beach and Pierside Pavillion, LLC which require your notarized signatures. Upon execution, please return all three originals to: Patty Esparza Office of the City Clerk 2000 Main Street Huntington Beach CA 92648 Your attention to this matter is greatly appreciated. Sincerely, an L. Flynn City Clerk JF:pe Enclosure: Agreements G:followup:agrmtltr Sister Cities: Anjo, Japan • Waltakere, New Zealand (Telephone:714-536-5227)