HomeMy WebLinkAbout2018/04/24 2pm - Revised DDA i
DISPOSITION AND DEVELOPMENT AGREEMENT
by and among
SAN DIEGO UNIFIED PORT DISTRICT
("District"),
CITY OF CHULA VISTA
and
RIDA CHULA VISTA, LLC
a Delaware limited liability company
("Developer")
RESORT HOTEL AND CONVENTION CENTER PROJECT
(Chula Vista Bayfront Master Plan Parcel H-3)
it
TABLE OF CONTENTS
Page
1. GENERAL PROVISIONS....................................................................................................5
1.1 Purpose of this Agreement.........................................................................................5
1.2 Project Site..................................................................................:.............................5
1.3 Project Approvals......................................................................................................6
1.4 Implementing Actions by City, District and Government Agencies............................7.
1.5 CEQA Compliance....................................................................................................9
1.6 Deposit......................................................................................................................9
11. IDENTITY OF PARTIES.....................................................................................................9
2.1 Developer..................................................................................................................9
2.2 District....................................................................................................................13
2.3 City.........................................................................................................................13
2.4 Notices....................................................................................................................13
111. TERM.................................................................................................................................16
3.1 Term.......................................................................................................................16
IV. DESIGN AND DEVELOPMENT OF PROJECT................................................................17
4.1 Design and Development of the Project...................................................................17
4.2 City Infrastructure Improvements............................................................................18
4.3 Design of Surface Parking and Parking Improvements............................................18
4.4 Submission and Approval of Schematic Plans and Building Pen-nit
ApplicationDrawings..............................................................................................18
4.5 Agreement on Total Project Costs...........................................................................22
4.6 No Developer's Obligation to Construct the Developer's Improvements
Surface Parking or Parking Improvements...............................................................23
4.7 District and City Financial Contribution..................................................................23
4.8 Expenditures Prior to the Close of Escrow...............................................................24
4.9 Inspection of Records..............................................................................................25
4.10 Insurance..........................................................................:......................................25
4.11 Liability Insurance Policy Limits.............................................................................26
4.12 Builder's"All Risk"Insurance................................................................................27
4.13 Required Policy Provisions.............................:........................................................27
4.14 Payment Bonds and Performance Bonds..................................................................27
4.15 Completion Guaranty..............................................................................................28
4.16 Prevailing Wages....................................................................................................28
4.17 Developer's Indemnity Obligations.........................................................................30
4.18 Liens and Claims.....................................................................................................31
4.19 Validation Action....................................................................................................31
4.20 City Procurement Process.............:..........................................................................32
4.21 Compliance with Law;Enforceability by District,City and JEPA............................32
4.22 Energy Requirements.......:......................................................................................33
V. REQUIREMENTS OF PARTIES,CONDITIONS PRECEDENT TO CLOSE OF
ESCROW............................................................................................................................34
5.1 Periodic Review;Meet and Confer..........................................................................34
5.2 Conditions Precedent to Close of Escrow Benefiting the District and the City.........35
5.3 Conditions Precedent to Close of Escrow Benefiting Developer..............................39
5.4 Approvals;Cooperation Between Parties.................................................................41
5.5. Consideration of Changes to the Ground Lease or Convention Center
Subleases................................................................................................................42
5.6 Waiver of Certain Conditions..................................................................................42
5.7 Physical Condition of the Project Site......................................................................42
5.8 Due Diligence Investigations, Early Entry by Developer, Due Diligence
PeriodWork............................................................................................................42
5.9 Exclusive Neeotiations............................................................................................43
Vl. LEASE OF PROJECT SITE;CLOSE OF ESCROW...........................................................44
6.1 Lease of Project Site................................................................................................44
6.2 Opening of Escrow;Updated Preliminary Title Reports...........................................44
6.3 Execution and Delivery of Documents.....................................................................46
6.4 Close of Escrow;Title Policies................................................................................46
6.5 Costs of Escrow;Title Insurance.............................................................................48
VII. DEFAULTS,REMEDIES...................................................................................................48
7.1 General Developer Default......................................................................................48
7.2 Default by District or City.......................................................................................49
7.3 Remedies Exclusive................................................................................................49
7.4 Dispute Resolution..................................................................................................49
Vlll. EVENTS OF TERMINATION; RIGHTS AND OBLIGATIONS OF PARTIES.................49
8.1 Events of Termination.............................................................................................49
8.2 Disposition of Deposit.............................................................................................50
8.3 Effect of Termination..............................................................................................51
IX. MISCELLANEOUS PROVISIONS....................................................................................52
9.1 Real Estate Commissions........................................................................................52
9.2 Time of Essence......................................................................................................52
9.3 Consent...................................................................................................................52
9.4 Entire Agreement....................................................................................................52
9.5 Interpretation...........................................................................................................53
9.6 Governine Laxv.......................................................................................................53
9.7 Captions..................................................................................................................53
9.8 No Third Party Rights.............................................................................................53
9.9 Modification or Amendment of Agreement;Operating Memoranda ........................53
9.10 Waiver....................................................................................................................53
9.11 Severability.............................................................................................................54
9.12 Certificates..............................................................................................................54
9.13 Counterparts............................................................................................................54
9.14 No Joint and Several Liability.................................................................................54
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APPENDICES AND ATTACHMENTS
Appendix No. 1 Definitions
Attachment No. 1 Map of Project Site
Attachment No.2 Legal Description of Project Site
Attachment No.3 Map Showing General Location of
Elements of the Project(Site Plan)
Attachment No.4 Conceptual Outline of JEPA Plan of Finance
Attachment No. 5 Scope of Development
Attachment No.6 Schedule of Performance
Attachment No. 7 Form of Developer's Private Improvements and Convention Center
Budget
Attachment No.8 Quality of Imported Soil
Attachment No.9 Draft of the Ground Lease
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DISPOSITION AND DEVELOPMENT AGREEMENT
Resort Hotel and Convention Center Project
JChula Vista Bayfront Master Plan Parcel H-31
This Disposition and Development Agreement (this "Agreement") is entered into as
,.20 May 7, 2018 (the "Execution Date"), by and among the SAN
DIEGO UNIFIED PORT DISTRICT, a public corporation (the "District"), the CITY OF CHULA
VISTA, a chartered municipal corporation (the "City'), and RIDA CHULA VISTA, LLC, a
Delaware limited liability company(the"Developer"). The District,City and Developer are the sole
parties (each, a "Party' and, collectively, the "Parties") to this Agreement. The "Effective Date"
shall be May 7, he same as the Execution Date.
RECITALS
This Agreement is based upon the following recitals,facts and understandings of the Parties:
A. In 2002, the District, the City and the Redevelopment Agency of the City of Chula
Vista,a redevelopment agency formed pursuant to California Health and Safety Code Section 33000
et seg.(the"Redevelopment Agency")began work to create a master plan,known as the Chula Vista
Bayfront Master Plan (District Clerk No. 59406) (the "Master Plan") for development of the
approximately 535-acre Chula Vista Bayfront (the "CHula Vista Bayfront") located on the
southeastern edge of San Diego Bay in the City of Chula Vista. The purpose of the Master Plan was
to reconfigure the approximately 497 acres of land and 59 acres of water which comprise the Chula
Vista Bayfront by connecting the land and water acres in a way that will promote public access to,
and engagement with,the water while enhancing the quality and protection of key habitat areas,with
the ultimate goal of creating a world-class bayfront through strong planning and design, economic
feasibility and community outreach.
B. On May 18,2010,the District,as Lead Agency(as such term is defined in California
Public Resources Code Section 21067),certified a Final Environmental Impact Report for the Chula
Vista Bayfront Master Plan and Port Master Plan Amendment (UPD No. 83356-EIR-658; SCH
No.2005081077) (District Clerk No. 56562)("Original FEIR"). The City is a Responsible Agency
(as such term is defined in California Public Resources Code Section 21069). The Master Plan is the
project described in the FEIR(as defined in Section 1.3(b)),and the area encompassed by the Master
Plan is referred to herein as the"Master Plan Project Area".
C. On May 18, 2010, the City, as a Responsible Agency (as such term is defined in
California Public Resources Code Section 21069) after having considered and relying on the Final
Environmental Impact Report (No. 83356-EIR-658; SCH No.2005081077) for the Master Plan and
Master Plan Amendment, pursuant to the California Environmental Quality Act (Public Resources
Code Section 21000, et seq.) ("CE A"), made certain Findings of Fact; adopted a Statement of
Overriding Considerations and adopted a Mitigation Monitoring and Reporting Program for the
Master Plan Project Area.
D. On August 9, 2012, the California Coastal Commission conducted a public hearing
and approved a request by the City to amend the certified Local Coastal Plan (LCP Amendment
No. 1-11), Land Use Plan and Implementation Plan to revise the Local Coastal Plan boundaries and
provide alternate land uses and development standards for the Master Plan in conjunction with the
District. On August 9, 2012, the California Coastal Commission conducted a public hearing and'
approved a request by the District to amend the Master Plan(PMP Amendment No. 41)to revise the
Master Plan boundaries, provide alternate land uses and development standards for the Master Plan
in conjunction with the City.
E. On May 6, 2014, the District Board of Port Commissioners ("BPC") adopted a
resolution authorizing the issuance of a Request for Qualifications("RFO") for the development of
the Project in the Master Plan Project Area. After considerable local, regional, national and
international marketing efforts by District staff and City staff, RFQ 14-24(District Clerk No. 62033)
was issued on June 30,2014.The responses to the RFQ were due on September 8,2014. A response
was received from RIDA Development Corporation ("RIDA"). On October 14, 2014, the BPC
adopted Resolution No. 2014-200 selecting RIDA as the successful respondent to the RFQ and
Resolution No.2014-201 authorizing District staff to negotiate an Exclusive Negotiating Agreement
with RIDA. RIDA formed the Developer for the Project and the District entered into an Exclusive
Negotiating Agreement with the Developer, dated February 10, 2015 (District Clerk No. 62899)
("Original ENA"), as modified by Agreement for Amendment of Exclusive Negotiating Agreement
Amendment No. 1, dated August 9, 2016 (District Clerk No. 65707) ("First Amendment"),
Agreement for Amendment of Exclusive Negotiating Agreement Amendment No. 2, dated
January 25, 2017 (District Clerk No. 66141) ("Second Amendment"), and Agreement for
Amendment of Exclusive Negotiating Agreement Amendment No. 3, dated February 16, 2018
(District Clerk No. 67906) ("Third Amendment") (the Original ENA, the First Amendment, the
Second Amendment,and Third Amendment are collectively referred to herein as,the"ENA"). This
Agreement is the "Definitive Agreement" contemplated in the ENA as the culmination of the
negotiations between the District and the Developer.
F. Through the implementation of the Master Plan, the Developer, the District and the
City have determined to cause the redevelopment of a portion of the Master Plan Project Area
referred to as Parcel H-3 (exclusive of the District Retained Property)(the"Project Site"),as shown
on the Map of the Project Site attached hereto as Attachment No. 11 and incorporated herein by
reference,and as more particularly described in the Description of the Project Site attached hereto as
Attachment No.22 and incorporated herein by reference, with the development of a resort hotel and
convention center in accordance with the terms herein, and, as further defined in the Scope of
Development attached hereto as Attachment No. 5 and incorporated herein by reference ("Scope of
Development"), to serve as the anchor project of the Master Plan (the "Project"). The Parties
anticipate that the Project will generate substantial benefits to the local and regional community in
the form of increased tax and lease revenues, permanent and temporary jobs, and the provision of
significant public amenities and public infrastructure and will be the development catalyst for the
Master Plan Project Area. As such, the District and City have found and determined that the
development of the Project Site pursuant to the terms of this Agreement are in the vital and best
interests of the people of the State of California, County of San Diego, and the City, and in accord
with the public purposes and provisions set forth in California Harbors and Navigation Code
Appendix 1,and the City Charter.
Attachment No.1 includes the District Retained Property.
Z Attachment No.2 includes the District Retained Property
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G. Development of the Master Plan Project Area, which area is currently largely vacant
land, will require the construction of substantial public improvements during the development and
construction process("Phase IA")of the Project. Such public improvements are contemplated in the
Amended and Restated Chula Vista Bayfront Master Plan Financing Agreement, dated June 20,
2017, between the City and District (District Clerk No. 67068) ("Financing Agreement") and the
Scope of Development. Developer shall construct a portion of the Phase IA Infrastructure
Improvements ('Developer's Phase IA Infrastructure Improvements") and District (or City, if
applicable) shall construct, or cause to be constructed on their behalf; the remaining Phase IA
Infrastructure Improvements(`Remaining Phase 1 A Infrastructure Improvements"and,together with
Developer's Phase IA Infrastructure Improvements, the "Phase IA Infrastructure Improvements"),
as more fully described in the Scope of Development. The Financing Agreement may be amended
from time to time during the predevelopment and approval process(the"Predevelopment Phase")set
out in this Agreement. The Financing Agreement anticipates the development of a binding
agreement between the District and the City that sets forth,amongst other things,certain criteria and
objectives related to the financing by the District and the City of the Phase IA Infrastructure
Improvements required under Phase IA ("Plan of Finance") as such Phase IA Infrastructure
Improvements are set forth in Exhibits I and 2 attached to the Scope of Development. The Financing
Agreement further contemplates the financing of such Phase 1 A Infrastructure Improvements by the
District and the City, collectively, through the contribution of various sources of revenue to be
further defined in the approved Plan of Finance. The total Development Costs of the Phase IA
Infrastructure Improvements (the"Phase IA Infrastructure Costs"), which are currently estimated to
be SIXTY MILLION FIVE HUNDRED NINETY THOUSAND DOLLARS (S60,590,000), shall be
the sole obligation of the District and the City. The City and District expect to issue bonds through
the JEPA to finance up to FIFTY-SIX MILLION DOLLARS (S56,000,000) of the Phase IA
Infrastructure Costs and to use other sources of funds to fund the remaining Phase I Infrastructure
Costs. Pursuant to one or more agreements to be negotiated by the Parties prior to the Close of
Escrow and to be executed by the Parties at the Close of Escrow, a portion of the proceeds of such
financing shall be used to pay or credit the Developer for the Development Costs of the Developer's
Phase IA Infrastructure Improvements that are incurred before or after the Close of Escrow (the
"Developer's Phase IA Infrastructure Improvements Costs"), which are currently estimated to be
FOURTY MILLION FOUR HUNDRED SEVENTY THOUSAND DOLLARS 540.470.000, a
portion of which is anticipated to be offset by Bayfront Development Impact Fees due from
Developer to City in accordance with the Scope of Development.. Developer shall not perform any
work at the Project Site prior to the Close of Escrow, except for due diligence investigations which
shall be covered through a separate agreement between the District and the Developer. The ultimate
Plan of Finance will be based on the Conceptual Outline of JEPA Plan of Finance set forth in
Attachment No.4 attached hereto and incorporated herein by reference,which may be amended from
time to time during the Predevelopment Phase.
H. In furtherance of the Project, the District, City and Developer entered into a Non-
Binding Letter of Intent (`LOP") dated June 14, 2017, which outlines some of the basic economic
terms and conditions upon which this Agreement was prepared.
1. In addition to the Phase IA Infrastructure Costs, the District and the City will
together contribute an amount not to exceed the Project Public Investment Amount (the "Project
Public Investment") to be used to pay the Developer for the Development Costs of the convention
center component of the Project, as described in the Scope of Development ("Convention Center"),
as may be determined by the District and City in the Plan of Finance. The payment of the Project
Public Investment is anticipated to be made through an existing Joint Exercise of Powers Authority
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created by the District and City commonly known as the Chula Vista Bayfront Facilities Financing
Authority("ExistingJ_EPA"),or a new Joint Powers Authority to be formed by the District and City
(the Existing JEPA or any new Joint Powers Authority formed by the City and District pursuant to
this Agreement,shall be referred to herein as,the"JEPAI'),as described in the Financing Agreement.
The "Project Public Investment Amount" equals TWO HUNDRED FORTY MILLION DOLLARS
($240,000,000). Any Development Costs of the Convention Center in excess of the Project Public
Investment Amount shall be the sole obligation of Developer(the "Developer's Convention Center
Costs"). The Developer's Convention Center Costs are currently estimated to be ONE HUNDRED
THIRTEEN MILLION DOLLARS ($113,000,000) and the Developer expects to use other sources
of funds to fund the Developer's Convention Center Costs.The Project Public Investment Amount is
based on the assumption that the Hotel will be constructed and operated in accordance with the
Scope of Development and the Ground Lease, including that the Hotel will have at least 1,570
Rooms and not more than 1,600 Rooms (where"Room"shall mean a separately keyed lodging unit
of the Hotel)and will,initially,be branded as a Gaylord Hotel.
J. The Parties agree that a portion of Parcel H-3 will be reserved by the District should
the District elect to fund the construction of a parking structure (the "Parking_Improvements"),
which, if so elected by the District, will be designed and constructed by Developer and will be
financed by the District in an amount not to exceed FORTY MILLION DOLLARS ($40,000,000)
(the"Parking Improvements Costs").
K. The City will pay for and cause the construction of the sewer and fire service
improvements required for the Project (collectively, the "City Infrastructure Improvements"). A
portion of the City Infrastructure Improvements may be constructed by the Developer as a part of the
Developer's Phase IA Infrastructure Improvements, the Development Costs of which are to be
financed by the City as set forth in the Plan of Finance("City Infrastructure Improvements Costs").
L. The Developer's Phase IA Infrastructure Improvements and the Convention Center
are collectively referred to herein as the "Developer's Public Improvements", as further defined in
the Scope of Development.
M. The Developer will design a resort hotel component of the Project, which shall
consist of no less than 1,570 Rooms and no more than 1,600 Rooms in accordance with the terms
herein, and, as further defined in the Scope of Development (the "Hotel") and related resort-level
amenities as more fully described in the Scope of Development (collectively, the "Developer's
Private Improvements" and, together with the Developer's Public Improvements, the "Developer's
Improvements"). The estimated Development Costs of the Developer's Private Improvements are
SIX HUNDRED SEVENTY ONE MILLION FOUR HUNDRED FORTY ONE THOUSAND TWO
HUNDRED SEVENTY SIX DOLLARS ($671,441,276)and will be financed by the Developer and
will be the sole obligation of Developer(the"Developer's Private Improvements Costs").
N. The Remaining Phase lA Infrastructure Improvements and the City Infrastructure
Improvements.are collectively referred to herein as the "Public Improvements". The Public
Improvements and the Developer's Improvements are collectively referred to herein as the"Project".
O. The Parties now desire to set forth the terms and conditions upon which the District
may lease the Project Site to the Developer for the development, operation and maintenance of the
Project and the District and City may finance the Phase IA Infrastructure Costs, the Project Public
Investment and the City Infrastructure Improvements Costs(collectively, the "Public Improvements
4
Costs") and the Developer may finance the Developer's Convention Center Costs and the
Developer's Private Improvements Costs.
AGREEMENTS
For valuable consideration, receipt of which is hereby acknowledged, and the mutual
obligations of and benefits to the Parties set forth herein,the District,the City and Developer agree as
follows:
I. GENERAL PROVISIONS.
1.1 Purpose of this Agreement. The intent and purpose of this Agreement is to set forth
the obligations of the Parties and conditions precedent to the leasing, development and construction
of the various elements of the Project, as applicable, and the financing and disbursement by the
District and the City of the Public Improvements Costs and the financing by the Developer of the
Developer's Convention Center Costs and the Developer's Private Improvements Costs.
Accordingly, this Agreement is intended to provide for the completion of all actions necessary to
plan and design the Project,and obtain all approvals necessary for the lease of the Project Site to the
Developer and for commencement of development and construction of the Project,including,but not
limited to, the preparation of all construction plans, specifications and cost estimates (to the extent
required under this Agreement as a condition to the Close of Escrow) and related documents for the
Project, the securing of private and public financing for the various elements of the Project and the
negotiation and execution of the Ground Lease and Convention Center Subleases. This Agreement
shall expire and be of no further force or effect as of the Closing Date except for those provisions that
expressly survive the expiration or earlier termination of this Agreement, which are set forth in
Article X.
1.2 Project Site.
(a) The Project Site, as shown on Attachment No. 1 and more particularly
described in Attachment No. 2, consists of approximately thirty-six (36) acres. The "Project Site"
shall include the Hotel Site and the Convention Center Site, each as defined below, which shall be
identified in accordance with Section 6.1(a). If the District elects to fund the construction of the
Parking Improvements, the District intends to use land directly adjacent to the Project Site for the
Parking Improvements (the "District Retained Property'), and the location and boundaries of such
District Retained Property shall be further defined and revised by the Developer for mutual
agreement by Developer and the District consistent with the Map Showing General Location of
Elements of the Project Site attached hereto as Attachment No..13 and incorporated herein by
reference. The portion of the Project Site where the Hotel is located(the"Hotel Site")shall be leased
to the Developer pursuant to a ground lease with the District(the "Ground Lease"), as described in
more detail in Section 6.1, for development of the Hotel as part of the Project. The portion of the
Project Site where the Convention Center is located(the"Convention Center Site")shall be leased to
the Developer by the District pursuant to the Ground Lease, as described in more detail in
Section 6.1. for development of the Convention Center as part of the Project. The Developer shall
cause a legal description of the Hotel Site, the Convention Center Site and the District Retained
Property to be prepared by a surveyor licensed in the State of California, which legal description
shall be approved by the District, in its reasonable discretion,and attached to the Ground Lease and
the Convention Center Subleases(defined in Section 6.1),as applicable,prior to the Close of Escrow
and prior to the execution of such documents.
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(b) A portion of a recreational vehicle park(the"Existing RV Park")is currently
existing on a portion of the Project Site pursuant to a certain lease between Chula Vista Marina/RV
Park, Ltd. ("Existing RV Park Lessee") and the District(District Clerk No. 14243), which is set to
terminate on March 4,2019(as amended from time to time, the"Existing RV Park Lease"). On or
prior to the Target Date set forth in the Schedule of Performance attached hereto as Attachment No.6
and incorporated herein by reference("Schedule of Performance"),the District shall enter into a new
lease(the"New S-1 RV Park Lease")for development of a new RV Park(the"New S-1 RV Park")
on a 19-acre site commonly known as Parcel S-1 located within the Chula Vista Bayfront(the"New
S-1 RV Park Site"). Request for Proposals 16-36RH (Destination RV Park Development
Opportunity) for the New S-1 RV Park was issued on October 24, 2016, and the BPC selected the
team of Sun Communities, Inc.and Northgate Resorts LLC on April 11,2017 pursuant to Resolution
No.2017-055. On March 2, 2018, the District delivered notice of termination of the Existing RV
Park Lease to the Existing RV Park Lessee. The District shall use commercially reasonable efforts to
cause the Existing RV Park Lessee and each of the tenants, occupants or guests on the land
encumbered by the Existing RV Park Lease to vacate such land on or before the Target Date set forth
in the Schedule of Performance and, if the District is unable to do so by such Target Date, then the
District shall use commercially reasonable efforts to do so as soon as is reasonably practicable
thereafter.
1.3 Project Approvals. The Parties agree that, as of the Execution Date, the following
documents in furtherance of the Master Plan have been approved and may be amended from time to
time by the City or the District(the"Existing Approvals"):
(a) The'Master Plan, including all amendments thereto, as described in the
Recitals;
(b) The Original FEIR and findings and determinations by the District and City
related thereto,including adoption of Findings of Fact and a Statement of Overriding Considerations,
mitigation measures and a Mitigation Monitoring and Reporting Program(District Clerk No..56555),
as made by District Resolution No.2010-78 adopted on May 18, 2010, and the Addendum to the
Original FEIR (District Clerk No. 60864) adopted by District Resolution No. 2013-138, on
August 13,2013(collectively,the"FEIR");
(c) Chula Vista Bayfront Master Plan Settlement Agreement,dated May 4,2010,
among the Bayfront Coalition Member Organizations identified therein,the District,the City and the
Redevelopment Agency of the City of Chula Vista (District Clerk No. 56523) ("Settlement
Agreement");
(d) Chula Vista Bayfront Development Policies;
(e) Chula Vista Bayfront Master Plan Natural Resources Management Plan
(District Clerk No.65065),approved by the BPC on May 10,2016,by Resolution No. 2016-79,and
the City Council of the City of Chula Vista (the "City Council") on June 14, 2016, by Resolution
No.2016-119;
(f) Chula Vista Bayfront Master Plan Public Access Program;
(g) City's Local Coastal Plan,as amended,as described in Recital D;
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(h) Chula Vista Bayfront Design Guidelines adopted on February 7,2018;
(i) The Financing Agreement;and
0) City Council compliance with Government Code Section 53083(AB 562)1 by
City Resolution No. 2018-062,adopted on or about April 24,2018.
1.4 -implementing Actions by City, District and Government Agencies. The
implementation of this Agreement requires certain actions by the City, District, and other
governmental agencies with an interest in the Project Site,which actions include,but are not limited
to, the following,which have been or shall be completed on or prior to the applicable target date set
forth in the Schedule of Performance (as such date may be extended pursuant to the terms of this
Agreement,the"Target Date")for such respective items:
(a) Preliminary project approval for the Project by the District ("Preliminary
Project Approval").-
(b)
pproval");(b) Review of Tenant Project Plan Application(as described in Section 4.4(a))by
the District and City.-
(c)
ity;(c) All discretionary approvals and actions required to be taken by the County of
San Diego ("County"), District and/or City for construction of the Phase IA Infrastructure
Improvements,including the Developer's Phase IA Infrastructure Improvements;
(d) All discretionary approvals and actions required to be taken by the County,
JEPA,District and/or City for the financing and disbursement of the Phase 1 A Infrastructure Costs as
provided for under the Plan of Finance;
(e) All discretionary approvals and actions required to be taken by the County,
District, City, or affiliated entities, as required for the formation of a community facilities district
("CFD")and enhanced infrastructure financing district("EIFD"),if applicable;
(f) All discretionary approvals and actions to be taken by the District and/or City
for construction of the Hotel;
(g) All discretionary approvals and actions to be taken by the District and/or City
for construction of the Convention Center;
(h) All discretionary approvals and actions required to be taken by the District for
the approval of the Parking Improvements;
(i) All discretionary approvals and actions required to be taken by the City for
the approval of the City Infrastructure Improvements;
0) All discretionary approvals and actions to be taken by JEPA, the District
and/or City for financing and disbursement of the Project Public Investment as provided for under the
Plan of Finance;
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(k) All discretionary approvals and actions to be taken by the District for
financing and disbursement of the Parking Improvements Costs, as provided for under the Plan of
Finance;
(1) All discretionary approvals and actions to be taken by the City for financing
and disbursement of the City Infrastructure Improvements Costs as provided for under the Plan of
Finance;
(m) All discretionary approvals and actions to be taken by the District to issue a
Coastal Development Permit for the Project;
(n) Issuance by the City of grading and building permits for the construction of
the Project;
(o) BPC approval of, and authorization for the District's Executive Director or
her designee, on behalf of the District, to execute the Ground Lease or any amendments thereto, as
applicable;
(p) BPC approval of, and authorization for the District's Executive Director or
her designee,on behalf of the District,to execute the Convention Center Subleases(as applicable);
(q) BPC approval of, and authorization for the District's Executive Director or
her designee, on behalf of the District as a member of the JEPA, to execute the Convention Center
Subleases(as applicable);
(r) City Council approval of, and authorization for the City Manager, on behalf
of the City,to execute the applicable Convention Center Subleases;
(s) City Council approval of, and authorization for the City Manager, on behalf
of the City,as a member of the JEPA,to execute the applicable Convention Center Subleases;
(t) Approval of the location,design and cost of the public art as part of the final
plans submitted to the District for approval,as provided for in Section 4.1(c);
(u) All approvals and actions required to be taken by the District to authorize the
District's Executive Director or her designee, on behalf of the District, to execute the New S-I RV
Park Lease and authorize construction of the New S-I RV Park;
(v) All discretionary approvals and actions required to be taken by the State of
California, acting by and through the California State Lands Commission ("State Lands
Commission")for the New S-1 RV Park Lease and construction of the New S-I RV Park;
(w) City Council approval of, and authorization for the City Manager, on behalf
of the City and on behalf of the City as a member of the JEPA,to execute all other documents and do
all acts necessary or convenient, to carry out the provisions of this Agreement and, subject to the
provisions of this Agreement and the Plan of Finance, the Convention Center Subleases (as
applicable), without the necessity for any further approval, authorization or action by the City
Council,except as provided under this Agreement;
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(x) One or more approvals by BPC providing authorization for the District's
Executive Director or designee,on behalf of the District and on behalf of the District as a member of
the JEPA, to execute all documents and do all acts necessary or convenient to carry out the
provisions of this Agreement, the Ground Lease, the Convention Center Subleases, and other
requirements pertaining to the full implementation of the Project;
(y) The District and Developer shall execute within 60 days of the Effective Date
an exclusive negotiating agreement with a term of one year from the Execution Date, concerning a
definitive agreement for the lease of up to 10 acres of Parcel H-23 that are closest to the Project Site,
for the development of up to 550 additional Rooms.
1.5 CEQA Compliance. The District prepared and certified,pursuant to CEQA and the
Guidelines for Implementation of the California Environmental Quality Act (California Code of
Regulations, Title 14, Section 15000, et seg.), the FEIR for the Project, which satisfies CEQA for
purposes of this Agreement and the Existing Approvals.
While no new or supplemental environmental approvals are contemplated, the Parties shall
cooperate with respect to any supplemental environmental documentation or approvals that may be
required for the Project.
The Developer understands and agrees that the District or City may require subsequent or
supplemental environmental review or other.environmental analysis to implement the Project as
required by CEQA, the California Coastal Act and/or by changes in applicable local, state, federal
laws, including, without limitation, the applicable codes, ordinances, regulations and policies of the
City and the District(collectively,the"Laws").
1.6 Deposit.
(a) As security for the performance of the obligations of the Developer
hereunder, the Developer shall deliver to the District on or before the Target Date set forth in the
Schedule of Performance a deposit in the sum of ONE MILLION DOLLARS (S1,000,000)
("Deposit") which shall be in the form of either cash or an irrevocable standby letter of credit in a
form,and from a financial institution,acceptable to the District.
(b) The Deposit shall be retained by the District until such time as(i)the Ground
Lease has been executed,in which event the Deposit shall be made part of the deposit required under
the Ground Lease, and shall thereafter be governed by the terms of the Ground Lease, or (ii)this
Agreement is earlier terminated, at which time the remaining Deposit shall be returned to the
Developer in whole or in part, retained in whole or in part by the District and the City, or otherwise
applied in accordance with the provisions of Section 8.2.
II. IDENTITY OF PARTIES.
2.1 Developer.
(a) The Developer is RIDA CHULA VISTA, LLC, a Delaware limited liability
company. The Developer's only member and manager is Ira M. Mitzner. It is on the basis of the
qualifications and experience of the Developer and Ira M. Mitzner that the District and the City are
entering into this Agreement. Accordingly, the provisions of this Section 2.1 are deemed necessary
9
by the District and the City and are agreed to be reasonable by the Developer to assure the District
and the City that the purposes of this Agreement will be achieved.
(b) Subject to Section 2.1(c),during the Term:
(i) Except for any Permitted Transfers, the Developer shall not
voluntarily or involuntarily assign any interest in this Agreement or sell,convey or transfer,or permit
any of its members, to sell, convey or transfer any of such member's direct or indirect membership
interests in the Developer(each, a "Transfer") without the prior written consent of the District and
the City. The City and the District shall not unreasonably withhold,condition or delay their consent
to a Transfer proposed by Developer that requires their consent if all of the following conditions are
satisfied:
(A) Ira M. Mitzner will continue to Control(as defined below)the
Developer and will continue to hold, directly or indirectly, not less than ten percent (10%) of the
membership interests in the Developer.
(B) Developer shall have disclosed to the City and District in
writing,each Person who will be a member of the Developer and each Person that will hold,directly
or indirectly, at least ten percent (10%) of the membership interests in the Developer as of the
effective date of such proposed Transfer.
(C) Developer shall provide documentation reasonably acceptable
to the City and the District that following the proposed Transfer, Developer shall have sufficient
financial resources for the Developer to perform its obligations under this Agreement and to achieve
the Close of Escrow, and to obtain financing in an amount sufficient to pay the Developer's Debt
Contribution.
(D) Developer shall provide documentation reasonably acceptable
to the City and the District that following the proposed Transfer,the Developer will continue to have
the commercial and real estate experience needed to perform the Developer's obligations under this
Agreement and the Ground Lease (including, without limitation, the ability to secure and maintain
the required Hotel brand and Operator and extensive experience financing and developing resort
hotel and convention center projects of a similar size and quality to the Resort Hotel and Convention
Center Project).
(E) The District and the City shall have reasonably determined
that each Unaffiliated Third Party(as defined below)that acquires ten percent(10%)or more of the
membership interests in the Developer is reputable(which shall mean the absence of reputations for
dishonesty, criminal conduct or association with criminal elements — "reputable" shall not mean
"prestigious", nor shall the determination of whether one is reputable involve considerations of
personal taste or preference), and has no history of, or reputation for, either discriminatory
employment practices which violate any Laws or non-compliance with applicable Environmental
Laws.
(F) Neither the transferee nor any Person with any direct or
indirect membership interest in the Developer shall be a Prohibited Person.
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(G) Developer shall have provided to the District and the City an
outline of any change in the proposed corporate structure of the Developer, in writing, in a detailed
narrative and a visual oreanizational flow chart.
(ii) The Developer shall not permit or suffer to exist any Change of
Control (as hereinafter defined)without the prior written consent of the District and the City, which
may be given or withheld in the sole and absolute discretion of each of the District and the City.
(iii) Except for any Permitted Transfers, the Developer shall prohibit each
of its members from voluntarily or involuntarily selling, conveying, or transferring any of such
member's direct or indirect membership interest in the Developer to any Person without the prior
written consent of the District and the City(which consent shall be given or withheld in the sole and
absolute discretion of the District and the City unless such Transfer satisfies the criteria of Section
2.1(b) in which case the City and the District's consent shall not be unreasonably withheld,
conditioned or delayed),and in no event to any Prohibited Person(as hereinafter defined).
Any purported Transfer in violation of this Section 2.1(b) shall be null and void, undone by
Developer at Developer's sole cost and expense,and not binding on the District or City.
(c) Upon written request by the Developer to the District and the City for consent
to a Transfer as required under Section 2.1(b), the District and the City shall mutually determine,
each in its reasonable discretion, within thirty (30) days following delivery of the Developer's
request and all information reasonably required by District and City to review the request, whether
the proposed Transfer as of_the effective date of the proposed Transfer, meets the qualifications set
forth in Section 2.1(b).
(d) The Developer shall deliver to the District and the City all agreements and all
certified documents evidencing the formation, existence, and good standing of the Developer(with
all information regarding distributions, including any definitions primarily related thereto,redacted),
for review by the District and the City for consistency with the provisions of this Agreement. Each
of the District and the City may request updates to such documents and/or agreements from time to
time during the Term and Developer shall deliver such updates within thirty(30)days of District's or
City's notice to Developer.
(e) The Developer represents and warrants to the District and the City that it has
disclosed to the District and the City each of its members, each Person that holds, directly or
indirectly, at least ten percent(10%)of the membership interests in the Developer, and each Person
that Controls the Developer.
(f) For purposes of this Section 2.1.the following definitions shall apply:
(i) "Change of Control" means a merger, consolidation, recapitalization
or reorganization of the Developer or other transaction or an amendment to any governing document
of the Developer that results in any Unaffiliated Third Party having the ability to Control the
Developer.
(ii) "Unaffiliated Third Party" means any Person that is not Ira M.
Mitzner or is not Controlled by Ira M.Mitzner.
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(iii) "Person" means a natural person, whether acting for himself or
herself, or in a representative capacity, a partnership, a corporation, a limited liability company, a
governmental authority,a trust,an unincorporated organization or any other legal entity of any kind.
(iv) "Control" means with respect to any Person (the "Controlline
Person")the power to both(A)direct or cause the direction of the management or policies of another
Person (the "Controlled Person"), whether through the ownership of voting equity, by contract or
otherwise;and(B)maintain active and direct control and supervision of the operations of Developer,
including without limitation, the day to day operations of the Project; provided, however, that a
contractual or other requirement that a Controlling Person obtain the consent or approval of one or
more other Persons as a condition to undertaking a Major Decision shall not affect whether such
Controlling Person Controls such Controlled Person. "Controls", "Controlled" and "Controlling"
shall have correlative meanings to"Control".
(v) "Major Decisions" means, with respect to any Person, any decision
that is of the type that requires the consent or approval of such Person's non-managing members,
limited partners or minority shareholders,which may include by way of example,any decision to(A)
enter into any financing or incur,assume or guarantee any indebtedness that has not been previously
approved in an approved budget or operating plan;(B)enter into or terminate or amend any material
agreement; (C) merge, liquidate, sell, restructure, consolidate, recapitalize, reorganize, wind up, or
dissolve the Person; (D) authorize or declare voluntary bankruptcy, assignment for benefit of
creditors,acceleration of third-party obligations,confession of judgment,reorganization or any other
similar insolvency action involving the Person or make any filing in connection therewith;(E)make
any material changes to the Project; (F)terminate or amend this Agreement; (G)purchase insurance
except as required by this Agreement or the Ground Lease; (H) sell or transfer any asset of the .
Person; (1)approve any budget or operating plan; (J)amend any of the organizational documents of
the Person;(K) issue,redeem,repurchase or cancel equity or other ownership interests in the Person
(or any rights,warrants or options to acquire the foregoing);(L)make changes to the governing body
of the Person; (M) declare or pay any distributions; (N) engage in new lines of business; (0) make
capital expenditures or similar expenditures except as required in an approved capital budget; (P)
make or change tax elections or accounting methodologies; or (Q) undertake an initial public
offering of securities.
(vi) "Permitted Transfer" means the following Transfers, provided that
there is no Change of Control as a result of such transfer: (A) any Transfer of not more than five
percent(5%)of direct or indirect membership interests in the Developer to any Affiliated Transferee
(as defined below)that is not a Prohibited Person; (B) if by a natural person, any Transfer upon the
death of such person by will or other instrument taking effect upon such death or by applicable
4wsLaws of descent and distribution to such person's estate and executors and then to such person's
heirs; or (C) if by a natural person, any Transfer made in connection with the dissolution of the
transferee's marriage or the legal separation of the transferee and his or her spouse on the account of
any settlement of any community property or other marital property rights such spouse may have in
any membership interests in the Developer.
(vii) "Prohibited Person" means any Person (A) named as a "Specifically
Designated National and Blocked Person" ("SDN") on the most current list published by the U.S.
Department of the Treasury Office of Foreign Assets Control at its official website or any
replacement website or other replacement official publication of such list or(B)that is Controlled by
an SDN.
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(viii) "Affiliated Transferee' means, with respect to any Transfer, any of
the following:(A)each sibling of the transferor,the spouse of the transferor,and each parent, child,
grandchild or great-grandchild of the transferor (including relatives by marriage); (B) any trust for
the benefit of the transferor or any of the foregoing members of his or her family; (C) where the
transferor is a trust, any beneficiary of the trust or any of the foregoing family members of a
beneficiary of the trust,or any other trust established for the benefit of any of the foregoing;and(D)
each Person that Controls, is Controlled by, or is under common-Control of,the transferor or any of
the foregoing Persons.
In addition, for purposes of this Section 2.1.the quantum of a Person's indirect ownership in
any other Person is calculated as the percentage of the proportional ownership interest at each level.
As an example, if Person A owns a 50% interest in Person B and Person B owns a 50% interest in
Person C,then Person A would be deemed to have a 25%indirect ownership interest in Person C.
2.2 District. The District is the San Diego Unified Pon District, a public corporation
created by the legislature in 1962 pursuant to California Harbors and Navigation Code
APPENDIX 1,Section I et seq.
2.3 City. The City is the City of Chula Vista,a charter city and municipal corporation.
2.4 Notices.
(a) To Developer. Notices to the Developer shall be given or served by
(a)recognized national ovemight delivery service, or(b)facsimile with a confirmed receipt of such
transmittal, provided a copy of such facsimile notice is also sent by mail, as provided below, or
(c)first-class mail or certified mail, return receipt requested, addressed as follows, or to such other
address(es)as the Developer may from time to time designate by notice to the other Parties:
RIDA Chula Vista,LLC
1777 Walker Street,Suite 501
Houston,Texas 77010
Attention: Ira Mitzner
With copy to:
RIDA Chula Vista, LLC
1777 Walker Street,Suite 501
Houston,Texas 77010
Attention: Legal Department
and
Latham& Watkins
12670 High Bluff Drive
San Diego,CA 92130
Attention: Steven Levine
(b) To District.Notices to the District shall be given or served by(a)recognized
national overnight delivery service, or (b)facsimile with a confirmed receipt of such transmittal,
13
provided a copy of such facsimile notice is also sent by mail, as provided below, or (c) first-class
mail or certified mail,return receipt requested,to the following address,or to such other address(es)
as the District may from time to time designate by notice to the other Parties:
Executive Director
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
With copy to:
Assistant Vice President,Real Estate
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
With a copy to:
Port Attorney
San Diego Unified Port District
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
(c) To City. Notices to the City shall be given or served by (a)recognized
national overnight delivery service, or (b)facsimile with a confirmed receipt of such transmittal,
provided a copy of such facsimile notice is also sent by mail, as provided below, or (c) first-class
mail or certified mail, return receipt requested,at the following address, or to such other address(es)
as the City may from time to time designate by notice to the other Parties:
City of Chula Vista
Attention: City Manager
276 Fourth Avenue
Chula Vista,California 91910
With a copy to:
City Attorney
City of Chula Vista
276 Fourth Avenue
Chula Vista,California 91910
(d) To JEPA. Notices to the JEPA shall be given or served by (a)recognized
national overnight delivery service, or (b)facsimile with a confirmed receipt of such transmittal,
14
provided a copy of such facsimile notice is also sent by mail, as provided below, or (c) first-class
mail or certified mail, return receipt requested,at the following address,or to such other address(es)
as the JEPA may from time to time designate by notice to the other Parties:
To the City:
City of Chula Vista
Attention: City Manager
276 Fourth Avenue
Chula Vista,California 91910
With a copy to:
City Attorney
City of Chula Vista
276 Fourth Avenue
Chula Vista,California 91910
To the District:
Executive Director
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
With copy to:
Assistant Vice President,Real Estate
San Diego Unified Port District
Administration Building
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
With a copy to:
Port Attorney
San Diego Unified Port District
3165 Pacific Highway
San Diego,California 92101-1128
(Mailing Address: P.O. Box 120488
San Diego,California 92112-0488)
(e) Forms of Delivery. Facsimile notice shall be deemed given on the date set
forth in the sender's confirmation notice; overnight delivery notice shall be deemed given the next
15
business day from when sent; and mailed notice shall be deemed to have been given or served, if
mailed by first class mail, on the third business day from when mailed, and, if by certified mail, on
the date set forth in the return receipt.
111. TERM.
3.1 Term. The term of this Agreement shall commence on the Execution Date and shall
expire on the earlier of the Closing Date and the Early Expiration Date (the "Term"). The "Early
Expiration Date" will occur on the fourth anniversary of this Agreement (subject to extensions as
provided below). Upon written request from the Developer, the District and City may
administratively extend the Early Expiration Date up to three(3)times(each,an"Extension'), for a
period of one (1) year for each such Extension ("Extension Period"), for a total possible term of
seven(7)years,in accordance with the following terms:
(a) Developer delivers notice to the District and City no later than sixty(60)days
prior to the Early Expiration Date or no later than forty-five (45) days prior to the expiration of an
Extension Period, as applicable, of its request to extend the Early Expiration Date, together with
written evidence that the following conditions precedent have been satisfied or requesting that some
or all of the conditions precedent be waived or the time for satisfying such condition(s)precedent be
extended by the District and City:
(i) The Developer shall have obtained approval of Schematic Plans and
Building Permit Application Drawings as required by this Agreement and shall have obtained,or be
diligently working to obtain,approvals of Building Permits in accordance with this Agreement;and
(ii) The Developer shall have completed its Due Diligence Investigations
of the Project Site and delivered to the District its notice that Developer accepts the conditions of the
Project Site as set forth in Section 5.8 or shall have made substantial effort towards completing its
Due Diligence Investigations and shall report to the District and City steps taken to complete its Due
Diligence Investigations;and
(iii) The Developer shall have submitted to the District and City for their
review and approval a current design and construction schedule for the Developer's Improvements.
(b) .Administrative staff-level approval of any Extension by the District and City
shall be conditioned upon,and shall be granted if(i)the Parties have completed a Periodic Review,
after the Extension request, as provided in Section 5.1, and District staff and City staff have
determined that the Project continues to be feasible and practicable (taking into consideration the
written evidence that the Developer has provided pursuant to Section 3.1(a) and the proposed
Extension), (ii) District staff and City staff have determined that no Developer Event of Default has
occurred and is continuing, (iii) District staff and City staff have determined that each of the Parties
is diligently proceeding in good faith to complete their respective obligations under this Agreement
for development of the Project, and (iv) District staff and City staff have determined that any such
Extension will be beneficial to the Parties.
(c) Upon receipt of notice of Extension in accordance with Section 3.1(a)which
requests the waiver of,or an extension of time to satisfy,any of the conditions precedent set forth in
Section 3.1(a)to achieve such Extension,the Parties shall meet and confer in good faith to determine
(i)if such waiver or extension would still make it feasible or practicable to proceed with the Project;
16
and(ii)how much additional time is required to satisfy the applicable conditions precedent for such
Extension. If it is determined by the Parties that it is feasible and practicable to proceed with the
Project and if the conditions precedent set forth in Section 3.1(b) have been satisfied, then the
District and the City shall extend the time period to satisfy the applicable condition(s)precedent. If it
is determined by any Party that it is not feasible or practicable to proceed with the Project,then any
Party may terminate this Agreement in accordance with Section 5.1 and Article Vlll.
Notwithstanding any such waivers or Extensions granted pursuant to this Section 3.1,this Agreement
shall terminate upon an Event of Termination as provided in Section 8.1.
IV. DESIGN AND DEVELOPMENT OF PROJECT.
4.1 Design and Development of the Project.
(a) The Project, other than the Phase IA Infrastructure Improvements (to the
extent designed by the District pursuant to Section 4.4(b)), the Remaining Phase IA Infrastructure
Improvements and the City Infrastructure Improvements, shall be designed by the Developer in
accordance with the Scope of Development,the Preliminary Project Approval and this Agreement.
(b) The final designs and plans for the Developer's Private Improvements and the
Convention Center shall be attached to the Ground Lease.
(c) The Developer shall comply with all Laws applicable to the Project,
including, without limitation, BPC Policy Nos. 357 ("Approval of Tenant Project Plans") and 608
(the"Public Arts Policy'). The Building Permit Application Drawings submitted to the District for
approval shall include the location, type and cost of the public art required pursuant to the Public
Arts Policy; provided that the Developer's contribution to the total costs of the public art shall be
equal to one percent (1%) of the estimated Hard Construction Costs of the Developer's Private
Improvements.
(d) The Developer shall comply with all Laws applicable to the development and
construction of the Developer's Private Improvements.
(e) The Developer shall comply with all Laws applicable to the development and
construction of the Developer's Public Improvements and,if applicable,the Parking Improvements.
(f) The Developer shall pay when due all fees pertaining to the review and
approval of the Developer's Improvements and, if applicable, the Parking Improvements, that are
lawfully required by any government agency, including,without limitation,the District and the City,
and by any public utility. The Developer shall endeavor to obtain, prior to the commencement of
construction of the Developer's Improvements and,if applicable,the Parking Improvements,any and
all governmental approvals and permits that are required for commencement of such construction and
any and all discretionary governmental approvals and permits that are required for completion of the
Developer's Improvements and,if applicable,the Parking Improvements.
(g) Subject to Sections 4.8(c)and 4.8(d),the Developer,the District and the City,
as applicable, shall cooperate to identify, design and obtain approvals and permits, as necessary, for
the relocation and/or abandonment of any easements or rights of way and their related termination
and related modification of record from title to the Project Site, as may be necessary for the
17
f
construction of.any of the Developer's Public Improvements and, if applicable, the Parking
Improvements.
(h) The design and development of the Project by the Developer pursuant to this
Agreement shall provide for continuous vehicular access and utility service to surrounding
properties, including, but not limited to, the leaseholds of Marine Group Boat Works LLC, Chula
Vista Marina/RV Park,.Ltd., Rohr, Inc., a United Technologies Aerospace Systems Company
("Rohr")and California Yacht Marina-Chula Vista, LLC.,to the satisfaction of the District and City.
Vehicular and pedestrian access and utility service to all or portions of Bayside Park shall be
maintained to the extent practicable.
4.2 City Infrastructure Improvements.
(a) The City shall prepare, or cause.the preparation of, preliminary and final
construction plans and documents for the City Infrastructure Improvements as set forth in the Scope
of Development on or before the Target Date set forth in the Schedule of Performance.
(b) The District and the City shall cause the Remaining Phase I Infrastructure
Improvements to be completed in a manner that will not result in a delay to the Developer obtaining
a temporary certificate of occupancy for, or the opening for business of, the Developer's
Improvements. The City shall cause a sewage substation,that is compatible with a hotel with 1,600
rooms and meeting space comparable to the meeting space at the Convention Center and other uses
contemplated at the Project,as applicable,to be completed not later than twelve(12)months after the
Closing Date.
4.3 Design of Surface Parking and Parking Improvements. Developer shall prepare,
or cause the preparation of, the design of the surface parking improvements to be located on Parcel
H-23 ("Surface Parking") in accordance with Section 4.4. If and to the extent that the District elects
to fund the construction of the Parking Improvements and notifies the Developer thereof, each
subject to Section 4.7(e), then the Developer shall prepare,or cause the preparation of,the design of
the Parking Improvements in accordance with Section 4.4. If the District does not elect to fund the
Parking Improvements and notifies the Developer thereof, each in accordance with Section 4.7(e),
then the Developer shall prepare, or cause preparation of, the Schematic Plans for the Parking
Improvements in accordance with Section 4.4(a)(i) and shall have the right to elect to prepare, or
cause the preparation of, the Building Permit Application•Drawings of the Parking Improvements at
its sole and absolute discretion.
4.4 Submission and Approval of Schematic Plans and Building Permit Application
Drawings.
(a) On or before the Target Date set forth in the Schedule of Performance, the
Developer shall have submitted or shall submit for approval to the District a tenant project plan
application pursuant to BPC Policy No. 357("Tenant Project Plan Application")for the Developer's
Improvements, the Surface Parking and the Parking Improvements. Subsequently, the Developer
shall submit (x) to the District, Schematic Plans for the Developer's Improvements, the Surface
Parking and the Parking Improvements and Building Permit Application Drawings for the
Developer's Improvements in accordance with clauses(i)and(ii)below, respectively,and(y)to the
City, Building Permit Application Drawings for the Developer's Improvements in accordance with
clause(iii)below.
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(i) Schematic Plans: On or before the Target Date set forth in the
Schedule of Performance, Developer shall submit to the District, for approval as part of a Tenant
Project Plan Application, three (3)hardcopies and an electronic version (pdf) of"Schematic Plans"
for development of the Developer's Improvements, the Surface Parking and the Parking
Improvements (each, "Schematic Plans Set" and, collectively, "Schematic Plans Sets")
demonstrating conformance with applicable mitigation measures in the FEIR, Port Master Plan,
Chula Vista Bayfront Development Policies and Public Access Program, the Settlement Agreement
and the California Coastal Act. Each Schematic Plans Set shall be prepared by an architect or an
engineer licensed in the State of California and shall include,as applicable,the following:
(1) A detailed dimensional site plan drawn to scale showing all of the
Developer's Improvements or the Parking Improvements planned to be
constructed on the Project Site, including buildings, vehicle and pedestrian
circulation,surface parking areas,outdoor improvements including hardscape
and furniture,public access and amenities,and existing and proposed utilities.
Such site plan shall include the location of all existing and proposed
easements and how they will be accommodated, location of all existing and
proposed utilities,site drainage and stormwater plans,site grading plan,grade
elevations of all structures, proposed site work, and site horizontal
(coordinate)and vertical control drawings with a benchmark reference.
(2) Floor and roof plans, elevations, and sections of all structures, and
mechanical design measures to ensure adequate indoor air quality.
(3) Exterior lighting plan(building and site)indicating required shielding.
(4) Exterior public way-finding signage necessary to obtain a CDP.
(5) Landscape and fencing development plans with plant material list and
estimated mature heights.
(6) Preliminary sustainable materials and energy conservation systems.
(7) Complete outline specifications to cover all phases of the work.
(8) A detailed description of improvements and methods of operation.
(9) A general outline specification indicating materials and methods of
construction.
(10) Civil plans including grading plan,drainage study and soil study reports.
(1 1) Stormwater Quality Management Plan.
(12) Exterior color schemes and materials.
Each Schematic Plans Set will include a soils and/or foundation report of a scope
commensurate with the Developer's Improvements or the Parking Improvements, as applicable,
planned for the Project Site prepared by a licensed soils consultant.
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District staff shall comment on each Schematic.Plans Set and deliver a copy of such
comments to the Developer within twenty(20)business days following submittal of such Schematic
Plans Set by the Developer. The District, the City and the Developer shall reasonably cooperate to
obtain comments on required portions of each Schematic Plans Set from the Wildlife Advisory
Group, Bayfront Cultural and Design Committee,and the District's Accessible Advisory Committee.
At the District's sole discretion,each Schematic Plans Set or any portion thereof may be presented to
the BPC for"Preliminary Project Review". If the BPC reviews a Schematic Plan Set or any portion
thereof,and directs District staff to further review or revise such Schematic Plan Set,then the District
shall comment on such Schematic Plans Set based on the BPC's direction and deliver a copy of such
comments to the Developer within sixty(60)days following submittal of such Schematic Plans Set
by the Developer. Within thirty(30)business days after the District delivers a copy of its comments
on such Schematic Plans Set, Developer shall correct factual errors in such Schematic Plans Set and
consider modifications to such Schematic Plans Set proposed by the District,and the Developer shall
resubmit such Schematic Plans Set to the District for review and approval. Inspection, review,
approval or comment by the District with respect to any of the Schematic Plans shall not in any way
affect or reduce the Developer's obligations under this Agreement or be deemed to be a warranty or
acceptance by the District with respect to such Schematic Plans; it being understood that the District
is relying upon the Developer for designing and engineering the Developer's Improvements(except
for the Schematic Plans for the development of Phase IA Infrastructure Improvements that the
District shall submit to the Developer in accordance with Section 4.4(b ,the SUF f ee n....,.:.,g and the
Parking imprevements in aeeer-danee with this )). Within ten(10)business days after the
Developer receives a "Tenant Construction Project Number" or"District Project Engineering Work
Order Number",whichever is the latest, from the District,the Developer shall submit an application
for approval of a Coastal Development Permit("CDP")to the District with all required supplemental
information pursuant to the District's certified CDP regulations.
(ii) Building Permit Application Drawings: On or before the Target
Date set forth in the Schedule of Performance, Developer shall submit to District for approval by the
District, six (6) hardcopies and electronic version (pdo of"Building Permit Application Drawings"
for development of the Developer's Improvements. Building Permit Application Drawings shall be
prepared by an architect or engineer,as appropriate,licensed to do business in the State of California,
and shall consist of the following:
(1) Complete architectural, civil, structural, mechanical, electrical, plumbing,
utility layout, landscaping and irrigation, fencing, public access and
amenities, lighting, stormwater and site horizontal (coordinate) and vertical
control plans included in the civil drawings.
(2) Complete specifications, materials, and color list, and engineering
calculations for all improvements.
(3) Draft construction contract form.
(4) Draft construction schedule.
(5) A detailed final construction cost estimate of all of the Developer's
Improvements, with indirect costs, furniture, fixtures and equipment
separately identified.
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The Building Permit Application Drawings are also known as the Tenant Project Plans. The
District shall review the Building Permit Application Drawings only to confirm that they are in
substantial conformance to the Schematic Plans approved by the District and the CDP. The District
shall approve or comment on the Building Permit Application Drawings within twenty(20)business
days following submittal thereof. Within twenty(20) business days after the District comments on
the Building Permit Application Drawings, Developer shall correct factual errors in the Building
Permit Application Drawings and consider modifications to the Building Permit Application
Drawings proposed by the District,and the Developer shall resubmit the Building Permit Application
Drawings to the District for review and approval. Inspection, review, approval or comment by the
District with respect to any of the Building Permit Application Drawings shall not in any way affect
or reduce the Developer's obligations under this Agreement or be deemed to be a warranty or
acceptance by the District with respect to such Building Permit Application Drawings: it being
understood that the District is relying upon the Developer for designing and engineering the
Developer's Improvements (except for the Schematic Plans for the development of Phase IA
Infrastructure Improvements that the District shall submit to the Developer in accordance with
Section 4.4(b)) in accordance with this Agreement. The Parties understand that the Developer may
submit the Building Permit Application Drawings in multiple phases.
(iii) Building Permits: After the District has approved the Building
Permit Application Drawings, the Developer shall submit such Building Permit Application
Drawings to the City for the City's review and approval and the City's issuance of final and complete
building permits that are required to commence the construction of the Developer's Improvements
("Building Permits"). All standard City fees with respect to the issuance of the Building Permits will
apply and shall be paid by the Developer. After the City's approval of the Building Permit
Application Drawings, the Developer shall submit the final signed Building Permit Application
Drawings for the Phase IA Infrastructure Improvements to the District for the BPC's adoption of
such Building Permit Application Drawings.
(b) Subject to Sections 4.8(c)and 4.8(d), on or before the Target Date set forth
in the Schedule of Performance, the District shall submit to the Developer three (3) hardcopies,
native digital files in computer-aided design (CAD) and electronic version (pdf) of "Schematic
Plans"for development of the Phase 1 A Infrastructure Improvements(other than Schematic Plans for
development of Harbor Park which the District shall submit to the Developer on or before the
corresponding Target Date set forth in the Schedule of Performance). Such Schematic Plans shall be
completed by, or on behalf of, the District to the extent sufficient to achieve approval of the CDP.
The Developer shall complete such Schematic Plans to fifty percent (50%) completion and shall
submit such 50% completed plans, together with Development Cost estimates for the Phase IA
Infrastructure Improvements as set forth in Section 4.4(c),to the District,for the District's approval,
in accordance with Section 4.4(a)(i). The Developer shall submit to the District, for the District's
approval, Building Permit Application Drawings for the Phase IA Infrastructure Improvements in
accordance with Section 4.4(a)(ii).
(c) With each submission of Schematic Plans and the Building Permit
Application Drawings pursuant to this Section 4.4, the Developer shall submit to the District
Development Cost estimates for such portion of the Developer's Improvements and,if applicable,the
Parking Improvements, prepared by Developer, Developer's general contractor or a qualified cost
estimator in such detail as warranted by the extent of detail and completeness of the Schematic Plans
and Building Permit Application Drawings submitted to the District. Such Development Cost
estimates shall be prepared in good faith and shall reflect the reasonable judgment of the Developer
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regarding such estimates. The Parties acknowledge that such estimates are estimates only and that
final Development Costs may differ from the previously provided estimates. Whenever this
Agreement requires the Developer to submit Development Cost estimates for such portion of
Developer's Improvements and, if applicable, the Parking Improvements, a separate Development
Cost estimate shall be prepared for each major category of such portion of the Developer's
Improvements, including the Developer's Private Improvements, the Convention Center and the
Developer's Phase IA Infrastructure Improvements (each, a "Major Component of Developer's
Improvements")and,if applicable,the Parking Improvements.
(d) Common costs shall be reasonably and equitably allocated between the
Developer's Private Improvements and the Convention Center, generally consistently with the
allocation of such common costs set forth in the Form of Developer's Private Improvements and
Convention Center Budget attached hereto as Attachment No. 7,and such allocations shall be subject
to review and approval by the District and City. All such common costs of the Developer's Private
Improvements and the Convention Center shall be tracked and allocated so as to properly distinguish
common cost allocations between the Developer's Private Improvements and the Convention Center
for purposes of complying with public finance requirements.
4.5 Agreement on Total Project Costs.
(a) "Hard Construction Costs"shall mean, with respect to any component of the
Project,all costs that the Developer is required to pay to the respective construction contractor for the
construction of such component of the Project under the construction agreement for such component
of the Project.
(b) Not later than thirty(30)days following Developer submission of the Tenant
Project Plans, the Developer shall submit final estimates of the total Development Costs of the
Developer's Improvements,including the items set forth in Section 4.5(d).
(c) Following receipt of the Developer's final estimates of the Development
Costs of the Developer's Improvements pursuant to Section 4.5(b), the District and City shall
promptly review such Development Cost estimates and may elect to have their own construction cost
estimator separately estimate the Development Costs of the Developer's Improvements and allocated
items thereof to the Developer's Private Improvements and the Developer's Public Improvements,
taking into consideration the prices received from contractors by the Developer. The final estimates
of the Development Costs for the Developer's Improvements which are either (i)reviewed and
consented to by the District and City as submitted by the Developer in accordance with
Section 4.5(b)or(ii)agreed by the District, the City and the Developer,are herein referred to as-the
"Total Project Costs".
(d) As to each Major Component of Developer's Improvements, such estimates
shall include an estimate for all Development Costs in connection with such Major Component of
Developer's Improvements. "Development Costs"shall mean,with respect to any component of the
Project, (i) the costs of the entire design, architectural work, engineering work, development work
and construction work and (ii) contingency which shall, except with respect to the Hotel, be in an
amount equal to ten percent(10%)of the sum of the costs set forth in clause(i). Development Costs
shall include,without limitation,costs of site preparation,soils testing, foundations,excavation costs,
landscaping,sprinklers,utilities(vaulting or relocation as deemed necessary by the District and City,
installation and connection), elevators, stairways, equipment, furnishings, fixtures and equipment,
22
striping and signs,compliance with special conditions, construction supervision, and that portion of
payments reasonably attributable to each element of the Developer's Improvements for architectural,
engineering, design consulting, construction liability and other insurance, including insurance
required under Article IV and each of the applicable Closing Documents, labor and materials and
performance bonds, title insurance services, City development and Building Permit fees, other
project permitting costs,contingency,and all other related costs required under this Agreement.
(e) In the event that at any time the estimated amounts of the Total Project Costs
allocated to the Developer's Public Improvements exceed the amount estimated in the Conceptual
Outline of JEPA Plan of Finance or the Plan of Finance, the Parties shall meet and confer in
accordance with Section 5.1.
(f) The Developer, City and District shall determine the Total Project Costs
pursuant to this Section 4.5 at the earliest possible time and, in any event, within sixty(60) days
following the Developer's submission of the final estimates of the Development Costs of the
Developer's Improvements pursuant to Section 4.5(b).
(g) The Developer shall submit executed guaranteed maximum price construction
contracts or fixed price construction contracts, as applicable, with respect to the Developer's
Improvements,based on signed bids from Developer's contractors and subcontractors(if applicable),
other than bids with respect to the Convention Center, for the construction of the Developer's
Improvements(all of which shall be provided to the District and City) on or before the Target Date
set forth in the Schedule of Performance. Each such contract will name the District and the City,as
applicable, as an intended third-party beneficiary. The Developer shall provide drafts of such
contracts to the District and the City, as applicable, for the District's and the City's review and
comment before execution, in which case the District and the City, as applicable, shall promptly
provide to the Developer any comments thereto.
4.6 No Developer's Obligation to Construct the Developer's Improvements Surface
Parking or Parking Improvements. The Developer shall have no responsibility for the
construction of any of the Developer's Improvements, Surface Parking or the Parking Improvements
unless and until the Close of Escrow occurs.
4.7 District and City Financial Contribution.
(a) The District and the City shall use good faith, commercially reasonable
efforts to provide certain financial contributions to the design, development and construction of the
Project and other activities, including the Public Improvements Costs, as provided in and subject to
the Plan of Finance, the Financing Agreement, and the Scope of Development ("Public Fund
Contribution"). The scope of, and limitations on, the District and City's obligations to provide the
Public Fund Contribution shall be set forth in the Plan and Finance. The Parties acknowledge that a
condition precedent to the issuance of bonds to fund any portion of the Public Fund Contribution
("Bond Financing")shall be the completion,on or prior to the applicable Target Date set forth in the
Schedule of Performance, of"Review of Underwriter's Updated Projections" and the receipt by
JEPA,City and District of a final,non-appealable judgment in the Validation Action finding in favor
of the JEPA, City and District on all points, among other conditions precedent to such Bond
Financing. If the District or the City determines in its good faith, reasonable discretion that it will
not be able to secure such Bond Financing before or at Close of Escrow,then it shall meet and confer
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with the other Parties to attempt to identify mutually acceptable alternative forms of financing for the
Public Fund Contribution pursuant to Section 5.1.
(b) The Public Fund Contribution and Equity Investor Contribution shall be
disbursed pari passu for the benefit of the Project.
(c) The District and the City shall reimburse the Developer in cash for any and
all funds expended prior to the Close of Escrow by the Developer in connection with design,
architectural work,and engineering work for the Developer's Phase IA Infrastructure Improvements
and the Parking impFevements as set forth in the Scope of Development,other than the amounts that
have been paid to Developer pursuant to Section 4.8(e), from the first disbursement of the Public
Fund Contribution pursuant to the Construction Loan Account Instructions.
(d) The Developer acknowledges that the City and District have made no
representation that the terms and provisions of this Agreement and form of Ground Lease are
consistent with or sufficient to enable the City, District or JEPA to finance the Public Fund
Contribution.
(e) The District shall have the right to elect to fund the construction of the
Parking Improvements, which, if so elected by the District, would be designed and constructed by
Developer and financed by the District in an amount not,to exceed the Parking Improvements Costs.
4.8 Expenditures Prior to the Close of Escrow.
(a) The District and City shall be solely responsible for all of the costs of
completing the Schematic Plans for development of the Phase I Infrastructure Improvements to the
extent sufficient to achieve approval of the CDP("Pre-Close Responsibility Costs").
(b) The District may elect in its sole and absolute discretion to perform some of
the Project Site preparation work,as set forth in Exhibit I to the Scope of Development,prior to the
Close of Escrow, but only as it relates to the import of soil to the Project Site ("Preliminary Site
Preparation"). If the District elects to import soil to the Project Site as part of the Preliminary Site
Preparation,then the District shall import soil that is of quality not worse than the quality of soil set
forth on Attachment No. 8 attached hereto and incorporated herein by reference. The Ground Lease
will provide that the District will pay TEN MILLION DOLLARS ($10,000,000) (the "Preliminary
Site Preparation Amount")to the Developer for certain costs in connection with the Preliminary Site
Preparation: provided, however; that (i) if the District imports 130,000 cubic yards of soil to the
Project Site in accordance with this Section 4.8(b)prior to the Close of Escrow,then the Preliminary
Site Preparation Amount will be reduced to SIX MILLION DOLLARS ($6,000,000) or (ii) if the
District imports soil to the Project Site in accordance with this Section 4.8(b) in an amount less than
130,000 cubic yards, then the Preliminary Site Preparation Amount will be reduced to equal to the
difference of(1)$10,000,000 minus(2)$30.77 per cubic yard of soil that the District delivers to the
Project Site in accordance with this Section 4.8(b).
(c) ,It shall be the sole responsibility of the District and City, at the sole expense
of the District and City, to investigate and detennine access and utilities, identify approvals, as
necessary,for the relocation and/or abandonment of any easements or rights of way,and their related
termination and related modification of record from title to the Project Site,as may be necessary for
the construction of the Developer's Improvements and the Parking Improvements,and to specify by
24
when the District and the City will complete the relocation and/or abandonment of each such
easement and right of way and their related termination and related modification of record, as
applicable, for the construction of the Developer's Improvements and the Parking Improvements
(collectively, "Easement Findings"), in each case on or before the Target Date set forth in the
Schedule of Performance and, to the extent necessary, to include such Easement Findings with
respect thereto in the Schematic Plans for development of the Phase I A Infrastructure Improvements
submitted to the Developer in accordance with Section 4.4(b).
(d) The Developer shall have sixty (60) days after receipt of the Easement
Findings to provide written comments thereto to District and City. if the District or the City
disagrees with any of the comments to the Easement Findings provided by the Developer, then the
Parties shall meet and confer in accordance with Section 5.1. if the District and the City agree with
all of the comments to the Easement Findings provided by the Developer or if the Parties reach an
agreement on the Easement Findings pursuant to Section 5.1, then it shall be the sole responsibility
of the District and the City, at the sole expense of the District and the City, to relocate and/or
abandon, terminate and remove of record from title to the Project Site each of the easements and
rights of way identified in such Easement Findings by the corresponding date set forth in such
Easement Findings(as modified to reflect such comments or agreement).
(e) The District and the City shall reimburse the Developer in.cash for any and
all funds expended prior to the Close of Escrow by the Developer in connection with design,
architectural work,and engineering work for the Developer's Phase IA Infrastructure Improvements
as set forth in Scope of Development, prior to the Close of Escrow in accordance with,to the extent
applicable,Chula Vista Municipal Code 2.56.160.H,including the reimbursement procedure set forth
therein,and any applicable agreements implementing Chula Vista Municipal Code 2.56.160.H.
4.9 Inspection of Records. In addition to requirements imposed elsewhere in this
Agreement, requirements of the financing of the Public Improvements Costs, and other applicable
Laws, including the PWL, the Developer shall use commercially reasonable efforts to keep and use
commercially reasonable efforts to maintain, and shall require the Developer's general contractor
(the "General Contractor"), subcontractors and materialmen to keep and maintain, for a period of
seven(7)years after the date such record was created(or such longer period that the Developer may
decide in its sole discretion),all records,books,correspondence,receipts,vouchers and similar items
relating to the construction of the Developer's Improvements, together with the originals of all
contracts and purchase orders and any related warranties or guarantees relating to such construction.
The District,City and their agents and representatives shall have the right to access al l such records,
books, correspondence, receipts, vouchers and similar items during regular business hours on
business days or at other reasonable times within the boundaries of San Diego County: provided that
the District or City, as applicable, shall have given the Developer at least three(3) business days'
prior notice thereof. Developer shall use commercially reasonable efforts to keep and use
commercially reasonable efforts to maintain the records described in this Section 4.9 in a safe
condition. At the expiration of the seven-(7-)year period, Developer shall deliver the records to the
District or to such other location as may be requested by District in writing.
4.10 Insurance. The Developer shall, and shall require its architects, engineers,
contractors and subcontractors to purchase and maintain such insurance as will protect the City, the
District, the Developer,the architects, engineers and contractors from claims which may result from
the undertakings of the Developer, its architects, engineers and contractors under this Agreement,
which include without limitation:
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(a) Claims under workers'compensation benefit Laws;
(b) Claims for damages due to bodily injury,occupational sickness or disease,or
death of employees;
(c) Claims for damages because of bodily injury, sickness or disease,or death of
any person other than employees;
(d) Claims for damages insured by usual personal injury liability coverage which
are sustained (i)by any person as a result of an offense directly or indirectly related to the
employment of such person by the Developer, architect, engineer, contractors, subcontractors or
(ii)by any other person;
(e) Claims for -damages, other than to the physical improvements which
constitute the Developer's Public Improvements themselves,as a result of injury to or destruction of
tangible property,including loss of use resulting therefrom;
(f) Claims for damages because of bodily injury or death of any person or
property damage arising out of the ownership,maintenance or use of any motor vehicle;and
(g) Claims for the usual damages insured by Professional Errors and Omissions
insurance against any Professionals (Developer, architect, engineer, contractors or any other
Persons).
4.11 Liability Insurance Policy Limits. The insurance required by this Agreement shall
be written for not less than the following limits of liability; provided that all such limits may, at the
Developer's option,be satisfied by limits set forth in primary policies and excess policies:
(a) Workers'Compensation in the State: Statutory limits as set forth in Article 1
(commencing with Section 3700) of Chapter 4 of Article 1 of Division 4 of the California Labor
Code. Employer's Liability: Not less than $2,000,000, which limit of insurance may be satisfied
through primary and excess liability policies.
(b) Commercial General Liability, Occurrence Form, Coverages A, B, and C:
Dedicated Project Policy limit not less than $2,000,000 per occurrence limit and $5,000,000
aggregate limit. Required limits of insurance may be satisfied through primary and excess liability
policies.
(c) Comprehensive Automobile Liability for any vehicle used for or in
connection with the Work(owned,hired or leased): Not less than$1,000,000.
(d) Pollution Legal Liability for any new or exacerbated conditions caused by
any contractor or subcontractor in the amount of $1,000,000 per claim and $2,000,000 in the
aggregate,dedicated project limits.
(e) Professional Liability for Professional acts, errors and omissions covering(i)
any engineer, contractor or any other Person for Developer's Improvements (other than the
Developer's Private Improvements and the Convention Center) in the amount of$1,000,000 per
claim and $2,000,000 in the aggregate and (ii) any architect for the Developer's Private
Improvements and the Convention Center in the amount of$5,000,000 per claim and$10,000,000 in
26
the aggregate, it being understood that such insurance may be obtained by such architect, engineer,
contractor or subcontractor (each, a "Professional"), instead of the Developer, if such Professional
provides such insurance to the City and District in accordance with Section 4.13.
4.12 Builder's "All Risk" Insurance. If there is any construction of any of the
Developer's Improvements and/or the Parking Improvements during the Term by the Developer,
which, for the avoidance of doubt, is not required or permitted pursuant to Section 4.6, Developer
shall obtain and maintain, or require its General Contractor and its subcontractors and all other
contractors; subcontractors and consultants to obtain and maintain, at all times during the course of
construction of the Developer's Improvements and/or the Parking Improvements by the Developer,
all insurance as required herein, the construction contracts for the Developer's Improvements or the
Parking Improvements, if applicable, the Ground Lease and the Convention Center Subleases, as
applicable, with respect to the applicable portion of the Developer's Improvements and/or the
Parking Improvements, as applicable, constructed by the Developer. Developer, District and City
shall be named,as applicable,for their interests in the Project.
4.13 Required Policy Provisions. The insurance policies required under this Agreement
shall include the following provisions:
(a) The City and the District shall be named as additional insureds on all
insurance policies,with an endorsement identifying the same,except the workers'compensation and
Professional Liability policies, with waivers of subrogation in form acceptable to the District and
City.
(b) Each policy of insurance required under this Agreement shall be obtained
from a provider licensed to do business in California and having not less than a Best's Insurance
Guide current rating of A-: X or better and shall bear an endorsement precluding cancellation or
termination of the policy or reduction in coverage-unless the City and District have been given
written notice of such intended action at least thirty(30)days prior to its effective date.
(c) The Developer shall provide to the City and the District,or, if applicable, in
the case of Section 4.1 1(e)cause its architects,engineers,contractors,subcontractors and consultants
to provide to the City and the District,certificates of said insurance on or prior to the Execution Date,
and shall provide to the District copies of all of the policies of said insurance within fifteen(15)days
from the Developer's receipt of written request therefor from the District.
(d) If the Developer fails to obtain and maintain, or cause its architects,
engineers,contractors,subcontractors and consultants,to obtain and maintain,any insurance required
by this Agreement and if the Developer does not cure such failure within ten(10)days from the date
when the Developer receives notice thereof from the District and the City, then the District and City
shall have the right,to.purchase the insurance on behalf of Developer, its architects, engineers,
contractors, subcontractors and consultants (as applicable) and the Developer shall promptly
reimburse the District or City,as applicable,the full cost of such insurance.
4.14 Payment Bonds and Performance Bonds.
(a) Prior to the Developer commencing the construction of the Developer's
Improvements and, if applicable,the Parking Improvements,the Developer shall furnish the District
and the City with the following separate corporate surety bonds from each contractor that is
27
responsible for the construction of a Major Component of Developer's Improvements, if applicable,
the Parking Improvements or,in each case,a portion thereof:
(i) A corporate surety performance bond ("Performance Bond") issued
by a surety company licensed and admitted to transact business as such in the State of California, in
an amount not less than one hundred percent(100%)of the estimated Hard Construction Costs of the
applicable Major Component of Developer's Improvements, the Parking Improvements or a portion
thereof, as applicable. The Performance Bond shall name Developer as principal obligee and the
District, the City, each of the Private Construction Lenders and each of the public lenders as co-
obligees. The Performance Bond shall assure full completion of the construction by such contractor
of such Major Component of Developer's Improvement,the Parking Improvements or such portion
thereof,as applicable;and
(ii) A corporate surety payment bond ("Pa)ment Bond") issued by a
surety company licensed and admitted to transact business as such in the State of California, in an
amount equal to one hundred percent (100%) of the estimated Hard Construction Costs of the
applicable Major Component of Developer's Improvements, the Parking Improvements or a portion
thereof, as applicable, guaranteeing payment for all materials, provisions, supplies and equipment
used in, upon, for.or about the performance of the construction by such contractor of such Major
Component of Developer's Improvements,the Parking Improvements or such portion thereof and for
labor done thereon and protecting the District and the City from any and all liability,loss or damages
arising out of or in connection with any failure to make any such payments. The Payment Bond shall
name Developer as principal obligee and the District, the City, each of the Private Construction
Lenders and each of the public lenders as co-obligees.
(b) The Payment Bonds and Performance Bonds shall be in form and content
reasonably satisfactory to the District and the City.
4.15 Completion Guaranty. "Completion Guaranty" shall mean a guaranty, or
guaranties,from a Person or multiple Persons(collectively,the"Guarantor"),each of which is not a
Prohibited Person, and which, in the aggregate, have a net worth, which shall mean total assets less
the amount of total liabilities, determined in accordance with generally accepted accounting
principles of at least TWO HUNDRED MILLION DOLLARS ($200,000,000) and which are
approved by each of the District and the City, in its reasonable discretion, guaranteeing to the
District,the City and the JEPA the completion by the Developer of the Developer's Improvements in
accordance with the Ground Lease. The Parties shall negotiate the form of the Completion Guaranty
on or before the Target Date set forth in the Schedule of Performance. The Parties shall execute and
deliver the Completion Guaranty at the Close of Escrow.
4.16 Prevailing Wages. The Developer acknowledges and agrees that:
(a) Any construction, alteration, demolition, installation or repair work that the
Developer pelf fms,EeJwired or eause&4e-be-performed,of`"^""e Deve!Gpff is FequiFed to peff4•
under this Agreement("De eloper.Genstfuefien` of!E+constitutes"public work"under California
Prevailing Wage Law, including Labor Code Sections 1720 through 1861, el seq. (as ^��.� states
may be amended &em time to tifne "PWL"), and PWL obligates the Developer to cause such
Developerensu- en WeFkwork to be performed as"public work", including, but not limited to,
the payment of applicable prevailing wages to all Persons subject to the PWL.
28
(b) The Developer shall cause all Persons performing
{1
public under this Agreement to comply with all applicable provisions of the PWL and
other applicable wage Laws.
(c) The District hereby notifies the Developer and the Developer hereby
acknowledges that the PWL includes,without limitation, Labor Code Section 1771.1(b)that provides
that the following requirements described in Labor Code Section 1771.1(a) shall be included in all
bid invitations and"public work"contracts: "A contractor or subcontractor shall not be qualified to
bid on,be listed in a bid proposal,subject to the requirements of Section 4104 of the Public Contract
Code, or engage in the performance of any contract for "public work''=, as defined in this chapter,
unless i"s-currently registered and qualified to perform``public work''—'pursuant to Section 1725.5. It
is not a violation of��sien 1:771 Ithis section for an unregistered contractor to submit a bid that is
authorized by Section 7029.1 of the Business and Professions Code or by Section 10164 or 20103.5
of the Public Contract Code—i€, provided the contractor is registered to perform "public work'—'
pursuant to Section 1725.5 at the time the contract is awarded-_
(d) The Developer acknowledges that its obligations under the PWL include,
without limitation,ensuring that:
(i) pursuant to Labor Code Section 177 LI(b),a bid shall not be accepted
nor any contract or subcontract entered into without proof of the contractor or subcontractor's current
registration to perform"public work"pursuant to Section 1725.5:
(ii) pursuant to Labor Code Section 1771.4(a)(1), the call for bids and
contract documents shall specify that the project is subject to compliance monitoring and
enforcement by the California Department of Industrial Relations("DIR"),
(iii) pursuant to Labor Code Section 1771.4(a)(2), it posts or requires the
prime contractor to post job site notices,as prescribed by regulation-,and
(iv) pursuant to Labor Code Section 1773.3(a)(1), it provides notice to the
DIR of any"public works"contract subject to the requirements of the PWL, within thirty(30)days
of the award, but in no event later than the first day in which a contractor has workers employed
upon the public work. Pursuant to Labor Code Section 1773.3(a)(2), the notice shall be transmitted
electronically in a format specified by the DIR and shall include the name and registration number
issued by the DIR pursuant to Section 1725.5 of the contractor, the name and registration number
issued by the DIR pursuant to Section 1725.5 of any subcontractor listed on the successful bid, the
bid and contract award dates, the contract amount, the estimated start and completion dates,job site
location, and any additional information that the DIR specifies that aids in the administration and
enforcement of the PWL. PWC-100 is the name of the form currently used by the DIR for providing
the notice,but the Developer shall determine and use whatever form the DIR requires.
(e) The District and the City shall not be responsible for the Developer's failure
to comply with any applicable provisions of the PWL.
(f) The Developer's violations of the PWL shall constitute a breach of this
Aereement.
29
(g) T4ie—Notwithstanding anything in this Agreement to the contrary, the
Developer shall not be responsible forany Person's failure to comply with
any applicable provisions of the PWL with respect to any work performed by, or on behalf of,
District or City (other than by the Developer, or atryon behalf of the Developer's eentr-aeters,
^Developer or eensultantaby any Person actinIz directly or indirectly under a contract
with the Developer).
4.17 Developer's Indemnity Obligations. Without limitation of the Developer's other
obligations under this Agreement, the Developer agrees, at its sole cost and expense, and with
counsel approved by District and City, each in its reasonable discretion, to indemnify, defend and
hold harmless the District and City, and their officers, directors, employees, partners, affiliates,
agents, contractors, successors and assigns("District and City Parties") from any claims, demands,
actions,causes of action,suits(collectively,"Claims")and any costs,damages(of all kinds including
punitive damage, diminution in value and loss of use), claims, liabilities, expenses (including
reasonable attorneys', consultants' and experts' fees), losses, fines, penalties and court costs related
to the subject matter of such costs(collectively,the"Related Costs")and amounts paid in settlement
of any claims or actions related to the subject matter of the Related Costs (as determined by the
Developer,District and City),arising out of.
(a) the obligations undertaken by the Developer and their officers, directors,
employees, partners, affiliates, agents, contractors, successors and assigns in connection with this
Agreement;
(b) the possession, use, occupancy, operation or development of the Project Site
by the Developer or the Developer's representatives,partners,directors,officers,agents,employees,
consultants, contractors, invitees, subtenants, successors, assigns or similar users/affiliates
(collectively,"Developer Affiliate");
(c) the approval of this Agreement or the approval of permits or approvals
granted to the Developer or a Developer Affiliate related to the Project or the Project Site, including,
but not limited to,approvals or permits for the development of any structures,buildings,installations,
and improvements on the Project.Site,or use of the Project Site(collectively,"Related Approvals");
(d) any third party challenges to the approval of the Project and the Related
Approvals;
(e) the granting or failure to grant any approvals set forth in this Agreement
(collectively,"DiscretionaryApprovals");
(f) environmental documents, mitigation and/or monitoring plans, or
determinations conducted and adopted pursuant to CEQA or the National Environmental Policy Act
for this Agreement,Related Approvals or Discretionary Approvals of the Developer;and
(g) the Developer's obligation to comply with the PWL with respect to the
Vier-kwork to be performed by or under contract with the Developer.
The foregoing indemnity, defense and hold harmless obligations of the Developer shall not
include any Claims and Related Costs and amounts paid in settlement of any Claims or actions
related to the subject matter of the Related Costs (as determined by the Developer), arising out of
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f
District's or the City's failure to comply with the applicable provisions of the PWL with respect to
any work performed by, or on behalf of, District or City(other than by the Developer or any of the
Developer's contractors,subcontractors or consultants).
If any of the District and City Parties tender to the Developer any Claim arising out of the
Project or the Project Site, the District and/or the City, then the Developer shall have the right to
terminate this Agreement in accordance with Article Vlll and, if the Developer elects to exercise
such right to terminate this Agreement, then the Developer shall have the right not to participate in
the defense of any such Claim and the Developer shall have no indemnity, defense or hold harmless
obligations to any District and City Party or any third party.
The District and the City may, in their sole and absolute discretion,participate in the defense
of any Claims, but the Developer shall have no obligation to reimburse the District and the City for
any costs of defense incurred by the District and/or the City, including, without limitation,
reimbursement for attorneys' fees, experts' fees and other costs. The District's and the City's
participation shall not relieve the Developer of any of its obligations under this Section 4.17. If the
District and City tender the defense of any Claim to Developer pursuant to this Section 4.17 and
Developer does not elect to terminate this Agreement in accordance with Article Vlll, then the
Parties contemplate that they will execute a binding agreement providing for the Parties' obligations
with respect to the defense of such Claim, including Developer's obligation to pay costs relating to
such Claim. The foregoing indemnity obligations of the Developer are in addition to, and not in
limitation of, any other indemnity obligations of the Developer contained in this Agreement. This
indemnity shall survive expiration or earlier termination of this Agreement,but solely with respect to
any event or condition that has occurred prior to, or exists at the time of, such expiration or
termination.
4.18 Liens and Claims.
(a) The Developer agrees that, if any Professional or materialman performing the
Work, or furnishing materials in connection therewith, or if anyone claiming directly or indirectly
under or through the Developer or any Developer Affiliate, Professional or materialman shall file or
cause to be filed any mechanics lien or other lien or security interest against the Project Site, the
Developer's Improvements, the Parking Improvements or any portion thereof, or against any assets
of or funds appropriated to or by the District or the City, then, within thirty (30) days after the
Developer receives notice of filing thereof,the Developer shall cause such lien or security interest to
be discharged of record by payment, deposit, bond, order of court of competent jurisdiction or
otherwise. If the Developer shall fail to cause such lien or security interest to be discharged of record
within the period aforesaid, then, in addition to any other right or remedy, the District or the City
may,but shall not be obligated to,discharge the same either by paying the amount claimed to be due
from retentions or any progress payment next due to the Developer or by procuring the discharge of
record of such lien or security interest. Any amount so paid by the District or the City, including all
reasonable costs and expenses incurred by the District or the City in connection therewith, shall be
payable by the Developer to the District or the City, as applicable,on demand. Each of the City and
District will endeavor to notify Developer of any lien notices that it receives: provided,however,that
the failure by City or District to so notify the Developer shall not affect Developer's obligations
hereunder.
(b) Notwithstanding Section 4.18(a), the Developer shall not be required to
discharge of record any such lien or security interest if the Developer is in good faith,and consistent
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with applicable Law, at its own expense, currently and diligently contesting the same; provided that
the Developer first records a surety bond sufficient to release such lien or such security interest, as
applicable.
4.19 Validation Action. Subject to the remaining provisions of this Section 4.19, the
District and City,as the sole members of the JEPA,shall file and reasonably pursue on behalf of the
JEPA a validation action under California Code of Civil Procedure§860,petition for writ of mandate
pursuant to California Code of Civil Procedure section 1085 and/or 1094.5 and a complaint for
declaratory relief(collectively, "Validation Action")to(a)validate selected contracts relating to the
financing of the Public Improvements Costs for the Convention Center and the Phase ]A
Infrastructure Improvements, including the scope and extent of legal obligations arising therefrom
(collectively, the "Public Financing Contracts") and (b) obtain a judicial determination that none of
the Public Financing Contracts, the Qualified Private Contracts or the Project violates any Laws.
Prior to filing the Validation Action, District and City shall meet and confer with Developer to
discuss the potential for including within the Validation Action private contracts reasonably
designated by Developer that are consistent with Project Financing Contracts, and are themselves
integral to the development of the Project (collectively, the "Qualified Private Contracts"). If City
and District reasonably determine,each in its reasonable discretion,that the addition of the Qualified
Private Contracts to the Validation Action is lawful and feasible, and will not materially delay or
compromise the effective prosecution of the Validation Action with respect to the Public Financing
Contracts,City and District agree to include the Qualified Private Contracts in the Validation Action.
The JEPA shall be responsible for the payment of all costs and expenses incurred in connection with
such Validation Action; provided, however, that (i) Developer shall be responsible for payment of
any and all incremental legal and other costs arising from the inclusion of the Qualified Private
Contracts; and (ii) if there is a third-party challenge to the Validation Action, whether or not it
includes the Qualified Private Contracts, such challenge shall trigger Developer's obligation to
defend the Project and Related Approvals pursuant to Section 4.17(d) (subject to the Developer's
right to terminate this Agreement pursuant to the last paragraph of Section 4.17). The Developer
acknowledges that(1)a final unappealable judgment finding in favor of the JEPA, District and City
on all points is a condition precedent to the issuance of the financing for the Public Improvements
Costs, and(2)the City, the District and/or the JEPA may request the Developer's cooperation with
respect to participation in such Validation Action,or request the Developer to provide documentation
or information in support of such Validation Action, and (3) in the absence of such cooperation or
participation by the Developer, the Validation Action may not succeed. Notwithstanding the
foregoing, in the event that the District and City, as the sole members of the JEPA, determine,each
in its reasonable discretion,that filing or pursuing a Validation Action is not likely to succeed,or will
be overly burdensome,the District and City,as the sole members of the JEPA,shall,each in its sole
and absolute discretion, have the right to decline to commence a Validation Action or to terminate
such Validation Action and in the event the District or City makes such a determination, the Parties
shall meet and confer pursuant to Section 5.1 (provided that if the Developer has exercised its right to
terminate this Agreement as a result of challenges to the Validation Action,the City and District shall
have no obligation to meet and confer with Developer before terminating such Validation Action).
Developer acknowledges and agrees that the City and District shall have sole and absolute discretion
with respect to the prosecution of the Validation Action, including without limitation decisions
relating to procedural, tactical and substantive matters. The JEPA and the District and City shall
keep the Developer informed of the progress made on such Validation Action.
4.20 City Procurement Process. Developer acknowledges and agrees that, in addition to
any and all other requirements set forth in this Agreement, the process for procurement and
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implementation of Developer's Public Improvements shall be governed by Chula Vista Municipal
Code Section 2.56.160.H.
4.21 Compliance with Law; Enforceability by District, City and JEPA. Each of the
District, the City and the JEPA shall provide to the Developer copies of its findings, policies and
resolutions which authorize (a) the District, the City or the JEPA, as applicable, to enter into each
and every of the Closing Documents to which it is a party and (b) the Person or Persons executing
each of such Closing Documents on behalf of the District, the City or the JEPA,as applicable,to do
so (collectively, "Compliance Documents"), when they are made available to the public. The
Developer shall provide its written comments to the Compliance Documents within a commercially
reasonable period of time of the receipt thereof. If the District, the City or the JEPA disagree with
any of the comments provided by the Developer,then the Parties shall meet and confer in accordance
with Section 5.1. If disagreements between the Developer, the District, the City and the JEPA are
not resolved pursuant to Section 5.1,then the Developer may terminate this Agreement in accordance
with Article VIII.
4.22 Energy Requirements. The Parties acknowledge that Section 15 of the Settlement
Agreement requires that all "Developments" within the Proposed Project (as defined in the
Settlement Agreement) area achieve, in the aggregate, a fifty percent (50%) reduction in annual
energy use (the="50% Energy Standard") compared to that allowed under the Building Energy
Efficiency Standards, Title 24, Part 6, of the California Code of Regulations in effect as of May 4,
2010 ("2010 Title 24"). To implement Section 15 of the Settlement Agreement with respect to the
Project,the Parties agree as follows:
(a) Developer shall cause the design of Developer's Private Improvements, the
Convention Center, and the Parking Improvements so that each building will operate at an energy
consumption level equal to or better than the more stringent of the following two standards, which
shall be referred to herein as,the"Minimum Energy Efficiency Design Standard":(i) fifteen percent
(15%) less than the amount of energy that each building would otherwise be permitted to consume
under 2010 Title 24;or(ii)the minimum energy efficiency performance standard adopted by the City
at the time a building permit application is submitted for each building. District and City shall
coordinate with Developer and its design teams(s) throughout the design process to identify
additional energy savings measures or credits which Developer shall consider implementing, in good
faith, in the design of the Developer's Private Improvements, to achieve or exceed the Minimum
Energy Efficiency Design Standard.
(b) The Developer agrees to include in the form of Ground Lease the following
two requirements,which will exist throughout the teen of the Ground Lease:
(i) Developer shall develop,implement,and maintain a measurement and
verification plan for energy efficiency for the Developer's Private Improvements, the Convention
Center,and the Parking Improvements("M&V Plan")-and
(ii) Developer shall cause the performance of, and deliver to the District
and City, an energy consumption audit for each of the Developer's Private'Improvements; the
Convention Center,and the Parking Improvements no less frequently than every three(3)years after
the issuance of the temporary certificate of occupancy of the Developer's Private Improvements, the
Convention Center or the Parking Improvements, as applicable, as more particularly set forth in
Section 15.2.2.4 of the Settlement Agreement(the"Required Energy Audits").
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(c) City and District will review and evaluate Developer's designs for the
Developer's Private Improvements, the Convention Center, and the Parking Improvements to
determine Developer's compliance with the Minimum Energy Efficiency Design Standard and the
50% Energy Standard. In such evaluation, City and District will (i) assume the 5% energy
consumption credit that would be achieved with Developer's commitment to perform the Required
Energy Audits and develop, implement, and maintain the M&V Plan for the term of the Ground
Lease;and(ii)work with Developer to identify and apply the most advantageous of the two"paths"
identified in Section 15.2.2 of the Settlement Agreement,the"Title 24 Path"or the"LEED Path,"to
measure overall energy savings. If City and District ultimately determine that Developer's actions
and commitments under Sections 4.22(a) and 4.22(b) do not achieve the 50% Energy Standard as
applied to the Project, City and District shall work with Developer to identify additional energy
savings measures, programs or credits (collectively, "Additional Energy Savings Measures")
available to achieve the 50% Energy Standard. Such Additional Energy Savings Measures may
include,without limitation, Developer's participation in renewable or"time of use"energy purchase
programs,and/or other measures identified in Section 15.2 of the Settlement Agreement. Developer
agrees to participate in and/or implement the Additional Energy Savings Measures so identified at
Developer's cost, to the extent"commercially reasonable"(as defined below), in order to maximize
energy use reduction at the Project, in the aggregate, up to the 50% Energy Standard. If, despite
Developer's efforts, Developer cannot reduce the energy use standard at the Project to achieve the
50% Energy Standard, either because it is not commercially reasonable to do so, or Developer's
participation in and/or implementation of the Additional Energy Savings Measures identified by the
City and District do not result in the 50% Energy Standard, the City and District agree to identify
additional energy savings measures or credits that the City and District could implement(at a cost to
be shared equally by the City and District) or cause third parties to implement (without a public
subsidy or rent reduction), throughout the Proposed Project area, to achieve the 50% Energy
Standard for the Project. For purposes of this Section 4.22(c)"commercially reasonable"Additional
Energy Savings Measures are the Additional Energy Savings Measures that the Developer
reasonably determines can be implemented practicably and cost-effectively at the Project.
(d) For purposes of this Agreement, Developer's obligations to comply with
Section 15 of the Settlement Agreement are limited to the requirements set forth herein. So long as
the Developer has complied with its obligations under this Section 4.22, Developer will not be in
default and will not be in breach under this Agreement based upon any alleged failure to comply with
the terms of Section 15 of the Settlement Agreement in the design of the Project.
V. REQUIREMENTS OF PARTIES; CONDITIONS PRECEDENT TO CLOSE OF
ESCROW.
5.1 Periodic Review;Meet and Confer.
(a) The District and City shall have the option, not more frequently than every
three (3) months during the Term, to conduct a review (the "Periodic Review") to evaluate, among
other things, the extent to which the Developer is complying with its obligations under this
Agreement,and the Parties'determinations of whether it is feasible to continue with the development
of the Project pursuant to this Agreement(collectively,"Periodic Review Matters").
(b) Meet and Confer. (i) Within thirty (30) days following submittal by the
Developer of the information and materials reasonably requested by the District and/or the City in
accordance with Section 5.1(a)or(ii)within five(5)days following notice of any Event of Default,
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District staff,City staff and the Developer shall meet and confer to seek mutual resolution of areas of
concern covered in the Periodic Review or such Event of Default, as applicable, and to come to a
mutual agreement whether to take one of the following actions:
(i) Pause. To the extent feasible, pause any actions and activities of the
Parties pursuant to this Agreement (except, to the extent applicable, insurance, maintenance and
indemnification obligations)for a period up to ninety(90)days to enable the Parties to schedule one
or more additional meet and confer events to gather additional information.and continue discussions
of the Periodic Review Matters or such Event of Default,as applicable;or
(ii) Delay. To the extent feasible,delay for a period up to sixty(60)days
any further actions or activities of the Parties under this Agreement to enable the Parties to further
investigate their respective positions and whether it is feasible to proceed with the development of
the Project as provided for hereunder. If disagreements between the Parties are not resolved pursuant
to Section 5.1(b)(i) or (ii), then the Parties shall attempt to resolve such disagreements through
mediation in accordance with Section 7.4. If such disagreements are not resolved through mediation
within one hundred twenty(120)days after the commencement of mediation, then either Party may
terminate this Agreement pursuant to Article VIII.
(c) If disagreements between the Parties are resolved pursuant to Section 5.1(b),
then, if applicable, the Parties shall revise the Schedule of Performance to incorporate the changes
agreed to by the Parties pursuant to Section 5.1(b)and such revisions to the Schedule of Performance
shall be made without the need for an amendment to this Agreement in accordance with Section 9.9.
(d) Notwithstanding any other provision in this Agreement, in the event Schedule
of Performance extensions pursuant to Sections 5.1(b)(i) and 5.1(b)(ii)above exceed three hundred
sixty five (365) days cumulatively, any Party may elect to terminate this Agreement in accordance
with Article Vlll.
5.2 Conditions Precedent to Close of Escrow Benefiting the District and the City.
The District's and the City's obligations in connection with the Close of Escrow are expressly
conditioned upon the satisfaction by the District, City, and/or Developer (or .waiver by both the
District and the City in writing)of each of the following conditions:
(a) the District shall have received from the Developer and shall have approved
in accordance with this Agreement: (i) the Schematic Plans for the Developer's Improvements, the
Surface Parking and the Parking Improvements as required under this Agreement; (ii) the Building
Permit Application Drawings for the Developer's Improvements as required under this Agreement;
-and (iii) final Development Cost estimates for the Developer's Improvements as required under
Section 4.5(d);
(b) the District and the City shall have approved in accordance with this
Agreement the identity of each Person, other than the Managing Person, that is a member in
Developer(each,an"Equity Investor"and,collectively,"the Equity Investors");
(c) the District and the City shall have received from the Developer and
reasonably accepted the terms of (i) the executable versions of the agreements with the Equity
Investor(s) evidencing the commitments of such Equity Investors to make contributions for the
Developer's Private Improvements Costs (the "Equity Investor Contribution"), and (ii) the
35
disbursement instructions or contribution terms for the portion of the Equity Investor Contribution
attributable to the Developer's Private Improvements that require that the Equity Investor
Contribution and the Public Fund Contribution be disbursed or contributed,as applicable,paid passu
for the benefit of the Project;
(d) the District and the City shall have caused the portion of the Public Fund
Contribution attributable to the Developer's Public Improvements to be deposited at the Close of
Escrow,and thereafter held and disbursed in accordance with a disbursement agreement which shall
be negotiated by relevant parties prior to the Close of Escrow and shall be executed by the relevant
parties at the Close of Escrow(the"Construction Loan Account Instructions");
(e) the District and the City shall have received from the Developer and shall
have approved an encumbrance package in accordance with BPC Policy No. 355, including the
Appraisal, audited financial statements of the Developer for not less than the past two (2) years(or
such shorter period of time as•the Developer has existed)and a term sheet or loan commitment from
a lender (the "Private Construction Lender") in an amount not in excess of the Developer's Debt
Contribution; provided that, as a condition subsequent to the effectiveness of such approval, the
Developer shall provide to the District and the City,prior to the recordation of such encumbrance,an
affidavit by an authorized representative of Developer with authority to bind Developer stating that
the final loan documents for the approved encumbrance("Loan Documents")conform substantially
to the terms of the encumbrance package,without material changes,and the Loan Documents or the
Developer, as applicable, satisfy the criteria of any conditions set forth in the resolution of the BPC
approving such encumbrance;and provided,further,that in no event shall the principal amount of the
indebtedness that is secured by an encumbrance on the Developer's leasehold interest created by the
Ground Lease exceed seventy-five percent(75%)of the expected value upon completion of all of the
following: the Developer's Private Improvements, the Developer's leasehold interest in the
Convention Center pursuant to the Convention Center.Subleases, the Developer's leasehold interest
in the Project Site and the Developer's interest in the Surface Parking(for the avoidance of doubt and
for purposes of such 75% calculation, any indebtedness that is unsecured or secured only by an
encumbrance on other assets, including any equity in the Developer, shall be excluded from the
indebtedness), as determined by an appraisal that is (i) prepared by an appraiser that is reasonably
approved by the District and the City and (ii) in accordance with the Uniform Standards of
Professional Appraisal Practice (USPAP) as modified from time to time and for so long as it is a
generally accepted standard for commercial real estate appraisals("Appraisal");where:
(i) "Developer's Debt Contribution" shall mean the Developer's
Contribution(as hereinafter defined)less the amount of the Equity Investor Contribution;and
(ii) "Developer's Contribution" shall mean the budgeted amount for the
Development Costs of the Developer's Private Improvements and the Convention Center to the
standard required by the Ground Lease and the Convention Center Subleases (which is currently
estimated to be ONE BILLION TWENTY FIVE MILLION DOLLARS($1,025,000,000), including
all furnishings,fixtures and equipment)less the Project Public Investment Amount;
(f) the District and the City shall have received from the Developer, and BPC
and City Council shall have consented to that certain management agreement (the "Management
Agreement") between the Developer and Marriott Hotel Services, Inc. as operator ("Operator"),
36
pursuant to which the Operator will operate the Hotel and the Convention Center upon the opening
and initially as set forth in the Ground Lease under the Gaylord Hotel brand; provided that the
Developer may deliver to the District and the City a copy of the Management Agreement with all
proprietary information contained therein redacted(provided that the Developer makes a copy of an
unredacted version of the Management Agreement available to the District and the City for review
(but not copying) at the main offices of the District or City); and provided, further, that Developer
accepts as a condition to approval, the delivery of an affidavit by an authorized representative of
Developer that the fully executed Management Agreement is the same as the unredacted version of
the Management Agreement reviewed by the District and the City;
(g) the District and the City shall have received from the Developer notice that
the Developer has completed its Due Diligence Investigations and has accepted the Project Site in its
then"as-is"condition in accordance with Section 5.8;
(h) the District and the City shall have received from the Developer copies of the
Required Building Permits and all other permits that are required for the commencement of
construction of Developer's Improvements; "Required Building Permits" means (i) the Building
Permits or (ii) certification by the City, to the reasonable satisfaction of the District, that final
building permits that are required for the commencement of construction of Developer's
Improvements will be issued subject only to payment of applicable fees, immediately following the
Close of Escrow as set forth in Article VI (which certifications the City shall provide if such
certifications would be factually correct),-
(i)
orrect);(i) the District and the City shall have reviewed and accepted (such acceptance
not to be unreasonably withheld, conditioned or delayed) the terms of the Developer construction
contracts with any contractor for the Developer's Improvements, including guaranteed maximum
price construction contracts or fixed price construction contracts for all Major Components of
Developer's Improvements;
(j) the District and the.City shall have approved the form of Completion
Guaranty required under Section 4.15 and the identity of the Guarantor in accordance with this
Agreement and the Guarantor shall be committed to delivering such Completion Guaranty at the
Close of Escrow;
(k) the District shall have received from the Developer evidence reasonably
satisfactory to the District that all discretionary permits and approvals that are required to complete
construction of the Developer's Improvements have been obtained from any and all governmental
agencies having jurisdiction over the Project Site;
(1) the District and the City shall have received from the Developer certificates
of insurance for each of the policies of insurance required under the Ground Lease and Convention
Center Subleases evidencing that such policies meet the respective insurance requirements set forth
in the Ground Lease and Convention Center Subleases and will be effective as of the Close of
Escrow;
(m) the District and the City shall have received from the Developer reasonably
satisfactory evidence that the Payment Bonds and the Performance Bonds have been issued in
accordance with Section 4.14;
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1
(n) the District and the City shall have received evidence that the Title Company
is irrevocably committed to issue to the JEPA and the City,simultaneously with the Close of Escrow,
leasehold policies of title insurance policy in such form and amounts,and with such special
endorsements as may be reasonably required by the District, City, JEPA and any public lender, as
applicable,subject only to the Approved Title Exceptions;
(o) the following actions set forth in the Schedule of Performance shall have been
completed: (i) Approval of New S-I RV Park Lease, and (ii) the final Review of Underwriter's
Updated Projections for the Public Improvements Costs;
(p) JEPA, District and City shall have received a final, non-appealable judgment
in the Validation Action in favor of JEPA,District and City on all points;
(q) no Developer Event of Default shall have occurred and be continuing;
(r) the Developer shall have executed the Ground Lease and each of the
Convention Center Subleases to which it is a party,and in each case delivered the Ground Lease and
Convention Center Subleases to the escrow for this transaction,with the effectiveness thereof subject
only to the consummation of the Close of Escrow;
(s) District,City and JEPA shall have considered and approved items set forth in
Section 1.4;
(t) the District,City,and JEPA shall have determined that moneys are available,
through Bond Financing, in an amount no less than the Project Public Investment Amount, in
accordance with the Plan of Finance;
(u) the District shall have received required approvals from any and all third
parties,including without limitation,the State Lands Commission, for lease of the New S-I RV Park,
Site and construction of Sweetwater Park and any related construction;
(v) the District and City shall have completed, or shall have caused to be
completed,relocation, and/or abandonment,termination and related modification of record from title
to the Project Site of each of the easements and rights of way that the District and City are required to
relocate, remove and/or abandon prior to the Close Escrow in accordance with the Easement
Findings;
(w) District and City shall have obtained commitments for all financing that is
necessary to satisfy their respective obligations under the Plan of Finance, with such financing to
close concurrently with the Close of Escrow;
(x) the District shall have secured the fee interest in the"Triangle Parcel";and
(y) The District and the City shall have received and accepted (such acceptance
not to be unreasonably withheld, conditioned or delayed) the final, executed versions of the Loan
• Documents that evidence the commitments for the Developer's Debt Contribution and the
disbursement conditions therefor; provided, however, the Developer may provide redacted versions
of such Loan Documents to the District and the City so long as such redacted versions of the Loan
Documents include all of the material terms sufficient to enable the City, District and JEPA to
disclose to investors in the Bond Financing the amount of the financing to be provided under such
38
Loan Documents, the conditions for disbursement of such financing, the default and remedies
provisions contained therein and any additional matters reasonably determined to be necessary by
disclosure counsel to the City,District and/or JEPA or the underwriters of the Bond Financing.
5.3 Conditions Precedent to Close of Escrow Benefiting Developer.
The Developer's obligations in connection with the Close of Escrow are expressly
conditioned upon the Developer, District and/or the City, as applicable, satisfying, or causing the
satisfaction,of each of the following conditions(or waiver by the Developer in writing of any of the
following conditions):
(a) the Title Company shall be irrevocably committed to issue to the Developer,
simultaneously with the Close of Escrow, a leasehold policy or policies of title insurance in such
form and amounts and with such special endorsements as may be reasonably required by the
Developer and the Private Construction Lender,subject only to the Approved Title Exceptions;
(b) the Developer shall have received notice from the District and the City that
the District and the City have approved or disapproved, the Developer's submittals required under
this Agreement:
(c) the Developer shall have received notice from the District and the City that
the District and the City have determined that the Public Improvements Costs may be funded in
accordance with the Plan of Finance-,
(d) the District and the City shall have executed the Construction Loan Account
Instructions,the effectiveness thereof subject only to the consummation of the Close of Escrow;
(e) the District and the City shall have completed, or shall have caused to be
completed, relocation and/or abandonment, termination and related modification of record from title
to the Project Site of each of the easements and rights of way that the District and City are required to
relocate, remove and/or abandon prior to the Close Escrow in accordance with the Easement
Findings;
(f) the Developer shall have approved each of the Compliance Documents in
accordance with Section 4.21 or the Developer, the District, the City and the JEPA shall have
reached an agreement regarding each of the Compliance Documents pursuant to Section 4.21;
(g) the Developer shall have received notice from the District and the City that
the District, the City and JEPA have executed the Plan of Finance substantially based on the
Conceptual Outline of JEPA Plan of Finance;
(h) the District,the City and the JEPA shall have deposited moneys,or shall have
provided instructions for the deposit of proceeds of Bond Financing at the Close of Escrow, in
amounts sufficient to satisfy the Public Improvements Costs,subject only to the Close of Escrow and
the Construction Loan Account Instructions;
(i) the Developer shall have entered into an agreement with the District on terms
mutually acceptable to the Developer and the District, the effectiveness of which shall only be
conditioned on the consummation of the Close of Escrow, to provide up to 15 acres of land(or such
smaller amount of land as is acceptable to the Developer)adjacent to the Project Site on Parcel H-23
39
or another mutually-acceptable site in a location and configuration mutually acceptable to the District
and Developer for Developer to locate construction trailers,construction material,equipment staging
and parking during the construction of the Project at no cost to the Developer;
0) the Developer shall have received from the District and the City evidence that
the District and the City have obtained commitments for all financing that is necessary to satisfy their
respective obligations under the Plan of Finance, with such financing to close concurrently with the
Close of Escrow;
(k) the Developer shall have received the Required Building Permits and all other
permits that are required for the commencement of construction of Developer's Improvements;
(1) the Developer shall have completed its Due Diligence Investigations and shall
have accepted the Project Site in its then"as is"condition in accordance with Section 5.8; -
(m) the Management Agreement shall have been agreed to and executed by all of
the parties thereto, with the effectiveness thereof subject only to the consummation of the Close of
Escrow;
(n) the Developer shall have received all discretionary permits and approvals that
are required to complete the construction of the Developer's Improvements from any and all
governmental agencies having jurisdiction over the Project Site and all such discretionary permits
and approvals are final beyond any applicable appealable periods;
(o) no Public Entities Event of Default has occurred and is continuing;
(p) the Loan Documents shall have been executed,with the effectiveness thereof
subject only to the consummation of the Close of Escrow, in an amount sufficient to pay the
Developer's Debt Contribution;
(q) the District shall have executed the Ground Lease and each of the District,the
City and the JEPA shall have executed each of the Convention Center Subleases to which it is a
party,with the effectiveness thereof subject only to the consummation of the Close of Escrow;
(r) District and City shall have considered and approved items set forth in
Section 1.4;
(s) the Developer shall have received evidence that the District and City have
determined that moneys are available, through Bond Financing, in an amount sufficient to fund the
Project Public Investment,in accordance with the Plan of Finance;
(t) the Developer shall have received evidence that the District has received
required approvals from any and all third parties, including without limitation, the State Lands
Commission, for lease of the New S-1 RV Park Site and construction of Sweetwater Park and any
related construction;
(u) a final,non-appealable order shall have been granted in the Validation Action
in accordance with Section 4.19 finding in favor of the Project on all points;and
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(v) the City Council shall have passed and adopted an ordinance that amends,
among other things,the Chula Vista Municipal Code Section 2.56.160.H.
Notwithstanding anything to the contrary set forth in this Agreement, the obligations of JEPA, the
City and the District shall be subject to all limitations set forth in the Financing Agreement and the
Plan of Finance.
5.4 Approvals;Cooperation Between Parties.
(a) All approvals required by the District, City and Developer under this
Agreement shall not be unreasonably withheld or denied(except where such actions are specifically
said to be in the sole and absolute discretion of a Party) and, where specifically referenced in this
Agreement or in the Schedule of Performance, shall be given within the times set forth in this
Aereement or in the Schedule of Performance.
(b) The Developer recognizes and agrees that implementation of a Plan of
Finance will require certain Developer actions, consents or approvals and the provision by the
Developer of all such actions, consents or approvals required for implementation of the Plan of
Finance, whether with respect to the Bond Financing, CFD, EIFD or otherwise, as determined in the
sole and absolute discretion of the City and the District, shall be a condition precedent to the
obligations of the District and the City hereunder.
(c) The District, City and Developer shall, to the extent reasonably necessary,
cooperate with each other to enable each Party to perform its obligations under this
Agreement(including .with respect to the financing of each Party's financial contributions to the
Project, each Party's due diligence investigations, each Party's design and site preparation
obligations, and otherwise); provided, however, that in the event that any Party is asked to provide
cooperation, assurance, assistance, documentation, or investigation and such Party determines that
complying with such request will be unlawful, unreasonably burdensome, unreasonably expensive,
or unreasonably time consuming, such Party may refuse to cooperate, without liability to that Party,
by providing notice to the Party requesting the cooperation. Notwithstanding this provision, this
Section 5.4(c) does not limit District's or City's discretionary actions and the District and City
reserve the right to exercise discretionary actions, each in in its sole authority and in its sole and
absolute discretion.
(d) From and after the second (2"d) anniversary of the Execution Date, the
District shall not use the Project Site for any uses other than legally permitted uses that would not
reasonably be expected to materially and adversely affect the development or use of the Project. For
the first twenty-four(24)months after the Execution Date,the District shall not permit any portion of
the Project Site to be used for any uses other than(i)the uses of such portion of the Project Site as of
the Execution Date(or if such portion of the Project Site is subject to a lease, license, right of entry,
or other form of occupancy agreement as of the Execution Date, that are permitted under the
applicable lease, license,right of entry, or other form of occupancy agreement)and(ii)other uses to
which the Developer consents;provided,however,that nothing in this Section 5.4(d)shall require the
District to terminate any existing agreements for the Project Site or remove any existing easements
on the Project Site,except as otherwise expressly set forth in this Agreement. Notwithstanding the
foregoing, Developer consents to one or more rights of entry between the District and Rohr or any
affiliate of Rohr to construct subsurface infrastructure or improvements,including without limitation,
monitoring wells, that are permanent on the Project Site, pursuant to any order from the San Diego
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Regional Water Quality Control Board; provided that Rohr .coordinates with Developer in
determining the location or re-location,as applicable, of the monitoring wells and provided, further,
that the District, the City and Rohr cooperate with the Developer to minimize the impact of such,
construction on the Project.
5.5 Consideration of Changes to the Ground Lease or Convention Center Subleases.
Except for subordination of the District's ownership in the Project Site, which shall not be
allowed, the District, City and Developer shall consider,each in its sole discretion, modifications to
the Ground Lease and/or Convention Center Subleases, which may be requested by lenders or
financial or legal advisors to the District, City or Developer and which do not substantially increase
the obligations of the affected Parties under this Agreement or the Ground Lease and/or Convention
Center Subleases (as determined, in each case, by the affected Parties acting in good faith), and
which are consistent with the requirements of the financing to be issued or provided by the City,
District and/or JEPA,as set forth in the Plan of Finance.
5.6 Waiver of Certain Conditions. Any Party,at its sole election,may in writing waive
satisfaction of any of the conditions by another Party set forth in Section 5.2 or Section 5.3 that is to
the benefit of such waiving Party only, or if it is to the benefit of two of the Parties, then upon the
agreement between such Parties. Any such condition waived by a Party or two Parties,as applicable,
shall be deemed to be"satisfied"for purposes of Section 5.2 or Section 5.3,as applicable. Any such
waiver shall be set out in an Operating Memorandum in accordance with Section 9.9.
5.7 Physical Condition of the Project Site. Subject to the Developer's right to
terminate this Agreement under Section 5.8, the Developer agrees to unconditionally accept the
Project Site SUBJECT TO ALL FAULTS AND CONDITION,"AS-IS", "WHERE IS",WITHOUT
ANY WARRANTY AS TO QUALITY, CHARACTER, PERFORMANCE OR CONDITION and
with full knowledge of the physical condition of the Project Site, all Laws applicable to the Project
Site,the Approved Title Exceptions and of any and all conditions,restrictions,encumbrances and all
matters of record relating to the Project Site. The Developer's delivery of its written notice of
acceptance of the Project Site provided for in Section 5.8 hereof shall constitute the Developer's
representation and warranty to the District and City that the Developer is relying solely on its own
investigation of the Project Site and has received assurances acceptable to the Developer by means
independent of the District or any employee,official,consultant or agent of the District of the truth of
all facts material to the Developer's leasing of the Project Site pursuant to this Agreement, the
Ground Lease and the Convention Center Subleases, and that the Project Site are being leased and
subleased, respectively, by the Developer as a result of its own knowledge, inspection and
investigation of the Project Site and not as a result of any representation(s) made by the District or
City,or any employee,official,consultant or agent of the District or City relating to the condition of
the Project Site. The District and City hereby expressly and specifically disclaim any express or
implied warranties regarding the Hotel Site and the Convention Center Site, except as expressly set
forth in this Agreement.
5.8 Due Diligence Investigations, Early Entry by Developer, Due Diligence Period
Work.
(a) It shall be the sole responsibility of the Developer, at the Developer's sole
expense, to investigate and determine the conditions of the Project Site and the suitability of such
conditions for the Developer's Improvements to be constructed by the Developer ("Due Diligence
Investigations"). If, following the completion of the Due Diligence Investigations,the conditions of
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the Project Site are not, in the Developer's opinion, in all respects entirely suitable for development
of the Project Site and the Developer elects to proceed with the Close of Escrow, then it is the sole
responsibility and obligation of the Developer to take such action as may be necessary to place the
conditions of the Project Site in a condition suitable for development of the Project Site.
(b) The Developer shall conduct all of its Due Diligence Investigations at its sole
cost and expense in accordance with that certain Right of Entry Agreement, dated as of March 16,
2018 (the "Initial Right of Entry Agreement"), and other right of entry agreements, as required, by
and between the Developer and the District (collectively, the "Right of Entry Agreement"). The
Pw4ies agFee that the Distfiet and the Develepef heFeby extend the teFm ef the initial Right ef Efitf�,
Agreement to the-€€feet+ie-1rl-ate—Any Due Diligence Investigations shall not unreasonably disrupt
any then-existing use or occupancy of the Project Site or the operations of the District on the Project
Site other than as expressly set forth in the Right of Entry Agreement.
(c) Upon completion of the Due Diligence Investigations, the Developer shall
deliver to the District a written notice that the Developer accepts or rejects the condition of the
Project Site. If the Developer does not unconditionally accept the condition of the Project Site on or
before the Target Date set forth in the Schedule of Performance, the Developer shall be deemed to
have not accepted the condition of the Project Site. If the Developer accepts the condition of the
Project Site,the District shall notify the Developer of each change to the condition of the Project Site
that could adversely affect the development or use of the Project as soon as reasonably practicable
after learning thereof and the Developer shall promptly investigate such change. After the
Developer's investigation of any change in the condition of the Project Site,the Developer shall have
the right to reject the condition of the Project Site based on such change, irrespective of its prior
acceptance of the condition of the Project Site. If the condition of the Project Site is rejected by the
Developer(including after the Developer's initial acceptance of the condition of the Project Site as
set forth in the preceding sentence), then the Developer or the District shall have the right to
terminate this Agreement, each in its sole and absolute discretion. Any termination of this
Agreement pursuant to this Section 5.8 shall be without liability to the other Party, except as
provided in the Right of Entry Agreement,and shall be accomplished by delivery of a written notice
of termination to the other Party,in which case the Parties shall proceed pursuant to Article VIII.
5.9 Exclusive Negotiations.
(a) The District hereby agrees that,during the Term,it shall negotiate exclusively
with the Developer regarding the development of any project at the Project Site; provided,however,
that the District shall not be precluded from negotiating with other parties for other developments on
other District properties, including, but not limited to, those in the Chula Vista Bayfront; provided,
further, that nothing herein shall prohibit the District from using the Project Site before the Closing
Date in accordance with Section 5.4(d).
(b) The City hereby agrees that it shall, during the Term, negotiate exclusively
with the Developer regarding the development of any project at the Project Site-, provided,however,
that the City shall not be precluded from negotiating with other parties for other developments on
other City properties,including,but not limited to,those in the Chula Vista Bayfront.
(c) The Developer hereby agrees that it shall, during the Term, negotiate
exclusively with the District and the City regarding the development of any project that is to be
branded as a Gaylord Hotel and located in any of the following counties: the County of Santa
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Barbara, the County of Ventura, the County of Los Angeles, the County of San Bernardino, the
County of Orange,the County of Riverside,the County of San Diego and Imperial County.
VI. LEASE OF PROJECT SITE;CLOSE OF ESCROW.
6.1 Lease of Project Site.
(a) The Hotel Site shall be leased to the Developer pursuant to the Ground Lease.
On or before the Target Date set forth in the Schedule of Performance,the District and the Developer
shall negotiate and agree on the form of Ground Lease. Attachment No. 9 attached hereto and
incorporated herein by reference is a draft of the Ground Lease prepared by the District and is subject
to review by the Developer in all respects and shall not be considered final or binding on the
Developer or the District in any respect. Developer shall commission an ALTA survey, at its sole
cost and expense, to determine the boundaries of the Project Site ("Site Survey"). Developer shall
deliver the legal descriptions of the Project Site, Hotel Site and Convention Center Site as determined
in the Site Survey to the District for review and approval. Upon written approval of the legal
description of the Project Site, Hotel Site and Convention Center Site by the District, the legal
description of each shall be attached to the Ground Lease and Convention Center Subleases, as
applicable.
(b) The Parties anticipate that the Convention Center Site will be leased by the
District to the Developer pursuant to the Ground Lease,then immediately thereafter subleased by the
Developer to the JEPA,by the JEPA to the City and by the City to the Developer pursuant to various
sublease agreements (collectively referred to as the "Convention Center Subleases"), for
development of the Convention Center and for the purpose of supporting the City's contribution to
the Project Public Investment. Pursuant to the Convention Center Subleases,the Developer shall be
responsible for the development,construction,operation and maintenance of the Convention Center,-
excluding
enter,excluding the obligation of the City to pay rent under the Convention Center Sublease made by the
JEPA to the City, which rent payments shall secure and be used to pay debt service on the Bond
Financing pursuant to the Plan of Finance,and the proceeds of such Bond Financing shall be used to
pay the Project Public Investment Amount. The Convention Center Subleases shall be negotiated on
or before the Target Date set forth in the Schedule of Performance and shall be executed by the
Developer, JEPA and City, as applicable, at the Close of Escrow. Upon approval of the legal
description of the Convention Center Site by the District pursuant to Section 6.1(a), the legal
description of the Convention Center Site shall be attached to each of the Convention Center
Subleases.
6.2 Opening of Escrow; Updated Preliminary Title Reports. The Parties shall open
an escrow with Chicago Title Insurance Company,or such other escrow company as the Parties may
mutually select (the "Escrow Agent") to consummate the Close of Escrow as herein provided.
Within sixty(60) days of the Execution Date ("Delivery Date"), the Developer shall deliver to the
District and City a preliminary title report("Preliminary Title Report")for the Project Site prepared
by Chicago Title Insurance Company(the"Title Company").
Developer shall have ninety (90) days after the Delivery Date to provide written notice to
District of any exceptions to title that are disapproved by Developer ("Developer's Disapproval
Notice"). Developer's failure to deliver Developer's Disapproval Notice to District within said
ninety-(90-)day period shall be deemed Developer's approval of all exceptions to title identified in
the Preliminary Title Report. District shall have ninety (90) days following receipt of Developer's
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Disapproval Notice to provide written notice to Developer("District's Response Notice") if District
elects to remove any such exceptions disapproved by Developer. If District agrees to remove all of
the disapproved exceptions identified by Developer, then District shall cause such disapproved
exceptions to be removed from title to the Project Site prior to Close of Escrow. If District elects not
to remove one or more of the disapproved exceptions, Developer may elect to either(a)terminate
this Agreement in accordance with Article Vlll, or (b)waive the disapproved exceptions that the
District elected not to remove by providing written notice to District, Escrow Agent and Title
Company, in which case the District shall cause the disapproved exceptions that the District agreed
to remove (if any) to be removed from title to the Project Site prior to Close of Escrow. Any
exceptions in the Preliminary Title Report that are approved or deemed approved by the Developer
shall be considered approved and shall be referred to collectively as the "Approved Title
Exceptions".
Not later than sixty (60) days after the Developer delivers a copy of the then-current
Preliminary Title Report to the Private Construction Lenders, the Developer shall deliver to the
District a copy of such Private Construction Lenders' notice of any exceptions to title that are
disapproved by such Private Construction Lenders ("Private Construction Lenders' Disapproval
Notice")- provided that the Private Construction Lenders' Disapproval Notice may not disapprove
any of the Approved Title Exceptions that are the result of a discretionary governmental approval of
a government authority, including the City and District, or that are otherwise agreed to by the
District,City and Developer in writing. Developer's failure to deliver Private Construction Lenders'
Disapproval Notice to District within said sixty- (60-) day period shall be deemed the Private
Construction Lenders' approval of all such exceptions to title. District shall have twenty(20) days
following receipt of Private Construction Lenders' Disapproval Notice to provide written notice to
Developer ("District's Response Notice") if District elects to remove any such exceptions
disapproved by the Private Construction Lenders. If District agrees to remove all of the disapproved
exceptions identified by the Private Construction Lenders, then the District shall cause such
disapproved exceptions to be removed from title to the Project Site prior to Close of Escrow. if
District elects not to remove one or more of the disapproved exceptions, Developer may elect to
either (a)terminate this Agreement in accordance with Article Vlll, or (b)waive the disapproved
exceptions that the District elected not to remove by providing written notice to District, Escrow
Agent and Title Company, in which case the District shall cause the disapproved exceptions that the
District agreed to remove (if any) to be removed from title to the Project Site prior to Close of
Escrow. Any exceptions in the Preliminary Title Report that are approved or deemed approved by
the Private Construction Lenders shall be considered approved and shall form part of the Approved
Title Exceptions.
The Title Company may provide an update to the Preliminary Title Report from time to time.
The Developer shall have twenty(20) days after receipt of such update to provide written notice to
District of any new or modified exceptions to title that may materially affect the development or use
of the Project Site and that are disapproved by Developer ("Developer's Disapproval Notice");
provided that the Developer's Disapproval Notice shall not contain any new or modified exceptions
which were created by Developer or Developer's employees, agents, contractors, or subcontractors,
or that were consented to or requested by Developer. Developer's failure to deliver Developer's
Disapproval Notice to District within said twenty- (20-) day period shall be deemed Developer's
approval of all such exceptions to title and such new or modified exceptions shall be considered
Approved Title Exceptions. If the Developer provides Developer's Disapproval Notice before a
final, non-appealable judgment in the Validation Action has been granted, then the District shall
provide written notice to Developer("District's Response Notice") if District elects to remove any
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such exceptions disapproved by Developer, at the time that is the earlier of(a) ninety (90) days
following receipt of Developer's Disapproval Notice before a final, non-appealable judgment in the
Validation Action and (b) ten (10) days after a final, non-appealable judgment in the Validation
Action is granted. if the Developer provides Developer's Disapproval Notice after a final, non-
appealable judgment in the Validation Action has been granted, then the District shall have ten (10)
days following receipt of Developer's Disapproval Notice to provide written notice to Developer
("District's Response Notice") if District elects to remove any such exceptions disapproved by
Developer. If District agrees to remove all of the disapproved exceptions identified by Developer,
then the District shall cause such disapproved exceptions to be removed from title to the Project Site
prior to Close of Escrow. If District elects not to remove one or more of the disapproved exceptions,
Developer may elect to either (i)terminate this Agreement in accordance with Article Vlll, or
(ii)waive the disapproved exceptions that the District elected not to remove by providing written
notice to District, Escrow Agent and Title Company, in which case the District shall cause the
disapproved exceptions that the District agreed to remove (if any) to be removed from title to the
Project Site prior to Close of Escrow. Any new or modified exceptions in the Preliminary Title
Report that are approved or deemed approved by the Developer shall be considered approved and
shall form part of the Approved Title Exceptions. The Developer shall not request an update to the
Preliminary Title Report from the Title Company other than (1) once after the Existing RV Park
Lessee and each of the tenants,occupants or guests on the land encumbered by the Existing RV Park
Lease have vacated such land, (2) once after a final, non-appealable judgment in the Validation
Action has been granted, and (3) two more times during the Terni, in each case, as the Developer
determines in its sole and absolute discretion.
The Parties acknowledge that JEPA, District and the City will require confirmation of
satisfactory title to the Convention Center Site pursuant to a title policy in form and substance
acceptable to support the financing of the Project Public Investment pursuant to the Plan of Finance,
as further described in Section 5.2(n).
6.3 Execution and Delivery of Documents. The applicable Parties shall complete,
execute and deliver the Closing Documents as set forth in Section 6.4(a).
6.4 Close of Escrow;Title Policies. Provided that each of the conditions in Sections 5.2
and 5.3 has been satisfied, or waived in.writing by the Party or the Parties, as applicable, to whose
benefit such condition exists,the Parties shall close the transaction contemplated by this Agreement
("Close of Escrow") on or before the Target Date set forth in the Schedule of Performance (the
"Closing Date"),but in no event earlier than the following conditions have been satisfied:
(a) Escrow Agent and Title Company shall have received fully executed originals
of all of the following documents(the"Closing Documents"),all of which Closing Documents shall
be delivered not later than one(1)business day prior to the Closing Date:
(i) Two (2) originals of the Ground Lease, executed by the District and
Developer;
(ii) One (1) notarized original of the Memorandum of Ground Lease,
executed by the District'and Developer,in recordable form;
(iii) Four (4) originals of each of the Convention Center Subleases,
executed by the Developer,the District,the City,and the JEPA,as applicable;
46
(iv) One(1)notarized original of the Memorandum of Convention Center
Sublease for each of the Convention Center Subleases,executed by the District, Developer, City and
JEPA,as applicable;
(v) One(1)original Closing Statement,executed by the District,
(vi) One(1)original Closing Statement,executed by the City;
(vii) One(1)original Closing Statement,executed by the JEPA;
(viii) One(1)original Closing Statement,executed by the Developer;
(ix) As to each of the lenders involved in the Close of Escrow, one (1)
original executed Closing Statement;and
(x) Such other customary and reasonable title and escrow documents
reasonably required by the Title Company and Escrow Company for the Close of Escrow in a form
and with terms reasonably acceptable to the Parties executing such documents and supplemental
escrow instructions as may be reasonably required for the Close of Escrow.
(b) The Title Company is irrevocably committed to issue to the Developer a
leasehold policy or policies of title insurance related to the Project Site in such form and amounts and
with such special endorsements as may be reasonably required by the Developer and the Private
Construction Lender,subject only to the Approved Title Exceptions;
(c) The Title Company is irrevocably committed to issue to the JEPA and City
leasehold policies of title insurance related to the Convention Center Site in such form and amounts
and with such special endorsements as may be reasonably required by the JEPA and City, as
applicable,subject only to the Approved Title Exceptions;
(d) Escrow Agent shall have received from the Developer evidence that the Title
Company is irrevocably committed to issue to the Private Construction Lender a lender's policy of
title insurance in the amount of the first lien leasehold mortgage, subject only to the Approved Title
Exceptions,and with special endorsements as may be required by the Private Construction Lender;
(e) Escrow Agent shall have received from the District and/or City evidence that
the Title Company is irrevocably committed to issue to any public lender a lender's policy of title
insurance in the amount of the financing, subject only to the Approved Title Exceptions, and with
special endorsements as may be required by the public lenders;
(f) The Developer and the Escrow Agent shall have received from the District
and the City certification in writing that all conditions to Close of Escrow set forth in Section 5.2
have either been satisfied or waived;and
(g) The District, the City and the Escrow Agent shall have received from the
Developer certification in writing that all conditions to Close of Escrow set forth in Section 5.3 have
either been satisfied or waived.
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6.5 Costs of Escrow;Title Insurance.
(a) The Developer shall pay in escrow to the Escrow Agent the following fees,
charges and costs promptly after the Escrow Agent has notified the Developer of the amount of such
fees,charges and costs,but not earlier than ten(10)days prior to the Closing Date:
(i) The escrow fee;
(ii) All premiums for title insurance policies and special endorsements
issued by the Title Company to the Developer and the Private Construction Lenders pursuant to
Sections 6.4(b)and 6.4(d);
(iii) Ad valorem taxes and assessments, including possessory interest
taxes,upon the Project Site accruing on and after the Closing Date;
(iv) Any transfer taxes required to be paid at the Close of Escrow;
(v) Any fees payable for the recordation of any of the Closing Documents
in the Official Records of the County of San Diego;and
(vi) One-half(1/2)of all other fees,charges and costs of escrow.
(b) The District, the City or the JEPA, as applicable, shall pay in escrow to the
Escrow Agent the following fees,charges and costs promptly after the Escrow Agent has notified the
District of the amount of such fees, charges and costs, and District has approved the same, but not
earlier than ten(10)days prior to the Closing Date:
(i) All premiums for title insurance policies and special endorsements
issued by the Title Company to the District,the City,the JEPA and the any public lender pursuant to
Sections 6.4(c)and 6.4(e);
(ii) The cost of any endorsements that are required to remove any Title
Exception that the District has agreed to remove;and
(iii) One-half(1/2)of all other fees,charges and costs of escrow.
Except as otherwise set forth in this Agreement,each of the Parties shall be responsible for the costs
of its own due diligence investigations or activities,including,without limitation,the costs of its own
consultants and legal counsel.
V11. DEFAULTS; REMEDIES.
7.1 General Developer Default. If, prior to the Close of Escrow and delivery of the
Project Site to Developer,the Developer shall fail to perform or fulfill any obligation required of it
under this Agreement and/or under the Right of Entry Agreement and shall not have cured or
commenced to cure such failure within thirty (30) days following written notice thereof from the
District and/or the City(or has commenced to cure such failure, but is not diligently proceeding to
cure such failure), then the Developer shall be in default under this Agreement(each such event or
occurrence,a"Developer Event of Default").
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In the event of a Developer Event of Default, the District and the City may, each in its sole
discretion,(a)extend the time for the Developer to perform the applicable obligation(s)hereunder for
a period of time acceptable to the District and City beyond the cure period set forth in this
Section 7.1, or(b)terminate this Agreement by giving written notice (as required under Section 2.4)
of such termination to the other Parties. Upon termination, the rights and obligations of the Parties
shall be as set forth in Section 7.3 and Article Vlll.
7.2 Default by District or City. If,prior to the Close of Escrow,the District or the City
shall fail to perform or fulfill any obligation required of such Party under this Agreement and/or
under the Right of Entry Agreement and shall not have cured or commenced to cure such failure
within thirty(30) days following written notice thereof from the Developer (or has commenced to
cure such failure, but is not diligently proceeding to cure such failure), then the District or the City,
as applicable, shall be in default under this Agreement (each such event or occurrence, a "Public
Entities Event of Default"and,together with a Developer Event of Default,any"Event of Default").
In the event of a Public Entities Event of Default, the Developer may, in its sole discretion,
(a)extend the time for the District or the City, as applicable,to perform the applicable obligation(s)
hereunder for a period of time acceptable to the Developer beyond the cure period set forth in this
Section 7.2, or(b)terminate this Agreement by giving written notice (as required under Section 2.4)
of such termination to the other Parties. Upon termination, the rights and obligations of the Parties
shall be as set forth in Section 7.3 and Article Vlll.
7.3 Remedies Exclusive.
(a) Because of the nature of this Agreement, the Parties agree that remedies
expressly set forth in this Agreement are the only remedies available to the Parties.
(b) The Developer shall not have any remedy for money damages against the
City,District or JEPA,except for return of the Deposit in accordance with Article VIII.
(c) Neither the District nor the City shall have any remedy for money damages
against the Developer,except for retention of the Deposit in accordance with Article Vlll.
(d) The District, the City or the Developer, as applicable, shall be entitled to
compel specific performance of the other Party's(ies') obligation to meet and confer in accordance
with Section 5.1.
(e) Except as set forth in Section 7.3(d),the Parties shall not have any remedy for
specific performance against any other Party.
7.4 Dispute Resolution. The Parties shall, before the commencement of any lawsuit or
court action against any other Party relating to this Agreement or the Project,attempt in good faith to
settle their dispute by third-party mediation.
VIII. EVENTS OF TERMINATION; RIGHTS AND OBLIGATIONS OF PARTIES.
8.1 Events of Termination. This Agreement shall automatically terminate if any of the
following events(an"Event of Termination")occur prior to Close of Escrow:
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I
(a) the Early Expiration Date or expiration of any Extension Period without an
approved Extension or expiration of the final Extension Period;
(b) termination of this Agreement by any Party pursuant to Section 3.1(c);
(c) termination of this Agreement by the Developer pursuant to Section 4.17;
(d) termination of this Agreement by the Developer pursuant to Section 4.21;
(e) termination of this Agreement by any Party pursuant to Section 5.1(c);
(f) termination of this Agreement by any Party pursuant to Section 5.1(e);
(g) termination of this Agreement by the Developer or the District pursuant to
Section 5.8(c);
(h) termination of this Agreement by the Developer by reason of a Public Entities
Event of Default or by the District or the City by reason of a Developer Event of Default, in each
case,pursuant to Article VII;and
(i) the failure to otherwise satisfy,by the Closing Date,the conditions set forth in
Sections 5.2,5.3 and 6.5, unless said failure is waived by the Party or Parties which the condition
benefits.
8.2 Disposition of Deposit.
(a) IF THIS AGREEMENT IS TERMINATED BY THE DISTRICT OR THE
CITY PURSUANT TO SECTION 8.1(h),THE DEVELOPER ACKNOWLEDGES AND AGREES
THAT THE DEPOSIT MAY BE RETAINED BY THE DISTRICT (50% OF THE DEPOSIT
AMOUNT)AND CITY(50%OF THE DEPOSIT AMOUNT)AS LIQUIDATED DAMAGES AND
AS THEIR PROPERTY WITHOUT ANY DEDUCTION, OFFSET OR RECOUPMENT
WHATSOEVER BY THE DEVELOPER. IF THE DEVELOPER SHOULD DEFAULT UPON ITS
OBLIGATIONS HEREUNDER, ANY SUCH TERMINATION OF THIS AGREEMENT WOULD
RESULT IN IMMEASURABLE DAMAGE AND LOSS TO THE DISTRICT AND THE CITY. IT
IS IMPRACTICABLE AND EXTREMELY DIFFICULT TO FIX THE AMOUNT OF SUCH
DAMAGES TO THE DISTRICT AND THE CITY, BUT THE PARTIES ARE OF THE OPINION,
UPON THE BASIS OF ALL INFORMATION AVAILABLE TO THEM, THAT SUCH
DAMAGES WOULD APPROXIMATELY EQUAL THE AMOUNT OF THE DEPOSIT, AND
THE AMOUNT OF SUCH DEPOSIT SHALL BE PAID TO THE DISTRICT AND THE CITY
UPON ANY SUCH OCCURRENCE AS THE TOTAL OF ALL LIQUIDATED DAMAGES FOR
ANY AND ALL SUCH DEVELOPER EVENTS OF DEFAULT AND NOT AS A PENALTY.
50
THE DEVELOPER, THE CITY AND THE DISTRICT SPECIFICALLY
ACKNOWLEDGE THIS LIQUIDATED DAMAGES PROVISION BY THEIR
SIGNATURES HERE:
DISTRICT:
By:
CITY:
By:
DEVELOPER:
By:
(b) If this Agreement is terminated by reason other than of a Developer Event of
Default, then the District shall promptly return or release the Deposit then held by the District to the
Developer as the Developer's sole remedy hereunder.
8.3 Effect of Termination.
(a) Following the Close of Escrow, the provisions of this Agreement shall be
governed by Article VIII, and the rights and obligations of the parties under the Ground Lease and
the Convention Center Subleases shall be governed by those documents.
(b) If this Agreement is terminated or expires, then the District and City shall
have the absolute right to enter into agreements relating to the Project, Developer's Improvements
and the Project Site with any developer or operator and brand of its choosing, including, without
limitation,the Operator and the Gaylord Hotel brand.
(c) Effect of Termination of this Agreement on Plans and Specifications and
Products.
(i) If either the District or the City terminates this Agreement by reason
of a Developer Event of Default,then the Developer shall transfer and assign to the District all of the
Developer's interest in (A) any and all Plans and Specifications with respect to the Phase IA
Infrastructure Improvements and the Parking Improvements("Partial Plans and Specifications")and
any and all documents relating to the Partial Plans and Specifications and (B) any and all surveys,
soils and hazardous materials investigations, tests and reports, engineering reports and geotechnical
reports (collectively, "Products") with respect to the Phase IA Infrastructure Improvements and the
Parking Improvements, other than due diligence materials, material correspondence and work
product documents(collectively,"Partial Products"),in each case,with the right of the District to use
such Partial Plans and Specifications and related documents and Partial Products for any purpose
without compensation to the Developer or any other Person; provided that each such Partial Plan and
Specification, related document or Partial Product shall be reviewed by an engineer retained by the
District and/or the City and stamped by such engineer before being used by the District or the City
for any purpose:or
51
(ii) If the District,or the City or the Developer terminates this Agreement
for any reason other than a Developer Event of Default,then the Developer shall not be obligated to
transfer or assign to the District except those Developer paid for under Section 4.7(c) any of the
Developer's interest in(A)any Plans and Specifications or any documents relating to such Plans and
Specifications or(B) any Product, except for any Plans and Specifications and Products which the
City or District has reimbursed the Developer for on or prior to the termination of this Agreement.
(iii) With respect to clause (i) and (ii) above, neither the Developer nor
any architect, engineer or other Person that prepared or contributed to such Plans and Specifications
and related documents and Products makes, and shall not be deemed to have made, any warranty or
representation as to the quality of such Plans and Specifications (including that such Plans and
Specifications were prepared in accordance with any standard of care) or Products or as to the
suitability of such Plans and Specifications and related documents and Products for any purposes of
the District.
(d) Except as otherwise expressly provided in this Article V111 and in subsection
(e)below,upon an Event of Termination none of the Parties shall have any further rights,obligations
or remedies to or against any other Party pursuant to this Agreement.
(e) Notwithstanding termination of this Agreement, the Parties agree that the
following provisions shall survive such termination to the extent and for such period as necessary to
give them full force and effect under the circumstances giving rise to termination of this Agreement:
(i) Sections 4.1(f),4.7(c),4.7(d)and 4.17;
(ii) Section 8.2;and
(iii) this Section 8.3.
IX. MISCELLANEOUS PROVISIONS.
9.1 Real Estate Commissions. Neither Party shall be liable for any real estate
commission or brokerage fees which may arise from this Agreement. Each Party represents that it
has engaged no broker, agent or finder in connection with this Agreement, and each Party agrees to
hold the other Party or Parties harmless from any claim by any broker, agent or finder retained by
such Party.
9.2 Time of Essence. Time is of the essence in the performance of the respective
obligations of the Parties under this Agreement.
9.3 Consent. The District and the City shall reasonably cooperate with the Developer in
the preparation and submittal of any governmental applications the Developer must submit in the
furtherance of this Agreement. The District and the City further agree to reasonably cooperate with
the Developer in the timely processing of any such applications.
9.4 Entire Agreement. This Agreement consists of 55 pages together with Attachment
Nos. I through 7, inclusive, which are attached hereto and incorporated herein by this reference,
which constitute the entire agreement between the Parties.
52
9.5 Interpretation. This Agreement has been negotiated at arm's length and between
Persons sophisticated and knowledgeable in the matters dealt with herein. In addition,each Party has
been represented by experienced and knowledgeable legal counsel. Accordingly, any rule of law
(including California Civil Code Section 1654)or legal decision that would require interpretation of
any ambiguities in this Agreement against the Party that has drafted it, is not applicable and is
waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the
purposes of this Agreement.
9.6 Governing Law. This Agreement shall be governed by the laws of the State of
California.
9.7 Captions. The captions used herein are inserted only as a matter of convenience and
for reference and in no way define,limit or describe the scope or the intent of any Section hereof.
9.8 No Third Party Rights. Nothing in this Agreement shall create or shall.give to third
parties any claim or right of action against the District,the City or the Developer beyond such as may
legally exist,irrespective of this Agreement.
9.9 Modification or Amendment of Agreement;Operating Memoranda.
(a) No change in, modification to,termination or discharge of this Agreement in
any form whatsoever shall be valid or enforceable unless it is in writing and signed by the Party to be
charged therewith or its duly authorized representative:.
(b) The Parties acknowledge that the provisions of this Agreement require a close
degree of cooperation, and that new information and future events may make appropriate changes
with respect to the details of performance of the Parties under this Agreement. If, as a result of a
Periodic Review provided for in Section 5.1, or otherwise from time to time prior to the Early
Expiration Date or during any Extension Period,the Parties find that non-substantive refinements or
adjustments that do not require any public review or approval and that concern details of
performance of the Parties hereunder, are necessary or appropriate, they may effectuate such
refinements or adjustments through a memorandum (individually, "Operating Memorandum", and
collectively, "Operating Memoranda") approved by the Parties which, after execution, shall be
attached to this Agreement as addenda and become a part hereof. Operating Memoranda must be
executed on the District's behalf by its Executive Director or designee, on behalf of the City by its
City Manager or designee, and on behalf of the Developer by its authorized representative.
Operating Memoranda shall not require prior notice or approval by the BPC nor the City Council,
and shall not constitute an amendment to this Agreement.
(c) Any substantive or significant modifications to the terms and conditions set
forth in this Agreement, such as an increase of the Project Public Investment Amount, reduction in
insurance or indemnity requirements, or waiver of any discretionary approval requirement, shall be
processed as an amendment of this Agreement, and must be approved by the Developer, BPC, and
City Council.
9.10 Waiver. No waiver or any breach of any of the terms, covenants, agreements,
restrictions or conditions of this Agreement shall be construed to be a waiver of any succeeding
breach of the same or other terms,covenants,agreements,restrictions and conditions hereof.
53
9.1 1 Severability. If any term,covenant or condition of this Agreement or the application
thereof to any Person or circumstance shall to any extent be invalid or unenforceable, the remainder
of this Agreement or the application of such term,covenant or condition of this Agreement shall be ,
valid and enforceable to the fullest extent permitted by Law.
9.12 Certificates.
(a) On or before the Target Date set forth in the Schedule of Performance, the
Developer shall provide to the District and the City an incumbency certificate, in form and substance
reasonably satisfactory to the District and the City and signed by a duly authorized officer of the
Developer, certifying that Ira M. Mitzner is duly authorized to execute this Agreement on behalf of
the Developer, and attaching a copy of the Amended and Restated Limited Liability Company
Agreement of RIDA Chula Vista,LLC and any applicable resolutions.
(b) On or before the Target Date set forth in the Schedule of Performance, the
District shall provide to the Developer a copy of the resolution duly adopted by the BPC,evidencing
that the Executive Director is authorized to execute this Agreement on behalf of the District.
(c) On or before the Target Date set forth in the Schedule of Performance, the
City shall provide to the Developer a copy of the ordinance duly passed and adopted by the City
Council, evidencing that the Mayor of the City is duly authorized to execute this Agreement on
behalf of the City.
9.13 Counterparts. This Agreement may be executed in counterparts which taken
together shall constitute one agreement.
9.14 No Joint and Several Liability. There shall be no joint and several liability between
or among the JEPA,District and City.
[Signatures on Following Pages]
54
DISPOSITION AND DEVELOPMENT AGREEMENT
Resort Hotel and Convention Center Project
[Chula Vista Bayfront Master Plan Parcel H=3]
Signatory Page
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above-A_
DISTRICT:
SAN DIEGO UNIFIED PORT DISTRICT,a public
corporation
By:
Randa Coniglio, Executive Director
APPROVED AS TO FORM AND LEGALITY:
GENERAL COUNSEL
By:
Assistant/Deputy
55
DISPOSITION AND DEVELOPMENT AGREEMENT
Resort Hotel and Convention Center Project
[Chula Vista Bayfront Master Plan Parcel H-3]
Signatory Page
CITY:
CITY OF CHULA VISTA,a charter city and
municipal corporation
By:
Mary Casillas Salas,Mayor
ATTEST:
Kerry K. Bigelow,City Clerk
APPROVED AS TO FORM:
Glen R.Googins,City Attorney
56
DISPOSITION AND DEVELOPMENT AGREEMENT
Resort Hotel and Convention Center Project
[Chula Vista Bayfront Master Plan Parcel H-3]
Signatory Page
DEVELOPER:
RIDA CHULA VISTA. LLC.a Delaware
limited liability company
By:
Its:
57
APPENDIX NO. 1
DEFINITIONS
50%Energy Standard As defined in Section 4.22.
2010 Title 24 As defined in Section 4.22.
Additional Energy Savings As defined in Section 4.22(c).
Measures
Affiliated Transferee As defined in Section 2.1(f)(vii).
Agreement As defined in the Preamble.
Appraisal As defined in Section 5.2(e).
Approval of Tenant Project Plans As defined in Section 4.1(c).
Approved Title Exceptions As defined in Section 6.2. '
Bond Financing As defined in Section 4.7(a).
BPC As defined in Recital E.
Building Permit Application As defined in Section 4.4(a)(ii).
Drawings
Building Permits As defined in Section 4.4(a)(iii).
CDP As defined in Section 4.4(a)(i).
CEQA As defined in Recital C.
CFD As defined in Section 1.4(e).
Change of Control As defined in Section 2.1(f)(i).
Chula Vista Bayfront As defined in Recital A.
City As defined in the Preamble.
City Council As defined in Section 1.3(e).
City Infrastructure Improvements As defined in Recital K.
City Infrastructure Improvements As defined in Recital K.
Costs
Appendix No. 1
Page 1 of 38
Claims As defined in Section 4.17.
Close of Escrow As defined in Section 6.4.
Closing Date As defined in Section 6.4.
Closing Documents As defined in Section 6.4(a).
Completion Guaranty As defined in Section 4.15.
Compliance Documents As defined in Section 4.21.
Construction Loan Account As defined in Section 5.2(d).
Instructions
Control(Controls,Controlled, As defined in Section 2.1(f)(iv).
Controlling)
Controlled Person As defined in Section 2.1(f)(iv).
Controlling Person As defined in Section 2.1(f)(iv).
Convention Center As defined in Recital 1.
Convention Center Site As defined in Section 1.2(a).
Convention Center Subleases As defined in Section 6.1(b).
County As defined in Section 1.4(c).
Delivery Date As defined in Section 6.2.
Deposit As defined in Section 1.6(a).
Developer As defined in the Preamble.
Developer Affiliate As defined in Section 4.17(b).
Developer Construction Work As defined in Section 4.16(a).
Developer Event of Default As defined in Section 7.1.
Developer's Contribution As defined in Section 5.2(e)(ii).
Developer's Convention Center As defined in Recital 1.
Costs
Developer's Debt Contribution As defined in Section 5.2(e)(i).
Developer's Disapproval Notice As defined in Section 6.2.
Appendix No. 1
Page 2 of 8
Developer's Improvements As defined in Recital M.
Developer's Phase 1 A As defined in Recital G.
Infrastructure Improvements
Developer's Phase lA As defined in Recital G.
Infrastructure Improvements Costs
Developer's Private Improvements As defined in Recital M.
Developer's Private Improvements As defined in Recital M.
Costs
Developer's Public Improvements As defined in Recital L.
Developer's Public Improvements As defined in Section 4.5(e).
Costs
Development Costs As defined in Section 4.5(d).
DIR As defined in Section 4.16(d)(ii).
Discretionary Approvals As defined in Section 4.17(e).
District and City Parties As defined in Section 4.17.
District Retained Property As defined in Section 1.2(a).
District's Response Notice As defined in Section 6.2.
Due Diligence Investigations As defined in Section 5.8(a).
Early Expiration Date As defined in Section 3.1.
Easement Findings As defined in Section 4.8(c).
EIFD As defined in Section 1.4(e).
ENA As defined in Recital E.
Equity Investor . As defined in Section 5.2(b).
Equity Investor Contribution As defined in Section 5.2(c).
Escrow Agent As defined in Section 6.2.
Event of Termination As defined in Section 8.1.
Execution Date As defined in the Preamble.
Existing Approvals As defined in Section 1.3.
Appendix No. 1
Page 3 of 8
Existing JEPA As defined in Recital 1.
Existing RV Park As defined in Section 1.2(b).
Existing RV Park Lease As defined in Section 1.2(b).
Existing RV Park Lessee As defined in Section 1.2(b).
Extension As defined in Section 3.1.
Extension Period As defined in Section 3.1.
FEIR As defined in Section 1.3(b).
Financing Agreement As defined in Recital G.
First Amendment As defined in Recital E.
General Contractor As defined in Section 4.9.
Ground Lease As defined in Section 1.2(a).
Guarantor As defined in Section 4.15.
Hard Construction Costs As defined in Section 4.5(a).
Hotel As defined in Recital M.
Hotel Site As defined in Section 1.2(a).
Initial Right of Entry Agreement As defined in Section 5.8(b).
JEPA As defined in Recital I.
Laws As defined in Section 1.5.
Loan Documents As defined in Section 5.2(e).
LOI As defined in Recital H.
Major Component of Developer's As defined in Section 4.4(c).
Improvements
Major Decisions As defined in Section 2.1(f)(v).
Management Agreement As defined in Section 5.2(f).
Managing Person Ira M.Mitzner.
Master Plan As defined in Recital A.
Appendix No. 1
Page 4 of 8
Master Plan Project Area As defined in Recital B.
Minimum Energy Efficiency As defined in Section 4.22(a).
Design Standard
M&V Plan As defined in Section 4.22(b)(i).
New S-1 RV Park As defined in Section 1.2(b).
New S-1 RV Park Lease As defined in Section 1.2(b).
New S-1 RV Park Site As defined in Section 1.2(b).
Operating Memorandum As defined in Section 9.9(b).
Operator As defined in Section 5.2(f).
Original ENA As defined in Recital E.
Original FEIR As defined in Recital B.
Outstanding Issues As defined in Section 4.8(c).
Parking Improvements As defined in Recital J.
Parking Improvements Costs As defined in Recital J.
Partial Products As defined in Section 8.3(c)(i).
Partial Plans and Specifications As defined in Section 8.3(c)(i).
Party As defined in the Preamble.
Payment Bond As defined in Section 4.14(a)(ii).
Performance Bond As defined in Section 4.14(a)(i).
Periodic Review As defined in Section 5.1(a).
Periodic Review Matters As defined in Section 5.1(a).
Permitted Transfer As defined in Section 2.1(f)(vi).
Person As defined in Section 2.1(f)(iii).
Phase I As defined in Recital G.
Phase I Infrastructure Costs As defined in Recital G.
Phase I Infrastructure As defined in Recital G.
Improvements
Appendix No. 1
Page 5 of 8
Plan of Finance As defined in Recital G.
Plans and Specifications As defined in Attachment No. 5.
Pre-Close Responsibility Costs As defined in Section 4.8(a).
Pre-Existing Hazardous Material As defined in Section 4.17(8).
Predevelopment Phase As defined in Recital G.
Preliminary Project Approval As defined in Section 1.4(a).
Preliminary Site Preparation As defined in Section 4.8(b).
Preliminary Site Preparation As defined in Section 4.8(b).
Amount
Preliminary Title Report As defined in Section 6.2.
Private Construction Lender As defined in Section 5.2(e).
Private Construction Lenders' As defined in Section 6.2.
Disapproval Notice
Products As defined in Section 8.3(c)(i).
Professional As defined in Section 4.10(e).
Prohibited Person As defined in Section 2.1(f)(vii).
Project As defined in Recital F.
Project Public Investment As defined in Recital 1.
Project Public Investment Amount As defined in Recital I.
Project Site As defined in Recital F and Section 1.2(a).
Public Arts Policy As defined in Section 4.1(c).
Public Entities Event of Default As defined in Section 7.2.
Public Financing Contracts As defined in Section 4.19.
Public Fund Contribution As defined in Section 4.7(a).
Public Improvements As defined in Recital N.
Public Improvements Costs As defined in Recital O.
PWL As defined in Section 4.16(a).
Appendix No. 1
Page 6 of 8
Qualified Private Contracts As defined in Section 4.19.
Redevelopment Agency As defined in Recital A.
Related Approvals As defined in Section 4.17(c).
Related Costs As defined in Section 4.17.
Remaining Phase IA Infrastructure As defined in Recital G.
Improvements
Required Building Permits As defined in Section 5.2(h).
Required Energy Audits As defined in Section 4.22(b)(ii).
RFQ As defined in Recital E.
RIDA As defined in Recital E.
Right of Entry Agreement As defined in Section 5.8(b).
Rohr As defined in Section 4.1(h).
i
Room As defined in Recital I.
Schedule of Performance As defined in Section 1.2(b).
Schematic Plans Set As defined in Section 4.4(a)(i).
Scope of Development As defined in Recital F.
SDN As defined in Section 2.1(f)(vii).
Second Amendment As defined in Recital E.
Settlement Agreement As defined in Section 1.3(c).
Site Survey As defined in Section 6.1(a).
State Lands Commission As defined in Section 1.4(v).
Surface Parking As defined in Section 4.3.
Target Date As defined in Section 1.4.
Tenant Construction Project As defined in Section 4.4(a)(i).
Number
Tenant Project Plan Application As defined in Section 4.4(a)(ii).
Tenant Project Plans As defined in Section 4.5(a).
Appendix No. 1
Page 7 of 8
Term As defined in Section 3.1.
Title Company As defined in Section 6.2.
Total Project Costs As defined in Section 4.5(c).
Transfer As defined in Section 2.1(b)(i).
Unaffiliated Third Party As defined in Section 2.1(O(ii).
Validation Action As defined in Section 4.19.
Work As defined in Section 4.13(c).
Appendix No. I
Page 8 of 8
r
ATTACHMENT NO. 1
MAP OF PROJECT SITE
Attachment No. l
Page 1 of 1
ATTACHMENT NO.2
DESCRIPTION OF PROJECT SITE
Attachment No.2
Page 1 of 1
ATTACHMENT NO.3
MAP SHOWING GENERAL LOCATION OF ELEMENTS OF THE
PROJECT
Attachment No. 3
Page 1 of 1
ATTACHMENT NO.4
CONCEPTUAL OUTLINE OF THE
JOINT EXERCISE OF POWERS AGREEMENT PLAN OF FINANCE
Exhibit 1 to Attachment No. 5
Page 1 of 1
ATTACHMENT NO.5
SCOPE OF DEVELOPMENT
1. General
The Project and all related public, improvements shall be designed and constructed
substantially in accordance with the provisions of this Agreement, including without limitation the
Laws, and all specifications, drawings, plans, data, reports, maps, permit applications, land use
applications,zoning applications,environmental review and disclosure documents and design review
documents (collectively, "Plans and Specifications") and related documents to be approved by the
District and City pursuant hereto. The District staff,the City staff,the District's engineers,the City's
engineers, the Developer and the Developer's architects, engineers, General Contractor and
subcontractors shall coordinate with respect to the overall design, architecture and nature of the
improvements on the Project Site.
In the event of any conflict between the contents of this Scope of Development and the
Agreement,the provisions of the Agreement shall prevail.
Il. Developer's Improvements
Subject to the terms and conditions of this Agreement, including all attachments hereto, the
Developer shall be responsible for the design and construction of all of the following improvements
(collectively,the"Developer's Improvements"):
A. Developer's Private Improvements. The Developer shall construct the Hotel
portion of the Project on the Hotel Site, which shall consist of the following improvements
(collectively,the"Developer's Private Improvements"):
1. Single-branded resort hotel with at least 1,570 Rooms but not more than
1,600 Rooms,which must initially be branded as a Gaylord Hotel(the"Hotel");
2. Associated retail and resort amenities, subject to required discretionary
review by regulatory entities.
B. Developer's Public Improvements. The Developer shall construct the Convention
Center portion of the Project on the Convention Center Site and other public improvements, which
shall consist of the following(collectively,the"Developer's Public Improvements"):
1. The Project of approximately 275,000 net usable square feet of meeting space
in the Convention Center ("Meeting Space"), including all ancillary uses (including pre-function),
together with other related public improvements in accordance with this Agreement. A portion of the
cost of constructing the Convention Center will be financed by the JEPA in an amount not to exceed
the Project Public Investment Amount,as set out in the Plan of Finance.
2. That portion of the Phase IA Infrastructure Improvements identified in Exhibit 1 attached
hereto(collectively, the"Developer's Phase IA Infrastructure Improvements"), to be constructed by
Attachment No. 5
Page 2 of 4
the Developer in lieu of remitting Bayfront Development Impact Fees to the City, pursuant to
Chapter 3.55 of the Chula Vista Municipal Code. A portion of the Developer's Phase IA
Infrastructure Improvements shall be financed by the District and City(the "Developer's Phase IA
Infrastructure Improvements Costs"), and the remaining portion of the Developer's Phase IA
Infrastructure Improvements(the"Developer's Sewer Improvements")shall be financed by the City,
each as set out in the Plan of Finance and in the Sources and Uses Matrix(Exhibit 4).
111. Architecture and Design
The Developer's Improvements shall be of high architectural quality and shall be sufficiently
landscaped. The Schematic Plans and the Building Permit Application Drawings shall describe the
architectural character intended for the Developer's Improvements and the Parking Improvements,as
applicable. The Developer shall also comply with the District's Public Arts Policy in the
development of the Project on the Project Site,as provided in Section 4.1(c)of this Agreement.
IV. Other Project Public Improvements
The District and City shall be responsible for the construction of,or causing the construction
of; the remaining portion of the public improvements, as identified below, to be financed by the
District and City in accordance with the Plan of Finance and the Sources and Uses Matrix
(Exhibit 4),including:
1. That portion of the Phase IA Infrastructure Improvements identified in Exhibit 2
attached hereto ("Remaining Phase IA Infrastructure Improvements")., The Remaining Phase IA
Infrastructure Improvements will be completed based on a schedule to be agreed to by the District,
City and Developer; provided, however, the District and City shall have the right to prioritize the
construction of certain Remaining Phase IA Infrastructure Improvements required to meet any
existing contractual obligations of the District and City, including without limitation,any contractual
obligations under the Settlement Agreement and any other agreements applicable to the Project Site
and, provided, further, that the District and the City shall cause the Remaining Phase IA
Infrastructure Improvements to be completed in a manner that will not result in a delay to the
Developer obtaining a temporary certificate of occupancy for, or the opening for business of, the
Developer's Improvements. The Remaining Phase IA Infrastructure Improvements identified in
Exhibit 2 will be financed by the District and City, in the amount of up to TWENTY MILLION ONE
HUNDRED TWENTY THOUSAND DOLLARS (S20,120,000), which together with the
Developer's Phase I Infrastructure Improvements Cost to be financed by District and City shall not
exceed a maximum combined total of FIFTY SIX MILLION DOLLARS(S56,000,000),as set out in
the Plan of Finance and the Sources and Uses Matrix(Exhibit 4).
2. Required service improvements identified in Exhibit 3, consisting solely of the G
Street Sewer Pump Station (the "City Infrastructure Improvements"), to be constructed by or on
behalf of the City, and financed by the City, which financing may be through any financing
mechanism in City's sole and absolute discretion; provided that the City shall cause the City
Infrastructure Improvements, that are compatible with a hotel with 1,600 rooms and meeting space
comparable to the Meeting Space and other uses contemplated at the Project, as applicable, to be
completed not later than twelve(12)months after the Closing Date.
Attachment No. 5
Page 3 of 4
3. If elected by the District,the Parking Improvements to be constructed on the District
Retained Property and financed�by the District up to the amount of FORTY MILLION DOLLARS
($40,000,000).
4. Removal of Existing RV Park and Site Preparation for H-3 Parcel.
Attachment No.5
Page 4 of 4
EXHIBIT 1
DEVELOPER'S PHASE I INFRASTRUCTURE IMPROVEMENTS
The following Phase ]A Infrastructure Improvements shall be constructed by the Developer relating
to the Project:
1. E Street(G Street to H Street): Project consists of the construction of a two-lane Class III
Collector street with turn lane,drainage, water,sewer,dry utilities,and connection/transition
to existing Lagoon Drive. Streetscape improvements include landscape, sidewalks,
biofiltration,lighting, furnishings,etc. The project includes on-street diagonal parking on the
west side of the north-south portion.
2. G Street Connection: Project consists of the construction of a two-lane collector street to
Rohr's Gate 66 with drainage, water, sewer, and dry utilities. Streetscape improvements
include landscape,sidewalk,biofiltration,lighting,etc.
3. H Street (Bay Boulevard to Street A): Project consists of improvements along an existing
roadway. Streetscape improvements will include landscape, Class I bike path and gateway
sign at Bay Boulevard.
4. H Street (Marina Parkway to E Street): Project consists of the construction of a Class 11
Collector street with tum lane, drainage, water, and dry utilities. Streetscape improvements
include landscape, sidewalk, biofiltration, lighting, furnishings, etc. The project includes a
Class I bike path along Parcel H-9, on-street diagonal parking on the south side, traffic
signals at Marina Parkway,and dry utilities extended to Bay Boulevard.
5. Harbor Park (Initial): Project consists of the expansion of the existing Bayside Park to
include amenities, such as open lawn, plaza, lighting, restrooms, bicycle racks, playground,
picnic areas, benches, interpretive signage and public art. Project includes a Pedestrian
Promenade and Class 1 bike path, parking, drainage and biofiltration. Harbor Park will be
constructed in multiple phases. Developer is responsible for initial phase only, to be
identified based on available funding.
6. H-3 Site Prep: Project consists of clearing the site,demolition of existing improvements on
H-3 and vicinity, rough grading, and temporary drainage and erosion control. Includes
maintaining access and utility service to surrounding businesses.
7. H-3 Utility Corridor: Project includes installation of new storm drain,sewer,water,and dry
utilities
Exhibit 1 to Attachment No. 5
Page 1 of 1
it
EXHIBIT 2
REMAINING PHASE IA INFRASTRUCTURE IMPROVEMENTS
The following Remaining Phase IA Infrastructure Improvements shall be constructed, or caused to
be constructed,by the District(and City,if applicable)relating to the Project:
1. E Street(Bay Boulevard to F Street): Project consists of the construction of a collector street
and roundabout with drainage, water and dry utilities. Streetscape improvements include
landscape, sidewalks, bioretention, lighting, furnishings, etc. The project includes a Class I
Bike Path, gateway signage, pedestrian crossings, and traffic signal modifications at Bay
Boulevard.
2. E Street(Lagoon Drive to G Street):Project consists of pavement repair and restriping.
3. F Street (Bay Boulevard to E Street): Project consists of the construction of earthwork,
drainage,sewer,and dry utilities.
4. F Street (E Street to Gunpowder Point Drive): Project consists of the construction of a
collector street with drainage, water, sewer, and dry utilities. Streetscape improvements
include landscape,sidewalks,lighting,etc.
5. Gunpowder Point Drive Relocation(Private Road): Project consists of the construction of a
two-lane roadway with water and dry utilities.
6. S-2 Sweetwater Signature Park: Project consists of construction of an 18-acre park. The
Signature Park will be a passive-use, meadow-type park. The project includes a Pedestrian
Promenade and Class I bike path connecting to Harbor Park, with a bridge over the channel
to the F&G Street Marsh.
7. SP-1 Sweetwater Buffer: Project consists of the restoration of a 400-foot-wide ecological
buffer with pedestrian trails.
8. SP-2 Seasonal Wetlands: Project consists of a bioretention basin. Restoration may be
provided as mitigation for projects.
9. SP-4 SDG&E: Project includes a decomposed granite trail for pedestrians and bicycles.
Exhibit No.2
Page 1 of 1
EXHIBIT 3
CITY INFRASTRUCTURE IMPROVEMENTS
The following City Infrastructure Improvements shall be constructed,or caused to be constructed,by
the City relating to the Resort Hotel and Convention Center Project:
I. G Street Sewer Pump Station: Project consists of an upgrade to an existing sewer pump
station to provide sufficient emergency storage for planned development, as well as
miscellaneous upgrades to the pump station equipment, concrete wet well, odor control
systems, and other related appurtenances on site and in the immediate vicinity of the pump
station.
Exhibit No. 3
Page 1 of 1
EXHIBIT 4
CITY INFRASTRUCTURE SOURCES AND USES MATRIX
Cost Developer BFDIF City Sewer Other
Im rovement Description Estimate' Credit Eligible' Funding Eligibles Fundin 6
eveloper's Phase IA Infrasn•ucture Improvements
E Street(G Street to H Street) 6,680,000 4,050,000 580,000 2,050,000
G Street Connection 950,000 430,000 110,000 410,000
H Street(Bay Blvd to Street A) 430,000 270,000 - 160,000
H Street(Marina Pkwy to E Street) 5,380,000 3,350,000 2,030,000
Harbor Park(Initial) 19,500,000 310,000 19,190,000
H-3 Site Prep 6,000,000 6,000,000
H-3 Utility Corridors 1,530,000 310,000 1,220,000
Subtotal 411,470.000 8,410,000 1,000,000 31,060,000
Remaining Phase lA h f rastructurc hnprovenrentr.
E Street(Bay Blvd to F Street) 3,970,000 - 60,000 3,910,000
E Street(Lagoon Drive to G Street) 290,000 - .290,000
F Street(Bay Blvd to E Street) 1,530,000 280,000 1,250,000
F Street(E Street to Gunpowder Pt Dr) 630,000 50,000 580,000
Gunpowder Point Drive Relocation 1,360,000 - 1,360,000
S-2 Sweetwater Signature Park 7,600,000 7,600,000
SP-I Sweetwater Buffer(for S-1) 2,570,000 2,570,000
SP-I Sweetwater Buffer(for S-2) 1,160,000 1,160,000
SP-2 Seasonal Wetlands 950,000 950,000
SP4 SDG&E 60,000 60,000
Subtotal 20,120,000 390,000 19,730,000
City hrfrusnzrclure Improvements
G Street Sewer Pump Station 2,640,000 - 2,640,000 -
Total 63,230,000 8,410,000 4,030,000 50,790,000
}Cost Estimates are in 2016 dollars. Estimates include hard costs,soft costs,and contingencies.
'Developer BFDIF Credit Eligible column reflects the estimated value of planned improvements that will be eligible for
credit against Developer's Bayfront Development Impact Fee("BFDIF")obligation. Actual BFDIF credit amount may
vary. Developer will be responsible for payment of BFDIF fees in excess of credits earned
5 City Sewer Funding Eligible column reflects the estimated value of sewer improvements associated with each project
that will be eligible for funding by the City through its sewer facility contribution. Actual sewer funds contributed may
vary. See Developer's Sewer Improvements.
Other Funding column reflects the estimated amount to be funded through the issuance of debt,the application of funds
on hand,or such other funding mechanisms as may be most appropriate.
'H-3 Site Prep budget of$6 million represents the maximum funds that will be provided by District and City for this
purpose, assuming District provides at least 130,000 cubic yards of imported soil. If District does not deliver
sufie'ent130,000 cubic yards of soil, funding will be proportionally increased to reflect the amount of soil actually
delivered,but in no event shall such amount exceed$10 million. Actual costs may vary. See Section 4.8.
R H-3 Utility Corridor budget of$1.53 million represents the maximum funds that will be provided by District and City for
this purpose.'Actual costs may vary.
Exhibit No.4
Page 1 of 1
i
ATTACHMENT NO.6
SCHEDULE OF PERFORMANCE
In the event of any conflict between the contents of the Schedule of Performance and the Agreement,
the provisions of the Agreement shall prevail.
ACTION TARGET DATE
1. Execution of Agreement by District.City. 10 Days from Approval of the Agreement
District and City to hold public hearings to
consider and approve or disapprove
Agreement. If approved,District and City
to execute Agreement.
2. Deposit. Developer to deliver the Deposit 5 Days from Full Execution of the Agreement
to the District. (§1.6(a))
3. Approval—Form of Ground Lease. BPC to 60 Days from Full Execution of the Agreement
approve and authorize form of Ground
Lease,and other related documents.
(§6.1(a))
4. District Submits Draft Plans for Phase 1 A 60 Days from Full Execution of the Agreement
Infrastructure Improvements and District
and City Submit Easement Findings.
District to submit to Developer draft plans
for Phase I Infrastructure Improvements
to the extent sufficient to achieve approval
of CDP,and District and City to submit to
Developer Easement Findings(§4.4(b));
(§4.8(c))
5. Developer Comments on Easement 60 Days after No.4(District Submits Plans for
Findings. Developer to provide comments Phase 1 A Infrastructure Improvements and
on Easement Findings to District and City. District and City Submit Easement Findings)
(§4.8(d))
6. District and City to Review Comments on 30 days after No.5(Developer Comments on
Easement Findings.(§4.8(d)) Easement Findings)
Attachment No.9
Page 1 of 12
ACTION TARGET DATE
7. Submission of Tenant Project Plan 60 Days from Full Execution of the Agreement
Application and Development Cost
Estimates—Developer's Improvements,
Surface Parkine and Parking Improvements
(includes Schematic Plans). Developer to
submit to the District Tenant Project Plan
Application and Development Cost
estimates for the Developer's
Improvements,Surface Parking and
Parking Improvements which includes
Schematic Plans. (§4.4(a))
8. District Staff Comments on Schematic 20 Business Days after No. 7(Submission of
Plans. The District Staff to provide Tenant Project Plan Application and
comments on Schematic Plans. (§4.4(a)(i)) Development Cost Estimates and Development
Cost Estimates—Developer's Improvements.
Surface Parking and Parking Improvements
(includes Schematic Plans))(each submittal):
or
If BPC reviews,60 Days after No. 7
(Submission of Tenant Project Plan
Application and Cost Estimates)
9. Developer Corrections to Schematic Plans. 30 Business Days after No.8(District Staff
Developer to make corrections to Comments on Schematic Plans)
Schematic Plans in response to District
Staff comments.(§4.4(a)(i))
10. Developer Submits CDP Application to 10 Business Days after the Developer receives
District.Developer to submit an application a"Tenant Construction Project Number'or
for a CDP to the District.(§4.4(a)(i)) "District Project Engineering Work Order
Number'.whichever is the latest
11. Developer Submits Building Permit May,2019
Application Drawings to the District.
Developer to submit Building Permit
Application Drawings for Developer's
Improvements to the District. (§4.4(a)(ii))
12. District Staff Reviews Building Permit 20 Business Days after No. I 1 (Developer
Application Drawings. District Staff to Submits Building Permit Application Drawings
review Building Permit Application to the District)(each submittal)
Drawings for substantial conformance with
Schematic Plans.(§4.4(a)(ii))
US-DOCS\97448325.38
ACTION TARGET DATE
13. Developer Corrections to BuildingPermit 20 Business Days after No. 12(District Staff
Application Drawings. Developer to make Reviews Building Permit Application
corrections to Building Permit Application Drawings)
Drawings based on District Staff
comments.(§4.4(a)(ii))
14. District Approves Building Permit 20 Business Days after No. 13(Developer
Application Drawings.(§4.4(a)(ii)) Corrections to Building Permit Application
Drawings)(each submittal)
15. Developer Submits Total Project Costs. 30 Days after the Districts approval of the
Developer to submit to District and City Tenant Project Plan Application(includes both
Total Project Costs.(§4.5(a)) Schematic Plans and Building Permit
Application Drawings)
16. Developer,City,and District Determine Earliest Possible Time Within 60 Days of No.
Total Project Costs.The Developer,City, 15(Developer Submits Tenant Project Plans)
and District to determine the Total Project
Costs of the Developer's Public
Improvements.(§4.5(f))
17. Approval of New S-I RV Park Lease and 150 Days from Full Execution of the
Funding. BPC to approve and authorize Agreement
District to enter into a New S-1 RV Park
Lease,and approve funding for Sweetwater
District Infrastructure and New S-1 RV
Park.(§1.2(b))
18. Approval of Tenant Project Plans. The 180 Days from No. 7(Submission of Tenant
Developer to take all actions as necessary Project Plan Application and Development
to obtain Approval of Tenant Project Plans Cost Estimates—Developer's Improvements
in compliance with BPC Policy No. 357. Surface Parking and Parking Improvements
(§4.5)] (includes Schematic Plans))
19. Coastal Development Permit. District to 180 Days from No. 10(Developer Submits
complete all documents and actions CDP Application to District)
necessary to consider Coastal Development
Permit for development of the Developer's
Improvements. (§1.4)
20. Developer Submits Building Permit Promptly After No. 19(Coastal Development
Application Drawings to o City. Developer Permit)
to submit Building Permit Application
Drawings to City for review and approval
and issuance of Building Permits.
(§4.4(a)(iii))
US-DOCS\97048325.38
ACTION TARGET DATE
21. Design of City Infrastructure 12 Months after Close of Escrow
Improvements. The City to prepare,or
cause the preparation of,preliminary and
final construction plans and documents for
the City Infrastructure Improvements.
(§4.2(a))
22. Wildlife Advisory Group and Bayfront 90 Days from Full Execution of the Agreement
Cultural and Design Committee Review.
The District,City and Developer to
cooperate to take such actions to obtain
comments on required portions of the
Schematic Plans from the Wildlife
Advisory Group,Bayfront Cultural and
Design Committee. (§4.4(a)(i))
23. Formation of CFD. The City to complete 120 Days from Full Execution of the
all documents and actions necessary to Agreement
commence formation of CFD. (§1.4)
24. City Property Tax Contribution. The City January,2019
to decide on EIFD and if appropriate
commence all documents and actions
necessary to commence formation of EIFD,
or identify other mechanism to contribute
City property tax increment.(§1.4)
25. Open Escrow Account;Preliminary Title 60 Days from Full Execution of the Agreement
ReRort. The District,City and Developer to
open an escrow with the Escrow Agent and
Developer to deliver Preliminary Title
Report to District and City. (§6.2)
26. Developer Title Review. The Developer to 90 Days from delivery of Preliminary Title
complete its title review and deliver Report
Developer's Disapproval Notice to District.
(§6.2)
27. District Response to Title Review. The 90 Days from No. 26(Developer Title Review)
District to complete its title review and to
deliver District's Response Notice to
Developer.(§6.2)
US-DOCS\97038325.38
ACTION TARGET DATE
28. Developer Due Diligence Investigations. 45 Days after completion of soil import to
The Developer to complete its Due Project Site by District. If no soil import to
Diligence Investigations and provide notice Project Site,then no later than 90 Days after
to District that it accepts or rejects the termination of the Existing RV Park Lease
conditions of the Project Site. (§5.8(c)) (March 2019)
29. Submission of Completed Building Permit 15 Months from Full Execution of the
Application and Final Cost Estimates- Agreement
Developer's Improvements. Developer to
submit to the District/City completed
Building Permit Application, final cost
estimates and documents for the
Developer's Improvements. (§4.5(b))
30. Developer to Obtain Buildine Permit 90 Days after Full Execution of the Agreement.
Processing Agreement.
31. Staff Approval and Acceptance— 20 Days after No.29(Submission of Final Cost
Completed Final Cost Estimates. The Estimates—Developer's Improvements)
District Staff and City Design Review Staff
to approve or disapprove the completed
documents,and accept the final cost
estimates,for the Developer's
Improvements. (§4.5)
32. Execution of New S-1 RV Park Lease and 150 Days from Full Execution of the
Construction of New S-I RV Park. District Agreement
to execute the New S-1 RV Park Lease,and
cause commencement of construction of
New S-1 RV Park and related
improvements. (§1.2(b); §1.4)
33. Submission of Encumbrance Package and Month 15 from Full Execution of the
Proposed Completion Guaranty. Developer Agreement
to submit to District encumbrance package
per BPC Policy No. 355 and proposed
Completion Guaranty language
34. Acceptance or Rejection of Encumbrance 60 days after No.33(Submission of
Package and Completion Guaranty. BPC to Encumbrance Package and Proposed
accept encumbrance package per BPC Completion Guaranty)
Policy No.355 for construction financing
and Completion Guaranty language.
(§5.2(e))
U S-DOCS\97048325.38 -
ACTION TARGET DATE
35. Submission of Management Agreement. Month 15 from Full Execution of the
Developer to submit to District and City the Agreement
Management Agreement. (§5.2(f))
36. Consent—Management Agreement. BPC 60 Days after No.35(Submission of
and City Council to consent to the Management Agreement)
Management Agreement. (§5.2(o)
37. Vacation of the Existing RV Park. District Not later than September 4,2019
to cause the Existing RV Park Lessee and
each of the tenants,occupants or guests on
the land encumbered by the Existing RV
Park Lease to vacate such land.
38. Review of Underwriter's Updated 20 Days from completion of No. 19(CDP
Projections. The District and City to Approval by District)
review and evaluate the underwriter's
updated financial projections. (§5.2(o))
39. Final Plan of Finance. BPC and City 10 Days from completion of No. 38(Review of
Council to prepare the Final Plan of Underwriter's Updated Projections)
Finance,estimated financing schedule and
all ongoing and one-time funding sources
for public financing.
40. Commence Drafting of Bond Documents. 10 Days from completion of No.39(Final Plan
The District.Staff and City Staff to of Finance)
commence drafting all documents to
present to the BPC and the City Council for
approval of issue of Bonds for public
financing. (§1.4)
41. Preparation of JEPA Bond Documents. 10 Days from completion of No.39(Final Plan
The JEPA to commence all documents to of Finance)
present to the JEPA Board, BPC and the
City Council for approval of issue of Bonds
for public financing. (§1.4)
42. Approval—Convention Center Subleases. 30 Days from completion of all tasks
JEPA Board,BPC and City Council to commenced as referenced in Nos.38-41
approve and authorize execution of
Convention Center Subleases._and other
related documents.
US-DOCS\97048325.38
ACTION TARGET DATE
43. Authorization for City Manager. The City 30 Days from completion of all tasks
Council to authorize the City Manager to commenced as referenced in Nos.38-41
execute all documents and do all acts
necessary to carry out the provisions of this
Agreement,the Convention Center
Subleases,and other requirements
pertaining to the full implementation of the
Project, including the Plan of Finance.
(§1.4)
44. Authorization for District's Executive 30 Days from completion of all tasks
Director. BPC to authorize the District's commenced as referenced in Nos. 38-41
Executive Director to execute all
documents and do all acts necessary to
carry out the provisions of this Agreement,
the Ground Lease,the Convention Center
Subleases,and other requirements
pertaining to the full implementation of the
Project,including the Plan of Finance.
(§1.4)
45. Approval of JEPA Bonds. The JEPA 30 Days from completion of all tasks
Board to conditionally approve and commenced as referenced in Nos.38-41
authorize execution of JEPA Bond
documents and issue of JEPA Bonds.
(§1.4)
46. CFD Financing. The City to conditionally 30 Days from completion of all tasks
approve and authorize levy of special tax. commenced as referenced in Nos.38-41
(§1.4)
47. EIFD Bonds. The City to conditionally 30 Days from completion of all tasks
approve and authorize execution of EIFD commenced as referenced in Nos.38-41
Bond documents and issue of EIFD Bonds.
(§1.4)
48. Validation Action—Bonds. The JEPA and 30 Days from completion of all tasks
consultants to file an action for validation commenced as referenced in Nos.42-47
of the bonds. (§4.19)
CLOSE OF ESCROW:
US-DOCS\97048325.38
ACTION TARGET DATE
49. Submission of Construction Contracts. 30 Days Prior to Close of Escrow.
Developer to submit to the District and the
City executed guaranteed maximum price
construction contracts or fixed price
construction contracts,as applicable for the
Developer's Improvements. (§4.5(g))
50. Gradine Permits and all Discretionary 30 Days Prior to Close of Escrow.
Actions. Final and complete grading
permits ready to be issued by the City for
the Developer's Improvements and
approval of all Discretionary Actions by
City, District and any third-parties required
for the completion of Developer's
Improvements(§5.2)
51. Project Public Investment. District and Prior to Close of Escrow.
City to submit to the Developer evidence
that the Project Public Investment and
Developer's Phase IA Infrastructure
Improvements Costs will be available at the
Close of Escrow. (§5.3)
52. Execution and Delivery of Ground Lease, Concurrently with Close of Escrow on
etc. The District and Developer to Convention Center Subleases and Issuance of
complete,execute and deliver into escrow Bonds.
the Ground Lease(including memorandum
relating thereto),together with all
documents and supplemental escrow
instructions required to close escrow.
(§6.3,6.4(a)(i))
53. Execution and Delivery of Convention Concurrently with Close of Escrow on Ground
Center Subleases,etc. The District,City, Lease and Issuance of Bonds.
JEPA and Developer to complete,execute
and deliver into escrow the Convention
Center Subleases(including recordable
memoranda relating thereto),together with
all documents and supplemental escrow
instructions required to close escrow.
(§6.4(a)(iii))
54. Escrow Fees,Charges. The District,City, Prior to Close of Escrow.
JEPA and Developer to pay their respective
fees,charges and other costs into escrow.
(§6.5)
U S-DOCS\97048325.38 -
ACTION TARGET DATE
55. Issue of Bonds. The JEPA to prepare and Concurrently with Close of Escrow.
close on sale of JEPA Bonds for public
financing. (§1.4)
56. Developer's Financing. Developer shall Concurrently with Close of Escrow.
complete all actions necessary to close on
Equity Investors contributions and
financing from the Private Construction
Lender for the Developer's costs for
construction of the Developer's Private
Improvements. (§5.2)
57. Certificates.City,District and Developer to 30 Days Prior to the Close of Escrow
provide required incumbency certificates,
resolutions or ordinances,as applicable.
(§9.12)
58. Close of Escrow. The District,City, October 30,2019
Developer and JEPA to cause Close of
Escrow and recordation of memoranda of
Ground Lease and Convention Center
Subleases. (§6.4)
Formatted: No bullets or numberir,
US-DOCS\97048325.38
ATTACHMENT NO.7
FORM OF DEVELOPER'S PRIVATE IMPROVEMENTS AND CONVENTION CENTER
BUDGET
US-DOCS\97045325.38
ATTACHMENT NO.8
QUALITY OF IMPORTED SOIL
US-DOCS\97048325.38
C
r
ATTACHMENT NO.9
DRAFT OF THE GROUND LEASE
US-DOCS\97048325.38