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CITY OF HUNTINGTON BEACH
�. ? 'INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
e he K ,
To Tom Tincher, Director Fro nio C ity
Business & Industrial Enterprise Devel pme t pecialist
Subject REVIEW OF ORIGINAL PARTICIPATION Date May 19, 19
AGREEMENT WITH LYON COMPANY FOR
OLD CIVIC CENTER
Pursuant to your request, I have reviewed the Participation Agreement originally
executed for the William Lyon Company's patrticipation in senior housing on the
Old Civic Center Site. Ydur specific question had been whether or not the Lyon
Company had the right to participate with other entities in the development of
the senior housing. I believe the answer to your question is provided as follows:
Section 15(b)(1)(2) , pages 25 and 26
My interpretation of this provision of the Participation Agreement
indicates that the Lyon Company, prior to initial endorsement of the
mortgage for the Huntington Seaview project, had the right to trans-
fer responsibilities conferred in the Participation Agreement to any
other entities under a joint venture, limited, or general partnership.
Subsequent clauses seem to indicate that only after development of
the project did the City have the prerogative to review any assignment
of the project. The above referenced sections are attached.
I hope that this information will be of assistance to you. If you should have any
further questions or require a more definitive interpretation, I would suggest that
we have the City Attorney' s office review these particular sections.
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attachments
Developer are of particular concern to the community and the
City. The Developer further recognizes that it is because of
such qualifications and identity that the City is entering
into the Agreement with the Developer, and, in so doing, is
further willing to accept and rely on the obligations of the
Developer for the faithful performance of all undertakings
and covenants hereby by it to be performed without requiring
in addition. A surety bond or similar undertaking for such per-
formance of all undertakings and covenants in the Agreement.
(b) Prohibition Against Transfer of Property and Assignment
of Agreement. also, for the foregoing reasons, the Developer
represents and agrees for itself, and its successors and
assigns, the Developer will not transfer the Lease to the
Property nor assign any of its obligations undertaken by this
Agreement except that:
(1) For security purposes to obtain financing necessary
to enable the Developer, or any successor in interest to the
Property, or any part thereof, to perform its obligations
under the Agreement, and
(2) Prior to the initial endorsement of the mortgage
by Mortgagee, Developer may assign all or a portion of its
rights and obligations under this Agreement to a joint venture,
limited or general partnership for the purpose of acquiring and
developing the Property provided that Mortgagee approves the
transfer in writing and the said joint venture, limited or
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general partnership or other entity agrees in, writing to be bound
by all of the provisions of this 'Agreement.
(3) The City shall be entitled to require , except as
otherwise provided in the Jgreement, as conditions to required
prior written approval of any transfer that:
(i) Any proposed transferee shall have the
qualifications and financial responsibility,
as .determined by the City, necessary and
adequate to fulfill the. obligation .under
taken in the Agreement by the Developer
(or, in the event the transfer is of or
relates to part of the Property, such obliga-
tions to the extent that they relate to such .
part) . Such determination by the City shall
not be unreasonably withheld.
(ii) Any proposedi 'transferee', by instrument in
writing satisfactory to the City and in form
recordable among the land records, shall, for
itself and its successors and assigns, and
expressly for the benefit of the City, have
expredsly assumed all of the obligations of
the Developer under the Agreement and agreed
to be subject to all the conditions and re-
dttictions to which the Developer is subject
(or., Aft event the transfer is of or relates
to pa.r� of the Property, such obligations,
cofiditidns, and restrictions to the extent
that they relate to such part) : Provided,
CITY OF HUNTINGTON BEACH
IF19 INTER-DEPARTMENT COMMUNICATION
MNIINZION BEACH
To Charles W. Thompson From Tom Tincher, Director
City Administrator Business & Industrial Enterprise
Subject RESPONSE TO. WILLIAM LYON LETTER Date November 12, 1981
DATED OCTOBER 29, 1981
The above referenced letter once again fails to recognize the d.ifference .between.
"concept" and- "commitment -On numerous_occasions during the meeting you stressed
that the ideas being discussed should not be construed as commitments but rather
reflect. possi.ble. res.ources ,which might be used in packaging a _viable. .project if
CHFA and/or HUD .financing '.is not retained or obtained in the future. - It was further
stressed that the first priority was to move ahead immediately. with drafting a
lease for the 4-acre site and getting the Lyon Company's concurrence so that CHFA
could `be.notified of the progress, made on the• new site prior to .September 30, 1981.
While that lease was delivered to Brian. Norkaitis on September 28, 1981, no comment
on its contents have been received to date. In addition, I find it interesting that
the Peckenpaugh memo to Norkaitis has no mention of same.
In spite- of the Lyon Company's disregard for the top .priority. which we had established,
my recent. discussion with Supervisor Wilson has resulted in her discussing our project
with Mr.- Farr and subsequently suggesting that we meet with Mr. Farr. and Mr. Randall
to determine how we might:expedite the application process -for the next- funding cycle.
Her message to me was that she felt we had a "good chance" for funding i.f we moved -
ahead immediately with the packaging of. a viable project. I suggest that we contact
Mr. Randall as soon as possible and pursue Supervisor Wilson's suggestion.
The following are my comments on each of the corresponding "notes" which Peckenpaugh
forwarded to Norkaitis.
1. "by virtue" should be removed and the last..sentence changed to . read: "He
agreed that Lyon, consistent with .the terms of .its existing agreement with
the City., must be made.whole in reaching a new participation agreement. "
2. In addition to the required 155 affordable senior citizen housing units,
the City will consider allowing additional market .rate development on the
site subJect to appropriate .design ,and density considerations. The City
. will also consider- providing additional contiguous property -as one means,
to:compensaoe.Lyon for previous ex penses..incurred as well as serve to under-
write the .project so that .affordable .rents might be maintained if Section
8 or other public subsidy .is not available.
3. Lyon will be reimbursed for Its out-of-pocket expenses incurred as part of
the Civic Center Project by. the benefits derived from .the- new agreement
for the Terry Park Site. If, for some reason, such agreement is not executed,
Lyon will be compensated in.a manner consistent with the terms of the previ-
ously executed participation agreement.
Charles W. Thompson
November 12, 1981
.Page Two
4. As discussed at the meeting, the length of the lease would be less than
the previously designated. 55 years because of Government Code constraints.
5. "Considered high priority" rather than guarantee a "first in line" review.
6. The City will consider constructing off-site. improvements, at its. expense,
as a means to assure affordable rents if CHFA and/or HUD assistance is not
available.
7. The City. will consider waiving fees where. legally_ possible and investigate
the. possibility .of obtaini.hg tax exempt status for the proposed project
as means to assure affordable rents if CHFA and/or HUD assistance is not
available.
In addition, the Lyon Company will be given credit.,for. previous plan check
and development fees incurred as part of the Civic Center Project. Said.
credit will. be applied. towards -the new fee obligations associated with the
Terry Park Site. If the. project is established as being ..tax exempt, the
City may require that one-half of the previously anticipated annual tax
obligation for the new project be conveyed to the City .through a correspond-
ing increase in the terms of the lease.
8. (See proposed lease).
9. If the. project is funded with CHFA and/or HUD assistance, this provision
would not. be allowed. If under a City funded approach we wish .to incorporate
such a provision, then I suggest that we include language that would provide
some minimum commitment for serving moderate and. low income seniors given
the "'free" land which is being provided along with possibly additional
public subsidy.
10. Preferably senior citizens and/or adults.
11. "high rise should be "multi-story construction."
12. The City will assure that Lyon has an opportunity to bid on the development
of the balance of the 10-acre City-owned site from which the senior citizen
site. is derived.. In addition, the City- will explore .the possibility of ex-.'
panding the Lyon Project Site into -the proposed residential development project
north and east of .the existing boundaries for either additional senior housing
or possibly comdominiums.
.13. If HUD Section 8 financing is not available for the Terry Park Project, then
the City will consider..using the various resources previously .discussed as
well as .others, to provide a financing package. which would still allow for
the construction of affordable senior citizen housing units on. the site.
One approach might be to involve a mix of market rate and affordable .unit.s
which is consistent with the level of subsidy which the City is providing.
It should be pointed out that if CHFA and/or HUD funding is not available and the
City and Lyon cannot develop a financially responsible and acceptable program to
Charles W. Thompson
November 12, 1981
Page Three
provide the necessary public subsidy to a cooperative project, then the City may
wish to develop the housing on its own. In my opinion, the City should move forward
immediately to retain an architect ,to begin the project design in cooperation with
the Lyon Company for which the.City will assume all the financial obligations
associated with said architectural work unless and until an agreement is executed
with Lyon.
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LYON
19 C PCfffl ffrE ORT BEACH, CALIF 92660 (714) 833 3600
0
NO V 0 31981
CITY OF HUNTINGTON BEACH October 29, 1981
ADMINISTRATIVE OFFICE
Mr. Charles W. Thompson
Office of the .City Administrator
City of Huntington Beach
2000 . Main Street
Huntington Beach, California 92648
Dear Mr. Thompson:
As I discussed with .Mr. Tincher earlier this week, I am
enclosing a copy. of a memorandum prepared by Tom Peckenpaugh in
. which he describes .the main business points discussed at our
meeting with you on September 17 , 1981.
We have been preparing, as you requested, a list of
our costs to date so you would know the approximate amount neces-
sary to "make .us whole" as to the abandoned Civic Center Site.
We were shocked to 'read the allegations in your letter
of "October 16, 1981 and will soon be providing you with informa-
Lion to show clearly that you need not be bewildered or confused.
Very truly yours,
THE WILLIAM C . PANY
Aa
L& 010,11,
Brian V.brtnkais
RegioManager
BVN/pmc
Enclosure
REAL ESTATE DEVELOPMENT
w
M E M O R A N D U M
TO: Brian V. Norkaitis -- The William Lyon Company
FROM: Thomas D. Peckeirpaugh -- Fulop & Hardee
DATE: October 9, 1981
RE : Senior .Citizens Housing/City of Huntington Beach
File No. 5398/10258
This memorandum will set forth a summary of the notes
which Don Clinebell and I took at our recent meeting. with repre-
sentatives of the .City of. .Huntington Beach held on September 17 ,
198i. As you- know, the meeting produced agreement on several
points., with the reservation of some issues for subsequent dis-
cussion.. We believe that this memorandum accurately reflects
the substance and intent of the actions taken by the parties at
the meeting.
1. At the outset of the meeting, we stressed the Lyon
Company' s firm belief_ .that fairness and equity dictate that Lyon
receive the "benefit of the bargain" agreed to, by .the City in
the 1979 Agreement. The city, t rough Mr. Charles Thompson,
indicated that that is "what we would be shooting for" and that
the 1979. Agreement would be a ."model" for a new participation
agreement. He agreed that Lyon, by virtue of its existing Agree-
nient with the City, must be "made whole" in reaching a new par-
ticipation agreement.
2 . The City .will provide zoning, legal access, and
land use permits for a project of ' one hundred fifty-five (155)
senior .citizen units at the "new" . four-acre site, plus whatever
n:UnAber of market rate units can fit onto the site. hn addition,
tile _City .wi.11 provide "as much as possible" of the lots .contiauous
'73 the "'new" s- te: uni s. The provision of. these
acTditinnal units may be use a, in part, to compensate Lyon- for its
cut-of-pocket expenses, .the cost of transferring the project to
a new site and the preparation of a new concept for development.
3 . Lyon. has incurred out-of-pocket expenses, obliga-
tions and fees related to the development of the . Civic. Center
Site. Lyon will submit a statement of its expenses , obligations
arid fees , and documentation in support thereof, and the City will
reimburse Lyon for those costs.
~To: Brian V. Norkaitis '
Re: Senior Citizens Housing
October 9, 1981 .
Page Two
4 . The land at the "new" site will be provided .by
long-term lease, at $1 per year. "Long-term" means the maximum
period permissible under the City Charter, but not less than in
the origihal . lease.
5 . The City will work with Lyon to expedite the new
plans and approvals., and will use all reasonable devices to "fast-
track" the plans. The City will, among other things, ucuaarantpe„
that all plans submitted are reviewed "first .in line. "
6 . The City will guarantee provision of certain .
improvements:. It is .contemplated that off-site costs will be
provided with Department of Housing and Community Development
funds. On-site costs will be provided in accordance with the
original Participation Agreement.
7. The. City will. waive .fees where legally possible.
Certain fees for which Lyon is presently- obligated under. the
Participation Agreement will. be wai-vee by City. The City .will
either vide a waiver of taxes or, ch a "fee"o of of more
an o - i o cityat ivic r
Waivers and tax breaks will continue throughout the life
o'er f—the project.
8. The City will provide, at its expense, a cleared,
ready-to-go parcel, eliminating all existing improvements . Title
to the property will be free of all encumbrances not acceptable
to . Lyon' s lender.
9 . Subject to City provision of economic assistance
necessary to create construction and carrying costs substantially
the same as they would have been at the Civic .Ce'nter Site, Lyon
will. provide one hundred fifty-five (155) apartment units for
senior, c:itizens earning less than 120o. of City' s median income.
If: Lyonis unable to rent these units to members of this group
after offering them for ninety (90) days-, Lyon will. have the
right to rent to any other senior :or adult who desires to live in
the project and who earns more than 120t of median income.
10. Lyon will be permitted to rent at market rate any
of the units built in excess of one ..hundred fifty-five (155)
units and may rent them to any age group.
11. Lyon may build the project as a conventional two-
story wood frame apartment complex with detached carports, or may
mix units to include wood frame andh444 , e. The City will .
niodify its parking standards to accommodate the development.
Lyon will have the right to determine the number of efficiency,
one bedroom, and two bedroom units to be built on the "new site.
' .. " Brian V. Norkaitis '
Senior Citizens Housing ;
October 9 , 1981
Page Three
.12 . Prior to execution of any new participation
agreement, the parties will explore, in good faith, Lyon' s future
. participation in the master planning of the twenty-one (21) acres
of which the "new" site will be a part. . The City will explore
all legal means, including, but not limited to, a right of first
refusal , by which to offer the twenty-one (21) acres. to Lyon and
to ensure that Lyon can protect its project from surrounding
incompatible arid .competing development. The City will also
explore all legal means by which Lyon may be permitted to build
additional condominium, commercial 'or other facilities that will
be included in the master plan for the twenty-one acres.
Z3. If Section 8 housing -is not available for the
"new." site, the City will take all reasonable . steps to duplicate
tlik: .economic effect of Section 8 which .would. have resulted at
il�� civic Center Site. Lyon will. build; and manage a privately
Owned- and .operated complex. The City, to the extent it wishes to
provide subsidized housing, must find a way to "write down" the
value of certain units to provide senior housing. "Write down"
means the reduction of L on' s c sts t rodure I't
ially__similar to the first project agreed upon by com-
pensa ina- for Loss of-CM and for increased construe-
costs._
The above contribution ("write down") -may be increased
by City to subsidize at Section 8 rents the number of units
desired. Up to one hundred fifty-five (155) 1units. may be sub-
sidized. If the City subsidizes less than one hundred fifty-five
.(155) units (the "Specified Units" ) and Lyon is able to rent the
balance of those .one hundred .fifty-five (155) units at rents
above market value determined by Section 8 standards,. the "surplus"
produced will be paid to the City to. -the extent necessary. to
reimburse City for its cost of subsidizing the Specified Units at
Section 8 rents. The :payment of this . "surplus" shall be made as
long as City is subsidizing at' least fifty. (50) . units in the
project.
By this method, Lyon :receives _ an expected .benefit of
its previous_ bargain, the receipt of rent at Section 8 .market
value. The payment of the "surplus" is designed to reduce the
ongoing City subsidy expense.
When final agreement is reached on all of these mat-
ters , they will be incorporated into a settlement agreement and a
iiew participation agreement.
'PDP/pmc
1 .
PARTICIPATION AGREEMENT
FOR THE
LEASING OF CERTAIN LAND FOR
PRIVATE DEVELOPMENT
BY AND BETWEEN
THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION
AND
THE WILLIAM LYON COMPANY
TABLE OF CONTENTS
Page
SECTION 1 Lease 3
(a) Duration 3
SECTION City Requirements 4
(a) Occupancy and Use 4
(b) Maintenance and Operation of
Property 4
(c) Landscaping 4
(d) Taxes 4
(e) Insurance 4
SECTION 3 Recordation of Lease 4
SECTION 4 Title Policy 5
SECTION 5 Conditions Precedent 5
SECTION 6 Time for Commencement and Completion
of Improvements 6
SECTION 7 Notices and Demands 6
SECTION 8 Rights of Access to Property 7
(a) Right of Entry for Utility Service 7
(b) Developer Not to Construct Over
Utility Easements 7
(c) Access to Property 7
SECTION 9 Construction of Improvements 8
(a) Plans . for Construction Improvements 8
(b) Construction Drawings and Related
Documents 8
(c) Landscaping Plan 9
(d) City Approval of Construction Plans
and Drawings 9
(e) Architect's Certification 10
(f) Changes in Construction Plans 11
(g) Commencement and Completion of
Construction of Improvements 11
(h) Progress Reports 12
SECTION 10 Time for Certain Other Actions
(a) Time for Submission of Construction
Plans 12
_TABLE OF CONTENTS
(continued)
Page
(b) Time for Submission of Corrected
Construction Plans 12
(c) Maximum Time for Approved Con-
struction Plans 13
(d) Time for City Action on Change
in Construction Plans 13
(e) Time for Submission of Evidence
of Equity Capital, Mortgage
Financing and Construction
Documents 13
(f) Time for Furnishing Certificate
of Completion 14
SECTION 11 Preparation of Property for Development 15
(a) Work to be Performed by the City 15
(b) Expenses, Income and Salvage 17
(c) City's Responsibilities for
Certain Other Actions 17
SECTION 12 Responsibilities of Developer Prior to
Construction of Improvements 18
(1) Conditional Use Permit 18
(2) Specific Plan 18
(3) Development Fees 19
(4) Schedule of Performance 19
(5) Mortgage Financing 19
SECTION 13 Changes or Repair of Work After Public
Improvements are Constructed or Completed 19
SECTION 14 Restrictions on. Use of Property 20
(a) Restriction on Use 20
(b) Covenants; Binding Upon' Successors
in Interest; Period of Duration 22
SECTION 15 Prohibitions Against Assignment and
Transfer 23
(a) Representations as to Development 23
(b) Prohibition Against Transfer of
Property and Assignment of
Agreement 24
TABLE OF CONTENTS
(continued)
Page
SECTION 16 Remedies 27
(a) In.-.General 27
(b) Termination by City Prior to
Conveyance 28
(c) Termination by .Developer Prior
to Execution of Lease 29
(d) Rights and Liabilities Termination
Prior to Possession 29
(e) Other Rights and Remedies of
. Parties; No Waiver by Delay 30
(f) Enforced Delay. in Performance for
Causes Beyond Control of Party 30
(g) Rights and Remedies Cumulative 31
SECTION 17 Special Provisions
(a) Tax Exemption 32
(b) Bodily Injury and Property Damage
Insurance 33
(c) Maintenance of Land Prior to
Construction 33
(d) Execution of Documents 33
(e) Environmental Impact Documents 33
(f) City and Other. Governmental Agency
Permits and Fees 34
(g) Successors in Interest 34
(h) Provisions Not Merged with Lease 34
(i) Titles of Sections 35
SECTION 18 Counterparts 35
SECTION 19 Entire Agreement, Waivers , and Amendments 35
SECTION 20 Time for Acceptance of Agreement by City 35
SECTION 21 Conflict of Interest; Agency.' s Representa-
tive Not Individually Liable 36
PARTICIPATION AGREEMENT FOR LEASING OF
LAND -FOR PRIVATE DEVELOPMENT
This agreement, and attachments annexed hereto and made
a part hereof (hereinafter called "Agreement") , is made this
day of 1979 , by and between the CITY OF HUNTINGTON
BEACH, a Municipal Corporation (hereinafter called "City") , and
having its office at 2000 Main Street, P. 0. Box 190, Huntington
Beach, California 92648, and THE WILLIAM LYON COMPANY, a Cali-
fornia Corporation, organized and existing under the laws of the
State of California (hereinafter called "Developer") , and having
its office at 19 Corporate Plaza, Newport Beach, California 92660.
WITNESSETH:
WHEREAS, in furtherance of the objectives of its Department
of Housing and Community Development, the Planning Commission and
City Council, the City has undertaken a program for the clearance,
reconstruction or rehabilitation of the Old Civic Center site
(hereinafter called "Project Area") located in the City, and;
WHEREAS, the City requested proposals for conceptual archi-
tectural drawings and financial feasibility statements for the
construction and operation of a senior citizens housing develop-
ment, full service senior citizens center, an exterior improvement
and re-landscaping of the existing branch library and limited
service commercial for the "Project Area, " (hereinafter called
"Development Plan") , and;
WHEREAS, the stated goal of the City is to combine Housing
and Community Development, General Funds and Section 8 Housing
Assistance resources with those of private enterprise in order
to provide a comprehensive housing, recreation, social and
cultural center for senior citizens, and;
WHEREAS, the Developer, along with other interested firms ,
submitted its detailed proposal . on December 22, 1978, on its
program designed to accomplish the goals enumerated by the City
in its Request for Proposals; and;
WHEREAS, the Developer made presentations to the Planning
and Redevelopment Commissions and City Council and was recommended
by the Planning and Redevelopment Commissions on March 13, 1979,
as the proposed Developer, which such action .was approved by the
City Council on April 2, 1979, and;
WHEREAS, Developer was selected by City of . its selection as
the developer for the development of the Project Area, and;
WHEREAS, the City has offered to lease and Developer is
willing to lease certain real property located in the Project Area
as shown on the "Site Map" which is incorporated herein and
attached hereto as Attachment No. 1 (hereinafter called "Property")
for the development of the housing, and;
WHEREAS, the Developer is willing to redevelop the Property
for and in accordance with the uses specified in the Request for
Proposal and in accordance with the Agreement, and;
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a ,
WHEREAS, the Developer's proposal for .the construction of
assisted housing for the Project Area fulfills a vital need of
the City; namely, the provision of housing for elderly persons , and
each of the . City and HCD is willing to undertake the obligation
outlined in this Agreement in .order to work in partnership with
the Developer to successfully implement the development, and;
WHEREAS, the City believes that the development of the Pro-
perty pursuant to this Agreement, and the fulfillment generally
of the Agreement, are vital and in the best interest of the City
and the health, safety, moral and welfare -of its residents, and
in accord with the public purposes and provisions of the appli-
cable federal, state and local laws and requirements under which
the Project has been undertaken and .is being assisted.
NOW THEREFORE, for the reasons set forth above, in considera-
tion of the promises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the
other as follows:
SECTION 1. Leaser Price, Terms
(a) Duration. Subject to all the terms, covenants and
conditions of this Agreement, the City will lease the Property to
the Developer for a term of fifty-five (55) years and the Developer
will pay therefor the amount of One Dollar ($1.00) per year
(hereinafter called "Lease Price") , to be paid at the time and
in the manner set forth in the lease, which when approved by the
Huntington Beach City Council and executed will be attached
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to this Agreement and incorporated therein by this reference as
Exhibit "A.
SECTION 2. City Requirements
(a) Occupancy and Use. The Developer agrees that the lease
shall contain provisions restricting use and occupancy of the
property as outlined in Section 14 hereof.
(b) Maintenance and Operation of. Property. The Developer
shall be responsible for the maintenance and operating of the
Property within the leasehold boundaries.
(c) Landscaping. The Developer shall install and maintain
landscaping of the Property as defined in the Old Civic Center
Specific Plan which when approved by the City Council will be
attached to this Agreement and incorporated therein by this
reference as Exhibit "B. "
(d) Taxes. The Developer agrees to pay such property taxes
on the improvements to the Property as shall be assessed by the
Orange County Assessor' s Office.
(e) . Insurance. The Developer and/or its assignees or
successors shall furnish and maintain in force policies of insurance
and executed and maintained on file with the City, the City pre-
scribed "Certificate of Insurance and Hold Harmless Agreement. "
The required coverage is as follows : One million dollars per
occurrence for liability and indemnification. The City is to be
an additional insured on Developer' s "et al" policy.
SECTION 3. Recordation of Lease
The lease to be executed by the parties herein shall be exe-
cuted in such form as the Orange County Recorder' s Office shall
require for it to be recorded.
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SECTION 4 . Title Policy
The Developer shall, at its own expense, order a preliminary
title policy covering the leased portion of the site.
SECTION 5. Conditions Precedent
The obligation of the City to issue a lease to the Property
and perform the conditions hereunder and the obligations of the
Developer to make .payment and perform the conditions hereunder
shall be terminated and neither the City nor the Developer shall
have any rights against or liability to the other under this
Agreement in the event of any of the following:
(1) The Developer- has not received, after exercising every
reasonable effort, a firm commitment from the California Housing
Finance Agency, or HUD or any other funding source (hereinafter
called "Mortgage") , for a construction loan and permanent
mortgage, with respect to the Senior Citizens Housing to be
constructed hereunder within one year of the date hereof.
(2) The Developer furnishes evidence satisfactory to the
City that it has been unable, after and despite diligent effort
for a period of one year after the date of execution hereof, to
obtain a commitment for mortgage financing for the construction
of the improvements on a basis and on terms that would generally
be considered satisfactory by builders or contractors for im-
provements of the nature and type provided in the Construction
Plans , and the Developer .has, after having submitted such evidence
and if so requested by the City, continued to make diligent efforts
to obtain such financing.
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r '
(3) City is unable to obtain necessary General Plan Amend-
ment and Specific Plan Amendment and approval of South Coast
Regional Coastal Commission and other relevant federal and state
agencies, or City departments such as but not limited to the
Department of Development Services.
SECTION 6 . Time for Commencement and Completion of Improve-. '
ments
The construction of the improvements referred to in SECTION
9 hereof shall be commenced in any event within two (2) months
after the closing of the mortgage financing, and, except as
otherwise provided in this Agreement, shall be completed within
the construction period set forth in the Mortgageee' s firm com-
mitment for mortgage financing.
SECTION 7. Notices and Demands
A notice, demand, or other communication under this Agree-
ment by either party to the other shall be sufficiently given
or delivered if it is dispatched by registered mail or '.delivered
personally, and
(i) in the case of the Developer, is addressed to or
delivered personally to the Developer at 19 Corporate
Plaza, Newport Beach, California 92660, and,
(ii) in the case of the City is addressed to or delivered
personally to the City at Office of City Administrator,
2000 Main Street, Huntington Beach, California 92648,
or at such other address with respect to either such party as that
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party may, from time to time designate in writing and forward to
the other as provided in this Section.
SECTION 8 . Rights of Access to Property
(a) Right of Entry for Utility Service. The City reserves
for itself, and any public utility company, as may be appropriate,
the unqualified right to enter upon the Property at all reasonable
times for the purpose of reconstructing, maintaining, repairing,
or servicing the public utilities located within the Property
boundary lines. and . provided for in the easements described or
referred to in SECTION 4 hereof.
(b) Developer Not to Construct. Over Utility Easements. Pro-
vided that the City and utility companies do not construct in
conflict with structures delineated on plans of Developer unless
said construction takes place on recorded easements referred to
in the preliminary title report, the Developer shall not construct
any building or other structure or improvement on, over, or
within the boundary lines of any easement for public utilities
described or referred to in Paragraph (a) hereof, unless such
construction is provided for in such easement or has been approved
by the holder of such easement. If approval for such construction
is requested by the Developer, the City shall use its best efforts
to assure that such approval shall not be withheld unreasonable.
(c) Access to Property. After the development of the Pro-
perty by Developer, the Developer. shall permit the representatives
of the City access to the Property at all reasonable times which
it deems necessary for the purpose of the Agreement, including
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but not limited to, inspection of all work being performed in
connection with the construction of the improvements. No compen-
sation shall be payable nor shall any charge be made in any form
by any party for the access provided for in this Section.
SECTION 9 . Construction of Improvements
(a) Plans for Construction Improvements. Plans and speci-
fications for the development of the Property and the contruction
of improvements thereon (hereinafter referred to as the "Improve-
ments") shall .be inconformity with the Old Civic Center Specific
Plan, and all applicable federal, state, and local laws and regula-
tions. All work with respect to the . improvements to be constructed
or provided by the Developer on the Property shall be in conformity
with the Construction Plans (Final Construction Documents and
Specifications) as approved by the City.
(b) Construction Drawings and Related Documents . The
Developer shall prepare and submit construction drawings and re-
lated documents to the Department of Development Services, City of
Huntington Beach (hereinafter referred to as "Development Service") ,
for architectural review and written approval for the Property or
portions thereof as provided. in the Schedule of Performance. Such
construction drawings and related documents shall be submitted in
three stages--schematic, preliminary and final. Final drawings
and plans are hereby defined as those in sufficient detail to obtain
a building permit. Approval of progressively more detailed drawings
and specifications will be promptly granted by Development Services
if they are not in conflict with drawings or specifications theretofore
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approved. Any items so submitted and approved in writing by
Development Services shall not be subject to subsequent dis-
approval .
During the preparation of all drawingsand plans, Development
Services and the Developer shall hold regular progress meetings
to coordinate the preparation of, submission to, and review of
construction plans and related documents by Development Services.
Said parties shall communicate and consult informally as fre-
quently as is necessary to insure that the formal submittal of
any documents to Development Services can. receive prompt and
speedy consideration.
If any revisions or corrections shall be required by any
governmental official, agency, department or bureau having juris-
diction, or any lending institution involved in financing, the
Developer and the City shall cooperate in efforts to obtain waiver
of such requirements or to develop a mutually acceptable alterna-
tive. If no such waiver is obtained and no such alternative is
developed, the City shall be bound by such revisions or corrections
if they are not inconsistent with the Scope of Development.
(c) Landscaping Plan. The Developer shall prepare and submit
to Development Services for approval final landscaping and finish
grading plans for that portion of the Property containing the
housing site. Said plans shall be prepared and submitted within
the times set forth in the Schedule of Performance.
(d) City Approval of Construction Plans and Drawings.
Development Services shall have the right of architectural review
of all plans and submissions, including changes therein.
-9-
Development Services shall approve or disapprove the plans,
drawings and related documents referred to in paragraphs (b) and
(c) of this Section within the times established in the Schedule
of Performance . Any disapproval. shall state in writing the
reasons for disapproval. The Developer, upon receipt of a dis-
approval based upon powers reserved to Development Services here-
under shall revise such portions as are not a logical evaluation
of the specific plans and construction requirements previously
approved by Development Services and resubmit to Development
Services as soon as possible after receipt of the notice of
disapproval. All plans, drawings and related documents approved
in writing by Development Services shall not be subject to subse-
quent disapproval.
(e) Architect' s Certification. The Developer shall submit
to Mortgageee and Development Service the Architect's Certifica-
tion on Mortgagee':s prescribed form.. Such certification shall be
made by the architect responsible for the preparation' of the
working drawings and specifications for the improvements. The
Architect's Certification shall state that, to the best of the
Architect' s knowledge and belief and professional judgment,
(i) the working drawings and specifications are consistent with
the approved final proposal, and (ii) the proposed construction
in accordance with these plans and specifications is permissible
under applicable zoning, building, housing and other codes,
ordinances, or regulations as modified by any waivers obtained for
the appropriate officials of the City of Huntington Beach. This
Certification shall also cover compliance with the appropriate
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Minimum Property Standards (MPS) and other standards, quidelines
and criteria applicable pursuant to Mortgagee's regulations as
to certification and standards. One copy of such certified
working drawings and specifications shall be submitted with
the Architect's Certification to Mortgagee as well as to Develop-
ment Services ; provided, however, that receipt and retention by
Mortgagee of -these working drawings and specifications shall not
denote or constitute Mortgagee review or approval of such drawings
and specifications .
(f) Changes in Construction Plans . _ If the Developer desires
to make any change other than minor field change items as defined
in Old Civic Center Specific Plan in the construction plans after
their approval by the City, the Developer shall submit the proposed
change to the City for its approval. If the construction plans ,
as modified by the proposed change conform to the requirements of
SECTION 10 (a) hereof and the Scope of Development, the City shall
approve the proposed change and notify the Developer in writing
within fifteen (15) days after receipt thereof by the City. Such
change in contruction plans in any event, shall be deemed approved
by the City unless rejected by the City, in whole or in part, by
written notice to. the Developer within said fifteen (15) day period
setting fbrth in detail the reasons therefor.
(g) Commencement and Completion of Construction of . Improve
ments. The Developer agrees for itself, its successors and
assigns, and every successor in interest .to the Site, or any part
thereof, that the Developer, and such successors and assigns, shall
promptly begin and diligently prosecute to completion the development
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of the Site through the construction of the improvements thereon,
and that such construction shall in any event be begun within
the period specified in SECTION 6 hereof and be completed within
the period specified in such SECTION 6.
It is intended and agreed., and the Lease shall so expressly
provide, that such agreement and covenants shall be covenants
running with the land and that they shall, in any event, and
without regard to technical classification or designation, legal
or otherwise, and except only as otherwise specifically provided
in the Agreement itself, be, to the fullest extent permitted by
law and equity, binding for the benefit of .the community and the
City and enforceable by the City against the Developer and its
successors and assigns to or of the Property or any. part thereof
or any interest therein.
(h) Progress Reports . Subsequent to execution of a lease
for Property, or any part thereof, to the Developer, and until
construction of the Improvements has been completed, the Developer
shall make reports in such detail and at such times as may reason-
ably be requested by the City as to the actual progress of the
Developer with respect to .such construction.
SECTION 10. Time for Certain Other Actions
(a) Time for Submission of Construction Plans . The time
within which the Developer shall submit its "Construction Plans"
(as defined in SECTION 9 hereof) to the City in any event shall
be not later than the dates set forth in the Schedule of Performance.
(b) Time for Submission of Corrected Construction Plans. Ex-
cept as provided in Paragraph (c) of this SECTION 10, the time within
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which the Developer shall submit any new or corrected Construction
Plans as provided for in SECTION 9 hereof shall be not later than
forty-five (45) days after the . date the Developer receives written
notice from the City of the City' s rejection of the Construction
Plans -referred to in the latest such notice.
(c) Maximum Time for Approved Construction Plans. In any
event, the time within which the Developer shall submit Construc-
tion Plans which conform to the requirements of SECTION 9 hereof
and are approved by the City shall be not later than dates set
forth in the Schedule of Performance for the approval of such
plans by the City.
(d) Time for City Action on Change in Construction Plans.
The time within which the City may reject any change in the Con-
struction Plans , as provided .in SECTION 9 hereof, shall be fifteen
(15) days after the date of the City's receipt of notice of such
change.
(e) Time for Submission of Evidence of Equity Capital,
Mortgage Financing and Construction Documents. At the times set
forth in the Schedule of Performance therefor, the Developer shall
submit to the City for its approval of the following:
(i) . A copy of the commitment or commitments ob-
tained by the Developer for a mortgage loan
or loans to assist in financing the construction
of the Improvements (as defined in SECTION 9
hereof) , certified by the Developer to be a
true and correct copy or copies thereof;
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(ii) A copy, certified by the Developer to be a true
and correct copy, of contractor's bonds covering
labor, materials and performance for equal to
one hundred percent (100%) of the construction
price in the contract entered into by Developer
and its general contractor. Said bonds and the
construction contract must conform to Mortgagee
requirements and be approved by the Community
Development Director prior to commencement of
construction. . The City shall not unreasonably
withhold such approval. Developer shall, prior
to commencement of construction, deliver to the
City a certificate from the bonding company
insuring aforesaid bonds, naming the City as
an additional insured.
(f) Time for Furnishing Certificate of Completion
(1) Promptly after completion of the Improvements in
accordance with those provisions of the Agreement relating solely
to the obligations of the Developer to construct the Improvements
(including the dates for beginning and completion thereof) , the
City will furnish the Developer with an appropriate instrument so
certifying. Such certification by the City shall be (and it
shall be so provided in the Lease and in the certification itself)
a conclusive determination of satisfaction and termination of the
covenants in the Agreement and in the Lease with respect to the
obligations of the Developer, and its successors and assigns, to
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construct the Improvements and the dates for the beginning and
completion thereof.
(2) Each certification provided for in this SECTION 10
shall be in such form as will enable it to be recorded in the
proper office for the recordation of deeds and other instruments
pertaining to the Property, including the Lease. If the City
shall refuse or fail to provide any certification in " accordance
with the provisions of this Section, the City shall, within
thirty (30) days after written request by the Developer, provide
the Developer with a written statement, indicating in adequate
detail in what respects the Developer has failed to complete the
improvements in accordance with the provisions of the Agreement,
or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the City, for the Developer to take
or perform in order to obtain such certification.
SECTION 11. Preparation of Property for Development
(a) Work to be Performed by the City. The City prior to
construction of Improvements on the Property and without expense
to the Developer prepare the Property for development by the
Developer .in accordance with this Agreement. Such preparation
shall consist of _ the following, unless the City and the Developer
hereafter agree in writing that any of the preparation shall not
be done, or that it shall be done subsequent to the conveyance
of the Property:
(1) Survey. The City at its own cost and expense
shall initiate an ALTA survey on the entire site. The survey
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shall establish boundary lines for the housing site and such
boundary lines shall be utilized for determining the area of
responsibility of the Developer with respect to landscaping and
maintenance duties .
(2) Soils Report. The City at its own cost and
expense shall furnish the Developer with a copy of the soils
report prepared by Associated Soils Engineers, Inc. , of Long
Beach, California, dated 11/22/78.
(3) General Plan Amendment. A General Plan Amendment
shall be initiated encompassing the concept of Developer' s pro-
posal and processed by City for recommendation by the Planning
Commission to the City Council for adoption at no cost or expense
to the Developer.
(4) Specific Plan. Shall be initiated by City staff
at no cost to Developer. The Developer shall cooperate and supply
whatever information may be required by City staff with respect
to the housing development. . .(Attached as Exhibit "B" . )
(5) Environmental Impact Report. The City shall
authorize Pacific Environmental Services of Santa Monica as out-
side consultants to conduct an EIR study for the proposed develop-
ment on the Property. The Developer shall pay a ,pro rata share
of the cost of the EIR study for the housing site.
(6) Coastal Commisson. The City shall initiate at
no cost to Developer an application to the Coastal Commission for
its approval of the proposed development. The Developer agrees
to cooperate and provide necessary documentation required by
City staff and to be available for all conferences , presentation
and hearings as is required.
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(7) Demolition and Removal. All existing buildings,
surface and below grade structures and other improvements on the
Property, such as but not limited to, foundations., cesspits, wells,
basements, debris, paving, all vegetation and .deleterious material
shall be demolished and removed in their entirety.. The cavities
left by such removal shall be back-filled and compacted according
to the recommendations of a licensed soils engineer, who shall
inspect and certify as to .the satisfactory completion of the
work, which shall also comply with the latest requirements of
HUD'.s data sheet 79 G as it may be amended.
(8) Removal and Relocation of Public Utility Lines .
The removal, relocation or abandonment by the City or by the ap-
propriate public body or public utility company of all public
utility lines,. installations , facilities, and related equipment
within or on the Property, as necessary for the construction of
the Project.
(9) Filling and Grading. The City shall only be
responsible for soil conditions and the placement of fill on the
Property as hereinabove set forth.
(b) Expenses , Income and Salvage. All expenses, including
current taxes , if any, relating to buildings or other structures
demolished or to be demolished in accordance with SECTION 11
hereof shall be borne by, and all income or salvage received as
a result of the demolition of such buildings or structures shall
belong to the City.
(c) City' s Responsibilities for Certain Other Actions. The
City, without expense to the Developer or assessment or claim
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against the Property and prior to completion of the Improvements
or at such earlier time or times as the Developer and the City
may agree in writing, shall, in accordance with the Development
Plan, provide or secure or cause to be provided or secured, the
following:
(1) Vacation of Streets, Etc. The closing and
vacation of all existing streets , alleys, and other public rights-
of-way within or. abutting on the Property.
(2) Replatting, . Resubdivision, Rezoning or Zoning
Variances. The replatting, resubdivision, rezoning or obtaining
of zoning variances, if necessary - for the conveyance of the Pro-
perty.
(3) Installation of Public Utilities. The installation
or relocation (by the City or by the appropriate public body or
public utility company) of such sewers, drains, water and gas
distribution lines, electric, telephone, and telegraph lines,
and all other public utility lines, installations, and facilities
as are necessary to be installed or relocated on or in connection
with the property at a point to be designated by Developer by
reason of the Development Plan and the development of the Property:
Provided, that the City shall not be responsible for, nor bear
any portion of the cost of, installing the necessary utility con-
nections within the boundaries of the Property between the Improve-
ments to be constructed on the Property by the Developer and the
water, sanitary sewer, and storm drain mains or other public
utility lines owned by the City or by any public utility company
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within or without such boundaries, or electric, gas , telephone
or other public utility lines owned by any public utility
company within or without such boundaries, and the Developer
shall secure any permits required for any such installation
without cost or expense to the City.
(4) Library and Senior Center. The City shall nego-
tiate and enter into a separate Agreement with the Architectural
firm of Kamnitzer Cotton Vreeland for their services in developing
architectural schematics, and full working .drawings and specifica-
tions on both the Senior Center and Library.
(5) Competitive Bids . City shall advertise for bids
in the normal process for the work to be done on the construc-
tion of the Senior Center and improvements to the Library.
SECTION 12 . Responsibilities of Developer Prior to Construc-
tion of Improvements
(1) Conditional Use Permit. Developer shall initiate
at its own cost and expense an application for a Conditional Use
Permit (CUP) immediately after the City Council adopts the EIR
and Specific Plan.
(2) Specific Plan. The Developer agrees to abide by
the requirements of the Specific Plan with respect to such things
as :
(a) Installation of sidewalks and street trees
(b) Street signs
(c) If Fire Department of City of Huntington
Beach shall require additional hydrants
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located on the housing site then the
City and Developer shall negotiate on
the respective cost of installation of
such additional fire hydrants.
(3) Development Fees . The Developer agrees to pay
the normal processing fees as may be adopted for the development
of the Property as were specified in the City's Request for Pro-
posals for such things as :
(a) Plan Check and Building Permits
(b) Water and Sewer Connection Fees
(c) Park and Recreation Fees
(d) Environmental Impact Report
(e) Conditional Use Permit
(f) County Sanitation District Fees
(g) Cultural Enrichment Fee
(h) Street Improvement Fee
(4) Schedule of Performance. The Developer shall pre-
pare a Schedule of Performance outlining the general processing
time-table for the processing of the application for mortgage
financing as well as the construction ;period and for the administra-
tive processing and approvals required. Such Schedule of Perform-
ance shall be attached to this Agreement as Exhibit "C. "
(5) Mortgage Financing. Developer shall immediately
submit an application to the Mortgagee for site and Developer
approval.
SECTION 13. Changes or Repair of Work After Public Improve-
ments are Constructed or Completed
Once Public improvements are constructed or completed any
changes required by the Developer shall be at the expense of the
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Developer. The City shall not be responsible for the removal,
restoration or repair of any pending, finished or completed work
which work must be or is removed or otherwise damaged by the
Developer in developing the Property.
The Developer shall bear all expense for restoring or re-
pairing any such work. These repairs , improvements and restoration
shall be constructed in accordance with the technical specifica-
tions and practices of the City. The City shall coordinate all
uncompleted work required under this Section with. Developer 's
schedule and activities so that all work may be completed in a
manner consistent with Developer ' s construction efforts . Any
other work to be performed by the City with reference to the Pro-
perty shall be as specified in the Development Plan and within
the times specified in the Schedule of Performance.
SECTION 14 . Restrictions on Use of Property
(a) Restriction on Use. The Developer agrees for itself,
and its successors and assigns , and every successor in interest
to the Property, or any part thereof, and the Lease shall contain
covenants on the part of the Developer for itself , and such suc-
cessors and assigns, that the Developer, and such successors and
assigns, shall:
(i) Devote the Property to, and only to and in
accordance with, the uses specified in this
Agreement; and
(ii) Not discriminate upon the basis of race, color,
marital status , religion, sex or national origin
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in the sale, lease, or rental or in the use
or occupancy of the Property or any improve-
ments erected or to be erected thereon, or
any part thereof.
Include the legend, "An Open Occupancy Building"
in type or lettering of easily legible size and
design in all advertising (including signs) for
the sale and/or rental of the whole or any part
of the Property. The word "Project" or
"Development" may be substituted for the word
"Building" where circumstances require substitu-
tion.
(iv) Comply with the regulations issued by the
Mortgagee and all applicable rules and regula-
tions issued pertaining to affirmative marketing,
affirmative actimn, leasing and employment
standards .
(v) Not use the Property for any purpose other than
for low and moderate income housing of senior
citizens .and handicapped persons for a period of
fifty-five (55) years from the date of the Lease,
or until maturity date of the mortgage pertaining
thereto, whichever is longer, or the period in
which Section 8 or a substantially equivalent
successor program is in effect. The mortgage on
the Property may not be prepaid without the
-21-
prior written approval of the City and
Mortgagee. For any unit rented with
subsidy assistance, senior citizens are
defined as single individuals over the age
of 62 years, or married couples, in which
case at least one spouse is over the age of
62 years or as HUD may subsequently redefine
it. For any unit rented at market rates,
senior citizens are defined as single indivi-
duals over the age of 58 years , or married
couples , in which case at least one spouse is
over the age of 58 years . If Developer prepays
the mortgage or transfers the Property before
the final mortgage debt has been paid, all other
documents relative to the prepayment, or transfer
shallcontain appropriate covenants requiring
such parcel to be used for low and moderate
income housing for the remaining years of the
period provided for in the preceding paragraph.
(b) Covenants; Binding upon Successors in Interest; Period
of Duration. It is intended and agreed, and the Lease shall so
expressly provide, that the agreements and covenants provided in
this SECTION 14 shall be covenants running with the land and that
they shall, i any event, and without regard to technical classifica-
tion or designation, legal or otherwise, and except only as other-
wise specifically provided in the Agreement, be binding, to the
-22-
fullest extent permitted by law and equity, for the benefit and
in favor of, and enforceable by, the City and any successor in
interest to the Property, or any part thereof, against the
Developer, its successors and assigns and every successor in
interest to the Property, or any part thereof or any interest
therein, and any party in possession or occupancy of the Property
or any part thereof.
SECTION 15 . Prohibitions Against Assignment. and Transfer
(a) Representations as to Development. The Developer re-
presents and agrees that its leasing of the Property, and its
other undertakings pursuant to the Agreement, are, and will be
used, for the purpose of development .of the Property and not for
speculation in land holding. The Developer further recognizes
that in view of:
(1) the importance of the development of the Pro-
perty to the general welfare of the community;
(2) the substantial financing and other public
aids that have been made available by law . for .the purpose of
making such development possible; and
(3) the fact that a transfer of the ownership
interest in the Developer or of a substantial part thereof, or
any other action or transaction involving or resulting in a signifi-
cant change in the ownership -or with respect to the identity of
the parties in control of the Developer or the degree thereof,
is for practical purposes a transfer of disposition of the pro-
perty then owned by the Developer;
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the qualifications and identity of the Developer are of particu-
lar concern to the community and the City. The Developer further
recognizes that it is because of such qualifications and identity
that the City is entering into the Agreement with the Developer,
and, in so doing, is further willing to accept and rely on the
obligations of the Developer for the faithful performance of
all undertakings and covenants hereby by- it to be performed with-
out requiring in addition a surety bond or similar undertaking
for such performance of all undertakings and covenants in the
Agreement.
(b) Prohibition Against Transfer of Property and Assignment
of Agreement'. Also, for the. foregoing reasons, the Developer
represents and agrees for itself, and its successors and assigns,
the Developer will not transfer the Lease to the Property nor
assign any of its obligations undertaken by this Agreement except
that:
(1) For security purposes to obtain financing neces-
sary to enable the Developer, or any successor in interest to
the Property, or any part thereof, to perform its obligations
with respect to making the Improvements under the Agreement, and
(2) Prior to the initial endorsement of the mortgage
by Mortgagee, Developer may assign all or a portion of its
rights and obligations under this Agreement to a joint venture,
limited or general partnership for the purpose of acquiring and
developing the Property provided that Mortgagee approves the
transfer in writing and the said joint venture, limited or
-24-
4
general partnership or other entity agrees in writing to be
bound by all of the provisions of this Agreement.
(3) The City shall be entitled to require, except as
otherwise provided in the:;Agreement, as conditions -to required
prior written approval of any transfer that:
(i) Any proposed transferee shall have the
qualifications and financial. responsibility,
as determined by the City, necessary and
adequate to fulfill the obligation under-
taken in -the Agreement by the .Developer (or,
in the event the transfer is of or relates
to part of the Property, such obligations
to the extent that they relate to such part). .
(ii) Any proposed transferee, by instrument in
writing satisfactory to the, 'City and in form
recordable among the land records, shall, for
itself and its successors and assigns , and
expressly. for the benefit of the City, have
expressly assumed all of the obligations of
the Developer under the Agreement and agreed
to be subject to all the conditions and re-
strictions to which the Developer is subject
(or, in event the transfer is of or relates
to part of the Property, such obligations,
conditions, and restrictions to the extent
that they relate to such part) : Provided,
-25-
that the fact that any transferr of, or any
other successor in interest whatsoever to,
the Property, or any part thereof, shall,
whatever the reason, not have assumed such
obligations or so agreed, shall not (,unless.
and only to the extent otherwise specifically
provided in the Agreement or agreed to in
writing by the City) relieve or except such
transferee or successor of or from such
obligations , conditions or restrictions , or
deprive or limit the City or with respect to
any rights or remedies or controls with
respect to the Property or the construction
of the Improvements; it being the intent of
this, together with other provisions of the
Agreement, that (to the fullest extent per-
mitted by law and equity and excepting only
in the manner and to the extent specifically
provided otherwise in this Agreement) no
transfer of, or change with respect to, lease-
hold in the Property or any. part thereof, or
any interest therein, however consummated or
occurring, and whether voluntary or involuntary,
shall operate, legally or practically, to
deprive or limit the City of or with respect
to any rights or remedies or controls provided
in or resulting from the Agreement with respect
to the Property and the construction of the
-26-
Improvements that the City would have had,
had there been no such transfer or change.
(iii) There shall be submitted to the City for
review all instruments and other legal docu-
ments affecting the identity or name style
of Developer or its successors; and if ap-
proved by the City, its approval shall be
indicated to the Developer in writing.
(iv) The Developer and its transferee shall comply
with such other reasonable conditions as
the City may find desirable in order to
achieve and safeguard the purposes of the
Development Plan. Provided, that in the
absence of specific written agreement by the
City to the contrary, no such transfer or ap-
proval by the City thereof shall be deemed to
relieve the Developer, or any other party bound
in any way by the Agreement or otherwise with
respect to the construction of the Improvements,
from any of its obligations with respect thereto.
SECTION 16 Remedies
(a) In General. Except as to any failure of the conditions
precedent set forth in SECTION 5 hereof, and as otherwise provided
in the Agreement, in the event of any default in or breach of the
Agreement, or any of its terms or conditions by either party hereto,
or any successor to such party, such party (or successor) shall,
-27-
upon written notice from the other, proceed immediately to cure
or remedy such default or breach, and, in any event, within
sixty (60) days after receipt of such notice. In case such
action is not taken or not diligently pursued, or the default or
breach shall not be cured or remedied within a reasonable time,
the aggrieved party may institute such proceedings as may be
necessary or desirable in its opinion to cure and remedy such
default or breach, including, but not limited to, proceedings
to compel specific performance by the party in default or breach
of its obligations.
(b) Termination by City Prior to Conveyance. Subject to
SECTION 16 (f) , in the event that prior to execution of Lease to
the Property to the Developer and in violation of this Agreement
Developer fails to meet its obligations hereunder, including,
without limitation, any failure by Developer to make a good
faith effort to fulfill the conditions precedent, and at the
option of the City, this Agreement shall be terminated and any
rights of the Developer, or any assignee or transferree, in the
Agreement, or arising therefrom with respect to the City or the
Property, shall, at the option of the City, be terminated by the
City, and neither the Developer (or assignee or transferee) nor
the City shall have any further rights against or liability to
the other under the Agreement.
In the event the City terminates this Agreement prior to con-
veyance, as provided herein, any services rendered or funds ex-
pended by the Developer shall be absorbed by the Developer without
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recoupment whatsoever, and neither the Developer nor the City
shall have any further rights against or liability to the other.
(c) Termination by Developer Prior to Execution of Lease.
Subject to SECTION 16 (f) , in the event that the City does not
tender possession of the Property in the manner and condition,
and by the date provided in the Agreement, and any such failure
shall not be cured within thirty (30) days after the date of
written demand by the Developer, then the Agreement shall, at the
option of the Developer, be terminated by written notice thereof
to the City, and neither the City nor the Developer shall have
any further rights against or liability to the other except as
provided under the Agreement. In the event the Developer termin-
ates this Agreement under those conditions set out in the previous
sentence, the Developer shall be entitled to a refund of any funds
advanced to obtain a Mortgagee commitment for financing, if not
otherwise refundable., plus 50% of all certifiable out-of-pocket
costs directly attributable to this project represented by
Mortgagee filing fees , the out-of-pocket cost of preparing final
architectural and egineering plans and specifications , plan check
fees, and building permit fees .
(d) Rights and Liabilities Termination Prior to Possession.
The City and Developer agree that it would be impractical or ex-
tremely difficult to fix actual damages in case of termination
prior to conveyance and therefore agree that their rights and
liabilities to the other under this Agreement are limited to those
provided in paragraphs (b) and (c) of the SECTION 16.
-29-
(e) Other Rights and Remedies of Parties ; No Waiver by Delay.
The parties shall have the right to institute such actions or pro-
ceedings as it may deem desirable for effectuating the purposes
of the SECTION 16 including also the right to execute and record
or file among the public land records in the office in which the
Lease is recorded a written declaration of the termination of
all the right, title, and interest of the Developer, and (subject
to such mortgage liens and leasehold interests as provided in
this SECTION 16 hereof) its successors in- interest and assigns, in
the - Property, and the revesting of title thereto in the City:
Provided, that any delay by the parties in instituting or prose .
cuting any such action or proceedings or otherwise asserting its
rights under this Agreement shall not operate as a waiver of such
rights or to deprive them of or limit such rights in any way (it
being the intent of this provision that the party should not be
constrained so as to avoid the risk of being deprived of or limited
in the exercise of the remedy provided in this Section because of
concepts of waiver, laches, or otherwise to exercise such remedy
at a time when it may still hope otherwise to resolve the problems
created by the default involved) ; nor shall any waiver in fact
made by one party with respect to any specific default by the
other party under this Section be considered or treated as a
waiver of rights of one party with respect to other defaults by
the other party under this Section or with respect to the particular
default except to the extent specifically waived in writing.
(f) Enforced Delay in Performance for Causes Beyond Control
of Party. For the .purposes of any of the provisions of the Agreement
-30-
neither the City nor the Developer as the case may be, nor any
successor in interest, shall be considered in breach of, or
default in, its obligations with respect to the preparation of
the Property for development, or the beginning and completion of
construction of the Improvements , or progress in respect thereto,
in the event of enforced delay in the performance of such obliga-
tions due to unforseeable causes beyond its control and without
its fault or negligence, including, but not restricted to, acts
of God, acts of the public enemy, acts of the Federal or State
government, including processing of financing commitments , acts
of the other .party, fires, floods, epidemics, quarantine restric-
tions , strikes, freight, embargoes and unusually severe weather
or delays of subcontractors due to such causes; it being the
purpose and intent of this provision that in the event of the
occurrence of any such enforced delay, the time or times for per-
formance of the City with respect to the preparation of the Pro-
perty for development or of the Developer with respect to con-
struction-of the Improvements, as. the case may be, shall be ex-
tended for the period of . the enforced delay as determined by
the City: Provided, that the party seeking the benefit of the
provisions of this Section shall, within thirty (30) days after
the beginning of any such enforced delay, have first notified the
other party thereof in writing, and of the cause or causes thereof,
and requested an extension for the period of the enforced delay.
(g) Rights and Remedies Cumulative. The rights and remedies
of the parties to the Agreement, whether provided by law or by the
Agreement, shall be cumulative, and the exercise by either party
-31-
of any one or more of such remedies shall not predlude the exercise
by it, at the same or different times, of any other such remedies
for the same default or breach or of any of its remedies for any
other default or breach by the other party. No waiver made by
either such party with respect to the performance, or manner or
time thereof, or any obligation of the other party or any condition
to its own obligation under the Agreement shall be considered a
waiver of any rights of the party making the waiver with respect
to the particular obligation of the other party or condition to
its own obligation beyond those expressly waived in writing and
to the extent thereof, or a waiver in any respect in regard to
any other rights of the party making the waiver or any other obliga-
tions of the other party.
SECTION 17. Special Provisions
(a) Tax Exemption. The Property shall not be removed from
the property tax rolls and shall not be exempted from property
tax payments, except under programs now or hereafter enacted by
the State of California for the general relief of homeowners.
Developer for itself and for its successors and assigns agrees
to pay taxes attributable to the leasehold improvements and not
to file an application for exemption from property tax assessment
and payment, except for those exemptions which may now exist or
hereafter be enacted by the State of California for the general
relief of homeowners . This in no way limits Developer' s right to
question or seek reduction of any assessed valuation of the pro-
perty.
-32
(b) Bodily Injury and Property Damage Insurance. Before
commencement of any work of improvement upon the Property, the
Developer shall furnish or cause to be furnished to the City
duplicate originals or appropriate certificates of bodily injury
and property damage insurance policies in the amount of at
least $500,000 for any person, $1,000,000 for any occurrence
and $100,000 .property damage, the City to be named as co-insured.
(c) Maintenance :of Land Prior to Construction. The
Developer shall maintain the cleared land he leases within the
Project Area in a neat and orderly condition between the date
of possession and.. the commencement of construction.
(d) Execution of Documents. The City and the Developer
agree to execute any and all documents that may be necessarily
required by California Housing Finance Agency in connection with
this Project.
(e) Environmental Impact Documents. As a condition precedent
to Developer' s obligation to lease the Property hereunder, the
City shall have caused to be prepared and approved such environ-
mental findings and documentation for the Development Plan for
the Project with respect to improvements contemplated in the
Scope of Development, as. may be required by the California En-
vironmental Quality Act of 1970, as amended (CEQA) , the Coastal
Commission and all applicable state regulations and local ordinances
with respect thereto, so that the Developer and the City shall be
legally entitled under the California Environmental Quality Act
of 1970 and all state regulations and local ordinances to construct
-33-
and use the improvements contemplated in the Scope of Development
(and all time periods for any judicial or administrative appeal
from or collateral attack upon such findings, or the approval
thereof, or the applicability thereof to the Project shall have
expired and no such appeal or attack shall be pending) . The
Developer shall pay a proportionate share of the said fee as
relates to the Property and shall provide all reasonable assist-
ance to the City and the Agency in satisfying the foregoing con-
ditions.
The Developer shall comply with all mitigation measures pro-
posed to minimize adverse impacts resulting from project imple-
mentation which are included in- any such environmental documenta-
tion.
(f) City and Other Governmental Agency Permits and Fees .
Before commencement of construction or development of any buildings,
structures or other work or improvement upon the Property or any
portion thereof, the Developer shall at its own expense secure or
cause to be . secured any and all permits and pay any and all fees
and charges which may be required by the City or any other govern-
mental agency affected by such construction, development or work.
The City shall provide all proper assistance to the Developer in
securing such permits.
(g) Successors in Interest. The terms of this Agreement
shall bind the parties , namely the City, and Developer, and their
successors in interest, if any.
(h) Provisions Not Merged with Lease. None of the pro-
visions of the Agreement are intended to or shall be merged by
-34-
reason of any lease transferring possession to the Property from
the City to the Developer or any successor in interest, and any
such lease shall not be deemed to affect or impair: the provisions
and covenants of the Agreement.
(i) Titles of Sections . Any titles of the several Sections
of the Agreement are inserted for convenience of reference only
and shall be disregarded in construing or interpreting any of its
provisions .
SECTION 18. Counterparts .
This Agreement is executed in five (5) counterparts , each of
which is deemed to be an original.
SECTION 19 . Entire Agreement, Waivers, and Amendments .
The Agreement integrates all of the terms and conditions men-
tioned herein or incidental hereto, and supersedes all negotiations
or previous agreements between .the parties with respect to all or
any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in
writing by the appropriate authorities of the City or the Developer
and all amendments hereto must be in writing by the appropriate
authorities of the City and .the Developer.
SECTION 20 . Time for Acceptance of Agreement by City.
This Agreement, when executed by the Developer and delivered
to the City must be authorized, executed and delivered by the
City within thirty (30) days after the date of signature by the
Developer or this Agreement. shall be void, except to the extent
-35-
that the Developer shall consent in writing to a further extension
of time for the authorization, execution and delivery of this
Agreement. The date of this Agreement shall be the date when
the Agreement shall have been signed by the City.
The City and the Developer .covenant that each individual
executing this document by and on behalf of each party hereto is
a person duly authorized to execute contracts for that party.
SECTION 21. Conflict of Interest; Agency' s Representative
Not Individually Liable..
No member, official, or employee of the City 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 this Agreement that affects his personal
interest or the interest of any corporation, partnership, or
association in which he is, directly or indirectly, interested.
No member, official, or employee of the City shall be personally
liable to Developer or any successor in interest in the event of
any default or breach by the City, or for any amount that may
become due to Developer or successor, or on any obligation under
the terms of this Agreement.
IN WITNESS WHEREOF, the City and the Developer have signed
this Agreement as of the dates set oppostire their signatures.
CITY OF HUNTINGTON BEACH
DATE: By:
Mayor
- 36-
ATTEST: APPROVED -AS TO FORM
By:
City Clerk City Attorney
,1
I
WILLIAM LYON COMPANY
DATE: By:
ATTEST:
Secretary
-37-
T
90 WILLIAM LYON'Wav,31.,,vw1
19 CORPORATE PLAZA, NEWPORT BEACH, CALIF 92660 (714) 833 -3600
September 5, 1980
City of Huntington Beach
PO Box 190
Huntington Beach, CA 92648
Attention: Steve Kohler
Subject: Huntington Seaview = Section 8
Dear Steve:
I would like to request your cooperation in .resolving the various offsite
questions related to the development of this project. We are now in the
process of attempting to get a firm construction loan commitment from CHFA
and need to adequately identify all the expenses related to this project.
The following questions I Believe still need to be resolved:
1. The exact location and size of various services which will be
extended to our property. line by the city. I feel a base map needs
to be prepared by your public works in coordination with our architect
to determine the best locations.
2. We need to clear up at this time exactly what street improvements, which
are being required by the city for the development of this property, are
going to be made .by the city and if there are adequate funds available
for them I have enclosed a copy of a letter from Paul Cook
identifying what street improvements are being required.
I would appreciate your help in resolving these areas as soon as possible
so we can complete our application to CHFA.
Sincerely,
THE WILLIAM LYON COMPANY'
Brian Irktis
Proj ct M na er
BVN:ss
cc: John tt n
REAL ESTATE DEVELOPMENT
f 1�
CITY OF H`JN'Y'INGTON BEACH
2000 MAIN STREET (714) 536-5431 CALIFORNIA 92648
P. 0. Box 190
Paul E. Cook June 30 , 1980 Public Works Department
Director
41
80
The William Lyon Company _
19 Corporate Plaza
Newport Beach, CA 92660
Subject: Department of Public Works
Development Requirements
Ref: 80-52 (CUP 80-11)
Location: Between 5th, 6th & Main $
Gentlemen: Orange
A copy of your application for development at the above loca-
tion has been forwarded to this office. In an effort to assist
you in processing your application, we have sent this letter in-
forming you of the various fees, dedications and other conditions
-involving Public Works requirements per the Huntington Beach
Municipal Code.
The items checked indicate those fees and requirements of the
Department of Public Works, which are a condition of approval of
your development. The fees must be paid and dedication made prior
to issuance of building permits. If dedication is required, please
have the attached deed signed, notarized and returned to this
office for processing. All other requirements must be completed
prior to occupancy.
If street improvements are required, the Municipal Code states
that the street improvement plans must be submitted to the City for
plan check prior to issuance of building permits. Additionally,
the street improvements must be completed prior to framing inspection.
Please be advised that other City Departments may have require-
ments in addition to those listed herein.
If you have any questions, please contact Mr . Bruce Crosby or
Don Noble at (714) 536-5431.
i •
FEES
Sewer ❑ $90. 00 for the first dwelling unit, plus the sum of
$60. 00 for each additional dwelling unit on parcels
containing less than 10,000 square feet.
1 unit @ $90/unit $90.00 .
units @ $60/unit $
Total $
® $60.00 per dwelling unit or $300 per acre whichever
is greater for parcels containing more- than 10,000 sq. ft.
157 units @ $60/unit $9 ,420 . 00
acreas @ $300/acre $
Q $300/per acre for allcommercial and industrial
developments.
acres @ $300/acre $
Orange County Sanitation District Nos. 3 & 11
❑ $50 for each 1000 sq. ft. of floor area with a $250/min
(commercial and industrial)
s. f. @ $50/1000 s. f. $
gj $250. 00 per dwelling unit
157 units @ $250/unit $39., 250. 00
Water ® $30/per dwelling unit or $150/per acre whichever is
greater.
157 units @ $30/unit $4 , 710 . 00
acres @ $150/acre $
® $6. 00 per unit for water used during construction
ISM units @ $6/unit $ 942 . 00
Drainage Your property is located in Drainage District No.
for which the fee is $ per acre.
[] acres @ $ /acre = $
❑ Developer to pay cost of paving 1/2 of
and 1/2 of alley $
-2-
Trees ❑ For City to furnish and install 15 gal. tree(s)
@ $75. 00/tree = $
❑ For City to furnish and install 20 boxed tree(s)
t
@ $150. 00/tree = $
Note: There may be special fees in addition. to those listed
above. Please check with the Dept. of Public Works. All
fees are due prior to issuance of building permits. -
EASEMENTS OR R/W DEDICATION
❑ feet of dedication required off of
❑ feet of dedication required off of alley
® 20. 00 foot radius required at the intersection of
Orange and 5th $ 6th
❑ foot by foot corner cut off required
-at and
foot storm drain easement required.
❑ foot sewer line easement required.
❑ foot water line easement required.
❑ foot public utility easement required along
Note: All utility easements must be entirely on one lot and
ten (10. 00) feet minimum in width. All dedications are
required prior to issuance of building permits.
STREET IMPROVEMENTS
Remove and replace existing curb and gutter.
gg Remove and replace existing sidewalk.
❑ Construct new sidewalk.
(] Construct new curb and gutter.
❑ Remove and relocate existing driveway.
❑ Construct new driveway where curb and gutter is existing.
[3 Remove and replace existing pavement to center of street.
❑ Construct new driveway.
Install street lights per Edison Co. requirements.
-3-
sJ
` ❑ Install parkway trees per Dept. of Public Works requirements.
❑ Install landscaping per Dept. of Public Works requirements.
Join existing edge of pavement with new construction.
r ❑ Extend water main.
❑ Extend sewer main.
Install V.C.P. sewer lateral.
❑ Install on-site fire mains.
Install water service.
❑ Install fire hydrant.
❑ Install traffic signs, barricades, street name signs.
❑ Install traffic striping.
i
)(M Install CATV (Cable Antenna Television) .
❑ Install storm drain facilities.
❑ Grade to drain at ends of new improvements.
❑ Construct temporary paving transitions.
❑ Install street lighting conduit only.
Pecan Ave. to be vacated (send request to vacate) .
Note: All existing improvements not requiring replacement shall
be protected in place.
Parcel Map required prior to occupancy.:
Street improvement plans are required for the above listed
work and are -to be submitted for plan check prior to
issuance of building permits.
On-site water utility improvement plans are required for
above listed work and are to be submitted for plan check
prior to issuance of building permits.
Very truly yours,
Paul E. Cook
Director of Public Works
PEC:BPC
-4-
CITY OF HUNTINGTON BEACH.<
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To Floyd G. Belsito From James W. Palin, Director
City Administrator Development Services .
Subject PARTICIPATION AGREEMENT: THE Date July 30, 1979
WILLIAM LYON COMPANY; OLD CIVIC
CENTER PROJECT
Attached is the final Participation Agreement between the City
and the William Lyon Company for the provision. of housing on
the Old Civic Center Site. The Agreement has been approved by
the City Attorney, duly executed by the. William Lyon Company
and is now ready for consideration by the City Council.
This Agreement was one of the topics of discussion at the .
Council ' s July 16, 1979 Study Session. At that time, the
Council requested that it be presented to them for action on
the Council ' s August 6, 1979 Agenda. It is now transmitted to
you for that purpose.
If ou s ould have any questions regarding the Participation
eem please contact Stephen V. Kohler at extension 5541.
,O
JW K:gc
CERTIFIED COPY OF RESOLUTION
OF
BOARD OF DIRECTORS
OF
THE WILLIA14 LYON COMPANY
A California Corporation
PESOLVFD, that Peter M. Ochs , president, and Joyce E.
Clendenin, Assistant Secretary, be and they hereby are authorized
and directed to enter into a "Participation -Agreement for Leasing
of Land for Private Development, " between this corporation and the
City of Huntington Beach, for development on the property known as
the O7.d.. Civic renter Site for construction and operation of a
senior citizens housing development.
I, Joyce E. Clendenin, hereby certify as follows :
I am now and at al.l.: times herein mentioned have been
the duly elected and acting Assistant Secretary of The William Lyon
Company, a California corporation; that the foregoing is a true
and correct copy of a resolution duly adopted by. the Board of
Directors of said corporation. at a regular meeting held on April 17,
1979; that the same has not heen repealed or annulled and is in
full force and effect.
Dated: July 30, 1979.
Asgisvlant Secretary.
ATTEST:
t �
ames E. qeMam , Vice president u
OFFICE OF
ota°"�1N6fp"BF CITY ATTORNEY
- - s
P.O.BOX 190
2000 MAIN STREET
HUNTINGTON BEACH
CALIFORNIA 92648
GAIL HUTTON TELEPHONE
City Attorney (714)536-6555
July . 26, 1979
Mr. Michael A. Casciola
HOUSING CONCEPTS
17895 Sky Park Circle
Irvine, California 92714
Re : Participation Agreement
Dear Mr . Casciola :
Recommendations on Participation Contract are as follows :
1. O. K.
2 . Auld provision which allows bond to be substituted by
a like guarantee of performance from the State of California or
any agency thereof (per agreement of parties ) .
3. O. K.
4 . O.K. , but add "80% to 120%" median income limitation.
5. Strike only the words . "the identity of the parties" .
6 . O .K. .
7. No . Impairs the. city ' s security, violates selection
procedure, is. implied in right to review and approve transfers .
8. Leave in. Valid requirement for review of potential
transferee.
9 . No . City should be protected in all matters pertaining
to risks created by .developer.
Very truly yours ,
ARTHUR DE LA LOZA /
Deputy City Attorney ! '
ADL:ps
' MICHAEL A. CASCIOLA
ATTORNEY AT LAW
S3692 CALLS CONEJO
SAN JUAN CAPISTRANO. CAUP. 92675
(714) 496.9825
I'
July 18, 19.79
Mr. Stephen V. Kohler
Senior Community Development Specialist
City of Huntington Beach
Re: Participation Agreement
Dear Steve,
The William Lyon Company's executive staff's final
review of the proposed agreement has resulted in their re-
commendation of ' some modifications which are detailed as
follows:
1. Page 2; the fourth yI@ereas down from the top should read
"Developer was notified
I 2. Page 14; Section 10, (E) ii; initially the developer had
language to the effect .that it may provide either a parfor-
mance bod or a Lettt" ofr*. Initial review,by. the city' s
12rgal department suggested that the reference to •the Letter
of Credit be removed:
The Developer intends to secure financing for this
project through the California Housing Financing Agency (CHFA) .
CHFA's policy has been to accept either a performance bond or
a Letter of Credit for an amount equal to a fixed percentage
of the construction amount. The Developer would like to re-
tain this flexibility to select that which is. less expensive
to provide and yet assure both the CHFA as lender and the
city that the construction of the improvements is secure. i
Thus ii should read;
(ii) A copy, certified by the Developer to be a true
and correct copy, of contractor's bonds covering labor, mater-
ials and performance for an amount equal to one hundred per-
cent (1000) of the construction price or a Letter of Credit
equal to fifteen percent (15%) of the construction price in
the contract entered into by Developer and its general con-
tractor. Said bonds or Letter of Credit and the construction
new construction-rehatHlilation
senior citizens-families Housing Concepts.
Michael A. casci a
17895 Sky Park Circle,Suite A
Irvine,CA 92714 714-540-8245
V
contract must conform to mortgagee' s requirements and be
approved by the Community Development,Director .prior to com-
mencement. of construction. . . . .
3. Two pages were numbered 17 and the agreement -must be num-
bered and Table of Contents renumbered.
4. Page 21, (V) ;
Add on second line from the bottom after "program is
in effect" _ "on those units for which a Contract for
Rental Assistance Payments has been executed with HUD, CHFA
or Orange County Housing Authority.
Page 22; half way down the page after the words "58 years. "
add, "and wi hout limitation as to net worth, earnings or
income. l -w�. ^'r o')e x.
Developers goal is to obtain rental assi ance on a
maximum number of units by virtue of CHFA's agreeing to pro-
vide subsidy for 49% of the units and the balance of subsidy
to be achieved by utilizing the Recently Completed program
with the Orange County Housing Authority. It would be de-
trimental for the Developer to commit to maintaining all of
the units for low and moderate income seniors when the possi-
bility exists that some of the units will be rented at the
market rate. Therefore we propose these modifications to
permit flexibility to seek families who can rent at the market
rate without income limitations.
5. Page 23, Section 15 (a) 3; The William Lyon Company has
agreed not to transfer ownership of this project in violation
of this agreement. However, it is a corporate developer and
internal identities may change from time to time and such
changes should not be considered a transfer of ownership and
a violation of the agreement.
We propose to modify (3) as follows:
(3) the fact that a transfer of the ownership interest of the
Developer of this Project, or of a substantial part thereof,
strike "or with respect to ... -awn - f the-pa�t-ies--in
control of the Developer or the degree thereof, "
6. Page 24 , (b) (i) ; strike out the words "with respect to
making the Improvements" .
This will allow the Developer greater flexibility to
seek additional financing resources over the long term of the
project. The way it was written financing could only be ob-
tained initially for the improvements.
-2-
An alternative would be to add the words or main-
taining" after "making. "
7. Page 25, (3) (i) ; - the Developer-proposed to strike this
subparagraph.
The agreement in subparagraph (ii) and (iv) have ad-
equate safeguards to protect the city as to the capability of
the proposed transferee .in the event the Developer wishes to
transfer its rights under the agreement.
8. Page 27 , (iii) ; strike out
If city wishes to receive evidence to the effect that
a substitute entity has been legally formed the Developer will
provide a copy of a Certificate of Partnership and/or Articles
of Incorporation, whichever is applicable.
9. Page 35; Hold Harmles clause. Should be modified to re-
strict Developer' s commitment to hold city harmless on Devel-
opers activities pertaining to the leasehold improvements.
If we can agree on these proposed changes quickly we
-can have the amended agreement back for review and approval by
the city attorney in time for the Council action at its August
6th meeting.
Very truly yours,
ichael A. Casciola
-3-
CITY OF HunTin (; Ton BEACH
DEPARTMENT OF DEVELOPMENT SERVICES
BUILDING DIVISION(714)536-5241 PLANNING DIVISION (714)53675271
• P.O.Box 190, HUNTINGTON BEACH,CALIFORNIA,92648
Mr. Brian Norkaitis, Project Manager July 13, 1979
The William Lyon Company
19 Corporate Plaza
Newport Beach, California 92660 .
Subjects Participation Agreement; Senior Housing
at Old Civic Center Site
Dear Brian:
Enclosed please find a copy of the final "Participation Agreement" for
the subject project as approved by the City Administrator, City Attorney, \
and the. Director of Development Services. Please note the following
regarding the agreement:
1. Hold Harmless: Section 17, paragraph (j) , page 35:. The City Attor-
ney has inserted a clause binding your firm to hold. the City harm-
less in any actions arising from activities included in this
agreement, and requiring your firm to show to the City proof of
workers compensation insurance.
2. The agreement must be executed by two (2) : officers of your corpora-
tion. We suggest the president and secretary execute the agreement;
however, if the secretary is not available, another officer may.
execute. Under this circumstance, please feel at liberty to correct
the signature page title block labeled "Secretary" to the appropriate
title of the executing officer.
3. The agreement calls for execution of the document in five (5) counter-
parts. If you do not object, I suggest awaiting the City Council
approval of the agreement before executing the required counterparts.
4. Please return the original signature page to me so that it may be
incorporated in the complete original copy of the agreement which we
. have retained.
If you should have any questions, please do not hesitate to call.
Very truly yours,
Stephen V. Kohler
Senior Community Development Specialist
SVK:df
Enclosure: Participation Agreement
�a .
t S.ev e
1-
REQUEST FOR: CITY COUNCIL ACTION
Submitted-by.. James: W. P'a;1n. Department: Development Services.
Jate,Prepared-.. July, _3, , 1.9.79' Backup.Material:Attached- X Yes. Nq.
Subject. APPROVAL OF PART ICI PATTON; AGREEMENT WITH_ WK., LYON. CO.j OLD
CIVIC' CENTER PROJECT
City Administrator's Comments
Approve. as recommended.
Statement of Issue,.Recommendation, Analysis, Funding.Source, Alternative Actions:
STATEMENT OF ISSUE:
Since the City Cbuncil `s selection of the Wm. Lyon Company' s proposal
for the subject site on April 2 , 1979 , many steps toward the implementa-
tion of facilities have been taken. Pred-icated upon the Council ' s
minute action, the Wm. Lyon Company has acted in good faith during this
formative . period. The project has now reached a stage where it is
necessary and advisable to formalize the responsibilities of both the
Lyon Company and the City regarding the . site to be leased for housing
through means of the attached Participation Agreement.
RECOMMENDATION:
Approve and order the City Clerk to execute the attached Participation
Agreement between the City and the Wm. Lyon Company.
ANALYSIS:
The Request for Proposal distributed to proponents of this project
stipulated the basic relationship between the selected developer and
the City of Huntington Beach. It both provided proponents with informa-
tion about actions .the City would take to prepare the leasehold site
for construction of housing units and mandated certain actions by the
developer in return for the City' s participation and financial commit-
ment.
The Participation Agreement addresses only the housing site and goes
beyond the Request for Proposals by addressing the specific conditions
under which the housing project will proceed. It provides assurances
to both parties that the .other will perform upon its responsibilities
and offers remedies in the event of non-performance. Through the
a
Plo 3178 C
r
Partici-pation Agreemen
.July 3, 1979
Page 2
vehicle of this agreement, then, the City and the developer fully
state intentions at the outset of this project.
The attached summary provides an overview of the provisions of the
most important sections of the Participation Agreement.
ALTERNATIVES:
Approval of a Participation Agreement is necessary to continue with
implementation of this project.
FUNDING SOURCE:
U.S. Department of Housing and Urban Development, Housing and Community
Development Program: $40,000 currently budgeted for the principal
costs to the City of offsite .improvements and s to preparation.
espectfully submitted,
mes W. alin, Director
Department of Development Services
JWP:SVK:df
Attachments : Participation Agreement
Summary
e
SUMMARY OF
PROPOSED PARTICIPATION AGREEMENT BETWEEN
CITY AND THE WILLIAM. LYON CO.
SECTION NO. GENERAL REQUIREMENTS
Section 1 & Stipulate the term of lease at 55 years at
Section 2 $1. 00 per year and the framework for lease
agreement to follow.
Section 6' Requires construction of housing to begin
within 2 months of approval of mortgage
financing.
Section 8 Reserves the City' s right of access to the
leased property for the full term of the
lease.
Section 9 a. Requires housing to be in conformance
with zoning (specific plan) .
b. Development Services will review and
approve construction drawings.
C. Requires submission to the City of a.
landscape plan.
e. Requires architect to certify plans to be
in conformance with City requirements.
f. Requires that changes in construction
drawings be approved or -disapproved by
City within 15 days..
h. Requires that the developer make progress
reports on construction to the City.
Section 10 a-d. Require that developer submit plans to
City in conformance with Schedule of Per-
formance (see attached Exhibit C) .
e. Requires developer to submit to City evi-
dence of mortgage financing and construc-
tion performance bond for City approval .
1
f. Requires City to issue Certificate of
Occupancy at completion of improvements ,
or provide developer with written state-
ment of cause for non-issuance.
► riye G
SI.CTION NO. GENERAL REQUIREMENTS
Section 11 Requires City to prepare site for construc-
tion of 'apartments by performing as follows :
1. Conduct a survey of site (completed) .
2. Conduct a soils report of site (completed) .
3. Approve General Plan Amendment (completed) .
4 . Prepare zone change (under way) .
5. Prepare EIR, with cost shared by the City
and developer (under way) .
6. Prepare and submit application for Coastal
Commission permit (no cost) .
7. Demolish and remove existing buildings and
fill resulting cavities (HCD funds - $60,000) .
8 . Relocate or remove utility lines on site
(none necessary) .
9 . Developer responsible for finish grading`;
salvage rights to City.
City shall also:
vacate street right-of-way (UKUA rWAT)
. install necessary public utility i provements
to property line of leasehold onlyC' ,�1VWhQ
. enter separate agreements for architectural
services
. receive competitive bids for construction
of senior center and library improvements.
Section 12 1. Requires developer to file for Conditional
Use Permit at own expense.
2. Requires developer to abide by Specific
Plan zoning requirements .
3. Developer agrees to pay City development
fees.
4 . Developer agrees to abide by Schedule of
Performance.
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SECTION NO. (U NERAT., REQUTREMBMT'S
Section 13 Requires developer to replace or repair any
public improvements damaged by construction.
Section 14 Requires developer or any successor to use
property solely for housing for low- and
moderate-income senior citizens.
Section 15 Permits developer to transfer interest to a
joint venture, limited or general partnership
with City approval. Requires any successors
to abide by all provisions of this agreement
and warrantees plans to be fulfilled despite
transfer of interest.
Section 16 Permits termination of agreement for cause by
either party within 60 days ' notice and estab-
lishes causes for termination and remedies to
Aggrieved party.
Also permits extensions of Schedule of Perform-
ance due to circumstances beyond control of
City or developer, provided 30-day notice of
delay is given.
Section 17 Requires developer to pay property tax on im-
provements; provide liability insurance; comply
with EIR findings; acquire City permits as
necessary.
Section 21 Prevents private interest by City employees in
development; also holds harmless City employees
from individual liability for non-performance.
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CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
W NTMG10M UACM
To Floyd G. Belsito From James W. Polin, 'Director
City Administrator Development .Services
Subject PARTICIPATION AGREEMENT: THE Date July 30, 1979
WILLIAM LYON COMPANY; OLD CIVIC
CENTER PROJECT
Attached is the final Participation Agreement ,between the City
and the William Lyon Company for the provision- of housing on
the Old Civic Center Site. The Agreement has been approved by
the City Attorney, duly executed by the William Lyon Company
and is now ready for consideration by the City Council. °
i
This Agreement was one of the' topics of discussion at the.
Council ',s July 16, 1979 Study Session. At that time, the
Council requested that it be presented to them` for action on
the Council ' s August 6,. 1979 Agenda. It is now transmitted to
you for that purpose.
If: ou s ould. have any questions regarding the Participation
eem please contact Stephen-V. Kohler at extension 5541.
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PARTICIPATION AGREEMENT
FOR THE
LEASING OF CERTAIN LAND FOR
PRIVATE DEVELOPMENT
BY AND BETWEEN
THE CITY OF HUNTINGTON .BEACH, A MUNICIPAL CORPORATION
AND
THE WILLIAM LYON COMPANY
TABLE OF CONTENTS
P age
SECTION 1 Lease 3
(a) Duration 3
SECTION 2 City Requirements 4
(a) Occupancy and .Use 4
(b) Maintenance and Operation of
Property 4
(c) Landscaping 4
(d) Taxes 4
(e) Insurance 4
SECTION 3 Recordation of Lease 4
SECTION 4 Title Policy 5
SECTION 5 Conditions Precedent 5
SECTION 6 Time for Commencement and Completion
of Improvements 6
SECTION 7 Notices and Demands 6
SECTION 8 Rights of Access to Property 7
(a) Right of Entry for Utility Service 7
(b) Developer Not to Construct Over
Utility Easements 7
(c) Access to Property 7
SECTION 9 . . Construction of Improvements 8
(a) Plans for Construction Improvements 8
(b) Construction Drawings and Related
Documents 8
(c) Landscaping Plan 9
(d) City Approval of Construction Plans
and Drawings 9
(e) Architect's Certification 10
(f) Changes in Construction Plans 11
(g) Commencement and Completion of
Construction of Improvements 11
(h) Progress Reports 12
SECTION 10 Time for Certain Other Actions
(a) Time for Submission of Construction
Plans 12
G �
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TABLE OF CONTENTS
(continued)
Page
(b) Time for Submission of Corrected
Construction Plans 12
(c) Maximum Time for Approved Con-
struction Plans 13
(d) Time for City Action on Change
in Construction Plans 13
(e) Time for Submission of Evidence
of Equity Capital, Mortgage
Financing and Construction
Documents 13
(f) Time for Furnishing Certificate
of Completion 14
SECTION 11 Preparation of Property for Development 15
(a) Work to be Performed by the City 15
(b) Expenses, Income and Salvage 17
(c) City's Responsibilities _ for
Certain Other Actions 17
SECTION 12 Responsibilities of Developer Prior to
Construction of Improvements 19,
(1) Conditional Use Permit 19
(2) Specific Plan 19
(3) Development Fees 20
(4) Schedule of Performance 20
(5) Mortgage Financing 20
SECTION 13 Changes or Repair of Work After Public
Improvements are Constructed or Completed 20
SECTION 14 Restrictions on Use of Property 21
(a) Restriction onUse 21
(b) Covenants,; Binding Upon Successors
in Interest; Period of Duration 23
SECTION 15 Prohibitions Against Assignment and
Transfer 24
(a) Representations as to Development 24
(b) Prohibition Against Transfer of
Property and Assignment of
Agreement 25
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TABLE OF CONTENTS
continued
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Page
SECTION 16 Remedies 28
(a) In -.General 28
(b) Termination by City Prior to
Conveyance 29
(c) Termination by Developer Prior
to Execution of Lease 30
(d) Rights and Liabilities Termination
Prior to Possession 30
(e) Other Rights and Remedies of
Parties; No Waiver by Delay 31
(f) Enforced Delay in Performance for
Causes Beyond Control of Party 31
(g) Rights and Remedies Cumulative 32
SECTION 17 Special Provisions 33
(a). Tax Exemption 33
(b) Bodily Injury and Property Damage
Insurance 34
(c) Maintenance of Land Prior to
Construction 34
(d) Execution of Documents 34
(e) Environmental Impact Documents 34
(f) City and Other Governmental Agency
Permits and Fees 35
(g) Successors in Interest 35
(h) Provisions Not Merged with Lease 35
(i) Titles of -Sections 36
(j) Hold Harmless 36
SECTION 18 Counterparts 36
SECTION 19 Entire Agreement, Waivers , and Amendments 36
SECTION 20 Time for Acceptance of Agreement by City 36
SECTION 21 Conflict of Interest; Agency's Representa-
tive Not Individually Liable .37
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PARTICIPATION AGREEMENT FOR LEASING OF
LAND FOR PRIVATE DEVELOPMENT
This agreement, and attachments annexed hereto and made
a part hereof (hereinafter called "Agreement") , is made this
day of 1979, by ,and between the CITY OF HUNTINGTON
BEACH, a Municipal Corporation (hereinafter called "City") , and
having its office at 2000 Main Street, P. O. Box 190, Huntington
Beach, California 92648, and THE WILLIAM LYON COMPANY, a Cali-
fornia Corporation, organized and existing under the laws of the
. State of California (hereinafter called "Developer") , and having
its office at 19 Corporate Plaza, Newport Beach, California 92660.
WITNESSETH:
WHEREAS, in furtherance of the objectives of its Department
of Housing and Community Development, the Planning Commission and
City Council, the City has undertaken a program for the clearance,
reconstruction or rehabilitation of the Old Civic Center site
(hereinafter called "Project Area") located in the City, and;
WHEREAS, the City requested proposals for conceptual archi-
tectural drawings and financial feasibility statements for the
construction and operation of a senior citizens housing develop-
ment, full service senior citizens center, an exterior improvement
and re-landscaping of the existing branch library and limited
service commercial for the "Project Area, " (hereinafter called
."Development Plan" ) , and;
b
WHEREAS, the stated goal of the City is to combine Housing
and Community Development, General Funds and Section 8 Housing
Assistance resources with those of private enterprise in order
to provide a comprehensive housing, recreation, social and
cultural center for senior citizens, and;
WHEREAS, the Developer, along with other interested firms,
submitted its detailed proposal on December 22, 1978, on its
program designed to accomplish the goals enumerated by the City
in its Request for Proposals, and;
WHEREAS, the Developer made presentations to the Planning
and Redevelopment Commissions and City Council and was recommended
by the Planning and Redevelopment Commissions on March 13, 1979,
as the proposed Developer, which such action was approved by the
City Council on April 2, 1979, and;
WHEREAS, Developer was notified by .City of its selection as
the developer for the development of the Project Area, and;
WHEREAS, the City has offered to lease and Developer is
willing to lease certain real property located in the Project Area
as shown on the "Site Map" which is incorporated herein and
attached hereto as Attachment No. 1 (hereinafter called "Property")
for the development of the housing, and;
WHEREAS, the Developer is willing to -redevelop the Property
for and in accordance with the uses specified in the Request for
Proposal and in accordance with the Agreement, and;
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WHEREAS, the Developer's proposal for the construction of
assisted housing for the Project Area fulfills a vital need of
the. City; namely, - the provision of housing for elderly persons, and
each of the City and HCD is willing to undertake the obligation
outlined in this Agreement in order to work in partnership with
the Developer to successfully •implement the development, and;
WHEREAS, the City believes that the development of the Pro-
perty pursuant to this Agreement, and the fulfillment generally
of the Agreement, are vital and in the best interest of the City
and the health, safety, moral and welfare of its residents, and
in accord with the public purposes and provisions of the appli-
cable federal, state and local laws and requirements under 'which
the Project has been undertaken and is being assisted.
NOW THEREFORE, for the reasons set forth above, in considera-
tion of the promises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the
other as follows:
SECTION 1. Lease: Price, Terms
(a) Duration. Subject to all the terms, covenants and
conditions of this Agreement, the City will lease the Property to
the Developer for a term of fifty-five (55) years and the Developer
will pay therefor the amount of One, Dollar ($1.00) per year
(hereinafter called "Lease Price") , to be paid at the time and
in the manner set forth in the lease, which when approved by the
Huntington Beach City Council and executed will be attached
pr
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to this Agreement and incorporated therein by this reference as
Exhibit "A. "
SECTION 2. City Requirements
(a) Occupancy and Use. The Developer agrees that the lease
shall contain provisions restricting use and occupancy of the
property as outlined in Section 14 hereof.
(b) Maintenance and Operation of Property. The Developer
shall be responsible for the maintenance and operating of the
Property within the leasehold boundaries.
(c) Landscaping. The Developer shall install and maintain
landscaping of the Property as defined in the Old Civic Center
Specific Plan which when approved by the City Council will be
attached to ,this Agreement and incorporated therein by this
reference as Exhibit "B."
(d) Taxes. The Developer agrees to pay such property taxes
on the improvements to the Property as shall be assessed by the
Orange County Assessor's Office.
(e) Insurance. The Developer and/or its assignees or
successors shall furnish and maintain in force policies of insurance
and executed and maintained on file with the City, the City pre-
scribed "Certificate of Insurance and Hold Harmless Agreement. "
The required coverage is as follows: One million dollars per
occurrence for liability and indemnification. The City is to be
an additional insured on Developer' s "et al" policy.
SECTION 3. Recordation of Lease
The lease to be executed by the parties herein shall be exe-
cuted in such form as the Orange County Recorder' s Office shall
require for it to be recorded.
SECTION 4 . Title Policy ,
The Developer shall, at its own expense, order a preliminary
title policy covering the leased portion of the site..
SECTION 5. Conditions Precedent
The obligation of the City to issue a lease to the Property
and perform the conditions hereunder and the obligations of the
Developer to make payment and perform the conditions hereunder
shall .be terminated and neither the City nor the Developer shall
have any rights against or liability to the other under this
Agreement in the event of any of the following:
(1) The Developer has not received, after exercising every
reasonable effort, a firm commitment from the California Housing
Finance Agency, or HUD or any other funding source (hereinafter
called "Mortgagee"), for a construction loan and permanent
mortgage, with respect to the Senior Citizens Housing to be
constructed hereunder within one year of the date hereof.
(2) The Developer furnishes evidence satisfactory to the
City that it has been unable, after and despite diligent effort
for a period of one year after the date of execution hereof, to
obtain a commitment for mortgage financing for the construction
of the improvements on a basis and on terms that would generally
be considered satisfactory by builders or contractors for im-
provements of the nature and type provided in the Construction
Plans , and the Developer has, after having submitted such evidence
and if so requested by the City, continued to make diligent efforts
to obtain such financing.
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(3) City is unable to obtain necessary General Plan Amend-
ment and Specific Plan Amendment and approval of South Coast
Regional Coastal Commission and other relevant federal and state
agencies, or City departments such as but not limited to the
Department of Development Services.
SECTION 6. Time for Commencement and Completion of Improve-
ments
The construction of the improvements referred to in SECTION
9 hereof shall be commenced in any event within two (2) months
after the closing of the mortgage financing, and, except as
otherwise provided in this Agreement, shall be completed within
the construction period set forth in the Mortgageee' s firm com-
mitment for mortgage financing.
SECTION 7. Notices and Demands
A notice, demand, or other communication under this Agree-
ment by either party to the other shall be sufficiently given
or delivered if it is dispatched by registered mail or delivered
personally, and
(i) in the case of the Developer, is addressed to or
delivered personally to the Developer at 19 Corporate
Plaza, Newport Beach, California 92660, and,
(ii) in the case of the City is addressed to or delivered
personally to the City at Office of City Administrator,
2000 Main Street, Huntington Beach, California 92648 ,
or at such other address with respect to either such party as that
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party may, from time to time designate in writing and forward to
' the other as provided in this Section..
SECTION 8 . Rights of Access to Property
(a) Right of . Entry for Utility Service. The City reserves
for itself,, and any public utility company, as may be appropriate,
the unqualified right to enter upon the Property at all reasonable
times for the purpose of reconstructing, maintaining., repairing,
or servicing the public utilities located within the Property
boundary lines and provided for in the easement:_ described or
referred to in SECTION 4 hereof.
(b) Developer Not to Construct Over Utility Easements. Pro-
vided that the City and utility companies do not construct in
conflict with structures delineated on plans of Developer unless
.said construction takes place on recorded easements referred to
in the preliminary title report, the Developer shall not construct
any building or other structure or improvement on, over, or
within the boundary lines of any easement for public utilities
described or referred to in Paragraph (a) hereof,. unless such
construction is provided for in such easement or has been approved
by the holder of such easement. If approval for such construction
is requested by the Developer, the City shall use its best efforts
to assure that such approval shall not be withheld unreasonable.
(c) Access to Proms. After the development of the Pro-
perty by Developer, the Developer shall permit the representatives
of the City access to the Property at all reasonable times which
it deems necessary for the purpose of the Agreement, including
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but not limited to, inspection of all work beiii:.j performed in
connection with the construction of the improv;.::aents. No compen-
sation shall be payable nor shall any charge be made in any form
by any party for the access provided for in this Section.
SECTION 9. Construction of Improvements
(a) Plans for Construction Improvements. Plans and speci-
fications for the development of the Property and the contruction
of improvements thereon (hereinafter referred to as the "Improve-
ments" ) shall be in conformity with the Old Civic Center Specific
Plan, and all applicable federal, state, and local laws and regula-
tions. All work with respect to. the improvements to be constructed
or provided by -the Developer on .the Property shall be in conformity
with the Construction Plans (Final Construction Documents and
Specifications) as approved by the City.
(b) Construction Drawings and Related Documents. The
Developer shall prepare and submit construction drawings and re-
lated . documents to the Department of Development Services , City of
Huntington Beach (hereinafter referred to as "Development Service") ,
for architectural review and written approval for the Property or
portions thereof as provided in the Schedule of Performance. Such
construction drawings and related documents shall be submitted in
three stages--schematic, preliminary and final. Final drawings
and plans are hereby defined as those in sufficient detail to obtain
a building permit. Approval of progressively more detailed drawings
and specifications will be promptly granted by Development Services
if they are not in conflict with drawings or specifications theretofu
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approved. Any items so submitted and approved in writing by
Development Services shall not be subject to subsequent dis-
approval .
During the preparation of all drawingsand plans, Development
Services and the Developer shall hold regular progress meetings
to coordinate the preparation of, submission to, and review of
construction plans and related documents by Development Services.
Said parties shall communicate and consult informally as fre-
quently as is necessary to insure that the formal submittal of
any documents to Development- Services can receive prompt and
speedy consideration.
If any revisions or corrections shall be required by any
governmental official, agency, department or bureau having juris-
diction, or any lending institution involved in financing, the
Developer and the City shall cooperate in efforts to obtain waiver
of such requirements .or to develop a mutually acceptable alterna-
tive. If no such waiver is obtained and no such alternative is
developed, the City shall be bound by such revisions or corrections
if they are not inconsistent with the Scope of Development.
(c) Landscaping Plan. The Developer shall prepare and submit
to Development Services for approval final landscaping and finish
grading plans for that portion of the Property containing the
housing site. Said plans shall be prepared and submitted within
the times set forth in the Schedule of Performance.
(d) City Approval of Construction Plans and Drawings .
Development Services shall have the right of architectural review
of- all plans and submissions, including changes therein.
14
Development Services shall approve or disapprove the plans,
drawings and related documents referred to in paragraphs (b) and
(c) of this Section within the times established in the Schedule
of Performance. Any disapproval shall state in writing the
reasons for disapproval. The Developer, upon receipt of a dis-
approval based upon powers reserved to Development Services here-
under shall revise such portions as are not a logical evaluation
of the specific plans and construction requirements previously
approved by Development Services and resubmit to Development
Services as soon as possible after receipt of the notice of
disapproval. All plans, drawings and related documents approved
in writing by Development Services shall not be subject to subse-
quent disapproval.
(e) Architect ' s Certification. The Developer shall submit
to Mortgageee and Development Service the Architect's Certifica-
tion on Mortgagee 's prescribed form. Such certification shall be
made by the architect responsible for the preparation of the
working drawings and specifications for the improvements. The
Architect 's Certification shall state that, to the best of the
Architect' s knowledge and belief and professional judgment,
(i) the working drawings and specifications are consistent with
the approved final proposal, and (ii) the proposed construction
in accordance with these plans and specifications is permissible
under applicable zoning, building, housing and other codes,
ordinances, or regulations as modified by any waivers obtained for
the appropriate officials of the City of Huntington Beach. This
Certification shall also cover compliance with the appropriate
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Minimum Property Standards (MPS) and other standards, quidelines
and criteria applicable pursuant to Mortgagee's regulations as
to certification and standards. One copy of such certified
working drawings and specifications shall be submitted with
the Architect 's Certification to Mortgagee as well as to Develop-
ment Services; provided, however, that receipt and retention by
Mortgagee of these working drawings and specifications shall not
denote or constitute Mortgagee review or approval of such drawings
and specifications .
(f) Changes in Construction Plans . If tl:- Developer desires
to make any change other than minor field change items as defined
in Old Civic Center Specific Plan in the construction plans after
their approval by the City, the Developer shall submit the proposed
change to the City for its approval . If the construction plans ,
as modified by the proposed change conform to the requirements of
SECTION 10 (a) hereof and the Scope of Development, the City shall
approve the proposed change and notify the Developer in writing
within fifteen (15) days after receipt thereof by the City. Such
change in contruction plans in any event, shall be deemed approved
by the City unless rejected by the City, in whole or in part, by
written notice to the Developer within said fifteen (15) day period
setting forth in detail the reasons therefor.
(g) Commencement and Completion of Construction of Improve-
ments. The Developer agrees for itself, its successors and
assigns, and every successor in interest to the Site, or any part
thereof, that the Developer, and such successors and assigns , shall
promptly begin and diligently prosecute to completion the development
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of the Site through the construction of the improvements thereon,
and that such construction shall' in any event be begun within
I
the period specified in SECTION 6 hereof and be completed within
the period specified in such SECTION 6.
It is intended and agreed, and the Lease shall so expressly
provide, that such agreement and covenants shall be covenants
running with the land and that they shall, in any event, and
without regard to technical classification or designation, legal
or otherwise, and except only as otherwise specifically provided
in the Agreement itself, be, to the fullest extent permitted by
law and equity, binding for the benefit of the community and the
City and enforceable by the City against the Developer and its
successors and assigns to or of the Property or any part thereof
or any interest therein.
(h) Progress Reports. Subsequent to execution of a lease
for Property, or any part thereof, to the Developer, and until
construction of the Improvements has been completed, the Developer
shall make reports in such detail and at such times as may reason-
ably be requested by the City as to the actual progress of the
Developer with respect to such construction.
SECTION 10. Time for Certain Other Actions
(a) Time for Submission of Construction Plans . The time
within which the Developer shall submit its "Construction Plans"
(as defined in SECTION 9 hereof) to the City in any event shall
be not later than the dates set forth in the Schedule of Performance.
(b) Time for Submission of Corrected Construction Plans. Ex-
cept as provided in Paragraph (c) of this SECTION 10, the time within
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which the' Developer shall submit any new or corrected Construction
Plans as provided for in SECTION 9 hereof shall be not later than
forty-five (45) days after the date the Developer receives written
notice from the City of the City' s rejection of the Construction
Plans referred to in the latest such notice.
(c) Maximum Time for Approved Construction Plans. In any
event, the time within which the Developer shall submit Construc-
tion Plans which conform to the requirements of :SECTION 9 hereof
and are approved by the City shall be not later than dates set
forth in the Schedule of Performance for the approval of such
plans by the City.
(d) Time for City Action on Change in Construction Plans.
The time within which the City may reject any change in the Con-
struction Plans, as provided in SECTION 9 hereof, shall be fifteen
(15) days after the date of the City 's receipt of notice of such
change.
(e) Time for Submission of Evidence of Equity Capital,
Mortgage Financing and Construction Documents. At the times set
forth in the Schedule of Performance therefor, the Developer shall
submit to the City for its approval of the following :
(i) A copy of the commitment or commitments ob-
tained by 'the Developer for a mortgage loan
or loans to assist in financing the construction
of the Improvements (as defined in SECTION 9
hereof) , certified by the Developer to be a
true and correct copy or copies thereof;
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(ii) A copy, certified by the Developer: to be a true
and correct copy, of contractor' s bonds covering
labor, materials and performance Eor an amount
equal to one hundred percent (100%) of the construc-
tion price in the contract entered into by Developer
and its general contractor. Said bonds and the
construction contract must conform to Mortgagee' s
requirements and be approved by the Community
Development Director prior to commencement of con-
struction. The City shall not unreasonably withhold
such approval. Developer shall, prior to commence-
ment of construction, deliver to the City a certifi-
Cate' from the bonding company insuring aforesaid
bonds, naming the City as an additional insured.
Such bond may be substituted at any time during
this agreement by a guarantee by the State of Cali-
fornia or any of its authorized agencies with the
same force and effect.
(f) Time for Furnishing Certificate of Completion
(1) Promptly after completion of the Improvements in
accordance with those provisions of the Agreement relating solely
to the obligations of the Developer to construct the Improvements
(including the dates for beginning and completion thereof) , the
City will furnish the Developer with an appropriate instrument so
certifying. Such certification by the City shall be (and it
shall be so provided in the Lease and in the certification itself)
a conclusive determination of satisfaction and termination of the
covenants in the Agreement and in the Lease with respect to the
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obligations of the Developer, and its successors and assigns , to
construct the Improvements and the dates for the beginning and
completion thereof.
(2) Each certification provided for in this SECTION 10
shall be in such form as will enable it to be recorded in the
proper office for the recordation of deeds and other instruments
pertaining to the Property, including the Lease . CL the City
shall refuse or fail to provide any certification in. accordance
with the provisions of this Section, the City shall, within
thirty (30) days after written request by the Developer, provide
the Developer with a written statement, indicating in adequate
detail in what respects the Developer has failed to complete the
improvements in- accordance with the provisions of the Agreement,
or is otherwise in default, and what measures or acts it will be
necessary, in the opinion of the City, for the Developer to take
or perform in order to obtain such certification.
SECTION 11. Preparation of Property for Development
(a) work to be Performed by the City . The City prior to
construction of Improvements on the Property and without expense
to the Developer shall prepare the property for the development by
the Developer in accordance with this Agreement. Such preparation
small consist of the following, unless the City and the Developer
hereafter agree in writing that any of the preparation shall not
be done, or that it shall be done subsequent to the conveyance
of the Property :
(1) Survey. The City at its own cost and expense
shall initiate an ALTA survey on the entire site . The survey
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shall establish boundary lines for the housing site and such
I
boundary lines shall be utilized for determinin .; the area of
responsibility of the Developer with respect to landscaping and
maintenance duties.
(2) Soils Report. The City at its own cost and
expense shall furnish the Developer with a copy of the soils
report prepared by Associated Soils Engineers, Inc. , of Long
Beach, California, dated 11/22/78 .
(3) General Plan Amendment. A General Plan Amendment
shall be initiated encompassing the concept of Developer' s pro-
posal and processed by City for recommendation by the Planning
Commission to the City Council for adoption at no cost or expense
to the Developer.
(4) Specific Plan. Shall be initiated by City staff
at no cost to Developer. The Developer shall cooperate and supply
whatever information may be required by City staff with respect
to the housing development. (Attached as Exhibit "B" . )
(5) Environmental Impart Report. The City shall
authorize Pacific Environmental Services of Santa Monica as out-
side consultants to conduct an EIR study for the proposed develop-
ment on the Property. The Developer shall pay a pro rata share
of the cost of the EIR study for the housing site.
(6) Coastal Commisson. The City shall initiate at
no cost to Developer an application to the Coastal Commission .for
its approval of the proposed development. The Developer agrees
to cooperate and provide necessary documentation required by
City staff and to be available for all conferences,, presentation
and hearings as is required.
9A
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(7) Demolition and Removal. All existing buildings,
surface and below grade structures and other improvements on the
Property, such as but not limited to, foundations, cesspits, wells,
basements, debris, paving, all vegetation and deleterious material
shall be demolished and removed in their entirety. The cavities
left by such removal shall he back-filled and compacted according
to the recommendations of a licensed soils engineer, who shall
inspect and certify as to the satisfactory completion of the
work, which shall also comply with the latest re;Iuirements of
HUD's data .sheet 79 G as it may be amended.
(8) Removal and Relocation of Public Utility Lines .
The removal, relocation or abandonment by the City or by the ap-
propriate public body or public utility company of all public
utility- lines, installations , facilities, and related equipment
within or on the Property, as necessary for the construction of
the Project.
(9) Filling and Grading. The City shall only be
responsible for soil conditions and the placement of fill on the
Property as hereinabove set forth.
(b) Expenses, Income and Salvage. All expenses, including
current taxes , if any, relating to buildings or other structures
demolished or to be demolished in accordance with SECTION 11
hereof shall be borne by, and all income or salvage received as
a result of the demolition of such buildings or structures shall
belong to the City.
(c) City ' s Responsibilities for Certain Other Actions . The
City, without expense to the Developer or assessment or claim
}
�1
against the Property and prior to completion of the Improvements
or at such earlier time or times as the Developer and the City
may agree in writing, shall, in accordance with the Development
Plan, provide or secure or cause to be provided or secured, the
'following:
(1) Vacation of Streets, Etc. The closing and
vacation of all existing streets , alleys, and other public rights-
of-way within or abutting on the Property.
(2) Replatting, Resubdivision, Rezoning or Zoning
Variances. The replatting, resubdivisioh, rezoning or obtaining
of zoning variances, if necessary for the conveyance of the Pro-
perty.
(3) Installation of Public. Utilities. The installation
or relocation (by the City or by the appropriate public body or
public utility company) of such sewers , drains, water- and gas
distribution lines, electric, telephone, and telegraph lines,
and all other public utility lines, installations , and facilities
as are necessary to be installed or relocated on or in connection
with the property at a point to be designated by Developer by
reason of the Development Plan and the development of the Property:
Provided, that the City shall not be responsible for, nor bear
any portion of the cost of, installing the necessary utility con-
nections within the boundaries of the Property between the Improve-
ments to be constructed on the Property by the Developer and the
water, sanitary sewer, and storm drain mains or other public
utility lines owned by the City or by any public utility company
1� -1f�-
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within or without such boundaries, or electric, gas , telephone
or other public utility lines owned by any public utility
company within or without such boundaries, and the Developer
shall secure any permits required for any such installation
without cost or expense to the City.
(4) Library and Senior Center. The City shall nego-
tiate and enter into a separate Agreement with the Architectural
t
firm of Kamnitzer Cotton Vreeland for their servi.,.es in developing
architectural schematics, and full working drawirit.;s and specifica-
tions on both the Senior Center and Library.
(5) Competitive Bids . City shall advertise for bids
in the normal process for the work to be done on the construc-
tion of the Senior Center and improvements to the Library.
SECTION 12 . Responsibilities of Developer Prior to Construc-
tion of Improvements
(1) Conditional Use Permit. Developer shall initiate
at its own cost and expense an application for a Conditional Use
Permit (CUP) immediately after the City Council adopts the EIR
and Specific Plan.
(2) Specific Plan. The Developer agrees to abide by
the requirements of the Specific Plan with respect 'to such things
as :
(a) Installation of sidewalks and street trees
(b) Street signs
(c) If Tire Department of City of Huntington
Beach shall require additional hydrants
�✓ 1 Q.
located on the housing site then the
City and. Developer shall negotiate on
the respective cost of installation of
such additional fire hydrants .
(3) Development Fees. The Developer agrees to pay
the normal processing fees as may be adopted for the development
of the Property as were specified in the City' s Request for Pro-
posals for such things as :
(a) Plan Check and Building Permits
(b) Water and Sewer Connection Fees
(c) Park and Recreation Fees
(d) Environmental Impact Report
(e) Conditional Use Permit
(f) County Sanitation District Fees
(g) Cultural Enrichment Fee
(h) Street Improvement Fee
(4) Schedule of Performance. The Developer shall pre-
pare a Schedule of Performance outlining the general processing
time-table for the processing of the application for mortgage
financing as well as the construction period and for the administra-
tive processing and approvals required. Such Schedule of Perform-
ance shall be attached to this Agreement as Exhibit "C. "
(5) Mortgage Financing. Developer shall immediately
submit an application to the Mortgagee for site and Developer
approval .
SECTION 13. Changes or Repair of Work After Public Improve-
ments are Constructed or Completed
Once Public improvements are constructed or complcted any
changes required by the Developer shall be at the expense of the
C- -2o-
Developer. The City shall not be responsible for the removal,
restoration or repair of any pending, finished or completed work
which work must be or is removed or otherwise damaged by the
Developer in developing the Property.
The Developer shall bear all expense. .for restoring or re-
pairing any such work.. These repairs , improvements and restoration
shall be constructed in accordance with the technical specifica-
tions and practices of the City. The City shall coordinate all
uncompleted work required under this Section with Developer 's
schedule and activities so that all work may be completed in a
manner consistent with Developer ' s construction efforts . Any
other work to be performed by the City with reference to the Pro-
perty shall be as specified in the Development Plan and within
the times specified in the Schedule of Performance.
SECTION 14 . Restrictions on Use of Property
(a) Restriction on Use. The Developer agrees for itself,
and its successors and assigns , and every successor in interest
to the Property, or any part thereof, and the Lease shall contain
covenants on the part of the Developer for itself , and such suc-
cessors and assigns, that the Developer, and such successors and
assigns , shall:
(i) Devote the Property to, and only to and in
accordance with, the uses. specified in this
Agreement; and
(ii) Not discriminate upon the basis of race, color,
marital status, religion , sex or national origin
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ab
c
in the sale, lease, or rental or i.n the use
or occupancy of the Property or any improve-
ments erected or to be erected thereon, or
any part thereof.
Include the legend, "An Open Occupancy Building"
in type or lettering of easily legible size and
design in all advertising (including signs) for
the sale and/or rental of the whole or any part
of the Property. The word "Project" or
"Development" may be substituted for the word
"Building" where circumstances require substitu-
tion.
(iv) Comply with the regulations issued by the
Mortgagee and all applicable rules and regula-
tions issued pertaining to affirmative marketing,
affirmative actimn, leasing and employment
standards.
(v) Not use the Property for any purpose other than
for low and moderate income housing of senior
citizens and handicapped persons for a period of
fifty-five (55) years from the date of the Lease,
or until maturity date of the mortgage pertaining
thereto, whichever is longer, or the period in
which Section 8 or a substantially equivalent
successor program is in effect. The mortgage on
the Property may not be prepaid without the
R -22-
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prior written approval of the City and Mortgagee.
For any unit rented with subsidy assistance.,
senior citizens are defined as single individuals
over the age of 62 years , or married couples, in
which case at least one spouse is over the age
of 62 years or as HUD may subsequently redefine
it. For any unit rented at market rites , senior
citizens are defined as single individuals over
the age of 58 years , or married couples., in
which case at least one spouse is over the age
of 58 years, and whose income doe:: not exceed
80-120% of the median income for the City of
Huntington Beach. If Developer prepays the
mortgage or transfers the Property before the
final mortgage debt has been paid, all other
documents . relative to the prepayment, or transfer
shall contain appropriate covenants requiring
such parcel to be used for low and moderate
income housing for the remaining years of the
period provided for in the preceding paragraph.
(b) Covenants; Binding upon Successors in Interest; Period
of Duration. It is intended and agreed, and the Lease shall so
expressly provide, that the agreements and covenants provided in
this si_;Cnot4 14 shall be covenants running with the land and that
they shall-, in any event, and without regard to technical classifi-
cation or designation, legal or otherwise , and except only as other-
wise specifically provided in the Agreement, be binding, to the
fullest extent permitted by law and equity, for the benefit and
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in favor of, and enforceable by, the City and an;, successor in i
interest to the Property, or any part thereof, at,,;Anst the
Developer, its successors and assigns and every successor in
interest to the Property, or any part thereof or any interest
therein, and any party in possession or occupancy of the Property
or any part thereof.
SECTION 15. Prohibitions Against Assignment and Transfer
(a) Representations as to Development. The Developer re-
presents and agrees that its leasing of the Property, and its
other undertakings pursuant to the Agreement, are , and will be
Used, for the purpose of development of the Property and not for
speculation in land holding. The Developer further recognizes
that in view of :
(1) the importance of the development of the Pro-
perty to the general welfare of the community;
(2) the substantial financing and other public aids
that have been made available by law for the. purpose of making
such development possible; and
( 3) the ' fact that a transfer of the ownership
interest of the Developer of this Project or of a substantial
)art thereof, or any other action or transaction involving or re-
sulting in a significant change in the ownership or the parties
in control of the Developer or the degree thereof, is for practi-
cal purposes a transfer or disposition of the property then
owned by the Developer_ . The qualifications and identity of the
` � -24-
Developer are of particular concern to the community and the
City. The Developer further recognizes that it is because of
such qualifications and identity that the City is entering
into the Agreement with the Developer, .and, in so doing, is
further willing to accept and rely on the obligations of the
Developer for the faithful performance of all undertakings
and covenants hereby by it to be performed without requiring
in addition a surety bond or similar undertaking for such per-
formance of all undertakings and covenants in the Agreement.
(b) Prohibition Against Transfer of Property and Assignment
of Agreement. Also, for the foregoing reasons, the Developer
represents and- agrees for itself, and its successors and
assigns, the Developer will not transfer the Lease to the
Property nor assign any of its obligations undertaken by this
Agreement except that:
(1) For security purposes to obtain financing necessary
to enable the Developer, or any successor in interest to the
Property, or any part thereof, to perform its obligations
under the Agreement, and
(2) Prior to the initial endorsement of the mortgage
by Mortgagee, Developer may assign all or a portion of its
. rights and obligations under this Agreement to a joint venture,
limited or general partnership for the purpose of acquiring and
developing the Property provided that Mortgagee approves the
transfer in writing and the said joint venture, limited or
G .30
-25-
general partnership or other entity agrees in writing to be bound
by all of the provisions of this Agreement.
(3) The "City shall be entitled to require, except as
otherwise provided in the Agreement, as conditions to required
prior written approval of any transfer that:
(i) Any proposed transferee shall have the
qualifications and financial responsibility,
as determined by the City, necessary and
adequate to fulfill the obligation -under-
taken in the Agreement by the Developer
(or, in the event the transfer is of or
relates to part of the Property, such obliga-
tions to the extent that they relate to such
part) . Such determination by the City shall
not be unreasonably withheld.
(ii) Any proposed transferee, by instrument in
writing satisfactory to the City and in form
recordable among the land records, shall, for
itself and its successors and assigns , and
expressly for the benefit of the City, have
expressly assumed all of the obligations of
the Developer under the Agreement and agreed
to be subject to all the conditions and re-
strictions to which the Developer is subject
(or, in event the transfer is of or relates
to part of the Property, such obligations ,
conditions , and restrictions to the extent
that they relate to such part) : Provided,
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that the fact that any transfers of, or any
other successor in interest whatsoever to,
the Property, or any part thereof, shall,
whatever the reason, not have assumed such
obligations or so agreed, shall not (unless
and only to the extent otherwise specifically
provided in the Agreement or agreed to in
writing by the City) relieve or except such
transferee or successor of or from such
obligations , conditions or restrictions , or
deprive or .Limit the City o.r with respect to
any rights or remedies or controls with
respect to the Property or the construction
of the Improvements; it being the intent of
this, together with other provisions of the
Agreement, that (to the fullest extent per-
mitted by law and equity and excepting only
in the manner and to the extent specifically
provided otherwise in this Agreement) no
transfer of, or change with respect to, lease-
hold in the Property or any part thereof, or
any interest therein, however consummated or
occurring, and whether voluntary or involuntary,
shall operate, legally or practically, to
deprive or limit the City of or with respect
to any rights or remedies or controls provided
in or resulting from the Agreement with respect
to the Property and the construction of the
.0 .
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1
Improvements that the City would have had,
had there been no such transfer or change .
(iii) There shall be submitted to the City for
review all instruments and ,ether legal docu-
ments affecting the identity or name style
of Developer or its successors; and if ap-
proved by the City, its approval shall be
indicated to the Developer in writing.
(iv) The Developer and its transferee shall comply
with such other reasonable conditions as
the City may find desirable in order to
achieve and safeguard the purposes of the
Development Plan. Provided, that in the
absence of specific written agreement by the
City to the contrary, no such transfer or ap-
proval by the City thereof shall be deemed to
relieve the Developer, or any other party bound
in any way by the Agreement or otherwise with
respect to the construction of the Improvements ,
from any of its obligations with respect thereto.
SECTION 16 Remedies
(a) In General. Except as to any failure of the conditions
precedent set forth in SECTION 5 hereof, and as otherwise provided
in the Agreement, in the event of any default in or breach of the
Agreement, or any of its terms or conditions by either party hereto,
or any successor to such party, such party (or successor) shall,
C,, 0 -2 a_
upon written notice from the other, proceed immediately to cure
or remedy such default or breach, and, in any event, within
sixty (60) days after receipt of such notice. In case such
action is not taken or not diligently pursued, or the default or
breach shall not be cured or remedied within a reasonable time,
the aggrieved party may institute such proceedings as may be
necessary or desirable in its opinion to cure and remedy such
default or breach, including, but not limited to, proceedings
to compel specific performance by the party in default or breach
of its obligations.
(b) Termination by City Prior to Conveyance. Subject to
SECTION 16 (f) , in the event that prior to execution of Lease to
the Property to the Developer and in violation of this Agreement
Developer fails to meet its obligations hereunder, including,
without limitation, any failure by Developer to make a good
faith effort to fulfill the conditions precedent, and at the
option of the City, this Agreement shall be terminated and any
rights of the Developer, or any assignee or transferree, in the
Agreement, or arising therefrom with respect to the City or the
Property, shall, at the option of the City, be terminated by the
City, and neither the Developer (or assignee or transferee) nor
the City shall have any further rights against or liability to
the other under the Agreement.
In the event the City terminates this Agreement prior to con-
veyance, as provided herein, any services rendered or funds ex-
pended by the Developer shall be absorbed by the Developer without
-29- � � p
J CC
recoupment whatsoever, and neither the Developer nor the City
shall have any further rights against or liability to the other.
(c) Termination by Developer Prior to Execution of Lease.
Subject to SECTION 16 (f) , in the event that the City does not
tender possession of the Property in the manner and condition,
and by the date provided in the Agreement, and any such failure
shall not be cured within thirty (30) days after the date of
written demand by the Developer, then the Agreement shall, at the
option of the Developer, be terminated by written notice thereof
to the City, and neither the City nor the Developer shall have
any. further rights against or liability to the other except as
provided under the Agreement. In the event the Developer termin-
ates this Agreement under those conditions set out in the previous
sentence, the Developer shall be entitled to .a refund of any funds
advanced to obtain a Mortgagee commitment for financing, if not
otherwise refundable, plus 50% of all certifiable out-of-pocket
costs directly attributable to this project represented by
Mortgagee filing fees, the out-of-pocket cost of preparing final
architectural and egineering plans and specifications , plan check
fees, and building permit fees.
(d) Rights and Liabilities Termination Prior to Possession.
The City and Developer agree that it would be impractical or ex-
tremely difficult to fix actual damages In case of termination
prior to conveyance and therefore agree that their rights and
liabilities to the other under this Agreement are limited to those
provided in paragraphs (b) and (c) of the SECTION 16 .
.3
5
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(e): Othe:r Rights and Remedies o-f: Parties ;: No= Waiver by Delay.
The parties: shall have the right to institute such actions. or pro-
ceedings as it may deem desirable for- effectuating: the: purposes
of the: SECTION: 16_ including: also the right to execute-- and record
or' file among; the public land records- in the office in which the
Lease ks recorded a written declaration of the termination of
all the right, title,, and interest of the Developer,. and (subject
to such mortg:ag.e liens and leasehold interests as provided in
this: SEC.TIONr16 hereof) its successors in -interest and ass.igns, in
the- Property, and' the revesting of title thereto in the City:
Provided, that any delay by the parties in instituting or prose-
cuting any such action or proceedings or otherwise asserting its
rights under this Agreement shall not operate as a waiver of such
rights or to deprive them of or limit such rights in any way (it
being; the intent of this provision that the party should not be
constrained so as to avoid the risk of being deprived of or limited
in the exercise of the remedy provided in this Section because of
concepts of waiver, laches, or otherwise to exercise such remedy
at a time when it may still hope otherwise to resolve the problems
created by the default involved) ; nor shall any waiver in fact
made by one party with respect to any specific default by the
other party under this Section be considered or treated as a
waiver of rights of one party with respect to other defaults by
the other party under this Section or with respect to the particular
default except to the extent specifically waived in writing.
(f) Enforced Delay in Performance for Causes Beyond Control
of Party. For the purposes of any of the provisions of the Agreement
3�
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neither the City nor the Developer as the case may be, nor any
successor in interest, shall be considered in t::,-each 'of, or
default in, its obligations with respect to the preparation of
the Property for development, or the beginning and completion of
construction of the Improvements , or progress in respect thereto, -
in the event of enforced delay in the performance of such obliga-
tions due to unforseeable causes beyond its. control and without
its fault or negligence, including, but not restricted to, acts
of God, acts of the public enemy , acts of the Federal or State
government, including processing of financing commitments , acts
of the other party, fires, floods, epidemics, quarantine restric-
tions , strikes, freight, embargoes and unusually severe weather
or delays of subcontractors due to such causes; it being the
purpose and intent of this provision that in the event of the
occurrence of any such enforced delay, the time or times for per-
formance of the City with respect to the preparation of the Pro-
perty for development or of the Developer with respect to con-
struction of the Improvements, as the case may be, shall be ex-
tended for ,the period of the enforced delay as determined by
the City: Provided, that the party seeking the benefit of the
provisions of this Section shall, within thirty (30) days after
the beginning of any such enforced delay, have first notified the
other party thereof in -writing, and of the cause or causes thereof,
and requested an extension for the period of the enforced delay.
(g) Rights and Remedies Cumulative. The rights and remedies
of the parties to the Agreement, whether provided by law or by the
Agreement, shall be cumulative, and the exercise by either party
n � ,� -32-
of any one or more of such remedies shall not preclude the exercise
by it, at the same or different times, of any other such remedies
for the same default or breach or of any of its remedies for any
other default or breach by the other party. No waiver made by
either such party with respect to the performance, or manner or
time thereof, or any obligation of the other party or any condition
to its own obligation under the Agreement shall be considered a
waiver of any rights of the party making the wa.i.ver with respect
to the particular obligation of the other party or condition to
its own obligation beyond those expressly waived in writing and
to the extent thereof, or a waiver in any respect in regard to
any other rights of the party making the waiver -or any other obliga-
tions of the other party.
SECTION 17. Special Provisions
(a) Tax Exemption. The Property shall not be removed from
the property tax rolls and shall not be exempted from property
tax payments , except under programs now or hereafter enacted by
the State of California for the general relief of homeowners.
Developer for itself and for its successors and assigns agrees
to pay taxes attributable to the leasehold improvements and not
to file an application for exemption from property tax assessment
and payment, except for those exemptions which may now exist or
hereafter be enacted by the- State, of California for the general
relief of homeowners. This in no way limits Developer ' s right to
question or seek reduction of any assessed valuation of the Pro-
perty.
-3;3- C " � �
(b) Bodily Injury and Property Damage Insurance. Before
commencement of any work of improvement upon the Property, the
Developer shall furnish or cause to be furnished to the City
duplicate originals or appropriate certificates of bodily injury
and property damage insurance policies in the amount of at
least $500, 000 for any person, $1,000,000 for any occurrence
and $100,000 .property damage, the City to be named as co-insured.
(c) Maintenance of Land Prior to Construction. The
Developer shall maintain the cleared land he leases within the
Project Area in a neat and orderly condition between the date
of possession and the commencement of construction.
(d) Execution of Documents. The City and the Developer
agree to execute any and all documents that may be necessarily
required by California Housing Finance Agency in connection with
this Project.
(e) Environmental Impact Documents. As a condition precedent
to Developer's obligation to lease the Property hereunder, the
City shall have caused to. be prepared and approved such environ-
mental findings and documentation for the Development Plan for
the Project with respect to improvements contemplated in the
Scope of Development, as may be required by the California En-
vironmental Quality Act of 1970, as amended (CEQA) , the Coastal
Commission and all applicable state regulations and local ordinances
with respect thereto, so that the Developer and the City shall be
legally entitled under the California Environmental Quality Act
of 1970 and all state regulations and local ordinances to construct
p 3�
o -34-
and use the improvements contemplated in the Scope of Development
(and all time periods for any judicial or administrative appeal
from or collateral attack upon such findings, or the approval
thereof, or the applicability thereof to the Project .shall have
expired and no such appeal or attach; shall be pending) . The
Developer shall pay a proportionate share of the said fee as
relates to the Property and shall provide all reasonable assist-
ance to the City and the Agency in satisfying the foregoing con-
ditions.
The Developer shall comply with all mitigation measures pro-
posed to minimize adverse impacts resulting from project imple-
mentation which are included in any such environmental documenta-
tion.
(f) City and Other Governmental Agency Permits and Fees .
Before commencement of construction or development of any buildings,
structures or other work or improvement upon the Property or any
portion thereof, the Developer shall at its own expense secure or
cause to be secured any and all permits and pay any and all fees
and charges which may be required by the City or any other govern-
mental agency affected by such construction, development or work.
The City shall provide all proper assistance to the Developer in
securing such permits.
(g) Successors in Interest. The terms of this Agreement
shall bind the parties , namely the City, and Developer, and their
successors in interest, if any.
(h) Provisions Not Merged with Lease. None of the pro-
visions of the Agreement are intended to or shall be merged by
40
-35- li
reason. of any lease transferring possession of the Property from
the City to the Developer .or any successor in interest, and any
such lease shall not be deemed to affect or impai.^ the provisions
and covenants of the Agreement.
(i) Titles of Sections. Any titles of the several Sections
of the Agreement are inserted for convenience of reference only
and shall be disregarded in construing or interpreting any of'
its provisions.
( j) Hold Harmless . Developer agrees to indemnify, hold harm-
less and defend City in all actions arising from all Developer' s
activities pursuant to this contract. Developer further agrees
to. provide workers ' compensation insurance and supply proof of such
Insurance on the City' s insurance form.
SECTION 18 . Counterparts.
This Agreement is executed in five (5) counterparts , each of
which is deemed to be an original.
SECTION 19 . Entire Agreement, Waivers and Amendments.
The Agreement integrates all of the terms and conditions men-
tioned herein or incidental hereto, and supersedes all negotiations
or previous. agreements between the parties with respect to all or
any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in
writing by the appropriate authorities of the City or the Developer
and all amendments hereto must be in writing by the appropriate
authorities of the City and the Developer.
SECTION 20 . Time for Acceptance of Agreement by City.
This Agreement, when executed by the Developer and delivered
to the City must be authorized, executed and delivered by the
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'1� -36-
City within thirty (30) days after the date of signature by the
Developer or this Agreement shall be void, except to. the extent
that the Developer shall consent in writing to a further extension
of time for the authorization, execution >.and delivery of this
Agreement. The date of this Agreement shall be the date when
the Agreement shall have 'been signed by the City.
The City and the Developer covenant that each individual
executing this document by and on behalf of each party hereto is
a person duly authorized to execute contracts for that party.
SECTION 21. Conflict of - Interest; Agency's Representative
Not Individually Liable.
No member, official, . or employee of the City 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 this Agreement that affects his personal
interest or the interest of any corporation, partnership, or
association in which he is, directly or indirectly, interested.
No member, official, or employee of the City shall be personally
liable to Developer or any successor in interest in the event of
any default or breach by the City, or for any amount that may
become due to Developer or successor, or on any obligation under
the terms of this Agreement.
IN WITNESS WHEREOF, the City and the Developer have signed
this Agreement as of the dates set opposite their signatures.
CITY OF TINGTON BEACH
Date 8-7-79 By; `;• "/ L
ATTEST:
May r
g`7,7
9 ity er -37-
APPROVED AS TO FORM:
By: ,
City Attorney
WILLIAM LYON COMPANY
DATE: By:
ATTEST:
Secretary
INITIATED AND APPROVED: APPROVED AS TO CONTENT:
)rector, evelopment Services C' y Administrator
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Y
CITY OF
HUNTINGTON BEACH
ORANGE COUNTY, CALIFORNIA
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CITY OF HUNTINGTON BEACH
LjINTER-DEPARTMENT COMMU C TION
HUNTINGTON BEACH
To Gail Hutton, City Attorney om ames W. Palin, Director
evelopment Services
Subject OLD CIVIC CENTER SENIOR Dote June 28, 1979
HOUSING PROJECT: PARTICI-
PATION AGREEMENT
Attached for your review, please find a copy of the subject
Agreement. This Agreement stipulates the responsibility of
both the City and the developer, William Lyon Company, re-
garding the production of facility on the Old Civic Center
Site.
Mr. Robert Sangster has reviewed a draft of this Agreement
previously, and returned comments by a memo dated June 11 , 19`79 .
We believe the concerns that have been expressed at that time
have been addressed by contents of this final Agreement.
This document is scheduled for consideration by the City Council
at a special adjourned session on Monday, July 16, 1979 and
must be forwarded to the City Administrator by Friday, July 6,
1979.
If you should have- any questions, please contact' Stephen
Kohler, Senior Community Development Specialist, at extension
5541. As always, we appreciate your cooperation and assistance.
JWP:SVK:gc
V
t v
JZ7 WILLIAM LYON` ;A�, awl
19 CORPORATE PLAZA, NEWPORT BEACH, CALIF. 92660 (714) 833 -3600
June 25, 1979
Mr. Steve Kohler
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Subject: Old Civic Center Site
Dear Steve:
After improving this property with a $4-5 million dollar structure, it
would be the desire of The William Lyon Company to retain a residual
interest in this property beyond its 55 .year lease. I would like to
suggest the following for your consideration:
1. Granting to The William Lyon Company three 5-year option
extentions at a predetermined fair market ground .rent.
2. Grant to The William Lyon Company the right to salvage or sell
any or all improvements made by same at the termination of its
leasehold interest.
3. Grant to The William Lyon.Company preferential option or a first
right of refusal in the event property is to continue to be used
by the city for the same purposes which property is being
improved.
I would be glad to discuss the above with you at our next meeting.
Sincerely,
THE WILLIAM LYON COMPANY
Brian V. Norkait
Project Manager
BVN:sh
REAL ESTATE DEVELOPMENT
95e WILLIAM LYON
19 CORPORATE PLAZA, NEWPORT BEACH, CALIF. 92660 (714) 833 -3600
June 25, 1979
Steve Kohler
City of Huntington Beach
PO Box 190
Huntington Beach, CA 92648
Subject: Old Civic Center Property -
Dear Steve:
It has been my understanding from the time we• responded to the R.F.P.
on the subject site that the city was intending to turn over to the builder
a "ready to build parcel". This would include clearing and demolition of
existing improvements and all off-site'required for the proposed use.
An amount of $40,000 was shown in the R.F.P. to "fully improve the site
for construction": It was my understanding that these improvements
would include such things as `the required capacity sewer and water service
to the site, along with any required fire hydrants, sidewalks, curb, storm
drains, etc. that might be required by public works.
The William Lyon Company would naturally be responsible for the cost of
extending these public utility services within the boundaries of its
leasehold interest.
I believe it would be to our mutual .benefit if we clarified our
responsibilities in this area in the near future.
Sincerely,
THE WILLIAM LYON COMPANY
JJw+
Brian V. Nork it
Project Manager
BVN:sh
REAL ESTATE DEVELOPMENT
CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
To Steven V. Kohler From City Attorney
Development Services Dept..
Subject PARTICIPATION AGREEMENT FOR Date June 11, 1979
SENIOR CITIZENS ' HOUSING
We have reviewed the draft Participation Agreement between the
William Lyon Company and the city for development of a senior
citizens ' housing center at the old Civic Center site . We
assume you have reviewed the documents and find the content
satisfactory; nonetheless , we do have some thoughts on the
content and point them out infra. From the standpoint of form,
the agreement would appear to be satisfactory.
We note that there are a number of blanks in Section 1.i relating
to various requirements , and these need to be determined.
In Section 5 , obtaining equity capital by the developer is a
condition precedent . Perhaps it would be more appropriate for
the developer to commit to the equity capital and reserve a
condition only as to mortgage :financing.
There are numerous references to building safety (see Section 9) ,
and these should be changed to development services . Note that
failure of the city to approve or disapprove the plans within
the particular time limit shall be deemed an approval . There
are specific time limits imposed. on the city throughout the
agreement ; you should be sure that the city can live with these
timetables .
On page 15 , there is an alternative of supplying a bond of fur-
nishing a letter of credit equal to 15% of the construction
amount . I would not think this would be acceptable to the city.
The city would agree to accept the determination of the Cali-
fornia Housing Finance Agency as to completion, even if the city
has not furnished by that time a Certificate of Completion. Is
this acceptable?
In Section 11, the city ' s various obligations are listed. There
is no provision in the agreement for funding these choices , or
any contingencies relating to inability to obtain such funding
that I can find. Is this accepable?
Page Two
In the prohibition against transfer, there is no limitation
upon sale of shares by the developer corporation. It would
seem appropriate to include such limitation on page 28 . Also,
the city should probably have the right to approve a joint
venture , general or limited partnership transferee .
Your attention is directed to the termination paragraph on
page 33, which may be somewhat harsh in view of the many duties
imposed on the city and the strict time limits . This is some-
what mitigated by the enforced delay paragraph at pages 35-36 ,
but there is a requirement in that paragraph that notice of
such enforced delay be given in writing at the beginning of
the delay period. It is easy for anybody to forget to give
such notices , and perhaps better if they are not affirmatively
required as a condition for relying on outside circumstances
as justification for a delay .
We would be willing to meet with you and the developer, if desir-
able, to resolve any problems with the agreement .
ROBERT C . SANGS R APPROVED:
RCS:ps A v4d6:��
cc : City Administrator
GAIL HUTTON
City Attorney
J• CITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
HUNUNG70N BEACH
To Gail Hutton From Steven V. Kohler
City Attorney Senior Community Develop-
ment Specialist
Subject PARTICIPATION AGREEMENT FOR _ Date May 29 , 1979
LEASE/DEVELOPMENT OF OLD
CIVIC CENTER SITE
Attached for your review is a copy of the proposed Participation Agreement.
between the City of Huntington Beach and the development team selected
by the City Council to construct the senior housing/activity center project
on the old Civic Center site.
This matter is scheduled to go before the City Council on June 18, 1979.
In order to expedite the processing of this document and allow the
. Council ample time to review the participation agreement, could you please `
complete your review by June 8, 1979 .
Thank you for your cooperation in this matter. If I can be of assistance,
Please contact me.
SVK:PWT:df
Attachment
f �. f
DEPT.
CITY OF HILIN'TINGTON BEACH
i C i
INTER-DEPARTMENT COMMUNICATION
HUNTINGTON BEACH
P. C?. I?ox 190
MuntinEto!i Bc,,i6, CA 92648
To JIM PALIN From . GAIL HUTTON '
Acting Planning Director City Attorney
Subject SENIOR CITIZEN HOUSING Date May 1, 1979
- OLD CIVIC CENTER
MEMORANDUM OPINION
Introduction:
The old Civic Center site , which is being considered for a
Senior Citizens ' housing and recreation center, is located
within the Coastal Zone boundary. As such, it is subject to
the interim permit jurisdiction of the South Coast Regional
Commission until the city' s Local Coastal Program is complete
and certified. The Local Coastal Program of the city is
scheduled to provide a land use plan in its Coastal Element
which will designate land uses compatible with Coastal Act
policies . An area background study is to be provided for
this specific area.
Question l : Can the city require in the finalized contract
an extension of time of Section 8 subsidized
housing beyond. the legal limit of 20 years?
Answer 1: Code of Federal Regulations Section 880 . 109
states that the contract may be for an initial
term of 5 years . This is renewable for addi-
tional terms of no more than 5 years each, at
the option of the owner. Generally, the total
contract terms for any dwelling may not exceed
30 years for a conditional or unconditional com-
mitment for permanent financing. However, if a
federal government loan was secured, there is a
20-year total time limit . If the financing is
procured through a state or local agency, the con-
tract limit for Section 8 subsidized housing may
be equal to the term of financing, but may not
exceed 40 years .
The problem, therefore , appears to be whether
the city can require the builder/manager of the
project to renew for more than the initial term
of 5 years . The Code of Federal Regulation ex-
plicitly states that it is solely at the option
of the owner of the project , which in this case
is the builder/manager.
i
Senior Citizens Housing
Page . Two
As to there being a limit of 20 ,years upon the
Section 8 subsidized housing, such a limit would
appear to arise only where the federal government
participated in subsidizing the development loan
or in guaranteeing or insuring the loan in some
manner.
Question 2 : Would the possessory interest on the housing
facility be .termed a ,yearly increased subsidy
based upon declining depreciation of the struc-
ture?
Answer 2 :. It appears as though the city subsidy would stall
be only the value of the land. involved. This is
the total contribution of the city to .the project.
However, 42 USCA 1437d provides that every contract
made pursuant to this chapter for loans or annual
contributions shall provide that the cost of con-
struction and equipment of the project on which
the computation of any annual contributions under
this chapter may based, shall not exceed more
than 10% the appropriate prototype cost for the
area; it further provides that annual contributions
with respect to a low income housing project shall
provide that no annual contributions by the federal
government shall be made available for such pro-
ject unless such project is exempt from all real
and personal property taxes levied or imposed by
the state , city , county or other political sub-
division; and such contract shall require the city
to make payments in lieu of taxes equal to 10% of
the sum of the annual rents charged in *such project .
Perhaps this requirement may be satisfied by the
loan value of the land contributed by the city.
Question 3 : After selection of a leading proposal, would the
city again have to advertise for bidding of the
final facility, or could this be incorporated in
the initial contractual arrangements?
Answer 3 : Where was no competitive bidding for the selection
of a proposal. There was merely an invitation for
proposals , similar t;o profess i_onal serv:i.ces as
when the city selects an architect for a public
works project . A provision exists in the Code of
_ Federal Regulations , Section 880 , which .requires
that such a project be advertised for competitive
bidding for the award of the contract for the con-
struction of the final facility.
Senior Citizens Housing
Page Three
Question 4 : Can the city use property held in trust for the
public for a single-purpose facility . such as
senior citizen housing?
Answer 4 : It is my understanding that this land was donated
to the city by the Huntington Beach Company. It
was not placed in a trust for the use of the public.
Therefore , since no trust appears to exist , this
question is moot . The land may be used for any
public purpose.
Question 5 : Should there be arrangements and provisions written
into _the final contract for ownership of the struc-
ture upon termination of the lease?
Answer 5 : Yes . Such a lease of unimproved land which pro-
vides for construction of improvements is called
a ground lease. Title to the improvements is.
usually held by the lessee , during the term of
the lease; the title passes to the lessor when the
lease is terminated. Such a provision could be
included in the lease to remove any ambiguities
and doubts in the area. Such a provision is neces-
sary to protect the interests of the city.
Question 6 : Should it become necessary to demolish the structure
because of damage caused by an act of God, should
there be arrangements in the contract to require
the builder/manager of the facility to pay for such
demolition costs?
Answer 6 : Yes . Since the lessor usually anticipates an in-
creased value due to the improvements and would
not realize same where said improvements were
damaged beyond reasonable cost of repair, it may
be to the best advantage of the city to avoid such
cost through a clause providing the builder/manager
to absorb it . In addition to this , U.S. Code,
Annotated Chapter 42 , Section 1437d, subsection f,
provides for annual contributions to accommodate
outstanding indebtedness and cover demolition in
just such circumstance.
Question 7 : Have the steps taken to date been satisfactory from
a legal standpoint in calling for proposals to pro-
vide a senior citizens housing facility on the
Civic Center site?
Answer 7 : Whose legal standpoint are we referring to? This
question has been answered, in part , in .Answer 3.
Senior Citizens Housing
Page Four
Government Code Section 37388 refers to housing
developments undertaken by a city and limits such
a land use to 50 years on a lease-hold basis.
Government Code Section 37395 also imposes a 50-
year limit where city property is leased for a
commercial development .. This section may also
have important ramifications should this project
be undertaken.
CAVEAT:
This memo was written with our present level of knowledge regard-
ing 42 United States Code Anotated, Chapter 8. Many hours were
spent to become acquainted with Chapter 8, the Code of Federal
Regulations and the Federal Register. This is a highly complex
field, and a specialty is required to develop an expertise in
this area of federal. law. A cursory reading of Section 8, Hous-
ing Law, is only the tip of the iceberg.
Re ewed and Revised-
/
AMES GEORGES
pproved:
.GAIL HUTTON
City Attorney
GH :ps
Research done by Legal Intern Tom Hanrahan
JZ WILLIAM LYON 1
366 SAN MIGUEL DR., SUITE 201, NEWPORT BEACH, CALIF. 92660 (714) 833-3600
April 27, 1979
Mr. Steve Kohler
Senior Community Development Specialist
City of Huntington Beach
P.O. Box 190
Huntington Beach, California 92648
Subject: Huntington Beach Civic Center Site
Dear Mr. Kohler:
Attached is a Draft Number 1 of Participation Agreement developed on
April 26, 1979.
Very truly yours,
THE WILLI/A�M LYON COMPANY
Brian V. Norkai 's
Project Manager
BVN/j
Enclosure
cc: Reed Flory - Housing Concepts
REAL ESTATE DEVELOPMENT
April 26, 1979
PARTICIPATION AGREEMENT
HUNTINGTON BEACH
Draft Number 1
TOPIC DEVELOPER HUNTINGTON BEACH
Lease recording?
Survey - initiate and pay for -
ALTA at least on housing
position. City to check on
ALTA requirement for Senior
Center/Library or ALTA -
on whole site and pay for?
Based on City
Soils Report - furnished by City at City's
cost
Title Policy
Prelminary - pay for
General Plan
Amendment - initiated by City and approved
and adopted
Planning Commission & City Council
no fees by developer
Specific Plan - developer - supply physical - to be initiated by City Staff
aspect, heights & dimensions no fees by developer
prior to City initiation
E.I.R. developer - pay for housing site - initiated by City
provide information to consultant costs appropriated by use
review of price and approval - outside consultant - fee split
- processing by City
Lot Split Check on CHFA requirement - Staff to investigate needs
CUP developer to bear any cost for - to determine if one i�1�be
CUP processing if required on required and if , developer
.housing site to fill on sing site
depends specific plan time
fra
-2-
TOPIC DEVELOPER HUNTINGTON BEACH
Preparation of
Property
Demo and Removal - City to do and pay for
- done within 30 days of issuance
of firm commitment
- salvage value to City
Public Utility
Lines - if required, City to bring to
the .site, and backfill, and
compact
- property line of leasehold
Filling and developer all - filling of demo cavities
Grading grading requirements - no grading - not even rough
Street - verify and certify that Pecan
Vacation Street has been abandoned and
if not, City to initiate and
pay for process
Improvements of - only to extent necessary to
Existing Streets relocate utilities
if any, Curbs,
Driveways
Sidewalk and - comply with specific plan
Street Trees requirements as to street
Landscaping trees and sidewalks
Street Lighting - to remain as is unless fire
Signs and Fire department requires additional
Hydrants services
- if required, additional hydrants
cost to be negotiated
Processing Fees - plan to do it - without cost
Coastal Commission to developer
-3-
TOPIC DEVELOPER HUNTINGTON BEACH
Zonin
Vary-ances - plan to do it_;---arIthout cost
— to deve-lop
Building Permit - plan check
Development - park fees
- sewer connection fees
Timetable establish a time frame for processing for meeting commitment
Processing and to have a progress report in prior to Council meeting due
within ,60 days.
Division of - City to be responsible for.
Responsibility working out with KCV architects
for. Library &
Senior Center
Working Drawings - separate contracts for each
and Specs
City to put out for competitive
bid for Senior Center and
Library work
t`♦ ,
1 ♦
I
PARTICIPATION AGREEMENT
FOR THE
LEASING OF CERTAIN LAND FOR
PRIVATE DEVELOPMENT
BY AND BETWEEN
THE CITY OF HUNTINGTON BEACH, A MUNICIPAL CORPORATION
AND
THE WILLIAM LYON COMPANY
PARTI IOATION AGREEMENT FOR LEASING OF
LAND FOR PRIVATE DEVELOPMENT
This agreement, and attachments annexed hereto and
made a part hereof, (hereinafter called "Agreement" ) , is made this
day of 1979 , by and between the CITY OF HUNTINGTON BEACH,
a Municipal Corporation, (hereinafter called "City") and having its
office at 2,(,Ub L�-a"" 1:�trCLt 1p`o- (ko Huntington, Beach,
gZ4W
California+ and THE WILLIAM LYON COMPANY, a California Corporation,
organized and existing under the laws of the State of California
i `I Co vyolr4c,
(hereinafter called "Developer") and having its office at 23-3—Sa-n-
+1 g-ue-1,—Su-ite— ,Newport Beach, California. 6( Z(P_aO
WITNESSETH:
WHEREAS, in furtherance of the objectives of its Department
of Housing and Community Development, the Planning Commission and
City Council, the City has undertaken a program for the clearance,
reconstruction or rehabilitation and of the Old Civic Center site
(hereinafter called "Project Area") located in the City, and;
WHEREAS, the City requested proposals for conceptual archi-
tectural drawings and financial feasibility statements for the con-
struction and operation of a senior citizens housing development,
full service senior citizens center, an.. exterior improvement and
re-landscaping of the existing branch library and limited service
commercial for the "Project Area" , and;
-1-
{
WHEREAS, the stated goal of the City is to combine Housing
and Community Development, General Funds and Section 8 Housing
Assistance resources with those of private enterprise in order to
provide a comprehensive housing, recreation, social and cultural
center for senior citizens, and ;
WHEREAS, the Developer, along with other interested firms,
submitted its detailed proposal on December 22 , 1978 on its program
designed to accomplish the goals enumerated by the City in its Re-
quest for Proposals, and;
WHEREAS, the Developer made presentations to the Planning V
Commission and City Council and was recommended by the Planning'� e��
Commission on as the proposed Developer, which
such action was approved by the City Council on April 2, 1979, and;
WHEREAS, Developer was selected by City of its selection as
the developer for the development of the Project Area, and;
WHEREAS,the City has offered to lease and Developer is will-
ing to lease certain real property located in the Project Area as
shown on the "Site Map" which is incorporated herein and attached
hereto as Attachment No. I (hereinafter called "Property") for
the development of the housing, and;
WHEREAS, the Developer is willing to redevelop the Property
for and in accordance with the uses specified in the Request for
-2-
Proposal and in accordance with the Agreement, and;
WHEREAS, the Developer' s proposal for the construction of
assisted housing for the Project Area fulfills a vital need of the
City, namely the provision of housing for elderly persons, each
of the City and HCD is willing to undertake the obligations out-
lined in this Agreement in order to work in partnership with the
Developer to successfully implement the development, and;
WHEREAS, the City believes that the redevelopment of the
Property pursuant to this Agreement, and the fulfillment generally
of the Agreement, are vital and in the best interest of the City
and the health, safety, moral and welfare of its residents, and
in accord with the public purposes and provisions of the applicable
Federal, State and Local laws and requirements under which the Pro-
ject has been undertaken and is being assisted.
NOW THEREFORE, for the reasons set forth above, in consider-
ation of the promises and the mutual obligations of the parties
hereto, each of them does hereby covenant and agree with the other
as follows:
SECTION 1. Lease: Price, Terms
(a) Duration. Subject to all the terms, covenants and con-
ditions of this Agreement, the City will lease the Property to the
-3-
Developer for a. term of fifty five (55) years and the Developer
will pay therefor the amount of One Dollar ($1.00) , per year,
(hereinafter called "Lease Price") , to be paid at the time and in
the manner set forth in the lease, which when executed will' be
attached to this Agreement and incorporated therein by this ref-
erence as Exhibit
SECTION 2 . City Requirements.
(a) Occupancy and Use.
(b) Maintenance and Operation -
}---
(c) Landscaping. 1
QvCAIUc,�l��
(d) Taxes.
V yt�2 - 0,� Al rtkv-r
(e) Insurance.
-4-
i
f 1
SECTION 3. Recordation of Lease.
The lease to be executed by the parties herein shall be
executed in such form required to be recorded.
SECTION 4 . Title Policy.
The Developer shall, at its own expense, order a preliminary
title policy covering the leased portion of the site.
SECTION 5 . Conditions Precedent.
The obligation of the City to issue a lease to the Property
and perform the conditions hereunder and the obligations of the
Developer to make payment and perform the conditions hereunder shall
be terminated and neither the City nor the Developer shall have any
rights against or liability to the other under this Agreement in
the event of any of the following:
(1) The Developer has not received, after exercising every
reasonable effort, a firm commitment from the California Housing
Finance Agency, (hereinafter CHFA) for a construction loan and per-
manent mortgage, with respect to the Senior Citizens Housing to be
constructed hereunder within of the date hereof.
(2) The Developer furnishes evidence satisfactory to the
City that it has been unable, after and despite diligent effort for
a period off d�Ga after the date of execution hereof, to obtain
equity capital and commitment for mortgage financing for the
-5-
1
t
construction of the improvements on a basis and. on terms that
would generally be considered satisfactory by builders or contractors
for improvements of the nature and type provided in the Construction
Plans, and the Developer has, after having submitted such evidence
and if so requested by the City, continued to make diligent efforts
to obtain such financing.
(3) City is unable to obtain necessary, General Plan and
Specific Plan amendments and approval of Coastal Commission and
other relevant City, State agencies, or departments such as but
not limited to zoning, building.
SECTION 6 . Time for Commencement and Completion of Improvements.
The construction of the improvements referred to in SECTION
hereof shall be commenced in any event within two (2) months after
the CHFA closing of the mortgage financing, and, except as otherwise
provided in this Agreement, shall be completed within the construction
period set forth in the CHFA firm commitment.
SECTION 7 . Notices and Demands.
A notice, demand, or other communication under this Agreement
by either party to the other shall be sufficiently given or de-
livered if it is dispatched by registered, or delivered personally,and
-6-
(i) in the case of Developer, is addressed to or delivered
personally to the Developer at 366 San Niguel, Newport
Beach, Suite Newport Beach, California and,
(ii) . in the case of the City is addressed to or delivered
personally to the City at
Huntington Beach, California ,
or at such other address with respect to either such party as that
party may, from time-to-time designate in writing and forward to
the other as provided in this Section.
SECTION 8. Rights of Access to Property.
(a) Right of Entry for Utility Service. The City reserves
for itself, and any public utility company, as may be appropriate,
the unqualified right to enter upon the Property at all reasonable
times for the purpose of reconstructing, maintaining, repairing, or
servicing the public utilities located within the Property boundary
lines and provided for in the easements described or referred to
in Paragraph (a) , SECTION 4 hereof.
(b) Developer Not to Construct Over Utility Easements.
Provided that the City and utility companies do not construct in
conflict with structures delineated on plans of Developer unless
said construction takes place on recorded easements referred to in
the preliminary title report, the Developer shall not construct any
building or other structure or improvement on, over, or within the
-7-
boundary lines of any easement for public utilities described or
referred to in Paragraph (a) hereof, unless such construction is
provided for in such easement or has been approved by the holder
of such easement. If approval for such construction is requested
by the Developer, the City shall use its best efforts to assure that
such approval shall not be withheld unreasonable.
(c) Access to Property. After the development of the
Property by Developer, the Developer shall permit the representatives
of the City access to the Property at all reasonable times which
it deems necessary for the purpose of the Agreement, including but
not limited to, inspection of all work being performed in connection
with the construction of the improvements. No compensation shall
be payable nor shall any charge be made in any form by any party
for the access provided for in this Section.
SECTION 9. Construction of Improvements.
(a) Plans for Construction Improvements. Plans and speci-
fications for the Development of the Property and the construction
of improvements thereon, (hereinafter referred to as the "ImprQve- L
JA
fwments") shall be in conformity with the w�� and .�3I'
all applicable Federal, State and Local laws and regulations. All
work with respect to the improvements to be constructed or provided
by the Developer on the Property shall be in conformity with the
-8-
Construction Plans (Final Construction Documents and Specifications)
as approved by the City.
(b) Construction Drawings and Related Documents. The
Developer shall prepare and submit construction drawings and related
documents to the Department of Building Safety City of Huntington
Beach, (hereinafter referred to as u31dg—Safety") for archi-
tectural review and written approval for the Property or portions
thereof as provided in the Schedule of Performance. Such construc-
tion drawings and related documents shall be submitted in three
stages - schematic, preliminary and final. Final drawings and plans
are hereby defined as those in sufficient detail to obtain a build-
ing. permit. Approval of progressively more detailed drawings and
specifications will be promptly granted by if they
are not in conflict with drawings or specifications theretofore
approved. Any items so submitted and approved in writing by Building
Safety shall not be subject to subsequent disapproval.
During the preparation of all drawings and plans, .au_i,.1rd g
afety and the Developer shall hold regular progress meetings to
coordinate the preparation of, submission to, and review of con-
struction plans and related documents by Building Safety. Said
parties shall communicate and consult informally as frequently as
is necessary to insure that the formal submittal of any documents
to can receive prompt and speedy consideration.
-9-
I
If any revisions or corrections shall be required by any
governmental official, agency, department or bureau having juris-
diction, or any lending institution involved in financing, the
Developer and the City shall cooperate in efforts to obtain waiver
of such requirements or to develop a mutually acceptable alternative.
If no such waiver is obtained and no such alternative is developed,
the City shall be bound by such revisions or corrections if they
are not inconsistent with the Scope of Development.
(c) Landscaping Plan. The Developer shall prepare and
submit to 1, for approval final landscaping and finish
grading plans for that portion of the Property containing -the housing
site. Said plans shall be prepared and submitted within the times
set forth in the Schedule of Performance.
(d) City Approval of Construction Plans and Drawings. 54z�ng.--
-Safety shall have the right of architectural review of all plans
and submissions, including changes therein.
B-u-ilding—S,&fety shall approve or disapprove the plans, draw-
ings and related documents referred to in paragraphs (b) and (c) of
this Section within the times established in the Schedule of Perfor-
mance. Failure by Ili-lding—Safety—to either approve or disapprove
within the times established in the Schedule of Performance shall
be deemed an approval. Any disapproval shall state in writing the
reasons for disapproval. The Developer, upon receipt of a disapproval
-10-
based upon powers reserved to $uWlzl=iig-�' afty�here under shall
revise such portions as are not a logical evaluation of the spec-
ific plans and construction requirements previously approved by
Building.-.-S-afety and resubmit to Buldi-ng.-_Safehy as soon as possible
after receipt of the notice of disapproval. All plans, drawings
and related documents approved in writing by Ru-�],ding_.Safety. shall
not be subject to subsequent disapproval.
(e) Architect' s Certification. The Developer shall sub-
mit to CHFA and Btini-ld-ing-S•afet_y the Architect' s Certification on
CHFA' s prescribed form. Such certification shall be made by the
architect responsible for the preparation of the working drawings
and specifications for the improvements. The Architect' s Certifi-
cation shall state that, to the best of the Architect' s knowledge
and belief and professional judgment, (i) the working drawings
and specifications are consistent with the approved final proposal,
and (ii) the proposed construction in accordance with these plans
and specifications is permissible under applicable zoning, building,
housing and other codes, ordinances, or regulations as modified by
any waivers obtained for the appropriate officials of the City of
Huntington Beach. This Certification shall also cover compliance
with the appropriate Minimum Property Standards (MPS) and other
standards, guidelines and criteria applicable pursuant to CHFA
regulations as to certification and standards. One copy of such
certified working drawings and specifications shall be submitted
-11-
with the Architect' s Certification to CHFA as well as to .BiMMMg
Sa�fv Provided, however, that receipt and retention by CHFA of
these working drawings and specifications shall not denote or
constitute CHFA review or approval of such drawings and specifications.
(f) Changes in Construction Plans. If the Developer desires
to make any change other than minor field change items, in the con-
struction plans after their approval by the City, the Developer
shall submit the proposed change to the City - for its approval. If
the construction plans, as modified by the proposed change conform
to the requirements of SECTION 10 (a) hereof and the Scope of 1W
Development, the City shall approve the proposed change and notify
the Developer in writing within fifteen (15) days after receipt
thereof by the City. Such change in construction plans in any event,
shall be deemed approved by the City unless rejected by the City,
in whole or in part, by written notice to the Developer within said
fifteen (15) day period setting forth in detail the reasons therefor.
(g) Commencement and Completion of Construction of
Improvements.
The Developer agrees for itself, its successors and assigns,
and every successor in interest to the Site, or any part thereof,
that the Developer, and such successors and assigns, shall promptly
begin and diligently prosecute to completion the development of the
Site through the construction of the improvements thereon, and that
such construction shall in any event be begun within the period
-12-
specified in SECTION �, hereof and be completed within the period
specified in such SECTION �Q .
It is intended and agreed, and the Lease shall so expressly
provide, that such agreement and covenants shall be covenants
running with the land and that they shall, in any event, and
without regard to technical classification or designation, legal
or otherwise, and except only as otherwise specifically provided in
the Agreement itself, be, to the fullest extent permitted by law
and equity, binding for the benefit of the community and the City
and enforceable by the City against the Developer
and its successors and assigns to or of the Property or any part
thereof or any interest therein.
(h) Progress Reports. Subsequent to execution of a lease
for Property, or any part thereof, to the Developer, and until con-
struction of the Improvements has been completed, the Developer
shall make reports, in such detail and at such times as may reason-
ably be requested by the City and ftqevroy, as to the actual progress
of the Developer with respect to such construction.
SECTION 10. Time for Certain Other Actions.
(a) Time for Submission of Construction Plans. The time
within which the Developer shall submit its "Construction Plans"
(as defined in SECTION 9. hereof) to the City in any event shall be
not later than the dates set forth in the Schedule of Performance.
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(b) Time for Submission of Corrected Construction Plans.
Except as provided in Paragraph (c) of this SECTION 10 , the
time within which the Developer shall submit any new or corrected
Construction Plans as provided for in SECTION 9 hereof shall be not
later than forty-five (45) days after the date the Developer receives
written notice from the City of the City' s rejection of the Construc-
tion Plans referred to in the latest such notice.
(c) Maximum Time for Approved Construction Plans. In any
event, the time within which the Developer shall submit Construc-
tion Plans which conform to the requirements of SECTION 9 hereof
and are approved by the City shall be not later than dates set forth
in the Schedule of Performance for the approval of such plans
by the City.
(d) Time for City Action on Change in Construction Plans.
The time within which the City may reject any change in the
e
Construction Plans, as provided in SECTION 9 hereof, shall be fif-
teen (15) day after the date of the City' s receipt of notice of
such change.
(e) Time for Submission of Evidence of Equity Capital,
Mortgage Financing and Construction Documents.
At the times set forth in the Schedule of Performance there-
for, the Developer shall submit to the City for its approval of
the following:
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(i) A copy of the commitment or commitments obtained by
the Developer for a mortgage loan or loans to assist .
in financing the construction of the Improvements (as
defined in SECTION 9 hereof) , certified by the Devel-
oper to be a true and correct copy of copies thereof;
(ii) A copy, certified by the Developer to be a true and
correct copy, of contractor' s bonds covering labor,
materials and performance for equal to one hundred
percent (100%) of the construction price or a Letter
of Credit equal to fifteen (15%) of the construction
amount, in the contract entered into by Developer and
its general contractor. Said bonds or Letter of Credit
and the construction contract must conform to CHFA re-
quirements and be approved by the Community Development
Director prior to commencement of construction. The
City shall not unreasonably withhold such approval.
Developer, shall, prior to commencement of construction,
deliver to the City a certificate from the bonding com-
pany insuring aforesaid bonds, naming the City as
additional insureds.
(f) Time for Furnishing Certificate of Completion.
(1) Promptly after completion of the Improvements in
accordance with those provisions of the Agreement relating solely
to the obligations of the Developer to construct the Improvements
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(including the dates for beginning and completion thereof) , the
City will furnish the Developer with an appropriate instrument
so certifying. Such certification by the City shall be (and it
shall be so provided in the Lease and in the certification itself)
a conclusive determination of satisfaction and termination of the
covenants in the Agreement and in the Lease with respect to the
obligations of the Developer, and its successors and assigns, to
construct the Improvements and the dates for the beginning and
completion thereof; P-r-evrd-ed;that—i-f—there is tfpon—t-he P erty
a mortgage insured, or held or owned, by the Californ' Housing
Finance Agency and the California Housing Financ gency shall have
determined that all buildings constitutinggaa part of the Improvements
and covered by such mortgage are in fact substantially completed
in accordance with the Construction Plans and are ready for occupancy,
then, in the event, the City and the Developer shall accept the
determination of the Califo n"ia Housing Finance Agency as to such
completion of the constr ction of the Improvements in accordance
P P
with the Construction�Plans, and, if the other agreements and cov-
enants in the Agreement obligating the Developer in respect of the
construction a=n""d completion of the Improvements have been fully
satified, the City shall forthwith issue its certification provided
for in this Section. Such certification and such determination
shal/not constitute evidence of compliance with or satisfaction
-16-
of any obligation of the Developer to an_y,�holder-of a mortgage,
or any insurer of a-mo-tgage, securing money loaned to finance
the rovements, or any part thereof.
(2) Each certification provided for in this SECTION 10
shall be in such form as will enable it to be recorded in the
proper office for the recordation of deeds and other instruments
pertaining to the Property, including the Lease. If the City shall
refuse or fail to provide any certification in accordance with the
provisions of this Section, the City shall, within thirty (30) days
after written request by the Developer, provide the Developer with
a written statement, indicating in adequate detail in what respects
the Developer has failed to complete the improvements in accordance
with the provisions of the Agreement, or is otherwise in default,
and what measures or acts it will be necessary, in the opinion of
the City, for the Developer to take or perform in order to obtain
such certification.
SECTION 11. Preparation of Property for Development.
(a) Work to be Performed by the City. The City prior to
construction of Improvements on the Property and without expense
to the Developer prepare the Property for development by the Devel-
oper in accordance with t��e-lUg tfffeent—P°1=am-amd--the�Agreement.
Such preparation shall consist of the following, unless the City,
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and the Developer hereafter agree in writing that any of the pre-
paration shall not be done, or that it shall be done subsequent
to the conveyance of the Property:
(1) Survey. The City at its own cost and expense shall
initiate an ALTA survey on the entire site. The survey shall es-
tablish boundary lines for the housing site and such boundary lines
shall be utilized for determining the area of responsibility of the
Developer with respect to landscaping and maintenance duties.
(2) Soils Report. The City at its own cost and expens �w� +
shall furnish the Developer with a soils report. NWv, 't L
(3) General Plan Amendment. A General Plan Amendment shall
be initiated encompassing the concept of Developers proposal and
processed by City for adoption by the Planning Commission and City
Council at no cost or expense to the Developer.
(4) Specific Plan.- Shall be initiated by City staff at- no
cost to Developer. The Developer shall cooperate and supply what-
ever information may be required by City staff with respect to the
housing development. (Attached as Exhibit )
(5) Environmental Impact Report. The City shall retain
outside consultants to conduct an EIR study for the proposed de-
velopment on the Property. The Developer shall pay a pro rata share
of the cost of the EIR study for the housing site.
(6) Coastal Commission. The City shall initiate an application
to the Coastal Commission for its approval of the proposed development.
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The Developer agrees to cooperate and provide necessary documen-
tation required by City staff and to be available for all con-
ferences, presentation and hearings as is required.
(7) Demolition and Removal. All existing buildings , sur-
face and below grade structures and other improvements on the
Property, such as but not limited to, foundations, cesspits, wells,
basements, debris, pal4ing, all vegetation and deleterious material
shall be demolished and removed in their entirety. The cavities
left by such removal shall be back-filled and compacted according
to the recommendations of a licensed soils engineer, who shall in-
spect and certify as to the satisfactory completion of the work,
which shall also comply with the latest requirements of HUD' s data /
sheet 79 G as .it may be amended.
(8) Removal and Relocation of Public Utility Lines. The
C
removal, relocation or abandonment by the Aijajaixy or by the appro-
priate public body or public utility company of all public utility
lines, installations, facilities, and related equipment within or
on the Property, as necessary for the construction of the Project.
(9) Filling and Grading. The City shall only be responsible
for soil conditions and the placement of fill on the Property as
hereinabove set forth.
(b) Expenses, Income and Salvage. All expenses, including
current taxes, if any, relating to buildings or other structures
demolished or to be demolished in accordance with SECTION' 11 hereof
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shall be borne by, and all income or salvage received as result of
the demolition of such buildings or structures shall belong to,
the City.
(c) City' s Responsibilities for Certain Other Actions.
The City, without expense to the Developer or assessment or
claim against the Property and prior to completion of the Improve-
ments or at such earlier time or times as the Developer and the
City may agree in writing, shall, in accordance with the Development
Plan, provide or secure or cause to be provided or secured, the
following:
(1) Vacation of Streets, Etc. The closing and vacation
of all existing streets, alleys, and other public rights-of-way
within or abutting on the Property.
(2) Replatting, Resubdivision, Rezoning or Zoning
Variances.
The replatting, resubdivision, rezoning or obtaining
zoning variances, if necessary for the conveyance of the Property.
(3) Installation of Public Utilities. The installation
or relocation (by the City or by the appropriate public body or
public utility company) or such sewers, drains, water and gas dis-
tribution lines, electric, telephone, and telegraph lines, and all
other public utility lines, installations, and facilities as are
necessary to be installed or relocated on or in connection with
the Property by reason of the Development Plan and the development
-20-
of the Property: Provided, that the City shall not be responsible
for, nor bear any portion of the cost of, installing the necessary
utility connections within the boundaries of the Property between
the Improvements to be constructed on the Property by the Developer
and the water, sanitary sewer, and storm drain mains or other public
utility lines owned by the City or by any public utility company
within or without such boundaries, or electric, gas, telephone, or
other public utility lines owned by any public utility company
within or without such boundaries, and the Developer shall secure
any permits required for any such installation without cost or
expense to( :the City or the Agency.
(4) Library and Senior Center. The City shall nego-
tiate and enter into a separate Agreement with the Architectural
firm of Kamnitzer Cotton Vreeland for their services in developing
architectural schematics, and full working drawings and specifica-
tions on both the Senior Center and Library.
(5) Competitive Bids. City shall advertise a�a J
aait.afor bids in their normal process the work ;e the construction
of the Senior Center and improvements to the Library.
SECTION 12 . Responsibilities of Developer Prior to
Construction of Improvements.
(1) Conditional Use Permit. Developer shall initiate at
its own cost and expense an application for a Conditional Use Permit
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(CUP) immediately after the City Council adopts the EIR and Speci-
fic Plan.
(2) Specific Plan. The Developer agrees to abide by the
requirements of the Specific Plan with respect to such things as:
(a) Installation of Sidewalks and Street Trees,
(b) Street Signs,
(c) Fire Hydrants shall remain as they presently exist.
If Fire Department of City of Huntington Beach shall require add-
itional hydrants located on the housing site then the City and De-
veloper shall negotiate on the respective cost of installation of
such additional fire hydrants.
(3) Development Fees. The Developer agrees to pay the nor-
mal processing fees for the development of the Property as were
specified in the City' s Request for Proposals for such things as:
(a) Plan Check
(b) Sewer Connection
(c) Park Fees
(d)
(e)
(f)
(4) Schedule of Performance. The Developer shall prepare
a Schedule of Performance outlining the general processing time-
table for the processing of the application for mortgage financing
-22-
as well as the construction period and. for the administrative
processing and approvals required. Such Schedule of Performance
shall be attached to this Agreement as Exhibit
(5) Mortgage Financing. Developer shall immediately submit
an application to the CHFA for site and developer approval.
SECTION 13. Changes or Repair of Work After Public
Improvements are Constructed or Completed.
Once public improvements are constructed or completed any
changes required by the Developer shall be at the expense of the
Developer. The City shall not be responsible for the removal,
restoration or repair of any pending, finished or completed work
which work must be or is removed or otherwise damaged by the De-
veloper in developing the Property.
The Developer shall bear all expense for restoring or
repairing any such work. These repairs, improvements and restor-
ation shall be constructed in accordance with the technical spec-
ifications and practices of the City. The City shall coordinate
all uncompleted work required under this Section with Developer ' s
schedule and activities so that all work may be completed in a
manner consistent with Developer' s construction efforts. Any other
work to be performed by the City with reference to the Property shall
be as specified in the Scope of Development and within the times
specified in the Schedule of Performance.
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SECTION 14. Restrictions on Use of Property.
(a) Restriction on Use. The Developer agrees for itself,
and its successors and assigns, and every successor in interest to
the Property, or any part thereof, and the Lease shall contain
covenants on the part of the Developer for itself, and such successors
and assigns, that the Developer, and such successors and assigns,
shall :
(i) Devote the Property to, and only to and in ac-
cordance with, the uses specified in this
Agreement; and
(ii) Not discriminate upon the basis of race, color,
marital status, religion, sex or national origin
in the sale, lease, or rental or in the use or
occupancy of the Property or any improvements
erected or to be erected thereon, or any part
thereof.
(iii) Include the legend, "An Open Occupancy Building"
in type or lettering of easily legible size and
design in all advertising (including signs) for
the sale and/or rental of the whole or any part
of the Property. The word "Project" or "Development"
may be substituted for the word "Building" where
circumstances require substitution.
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(v) Comply with the regulations issued by the
California Housing Finance Agency and all
applicable rules and regulations issued per-
taining to affirmative marketing, affirmative
action, leasing and employment standards.
(vi) Not use the Property for any purpose other than
for low and moderate income housing of senior
citizens and handicapped persons for a period of
fifty-five (55) years from the date of the Lease,
or until maturity date of the mortgage pertain-
ing thereto, whichever is longer, or the period in
which Section 8 or a substantially equivalent suc-
cessor program is in effect. The mortgage on the
Property may not be prepaid without the prior
written approval of the City and CHFA. Senior
citizens are defined as single individuals over
the age of 62 years, or married couples, in which
case at least one spouse is over the age of 62
years or as HUD may subsequently redefine it.
If Developer prepays the mortgage or transfers the
Property before the final mortgage debt has been
paid, all other documents relative to the prepayment,
or transfer shall contain appropriate covenants
-25-
requiring such Parcel to be used for low and
moderate income housing for the remaining years
of the period provided for in the preceding
paragraph.
(b) Covenants; Binding Upon Successors in Interest; Period
of Duration.
It is intended and agreed, and the Lease shall so expressly
provide, that the agreements and covenants provided in this SECTION
14 shall be covenants running with the land and that they shall ,
in any event, and without regard to technical classification or de-
signation, legal or otherwise, and except only as otherwise speci-
fically provided in the Agreement, be binding, to the fullest extent
permitted by law and equity, for the benefit and in favor of, and
enforceable by, the City and any successor in interest to the Property,
or any part thereof, against the Developer, its successors and
assigns and every successor in interest to the Property, or any
part thereof or any interest therein, and any party in possession
or occupancy of the Property or any part thereof.
SECTION 15. Prohibitions Against Assignment and Transfer.
(a) Representations as to Development. The Developer re-
presents and agrees that its Leasing of the Property, and its other
undertakings pursuant to the Agreement, are, and will be used, for
-26-
the purpose of development of the Property and not for specu-
lation in land holding. The Developer further recognizes that,
in view of:
(1) the importance of the development of the Property
to the general welfare of the community; '
(2) the substantial financing and other public aids
that have been made available by law for the
purpose of making such development possible; and
(3) the fact that a transfer of the ownership interest
in the Developer or of a substantial part thereof,
or any other action or transaction involving or
resulting in a significant change in the ownership
or with respect to the identity of the parties in
control of the Developer or the degree thereof,
is for practical purposes a transfer of disposition
of the property then owned by the Developer;
the qualifications and identity of the Developer are of particular
concern to the community and the City. The Developer further
recognizes that it is because of such qualifications and identity
that the City is entering into the Agreement with the Developer,
and, in so. doing, is further willing to accept and rely on the
obligations of the Developer for the faithful performance of all
undertakings and covenants hereby by it to be performed without
-27-
requiring in addition a surety bond or similar undertaking for
such performance of all undertakings and covenants in the Agreement.
(b) Prohibition Against Transfer of Property and Assignment
of Agreement.
Also, for the foregoing reasons the Developer represents
and agrees for itself, and its successors and assigns, the Developer
will not transfer the Lease to the Property nor assign any of its
obligations undertaken by this Agreement except that:
(1) For security purposes to obtain financing necessary
to enable the Developer, or any successor in in-
terest to the Property, or any part thereof, to
perform its obligations with respect to making
the Improvements under the Agreement, and
(2) Prior to the initial endorsement of the mortgage
by CHFA, Developer may assign all or a portion of
its rights and obligations under this Agreement to
a joint venture, limited or general partnership
for the purpose of acquiring and developing the
Property provided that CHFA approves the transfer
in writing and the said joint venture, limited or
general partnership or other entity agrees in
writing to be bound by all of the provisions of
this Agreement.
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(3) The City shall be entitled to require, except as
otherwise provided in the Agreement, as condi-
tions to required prior written approval of any
transfer that:
(i) Any proposed transferee shall have the qual-
ifications and financial responsibility, as deter-
mined by the City, necessary and adequate to ful-
fill the obligation undertaken in the Agreement
by the Developer (or, in the event the transfer
is of or relates to part of the Property, such
obligations to the extent that they relate to such
part.
(ii) Any proposed transferee, by instrument in
writing satisfactory to the City and in form record-
able among the land records, shall, for itself and
its successors and assigns , and expressly for the
benefit of the City, have expressly assumed all
of the obligations of the Developer under the
Agreement and agreed to be subject to all the condi-
tions and restrictions to which the Developer is
subject (or, in event the transfer is of or relates
to part of the Property, such obligations, condi-
tions, and restrictions to the extent that they
-29-
relate to such part) : Provided, that the fact that
any transferee of, or any other successor in inter-
est whatsoever to, the Property, or any part thereof,
shall, whatever the reason, not have assumed such
obligations or so agreed, shall not (unless and
only to the extent otherwise specifically pro-
vided in the Agreement or agreed to in writing
by the City) relieve or except such transferee
or successor of or from such obligations, con-
ditions or restrictions, or deprive or limit the
City or with respect to any rights or remedies
or controls with respect to the Property or the
construction of the Improvements; it being the
intent of this, together with other provisions
of the Agreement, that (to the fullest extent
permitted by law and equity and excepting only
in the manner and to the extent specifically
provided otherwise in this Agreement) no transfer
of, or change with respect to, leasehold in the
Property or any part thereof, or any interest
therein, however consummated or occurring, and
whether voluntary or involuntary, shall operate,
legally or practically, to deprive or limit the
-30-
City of or with respect to any rights or remedies
or controls provided in or resulting from the
Agreement with respect to the Property and the
construction of the Improvements that the City
would have had, had there been no such transfer
or change.
(iii) There shall be submitted to the City for
review all instruments and other legal documents
affecting the identity or name style of Developer
or its successors; and if approved by the City,
its approval shall be indicated to the Developer
in writing.
(iv) The Developer and its transferee shall
comply with such other reasonable conditions as
each of the City may find desirable in order to
achieve and safeguard the purposes of the Devel-
opment Plan. Provided, that in the absence of
specific written agreement by the City to the con-
trary, no such transfer or approval by the City
thereof shall be deemed to relieve the Developer,
or any other party bound in any way by the Agree-
ment or otherwise with respect to the construction
of the Improvements, from any of its obligations
with respect thereto.
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SECTION 16 . Remedies.
(a) In General . Except as to any failure of the Conditions
Precedent set forth in SECTION n , hereof, and as otherwise pro-
vided in the Agreement, in the event of any default in or breach of
the Agreement, or any of its terms or conditions, by either party
hereto, or any successor to such party, such party (or successor)
,shall, upon written notice from the other, proceed immediately to
cure or remedy such default or breach, and, in any event, within
sixty (60) days after receipt of such notice. In case such action
is not taken or not diligently pursued, or the default or breach
shall not be cured or remedied within a reasonable time, the ag-
grieved party may institute such proceedings as may be necessary
or desirable in its opinion to cure and remedy such default or breach,
including, but not limited to, proceedings to compel specific per-
formance by the party in default or breach of its obligations.
(b) Termination by City Prior to Conveyance. Subject to
SECTION 16 (f) , in the event that prior to execution of Lease to
the Property to the Developer and in violation of this Agreement
Developer fails to meet its obligations hereunder, including, with-
out limitation, any failure by Developer to make a good faith effort
to fulfill the conditions precedent, and at the option of the City,
this Agreement shall be terminated and any rights of the Developer,
or any assignee or transferee, in the Agreement, or arising there-
from with respect to the City or the Property, shall, at the option
-32-
of the City, be terminated by the City, and neither the Developer
(or assignee or transferee) nor the City shall have any further
rights against or liability to the other under the Agreement.
In the event the City terminates this Agreement prior to
conveyance, as provided herein, any services rendered or funds
expended by the Developer shall be absorbed by the Developer with-
out recoupment whatsoever, and neither the Developer nor the City
shall have any further rights against or liability to the other.
(c) Termination by Developer Prior to Execution of Lease.
Subject to SECTION 16 (f) , in the event that the City does
not tender possession of the Property .in the manner and condition,
and by the date, provided in the Agreement, and any such failure
shall not be cured within thirty (30) days after the date of written
demand by the Developer, then the Agreement, shall, at the option
of the Developer, be terminated by written notice thereof to the
City, and neither the City nor the Developer shall have any further
rights against or liability to the other except as provided under
the Agreement. In the event the Developer terminates this Agree-
ment-under those conditions_ .set out in:' the previous sentence, the
Developer shall be entitled to a refund of any funds advanced to
obtain an CHFA commitment for financing, if not otherwise refundable,
plus 50% of all certifiable out-of-pocket costs directly attributable
to this project represented by CHFA filing fees, the out-of-pocket
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cost of preparing final architectural and engineering plans and
specifications, plan check fees, and building permit fees.
(d) Rights and Liabilities Termination Prior to Possession.
The City and Developer agree that it would be impractical
or extremely difficult to fix actual damages in case of termination
prior to conveyance and therefore agree that their rights and
liabilities to the other under this Agreement are limited to those
provided in paragraphs (b) and (c) of the SECTION 16 .
(e) Other Rights and Remedies of Parties; No Waiver by Delay.
The parties shall have the right to institute such actions
or proceedings as it may deem desirable for effectuating the pur-
poses of the SECTION 16 including also the right to execute and
record or file among the public land records in the office in which
the Lease is recorded a written declaration of the termination of
all the right, title, and interest of the Developer, and (subject
to such mortgage liens and leasehold interests as provided in this
SECTION 16 hereof) its successors in interest and assigns, in the
Property, and the revesting of title thereto in the Agency:
Provided, that any delay by the parties in instituting or prosecuting
any such action or proceedings or otherwise asserting its rights
under this Agreement shall not operate as a waiver of such rights
or to deprive them of or limit such rights in any way (it being
the intent of this provision that the party should not be constrained
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so as to avoid the risk of being deprived of or limited in the
exercise of the remedy provided in this Section because of concepts
of waiver, laches, or otherwise to exercise such remedy at a time
when it may still hope otherwise to resolve the problems created
by the default involved) ; nor shall any waiver in fact made by one
party with respect to any specific default by the other party under
thie Section be considered or treated as a waiver of rights of one
party with respect to other defaults by the other party under this
Section or with respect to the particular default except to the
extent specifically waived in writing.
(f) Enforced Delay in Performance for Causes Beyond
Control of Party.
For the purposes of any of the provisions of the Agreement,
neither the City nor the Developer as the case may be, nor any
successor in interest, shall be considered in breach of, or default
in, its obligations with respect to the preparation of the Property
for development, or the beginning and completion of construction
of the Improvements, or progress in respect thereto, in the event
of enforced delay in the performance of such obligations due to un-
forseeable causes beyond its control and without its fault or
negligence, including, but not restricted to, acts of God, acts of
the public enemy, acts of the Federal or State Government, including
processing of financing commitments, acts of the other party, fires,
floods, epidemics, quarantine restrictions, strikes, freight, embar-
goes and unusually severe weather or delays of subconstractors due
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to such causes; it being the purpose and intent of this provision
that in the event of the occurrence of any such enforced delay,
the time or times for performance of the obligations of the City
with respect to the preparation of the Property for development or
of the Developer with respect to construction of the Improvements,
as the case may be, shall be extended for the period of the enforced
delay as determined by the City: Provided, that the party seeking
the benefit of the provisions of this Section shall, within ten (10)
days after the beginning of any such enforced delay, have first
notified the other party thereof in writing, and of the cause or
causes thereof, and requested an extension for the period of the
enforced delay.
(g) Rights and Remedies Cumulative. The rights and remedies
of the parties to the Agreement, whether provided by law or by the
Agreement, shall be cumulative, and the exercise by either party of
any one or more of such remedies shall not preclude the exercise by
it, at the same or different times, of any other such remedies for
the same default or breach or of any of its remedies for any other
default or breach by the other party. No waiver made by either such
party with respect to the performance, or manner or time thereof,
or any obligation of the other party or any condition to its own
obligation under the Agreement shall be considered a waiver of any
rights of the party making the waiver with respect to the particular
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obligation of the other party or condition to its own obligation
beyond those expressly waived in writing and to the extent thereof,
or a waiver in any respect in regard to any other rights of the
party making the waiver or any other obligations of the other party.
SECTION 17 . Special Provisions.
(a) Tax Exemption. The Property shall not be removed from
the property tax rolls and shall not be exempted from property tax
payments, except under programs now or hereafter enacted by the State
of California for the general relief of homeowners. Developer for
itself and for its successors and assigns agrees not to file an
application for exemption from property tax assessment and payment,
except for those exemptions which may now exist or hereafter be
enanacted by the State of California for the general relief of home-
owners. This in no way limits Developer' s right to question or
seek reduction of any assessed valuation of the Property.
(b) Bodily Injury and Property Damage Insurance. Before
commencement of any work of improvement upon the Property, the
Developer shall furnish or cause to be furnished to the City
duplicate originals or appropriate certificates of bodily injury t
and property damage insurance policies in the amount of at least
$500, 000 for any person, $2, 000, 000 for any occurrence and $100, 000
property damage, the City as co-insured.
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(c) Maintenance of Land Prior to Construction. The Devel-
oper shall maintain the cleared land he leases within the Project
Area in a neat and orderly condition between the date of possession
and the commencement of construction.
(d) Execution of Documents . The City and the Developer
agree to .execute any and all documents that may be necessarily
required by California Housing Finance Agency in connection with
this Project.
(e) Environmental Impact Documents. As a condition pre-
cedent to Developer' s obligation to lease the Property hereunder,
the City shall have caused to be prepared and approved such en-
vironmental findings and documentation for the Development Plan
for the Project with respect to improvements contemplated in the
Scope of Development, as may be required by the California Envi-
ronmental Quality Act of 1970 , as amended (CEQA) , the Coastal
Commission and all applicable state regulations and local ordinances
with respect thereto, so that the Developer and the City shall be
legally entitled under the California Environmental Quality Act of
1970 and all state regulations and local ordinances to construct
and use the improvements contemplated in the Scope of Development
(and all time periods for any judicial or administrative appeal
from or collateral attack upon such findings, or the approval there-
of, or the applicability thereof to the Project shall have expired
and no such appeal or attack shall be pending) . The Developer
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shall provide all reasonable assistance to the City and the Agency
in satisfying the foregoing conditions.
The Developer shall comply with all mitigation measures
proposed to minimize adverse impacts resulting from project imple-
mentation which are included in any such environmental documentation.
(f) City and Other Governmental Agency Permits and Fees.
Before commencement of construction or development of any
buildings, structures or other work or improvement upon the Property
or any portion thereof, the Developer shall at its own expense
secure or cause to be secured any and all permits and pay any and
all fees and charges which may be required by the City or any other
governmental agency affected by such construction, development or
GL
work. The Aqe,,Rfy shall provide all proper assistance to the De-
veloper in securing such permits.
(g) Successors in Interest. The terms of this Agreement
shall bind the parties, namely the City, and Developer, and their
successors in interest, if any.
(h) Provisions Not Merged With Lease. None of the provisions
of the Agreement are intended to or shall be merged by reason of
any lease transferring possession to the Property from the City to
the Developer or any successor in interest, and any such lease shall
not be deemed to affect or impair the provisions and covenants of
the Agreement.
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(i) Titles of Sections. Any titles of the several Sections
of the Agreement are inserted for convenience of reference only and
shall be disregarded in construing or interpreting any of its
provisions.
SECTION 18. Counterparts.
This Agreement is executed in five (5) counterparts, each
of which is deemed to be an original.
SECTION 19 . Entire Agreement, Waivers, and Amendments.
The Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotia-
tions or previous agreements between the parties with respect to
all or any part of the subject matter hereof.
All waivers of the provisions of this Agreement must be in
writing by the appropriate authorities of the City or the Developer
and all amendments hereto must be in writing by the appropriate
authorities of the City, and the Developer.
SECTION 20 . Time for Acceptance of Agreement by City.
This Agreement, when executed by the Developer and delivered
to the City must be authorized, executed and delivered by the City
within thirty (30) days after the date of signature by the Developer
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or this Agreement shall be void, except to the extent that the
Developer shall consent in writing to a further extension of time
for the authorization, execution and delivery of this Agreement.
The date of this Agreement shall be the date when the Agreement
shall have been signed by the City.
The City and the Developer covenant that each individual
executing this document by and on behalf of each party hereto is
a person duly authorized to execute contracts for that party.
SECTION 21. Conflict of Interest; Agency' s Representative
Not Individually Liable.
No member, official, or employee of the City 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 this Agreement that affects his personal interest or
the interest of any corporation, partnership, or association in which
he is, directly or indirectly, interested. No member, official,
or employee of the City shall be personally liable to Developer or
any successor in interest in the event of any default or breach by
the City, or for any amount that may become due to Developer or
successor, or on any obligation under the terms of this Agreement.
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t
IN WITNESS WHEREOF, the City, and the Developer have signed
this Agreement as of the dates set opposite their signatures.
CITY OF HUNTINGTON BEACH
DATE : By:
Mayor
ATTEST: APPROVED AS TO FORM:
By:
City Clerk City Attorney
WILLIAM LYON COMPANY
DATE: By:
ATTEST:
Secretary
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